8PG.L Regulatory News (8PG)

15 Sep 2005 10:45

Legendary Investments PLC15 September 2005 LEGENDARY INVESTMENTS PLC (LEG) PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2005 Chief EXECUTIVE's STATEMENT REVIEW OF ACTIVITIES In the year under review, your Company substantially completed the consolidationof its portfolio. Conservative criteria were applied in order to ensure that theportfolio valuation reflected market conditions. After considerable effort, bothto realise value for the unlisted investments and to determine the likelihood ofrealising value at some future point, the Directors decided that it was prudentto write off all unlisted investments. These investments were primarily made inthe last dot.com boom era and it is highly unlikely that any value will berealised from them. The total associated write off amounted to £904,000.Following the write offs, your Company's investments are now comprised of listedsecurities. In addition, mark to market markdowns of £389,000 were made on listedinvestments. Of these markdowns, and as noted in last year's annual report (postbalance sheet event) and the last interim statement, £387,500 of the markdownwas due to Legends Surf Shop Plc being put into administration. In total, writeoffs and markdowns amounted to £1,293,000. Despite the above write offs and markdowns, net losses on investments made byyour Company amounted to only £873,000. This is the direct result of the successof your Company's short and medium term investments and treasury managementactivities. For the year under review these investments and activities generatednet profits of £420,000. These activities are ongoing. In addition, your Company's cash and current asset investments rose from£1,219,000 as at the previous year end to £2,798,000 as at the current year end.Current asset investments comprise short and medium term positions in variousfully listed investments. These assets are readily realisable into cash. Theincrease in cash and current asset investments increases the ability of yourCompany to be able to take advantage of appropriate opportunities when and asthey arise. Your Company's drive for efficiency continued. Administrative costs for the yearwere reduced from £182,000 for the previous year (excluding the write back ofaccruals) to £149,000 for the current year. This reduction of 18% follows onfrom a 53% reduction achieved last year and the 26% reduction achieved the yearbefore. The Directors believe that the current level of administrative costs isboth efficient and maintainable. Overall, for the year under review, your Company made losses of £1,094,000compared with losses of £1,052,000 last year. OUTLOOK Your Company now has a substantially better quality investment portfolio,significantly more liquidity and more efficient operations. The write off of allthe unlisted investments, while a difficult decision, was necessary. It draws aline under investments made during the last dot.com boom and allows sharperfocus on new investments. The increased liquidity of your Company's portfolio better places it to takeadvantage of future investment opportunities. Short and medium term investmentsand treasury management activities have proved profitable and are ongoing. With the portfolio consolidation substantially complete, the success of theshort and medium term investments and treasury management activities and theadministrative costs pared down to an efficient level, the Directors look to thefuture with confidence. Shami AhmedChief Executive12 September 2005 Registered Office:2nd FloorBerkeley Square HouseBerkeley SquareLondon W1J 6BDFor further information please contact: Zafar Karim Legendary Investments 020 7887 1338 Sarah Wharry Seymour Pierce 020 7107 8000 PROFIT AND LOSS ACCOUNTfor the year ended 31 March 2005 Note 2005 2004 £'000 £'000Administrative expenses (149) (51)Net losses on investments (873) (979) Operating loss 2 (1,022) (1,030)Interest receivable 8 3Interest payable (80) (25) Loss on ordinary activities before taxation (1,094) (1,052)Taxation 4 - - Retained loss for the financial period 13 (1,094) (1,052) Loss per share 5 (0.2p) (0.2p)- basic and fully diluted A separate statement of recognised gains and losses has not been prepared as theCompany has no recognised gains or losses in the current or prior period otherthan the losses for the periods. A separate note of historical cost profits and losses has not been prepared asthe practice of marking to market is not considered to be a departure from thehistorical cost convention. Accordingly, the figures presented above areprepared on the historical cost basis. All activities are continuing. BALANCE SHEETfor the year ended 31 March 2005 2005 2004 Notes £'000 £'000 £'000 £'000Fixed assets 6 - -Tangible assetsFixed asset investments 7 6 1,357 6 1,357Current assets 8 26 27DebtorsListed investments 9 2,371 807Cash at bank and in hand 430 412 2,827 1,246CREDITORS: amounts falling duewithin 10 (2,363) (1,039)one year Net current ASSETS 464 207 NET ASSETS 470 1,564 Capital and reservesCalled up share capital 11 628 628Share premium account 12 8,270 8,270Profit and loss account - deficit 13 (8,428) (7,334) Equity Shareholders' funds 14 470 1,564 The financial statements were approved by the Board on 12 September 2005 Shami AhmedChairman CASH FLOW STATEMENTfor the year ended 31 March 2005 Notes £'000 2005 £'000 2004 £'000 £'000Net cash outflow from operatingactivities 15 (148) (127)Returns on investments and servicingof financeInterest received 8 3Interest paid (80) (25) (72) (22)Capital expenditure and financialinvestmentPayments to acquire fixed assetinvestments - (10)Payments to acquire current assetinvestments (20,615) (30,654)Receipts from fixed assets 58 481investmentsReceipts from current asset 21,227 30,085investments Net cash INFLOW/(outflow) frominvesting 670 (98)activities Net cash inflow/ (outflow) beforefinancing 450 (247)Financing - 485Issue of sharesDirector's loan (435) 410 (435) 895 INCREASE in cash 16 15 648 1 Accounting policies Accounting conventionThe accounts have been prepared in accordance with applicable accountingstandards and under the historical cost convention, modified by the revaluationof listed investments. Tangible fixed assets and depreciationTangible fixed assets are stated at cost less depreciation. Depreciation isprovided at rates calculated to write off the cost less the estimated residualvalue of each asset over its expected useful life, as follows: Office equipment, furniture and fittings 3 - 4 years Unlisted fixed asset investmentsUnlisted fixed asset investments are stated at the lower of cost, includingacquisition costs, and their estimated realisable value. Impairment of asset valuesWhere asset values are impaired, they are written down to their economic valueto the business. Listed investmentsAll traded investments, whether classed as fixed or current asset investments,are marked to market and these are stated at their fair value at the balancesheet date. This policy results in the profit and loss account includingunrealised profits, which is contrary to the Companies Act 1985. This departurefrom the Companies Act 1985 is required for the financial statements to show atrue and fair view. Ownership of investments is recognised when the Companytakes on all the risks and obligations of ownership, irrespective of legalownership. Financial instrumentsWhere financial instruments, which serve to transfer to the Companysubstantially all of the risks and rewards of ownership of the underlyingassets, are acquired the Company immediately recognises the underlying asset andthe associated liability. Any subsequent gains and losses are recognised as theyoccur. Deferred taxationDeferred tax is recognised in respect of differences between the Group's taxableprofits and its results as stated in the financial statements that haveoriginated but not reversed at the balance sheet date. Deferred tax assets are only recognised where there is an expectation that theywill result in a reduction in corporation tax payments in the foreseeablefuture. Deferred tax is measured at the average tax rates that are expected to apply inthe periods in which timing differences are expected to reverse, based on taxrates and laws that have been enacted or substantially enacted by the balancesheet date. Deferred tax is measured on a non-discounted basis. Foreign currency translationMonetary assets and liabilities denominated in foreign currencies are translatedinto sterling at the rates of exchange ruling at the accounting date.Transactions in foreign currencies are recorded at the rate ruling at the dateof the transaction. All differences are taken to profit and loss account. 2 OPERATING LOSS 2005 2004 £'000 £'000 Operating loss for the year ended is stated after charging/(crediting): Auditors' remuneration 14 12- statutory auditTax services 7 6- compliance servicesOther services 7 6- company secretarial services 28 24Depreciation of tangible fixed assets - 3Write-back of excessive accruals relating to administrationcosts - (130)Unrealised losses on marking to market 520 212Unrealised losses on write downs of unlisted investments 904 665Realised (gain)/loss on the disposal of investments (528) 102 3 DIRECTORS 2005 2004 Number Number Number of employees 2 2The average number of employees, including directors, duringthe period £'000 £'000Directors' emoluments 47 49Aggregate emoluments Emoluments of highest paid director: 35 35Remuneration The Company was charged salary related costs of £27,000 (2004 : £26,000) inrespect of services provided to the Company by a company controlled by S Ahmed. 4 TAX ON PROFIT ON ORDINARY ACTIVITIES 2005 2004 £'000 £'000Analysis of charge in the period:Current tax - -Deferred tax - - - - Factors affecting tax charge for period:The tax assessed for the period is lower than the standardrate of corporation tax in the UK (30%). The differences areexplained below:Loss on ordinary activities before tax (1,094) (1,052) Loss on ordinary activities multiplied by standard rate ofcorporation tax in the UK 30% (2004: 30%) (328) (316)Expenses not deductible for tax purposes 265 234Income not taxable - (33)Tax losses carried forward 63 115 Current tax charge for period - - The reported losses include losses on fixed asset investments which are onlyrelievable against future capital profits. As at 31 March 2005 the Company had corporation tax revenue losses ofapproximately £5.4 million available to carry forward against future income. Nodeferred tax asset is recognised in respect of these losses due to theuncertainty as to the utilisation of the losses in the foreseeable future. Future tax charges will be dependent on the split of profits for tax purposes asbetween revenue and capital items, and the utilisation of losses incurred todate. 