Warthog PLC
30 September 2005
Warthog plc
Chairman's Statement
Year ended 31 March 2005
Our results
As set out in my last statement on the 29 December 2004 these accounts reflect
the difficult trading in the year up to the sale of all of the subsidiaries to
Tiger Telematics Inc which took place on 1st November 2004. I therefore do not
propose to comment further about them.
The current position is that we have been advised of no claims arising out of
the completion accounts and the warranties and indemnities given to the
purchaser on the disposal of the subsidiaries. We therefore continue to own
478,866 shares in Tiger Telematics Inc, which as at today's date had a value of
$6.2m. These shares together with £150,000 are held in an escrow account under
the control of the lawyers for Tiger Telematics Inc. Both the cash and shares
are due for release to the company on 2nd November 2005. As of today's date we
have £76,777 in cash and ongoing costs of £6,500 per month.
Since 1st November 2004 the value of Tiger Telematics Inc shares has fluctuated
between $11 and $31 per share. Tiger Telematics Inc is still an early stage
company that has not yet achieved any significant turnover and is still heavily
loss making. We cannot, therefore, have any certainty as what these shares could
realise if we were to sell post 2nd November. However up to that point the
478,866 shares remain in escrow.
Under the sale arrangements it was anticipated that Warthog plc would have to
change its name as the name Warthog would be required for use in the Tiger
Telematics Group. This has not taken place as the previous Warthog subsidiaries
have changed their names to Gizmondo adopting the name of their immediate parent
company Gizmondo Europe ltd which is a wholly owned subsidiary of Tiger
Telematics Inc.
The directors are currently reviewing acquisition opportunities.
Ian Templeton
Chairman
Notes Continuing Discontinued Total 2004
Operations Operations 2005
2005 £ 2005 £
£ £
TURNOVER 1 - 1,714,281 1,714,281 5,674,899
Cost of sales 59,187 2,676,184 2,735,371 8,674,367
Exceptional
costs 5 105,218 578,347 683,565 4,424,991
Gross loss (164,405) (1,540,250) (1,704,655) (7,424,459)
Other
operating
expenses (net) 2 432,837 1,414,856 1,847,693 1,627,981
OPERATING LOSS (597,242) (2,955,106) (3,552,348) (9,052,440)
Profit on sale
of
discontinued
operations - 3,410,874 3,410,874 -
Profit on sale
of
intellectual
property - 202,101 202,101 -
PROFIT/(LOSS)
ON ORDINARY
ACTIVITIES
BEFORE
INTEREST (597,242) 657,869 60,627 (9,052,440)
Investment
income 3 1,428 2,161
Interest
payable 4 66,070 192,394
LOSS ON
ORDINARY
ACTIVITIES
BEFORE
TAXATION (4,015) (9,242,673)
Taxation 7 214,357 (154,816)
RETAINED
PROFIT/ (LOSS)
FOR THE YEAR 18 210,342 (9,397,489)
Earnings per
ordinary share
- basic 9 0.06p (12.85)p
Earnings per
ordinary share
- diluted 9 0.06p (12.85)p
2005 2004
£ £
Profit/ (Loss) for the financial year 210,342 (9,397,489)
Currency translation gain / (loss) on foreign currency
net investments - (43,656)
Total recognised gains and losses relating to the year 210,342 (9,441,145)
Notes 2005 2004
£ £
FIXED ASSETS
Intangible assets 12 - 751,309
Tangible assets 10 - 1,959,875
Investments 11 3,888,885 -
3,888,885 2,711,184
CURRENT ASSETS
Stock 13 - 435,678
Debtors 14 186,059 1,154,631
Cash at bank and in hand 113,390 360,845
299,449 1,951,154
