Bradda Head Lithium Regulatory News (BHL)

8 Aug 2006 07:01

4Less Group plc (The)08 August 2006 The 4Less Group plc ("4Less" or the "Group") www.the4lessgroup.com Audited final results for the year ended 31 March 2006 Highlights • On 31 March 2006 net proceeds of £1.252m were raised pursuant to a placing of 6,522,522 new ordinary shares of 1p each • Increasing focus on the introduction of Independent Financial Advisor and multi-introducer groups for the Retail division • Continuing development of the international mortgage broking division • New focus on the development of the Corporate Foreign Exchange side of the business Contacts The 4Less Group Plc 020 7594 0515Eric Peacock, ChairmanRichard Collier, Chief Executive Corporate Synergy Plc 020 7448 4400Oliver CairnsRomil Patel CHAIRMAN'S STATEMENT Introduction The year under review has been a difficult period for the Group coming as itdoes at the finalisation of the Group's restructuring, the advent of anincreasingly competitive market which is witnessed by an increasing number offoreign exchange suppliers and a challenging retail environment. In this financial year, the Group has continued its restructuring to concentrateon its core businesses which are the provision of specialist foreign exchangeservices for retail and corporate customers, the provision of overseasmortgages, insurance products primarily for the owners of overseas properties,and the provision of services to facilitate regular payments to cover mortgages,pensions and other payments. Performance Gross turnover for the Group for the year under review was £279 million,resulting in a gross profit of £2.3 million for the year. These represented a17 per cent. and 20 per cent. decrease respectively over the 2005 results on alike for like basis. At a Group level, the consolidated loss for the financialyear was £593,000 which compares to the loss of £968,000 recorded in thefinancial year ended 31 March 2005. In a difficult market, the continuingoperations' loss of £593,000 in 2006 included some substantial expenses incurredin its core businesses including new marketing initiatives, customerrelationship management and innovative online registration and web costs. The directors have not recommended the payment of a dividend. The Board A number of board changes have taken place following the restructuring of thebusiness. Charles McLeod became a non-executive director with effect from 1April 2005. On 12 August 2005 David Haddon was appointed executive marketingdirector and James Corsellis resigned from his position as non-executivedirector. On 26 September 2005 Richard Collier was appointed Chief Executive inplace of Nigel Paul, who resigned from the Board. On 24 April 2006 Sarah Collisand Geoffrey Mayhill were appointed as non-executive directors. Shareholders On 31 March 2006, Ekwienox FX Limited subscribed for a 45 per cent. equityinterest by investing some £1.5 million in the Company. Coupled with itsexisting investments Ekwienox FX Limited has an effective 51.6 per cent.interest in the Group, and as part of its subscription, Ekwienox FX Limited hasbeen allotted warrants entitling it to increase its equity interest in the Groupto 65 per cent. People This has been a difficult time for the staff. However, I have been impressedwith their energy and commitment over this challenging time. Outlook Given the challenging retail market place, the Foreign Currency Broking Divisionperformed admirably and, following its restructuring, the Property FinanceDivision is performing above target. We have entered into a number ofagreements with overseas banks, highly reputable financial institutions,Independent Financial Advisor groups and Real Estate Property Services Groups.Coupled with the Group's ability to facilitate regular overseas payment plansand overseas insurance, the Group provides a completely integrated financialservices solution for clients who are looking to purchase, or who already ownproperties overseas. The Group is positioning itself to be the market's leading provider of anintegrated financial service solution for clients purchasing overseas propertyor requiring physical foreign exchange delivery in the retail market. Althoughin a relatively early stage, the new management initiatives for the Group'sretail operations should enable the Group to increase its market share andmaintain its highly professional service in the market place. However, theGroup believes that the benefit from the investment and the anticipated returnswill only be fully reported in the next financial year and thereafter. In addition, the Group is actively developing a corporate foreign exchangecapability. Given service excellence, a corporate foreign exchange capabilitywill lessen the reliance of the Group on the purely retail market and shouldprovide the Group with more regular and higher volume foreign exchange turnover,thereby increasing its profitability. However, it