1 Jul 2008 16:57
For immediate release: CREON CORPORATION PLC ("Creon" or the "Company") AUDITED RESULTS FOR THE YEAR ENDED 31 JANUARY 2008
Creon Corporation Plc (AIM: CRO), today announces its final results for the year ended 31 January 2008.
Headline Points
* Deterioration of housing market has led to a significant reduction of loans made in the period - down to ‚£1.05 million from ‚£1.99 million for year before; * Turnover down to ‚£401,862 from ‚£806,882 for year before; * Full year loss of ‚£122,390, compared to a post tax profit of ‚£265,295 for last year
Post Period
* One new mezzanine loan for ‚£250,000 made in current financial year to date;
Announced today
* Proposed acquisition of Pinnacle Plus Limited.
Jonathan Freeman, Director of Creon, commented:
"Whilst the Directors continue to believe that in the long term there is still a good opportunity in the market for the provision of equity finance for small and medium sized residential developers, the Board recognises the need to re-appraise a part of Creon's business model in order to make better use of its available assets. Going forward, the Directors' believe the acquisition of Pinnacle provides the Company with an opportunity to make better use of the resources it has at its disposal whilst continuing to build on the Company's existing reputation as a mezzanine provider. The Board hopes this will result in a fuller utilisation of the Company's assets and an improved financial performance in the next financial year as Pinnacle begins to contribute to the Company's profits."
-Ends-
Copies of Creon's audited report and accounts for the year ended 31 January 2008 are today being sent to shareholders. Further copies will be available from the Company's registered office, 11 Grosvenor Crescent, London SW1X 7EE.
For further information please contact:
Creon Corporation Plc Jonathan Freeman +44 (0)20 7752 0215
Daniel Stewart & Company Plc Oliver Rigby +44 (0)207 776 6550
GTH Media Relations Toby Hall +44 (0)20 7153 8039
Christian Pickel +44 (0)20 7153 8036
CHAIRMAN'S STATEMENT
I am pleased to present the annual report to shareholders for the year ended 31 January 2008. The last financial year has been a challenging one for Creon Corporation Plc ("Creon" or the "Company") which has been significantly affected by the slowdown in the housing market. As a consequence, there were fewer suitable projects available for Creon to finance during the year resulting in much of the Company's cash balance being held on deposit rather than being invested in projects with more attractive returns. In addition, fee charges on loan extensions have been reviewed in the light of the deteriorating housing market with a resultant reduction of accrued revenue. However, I am pleased to report that, since the end of the financial year under review, we have completed one new mezzanine loan to a UK developer of ‚£250,000, the benefits of which are expected in the current financial year.
Turnover for the year under review was ‚£401,862, down from ‚£806,882 in the previous year, due to the lower level of invested funds. The total amount of loans advanced during the year under review was ‚£1.05 million, compared to ‚£ 1.99 million in the previous year. Full year loss was ‚£122,390, compared to a post tax profit of ‚£265,295 last year, equating to a loss per share of 1.22 pence (EPS of 2.64 pence the previous year). The full year loss was higher than expected due to the Directors decision to make prudent provisions against certain of the Company's accrued loan fees totalling ‚£250,685, which are included in administration expenses. Creon had net cash of ‚£481,749 at the year end (2007: ‚£942,234). Given the slowdown in the property sector, the Directors believe that it was appropriate to be cautious during most of the last financial year and feel justified in tightening the Company's requirements with regard to security and the loan to value ratios, even though this meant that a large part of the Company's working capital remained uninvested during the period under review. The Directors expect to continue to operate within these highly cautious loan parameters in the short term and until conditions in the property sector begin to improve.
Creon's focus to date has been on providing mezzanine finance for UK residential property development. The Company's business is based upon the experience of the Directors in managing a quoted company and upon the experience of the members of Creon Equity LLP in the residential property sector. The Board remains committed over the long term to continue to provide mezzanine finance that can provide an excellent return with an acceptable risk profile. The Directors continue to believe that there is a good opportunity in the market for the provision of equity finance for small and medium sized residential developers.
