BIDS.L Regulatory News (BIDS)

18 Apr 2005 07:00

ADDleisure PLC18 April 2005 ADDLEISURE PLC ('ADDleisure' or 'the Company') INTERIM RESULTS ADDleisure Plc, a holding company formed to capitalise on opportunities in theleisure, health and fitness sectors, announces its results for the six monthsended 31 January 2005. Overview • Company established to take advantage of opportunities in the leisure, health and fitness sectors • Completed investments in Liberation Fitness Systems Limited and Fitbug Limited • Successful flotation on the AIM market in October 2004 following a £1.5 million fundraising • Primary focus during the period was the marketing of the Company's initial investments, Power Plate and Fitbug • Increased stake in Liberation Fitness Systems, distributors of the Power Plate, from 28% to 42% • Power Plate showroom opened in central London - achieved first sales of both the commercial and personal products • Fitbug launched and first members enrolled in January • Since the half year end the Company has agreed to acquire (subject to approval at EGM) a 50.2% stake in Digital Plantation Limited, which has developed an intelligent booking system for the leisure industry Chairman's Statement AIM Listing ADDleisure has made a positive start to the 2005 financial year. The listing hasincreased the awareness of the Company and given us the financial frameworkwithin which to develop our business proposition. We raised £1.25 million, netof costs, from institutions and private investors and aim to build the Companyinto a leading investor in the leisure, health and fitness sectors. Financial Results In line with the Board's expectations, the results for the six months ended 31January 2005 show a turnover of £98,000, although the Company was not activelytrading for most of that time. There was a gross profit of £35,000 but afterdeducting administrative expenses, which include product development and launchcosts, there was a loss for the period of £506,000 in line with internalestimates. There is no dividend. Investments Liberation Fitness Systems ('Liberation') - 42% holding Liberation has the rights to market the Power Plate, an innovative fitnessproduct that uses vibration technology to stimulate muscular and circulatoryresponses. In essence Power Plate Advanced Vibration Technology produces avibration through which energy is transferred to the human body to stimulateactivity artificially. The Power Plate was successfully introduced in the Netherlands in 1999. Today itis licensed for distribution in over 24 countries including Italy, Spain,France, Japan, China, South Korea, Canada and the USA and is widely used byprofessional sports teams, training centres, rehabilitation /medical facilities,gyms and private home users. During the period Liberation has made good progress marketing both thecommercial and personal Power Plate in the UK and Ireland. It has already wonorders to supply it to a major UK health and fitness chain and is innegotiations with several others, some of whom have taken the first step towardsan order of taking Power Plate on trial. Harrods, the world famous Knightsbridgestore, began stocking Power Plate and held in-store demonstrations everySaturday before Christmas, which gave valuable exposure to the product andgenerated significant sales. At the same time a dedicated Power Plate showroomopened at 108, Crawford Street, London W1 where increasingly popular dailyfitness classes using the product are also held. Following the success of the product launch, we decided to convert ourconvertible loan stock into new ordinary shares. ADDleisure now holds 42% of theshare capital of Liberation, which is an increase from the original 28% stake. Fitbug Limited ('Fitbug' )- 75% holding Fitbug has developed a unique online personal health and wellbeing coach,fitbug.co.uk, using the combination of an interactive pedometer and webtechnology to measure, provide feedback on and prescribe physical activity andnutrition programmes for its users. Encouraging small lifestyle changes to reaplarge health benefits, fitbug.co.uk has broad consumer appeal which reaches farbeyond the 10% of the population that currently use gyms and health clubs.Following a period of development during 2004, the fitbug.co.uk consumer websitewent live in January 2005. Since the half year end, the member section of thewebsite has been reviewed taking early feedback from our members into account.We have introduced SMS messaging and personalised e-mail communication to ourmembers to provide innovative feedback and motivational opportunities. The launch campaign was aimed at establishing brand awareness initially withinLondon and the South East whilst the concurrent PR campaign resulted insignificant coverage in several local and national titles. We have been encouraged by the response to the launch of fitbug.co.uk. Since thehalf year end we have developed propositions for what we consider to be threekey sales channels; corporate health and wellbeing, private healthcare providersand the health and fitness industry. In addition, Fitbug has been selected bythe Fitness Industry Association (FIA) as a partner to the government-endorsed'Adopt A Business' campaign due to its unique ability to provide simple buteffective measurement and feedback on physical activity. This is part of theFIA's seven year campaign 'On the Move to 2010', which was launched to improvepublic awareness about the health benefits of regular physical activity. From a development perspective, the product continues to evolve. Together withOmron Healthcare, we are developing a suite of interactive health monitoringproducts which can link to fitbug.co.uk. We are currently testing an interactiveblood pressure monitor which we intend to launch by the final quarter of ourfinancial year. This will offer the user a more complete health picture andrepresents an opportunity to enter the healthcare market. Since launch, we have received unanticipated interest from potential strategicpartners in the fitness and healthcare sectors leading us to believe there isgreater market potential than we had originally estimated. We are currentlyreviewing the incremental investment required to enable us to pursue theseopportunities. Digital Plantation Limited ('Digital') - 50.2% holding Since the half year end we have agreed to acquire (subject to EGM approval) a50.2% stake in Digital for a cash consideration of £500,000 which willconsiderably broaden our activities in the health spa and wider leisure market.Digital was established in 