30 Sep 2009 07:00
30 September 2009 Sterling Green Group plc ("Sterling" or "the Company") Final Results for the year ended 31 March 2009
CHAIRMAN'S STATEMENT
Introduction and review of activities
I am pleased to present the financial statements of Sterling Green Group plc and its subsidiaries ("the Group") covering the year ended 31 March 2009.
Results and dividends
Revenue for the year ended 31 March 2009 was 1,966,000 (15 month period ended31 March 2008 - 1,309,000). Revenue was made up of 1,609,000 (15 month periodended 31 March 2008 - 970,000) from debt management services and 357,000 (15month period ended 31 March 2008 - 339,000) relating to mortgage business.
The Group loss after taxation for the year amounted to 347,000 (15 month period ended 31 March 2008 - 1,648,000). The Directors are not able to recommend the payment of a dividend.
Trading review
In the Chairman's Statement dated 30 September 2008 which accompanied the 2008financial statements, I reported that the Board had overseen a significantreduction in the Group's operational costs, following amongst other things, astreamlining of the senior management team.Those events have enabled the Group to show, at an operating level, a profit of 31,000 for the second half of the financial year ended 31 March 2009, havingalready reported an interim operating loss for the 6 month period ended 30September 2008 of 352,000. This turnaround reflects the combination of reducedoperating costs and increased revenues.
Current performance and future developments
The Group has started the new financial year as a much more streamlinedbusiness, with a lower overhead base and improving recurring revenues in itsdebt management business. The current economic climate in the UK is enablingthe Group to increase its customer numbers at a faster rate than that seenduring the year ended 31 March 2009. At the present time, the Group already hasin excess of 3,000 live clients and the Board believe that the resulting risinglevels of recurring income give the Group a solid foundation on which to builda profitable future.The Group's working capital position remains challenging. The Group iscurrently operating within its existing borrowing facilities and based onforecasts prepared for the period ended 31 March 2011 management remainconfident that this situation will continue throughout the forecast period.Should those forecasts not be achieved, however, the Group will need to reduceits operating costs further and will be required to consider raising additionalcapital through the issue of further equity or through increased bank or otherfacilities.Further regulation in the UK debt management industry appears inevitable ascompetition in the sector continues to increase. The Board will welcome theintroduction of any new regulation and considers that the Group's existingprocedures and systems meet with industry best practice. The introduction ofnew regulation often leads to acquisition opportunities and the Board considersthat the acquisition of debt management businesses or debt managementportfolios remains a viable option for increasing Group revenues andprofitability in the short term.J M EdelsonChairman29 September 2009Further Enquiries:Sterling Green Group plc Tel: +44 161 975 5757 Michael Edelson
John East & Partners Limited, a subsidiary of Merchant Tel: +44 20 7628 2200
Securities Plc David Worlidge / Simon Clements
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH 2009
Note Year ended Period ended 31 March 31 March 2009 2008 GBP000 GBP000 Revenue 1,966 1,309 Cost of sales (1,069) (1,423) Gross profit/(loss) 897 (114) Administrative expenses (1,218) (1,538) Loss from operations (321) (1,652) Investment income 5 24 Finance costs (49) (20) Loss on ordinary activities before taxation (365) (1,648) Income tax credit 2 18 - Loss on ordinary activities after taxation (347)
(1,648)
attributable to equity holders of the
parent Loss per share - basic and diluted 3 (0.12p) (0.70p)CONSOLIDATED BALANCE SHEETAS AT 31 MARCH 2009 Note 2009 2008 GBP000 GBP000 Non-current assets Intangible assets 1,115 1,115 Property, plant and equipment 209 309 Total non-current assets 1,324 1,424 Current assets Trade and other receivables 142 141 Cash and cash equivalents 4 182 180 Total current assets 324 321 Current liabilities Trade and other payables (319) (318) Current tax liabilities - (18) Borrowings (86) (284) Total current liabilities (405) (620) Net current liabilities (81) (299) Non-current liabilities Borrowings (318) (153) Total non-current liabilities (318) (153) Net assets 925 972 Equity Called up share capital 288 280 Share premium account 1,710 1,518 Share capital to be issued 100 - Capital reserve 6 6 Other reserve 891 891 Accumulated losses (2,070) (1,723) Total equity 925 972
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2009
Note Year ended Period ended 31 March 31 March 2009 2008 GBP000 GBP000
Cash flows used in operating activities
Loss before tax (365) (1,648) Adjustments for:
Depreciation of property, plant and equipment 101
113 Investment income (5) (24) Finance costs 49 20 Operating cash flows before movement in (220) (1,539)working capital
Increase in trade and other receivables (1)
(46)
Increase in trade and other payables 1
88
Net cash used in operating activities (220)
(1,497)
Cash flows from investing activities
Investment income received 5 24 Purchase of property, plant and equipment (1)
(389)
Acquisition of subsidiary, net of cash -