However, the Board recognises that, given the well publicised general slowdown in the economy, and more specifically a reduction in the availability of credit coupled with static or falling house prices, it should re-appraise a part of Creon's business model in order to make better use of its available assets. Towards the end of the last financial year, the Directors came to the conclusion that there are unlikely to be sufficient property related projects over the short to medium term which comply with the Company's tighter loan to value and security parameters to enable the Company to fully invest its cash resources. Consequently the Directors, having consulted a number of shareholders, began to seek additional investment opportunities in addition to the existing provision of mezzanine finance for residential property development.
To this end, the Directors are pleased to announce today the conditional acquisition of Pinnacle Plus Limited ("Pinnacle") for a total aggregate consideration of ‚£1.15 million, payable by the issue of new ordinary shares in Creon ("Acquisition"), conditional upon the approval of the majority of Creon's shareholders at Creon's Annual General Meeting, to be held at the registered office of Creon on 24 July 2008 ("AGM"), further details of which are set out in this report.
Background on Creon
Creon was incorporated on 27 August 2004 and its ordinary shares were admitted to trading on the AIM market of the London Stock Exchange on 25 November 2004. The Company's focus since incorporation has been to provide mezzanine finance to residential property developers in the UK on the back of an appreciating housing market. The Company finances projects that are chosen by the Board on the basis of advice received from the members of Creon Equity LLP who have experience of the residential property development sector.
Since its incorporation, Creon has raised a total of ‚£3.25 million (excluding issue costs) in equity finance (no new equity funds were raised during the year) and as at the year end, Creon had an unused ‚£1.0 million debt facility with Bank of Scotland.
Creon's operations
Creon was set up in a way that aims to keep operating costs to a minimum in order to maximise the funds available for lending. In order to ensure that there is a wide spread of financing opportunities available to the Company, the Company entered into a consultancy agreement with Creon Equity LLP (the "Manager") which provides the Directors with specialist advice regarding the provision of finance to developers. In summary the Manager:
(i) Identifies, evaluates, negotiates and processes suitable opportunities for Creon to provide mezzanine finance to small and medium sized residential property developers;
(ii) Provides the Creon Board with sufficient information on suitable opportunities to enable the Directors to make informed decisions on financing opportunities;
(iii) Provides all necessary documentation to the Board in respect of each project:
(iv) Manages the related transaction and keeps under review the underlying property developments to ensure that Creon is repaid, together with its agreed fee, on time and in full; and
(v) Provides Creon, in a timely manner, appropriate accounting records in respect of each project undertaken.
All decisions to provide mezzanine finance to property developers are based upon recommendations made by the Manager but there is no obligation upon the Directors to accept such recommendations.
The partners of Creon Equity LLP are as follows:
Jonathan Lavy FCA
Jonathan Lavy is a Chartered Accountant with many years experience in professional practice. He has subsequently been involved in the property industry as a principal over the last 25 years and has built up extensive experience of commercial property investment, debt and equity financing and residential property development. He has invested in property as principal, managed property investment consortia and has been responsible for evaluating opportunities, related financial modeling, sensitivity and risk analysis together with management of refurbishment and renovation projects.
Roger Holbeche FRICS
Roger Holbeche is a Chartered Surveyor and has been involved in residential and commercial property development since qualifying. He was co-founder, chairman and chief executive of The Embassy Property Group plc which was primarily involved in commercial property development and investment, construction and house building. Roger had specific responsibility for promoting and coordinating strategy for the Embassy Property Group plc as well as for managing the development subsidiary and commercial development financing. He has also subsequently been responsible for investing in and project managing warehouse, office and residential development schemes where he had responsibility for negotiating the purchase of sites and subsequent sale of the developments.
Loans
As at 31 January 2008, the Company had five outstanding loans, four for ongoing development projects totalling ‚£1,649,000, and one from a completed development project which has been partially sold with an outstanding balance owing of ‚£ 582,000.
