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Environmental Recyc (ENRT)

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Monday 30 September, 2013

Environmental Recyc

Half Yearly Report

RNS Number : 1864P
Environmental Recycling Tech. PLC
30 September 2013
 



For Immediate Release:

 

Environmental Recycling Technologies plc

 

Interim Results for the six months ended 30 June 2013

 

 

 

Environmental Recycling Technologies plc ("ERT", "the Company") (AIM: ENRT), the patent rights holder  to the Powder Impression Moulding ("PIM") process which is capable of converting mixed waste plastics into commercially viable products, announces its unaudited interim results for the six months ended 30 June 2013.

 

 

For further information:

 

Environmental Recycling Technologies plc


Ken Brooks (Chairman)


Roger Baynham (Deputy Chairman)              

01993 779 468



W H Ireland


John Wakefield

0117 945 3470



Kreab Gavin Anderson

Robert Speed/Ross Gillam

 

020 7074 1800 

 

 

                 

 

 

Business Review

 

Financial Results

 

Revenue for the six months ended 30 June 2013 was £99,000 (H1, 2012 £30,000).  The loss on operations was £2.12 million (H1, 2012 loss £0.77 million).  Losses attributable to equity shareholders were £2.41 million (H1, 2012 loss £1.49 million).

 

Turnover included revenue from royalties.

 

Administrative expenses incurred in the day to day running of the business were £0.63 million (H1, 2012 £0.80million).

 

A prudent provision of £1.61 million has been made against the trade receivable loan due to non-payment of the current outstanding balance due.

 

Overview

 

The first half of 2013 has seen significant changes to the company.

 

Highlights:

 

·      Restructuring of the board.

·      Successful protection of core patents.

·      New patents granted.

·      New licence agreement.

 

Board

 

The company recently announced the appointment of Lee Clayton to Managing Director. Lee was previously Chief Operating Officer.  Roger Baynham has assumed the role of Deputy Chairman, whilst Ken Brooks has moved to be Non-Executive Chairman.

 

This restructure will allow for focus on the day to day operations of the company and also to deliver the business strategy for the coming twelve months.

 

As part of the board restructuring, the directors have embarked on a recruitment campaign to engage a suitable non-executive director.

 

 

Patent Protection

 

Earlier in 2013 the company successfully defended its core patent. It is the company's policy to continue to police its IP portfolio and to continue to strengthen our IP through continued enhancement.

 

 

Patents Granted

 

The company is pleased to announce that it was successful in expanding its PIM patent to the following territories:

 

·      Japan.

·      Mexico.

·      Hong Kong.

 

This strengthens our ability to promote the IP to a global market where with changing legislation there are continuing demands to divert waste from landfill and promote mechanical recycling.

 

 

Licence Agreement

 

The company announced that as part of its sales and marketing plan, it had expanded its licensee portfolio to the Middle East and North Africa with the appointment of a new licensee, Falanx. The license allows for the manufacture and sale of "anti-blast" applications.  Discussions continue with Falanx on other opportunities that may incorporate PIM.

 

 

Summary of current licensee operations

 

·      2K Manufacturing

 

Since the restructuring of the license agreement between 2K and the company in 2012 (which enabled ERT to recover global flat sheet licensing rights), the company has continued to work closely with 2K. We have introduced 2K to alternative material suppliers and offered them access to our in-house laboratory facility to assist in identifying additional raw material streams and the expansion of productivity.

 

The 2012 license agreement was predicated on a promised  scaling up of production, initially by increasing the existing line to working 24/7 and subsequently by the addition of a new production line.  Despite this, 2K has not accelerated productivity as initially envisaged. The failure to expand production by 2K has impacted its sales revenue and consequently potential royalty revenues to ERT.

 

In the light of this, exploratory discussions have taken place between ERT and 2K to combine the activities of the businesses.  Following some investigation, the company has concluded that the business model at 2K is fundamentally sound, but lacks a clear investment strategy and sector expertise as a result of which it has not performed as it could have done.

 

Despite payment of previous minimum royalties and debt repayment instalments this year, the amounts which became due for payment at the beginning of July 2013 have not been paid.  In consequence the company advised 2K and its investors that continuation of discussions beyond an exploratory stage could not progress until the outstanding accounts were settled.

