26 Jun 2007 07:00
25 June 2007 Cubus Lux plc Preliminary Results
Cubus Lux plc, the Croatian leisure and tourism company, announces final results for the 15 months ended 31 March 2007.
Cubus Lux plc currently has completed the construction of, and now has fullyoperational the first Plava Vala marina, a 200 plus berth marina in the bay ofSutomiscica on the island of Ugljan near Zadar. In addition, the group includesthe second largest casino operator in Croatia, Cubus Lux d.o.o. with casinos inPula and Rabac.Highlights in the period:
- Achievement of pre tax profit of ‚£160,000.
- Strengthening of the management team with the appointment of Christian Kaiser
and Steve McCann as Executive Directors and Francisco Alvarez-Molina as a
Non-Executive Director.
- Completion of a world class marina, Olive Island Marina, which is already
being labeled a `destination place'.
- Further successful development of casino junkets business
- The purchase of two plots of land in Zadar for development of top quality
holiday apartments.
Since the year end:
- Entered into two Option Agreements to acquire companies that own development
land on Ugljan where we will build the Olive Island Resort and Hotel. The
development includes 431 Villas and Apartments, a 500 bed 4 plus star Hotel and
a marina. Exercise of these options would be classified as a reverse takeover
under the AIM Rules.
- Placing raised ‚£1,557,000 for working capital and to fund future strategy
- Consolidated casino operations by the transfer of equipment from Medulin
casino to the enlarged and extended Pula casino to take advantage of the new
air routes introduced by the low fare airlines from the UK and Ireland.
Gerhard Huber, Executive Chairman of Cubus Lux, commented:
"Cubus Lux has continued to see much change over the year transforming from apure casino business into a leisure and tourism company. The acquisition ofPlava Vala has created a three pillar strategy of casinos, marinas and otherleisure opportunities such as hotels and golf courses and this sets us on ourway to achieving our goal of becoming the pre-eminent tourist and leisurebusiness in Croatia"
"The Olive Island marina is now fully operational and we are now starting to focus on exciting new opportunities such as the Olive Island Resort and Hotel."
For further information please contact:
Cubus Lux Plc
Gerhard Huber, Chairman: 07900 683 683
City Financial Associates Limited
Simon Sacerdoti, Corporate Finance: 020 7090 7800
Threadneedle Communications
Graham Herring, Financial PR: 020 7936 9605/07793 839 024
Chairman's statement
I am pleased to submit results for the 15 months ended 31 March 2007.
Operations
Cubus Lux d.o.o. - the gaming company:
Cubus Lux d.o.o. owns a gaming concession in Croatia. During the period, thecompany operated three casinos in Pula, Medulin and Rabac. The operations areinspected and audited regularly by the Croatian Ministry of Finance, and allinspections to date have been satisfactorily completed. Management iscontinuing its objectives of enhancing profitability and, as a result, as ofthe end of the period, the company has expanded its Pula operation and closedthe Medulin casino.The second half of the year is traditionally our stronger one and this yearshows the same trend. August was a record month for the company with more than12,500 visitors in our casino in Pula. September and October continued stronglyas the new management has attracted a number of junkets.
Plava Vala d.o.o. - the marina company:
The marina in Sutomiscica, near Zadar is thought by some to be a jewel on theAdriatic coast. The autumn season of the European boat fairs showed a soliddemand for our berths, and we are looking to our first period of operation in2007 with confidence.As part of the requirements of IFRS 3, the management asked Brand Finance Plcto value the marina concession that is owned by Plava Vala d.o.o.. This hasbeen separately disclosed in note 8 to the financial statements, and the assetis shown on the balance sheet as an intangible asset acquired as part of theacquisition of Plava Vala d.o.o..
Recent expansion:
We have purchased two plots of land in Zadar at a cost of ¢â€š¬5.8 million for thedevelopment of top quality apartments. The first project is a 6 storey mixedcommercial/residential building close to the city centre of Zadar. The secondproject is a 5 storey residential building that is in close proximity to theBorik hotel and resort area and the Borik marina. Each of these developmentswill have around 80 units. We believe that demand for these will be strong andthat the developments will be successful.