The geographic spread of the property developments are in Suffolk (‚£624,000), Hampshire (‚£275,000) West Midlands (‚£450,000) and Yorkshire (‚£300,000). The partially realised loan is also based in the West Midlands.
During the course of the year to 31 January 2008, a total of ‚£677,000 of capital was repaid to Creon from two developments. These sums included the total repayment of one loan for ‚£500,000 and the partial repayment of a loan in the sum of ‚£177,000. In addition, Creon received fees on repaid loans totalling ‚£262,500 during the year.
Creon provided three new loans during the year to 31 January 2008 totalling ‚£ 1,025,000, which are due to be repaid during the financial year ending 31 January 2009.
As at 31 January 2008, Creon had two loans that had passed their original repayment date. However, they still remain profitable projects. One of these loans has since been re-repaid, except for an outstanding ‚£25,000 bank retention, by Creon taking ownership of the two unsold properties in the development.
The property which is the subject of the second overdue loan has become the subject of a legal dispute involving the current property owner, the previous owner, the local council and its planning officers. The Board understands that, before the property can be sold and Creon can be repaid, there needs to be at least a partial resolution of the disputes. Despite these problems, the Board believes that the value of the property is still sufficient to repay Creon together with a proportion of the accrued fees. The Board has not accrued any fees in respect of this loan since 31 January 2007 and has taken the prudent step of writing down some of the fees previously accrued, resulting in the larger than anticipated net administration costs shown in the profit and loss account for the year ended 31 January 2008.
In summary, therefore, as at 31 January 2008, Creon had five loans outstanding, three of which are continuing to accrue fees and two of which the directors deemed to be "non-performing". In addition, a further new mezzanine loan of ‚£ 250,000 has been provided shortly after the end of the year under review. We do not anticipate making any further new mezzanine property loans in the short term until there are signs of stabilisation in the property sector. We are now concentrating our efforts on realising the one non-performing loans and monitoring the four performing loans to ensure their timely repayment.
Pinnacle acquisition
Following an extensive review of a number of investment opportunities, the Directors have concluded that the acquisition of Pinnacle represents a good opportunity to better utilise a proportion of Creon's asset base in order to generate significant return for shareholders.
Pinnacle designs and manufactures products for companies operating ground support equipment ("GSE") at airports to enable them to effectively manage their equipment, improve operational efficiency and reduce costs. The business of Pinnacle was founded by its CEO, Simon Fowler in 2003 and has worked with leading GSE operators to design and develop its proprietary Vehicle Telematics Information System ("VTIS"). VTIS enables the customer to receive a range of key information, including the performance, status and location of the specific GSE. This information is transmitted from the relevant piece of GSE to Pinnacle's central servers via a wireless connection where it can be accessed by customers either through their own enterprise systems or via a web-based browser.
Pinnacle has a number of long term contracts with major ramp handling operators and GSE maintainers in Europe and the Far East including KLM, American Airlines, Air France, Martinair and Menzies. VTIS is currently installed on GSE equipment at leading airports including Heathrow, Schiphol airport and Chek Lap Kok airport in Hong Kong. Today, Pinnacle has installed a significant number of units and in addition has other units contracted to be installed and several proposals currently outstanding with customers. The Directors' believe that the Pinnacle's business has significant potential to increase its revenues and that by the end of year 2010, it should materially add to Creon's profits.
As announced today, Creon has conditionally agreed to acquire the entire issued and to be issued share capital of Pinnacle for an aggregate consideration of up to ‚£1.15 million ("Total Consideration"), to be satisfied at completion by the issue to the vendors of Pinnacle ("Vendors") of 2,005,380 new ordinary shares of 1p each in Creon ("Ordinary Shares") ("Initial Consideration Shares") at a price of 32.5 pence per Ordinary Share, being the average closing mid-market price per Ordinary Share for the last 10 business days and, subject to Pinnacle achieving certain performance targets by 31 January 2009, the Vendors will be issued with up to a further 1,538,462 new Ordinary Shares ("Deferred Consideration Shares"). On completion, the Initial Consideration Shares will represent approximately 16.7 per cent of the Company's then enlarged issued share capital and, if the Deferred Consideration Shares are issued in full at a price of 32.5p, the Total Consideration will represent approximately 26.1 percent of the Company's then enlarged issued share capital.