 

Subsequently, the company has  taken legal advice to pursue all means open to it to recover the monies owed to it.

 

 

·      Contour Showers

 

Since the start of the year, the company has been working collectively with Contour showers.  This has led to a better understanding of the process, resulting in increased productivity and efficiency.

 

Due to the increasing demands to use recycled material, the company has agreed to process some of the more challenging materials on a fee paying basis, to assist further in reducing raw material costs.  The company expects Contour to continue to increase its productivity by moving to a seven day week shift pattern and also to  take the materials processing in house.

 

·      James Marine

 

It has been a challenging year for James Marine due in part to the severe drought that occurred in the southern USA in 2012.  This has had a knock on effect on barge movements and procurement which ultimately affects the barge covers market.  However, James Marine anticipates a much better harvest in 2013 which should have a positive effect on the uptake of barges and barge covers.  They have informed the company that they have received serious enquires from South America for the supply of barge covers and have been exploring the possibility of producing these locally.

 

James Marine has also been in discussions with us with regards to developing new products to de-risk the single product line they are licensed to produce presently.  These matters will be discussed on a visit to USA presently being undertaken by Lee Clayton and Roger BaynhamNorth Brook Farms

 

Since signing the non-exclusive licence to produce flat sheet to North Brook Farms, they have been working extensively on material analysis based on the materials they have at their disposal and how this translates into the PIM process.  Lee Clayton and Roger Baynham will also be visiting NBF  to assist further in accelerating the commercialisation of process.

 

 

Research and Development

 

It is recognised the enhancement of the process will lie firmly with the continued expansion of our research and development department.  As a business that looks to exploit new and innovative technologies, it will become the back bone of the business.

 

The concluding stages of finalising the submission of the Knowledge Transfer Programme with Sheffield University are in hand.  The plan is to have this division managed by a suitably qualified engineer, who will work closely with our preferred academic partner.

 

The continued research will enable us to develop a better understanding of the changing raw materials being handled globally therefore enabling the company to devise solutions to these otherwise problematic materials.

 

It will also facilitate the needs of our existing licensees who may encounter problems with their feedstock and mechanical properties of their products, giving them a "help desk" option.

 

 

Outlook

 

Since embarking on a promotional campaign, the company has exhibited in China, Europe and the UK.

 

Two serious enquiries have emanated as a direct result and the company has taken samples of their material and converted them with encouraging results.  This has produced interest in the delegations traveling from both Europe and Asia. and the company will continue exploring all opportunities for converting these enquiries into license agreements.

 

Due to the scale of these potential enquiries it will be necessary for the company to bring in substantial additional resource and discussions are in progress with the appropriate organisations on producing commercial/technical business plans to develop these projects.

 

The company will be continuing to promote the technology, but with the option of turnkey solutions, which may include product route to market, continuing after sales support, raw material supply and in house research and development.

 

To assist with on-going promotion of PIM, the company has engaged the expertise of Kreab Gavin Anderson, an independent company which specialises in business support in this area.  They have been working closely with the company to help reach a wider audience, including potential licensees, in order to educate them about the merits of PIM and ERT.   One of the company's aspirations is to brand PIM as a generic polymer process alongside other well-known processes such as injection moulding, compression moulding and extrusion.

 

The board recognises that as the demands on the business increases there will be a need to have some lower level management to facilitate the necessary growth.  Therefore we expect to adopt a recruitment strategy to provide the level of resources to meet the business needs going forward.

 

 

 

Ken Brooks                                           Roger Baynham                                                    Lee Clayton

Chairman                                               Deputy Chairman                                                 Managing Director



 

Financial review for the six months ended 30 June 2013

 

Results

 

Revenue for the six months ended 30 June 2013 was £99,000 (H1, 2012 £30,000).  The loss on operations was £2.12 million (H1, 2012 loss £0.77 million).  Losses attributable to equity shareholders were £2.41 million (H1, 2012 loss £1.49 million).

 

Dividends and loss per share

 

As at 30 June 2013 as reported in the statement of financial position, the company does not have distributable reserves and is unable to declare a dividend.