is anticipated that this willtake a sizeable investment in people and systems over the next two years beforethe success and the returns become evident. The strategy being pursued should position the Group better for the future,although it's not expected that there will be immediate returns from theinvestment being made in your Company. With increased competition; an uncertaininterest rate scenario impacting on the Retail Market, additional investment andrelatively fresh initiatives being undertaken, I expect the 2007 financial yearto be challenging. With the support of Ekwienox FX Limited, our people and ourshareholders the Group should look forward to it being better positioned for thelonger term future. Eric Peacock CMG DL2006 CONSOLIDATED PROFIT AND LOSS ACCOUNT YEAR ENDED 31 MARCH 2006 2006 2005 2005 Continuing Continuing Discontinued Operations Operations Operations Total £ £ £ £ Turnover 278,822,687 335,048,877 184,403 335,233,280 Cost of sales (276,513,820) (332,166,149) (38,525) (332,204,674) Gross profit 2,308,867 2,882,728 145,878 3,028,606 Administrative expenses (3,080,727) (3,628,056) (412,699) (4,040,755) Operating loss (771,860) (745,328) (266,821) (1,012,149) Interest receivable and 183,872 208,737 4,499 213,236similar income Interest payable and (4,834) (5,511) (13) (5,524)similar charges (592,822) (542,102) (262,335) (804,437) Profit on sale of - 35,269subsidiary Loss before Reorganisation (592,822) (769,168)Costs Reorganisation costs - (199,221) Loss on ordinary activities (592,822) (968,389)before taxation Taxation - 85,221 Loss for the financial year (592,822) (883,168) Loss per share (7.42p) (11.23p) There were no other recognised gains and lossesin the year CONSOLIDATED BALANCE SHEET 31 MARCH 2006 2006 2005 £ £ £ £FIXED ASSETSTangible 119,888 247,084 119,888 247,084 CURRENT ASSETSDebtors 311,631 597,393Cash at bank and in hand 5,087,488 5,594,089 5,399,119 6,191,482 CREDITORS: amounts falling due (4,019,730) (5,598,128)within one year NET CURRENT ASSETS 1,379,389 593,354 TOTAL ASSETS LESS CURRENT LIABILITIES 1,499,277 840,438 NET ASSETS 1,499,277 840,438 CAPITAL AND RESERVESCalled up share capital 144,987 79,762Share premium account 2,600,623 1,414,187Profit and loss account (1,246,333) (653,511) EQUITY SHAREHOLDERS' FUNDS 1,499,277 840,438 COMPANY BALANCE SHEET 31 MARCH 2006 2006 2005 £ £ £ £FIXED ASSETSTangible 119,888 246,716Investments 10 10 119,898 246,726 CURRENT ASSETSDebtors due within one year 261,073 461,056Debtors due in more than one year 481,865 414,656Cash at bank and in hand 4,997,105 5,488,407 5,740,043 6,364,119 CREDITORS: amounts falling due (4,000,911) (5,591,742)within one year NET CURRENT ASSETS 1,739,132 772,377 TOTAL ASSETS LESS CURRENT LIABILITIES 1,859,030 1,019,103 CAPITAL AND RESERVESCalled up share capital 144,987 79,762Share premium account 2,600,623 1,414,187Profit and loss account (886,580) (474,846) EQUITY SHAREHOLDERS' FUNDS 1,859,030 1,019,103 CONSOLIDATED CASH FLOW STATEMENT YEAR ENDED 31 MARCH 2006 2006 2005 £ £Reconciliation of operating loss to net cash flow from operatingactivitiesOperating loss (771,860) (1,012,149)Reorganisation costs - (199,221)Disposal of assets to subsidiary - 10,896Depreciation of tangible fixed assets 147,891 157,333Decrease in debtors 220,812 49,917Decrease in creditors (1,578,398) (2,556,248) Net cash outflow from operating activities (1,981,555) (3,549,472) CASH FLOW STATEMENT (note 20)Net cash outflow from operating activities (1,981,555) (3,549,472)Returns on investments and servicing of finance 179,038 207,712Taxation 64,950 -Capital expenditure (20,695) (121,231)Disposal of subsidiary - (68,998) Cash outflow before financing (1,758,262) (3,531,989) Financing - net proceeds of flotation - 1,281,715 - net proceeds of placing 1,251,661 - Decrease in cash in the period (506,601) (2,250,274) Reconciliation of net cash flow to movement in net funds (note 21)Decrease in cash in the period (506,601) (2,250,274) Net funds at 1 April 2005 5,594,089 7,844,363 Net funds at 31 March 2006 5,087,488 5,594,089 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED 31 MARCH 2006 FINANCIAL STATEMENTS The financial information set out above does not constitute the Group'sstatutory information for the year ending 31 March 2006, but is derived fromthose accounts. The financial statements for 2006 will be delivered to theRegistrar of Companies following the Company's Annual General Meeting. Theauditors have reported on these accounts, their report was unqualified and didnot contain statements under the Companies Act 1985, s237 (2) or (3). ACCOUNTING POLICIES (a) Basis of preparation of financial statements The financial statements have been prepared under the historical cost convention and in accordance with applicable accounting standards. The consolidated financial statements comprise the audited financial statements of the company and its subsidiary undertakings