In the year ended 30 April 2007, Pinnacle reported audited revenues of approximately ‚£0.3 million and a loss of approximately ‚£1.4 million. As at the same date Pinnacle had audited net liabilities of approximately ‚£0.6 million. In the 9 month period to 31 January 2008, Pinnacle's management accounts showed unaudited revenues of approximately ‚£0.3 million and a loss of approximately ‚£ 0.6 million for the same period. Since 17th March 2008, Creon has provided Pinnacle with a secured loan of ‚£403,000 on commercial terms for general working capital purposes which is wholly repayable in the event that the Acquisition does not complete. Additional working capital is required, up to a maximum of ‚£750,000 for Pinnacle, and Creon will ensure that arrangements are in place for this to be available.
The Board believes that the Pinnacle business has significant potential and that the competitive valuation of Pinnacle secured by the Board means that, if it achieves its targets, this investment could materially improve Creon's profitability. The Board understands that, for the current shareholders of Pinnacle, the potential to gain access to additional working capital resources for its future development is an attractive driver for the sale. However Pinnacle also stands to benefit from the increased profile that should result from being a part of a quoted group and the added corporate governance knowledge and management experience of the Directors.
Although the Directors of the Company have sufficient existing powers to issue the maximum number of Creon shares pursuant to the Acquisition on a non pre-emptive basis, the effect of issuing the Initial Consideration Shares will significantly reduce the Directors remaining scope and therefore the Directors are proposing resolutions at the Company's Annual General Meeting ("AGM") to allow the Directors to issue the maximum number of Consideration Shares and also to give the Directors sufficient ongoing general authority. Consequently, the Acquisition is conditional on, inter alia, the passing of certain of the resolutions proposed at the AGM and admission to AIM of the Initial Consideration Shares.
Provided that certain of the resolutions are passed at the AGM, admission to trading on AIM of the Initial Consideration Shares is expected at 8.00 a.m. on 30 July 2008.
Lock-In and orderly market arrangements
Pursuant to the terms of the acquisition agreement, the principle vendors of Pinnacle, who hold approximately 70.77% of the issued shares in Pinnacle, have agreed, save in certain limited circumstances, not to (without the prior written consent of the Company) dispose of their Initial Consideration Shares until the issue of Creon's audited accounts for the year ended 31 January 2009. A further 20.65% of the shareholders in Pinnacle have agreed to only dispose of their Initial Consideration Shares in an orderly market manner during the same period. The Deferred Consideration Shares will also be subject to orderly market arrangements.
Annual general meeting
You will find set out at the end of this document a notice convening an Annual General Meeting of the Company to be held at 3p.m. on 24 July 2008 and includes the following resolutions:
* Directors' powers to allot securities; * Directors' powers to disapply pre-emption rights; and * Amendments to the Company's articles of association
Share price
Creon's share price and market liquidity have continued to be below expectations during the financial year ended 31 January 2008. The value of its ordinary shares has fallen from 42 pence per share (closing mid-market price) on 1 February 2007 to 31.5 pence per share (closing mid-market price) as at 31 January 2008. Given the poor performance of the finance and property sectors generally the Directors are not surprised but remain disappointed with this fall and the continued general lack of interest in the Company's shares. The Board's objective remains to grow the size and profitability of the Company, and to promote the Company to potential investors, with the expectation that the share price will improve as the Company becomes more widely known.
Strategy for the enlarged group
The Directors' believe the acquisition of Pinnacle provides the Company with an opportunity to make better use of the resources it has at its disposal whilst continuing to build on the Company's existing reputation as a mezzanine provider. The Board hopes this will result in a fuller utilisation of the Company's assets and an improved financial performance in the next financial year as Pinnacle begins to contribute to the Company's profits.