 

The loss per share was 0.30 pence (H1, 2012 0.27 pence).

 

Trading

 

Turnover included revenue from royalties.

 

Administrative expenses incurred in the day to day running of the business were £0.63 million (H1, 2012 £0.80million).

 

A prudent provision of £1.61 million has been made against the trade receivable loan due to non-payment of the current outstanding balance due.

 

Financing

 

Open offer and capital reorganisation

On 30 April 2013, the Company raised £693,327 under an Open Offer to shareholders.  At a General Meeting held that day, resolutions were passed to consolidate and sub-divide the entire issued and authorised share capital into new ordinary shares of 0.25p per share and to adopt new Articles of Association. 

In addition, £350,000 of outstanding debt from Oxford Capital was satisfied in full by the issue of 28 million shares at the Open Offer price of 1.25p per share.

 

Short term funding

 

The Company meets its day to day cost base by managing its cash resources and securing appropriate levels of finance to settle its liabilities as they fall due.  Additional cash loans during the period were £200,000, and after date a further £125k loan was raised.

 

The directors have received written assurance from Oxford Capital, the lenders of £0.67 million, that there is no intention to request immediate repayment of the liabilities and that subject to agreement, the lender would accept repayment by way of a debt for equity swap.

 

Short term funding facilities have been organised to cover the Company's normal overheads for the rest of the year.  The directors do not expect there to be a requirement to repay the loans in cash during the next twelve months.  The directors are in advanced stages of negotiating additional funding on acceptable terms that will allow overheads to be met as they fall due for the foreseeable future.

 

 

David Shepley-Cuthbert

Finance Director

 

Independent review report to Environmental Recycling Technologies plc.

Introduction

We have been engaged by the company to review the financial statements in the half-yearly financial report for the six months ended 30 June 2013 which comprises the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Shareholders' Equity, Statement of Cash Flows and notes 1 to 7.

We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

Directors' responsibilities

The interim report, including the financial information contained therein, is the responsibility of and has been approved by the directors.  The directors are responsible for preparing the interim report in accordance with the rules of the London Stock Exchange for companies trading securities on the Alternative Investment Market which require that the half-yearly report be presented and prepared in a form consistent with that which will be adopted in the company's annual accounts having regard to the accounting standards applicable to such annual accounts.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Our report has been prepared in accordance with the terms of our engagement to assist the company in meeting the requirements of the rules of the London Stock Exchange for companies trading securities on the Alternative Investment Market and for no other purpose.  No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent.  Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, ''Review of Interim Financial Information Performed by the Independent Auditor of the Entity'', issued by the Auditing Practices Board for use in the United Kingdom.  A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.  A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit.  Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the financial statements in the half-yearly financial report for the six months ended 30 June 2013 is not prepared, in all material respects, in accordance with the rules of the London Stock Exchange for companies trading securities on the Alternative Investment Market.



 

Emphasis of matter - going concern

In forming our conclusion, which is not modified, we have considered the adequacy of the disclosures made in note 1 of this half yearly financial report concerning the ability of the company to continue as a going concern.  The company has recognised a provision of £1.61 million against a trade receivables loan due from its principal customer, 2K Manufacturing Limited, and there is uncertainty over future revenues.  The company requires additional long term funding to meet its liabilities as they fall due for the foreseeable future.  The directors are in advanced stages of negotiation with potential lenders and expect to conclude funding arrangements on acceptable terms in the near future.  Should these negotiations not be successfully concluded the directors would have to seek alternative sources of finance in order to continue in operation.  These conditions indicate the existence of material uncertainties which may cast doubt over the company's ability to continue as a going concern.

The financial statements do not include the adjustments that would result if the company was unable to continue as a going concern.

 

BDO LLP

Chartered Accountants and Registered Auditors,  Birmingham.  27 September 2013

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127)



 

Interim Accounts for the Six Months ended 30 June 2013 (unaudited)

 

The financial information contained within these accounts has been prepared by the Directors who accept responsibility for the financial information presented below and confirm that it has been properly presented in accordance with applicable law. The interim financial statements were approved by the Board of Directors on 27 September 2013 and have been prepared on the basis of the accounting policies set out in note 1. The financial information covers the six months ended 30 June 2013.

