Avacta Group Regulatory News (AVCT)

14 Jul 2006 14:20

Readybuy PLC14 July 2006 READYBUY PLC PRELIMINARY ANNOUNCEMENT OF RESULTS YEAR ENDED 30 APRIL 2006 CHAIRMAN'S STATEMENT The results for the year show a pre tax loss of £107,000 on minimal turnover of£4,000. During the year the manufacturing operations of the Group operatingsubsidiary Oriental Fine Foods Limited ceased and costs were incurred in closingthe factory. This included a payment of £30,000 to Paul Bennett the former ChiefExecutive as compensation for loss of office. Since the cessation of trading the board has reviewed a number of options forthe group and this culminated in a placing to raise £262,500, less issue costsof £12,500. At the same time the group announced that a consortium led by ChrisPotts intended to look for suitable acquisitions for the group and that furtherfunding should be made available at the appropriate time. I am pleased to report that Readybuy plc has today announced the acquisition ofAvacta Limited. Daron LeeChairman 14 July 2006 CONSOLIDATED PROFIT & LOSS ACCOUNTYEAR ENDED 30 APRIL 2006 Note 2006 2005 £'000 £'000 Turnover 2 4 313 Cost of sales 1 (224) ______ ______ Gross profit 5 89 Distribution costs (1) (20)Administrative expenses (137) (321) ______ ______ Operating loss 3 (133) (252) Provision for loss on discontinued operations 5 25 (804) ______ ______ Loss before interest and taxation (108) (1,056) Interest receivable 6 1 2Interest payable 7 - (4) ______ ______ Loss on ordinary activities before taxation (107) (1,058) Taxation 8 - 45 ______ ______ Loss for the financial year 9 (107) (1,103) ______ ______ Earnings per share 10 (0.6p) (6.1p) ______ ______ Dividends per share - - ______ ______ The Group's trading activities were terminated in July 2005, therefore all theabove activities are classified as discontinued. The Group has no recognised gains or losses other than the results for theperiod as set out above. CONSOLIDATED & COMPANY BALANCE SHEETS 30 APRIL 2006 Group Group Company Company 2006 2005 2006 2005 Note £'000 £'000 £'000 £'000 Fixed assetsIntangible assets 11 - - - -Investment 12 - - - - ______ ______ ______ ______ - - - - ______ ______ ______ ______ Current assetsStocks 13 - 2 - -Debtors 14 1 44 - 4Cash at bank and in hand 32 169 32 162 ______ ______ ______ ______ 33 215 32 166Creditors: amounts falling due 15 (19) (194) (16) (110)within one year ______ ______ ______ ______ Net current assets 14 21 16 56 ______ ______ ______ ______ Total assets less current 14 21 16 56liabilities ______ ______ ______ ______ Capital and reservesCalled up share capital 16 96 93 96 93Share premium account 17 1,426 1,329 1,426 1,329Profit and loss account 17 (1,508) (1,401) (1,506) (1,366) ______ ______ ______ ______ Equity shareholders' funds 18 14 21 16 56 ______ ______ ______ ______ CONSOLIDATED CASHFLOW STATEMENTYEAR ENDED 30 APRIL 2006 2006 2005 Note £'000 £'000 Net cash outflow from operating activities 19 (139) (80) _____ _____ Returns on investments and servicing of financeInterest paid - (2)Interest element of finance lease payments - (2)Interest received 1 2 _____ _____ Net cash inflow/(outflow) from servicing of finance 1 (2) _____ _____ Capital expenditure and financial investmentPurchase of tangible fixed assets - (9)Sale of tangible fixed assets 25 1 _____ _____ Net cash inflow/(outflow) from capital expenditure andfinancial investment 25 (8) _____ _____ Net cash outflow before use of liquid resources and financing (113) (90) _____ _____ FinancingProceeds on issue of shares - 90Capital element of finance lease payments (25) (34) _____ _____ Net cash inflow from financing (25) 56 _____ _____ Decrease in cash in the year 21 (138) (34) _____ _____ NOTES TO THE ACCOUNTS YEAR ENDED 30 APRIL 2006 1 ACCOUNTING POLICIES The financial statements are prepared in accordance with applicable accountingstandards in the United Kingdom. The particular accounting policies adopted bythe Group are described below. In July 2005, due to continuing losses and an uncertain market, the directorstook the decision to cease manufacturing operations in the group's tradingsubsidiary, Oriental Fine Foods Limited. Accordingly the assets and liabilitiesof the subsidiary undertaking at 30 April 2005 were recorded at their expectedrecoverable amounts and reclassified as current assets or liabilities asappropriate. These figures are also reflected in these consolidated financialstatements in the comparative figures. Basis of Consolidation The Group financial statements consolidate the financial statements of theCompany and its subsidiary undertaking at 30 April 2006 using acquisitionaccounting. The results of the