CREDITORS: Amounts falling due within one
year 15 (32,040) (1,154,954)
NET CURRENT ASSETS 267,409 796,200
TOTAL ASSETS LESS CURRENT LIABILITIES 4,156,294 3,507,384
PROVISIONS FOR LIABILITIES AND CHARGES 16 - (11,464)
4,156,294 3,495,920
CAPITAL AND RESERVES
Called up share capital 17 3,478,821 3,197,847
Contingent share capital 19 - 143,442
Share premium account 18 9,555,365 9,190,402
Merger reserve 18 - 52,463
Profit and loss account 18 (8,877,892) (9,088,234)
SHAREHOLDERS' FUNDS 4,156,294 3,495,920
Notes 2005 2004
£ £
FIXED ASSETS
Investments 11 3,888,885 945,311
CURRENT ASSETS
Debtors 14 186,059 6,550,962
Cash at bank and in hand 113,390 683,561
299,449 7,234,523
CREDITORS: Amounts falling due within one
year 15 (32,040) (320,106)
NET CURRENT ASSETS 267,409 6,914,417
TOTAL ASSETS LESS CURRENT LIABILITIES 4,156,294 7,859,728
4,156,294 7,859,728
CAPITAL AND RESERVES
Called up share capital 17 3,478,821 3,197,847
Contingent share capital 19 - 143,442
Share premium account 18 9,555,365 9,190,402
Profit and loss account 18 (8,877,892) (4,671,963)
SHAREHOLDERS' FUNDS 4,156,294 7,859,728
Notes 2005 2004
£ £
Cash flow from operating activities 20a (2,594,366) (3,356,553)
Returns on investments and servicing of
finance 20b (64,642) (190,233)
Taxation 194,159 168,873
Capital expenditure and servicing of finance 20b 1,602,229 (169,135)
Acquisitions and disposals of subsidiaries 20b 496,115 -
CASH OUTFLOW BEFORE FINANCING (366,505) (3,547,048)
Financing 20b 119,050 3,548,405
INCREASE/(DECREASE) IN CASH IN THE YEAR (247,455) 1,357
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN DEBT
2005 2004
£ £
Increase/ (decrease) in cash in the year (247,455) 1,357
Change in net debt resulting from cash flows - 1,500,000
MOVEMENT IN NET DEBT IN YEAR (247,455) 1,501,357
NET FUNDS/(DEBT) AT 1 APRIL 2004 360,845 (1,140,512)
NET FUNDS AT 31 MARCH 2005 20c 113,390 360,845
1 TURNOVER AND PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
The Group's turnover and profit before taxation were all derived from its
principal activity.
Sales originated in the following geographical markets:
Continuing Discontinued Total 2004
Operations Operations 2005
2005 £ 2005 £
£ £
United Kingdom - 655,114 655,114 3,952,624
USA - 1,667 1,667 980,510
EC - 1,057,500 1,057,500 741,765
- 1,714,281 1,714,281 5,674,899
Loss before tax originated in the following geographical markets:
2005 2004
£ £
United Kingdom 518,446 (8,818,923)
USA (553,604) 269,597
EC 31,143 (693,347)
(4,015) (9,242,673)
2 OTHER OPERATING Continuing Discontinued Total 2004
EXPENSES (NET) Operations Operations 2005
2005 £ 2005 £
£ £
Administration 432,837 1,414,856 1,847,693 1,627,981
expenses
3 INVESTMENT INCOME 2005 2004
£ £
Bank interest receivable 1,428 2,161
4 INTEREST PAYABLE 2005 2004
£ £
On other loans 66,070 192,394
5 LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION 2005 2004
£ £
Loss on ordinary activities after taxation is stated
after charging:
Amortisation of intangible fixed assets 932,653 214,416
Depreciation on tangible fixed assets:
Charge for the year - owned assets 226,446 477,296
Auditors' remuneration- audit fees 7,500 27,986
Auditors' remuneration- non-audit fees: further 23,190 22,542
assurance services
Auditor's remuneration for non-audit fees (further assurance services) charged
to the share premium account totalled £Nil (2004: £23,237).