Financial
For the 15 months ended 31 March 2007, the company is reporting revenues of ‚£1,017,000 and a profit before tax of ‚£160,000. The trading activity within thisresult shows the progress made in the last period in turning around ouroperations.In the second six months of 2006, the Company placed more than 2,000,000 sharesat 13.125p per share in order to finance further expansion. The market receivedthis well and we were able to place a further 9,570,000 shares in May of thisyear at 16.275p to meet current expansion plans.
Our plans for the future
We are in the process of transition from a casino operator into a leisure anddevelopment company in Croatia. As a first step in doing this we have enteredinto two option agreements to acquire certain development land known as the"Olive Island Resort" on the Dalmatian coast of Croatia.
The Olive Island Resort development land is set in 400,000sqm of land along 1.5km of beach, and is intended to be developed into:-
(a) a village resort comprising 431 units, namely 126 villas and 305 apartmentsas well as the accompanying facilities such as restaurants, shops, offices anda marina (the "Villas Development"); and
(b) a 4 star hotel containing 500 beds (the "Hotel Development").
I believe that this potential acquisition could be a milestone event for thecompany moving forward with our plan to transform the company from being solelya casino operator to being a company developing and managing leisure facilitiesin Croatia.GERHARD HUBERChairmanExecutive Director
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE 15 MONTHS ENDED 31 MARCH 2007
Period ended Year ended 31 31 March 2007 December 2005 Notes ‚£'000 ‚£'000 TURNOVER 1,017 571 Cost of sales (150) (70) ------------- ------------- GROSS PROFIT 867 501 Administrative expenses (1,957) (981) Other income 1,451 - ------------- ------------- OPERATING PROFIT/(LOSS) 361 (480) Finance expenditure (201) (17) ------------- ------------- PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION 160 (497)
Tax on loss on ordinary activities 1 (290)
- ------------- ------------- LOSS FOR THE PERIOD 2 (130) (497) ====== ====== LOSS PER SHARE Basic 6 (0.19)p (2.15)p ====== ====== Diluted 6 (0.18)p (2.14p) ====== ======
All activities arose from continuing activities.
CONSOLIDATED BALANCE SHEET 31 March 31 December 2007 2005 Notes ‚£'000 ‚£'000 FIXED ASSETS Non-current assets Intangible assets 3 5,372 - Property, plant and equipment 4 3,315 590 ------------- ------------- 8,687 590 ------------- ------------- CURRENT ASSETS Stock 41 10 Trade and other receivables 950 301 Cash at bank 5 1,375 431 ------------- ------------- 2,366 742 ------------- ------------- 11,053 1,332 ====== ====== EQUITY
Capital and reserves attributable to the
Company's equity shareholders Called up share capital 881 249 Share premium account 7,239 1,321 Merger reserve 347 347 Profit and loss account (1,565) (1,650) ------------- ------------- TOTAL EQUITY 6,902 267 ====== ====== LIABILITIES Non-current liabilities Deferred tax liabilities 290 - Loans 3,138 311
Amounts due under finance leases 7
14 ------------- ------------- 3,435 325 ====== ====== Current liabilities
Trade and other payables and deferred 589
464income Loans 122 271
Amounts due under finance leases 5
5 ------------- ------------- 716 740 ====== ====== TOTAL LIABILITIES 4,151 1,065 ====== ====== TOTAL EQUITY AND LIABILITIES 11,053 1,332 ====== ======PARENT COMPANY BALANCE SHEET 31 March 31 December 2007 2005 Notes ‚£'000 ‚£'000 FIXED ASSETS Non-current assets Investments 3,819 319 CURRENT ASSETS Trade and other receivables 2,919 703 Cash at bank 5 616 15 ------------- ------------- 3,535 718 ------------- ------------- 7,354 1,037 ====== ====== EQUITY
Capital and reserves attributable to the
Company's equity shareholders Called up share capital 881 249 Share premium account 7,239 1,321 Profit and loss account (920) (616) ------------- ------------- TOTAL EQUITY 7,200 954 ====== ====== LIABILITIES Current liabilities Trade and other payables 154 83 ------------- ------------- TOTAL LIABILITIES 154 83 ====== ====== TOTAL EQUITY AND LIABILITIES 7,354 1,037 ====== ======
CONSOLIDATED CASH FLOW STATEMENT
Period ended Year ended 31 31 March 2007 December 2005 ‚£'000 ‚£'000