2005 20045 LOSS PER ORDINARY SHARE £'000 £'000 Attributable loss (£'000) (1,094) (1,052) Average number of ordinary shares in issue ('000) 627,667 534,679 Average number of ordinary shares in issue and over whichoptions have been granted ('000) 627,667 534,679 Basic loss per share (pence) 0.2p 0.2p Fully diluted loss per share (pence) 0.2p 0.2p The fully diluted loss per share takes account of outstanding share options andwarrants, to the extent that they are dilutative. 6 TANGIBLE ASSETS Office equipment, furniture & fittings £'000COST 12At 31 March 2004 and 31 March 2005 DEPRECIATION 12At 31 March 2004 and 31 March 2005 NET BOOK VALUE -At 31 March 2005 and 31 March 2004 7 INVESTMENTS Unlisted investments Listed TotalCOST/VALUE at cost investments at £'000 £'000 valuation £'000 At 31 March 2004 2,031 453 2,484Additions in the year - - -Disposals - (58) (58)Mark to market adjustment - (389) (389) At 31 March 2005 2,031 6 2,037 PROVISIONSAt 31 March 2004 1,127 - 1,127Movement in the year 904 - 904 At 31 March 2005 2,031 - 2,031 NET BOOK VALUEAt 31 March 2005 - 6 6 At 31 March 2004 904 453 1,357 All listed investments are listed on a recognised stock exchange. The directorshave provided against the cost of the unlisted investments as they believe thecurrent position best reflects their net realisable values. 8 DEBTORS 2005 2004 £'000 £'000 Trade debtors 21 -Other debtors - 27Prepayments and accrued income 5 - 26 27 9 CURRENT ASSET INVESTMENTS 2005 2004LISTED INVESTMENTS £'000 £'000 Market value as at 31 March 2005 2,371 807 10 CREDITORS: amount falling due within one year 2005 2004 £'000 £'000 Bank overdraft 3 -Trade creditors 2,277 498Other creditors 15 21Accruals 67 84Directors' loan (note 19) 1 436 2,363 1,039 11 SHARE CAPITAL AND SHARE OPTIONS 2005 2004 £'000 £'000 AUTHORISED 3,000 3,0003,000,000,000 ordinary shares of £0.001 each ALLOTTED, CALLED UP AND FULLY PAID627,667,198 ordinary shares of £0.001 each 628 628 Share options As at 31 March 2005 200,000,000 (2004 : 125,000,000) unapproved options remainedin issue. No approved share options have been granted. The Company has issued warrants in respect of an aggregate of 14,450,000 (2004 :14,450,000) Ordinary Shares. 12 SHARE PREMIUM ACCOUNT 2005 2004 £'000 £'000 At 31 March 2004 8,270 7,881Premium on shares issued on 22 March 2005 - 406Expenses of issue - (17) At 31 March 2005 8,270 8,270 13 PROFIT AND LOSS ACCOUNT 2005 2004 £'000 £'000 At 1 April 2004 (7,334) (6,282)Retained loss for the year (1,094) (1,052) Retained loss carried forward (8,428) (7,334) 14 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS 2005 2004 £'000 £'000 Opening shareholders' funds 1,564 2,131Loss for the financial year (1,094) (1,052)Received from share issue - 485 Closing shareholders' funds 470 1,564 15 RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOWFROM OPERATING ACTIVITIES 2005 2004 £'000 £'000 Operating loss (1,022) (1,030)Depreciation of tangible fixed assets - 3Gains on investments 896 971Decrease in debtors 1 5Decrease in creditors (23) (76) Net cash outflow from operating activities (148) (127) 16 ANALYSIS OF NET (DEBT)/ At 31 March 2004 Cash At 31 March 2005FUNDS flows £'000 £'000 £'000 Cash at bank and in hand 412 18 430Bank overdraft - (3) (3) 412 15 427Director's loan (436) 435 (1) (24) 450 426 17 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT £'000 Increase in cash in the year 15Cash outflow from financing activities 435Net debt at 31 March 2004 (24) Net (debt)/ funds at 31 March 2005 426 18 Financial instruments and currency risk Financial instruments The Company uses financial instruments in order to minimise the initial monetaryinvestment required and, for options, to reduce the overall exposure to loss ofthe Company. The only financial instruments that the Company uses are asfollows: (a) options to acquire equity shares in other entities. As atthe year end, the carrying value of options held was £Nil. (b) "contracts for differences" whereby the Company acquires therights and obligations of ownership of shares, but does not legally own theshares. As at the year end, the Company had extant contracts in respect ofshares having a market value of £2,219,000. The related obligation as at theyear end was £2,275,000. Short term debtors and creditors Short term debtors and creditors have been excluded from all the followingdisclosures other than currency risk disclosure.Interest rate risk Floating rate financial liabilities of £3,000 (2004: £nil) bear interest atrates based on LIBOR plus 1-1.5%. Cash at bank earns interest at floating ratesbased on LIBOR. Borrowing facilities At the year end the Company had no overdraft facility (2004: £nil). Currency risk During the year, the Company had no exposure to currency risk. 19 RELATED PARTY TRANSACTIONS During the year the Company incurred expenditure on behalf of the ChiefExecutive and received funding from the Chief Executive. As at the balance sheetdate, the amount lent by the Chief Executive to the Company amounted to £870 (2004 : £435,750). This sum is interest free and there are no fixed terms forrepayment. The maximum balances outstanding during the year were £Nil owed bythe Chief Executive to the Company and £435,750 owed to the Chief Executive bythe Company. This information is provided by RNS The company news service from the London Stock Exchange