EXCEPTIONAL ITEMS
Exceptional costs of £683,565 (2004: £4,424,991) have been incurred during the
current year. Provisions of £Nil (2004: £4,043,948) have been made in the
current year against the costs incurred in developing certain games. Exceptional
costs of £578,347 (2004: £381,043) relate to the cost of restructuring Group
operations. Exceptional costs of £105,218 relate to legal and professional
charges incurred during the disposal of Group subsidiary's during the year. As
the Group has trade losses to carry forward for tax purposes, there is no effect
of these charges on the Group's tax charge for the year.
6 EMPLOYEES 2005 2004
No. No.
The average monthly number of persons (including directors)
employed by the group during the year was:
Administration 7 15
Technical and design 69 211
76 226
2005 2004
£ £
Staff costs for above persons:
Wages and salaries 2,442,132 7,248,460
Social security costs 292,715 872,823
Other pension costs 107,076 294,489
2,841,923 8,415,772
6 EMPLOYEES (continued) 2005 2004
£ £
DIRECTORS' REMUNERATION
Emoluments 178,597 354,343
Amounts paid to money purchase pension schemes 6,401 16,363
Compensation for loss of office - 47,500
Total emoluments 184,998 418,206
2005 2004
Number Number
The number of directors to whom relevant benefits 3 5
are accruing under money purchase pension schemes was:
Emoluments
disclosed above
include the
following
amounts paid to
the highest
paid director.
2005 2004
£ £
Emoluments for qualifying services 45,655 93,453
Company pension scheme contributions to money purchase schemes 1,011 3,080
7 TAXATION
2005 2004
£ £
Current Tax:
UK corporation tax at 30% on loss of the year - -
Foreign tax - 11,349
Adjustments in respect of previous periods (197,358) (191,098)
Total current tax (197,358) (179,749)
Deferred tax:
Origination of timing differences (16,999) 334,565
Tax on loss on ordinary activities (214,357) 154,816
7 TAXATION (continued)
TAX RECONCILIATION
Factors affecting tax charge for the year
The tax assessed for the year is higher than the
standard rate of corporation tax in the UK of 30%
(2004: 30%). The differences are explained below:
2005 2004
£ £
Loss on ordinary activities before tax (4,015) (9,242,673)
Loss on ordinary activities multiplied by the standard
rate of corporation tax in the UK of 30% (2004: 30%). 1,205 (2,772,802)
Effects of:
Creation of tax losses 1,022,054 2,927,550
Permanent timing differences - 27,791
Capital gains not taxed (1,023,262) -
Other timing differences - 64,325
Capital allowances in excess of depreciation - 102,519
Short-term timing differences - (3,469)
Research and development tax credits (197,355) (191,098)
Tax charge/ (credit) for the year (197,358) 154,816
8 PROFIT ATTRIBUTABLE TO THE MEMBERS OF THE PARENT COMPANY
As permitted by Section 230 Companies Act 1985, the company has not presented
its own profit and loss account. Of the retained profit for the year, a loss of
£4,205,929 (2004 loss: £4,656,817) is attributable to the activities of the
holding company.
9 EARNINGS PER SHARE
Earnings and the number of shares used in the calculations of earnings per share
are set out below:
2005 2004
£ £
Basic:
Profit/(loss) after tax 210,342 (9,397,489)
Weighted average number of shares 336,980,765 73,135,755
EPS (pence) 0.06p (12.85)
Basic and fully diluted earnings are the same due to the loss for the year in
2004; at 31 March 2005 the share price was below the option exercise price and
hence diluted earnings per share are the same as basic as it is assumed that the
options would not be exercised..