subsidiary undertaking are included from theeffective date of acquisition. On acquisition of a subsidiary, all of thesubsidiary's assets and liabilities existing at the date of acquisition arerecorded at their fair values reflecting their condition at that date. Profits or losses on intra-group transactions are eliminated in full. Turnover Turnover represents the amounts derived from the provision of goods and servicesduring the period stated net of Value Added Tax. Financial Instruments Financial assets are recognised in the balance sheet at the lower of cost andnet realisable value. Provision is made for diminution in value. Income and expenditure arising on financial instruments is recognised on theaccruals basis and charged or credited to the profit and loss account in theperiod to which it relates. Goodwill Goodwill representing the difference between the fair values of considerationgiven and net assets acquired is capitalised and amortised through the profitand loss account over its estimated useful economic life up to a maximum oftwenty years. In view of the decision in the prior year to cease businessoperations in the trading subsidiary, the directors were of the opinion that thegoodwill originally acquired no longer had any value and the balance wastherefore written off as a permanent diminution in value as at 30 April 2005. Investments Investments held as fixed assets are stated at cost less provision for any impairment. Impairment The Group evaluates its fixed assets for financial impairment where events orcircumstances indicate that the carrying amount of such asset may not be fullyrecoverable. When such evaluations indicate that the carrying value of an assetexceeds its recoverable value, the impairment loss is recognised in the profitand loss account. Stocks Stocks are valued at the lower of cost and estimated net realisable value. 1 ACCOUNTING POLICIES /Continued ... Deferred Taxation Deferred taxation is provided in full on timing differences that result in anobligation at the balance sheet date to pay more tax, or a right to pay lesstax, at a future date, at rates expected to apply when they crystallise based oncurrent tax rates and law. Timing differences arise from the inclusion of itemsof income and expenditure in taxation computations in periods different fromthose in which they are included in financial statements. Deferred tax assetsare recognised to the extent that it is regarded as more likely than not thatthey will be recovered. Deferred tax assets and liabilities are not discounted. Leased Assets Assets held under finance leases and hire purchase contracts are capitalised attheir fair value on inception of the lease and depreciated over the shorter ofthe period of the lease and the estimated useful economic lives of the assets.The finance charges are allocated over the period of the lease in proportion tothe capital amount outstanding and are charged to the profit and loss account. The rental costs arising from operating leases are charged to the profit andloss account as the related expenditure is incurred. Changes in accounting policies In preparing the financial statements for the current year, thecompany has adopted the following Financial Reporting Standards: FRS 21 'Events after the Balance Sheet date (IAS 10)'; and From 1 April 2005, the company has adopted the full requirements ofFRS21 (IAS 10) 'Events after the Balance Sheet Date' FRS 25 'Financial Instruments: Disclosure and Presentation (IAS 32)' In preparing this statement the Company has adopted FRS 25'Financial Instruments: disclosure and presentation' for the first time. The adoption of the above standards represent a change in accounting policyhowever no restatement is required. 2 TURNOVER The turnover, operating loss and net assets of the Group are attributable to oneclass of business. The Group's entire turnover was within the United Kingdom. 3 OPERATING LOSS The operating loss is stated after charging:- 2006 2005 £'000 £'000 Depreciation of tangible fixed assets - 35Amortisation of goodwill - 33Directors' remuneration 42 55Auditors' remuneration - audit services 4 7 - other services - 2 _____ _____ 4 PARTICULARS OF EMPLOYEES The average number of persons (including directors) employed by theGroup during the year was: 2006 2005 No. No. Production - 2Selling, distribution and administration 4 2 ____ ____ 4 4 ____ ____ The Company used sub-contract labour for much of its production. Staff costs incurred during the year in respect of these employees were: 2006 2005 £'000 £'000 Wages and salaries 39 118Social security costs 4 13Pension costs 2 8Compensation for loss of office 30 - ____ ____ 75 139 ____ ____ Directors' remuneration Compensation Salary/ Benefits Pension for loss Total Total Fees in kind Pension of office 2006 2005 £'000 £'000 £'000 £'000 £'000 £'000 B P Bennett 9 1 2 30 42 64K M Yeung - - - - - -K W Salisbury - - - - - -C E Davies - - - - - - ______ ______ ______ ______ ______ ______ 9 1 2 30 42 64 ______ ______ ______ ______ ______ ______ At 30 April 2006 no directors were accruing retirement benefitsunder money purchase schemes. 