(29)acquired Net cash from/(used in) investing activities 4
(394)
Cash flows from financing activities Capital element of lease payments (85)
(68) Finance leases entered into - 307 Loans advanced 250 - Issue of ordinary share capital, net of costs 200
1,593
Proceeds in advance of issue of share capital 100
- Finance costs paid (49) (20) Net cash from financing activities 416
1,812
Net increase/(decrease) in cash and cash 200
(79)equivalents
Cash and cash equivalents at the start of the (18)
61year
Cash and cash equivalents at the end of the 4 182
(18)
year
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2009
Attributable to equity holders of the parent Share Share Share Capital Other Accumulated Total capital premium capital reserve reserve losses account to be issued GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 January 2007 85 - - 6 - (75)
16 Loss for the - - - - - (1,648) (1,648)period Issue of share 195 1,677 - - 891 - 2,763capital Costs of share - (159) - - - - (159)issue At 31 March 2008 280 1,518 - 6 891 (1,723) 972 Loss for the year - - - - - (347) (347) Issue of share 8 192 - - - - 200capital Share capital to - - 100 - - - 100be issued
At 31 March 2009 288 1,710 100 6 891 (2,070) 925
Other reserve
The other reserve is a merger reserve created on the acquisition of Sterling Green Limited.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2009
1. BASIS OF PREPARATION
The financial information set out above does not constitute the Company'sstatutory financial statements for the period ended 31 March 2008 and for theyear ended 31 March 2009, but is derived from those financial statements. TheAuditors have reported on those financial statements; their reports wereunqualified and did not contain statements under the Companies Act 1985,sections 237(2) or (3).The financial statements from which the financial information set out above isderived have been prepared in accordance with International Financial ReportingStandards as adopted by the European Union (IFRS).The Board has considered the Group's financial position and trading prospectsusing detailed forecasts covering the period ending 31 March 2011. Thoseforecasts incorporate the current drawn down loan facility which is confirmedas available until 30 September 2010. There are no financial covenants attachedto that facility. Accordingly, the Board considers that there will be nobreaches of financial covenants during the period to 30 September 2010. Havingmade appropriate consideration, the Board believes that it has adequateresources to continue trading for the foreseeable future, and accordingly, thegoing concern basis has been adopted in preparing these financial statements.2. INCOME TAX CREDIT Year ended Period ended 31 March 31 March 2009 2008 GBP000 GBP000 Current tax: Income tax credit 18 -
The income tax credit is calculated at 28% (period ended 31 March 2008 - 30%) of the estimated assessable loss for the year.
The income tax credit for the year can be reconciled to the income statement asfollows: Year ended Period ended 31 March 31 March 2009 2008 GBP000 GBP000 Loss before tax (365) (1,648) Loss on ordinary activities multiplied by the (102)
(494)
relevant standard rate of income tax in the UK of
28% (2008 - 30%) Effect of:
Expenses not deductible for tax purposes 6
18
Depreciation for year in excess of capital 28
34allowances Utilisation of losses 18 - Losses carried forward 68 442
Current tax credit for the year 18
-
Unrecognised deferred tax assets
The following deferred tax assets have not been brought into account as assets: 2009 2008 GBP000 GBP000 Tax losses 476 333 Temporary differences 56 233. LOSS PER SHARE
The calculation of basic loss per share is based on the following:
Basic Year ended Period ended 31 March 31 March 2009 2008 Loss for the year ( 000) (347) (1,648) Weighted average number of shares 287,569,637 235,986,036 Loss per share (pence) (0.12) (0.70)Diluted loss per share is calculated by adjusting the weighted average numberof ordinary shares in issue assuming conversion of all dilutive potentialordinary shares. During the year the Company's potential ordinary sharesconsist of share options, warrants and deferred consideration. Due to losses inthe current year and preceding period there are no dilutive ordinary shares.
4. NOTES TO THE CASHFLOW STATEMENT
4.1 Cash and cash equivalents
Cash and cash equivalents consist of bank balances and bank overdrafts. Cashand cash equivalents included in the cash flow statement comprise the followingbalance sheet amounts: 2009 2008 GBP000 GBP000 Cash at bank 182 180 Bank overdrafts - (198) Cash and cash equivalents 182 (18)
4.2 Significant non-cash transactions
During the comparative period the Group acquired property, plant and equipment with a total cost of 340,000 of which 307,000 was acquired by means of finance leases.
Part of the purchase price for the acquisition of Sterling Green Limited duringthe comparative period comprised ordinary shares. The fair value of the sharesissued was 950,000.5. DIVIDEND
The directors are not able to recommend the payment of a dividend.
6. COPIES OF THE REPORT & ACCOUNTS
Copies of the Report & Accounts will be posted to shareholders shortly and arealso available from the Company's registered office at Number 14, TheEmbankment, Vale Road, Heaton Mersey, Stockport, Cheshire SK4 3GN and from theCompany's website www.sterlinggreen.co.uk.
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