Amedeo Resources Regulatory News (AMED)

3 Oct 2006 07:00

Creon Corporation PLC03 October 2006 CREON CORPORATION PLC UNAUDITED CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 JULY 2006 Creon Corporation Plc ("Creon" or "the Company"), the AIM-traded company whichprovides mezzanine financing packages for residential property projects, ispleased to announce its unaudited results for the six months ended 31 July 2006. Highlights: • Profit before tax for the period of £228,100 (2005: loss of £53,000) • Five mezzanine finance advances in place at period end • Raised debt funding of up to £1 million since period end Jonathan Freeman, a Director of Creon, commented: "Our aim with Creon is to identify and support small and medium sizedresidential property developers. We believe that we are doing this successfullyand that we have now created a business that is building momentum andprofitability. We continue to receive interesting proposals that meet ourfinancing strategy and which we anticipate will provide an attractive level ofprofit with an acceptably low risk profile. We therefore look forward to thecoming months with confidence." For further information: Jonathan Freeman, +44 (0) 1600 750 432 Director, Creon Corporation plc Alasdair Robinson +44 (0) 131 225 9677 Noble & Company Limited CREON CORPORATION PLC UNAUDITED CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 JULY 2006 Directors' Review Introduction We are delighted to present these interim results to shareholders which show thefinancial performance of the Company for the six months ended 31 July 2006.Creon provides mezzanine finance to small and medium sized UK residentialproperty developers. The business is based upon the experience of the Directorsin managing a quoted company and the experience of the partners of Creon EquityLLP in the property sector generally and the provision of mezzanine finance inparticular. Strategy The Directors believe that the market for the provision of equity finance forsmall and medium sized residential developers is not well served by existingsources which can often be expensive or uncertain in nature. This has providedan opportunity for Creon to develop a business supplying mezzanine finance todevelopers at an attractive level of return within an acceptable level of risk. Creon's approach is to maximize the return on its funds, at the same time asminimizing its exposure to outside risks. The preference, therefore, is toprovide finance on projects that can be completed within 18 months fromacquisition of the site and for the development to have strong appeal within themarket on which it is focused. We discussed in our annual report for the year ended 31 January 2006 thebroadening of Creon's operational base by setting up a property investmentsubsidiary to complement its mezzanine finance activities. Whilst we have nowincorporated four subsidiary companies, (Creon Investments Ltd, Creon EstatesLtd, Creon Property Investments Ltd and Creon Properties Ltd) we are yet toidentify suitable investment opportunities; these companies therefore remaindormant for the time being. Financings We have now developed a mezzanine finance portfolio providing mezzanine financeto five individual property developments. This compares to a portfolio of twofinancings as at 31 July 2005 and three financings as at 31 January 2006. At 31July 2006 mezzanine finance advances totalled £2,691,264 (31 January 2006:£958,490) and were in respect of the following commitments: £10 terraced houses in Solihull 678,6557 apartments in Wimbledon 523,1945 houses in Cornwall 389,4151 house in Suffolk 600,0001 house in Weybridge 500,000 We expect that the number of mezzanine finance advances and their total valuewill continue to rise during this year. We are delighted to be able to report that the income for the six months ended31 July 2006 was £440,775, generating a pre-tax profit of £228,100. We expectthat as our mezzanine finance portfolio continues to grow in both number andvalue the prospects for the business will continue to grow. Funding We have raised a total of £3.3 million (before costs) in equity funding sincethe Company was incorporated, all of which was raised in previous financialperiods. In addition we have, since this period end, agreed a revolving debtfacility of up to £1 million with the Bank of Scotland which is available forexpanding our mezzanine finance portfolio, as opportunities arise (this debtfacility has not yet been used). We are now providing clear evidence that the business model is one that candeliver profits. We therefore believe that it would be in the Company'sinterest to have access to additional funds to enable it to continue to increaseits mezzanine finance portfolio and to take full advantage of the platform thatCreon has built. Share Price Trading volumes in the Company's ordinary shares continue to be very low, as hasbeen the case since trading on AIM began. We believe that this is because ithas until now been very difficult for third parties to properly assess theCompany's business model or its prospects. We are hopeful that increasingprofitability will generate additional interest from potential investors withconsequent increases in trading volumes. Outlook The Directors believe that Creon has made further good progress in thedevelopment of a business in a niche area of property finance. We expect thatthese results, which include our maiden profits, can be developed further as thenumber of mezzanine finance advances continue to grow. We also believe thatthis growth will be achieved both organically and through the raising ofadditional capital. We consider