 

Statement of Comprehensive Income (unaudited)

                                                                                                                                                                                            



Six months ended 30 June

2013

Six months ended

30 June

2012

Year ended

31 December

2012

 



£'000

£'000

£'000

Continuing operations

Note

Unaudited

Unaudited

Audited






Revenue


99

30

40
















Administrative expenses





Impairment of trade receivables loan

2

(1,608)

-

-

Impairment of intangible assets

2

-

-

(1,569)

Other


(613)

(800)

(1,814)






Total administrative expenses


(2,221)

(800)

(3,383)






Loss on operations


(2,126)

(770)

(3,343)






Finance income

3

-

-

1,239

Finance costs

3

(290)

(719)

(1,631)






Loss before income tax


(2,412)

(1,489)

(3,735)






Tax on loss on ordinary activities


-

-

-






Loss for the period from continuing





operations attributable to the equity shareholders of the company


(2,412)

(1,489)

(3,735)






Total comprehensive loss for the period attributable to equity shareholders of the company

 


(2,412)

(1,489)

(3,735)

Loss per share (pence)   










Basic and diluted loss per share

4

(0.30p)

(0.27p)

(0.62p)



Statement of Financial Position (unaudited)

 




Six months ended 30 June

2013

Six months ended

30 June

2012

Year ended

31 December

2012




£'000

£'000

£'000

Assets


Note

Unaudited

Unaudited

Audited

Non-Current Assets





Intangible assets


1,877

3,786

2,000

Plant & equipment


17

-

9

Available-for-sale financial assets


40

32

40

Trade and other receivables


-

-

1,558






Total non-current assets


1,934

3,818

3,607






Current assets





Trade and other receivables

5

186

1,851

244

Cash and cash equivalents


284

190

132






Total current assets


470

533

376






Total assets


2,404

5,859

3,983






Liabilities










Current liabilities





Trade and other payables


263

1,549

447

Borrowings

6

674

5,517

680

Total current liabilities


937

7,066

1,127






Non-Current current liabilities





Borrowings


1,841

-

1,841

Total Non-Current current liabilities


1,841

-

1,841






Total liabilities


2,778

7,066

2,968






Net assets


(374)

(1,207)

1,015






Equity attributable to the shareholders of the parent



Share capital

7

19,861

14,026

19,657

Share premium reserve


37,436

36,637

36,637

Warrant reserve


395

439

515

Available-for-sale reserve


(71)

(71)

(71)

Retained earnings


(57,995)

(52,238)

(55,723)






Total equity


(374)

(1,207)

1,015

 



Statement of Changes in Shareholders' Equity (unaudited)

 

 

Six months ended 30 June 2013

Share

Capital

Share

Premium

Warrant

Reserves

Available

-for-sale   

reserve

Retained

Earnings

Total



£'000

£'000

£'000

£'000

£'000

£'000

 

Loss for the period

 

 

-

 

 

-

 

 

-

 

 

-

 

 

(2,412)

 

 

(2,412)

 

Total comprehensive loss for the period


-

-


-

(2,412)

(2,412)

 

Issue of share capital


 

204

 

799

 

-

 

-

 

-

 

1,003









Warrants lapsed


-

-

(120)

-

120

-









Losses on liabilities settled in shares


-

-

-

-

20

20









Movement for the period


204

799

(120)

-

(664)

219









Balance at 1 January 2013


19,657

36,637

515

(71)

(55,723)

1,015









Balance at 30 June 2013


19,861

37,436

395

(71)

(57,995)

(374)

 

 

 

 

Six months ended 30 June 2012

Share

Capital

Share

Premium

Warrant

Reserves

Available

-for-sale

Reserve

Retained

Earnings

Total



£'000

£'000

£'000

£'000

£'000

£'000

 

Loss for the period

 

-

 

-

 

-

 

-

 

(1,489)

 

(1,489)

Total comprehensive loss for the period

-

-

-

-

(1,489)

(1,489)






















Options granted


-

 13

-

-

13






















Movement for the period

-

-

13

-

(1,489)

