30 Sep 2008 15:55
30 September 2008 Sterling Green Group Plc (the "Group" or the "Company") Final results for the period ended 31 March 2008
CHAIRMAN'S STATEMENT
Introduction and review of activities
I am pleased to present the financial results of Sterling Green Group plc (formerly Hamilton Partners plc) covering the 15 month period ended 31 March 2008.
We are emerging from an extremely challenging start to our life as a public company, following the well-documented issues affecting our industry caused by the impact of difficult and uncertain financial markets.
The Company acquired Sterling Green Limited ("SGL") in April 2007. The Group's results for the 15 month period incorporate the trading results of SGL for 11 months, together with the results from the date of commencement of trade of the Group's other subsidiaries, Sterling Green (Mortgages) Limited ("SGM") for five months and Tax Debts Limited ("TDL") for eight months.
Following the acquisition of SGL, the operational activities of the Group were transferred from premises in Stockport to offices in the centre of Manchester which enabled SGL to attract and employ additional staff to operate a call centre and expand the debt management activities. In addition, new call centre telephony and computer equipment and office furniture was acquired to support the expanded operation.
As advised in the admission document sent to shareholders relating to the acquisition of SGL, it was intended that the business activities of the Group would encompass all areas of debt management, including offering IVA solutions. Owing to the well reported market turbulence in the IVA sector following the acquisition of SGL the Board decided not to pursue this trading activity.
In the Spring of 2007, the Group was not alone in believing that offering mortgage solutions as part of a debt management solution was a potentially lucrative business and we therefore incurred considerable time and cost in setting up our regulated subsidiary, SGM. The events of August 2007 which have culminated in a severe contraction of available credit on both macro and micro levels, has altered the mortgage market landscape considerably. There are now significantly less mortgage products available to consumers and a number of mortgage providers are no longer operating in the marketplace. At this time the Board along with many other market commentators believed the mortgage market would recover to some degree by the latter half of 2008. However, this has not turned out to be the case. Consequently, the Group has reduced the scale of its mortgage operation in recent months and as a result of these actions the division is now operating profitably, before the allocation of central costs.
As a result of the losses made in the first half of this year the Group's working capital position remains challenging. The Group's bank overdraft facility has been replaced recently with a ‚£250,000 loan facility with a third party at an interest rate of 18 per cent. per annum. The Directors believe that the steps they have taken will ensure the Group has sufficient working capital for its short term needs. However, in the event that trading does not continue at or above the current levels the Group will need to consider its financing options.
In the last three months the Group has focused on its debt management and tax debts marketing programmes which has resulted in increased month-on-month revenues. Currently, the Group has in excess of 2,500 live clients representing future contracted revenue over an average three year period of approximately ‚£ 2.25 million, assuming clients continue to pay in accordance with their agreed plans. This gives the Board grounds to believe that the recurring income stream which has been established provides a solid foundation on which to improve the profitability of the Group.
Results and dividends
Turnover for the 15 month period was ‚£1.3 million (12 months ended 31 December 2006 - ‚£nil) although this turnover related to only 11 months of trading.
Turnover comprised ‚£970,000 from debt management services and ‚£339,000 relating to mortgage business.
The Group's loss before and after taxation for the 15 month period amounted to ‚£1.65 million (12 months ended 31 December 2006 - ‚£73,000).
The directors are not able to recommend the payment of a dividend.
Current and future performance
In recent months the Board has overseen a significant reduction in the Group's operating costs and streamlined the senior management team. These actions have reduced the Group's operational costs to a level which we believe can be adequately matched or exceeded by conservative forecast levels of income.
The operational losses have fallen significantly in the last three months and the Board anticipates that the Group will begin to operate profitably on a monthly basis in the short term.