5 PROVISION FOR LOSS ON DISCONTINUED OPERATIONS 2006 2005 £'000 £'000 Unamortised element of goodwill written off - 613Write down of fixed assets to expected recoverable amount (25) 178Write down of stocks to expected recoverable amount - 13 _____ _____ (25) 804 _____ _____ 6 INTEREST RECEIVABLE AND SIMILAR INCOME 2006 2005 £'000 £'000 Bank interest receivable 1 2 ___ ___ 7 INTEREST PAYABLE AND SIMILAR CHARGES 2006 2005 £'000 £'000 Interest on bank overdraft - 2Interest element of finance lease payments - 2 ___ ___ - 4 ___ ___ 8 TAXATION Analysis of Tax on Ordinary Activities 2006 2005 £'000 £'000Current taxation:UK Corporation tax charge for the period - - Deferred taxation:Origination and reversal of timing differences - 45 ____ ____ Tax on profit on ordinary activities - 45 ____ ____ Factors Affecting Tax Credit Loss on ordinary activities before tax (107) (1,058) _______ ____ Loss on ordinary activities by rate of tax of 19% (20) (201) Effects of trading losses carried forward 60 193Capital allowances in excess of depreciation (40) 2Expenses not deductible - 6 ____ ____ Corporation tax charge for the period - - ____ ____ At 30 April 2006 the company had £1,576,507 of unrelieved taxable losses. No deferred tax asset has been provided due to the uncertainty of future taxableprofits. 9 LOSS ATTRIBUTABLE TO MEMBERS OF THE PARENT COMPANY As permitted by Section 230 of the Companies Act, the profit and loss account ofthe parent company is not presented as part of these accounts. The parentcompany's loss for the financial year amounted to £140,000 (2005: £1,360,000). 10 EARNINGS PER SHARE The calculation of earnings per share is based upon the loss aftertaxation of £107,000 (2005: £1,103,000) divided by the weighted average numberof ordinary shares in issue during the year which was 19,226,887 (2005:18,066,870). 11 INTANGIBLE FIXED ASSETS Goodwill £'000CostAs at 1 May 2005 and 30 April 2006 668 _____AmortisationAs at 1 May 2005 and 30 April 2006 668 _____Net Book Value At 30 April 2006 - _____ At 30 April 2005 - _____ 12 INVESTMENTS Investment in subsidiary undertaking £'000 CostAs at 1 May 2005 and at 30 April 2006 435 _____ProvisionAs at 1 May 2005 and at 30 April 2006 435 _____ Net book value At 30 April 2006 - _____At 30 April 2005 - _____ The Group holds the entire issued ordinary share capital and voting rights ofOriental Fine Foods Limited, a company incorporated in England & Wales. Theprincipal activity of that company was the manufacture of chilled foods. Thesubsidiary's trading operations ceased in July 2005 and the investment was fullyprovided at 30 April 2005. 13 STOCKS Group Group Company Company 2006 2005 2006 2005 £'000 £'000 £'000 £'000 Raw materials and consumables - 2 - - _____ _____ _____ _____ 14 DEBTORS Group Group Company Company 2006 2005 2006 2005 £'000 £'000 £'000 £'000 Trade debtors - 20 - - Other debtors 1 17 - - Prepayments and accrued income - 7 - 4 _____ _____ _____ _____ 1 44 - 4 _____ _____ _____ _____ 15 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR Group Group Company Company 2006 2005 2006 2005 £'000 £'000 £'000 £'000 Convertible loans - 100 100Bank overdraft (see below) 1 - - -Obligations under hire purchase - 25 - -Trade creditors - 39 - -Other taxes and social security - 6 - -Accruals and deferred income 18 24 16 10 _____ _____ _____ _____ 19 194 16 110 _____ _____ _____ _____ Overdraft facilities in the previous year were supported by a cash collateralarrangement of similar size together with unlimited cross guarantees given bythe Company and its subsidiary undertaking. 16 SHARE CAPITAL 2006 2005 £'000 £'000Authorised:Equity: 40,000,000 Ordinary shares of 0.5p each 200 200Non-Equity: 50,000 Redeemable shares of £1 each 50 50 _______ _______ 250 250 _______ _______Allotted, issued and fully paid:19,327,344 Ordinary shares of 0.5p each (2005: 18,660,677) 96 93 _______ _______ On 25 May 2005 £100,000 of convertible loans wereconverted in full by the issue of 666,667 ordinary shares of 0.5p each at 15pper share. This increased the total number of shares in issue to 19,327,344. 