10 TANGIBLE FIXED ASSETS
GROUP Land and Computer Fixtures, Total
buildings equipment fittings and £
£ £ equipment
£
Cost or
valuation
1 April 2004 1,770,431 1,712,590 153,611 3,636,632
Additions - 50,637 - 50,637
Disposals (1,770,431) (1,763,227) (153,611) (3,687,269)
31 March 2005 - - - -
Depreciation
1 April 2004 290,781 1,276,901 109,075 1,676,757
Charged in the 33,913 179,591 12,942 226,446
year
Disposals (324,694) (1,456,492) (122,017) (1,903,203)
31 March 2005 - - - -
Net book value
31 March 2005 - - - -
31 March 2004 1,479,650 435,689 44,536 1,959,875
11 FIXED ASSET INVESTMENTS Shares in Listed Total
investments
GROUP subsidiary £ £
undertaking
£
Cost
At 1 April 2004 20,500 - 20,500
Disposals (20,500) - (20,500)
Additions - 3,888,885 3,888,885
At 31 March 2005 - 3,888,885 3,888,885
Provision for diminution in value
1 April 2004 20,500 - 20,500
Provision written back (20,500) - (20,500)
At 31 March 2005 - - -
Net book value
31 March 2005 - 3,888,885 3,888,885
31 March 2004 - - -
11 FIXED ASSET INVESTMENTS
(continued)
Shares Listed Total
insubsidiary investments
undertakings £ £
£
COMPANY
Cost
At 1 April 2004 1,245,311 - 1,245,311
Additions 526,888 3,888,885 4,415,773
Disposals (1,772,199) - (1,772,199)
At 31 March 2005 - 3,888,885 3,888,885
_ _ _
Provision for diminution in
value
At 1 April 2004 (300,000) - (300,000)
Provision written back on 300,000 - 300,000
disposal
At 31 March 2005 - - -
_ _ _
Net book value:
At 31 March 2005 - 3,888,885 3,888,885
At 31 March 2004 945,311 - 945,311
On 1 November 2004, the Company sold all its subsidiary investments to Tiger
Telematics Inc. As a result of this sale, the company acquired an investment of
£3,888,885 as settlement against outstanding debt at date of acquisition.
The fair value of assets and liabilities disposed of was as follows:
£
Debts transferred to Tiger Telematics Inc 3,355,552
Cash/shares acquired (see below) 4,305,552
Proceeds 950,000
Net assets disposed of (2,460,874)
Profit on disposal of investments 3,410,874
_
Consideration:
Shares in Tiger Telematics Inc 3,888,885
Cash 416,667
4,305,552
12 INTANGIBLE FIXED ASSETS Goodwill Intellectual Total
£ property £
£
GROUP
Cost
At 1 April 2004 1,121,182 6,818 1,128,000
Additions 383,445 202,101 585,546
Disposals (1,504,627) (208,919) (1,713,546)
At 31 March 2005 - - -
Provision for diminution in
value
At 1 April 2004 369,873 6,818 376,691
Charge in the year 932,653 - 932,653
Disposals (1,302,526) (6,818) (1,309,344)
At 31 March 2005 - - -
Net book value
31 March 2005 - - -
31 March 2004 751,309 - 751,309
13 STOCK 2005 Group 2005 Company
£ 2004 £ 2004
£ £
Work in progress - 435,678 - -
Work in progress in 2004 related to contracts in respect of which development
costs were recoverable against royalties receivable after publication of the
software.
14 DEBTORS 2005 Group 2005 Company
£ 2004 £ 2004
£ £
Due within one year:
Trade debtors - 34,797 - -
Amount recoverable on long term - 965,955 - -
contracts
Amounts owed by Group - - - 6,343,942
undertakings
Other debtors 177,570 57,476 177,570 1,851
Corporation tax - 13,090 - -
Other taxation and social - - - 179,084
security
Prepayments and accrued 8,489 83,313 8,489 26,085
income
186,059 1,154,631 186,059 6,550,962
During the year, the Company wrote off £7,760,338 of inter-company debt.
£4,333,000 of this amount had been provided against in 2004.