that the possibilities for raising new capitalwill tend to become easier and cheaper to achieve. We continue to review a widerange of potential opportunities and are confident that the current portfoliowill be realised in a profitable and timely manner. We therefore remainoptimistic about the future. Jonathan Freeman James Barder 3 October 2006 CREON CORPORATION PLC UNAUDITED CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 JULY 2006 Unaudited consolidated profit and loss account 1 Feb 2006 - 11 Nov 2004 - 27 Aug 2004 - 31 Jul 2006 31 Jul 2005 31 Jan 2006 (unaudited) (unaudited) (audited) Note £'000 £'000 £'000 Turnover 1 491 33 219Administrative expenses (278) (114) (321) Profit/(loss) on ordinary activities before interest 213 (81) (102)Interest received 16 28 46Interest paid (1) - - Profit/(loss) on ordinary activities before tax 228 (53) (56)Tax on profit/(loss) on ordinary activities (63) - - Profit/(loss) on ordinary activities after taxation 165 (53) (56) 1.65p (89)p (0.77)p Profit/(loss) per share 2 There were no recognised gains or losses other than the profit for the period. Unaudited consolidated balance sheet As at As at As at 31 Jul 31 Jul 31 Jan 2006 2005 2006 Note (unaudited) (unaudited) (audited) £'000 £'000 £'000 Current AssetsDebtors 3 3,276 719 1,128Cash at bank 18 476 1,754 3,294 1,195 2,882 Creditors: amounts falling due within one year 4 (310) (23) (63)Net current assets 2,984 1,172 2,819 Net Assets 2,984 1,172 2,819 Capital and ReservesCalled up equity share capital 100 61 100Share premium 2,775 1,164 2,775Profit and loss account 109 (53) (56) Total Equity Shareholders' Funds 5 2,984 1,172 2,819 Unaudited consolidated cash flow statement 01 Feb 2006 - 11 Nov 2004 - 27 Aug 2004 - 31 Jul 2006 31 Jul 2005 31 Jan 2006 (unaudited) (unaudited) (audited) Note £'000 £'000 £'000 Net cash outflow from operating activities 6 (133) (97) (209)Returns on investment and servicing of financeInterest received 16 28 46Interest paid (1) - - (118) (69) (163)Taxation - - -Capital expenditure and financial instrumentsMezzanine finance advanced (1,733) (680) (958) Net cash outflow before financing (1,851) (749) (1,121)FinancingIssue of equity shares - 732 2,875New loan advanced 7 115 - - (Decrease) / Increase in cash in the period (1,736) (17) 1,754 Reconciliation of net cash to movement in net funds 01 Feb 2006 - 11 Nov 2004 - 27 Aug 2004 - 31 Jul 2006 31 Jul 2005 31 Jan 2006 (unaudited) (unaudited) (audited) £'000 £'000 £'000 (Decrease)/increase in cash in the period 7 (1,736) (17) 1,754Cash (inflow) from debt financing (115) - - Movement in net funds in period 7 (1,851) (17) 1,754Net funds at start of period 1,754 493 - Net (debt)/funds at end of period 7 (97) 476 1,754 Notes to the consolidated interim results 1) Accounting policies Basis of accounting The financial statements have been prepared under the historical cost conventionand in accordance with applicable accounting standards and the Companies Act1985. Turnover Turnover represents the arrangement fees due in respect of mezzanine financeadvances spread on a straight-line basis over the loan terms. Deferred taxation Deferred tax balances are recognised in respect of all timing differences thathave 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. Financial Instruments Finance provided by the Company is in the form of mezzanine finance which isincluded in debtors and is stated at the amount of the funds advanced net of anyprovision for potentially irrecoverable amounts. 2) Earnings per Share The earnings per share for the period was 1.65p. The calculation of earnings pershare is based on the profit of £165,100 for the period and the weighted numberof shares in issue (10,036,110). 3) Debtors As at As at As at 31 July 06 31 July 05 31 Jan 06 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Mezzanine finance advances 2,691 680 958Prepayments and accrued income 585 39 170 3,276 719 1,128 All debtors are due within one year. 4) Creditors As at As at As at 31 July 06 31 July 05 31 Jan 06 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Trade creditors and accruals 132 23 63Corporation tax 63 - -Other loan 115 - - 310 23 63 All creditors are due within one year. 5) Shareholders funds As at As at As at 31 July 06 31 July 05 31 Jan 06 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Shareholders funds brought forward 2,819 493 -Profit/(loss) for the period 165 (53) (56)Issue of shares - share capital - 20 100Issue of shares - share premium - 712 2,775Shareholders funds carried forward 2,984 1,172 2,819 6) Reconciliation of operating loss to new cash outflow from operating activities 01 Feb 2006 - 11 Nov 2004 - 27 Aug 2004 - 31 Jul 2006 31 Jul 2005 31 Jul 2005 £'000 £'000 £'000 Operating Profit/(loss) 213 (81) (102)(Increase) in debtors (415) (39) (170)Increase in creditors 69 23 63 (133) (97) (209) 7) Analysis of movement in net funds As at As at 01 Feb 06 Cash flow 31 July 06 £'000 £'000 £'000 Cash at bank and in hand 1,754 (1,736) 18Other loans:Due within one year - (115) (115) 1,754 (1,851) (97) 8) The results for the period ended 31 July 2006 are unaudited and do not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. 9) The comparatives for the period ended 31 January 2006 are not the Company's full statutory accounts for that period. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified. 10) The interim report is being sent to shareholders as soon practicable. In addition copies are available from the Company's registered office, 120 Old Broad Street, London, EC2N 1AR. This information is provided by RNS The company news service from the London Stock Exchange