Outlook
The Directors believe that Creon has made some further progress in the development of its business in a niche area of property finance and that, despite the current poor market conditions, it continues to develop a profile within the residential development market. However, given the continued uncertainty within the property sector the Directors believe that it is in the best interests of the Company to diversify its portfolio whilst continuing its core mezzanine finance business. The Company will seek to make the best use of its resources to generate greater returns and in particular provide Pinnacle with the working capital it requires to allow it to grow substantially and add to the revenues of the Company. We intend to continue to seek property development opportunities that represent a good rate of return relative to their risk.
Jonathan FreemanJames Barder1 July 2008CREON CORPORATION PLCPROFIT AND LOSS ACCOUNT
for the year ended 31 January 2008
2008 2007 Note ‚£ ‚£ Turnover 2 401,862 806,882 Cost of sales (145,985) (264,728) ________ ________ Gross profit 255,877 542,154 Administrative expenses (435,601) (206,521)(including provision against doubtful fee income) ________ ________ Operating (loss)/profit 3 (179,724) 335,633 Interest receivable and similar 26,736 23,381income Interest payable and similar 7 - (44,837)charges ________ ________ (Loss)/profit on ordinary (152,988) 314,177activities before taxation Taxation 8 30,598 (48,882) ________ ________ Retained (loss)/profit for the year (122,390) 265,295 Basic and diluted (loss) /earnings 4 (1.22)p 2.64pper share
All recognised gains and losses in the current year and prior period are included in the profit and loss account.
All amounts relate to continuing activities.
BALANCE SHEETas at 31 January 2008 2008 2007 Note ‚£ ‚£ Fixed Assets Investments - 8 Current Assets Debtors 10 2,645,464 2,355,573 Cash at bank 481,749 942,234 3,127,213 3,297,807 Creditors: amounts falling due 11 (164,713) (212,925) within one year Net Current Assets 2,962,500 3,084,882 ________ ________ Total Assets Less Current 2,962,500 3,084,890 Liabilities Capital And Reserves Called up share capital 13 100,361 100,361 Share premium account 14 2,774,949 2,774,949 Profit and loss account 15 87,190 209,580 ________ ________ Shareholders' Funds 16 2,962,500 3,084,890
The financial statements were approved by the Board of Directors and authorised for issue on 1 July 2008.
Jonathan FreemanDirectorCASH FLOW STATEMENTFor the year ended 31 January 2008 Note 2008 2007 ‚£ ‚£
Net Cash Outflow/Inflow from Operating 17 (63,301) 110,044 Activities
Corporation tax paid (52,225) - Net Cash Inflow/(Outflow) From Returns On Investments And Servicing Of Finance: Interest received 26,736 23,381 Interest paid - (44,837) 26,736 (21,456) Net Cash Outflow From Capital Expenditure And Financial Investments: Mezzanine finance loans advanced (1,049,206) (1,991,710) Mezzanine finance loans repaid 677,503 1,090,997 (371,703) (900,713) Net Cash Outflow From Financing New loans 0 377,000 Repayment of loans 0 (377,000) Sale of investments 8 - Decrease In Cash (460,485) (812,125) Reconciliation Of Net Cash Flow To Movement In Net Funds Decrease in cash in the year 18 (460,485) (812,125) _________ _________ Change in net funds resulting from cash (460,485) (812,125) flows
Net funds at the beginning of February 18 942,234 1,754,359
_________ _________ Net Funds at The End of January 481,749 942,234
NOTES TO THE FINANCIAL STATEMENTS
1 Accounting policies
Basis of accounting
The financial statements have been prepared under the historical cost convention and in accordance with applicable accounting standards and the Companies Act 1985 and cover the year ended 31 January 2008.
Turnover
Turnover represents the arrangement fees due in respect of mezzanine finance advances and additional fees arising from the extension of loans beyond the original repayment date. These are spread on a straight-line basis over the loan terms.
Deferred taxation
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that the recognition of deferred tax assets is limited to the extent that the Company anticipates making sufficient taxable profits in the future to absorb the reversal of the underlying timing differences.