made up to 31 March 2006 using the acquisition method of accounting. Under the acquisition method the results of subsidiary undertakings are included from the date of acquisition. On disposal, the results are included up to the date of disposal. A separate profit and loss account for the parent company has not been prepared as permitted by Section 230(2) of the Companies Act 1985. The loss after tax for the financial period of the parent company was £411,734 (2005 Loss - £771,034). (b) Turnover and revenue recognition Turnover represents: 1. The gross value of foreign exchange currency transactions undertaken by the group's foreign currency business. Purchases of currency relating to such transactions are treated as cost of sales. Turnover is recognised after receiving the client's written authorisation. Where the group enters into contracts with its clients, it also enters into separate matched contracts with its bankers. 2. Commissions earned from arranging property and car finance. Such revenue is recognised when the client has entered into irrevocable arrangements with the loan provider. EARNINGS PER SHARE Both basic earnings per share and diluted earnings per share are based on a lossafter tax of £592,822 (2005: Loss after tax £883,168). The basic earnings pershare has been calculated on a weighted average of 7,994,053 (2005: 7,867,507)ordinary shares in issue. Diluted loss and earnings per share is calculated onthe same basis as basic loss and earnings per share because the effect of thepotential ordinary shares (share options) reduces the net loss per share and istherefore anti-dilutive. DEBTORS Group Company 2006 2005 2006 2005 £ £ £ £ Due within one yearTrade debtors 39,374 122,166 29,620 59,297Corporation tax recoverable 3,697 64,972 - 48,314Prepayments and accrued income 268,560 410,255 231,453 353,445 311,631 597,393 261,073 461,056 Due within more than one yearAmounts due from group undertakings - - 481,865 414,656 CREDITORS Group Company 2006 2005 2006 2005 £ £ £ £ Amounts falling due within one year Trade creditors 3,784,492 5,303,044 3,784,274 5,297,148 Other tax and social security 38,649 72,266 38,649 72,266 Accruals and deferred income 196,589 222,818 177,988 222,328 4,019,730 5,598,128 4,000,911 5,591,742 SHARE CAPITAL Ordinary shares of 1p each Authorised Allotted, called up and Fully paid No. £ No. £ At 31 March 2005 14,000,000 140,000 7,976,183 79,762Increased 31 March 2006 36,000,000 360,000 - -Issued 31 March 2006 - - 6,522,522 65,225 At 31 March 2006 50,000,000 500,000 14,498,705 144,987 During the year, Ekwienox Limited, a company incorporated in England and Wales,acquired 958,333 shares in The 4Less Group plc, representing 12 per cent of thepre-enlarged share capital. In February 2006 Ekwienox Limited purchased a shellcompany which was renamed Ekwienox FX Limited. On 8 March 2006 Ekwienox FXLimited entered into an investment agreement with The 4Less Group whereby itagreed to extend to The 4Less Group a convertible loan of £450,000 bearinginterest at a rate of 7 per cent. The loan was converted on 31 March 2006,resulting in the issue of 1,956,522 Ordinary Shares at 23p per share. Theinvestment agreement also provided for a provisional placing of sharesrepresenting a further 39 per cent for £1,050,180, which resulted in the issueof a further 4,566,000 Ordinary Shares at 23p per share. Following the placingand conversion of the convertible loan, Ekwienox Limited and Ekwienox FX Limitedtogether own 51 per cent of the issued share capital of The 4Less Group plc.Following the completion of the placing, Ekwienox were granted warrants andsubscription rights entitling it to increase its holding to 65 per cent on afully diluted basis at a subscription price of 23p per share. SHAREHOLDERS' FUNDS Group 2006 2005 £ £ At beginning of year 840,438 441,891(Loss) for the year (592,822) (883,168)New shares issued 1,500,180 1,700,000Costs incurred in respect of Placing (248,519) (418,285) At end of year 1,499,277 840,438 Company 2006 2005 £ £ At beginning of year 1,019,103 508,422(Loss) for the year (411,734) (771,034)New shares issued 1,500,180 1,700,000Costs incurred in respect of Placing (248,519) (418,285) At end of year 1,859,030 1,019,103 GROSS CASH FLOWS 2006 2005 Returns on investments and servicing of financeInterest received 183,872 213,236Interest paid (4,834) (5,524) 179,038 207,712Capital expenditurePayments to acquire tangible fixed assets (20,695) (121,231) Disposal of subsidiaryNet cash disposed on sale of subsidiary undertaking - (68,998) FinancingIssue of share capital 1,500,180 1,700,000Expenses paid in connection with share issues (248,519) (418,285) 1,251,661 1,281,715 ANALYSIS OF CHANGES IN NET FUNDS At At 1 April Cash Other 31 March 2005 Flows Changes 2006 £ £ £ £ Cash at bank and in hand 5,594,089 (506,601) - 5,087,488 This information is provided by RNS The company news service from the London Stock Exchange