Bradda Head Lithium Regulatory News (BHL)

27 Sep 2005 16:49

4Less Group plc (The)27 September 2005 The 4Less Group Plc Amendment to preliminary results and trading update Introduction As a result of a further accounting review by the Group of its businesses, theDirectors of The 4Less Group Plc ("4Less" or "the Company") wish to advise thatthe Group had overstated its turnover and profit before tax in the preliminaryresults for the year ended 31 March 2005 as announced on 14th July 2005. Theoverstatement occurred in the Group's Property Finance subsidiary, PropertyFinance 4Less Limited, a business that acts as a broker for overseas mortgages.This division remains core to the on-going operations of the Group but as aresult of this overstatement, its management and processes have beenrestructured and a senior member of its staff has left the Group. Turnover and profit before tax was overstated in the preliminary results for theyear ended 31 March 2005 by £174,000. The Directors have also made anadditional provision of £89,000 for doubtful debtors in the audited financialstatements of the parent company for the year ended 31st March 2005. In total these adjustments will increase the previously reported group lossafter tax for the financial year from £529,000 to £883,000. The Group netassets at 31st March 2005 are reduced from £1,194,000 to £840,000. There is noeffect on the Group's cash balances at the balance sheet date. The audited figures for the year ended 31 March 2005 of the Group have todaybeen agreed by the Group auditors, and will be filed with Companies House andsent to shareholders shortly. The fully amended preliminary statement has beenset out below. As a consequence of the adjustments made in the Property Finance division andthe marketing initiatives of the Group being delayed, the forecast recovery ofthe businesses has slowed. In accordance with the Group's previous announcement on 15th August 2005,Richard Collier, who was appointed as a non-executive director on that date,became full time Chief Executive on 26 September 2005. Richard Collier, chief executive of the Group commented, "I am disappointed tobe reporting such news so soon after my appointment. The internal systems andcontrols are under permanent review and improvement but I believe that thepresent internal controls of the Group are appropriate for a company the size of4Less. I would like to welcome David Haddon, as marketing director. Nigel Paul stepsdown from the Board following my appointment as Chief Executive. I would liketo thank him, on behalf of the Board for his valuable contribution to the group,especially through the last twelve months." Enquiries: Richard CollierThe 4Less Group Plc Tel: 0207 594 051527 September 2005 THE 4 LESS GROUP PLC CHAIRMAN'S STATEMENT Introduction The year under review has been a difficult period for the Group. Following thepoor performance of the new ventures and activities of insurance and corporateservices, the Group conducted a full and detailed review of its activitiescommencing in December 2004. This review, which is now completed, resulted inthe Group refocusing its activities on the core operations of foreign currency,the arrangement of overseas mortgages and broking insurance products foroverseas home owners. As a result, the corporate services division was closed, and the underperformingCar Finance 4Less was sold to Charles McLeod at the end of the year underreview. Performance Gross turnover for the Group for the year under review was £335.2 millionrepresenting a 5 per cent. increase over the 2004 result. This resulted in agross profit of £3.0 million for the year, representing a 4.3 per cent. increaseover the previous year. Continuing operations produced gross profits of £2.9million. The greatest effect of the review and the measures taken to return the Group toprofitability has been on the staffing and overhead structure of the business.Administrative expenses of £0.4 million have been eliminated by the closure ofbusinesses, and overhead and staff reductions in the continuing businesses haveresulted from the streamlining of operations, and improved efficiencies.Notwithstanding the above, the Group's continuing operations recorded a loss of£542,000 and after taking in to account losses in discontinued operations andthe costs of reorganisation, the Group's consolidated loss for the financialyear amounted to £883,000. The directors have not recommended the payment of a dividend. The Board During the year there have been a number of changes to the Board of Directors.Nigel Paul, Finance Director, was appointed Chief Executive Officer in December2004 to effect a reorganisation of the business. At the same time Ian Collins,Financial Controller, was appointed Finance Director. Charles McLeod thefounder of the business has become a non-executive director with effect from theend of the financial year. Greg Begley has left the Group. On 15 August 2005Richard Collier joined the board and on 26 September 2005 was appointed ChiefExecutive Officer. On 15 August 2005 David Haddon joined the board as MarketingDirector and James Corsellis resigned as Non-Executive Director. People Having undertaken