Deferred tax balances are not discounted.
Financial instruments
Financial instruments are recognised initially and subsequently at cost.
Finance provided by the Company is in the form of mezzanine finance which is included in debtors and is stated as the amount of the funds advanced net of any provision for potentially irrecoverable amounts.
For the purpose of the information in note 12 in the financial statements short-term debtors and creditors have been excluded from that information.
2 Turnover
Turnover is wholly attributable to the principal activity of the Company and arises solely within the United Kingdom.
3 Operating (loss)/profit
2008 2007 This is arrived at after charging: ‚£ ‚£ Auditor's remuneration - for audit work 18,212 17,625 Provision against doubtful fee income 250,000 -
4 (Loss)/earnings per share
The loss per share for the year ended 31 January 2008 was 1.22p. The calculation of earnings per share is based on the loss of ‚£122,390 for the year ended 31 January 2008, and the number of shares in issue during the year (10,036,110).
The earnings per share for the period to 31 January 2007 was 2.64p. The calculation of earnings per share for that period was based on profit of ‚£ 265,295 for the year to 31 January 2007 and the number of shares in issue during the year (10,036,110).
All of the share warrants have been excluded from the earnings per share calculation. These warrants could be dilutive in future periods.
5 Asset value per share
The net asset value per share at 31 January 2008 was ‚£0.30 (as at 31 January 2007; ‚£0.31). Net asset value is based on the net assets as at 31 January 2008 of ‚£2,962,500 (as at 31 January 2007; ‚£3,084,882) and on the number of shares in issue at 31 January 2008 being 10,036,110 shares (as at 31 January 2007 - 10,036,110 shares).
6 Staff numbers and costs
The average monthly number of employees of the Company, including Directors, during the year, was 2 (2008: 2).
The aggregate remuneration and associated costs of the Company's employeeswere: 2008 2007 ‚£ ‚£ Wages and salaries 12,000 12,000 Social security costs 867 892 12,867 12,892Directors' emoluments 2008 2007 ‚£ ‚£ Amounts paid to third parties in respect of 54,142 53,016Directors' services Emoluments 12,000 12,000 66,142 65,016
7 Interest payable and similar charges
2008 2007 ‚£ ‚£ On other loans - 44,837 8 Taxation 2008 2007 ‚£ ‚£ UK Corporation Tax
Current tax on (loss)/profit for the year (30,598) 48,882
Factors affecting tax charge in the year
(Loss)/Profit on ordinary activities before (152,988) 314,177 tax
(Loss)/Profit on ordinary activities at the (30,598) 59,693 effective rate of corporation tax in the UK
of 20% (2007 - 19%) Effect of: Utilisation of tax losses - (10,811) Tax (credit)/charge for the year (30,598) 48,882
As at 31 January 2008 the Company had trade losses of ‚£nil (2007 - nil) available to carry forward to set off against future profits.
9 Fixed asset investments 2008 2007 ‚£ ‚£ Shares in Group undertaking - 8 During the year the Company disposed of its dormant subsidiaries. 10 Debtors 2008 2007 ‚£ ‚£ Corporation tax 33,942 - Prepayments and accrued income 380,615 496,370 Mezzanine finance advances 2,230,907 1,859,203 2,645,464 2,355,573
All amounts fall due for payment within one year.
11 Creditors: amounts falling due within one year
2008 2007 ‚£ ‚£ Trade creditors 489 4,600 Accruals and deferred income 164,224 159,113 Corporation tax - 48,882 Other taxation and social security - 322 Amounts due to group undertakings - 8 164,713 212,925 12 Financial instruments 2008 2007 ‚£ ‚£ Cash at bank 481,749 942,234 Mezzanine finance advances 2,230,907 1,859,203
There is no difference between the book values and fair values of the Company's financial instruments.
The Company's financial instruments consist of cash and mezzanine finance. The risks associated with these are interest rate risk and the potential non-recoverability of the loans. Interest rate risk is monitored through cash flow management and the placing of cash on interest bearing deposit accounts. The risk of potential non-recoverability of the loans is reduced by closely considering each loan applicant before agreeing to the loan facility and by securing the loans against property.