15 CREDITORS: Amounts falling due 2005 Group 2005 Company
within one year
£ 2004 £ 2004
£ £
Trade creditors - 310,670 - 178,085
Other taxation and social - 304,758 - 16,509
security
Other creditors - 17,924 - 77
Accruals and deferred income 32,040 521,602 32,040 125,435
32,040 1,154,954 32,040 320,106
PROVISION FOR LIABILITIES AND CHARGES
Deferred taxation provided in the financial statements and the unprovided
potential asset is as follows:
Unprovided asset Amount provided
2005 2004 2005 2004
£ £ £ £
GROUP
Accelerated capital allowances and
other - (44,685) - -
timing differences
Tax losses available against future
profits (99,200) (2,643,882) - -
(99,200) (2,688,567) - -
The movement on deferred taxation was as follows:
£
Balance at 1 April 2004 11,464
Transfer to profit and loss account (16,999)
Balance at 31 March 2005 (5,535)
_
SHARE CAPITAL
Movement in share capital
Number Nominal value
£
At 1 April 2004 319,784,645 3,197,846
Issued during the year 28,097,478 280,975
At 31 March 2005 347,882,123 3,478,821
During the year 28,097,478 ordinary shares were issued as follows:
Number Nominal value Share premium
£ £
Issued at 2p 8,500,000 85,000 85,000
Issued at 40.63p 353,090 3,531 139,911
Issued at 1.9925p 19,244,388 192,444 191,001
28,097,478 280,975 415,912
2005 2004
£ £
Authorised:
600,000,000 shares of 1p each 6,000,000 6,000,000
Allotted, issued and fully paid:
347,882,123 ordinary shares of 1p each (2004:
319,784,645) 3,478,821 3,197,847
17 SHARE CAPITAL (continued)
SHARE DISCLOSURES
The Group has granted the following options to subscribe for ordinary shares of
1p each, as follows:
Grant date Subscription Number of Lapsed in year Exercise period
shares for
which rights
are exercisable
price per share
Unapproved
share options:
14 November
2000 32.0p 156,250 - 14 Nov 2004 -
14 Nov 2010
17 June 2004 19.0p 191,492 (191,492) 4 Feb 2006 - 4
Feb 2013
Approved share
options:
7 December
2000 20.0p 819,936 (819,936) 7 Dec 2004 - 7
Dec 2010
5 November
2001 44.5p 257,600 (257,600) 5 Nov 2005 - 5
Nov 2011
EMI share
options:
7 December
2000 20.0p 1,174,986 (1,174,986) 7 Dec 2004 - 7
Dec 2010
5 November
2001 44.5p 10,000 (10,000) 5 Nov 2005 - 5
Nov 2011
21 December
2001 44.5p 110,000 (110,000) 21 Dec 2005 -
21 Dec 2011
12 June 2004 14.5p 68,000 (68,000) 12 Jun 2006 -
12 Jun 2013
All share options, other than 156,250 options under an approved scheme and held
by David Robinson, lapsed on 2 November 2004 following disposal of all
subsidiary investments to Tiger Telematics Inc.
RESERVES Merger Share Profit and
reserve premium Loss
£ £ account
£
GROUP
At 1 April 2004 52,463 9,190,402 (9,088,234)
Retained profit for the year - - 210,342
Realised on disposal of investment (52,463) - -
Premium on issue of shares - 415,912 -
Share issue costs - (50,949) -
At 31 March 2005 - 9,555,365 (8,877,892)
COMPANY
At 1 April 2004 - 9,190,402 (4,671,963)
Retained loss for the year - - (4,205,929)
Premium on issue of shares - 415,912 -
Share issue costs - (50,949) -
At 31 March 2005 - 9,555,365 (8,877,892)
RECONCILIATION OF MOVEMENT
IN SHAREHOLDERS' FUNDS 2005 Group 2005 Company
£ 2004 £ 2004
£ £
Profit / (Loss) for the
financial year 210,342 (9,397,489) (4,205,929) (4,656,817)
Currency translation gain
on foreign currency net
investments - (43,656) - -
Proceeds from issue of
shares 645,937 5,251,215 645,937 5,251,215
Contingent share capital (143,443) (143,443) (143,443) (143,443)
-----------
Merger reserve realised on
disposal of investments (52,463) - - -
Net addition/(reduction)
to shareholders' funds 660,374 (4,333,373) (3,703,435) 450,955
Opening shareholders'
funds 3,495,920 7,829,293 7,859,728 7,408,773
Closing shareholders'
funds 4,156,294 3,495,920 4,156,294 7,859,728
17 CASH FLOWS 2005 2004
18 £ £
a Reconciliation of operating loss
to net cash outflow from
operating activities
Operating (loss)/ profit on (2,868,783) (4,627,449)
ordinary activities
Exceptional costs (683,565) (4,424,991)