Cash flows from operating activities
Operating profit/(loss) 361 (480)
Profit/(loss) on disposal of fixed assets 45
(4) Share based payments 178 - Depreciation 148 113
Negative goodwill written back to profit and loss (1,451)
-account (Increase) in debtors (559) (247) (Increase) in stock (31) (4) Increase in creditors 14 111 ------------- ------------- Net cash used in operating activities (1,295) (511) ------------- -------------
Cash flows from investing activities
Interest payable (256) (18) Interest receivable 55 1 Purchase of fixed assets (2,472) (120)
Proceeds from the sale of fixed assets -
15 Cash acquired with subsidiary 114 - ------------- ------------- Net cash used in investing activities (2,559) (122) ------------- -------------
Cash flows from financing activities Issue of shares (net of issue costs) 3,050
246
Capital element of finance lease repaid (5)
-
New loans undertaken less repayments 1,690
453 ------------- -------------
Net cash generated from financing activities 4,735
699 ------------- -------------
INCREASE IN CASH IN THE PERIOD 881
66 ====== ======
RECONCILIATION OF NET CASH FLOW TO NET DEBT
Period ended Year ended 31 31 March 2007 December 2005 ‚£'000 ‚£'000
Increase in cash in the period 881
66 Exchange differences 63 (20) Cash inflow from movement in debt (1,690)
(448)
Capital element of finance leases repaid 5
-
Debt acquired on acquisition of subsidiary (988)
- ------------- ------------- Movement in net funds in the period (1,729)
(402)
Net (debt)/funds at beginning of period (170)
232 ------------- ------------- Net debt at end of period (1,899) (170) ====== ======
ANALYSIS OF CHANGES IN NET DEBT
At 1 January Cash Other Exchange At 31 March 2006 movements flows differences 2007 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 Cash at bank and in 431 881 - 63 1,375hand ------------ ------------ ------------ ------------ ------------ 431 881 - 63 1,375 Debt due in less than one period Finance leases (5) (1) - - (6) Loans (271) (149) - - (122) ------------ ------------ ------------ ------------ ------------ 155 1,029 - 63 1,247 Debt due in more than one year Finance leases (14) 6 - - (8) Loans (311) (1,839) (988) - (3,138) ------------ ------------ ------------ ------------ ------------ (170) (804) (988) 63 (1,899) ====== ====== ====== ====== ======
RECONCILIATION OF MOVEMENTS IN GROUP SHAREHOLDERS' FUNDS
Period ended 31 Year ended 31 March 2007 December 2005 ‚£'000 ‚£'000 Loss for the period (130) (497) --------------- --------------- (130) (497) Exchange rate differences 37 (20) Share based payments 178 -
New shares issued in Cubus Lux plc (net of issue 6,550
246costs) --------------- ---------------
Net movement in shareholders' funds 6,635
(271) Opening shareholders' funds 267 538 --------------- --------------- Closing shareholders' funds 6,902 267 ======= =======NOTES1. TAXATIONThe Company is controlled and managed by its Board in The Republic of Croatia.Accordingly, the interaction of UK domestic tax rules and the taxationagreement entered into between the U.K. and The Republic of Croatia operate soas to treat the Company as solely resident for tax purposes in The Republic ofCroatia. The Company undertakes no business activity in the UK such as mightresult in a Permanent Establishment for tax purposes and accordingly has noliability to UK corporation tax
(a) The taxation charge comprises
Period ended 31 Year ended 31 March 2007 December 2005 ‚£'000 ‚£'000
Current corporation tax for the period -
- Deferred tax 290 - --------------- --------------- 290 ======= =======
(b) Factors affecting tax charge for the period
The tax assessed for the period is different than the standard rate of corporation tax. The differences are explained below:
Period ended 31 Year ended 31 March 2007 December 2005 ‚£'000 ‚£'000
Profit/(loss) on ordinary activities before 160
(497)taxation ======== ========
Multiplied by the standard rate of 48
(149)corporation tax of 30% Effects of:
Utilisation of tax losses brought forward (48)
- Losses carried forward - 149 ------------------ ------------------ Current period tax charge - - ======== ========
(c) Factors affecting future tax charges
The directors believe that the future tax charges will be reduced by the use of tax losses carried forward in Croatia.