(1,476)








Balance at 1 January 2012

14,026

36,637

426

(71)

(50,749)

269








Balance at 30 June 2012

14,026

36,637

439

(71)

(52,238)

(1,207)

 

 



 

Statement of Changes in Shareholders' Equity (unaudited)

 

Year ended 31 December 2012

Share

Capital

Share

Premium

Warrant

Reserves

Available

-for-sale

reserve

Retained

Earnings

Total



£'000

£'000

£'000

£'000

£'000

£'000

 

Loss for the year

 

 

-

 

-

 

-

 

-

 

(3,735)

 

(3,735)








Total comprehensive loss for the period

-

-

-

-

(3,735)

(3,735)








Issue of share capital

5,631

-

-

-

(1,239)

4,392








Warrants and options granted

-

-

89

-

-

89















Movement for the year

5,631

-

89

-

(4,974)

746








Balance at 1 January 2012

14,026

36,637

426

(71)

(50,749)

269








Balance at 31 December 2012

19,657

36,637

515

(71)

(55,723)

1,015















 



 

Statement of Cash Flows (unaudited)

 

Six months ended 30 June 2013

 



Six months ended 30 June

2013

Six months ended

30 June

2012

Year ended

31 December

2012



£'000

£'000

£'000



Unaudited

Unaudited

Audited

Continuing Activities





Loss before tax


(2,412)

(1,489)

(3,735)

Adjusted for:





Amortisation of intangible assets


123

217

434

Depreciation of plant and machinery


2

-

-

Impairment of intangible assets


-

-

1,569

Accrued interest cost


66

181

314

Share options granted


-

13

87

Warrants granted


-

-

2

(Gains)/losses on liabilities settled in shares


20

-

(1,239)

Impairment of available-for-sale assets


-

-

12

Amortisation of debt issue costs


145

518

1,152

Provision for trade receivable loan


1,608

-

-

Other


-

-

(5)






Adjusted loss from operations


(448)

(560)

(1,409)






Decrease/(increase) in trade and other receivables


8

(119)

(70)

Decrease  in trade and other payables


(181)

(111)

(240)






Cash used by operations


(578)

(790)

(1,719)






Net cash outflow from operations


(578)

(790)

(1,719)






Cash flows from investing activities





Purchase of available-for-sale assets


-

-

(20)

Purchase of plant and machinery


(10)

-

(9)






Net cash used in investing activities


(10)

-

(29)






Cash flows from financing activities





Issue of equity share capital


693

-

-

Par reduction buy back


(6)

-

-

Inception of loans


200

750

1,650

Share issue costs


(34)

-

-

Interest paid on loans


(70)

-

-






Net increase in cash from financing activities


783

750

1,650






Net increase/(decrease) in cash


152

(40)

(98)

Cash and cash equivalents at beginning of period

132

230

230






Cash and cash equivalents at end of period


284

190

132

 

 

 

 

 

 

 

Notes to the comprehensive financial statements

 

1. Accounting policies

 

Basis of accounting

 

The principal accounting policies adopted in the preparation of the interim financial statements are set out below.

 

In the preparation of this Interim Report there have been no changes to the accounting policies applied and disclosed in the annual financial statements for the year ended 31 December 2012. Furthermore the Company does not expect there to be any changes to the accounting policies applicable at 31 December 2013.

 

The interim report has been prepared in accordance with the recognition and measurement principles that are consistent with International Financial Reporting Standards (IFRSs) as endorsed by the European Union using accounting policies that are expected to be applied for the financial year ended 31 December 2013.

 

The financial information in this interim report does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006.

 

The financial information for the year ended 31 December 2012 does not constitute the full statutory accounts for that period, but is derived from those accounts.

 

The Annual Report and Financial Statements for 2012 have been filed with the Registrar of Companies.  The Independent Auditors' Report on the Annual Report and Financial Statements for 2012 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under Section 498(2) or 498(3) of the Companies Act 2006.

 

As at 30th June 2013, the company held 40% of the voting rights of Delta Waste Management Limited, which meets the definition of an associated undertaking. Delta Waste Management Limited has not been accounted for as an associated undertaking on the basis that its results are not material to the company.