No interest is receivable in respect of the mezzanine finance advances. Arrangement fees are charged and these are included within turnover. Mezzanine loans are generally advanced by the Company for a maximum period of 12 months and are for the purposes of property development. The loans are secured against the properties being developed.
The Company has an undrawn revolving credit facility of ‚£1million. Interest is due on any amounts drawn at 2% above the Bank of Scotland base rate. The facility has no fixed termination date.
13 Share capital 2008 2007 ‚£ ‚£ Authorised 50,000,000 Ordinary shares of 1p each 500,000 500,000 Allotted, called up and fully paid 10,036,110 Ordinary shares of 1p each 100,361 100,361
On 25 October 2004, the Company issued and allotted 300,000 warrants to each of Roger Holbeche and Jonathan Lavy. In relation to each holding, 100,000 warrants were exercisable from 25 November 2005 at a price of 60p per share, 100,000 were exercisable on 25 November 2006 at a price of 70p per share and 100,000 were exercisable on 25 November 2007 at a price of 80p per share. Each warrant entitles the holder to subscribe for one new Ordinary share. The final exercise date for all warrants is 25 November 2008. The warrants have been issued for no consideration and to date no warrants have been exercised.
The charge in respect of the warrants as required by FRS 20 Share-Based Payments is not significant and has therefore not been booked.
14 Share premium account
There has been no movement in the share premium account during the year.
15 Profit and loss account ‚£ At 1 February 2007 209,580 Loss for the year (122,390) At 31 January 2008 87,190
16 Reconciliation of movements in shareholders' funds
2008 2007 ‚£ ‚£ Shareholders' funds at 1 February 3,084,890 2,819,595 (Loss)/profit for the financial period (122,390) 265,295 Shareholders' funds at 31 January 2,962,500 3,084,890
17 Net cash (outflow)/inflow from operating activities
2008 2007 ‚£ ‚£ Operating (loss)/profit (179,724) 335,633 Decrease/(increase) in debtors 115,754 (326,318) Increase in creditors 669 100,729 _______ ________ Net cash (outflow)/inflow from operating (63,301) 110,044 activities 18 Analysis of net funds ‚£ Cash at bank as at 1 February 2007 942,234 Cash Flow (460,485) ________ Cash at bank at 31 January 2008 481,749
19 Capital commitments
There were no capital commitments at the year end (2007 - ‚£nil).
20 Post balance sheet events
Since 31 January 2008, the Directors have agreed one further loan to a developer. The loan is for ‚£250,000, repayable within 12 months and is secured against property.
Creon has taken possession of the two remaining unsold properties in a development as settlement for one of the outstanding loans as at 31 January 2008.
The Directors have also released the first two tranches of a loan totalling ‚£ 403,000 in relation to the proposed acquisition of Pinnacle Plus Limited. Further detail is noted in the Chairman's Statement.
21 Related party transactions
The following information discloses the significant related-party transactionsduring the year Amount paid Balance outstanding at year end
Name of related party and nature of Transaction 2008 2007 2008 2007 relation
type ‚£ ‚£ ‚£ ‚£
Jonathan Freeman, Director of Creon Directors 24,299 26,508 2,209 Nil is a 50% shareholder in Combined fees
Management Services Limited
Jonathan Freeman, Director of Creon Admin & 25,631 26,508 2,272 Nil is a 50% shareholder in Combined support
Management Services Limited services
Jonathan Freeman, Director of Creon Accountancy 1,958 Nil 1,958 Nil is a 50% shareholder in Combined services
Management Services Limited
Jonathan Freeman, Director of Creon Provision 2,350 Nil 1,175 Nil is a 50% shareholder in Combined of Office
Management Services Limited space
Combined Management Services Limited ("CMS") invoiced Creon a total of ‚£10,293 (including VAT) during the year for public relations services it procured for Creon on Creon's behalf.)
vendor