BIDS.L Regulatory News (BIDS)

10 Apr 2006 10:34

ADDleisure PLC10 April 2006 ADDleisure plc / Ticker: ADE.L / Index: AIM / Sector: Leisure 10 April 2006 ADDleisure plc ('ADDleisure' or 'the Company') Interim Statement ADDleisure Plc, the AIM traded company formed to develop products and servicesin the health and leisure sectors, announces its interim results for the sixmonths ended 31 January 2006. Overview • First half turnover of £516,000 (2005: £98,000) and a pre-tax loss of £411,000 (2005: £595,000) • First companies signed to Fitbug corporate health and well-being programme in the UK include Ford Motor Company, O2 plc, Channel 4 and the Department of Health • Fitbug US distribution agreement signed with Brunswick Inc. generating license fee and prospect of royalty revenues • First major roll-out of Ez-Book intelligent management software with signing of deal with Mitchells & Butlers plc; continuing trials with several leading leisure operators • Successful disposal of stake in Liberation Fitness Systems Limited (Liberation) for US$0.6m, representing a profit of 240% (completed post-period end) Chairman's Statement This has been a positive period for the Group and I am very happy with theprogress we have made. We have invested time and capital into the developmentand marketing of our investments, particularly Fitbug and Ez-Book and realised asignificant profit, post-period end, from our stake in Liberation, thedistributors of Power Plate. We now aim to diversify our revenue streams withthe opening of new innovative health and fitness studios addressing what webelieve to be a sizeable market of those who do not wish to join health clubs.We have a highly experienced team, blue-chip partners both in the UK andinternationally, a strong product portfolio and a healthy financial position. Wetherefore believe that we are well positioned to drive the business forward andtake advantage of the increasing awareness of and demand for health andwell-being services and products. Financial Performance In line with the Board's expectations, the results for the six months to 31January 2006 show turnover up to £516,000 (2005: £98,000) and a pre-tax loss of£411,000 (2005: £595,000). Cash at bank and in hand has recently been augmentedwith the disposal of our interest in Liberation and stands in excess of£500,000. The Board is not recommending a dividend. Investments Fitbug Limited ("Fitbug") (75% stake) Fitbug, our online personal health and well-being coach, is proving to be anincreasingly exciting investment with rapidly expanding opportunities worldwide.By combining a unique interactive tracking device and web technology, Fitbugcan measure activity, provide feedback and motivate users towards a healthierlifestyle. With a defined sales and marketing strategy, we have increased itsexposure in the UK corporate and consumer markets as well as internationally. In November, we signed a three year agreement with Brunswick New Technologies ("Brunswick"), a unit of a Fortune 500 company, Brunswick Corporation (NYSE:BC),to market the Fitbug offering in the US through online, retail, corporate andgym sales channels. Brunswick recently began exploring opportunities in thehealthcare and corporate sectors in the US and is hopeful of establishingrelationships that can lead to significant volume sales. Our agreement withBrunswick provides for an annual license fee payable to Fitbug along with aroyalty on each unit sold. In the UK, impetus within the corporate market is building. Blue-chiporganizations including O2 plc, Channel 4, the Department of Health and FordMotor Company, have adopted Fitbug as part of their employee well-beingprogrammes. Furthermore, we anticipate making a breakthrough in the healthcaremarket during the second half of this year with a number of health professionalsand healthcare providers currently running trials of the product. Additionally,we recently initiated a pilot for a curriculum-based schools project addressingmany of the topical issues facing the education profession as regards children'sactivity and nutrition. We are committed to developing Fitbug as a health and well-being portal andcontinue to explore ways of enhancing its offering. The market potential forFitbug's software solutions is large and we believe that through our expertiseand the relationships that we are nurturing we have the right channels to makethis product a great success. Digital Plantation Limited ("Digital") (50.2% stake) Digital's intelligent management software, Ez-Book, is making significantinroads across a range of sectors. In essence, it greatly improves theoperating efficiency of customer-facing businesses whilst facilitatingcutting-edge booking functionalities utilising both the Web and SMS messaging.While initially aimed at the health spa market, operators across the broaderleisure sector are understanding its advantages and embracing the technology. Most recently Digital signed a five year licensing agreement with leading UKleisure operator, Mitchells & Butlers plc, which operates Hollywood Bowl. Thetechnology is now being rolled out across the 24 venue estate which I believeunderlines the significant market potential of the product. We are also looking to widen the application of the software to operators in theretail and service sectors as well as looking to international markets thusincreasing the potential to generate further revenue for the Group. Liberation Fitness Systems Limited Post the reporting period, in February 2006, as a result of the merger betweenLiberation, Power Plate International BV and Power Plate North America Inc., werealised US$ 608,000 on the sale of our 41.8% stake in Liberation representing a240% profit on our original investment made just over a year earlier. I amcontinuing as a director of the newly merged entity. Using the proceeds of the sale we hope to develop a new high street fitness andwell-being studio concept, which combines Power Plate training and Fitbugpersonal programmes, utilises our booking system, Ez-Book and offers "convenience fitness" to the public. We are currently looking at a number ofsites, having already confirmed the concept's viability with the Power Platestudio in Crawford Street which is increasingly popular. ADDleisure Consulting This division has been