 

Going concern

 

The company's business activities, together with the factors likely to affect its future development, performance and position are set out in the Reviews. The financial position of the company, its borrowings and borrowing facilities are described in the Financial Review.

 

The progress towards profitability is challenging and the company has reported another operating loss for the half year. Whilst there are a number of uncertainties, the directors consider that the outlook remains promising. The directors have instituted measures to manage cash resources and secure appropriate levels of finance. At the date of approving this Interim Report the company's debt amounts to £2.515 million.

The company has recognised a provision of £1.61 million against a trade receivables loan due from 2K Manufacturing Limited and there is uncertainty over future revenues.  The company requires additional funding to meet its liabilities as they fall due for the foreseeable future.

The directors have prepared forecasts that indicate that the company has adequate resources to meet commitments as they fall due for the remainder of 2013.  The directors, at the date of approval of these financial statements, have no reason to believe that the above lender will not continue to provide financial support.  Furthermore, the company is in advanced discussions with lenders to provide finances on acceptable terms to cover the company's normal overheads for the foreseeable future. 

These conditions indicate the existence of a material uncertainty which may cast significant doubt upon the entity's ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business.

After making enquiries and considering the uncertainties described above the directors consider that the company will have adequate resources to continue in operational existence for the foreseeable future.  Accordingly, they continue to adopt the going concern basis in preparing the annual report and accounts.

The financial statements do not include any adjustments that would result from the basis of preparation being inappropriate.

2. Impairments

 


Six months ended 30 June

2013

Six months ended

30 June

2012

Year ended

31 December

2012


£'000

£'000

£'000


Unaudited

Unaudited

Audited





Provision against trade receivables loan

1,608

-

-

Impairment of intangible assets

-

-

1,569





Total impairment

1,608

-

1,569

 

The amounts which became due for payment from 2K Manufacturing at the beginning of July 2013 have not been paid.  Due to non-payment a provision of £1,608,000 has been made against the trade receivables loan.

 

As part of the on-going review of the company's assets, the Board recognised that commercial production, utilising the PIM process, had not achieved forecasted levels as at 31 December 2012.  Discounted Cash Flow forecasts had been prepared applying a discount rate of 15% and intangible assets were written down to their recoverable value.  The recoverable value of the assets was calculated as its value in use.

 

 

3. Finance


Six months ended 30 June

2013

Six months ended

30 June

2012

Year ended

31 December

2012


£'000

£'000

£'000


Unaudited

Unaudited

Audited

Finance income

 




Gain on liabilities settled in shares

-

-

1,239





Total finance income

-

-

1,239





Finance costs

 




Loan interest

66

181

314

Stock lending costs

161

518

1,229

Amortisation of finance costs

20

20

88

Capital reorganisation and open offer costs

43







Total finance costs

290

719

1,631



4. Earnings per share

 

From continuing operations


Six months ended 30 June

2013

Six months ended

30 June

2012

Year ended

31 December

2012


£'000

£'000

£'000


Unaudited

Unaudited

Audited





Numerator




Loss used for calculation of basic and diluted EPS

(2,412)

(1,489)

(3,735)

 


Six months ended 30 June

2013

Six months ended

30 June

2012

Year ended

31 December

2012


Number

number

Number


Unaudited

Unaudited

Audited

Denominator




Weighted average number of shares used in basic and diluted EPS

814,271,695

 

561,044,179

606,092,565

                                                                                       

At 30 June 2013, there were 38,491,000 (31 December 2012: 38,979,185) (H1, 2011: 34,879,185) of potentially issuable shares which are anti-dilutive.

 

 

 

5. Trade and other receivables


30 June 2013

30 June 2012

31 December 2012

 


£'000

£'000

£'000

 


Unaudited

Unaudited

Audited

 





 

Current - due within one year




Trade receivables

124

-

12

Trade receivables loan

-

-

150

VAT recoverable

16

42

29

Other debtors and prepayments

46

71

53

Accrued income

-

1,738

-

Total

186

1,851

244





Non-current - due over one year




Trade receivables loan

-

-

1,558





Total

186

-

1,802

 

All receivable balances are in sterling.  A provision of £1,608,000 has been made against the trade receivable loan due to non-payment of the current outstanding balance due.