a period of expansion of personnel, the reorganisation andrefocusing of the business on its core activities has resulted in a number ofredundancies across the Group. This has been a difficult time for the staff,but I remain impressed by the way they have dealt with the circumstances. Outlook The year under review saw the establishment of a sound operational base on whichto develop the successful activities of the business. Having taken robust stepsto reorganise the activities and operations of the Group, we continue to improveall aspects of the Group's activities and can now look forward to the futurewith confidence. Eric Peacock CMG DL27 September 2005 THE 4LESS GROUP PLC CHIEF EXECUTIVE OFFICER'S REVIEW Introduction Following a year which has been a difficult one for the Group resulting insignificant losses, the core business of foreign currency exchange continued togrow, and generate increased gross profits for the year. Following oursuccessful flotation on AIM in April 2004, the Group started the development ofnew business areas with the attendant increases in our cost base. Thesebusinesses regrettably did not perform in line with expectations. Further theGroup bore significant one off costs associated with the intended expansion ofall activities. In December 2004, we reassessed the Group's core priorities andimplemented an overall restructuring to close non profitable operations, andstreamline the administrative cost base of the core businesses. The year also saw a complete review of the Group's anti-money launderingprocedures in conjunction with our specialist advisers, and the authorisation ofboth Property Finance 4Less Limited and FLG Insurance Brokers Limited under thenew FSA regulations. Following the release of our 6 months results in December 2004, I was appointedChief Executive Officer in order to co-ordinate the strategic review andimplement the turnaround strategies necessary to return the Group toprofitability. The Group addressed the issues in the last quarter of the yearunder review, closing non profitable businesses, making significantredundancies, implementing new remuneration and commission structures, andoutsourcing certain administrative functions such as human resource and healthand safety management. The Directors have not recommended the payment of a dividend. Trading Review Continuing operations Continuing operations produced a turnover of £335.0 million up from £318.9million in 2004 representing a 5 per cent increase, and generated a gross profitof £2.9 million up from £2.7 million in 2004 representing a 6 per cent.increase. The core foreign exchange business has achieved modest growth over the year.Both this activity, and the property finance business saw a marked decline inactivity in the last quarter of the year, following the slowing of the UKproperty market at that time and the tragic events in the Indian Ocean on BoxingDay. This trend is now reversing in both businesses. We continue to expand theskills within the business and adapt the offering to suit the ever changingmarket place. The turnover of Property Finance 4Less decreased to £141,452 and a net loss of£131,041 was generated. Measures have been put in place to improve theperformance of this division. The market continues to develop for the overseasmortgage provider and we continue to develop relationships with a range of banksand mortgage providers throughout Europe, America, South Africa, and Australia. FLG Insurance Brokers has been refocused solely on the provision of retailinsurance products to meet the requirements of property ownership overseas. Toenhance the development of FLG Insurance Brokers and to provide a comprehensiverange of insurance products to customers, we have recently entered into a jointventure with Healthcare International Limited, a company specialising inhealthcare insurance products to the ex-patriot communities around the world,and associated insurance products such as critical illness, mortgage protectionand travel insurance. Interest receivable, a fundamental income source for the business, increased by60% to £213,236 from £133,496. Administrative costs in the continuing businesses amounted to £3,628,056. TheGroup had increased its support structures and was faced with a high level oflegal and consultancy fees during the year. As part of the review andreorganisation these costs have been significantly reduced. Discontinued businesses The discontinued businesses of Corporate Services and Car Finance 4Less producedoperating losses of £262,335. The activities of Corporate Services have beenclosed and Car Finance 4Less was sold to Charles McLeod, producing a profit ondisposal of £35,269. During a period of reorganisation there is inevitable uncertainty amongst staff,but the rapid execution of changes, and the undoubted skill, temerity anddiligence of all our staff, has led to the acceptance of difficult decisions.The costs of the reorganisation of the businesses, which is now complete,including the costs of redundancies and associated legal fees amounted to£199,221. The losses have resulted in a tax credit of £89,771 being received. In totalthe Group made post tax losses of £883,168. The