Operating loss (3,552,348) (9,052,440)
Depreciation and amortisation 1,159,099 691,712
Decrease in stocks 380,123 1,198,356
Decrease/ (Increase) in debtors (262,853) 4,105,788
Decrease in creditors (265,924) (256,313)
Other non cash movements (52,463) (43,656)
Net cash outflow from operating (2,594,366) (3,356,553)
activities
20 CASH FLOWS (continued) 2005 2004
£ £
b Analysis of cash flows for headings netted in the
cash flow
Returns on investments and servicing of finance
Interest received 1,428 2,161
Interest paid (66,070) (192,394)
Net cash outflow from returns on investments and (64,642) (190,233)
servicing of finance
Capital expenditure and financial investment
Purchase of tangible fixed assets (50,637) (171,561)
Sale of intangible fixed assets 202,101 -
Sales of tangible fixed assets 1,450,765 2,426
Net cash outflow from capital expenditure and 1,602,229 (169,135)
financial investment
Acquisitions and disposals
On sale of subsidiary undertakings 416,667 -
Net cash transferred with subsidiary 79,448 -
undertakings
496,115 -
Financing
Issue of ordinary share capital 170,000 5,425,661
Share issue costs (50,949) (377,256)
Repayment of other long term loans - (1,500,000)
Net cash inflow from financing 119,050 3,548,405
20 CASH FLOWS (continued) At1 April Cash flow At31 March 2005
c Analysis of net debt 2004 £ £
£
Cash in hand and at bank 360,845 (247,455) 113,390
21 PENSION COMMITMENTS
The company operates a defined contribution pension scheme. The assets of the
scheme are held separately from those of the company in an independently
administered fund. The pension cost charge represents contributions payable by
the company to the fund and amounted to £107,076 (2003: £294,489).
22 FINANCIAL INSTRUMENTS
The Group holds and uses financial instruments to finance its operations and to
manage its interest rate, liquidity and currency risks. The Group does not hedge
directly the translation exposure of the profit and loss account whether by use
of options or other derivatives.
As permitted by FRS 13, short-term debtors and creditors have been excluded from
the disclosures, other than the currency disclosures.
a. Fair values of financial assets and financial liabilities
The fair value of the Group's financial instruments at 31 March 2005 was:
2005 2004
Book Value Fair Value Book Value Fair Value
£ £ £ £
Cash at bank 263,390 263,390 360,845 360,845
and in hand
=============== ================ =============== ===============
All fair values have been determined using appropriate market rates as at 31
March 2005 and by discounting relevant cash flows at the prevailing rate.
As at 31 March 2005 the group had no borrowings.
22 FINANCIAL INSTRUMENTS (continued)
b. Financial assets
Other than cash at bank and short-term debtors the Group has no other financial
assets as at 31 March 2005. All financial assets were at floating rates.
c. Financial liabilities
Other than short-term creditors the Group has no other financial liabilities as
at 31 March 2005.
d. Currency exposures
The Group's borrowing and net assets by currency at 31 March 2005 were:
2005 2004
Net operating Net borrowing Total net Total net
assets assets assets
£ £ £ £
Sterling 267,409 - - 18,889
US dollar 3,888,885 - - 171,577
Swedish - - - 835,344
Krona
Total 4,156,294 - - 1,025,810
The amounts shown above for net borrowing and total net assets are after taking
into account forward foreign exchange contracts entered into by the Group.
e. Borrowing facilities
The Group had undrawn committed borrowing facilities at 31 March 2005, in
respect of which all conditions precedent had been met, as follows:
2005 2004
£ £
Expiring in one year or less - 500,000
Expiring in more than one year but not more
than two - 850,000
years
Expiring in more than two years - 900,000
- 2,250,000
23 CONTROL
In the opinion of the directors there is no single controlling party.
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