17 RESERVES Share Profit & Premium Loss £'000 £'000GroupAt 1 May 2005 1,329 (1,401)Loss for the year - (107)Premium on shares issued in the period 97 - _______ ______ At 30 April 2006 1,426 (1,508) _______ ______ CompanyAt 1 May 2005 1,329 (1,366)Loss for the year - (140)Premium on shares issued in the period 97 - _______ ______ At 30 April 2006 1,426 (1,506) _______ ______ 18 RECONCILIATION OF MOVEMENT IN EQUITY SHAREHOLDERS' FUNDS 2006 2005 £'000 £'000 Loss for the financial period (107) (1,103)Equity shares issued in the period 3 3Share premium on equity shares issued 97 97Costs incurred - (10) ______ ______ (7) (1,013) Opening shareholders' funds 21 1,034 _______ _______ Closing shareholders' funds 14 21 _______ _______ 19 RECONCILIATION OF OPERATING PROFIT TO NET CASH OUTFLOW FROMOPERATING ACTIVITIES 2006 2005 £'000 £'000 Operating loss (133) (252)Depreciation of tangible fixed assets - 34Amortisation of goodwill - 33Decrease/(Increase) in stocks 2 (8)Decrease in debtors 43 7(Decrease)/Increase in creditors (51) 106 _____ _____ Net cash outflow from operating activities (139) (80) _____ _____ 20 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS 2006 2005 £'000 £'000 Decrease in cash in year 138 34Cash outflow in respect of hire purchase (25) (34) _____ _____ Change in net debt arising from cash flows (113) -Other changes not arising from movements in cash 100 - _____ _____ Movement in net funds for the year (13) - Opening net funds 44 144 _____ _____ Closing net funds 31 144 _____ _____ 21 ANALYSIS OF CHANGES IN NET FUNDS Other 30 April Cash non-cash 30 April 2005 flows movements 2006 £'000 £'000 £'000 £'000 Cash in hand and at bank 169 (137) - 32Overdraft - (1) - (1) _____ _____ _____ _____ 169 (138) - 31Hire purchase (25) 25 - -Debt due within one year (100) - 100 - _____ _____ _____ _____ Net funds 44 (113) 100 31 _____ _____ _____ _____ During the year £100,000 of convertible loans were converted in full by theissue of 666,667 ordinary shares (see Note 16). 22 COMMITMENTS The Group had no capital or operating lease commitments at 30 April2006 and 30 April 2005. 23 FINANCIAL INSTRUMENTS The disclosures required by FRS 13 in relation to the nature of any financialinstruments used during the year to mitigate interest rate movements, liquidityand foreign currency risks are shown in the Directors' Report on page 5, underthe heading 'Financial Instruments'. During the year £100,000 of convertible loans were repaid in full by the issueof 666,667 ordinary shares (see Note 16). 24 RELATED PARTY TRANSACTIONS Following the decision to cease manufacturing activities in the subsidiaryduring 2005, the leasehold property was returned to the K M and K S YeungPartnership without financial penalty. At 30 April 2006, K S Yeung and K M Yeungeach owned 10% of the company's issued share capital and K M Yeung was anon-executive director of the company until 11 April 2006. These shareholdings were substantially diluted following the share issue in May2006 (see Note 25). 25 POST BALANCE SHEET EVENTS It was resolved at an Extraordinary General Meeting on 5 May 2006 that theauthorised share capital of the Company be increased to £300,000 by the creationof 100,000,000 New Ordinary Shares. Further, it was resolved that 105,000,000New Ordinary 0.1p shares be allotted and issued. It was also resolved that each of the 19,327,344 issued shares of the company atthat date be sub-divided into one New Ordinary Share and one Deferred Share andthe 20,672,656 unissued Existing Ordinary Shares be sub-divided into fiveunissued New Ordinary Shares. All new shares will rank pari-passu with the NewOrdinary 0.1p shares. On 8 May 2006, 105,000,000 New Ordinary 0.1p Shares were issued for 0.25p to aconcert party. This raised £262,500, less issues costs of £12,500, in order tofinance the costs of further potential acquisitions. The Concert Party is a group of mainly high net worth individuals, many of whomhave previously invested in private and public companies. 26 FINANCIAL RISK MANAGEMENT The Group does not trade. The future strategy of the Grouptherefore depends on identifying a suitable target to add value to the Group.It may not be possible to identify such a target or identification of the targetmay take some considerable time. Assuming a target is acquired by the Group, various factors willdetermine the success of the business purchased, including the market withinwhich it operates. 27 ANNUAL REPORT The annual report will be sent to shareholders on 26 September 2006. Copies will be available to the public, free of charge, at the Company'sregistered office at Television House, 10-12 Mount Street, Manchester, M2 5NT. This information is provided by RNS The company news service from the London Stock Exchange