2. PROFIT FOR THE FINANCIAL PERIOD
The parent company has taken advantage of section 230 of the Companies Act 1985and has not included its own profit and loss account in these financialstatements. The group profit for the period includes a loss after taxation of ‚£482,000 (2005: loss ‚£283,000) which is dealt with in the financial statementsof the company.3. INTANGIBLE FIXED ASSETS Marina licence ‚£'000 Cost or valuation At 1 January 2006 - Acquired on acquisition 5,372 ------------------ At 31 March 2007 5,372 ========On 6 March 2006, the company purchased the entire issued share capital of PlavaVala d.o.o., a company registered in Croatia for a consideration of 35,000,000ordinary shares of ‚£0.01 each valued at ‚£0.10 each. At this date. the fairvalue of Plava Vala d.o.o.'s assets was ‚£3,921,000 creating negative goodwillof ‚£1,451,000 which, in accordance with IFRSs, has been credited to the profitin the period. A deferred tax liability of ‚£290,000 against this profit hasbeen provided for. In adopting IFRSs, the company obtained an externalvaluation by Brand Finance Plc of the marina licences acquired with Plava Valad.o.o. which were valued at ‚£5,372,000 and are included in the above net assetfigure.4. TANGIBLE FIXED ASSETS Casino Marina Casino assets Marina Total leasehold leasehold assets premises premises ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 Cost or valuation At 1 January 2006 51 - 801 - 852 Additions 7 2,103 217 145 2,472 Acquired on acquisition - 472 - 3 475 Disposals - (26) (24) - (50) Exchange rate movements 1 (33) 8 (2) (26) ------------ -------------- --------------- ------------ ---------------- At 31 March 2007 59 2,516 1,002 146 3,723 ------------- -------------- --------------- ------------ --------------- Depreciation At 1 January 2006 16 - 246 - 262 Acquired on acquisition - - - 1 1 Charge for the period 19 2 106 21 148 Disposals - - (5) - (5) Exchange rate movements - - 2 - 2 ------------ -------------- -------------- ------------ -------------- At 31 March 2007 35 2 349 22 408 ------------- -------------- --------------
------------ -------------- Net Book Value At 31 March 2007 24 2,514 653 124 3,315 ====== ======= ======= ======= ======= At 31 December 2005 35 - 555 - 590 ====== ======= ======= ======= =======5. CASH AT BANK Group Company Group Company 31 March 31 March 31 December 31 December 2007 2007 2005 2005 ‚£'000 ‚£'000 ‚£'000 ‚£'000 Cash at bank 1,375 616 431 15 ======= ======= ======= =======
Included within the cash at bank and in hand at 31 March 2007 is ‚£221,000(2005: ‚£221,000) which is held by the Croatian Ministry of Finance as a bond tocover any large casinos wins. Cubus Lux d.o.o. is required to keep this bond inplace in order to maintain its gaming licence.
Cubus Lux d.o.o. is also required by law to maintain cash on site of ¢â€š¬50,000 and HRK 150,000 at each casino, which is included within the above.
6. LOSS PER SHARE
The loss per share of 0.19p (31 December 2005: loss 2.15p) has been calculatedon the weighted average number of shares in issue during the period namely68,681,402 (31 December 2005: 23,120,334) and losses of ‚£130,013 (31 December2005: losses ‚£496,852).
The calculation of diluted losses per share of 0.18p (31 December 2005: loss 2.14p) is based on the losses on ordinary activities after taxation and the diluted weighted average of 73,896,786 (31 December 2005: 23,190,334) shares.
7. FINANCIAL INFORMATION
The financial information set out in this announcement does not constitute theGroup's statutory accounts within the meaning of Section 240 of the CompaniesAct 1985 and has been extracted from the full accounts for the 15 months ended31 March 2007.The full report and accounts for the 15 months ended 31 March 2007 have beensent to shareholders, and a copy will be delivered to the Registrar ofCompanies in due course. The auditors' report on the financial statements wasunqualified and did not include a statement under section 237(2) or (3) of theCompanies Act 1985.
The annual report and accounts will be available on the Company's website at www.cubuslux.com
CUBUS LUX PLC