2003 by David Cummin, also a founding director ofADDleisure, to exploit the opportunities for supplying new software systems intothe health and leisure markets. It has developed an intelligent booking systemcalled Ez-book which allows leisure operators to improve the efficiency of theirbooking capability and maximise yields. David Cummin was a founder member ofMembertrack, a leading club membership software provider which was the first tomarket with its Windows based solution in 1992. In 2000 he sold his interest inMembertrack to Gladstone plc for £8.75 million The Company will, subject to shareholder approval, enter into a put optionagreement with David Cummin whereby the Company can sell its stake in Digitalback to David Cummin for £500,000 if the aggregate of Digital's profits onordinary activities before taxation less losses for the three years from 1August 2005, are less than £600,000. This acquisition fits well with our strategy. We firmly believe leisureoperators will rely increasingly on technology and informed data management togrow their operations and improve margins. Digital is currently loss-making but,with recent sales completed to leading operators, we believe it will soongenerate a useful contribution to your Company. Current Trading & Future Prospects The Board is pleased with the progress of ADDleisure since the half year end. Wecontinue to examine exciting opportunities for the development of both PowerPlate and Fitbug whilst exploring opportunities for acquiring further productsand services within the leisure, health and fitness sectors. Whilst we do notcurrently anticipate any further acquisitions during 2005, we believe that ourexperienced team can take advantage of such opportunities as they arise infuture. I would like to take this opportunity to thank everyone at ADDleisure, Fitbugand Liberation for their contribution to date. ABH FisherChairman Consolidated Profit and Loss Accountfor the six months ended 31 January 2005 Six months Twelve Six months ended months ended Note 31 January ended 31 January 2005 31 July 2004 2004 £000s £000s £000s Turnover 98 - -Cost of sales (63) - - _______ _______ _______ Gross profit 35 - - Administrative Expenses (592) (1) - _______ _______ _______ Operating loss (557) (1) - Share of operating lossof (60) - -associated undertaking Interest receivable 22 - - _______ _______ _______ Loss on ordinaryactivities (595) (1) -before and after taxation Minority Interest 89 - - _______ _______ _______ Loss for the period (506) (1) - Loss brought forward (1) - - _______ _______ _______ Loss carried forward (507) (1) - _______ _______ _______ Basic loss per share(pence) 2 (0.70) Nil NilDiluted loss per share(pence) 2 (0.70) Nil Nil _______ _______ _______ All amounts relate to continuing activities.All recognised gains and losses are included in the profit and loss account. Consolidated Balance sheet (unaudited)at 31 January 2005 Note 31 January 2005 31 July 2004 31 January 2004 £000s £000s £000sFixed assetsIntangible assets 2,010 2,000 -Tangible assets 51 - -Investment inassociate 42 - - _______ _______ _______ 2,103 2,000 -Current assetsStock 145 - -Debtors 127 - -Cash at bank and inhand 1,357 600 25 _______ _______ _______ 1,629 600 25Creditors: amountsfalling due (378) (1) -within one year _______ _______ _______ Net current assets 1,251 599 25 _______ _______ _______ Total assets lesscurrent liabilities 3,354 2,599 25 Creditors: amountsfalling due aftermore than one year (71) - - _______ ______ _______ Net assets 3,283 2,599 25 _______ _______ _______Capital and reservesCalled up sharecapital 500 350 25Share PremiumAccount 1,125 - -Merger Reserve 2,250 2,250 -Profit and lossaccount (507) (1) - _______ ______ _______Shareholders' funds- equity 3,368 2,599 25 Minority Interest (85) - - _______ _______ _______ 3,283 2,599 25 _______ _______ _______ Consolidated Cash Flow StatementFor the six months ended 31 January 2005 Note Six months Twelve months Six months ended ended ended 31 January 31 July 31 January 2005 2004 2004 £000s £000s £000s Net cash outflow fromoperating activities 3 (386) - - Returns on investments andServicing of financeInterest received 22 - - _______ _______ _______ Net cash outflow from (364) - -returns on investments andservicing of finance Capital expenditure andfinancial investmentPurchase of tangiblefixed assets (56) - -AcquisitionsCash acquired withsubsidiaries 4 500Acquisition ofinvestments (102) - - _______ _______ _______Cash (outflow)/inflowbefore financing (518) 500 - FinancingIssue of ordinary sharecapital 1,275 75 - _______ _______ _______ Increase in cash 757 575 - _______ _______ _______ Notes 1 Basis of Preparation The results for the six months ended 31 January 2005 and the comparative figuresfor the six months ended 31 January 2004 are unaudited. They have been preparedon accounting bases and policies that are consistent with those used in thepreparation of the financial statements of the Group for the period ended 31July 2004. The financial information contained in this report does not constitute statutoryaccounts within the meaning of Section 240 of the Companies Act 1985 (asamended). The results of ADDleisure Plc for the period ended 31 July 2004 werereported on by the auditors and received an unqualified report and contained nostatement under Section 237(2) or (3) of the Companies Act 1985 (as amended).Statutory accounts for the period ended 31 July 2004 have been delivered to theRegistrar of Companies. Basis of Consolidation The unaudited consolidated accounts for ADDleisure plc incorporate the resultsof ADDleisure 2004 Limited and its subsidiary undertaking, Fitbug Limited usingthe acquisition accounting method. 2 Basic loss per share for the six months ended 31 January 2005 has been calculated on the basis of the loss after taxation for the periodof £595,000 (31 July 2004: loss of £1,000) and the average number of shares inissue during the period of 85,000,000 (31 July 2004: 21,780,822). The effect of all potential ordinary shares is anti-dilutive. 3 Reconciliation of operating loss to net cash outflow from operating activities Six months Twelve months Six months ended ended ended 31 January 2005 31 July 2004 31 January 2004 Operating loss (557) (1) -Depreciation 7 - -Amortisation 52Increase in stocks (132) - -Increase in debtors (105) - -Increase in creditors 349 1 - _______ _______ _______Net cash outflow fromoperating activities (386) - - _______ _______ _______ This information is provided by RNS The company news service from the London Stock Exchange