established to utilise our team's extensive experience inthe European leisure industry. We completed our first assignment in the firsthalf, which was to undertake a comprehensive review of a major hotel group'sexisting wellbeing initiatives, conduct market research and competitor analysis,and create an umbrella wellbeing strategy for the group. Prospects While focussed on advancing our current investments in Fitbug and Ez-Book wealso continue to assess new opportunities and ideas within the health andleisure sectors. Health issues continue to be at the top of the public agendaand demand for innovative fitness and wellbeing products continues to increase.People are taking control of their own fitness regimes and we are providing themwith the incentives, tools and help with which to achieve their objectives. Wehave the ingredients in place to create a business that generates significantshareholder value, so I am looking forward to the next six months and buildingon the platform that we have created. Allan FisherChairman Contacts Isabel Crossley St. Brides Media & Finance Ltd Tel: 020 7242 4477Ben Margolis ADDleisure Plc Tel: 020 7449 1000 Consolidated Profit and Loss Account for the six months ended 31 January 2006 Unaudited Audited Unaudited six months ended Twelve months six months 31 January 2006 ended ended Note 31 July 2005 31 January 2005 £000s £000s £000s Turnover 516 285 98 Cost of sales (128) (147) (63) _______ _______ _______ Gross profit 388 138 35 Administrative expenses (812) (1,000) (592) _______ _______ _______ Operating loss (424) (862) (557) Share of operating profit/(loss) of associated 7 (76) (60) undertaking _______ _______ _______ Loss on ordinary activities before interest (417) (938) (617) Interest receivable 6 30 22 _______ _______ _______ Loss on ordinary activities before and after (411) (908) (595) taxation Minority interest 86 159 89 _______ _______ _______ Loss for the period (325) (749) (506) Loss brought forward (750) (1) (1) _______ _______ _______ Loss carried forward (1,075) (750) (507) _______ _______ _______ Basic and fully diluted loss per share (pence) 3 (0.30) (0.80) (0.70) _______ _______ _______ All amounts relate to continuing activities.All recognised gains and losses are included in the profit and loss account. Consolidated Balance Sheet at 31 January 2006 Unaudited Audited Unaudited 31 January 2006 31 July 2005 31 January 2005 £000s £000s as restated Fixed assets £000s Intangible assets 730 738 10 Tangible assets 43 49 51 Investment in associate 31 26 42 _______ _______ _______ 804 813 103 Current assets Stock 91 203 145 Debtors 273 161 127 Cash at bank and in hand 275 647 1,357 _______ _______ _______ 639 1,011 1,629 Creditors: amounts falling due within one year (260) (223) (378) _______ _______ _______ Net current assets 379 788 1,251 _______ _______ _______ Total assets less current liabilities 1,183 1,601 1,354 Creditors: amounts falling due after more than one year (44) (52) (71) _______ _______ _______ Net assets 1,139 1,549 1,283 _______ _______ _______ Capital and reserves Called up share capital 550 550 500 Share premium account 1,575 1,575 1,125 Merger reserve 250 250 250 Profit and loss account (1,075) (750) (507) _______ _______ _______ Shareholders' funds - equity 1,300 1,625 1,368 Minority interest (161) (76) (85) _______ _______ _______ 1,139 1,549 1,283 _______ _______ _______ Consolidated Cash Flow Statement For the six months ended 31 January 2006 Unaudited Audited Unaudited Note six months ended twelve months six months 31 January 2006 ended ended 31 July 2005 31 January 2005 £000s £000s £000s Net cash outflow from operating activities 4 (296) (918) (386) Returns on investments and Servicing of finance Interest received 6 30 22 Capital expenditure and financial investment Purchase of tangible fixed assets (5) (61) (56) Development costs (70) (222) - _______ _______ _______ Net cash outflow from capital expenditure and (75) (283) (56) financial investment Acquisitions Purchase of subsidiary undertakings - (607) - Cash acquired with subsidiaries - 158 4 Acquisition of associate - (102) (102) _______ _______ _______ Net cash outflow from acquisitions - (551) (98) Cash outflow before financing (365) (1,722) (518) Financing Issue of ordinary share capital - 2,000 1,275 Issue costs - (225) - Capital element of finance lease repayments (7) (6) - _______ _______ _______ Net cash (outflow)/inflow from financing (7) 1,769 1,275 _______ _______ _______ (Decrease)/increase in cash (372) 47 757 Notes 1 Basis of Preparation The results for the six months ended 31 January 2006 and the comparative figuresfor the six months ended 31 January 2005 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 year ended 31 July2005. 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 2005 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 2005 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 undertakings Fitbug Limited,Digital Plantation Limited and ADDleisure Consulting Limited, using theacquisition accounting method. 2 Prior period adjustment The 2004/5 comparative figures were revised to eliminate the goodwill andassociated merger reserve arising in the consolidated financial statements by£2,000,000 as this was incorrectly recorded. These adjustments had no effect onprior period profit. 3 Loss per share Basic loss per share for the six months ended 31 January 2006 has beencalculated on the basis of the loss after taxation for the period of £325,000(31 July 2005: loss of £749,000) and the average number of shares in issueduring the period of 110,000,000 (31 July 2005: 93,095,890). The effect of all options and warrants outstanding at 31 January 2006 is anti-dilutive. 4 Reconciliation of operating loss to net cash outflow from operating activities Six months Twelve months Six months ended ended ended 31 January 2006 31 July 2005 31 January 2005 £000s £000s £000s Operating loss (424) (862) (557) Depreciation 11 16 7 Amortisation: goodwill 26 18 52 development costs 54 37 - Movement in: stocks 111 (190) (132) debtors (112) (75) (105) creditors 38 138 349 _______ _______ _______ Net cash outflow from operating activities (296) (918) (386) _______ _______ _______ END This information is provided by RNS The company news service from the London Stock Exchange