 



 

 

6. Borrowings


30 June 2013

30 June 2012

31 December 2012

 


£'000

£'000

£'000

 


Unaudited

Unaudited

Audited

 





 

Current - due within one year




Short term borrowings

674

5,517

680





Long term - due more than one year




Long term borrowings

1,841

-

1,841





Total borrowings

2,515

5,517

2,521

 

The carrying value (which is a reasonable approximation to fair value) of borrowings analysed by lender is as follows:


30 June 2013

30 June 2012

31 December 2012

 


£'000

£'000

£'000

 


Unaudited

Unaudited

Audited

 





 

Oxford Capital - current

674

5,517

680

                              long term

1,841

-

1,841





Total borrowings

2,515

5,517

2,521

                                                                                                                                                              

 

Cash loans advanced during the period totalled £200,000 (31 December 2012: £1,650,000) (H1: £750,000). 

 

Long term borrowings of £1,841,369 are secured five year loan notes and carry an interest rate of 2% above the Bank of England base rate. The balance of loans outstanding carry interest at 7.5%.

 

The company has no other borrowing facilities.

 

7. Share capital

 

Authorised share capital

 


30 June 2013

30 June 2012

31 December 2012


£'000

£'000

£'000

1,000,000,000 New Ordinary shares of 0.25 pence

and 1,000,000 Deferred shares of 2.25 pence

 

25,000

 

20,000

 

25,000

 

The authorised share capital was increased at the AGM held on 12 September 2012 under Special Business Resolution 6 "To increase the authorised share capital of the Company from a nominal value of £20,000,000 to a nominal value of £25,000,000"

 

At a General Meeting held on 30 April 2013, resolutions were passed to consolidate the entire issued and authorised share capital of 2.5p per share Ordinary Shares into New Ordinary shares of 0.25p per share and Deferred Shares of 2.25p per share.

 

The Deferred Shares do not entitle holders to receive any dividend or other distribution or to attend or vote at any general meeting of the company.

 



 

Allotted, called up and fully paid

 


30 June

2013

30 June

2012

31 December

2012


No

£'000

No

£'000

No

£'000

Ordinary share capital  brought forward

 

786,286,107

 

19,657

 

561,044,179

 

14,026

 

561,044,179

 

14,026

Issue for cash

55,466,133

139

-

-

-

-

Effect of share consolidation

(188,507)

(5)

-

-

-

-

Settlement of debts

28,000,000

70

-


225,241,928

5,631









869,563,733

19,861

561,044,179

14,026

786,286,107

19,657

Conditional Open Offer for new Ordinary Shares

On 30 April 2013, the Company confirmed that it had received valid applications for a total of 55,466,133 new ordinary shares under the Open Offer ("the New Ordinary Shares") which closed for acceptance at 11.00 on Monday 29 April 2013, raising a total of £693,327 for the Company and representing approximately 67 per cent of the amount available for acceptance under the Open Offer.

Of the shares applied for, 30,609,976 shares represented individual shareholders' basic entitlements and the balance of 24,855,157 shares were shares applied for by shareholders in excess of their basic entitlements.

General Meeting held on 30 April 2013

All resolutions were passed to give the directors authority to issue the New Ordinary Shares; to consolidate the entire issued and authorised share capital into new ordinary shares of 0.25p per share; and to adopt new Articles of Association. Dealings in the New Ordinary Shares began on commencement of business on Wednesday 1 May 2013.

Debt conversion

At the General Meeting held on 30 April 2013, the Company confirmed that it had agreed with Oxford Capital Limited ("Oxcap") that £350,000 outstanding debt in the Company owned by Oxcap was satisfied in full by the issue of a further 28m shares at the Open Offer price of 1.25p per share. Following this repayment, the balance of debt owned by Oxcap (including accrued interest) was approximately £2,406,250.  As a result, Oxcap owned 253,241,928 shares in the Company representing approximately 29.12 per cent of the issued share capital following completion of the Open Offer and this debt conversion. Application was made for the new ordinary shares arising out of this exercise to be admitted to AIM.

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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