J M EdelsonChairmanFURTHER ENQUIRIESSterling Green Group Plc Michael Edelson 0161 975 5757Ian Aspinall John East & Partners Limited Simon Clements / David Worlidge 020 7628 2200
CONSOLIDATED INCOME STATEMENT FOR THE PERIOD ENDED 31 MARCH 2008
Note 15 months ended Year ended 31 March 31 December 2008 2006 ‚£000 ‚£000 Revenue - acquisitions 1,309 - Cost of sales (1,423) - ______ ______ Gross loss (114) - Administrative expenses (1,538) (75) Loss from - ongoing (245) (75)operations - (1,407) - acquisitions (1,652) (75) Finance income 24 2 Finance costs (20) - ______ ______ Loss on ordinary activities (1,648) (73)before taxation Income tax expense 2 - - Loss on ordinary activities after (1,648) (73)taxation ______ ______ Loss per share - basic and 4 (0.70p) (0.13p)diluted ______ ______
CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2008
31 March 31 December 2008 2006 ‚£000 ‚£000 Non-current assets Intangible assets 1,115 - Property, plant and equipment 309 - Total non-current assets 1,424 - Current assets Trade and other receivables 141 27 Cash and cash equivalents 180 61 Total current assets 321 88 Current liabilities Trade and other payables (318) (72) Current tax liabilities (18) - Borrowings (284) - Total current liabilities (620) (72) Net current (liabilities)/assets (299) 16 Non-current liabilities Borrowings (153) - Total non-current liabilities (153) - Net assets 972 16 Equity Called up share capital 280 85 Share premium account 1,518 - Capital reserve 6 6 Other reserve 891 - Retained losses (1,723) (75) Total equity 972 16
CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIOD ENDED 31 MARCH 2008
Note 15 months Year ended ended 31 December 31 March 2006 2008 ‚£000 ‚£000 Cash flows from operating activities Loss before tax (1,648) (73) Adjustments for: Depreciation of property, plant and 113 -equipment Share based payment charge - 6 Increase in trade and other receivables (46) (28) Increase in trade and other payables 88 69 Finance income (24) (2) Finance costs 20 - Net cash used in operating activities (1,497) (28) Cash flow from investing activities Finance income received 24 2 Purchase of property, plant and equipment (82) - Acquisition of subsidiary, net of cash (29) -acquired Net cash (used in)/from investing (87) 2activities Cash flow from financing activities Capital element of lease payments (68) - Issue of ordinary share capital, net of 1,593 35costs Finance costs paid (20) - Net cash from financing activities 1,505 35 Net (decrease)/increase in cash and cash (79) 9equivalents Cash and cash equivalents at the start of 61 52the period Cash and cash equivalents at the end of the 3 (18) 61period
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 31 MARCH 2008
Attributable to equity holders of the parent Share Share Capital Other Retained Total capital premium reserve reserve losses ‚£000 ‚£000 account ‚£000 ‚£000 ‚£000 ‚£000 At 1 January 2006 50 - - - (2) 48 Loss for the year - - - - (73) (73) Issue of share 35 - - - - 35capital Share based payments - - 6 - - 6 At 31 December 2006 85 - 6 - (75) 16 Loss for the period - - - - (1,648) (1,648) Issue of share 195 1,677 - 891 - 2,763capital Costs of share issue - (159) - - - (159) At 31 March 2008 280 1,518 6 891 (1,723) 972
NOTES TO THE PRELIMINARY RESULTS FOR THE PERIOD ENDED 31 MARCH 2008
1. BASIS OF PREPARATION
The financial information set out above does not constitute the Company's statutory financial statements for the year ended 31 December 2006 and for the period ended 31 March 2008, but is derived from those financial statements. The Auditors have reported on those financial statements; their reports were unqualified 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 is derived have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS).
2. INCOME TAX EXPENSE
There is no income tax charge/credit for the period ended 31 March 2008.
3. 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: 15 months Year ended ended 31 31 March December 2008 2006 ‚£000 ‚£000 Bank overdrafts (198) - Cash at bank 180 61 Cash and cash equivalents (18) 614. LOSS PER SHARE
The calculation of basic loss per share is based on the following:
15 months Year ended 31 December ended 2006 31 March 2008 Loss for the period (‚£000) (1,648) (73) Weighted average number of shares 235,986,036 55,833,333 Loss per share (pence) (0.70) (0.13)
Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares in issue assuming conversion of all dilutive potential ordinary shares. During the period the Company's potential ordinary shares consist of share options, warrants and deferred consideration. Due to losses in the current period and preceding year there are no dilutive ordinary shares.
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 are also available from the Company's registered office at Number 14, The Embankment, Vale Road, Heaton Mersey, Stockport, Cheshire SK4 3GN and from the Company's website www.sterlinggreen.co.uk.
vendor