future Having undertaken the re-organisation, the Group is now in a position tocontinue to develop the core business activities and pursue organic growth. Ourinfrastructure is capable of supporting the future development plans of thebusiness, although we continue to enhance systems and seek opportunities tofurther improve our administrative and organisational procedures. We arelooking forward to the future development of the Group with confidence. Nigel Paul27 September 2005 CONSOLIDATED PROFIT AND LOSS ACCOUNT YEAR ENDED 31 MARCH 2005 2005 2004 Note Continuing Discontinued Continuing Discontinued Operations Operations Total Operations Operations Total £ £ £ £ £ £ Turnover 335,048,877 184,403 335,233,280 318,964,063 205,389 319,169,452 Cost of sales (332,166,149) (38,525) (332,204,674) (316,244,518) (19,980) (316,264,498) Gross profit 2,882,728 145,878 3,028,606 2,719,545 185,409 2,904,954 Administrative expense (3,628,056) (412,699) (4,040,755) (2,511,618) (224,900) (2,736,518) Operating (loss) / profit (745,328) (266,821) (1,012,149) 207,927 (39,491) 168,436 Interest receivable and 208,737 4,499 213,236 130,303 3,193 133,496similar income Interest payable and (5,511) (13) (5,524) (4,001) (10) (4,011)similar charges (542,102) (262,335) (804,437) 334,229 (36,308) 297,921 Exceptional Items Profit on sale of 35,269 -subsidiary (Loss) / profit before (769,168) 297,921Reorganisation Costs Reorganisation costs (199,221) - (Loss) / profit on (968,389) 297,921ordinary activitiesbefore taxation Taxation 85,221 (96,152) (Loss) / profit for the (883,168) 201,769financial year (Loss) / earnings per (11.23p) 3.92pshare Diluted (Loss) / earnings (11.23p) 3.81pper share There were no other recognised gains andlosses in the year. CONSOLIDATED BALANCE SHEET 31 MARCH 2005 2005 2004 £ £ £ £FIXED ASSETSTangible 247,084 299,516 247,084 299,516 CURRENT ASSETSDebtors 597,393 608,220Cash at bank and in hand 5,594,089 7,844,363 6,191,482 8,452,583 CREDITORS: amounts falling due (5,598,128) (8,310,208)within one year NET CURRENT ASSETS 593,354 142,375 TOTAL ASSETS LESS CURRENT LIABILITIES 840,438 441,891 NET ASSETS 840,438 441,891 CAPITAL AND RESERVESCalled up share capital 79,762 51,429Share premium account 1,414,187 160,805Profit and loss account (653,511) 229,657 EQUITY SHAREHOLDERS' FUNDS 840,438 441,891 COMPANY BALANCE SHEET 31 MARCH 2005 2005 2004 £ £ £ £FIXED ASSETSTangible 246,716 288,708Investments 10 6 246,726 288,714 CURRENT ASSETSDebtors 875,712 664,519Cash at bank and in hand 5,488,407 7,784,558 6,364,119 8,449,077 CREDITORS: amounts falling due (5,591,742) (8,229,369)within one year NET CURRENT ASSETS 772,377 219,708 TOTAL ASSETS LESS CURRENT LIABILITIES 1,019,103 508,422 CAPITAL AND RESERVESCalled up share capital 79,762 51,429Share premium account 1,414,187 160,805Profit and loss account (474,846) 296,188 EQUITY SHAREHOLDERS' FUNDS 1,019,103 508,422 CONSOLIDATED CASH FLOW STATEMENT YEAR ENDED 31 MARCH 2005 2005 2004 £ £Reconciliation of operating (loss) / profit to net cash flow fromoperating activitiesOperating (loss) / profit (1,012,149) 168,436Reorganisation costs (199,221) -Disposal of assets to subsidiary 10,896 -Depreciation of tangible fixed assets 157,333 108,113Increase / (decrease) in debtors 49,917 (397,280)(Decrease) / increase in creditors (2,556,248) 3,520,958 Net cash (outflow) inflow from operating activities (3,549,472) 3,400,227 CASH FLOW STATEMENT (note 22)Net cash (outflow) / inflow from operating activities (3,549,472) 3,400,227Returns on investments and servicing of finance 207,712 129,485Taxation - (35,189)Capital expenditure (121,231) (319,758)Disposal of subsidiary (68,998) - Cash (outflow) / inflow before financing (3,531,989) 3,174,765 Financing - net proceeds of flotation 1,281,715 - (Decrease) / increase in cash in the period (2,250,274) 3,174,765 Reconciliation of net cash flow to movement in net funds (note 23)(Decrease) / increase in cash in the period (2,250,274) 3,174,765 Net funds at 1 April 2004 7,844,363 4,669,598 Net funds at 31 March 2005 5,594,089 7,844,363 NOTES EARNINGS PER SHARE Both basic earnings per share and diluted earnings per share are based on a lossafter tax of £883,168 (2004: Profit after tax £201,769). The basic earnings pershare has been calculated on a weighted average of 7,867,507 (2004: 5,142,805)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. For 2004, the diluted earnings per share has beencalculated on a weighted average of 5,288,452 of ordinary shares in issue andthe dilutive potential ordinary shares from warrants. NATURE OF ACCOUNTS The financial information set out in the announcement does not constitute thecompany's statutory accounts for the year ended 31 March 2005 or 2004. Thefinancial information for the year ended 31 March 2004 is derived from thestatutory accounts for that year which have been delivered to the Registrar ofCompanies. The auditors reported on those accounts; their report wasunqualified and did not contain a statement under s237(2) or (3) Companies Act1985. The statutory accounts are expected to be sent to shareholders shortly. This information is provided by RNS The company news service from the London Stock Exchange