CBX.L Regulatory News (CBX)

25 Sep 2006 09:11

Cubus Lux plc25 September 2006 Cubus Lux plc Interim Results Cubus Lux plc, the Croatia-based leisure and tourism company, announces interimresults for the 6 months ended 30 June 2006. Cubus Lux plc is the second largest casino company in Croatia, where it operatesat three venues. In March 2006, the company acquired Plava Vala, which holds alicence to build and operate a marina under the brand name Olive Island Marina,on the island of Uglijan, Croatia. Highlights in the period: • Acquired the entire issued share capital of Plava Vala d.o.o. for £3.5 million • HI revenue increased to £327,000 (H1 2005: £191,000) • Casinos started to attract junkets following extensive marketing programme, with significant interest in second quarter • Construction of the marina in Sutomiscica commenced in February 2006 Since the period end: • Excellent month of August with almost 12,500 visitors to the three casinos • High levels of bookings for junkets in September Gerhard Huber, Executive Chairman of Cubus Lux, commented: "Our progress towards becoming the pre-eminent tourist and leisure business inCroatia is well under way. The strong interest seen in the months of May andJune are further vindication of our marketing strategy to attract junkets to ourcasinos. After an excellent August and high bookings for September we areconfident of further improvement in the second half of the year. "Construction of the marina in Sutomiscica is expected to be almost completed bythe key booking season of autumn, and we are confident of attracting significantinterest for next year." For further information please contact: Cubus Lux Plc Gerhard Huber, Chairman: 07900 683 683 Corporate Synergy Oliver Cairns/Katie Ratner, Corporate Finance: 020 7448 4400 Threadneedle Communications Graham Herring/Josh Royston, Financial PR: 020 7936 9606/07789 003223 CHAIRMAN'S STATEMENT I am pleased to report results for the six months ended 30 June 2006. In March 2006, the company acquired the entire issued share capital of PlavaVala d.o.o.for £3.5 million, satisfied by the issue of 35,000,000 shares.. Operations Cubus Lux d.o.o. - the gaming company: The first half of 2006 saw the first fruits of our efforts to attract junkets toour casinos. We were able to create significant business in the second quarterwith May and June being our best months. Since the period end, August proved tobe excellent in trading terms as we attracted almost 12,500 visitors to ourthree casinos, and there is a high level of junket bookings for the month ofSeptember. Plava Vala d.o.o. - the marina company: Because of a delay in obtaining the building permit, the construction of theSutomiscica marina only started in February 2006. Nevertheless, constructionwill be almost completed in autumn, and Plava Vala d.o.o. has already started totake bookings. Autumn is traditionally the booking season and we are confidentof attracting many boats for next season. Financial For the six months ending 30 June 2006, the company generated revenues of£327,000 (H1 2005: £191,000) and a net operating loss of £397,000 (H1 2005:£147,000). The results were below our expectations but we are confident that thesecond half will show an improvement in our operating performance. In the first six months of the year the Company raised more than £1m through theissue of new shares in order to finance further expansion. Our plans for the future We are in the process of transition from a casino operator into a leadingtourism company in Croatia, with operations that are complementary to gaming. Wecontinue to evaluate a number of opportunities to further this strategy. GERHARD HUBER Chairman Executive Director GROUP PROFIT AND LOSS ACCOUNT Six months to Six months to Year to 31 30 June 2006 30 June 2005 December 2005 Unaudited Unaudited Audited Note £'000 £'000 £'000 TURNOVER 1,2 327 191 571 Cost of sales (41) (24) (70) ------------- ------------- ------------- GROSS PROFIT 286 167 501 Administrative expenses (683) (314) (981) ------------- ------------- ------------- OPERATING LOSS (397) (147) (480) Interest receivable 26 - 1Interest payable (42) (21) (18) -------------- -------------- -------------LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (413) (168) (497) Tax on loss on ordinary activities 3 - - - ------------- ------------- ------------- RETAINED LOSS (413) (168) (497) ====== ====== ====== LOSS PER SHARE Basic 8 0.75p 0.76p 2.15p ====== ====== ======Diluted 8 0.72p 0.72p 2.14p ====== ====== ====== GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES Six months to Six months to Year to 31 30 June 2006 30 June 2005 December 2005 Unaudited Unaudited Audited £'000 £'000 £'000 Loss for the financial period (413) (168) (497)Share based payments 30 - -Exchange rate movements 4 17 (20) ------------- ------------- ------------- Total recognised losses relating to the period (379) (151) (517) ====== ====== ====== GROUP BALANCE SHEET Notes As at 30 June As at 30 June As at 31 2006 2005 December 2005 Unaudited Unaudited Audited £'000 £'000 £'000 FIXED ASSETS Intangible fixed assets 4 3,856 - - Tangible assets 5 2,210 632 590 ------------- ------------- ------------ 6,066 632 590 CURRENT ASSETS Stock 10 35 10 Debtors 546 218 301 Cash at bank 1,014 357 431 ------------- ------------- ------------ 1,570 610 742 CREDITORS: amounts falling due within one year (1,222) (626) (740) ------------- ------------- ------------ NET CURRENT ASSETS/(LIABILITIES) 348 (16) 2 -------------- -------------- ------------ TOTAL ASSETS LESS CURRENT LIABILITIES 6,414 616 592 CREDITORS: amounts falling due after one year (2,183) (229) (325) -------------- -------------- ------------ 4,231 387 267 ====== ====== ===== CAPITAL AND RESERVES Called up share capital 6 711 223 249 Share premium 7 5,202 1,101 1,321 Other reserve 7 30 - - Merger reserve 7 347 347 347 Profit and loss account 7 (2,059) (1,284) (1,650) ------------- ------------- ------------- EQUITY SHAREHOLDERS' FUNDS 4,231 387 267 ======= ====== ====== GROUP CASH FLOW STATEMENT Six months to Six months to Year to 31 30 June 2006 30 June 2005 December 2005 Unaudited Unaudited Audited £'000 £'000 £'000 Operating loss (397) (147) (480) Loss on disposal of fixed assets - - (4) Share based payments 30 - - Depreciation 74 50 113 Amortisation 65 - - Increase in debtors (154) (164) (247) Increase in stock - (29) (4) Increase in creditors 167 354 111 -------------- -------------- --------------- CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES (215) 64 (511) RETURN ON INVESTMENT AND SERVICING OF FINANCE (16) (21) (17) CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT (1,133) (88) (105) ACQUISITIONS AND DISPOSALS Cash acquired with subsidiary 115 - - -------------- -------------- --------------- CASH OUTFLOW BEFORE FINANCING (1,249) (45) (633) FINANCING Issue of shares (net of issue costs) 843 - 246 Capital element of finance leases repaid (4) - - Net loans received 1,075 - 453 --------------- --------------- -------------- INCREASE/(DECREASE) IN CASH IN THE PERIOD 665 (45) 66 ======= ====== ====== RECONCILIATION OF NET CASH FLOW TO NET (DEBT)/FUNDS Six months to Six months to Year to 31 30 June 2006 30 June 2005 December 2005 Unaudited Unaudited Audited £'000 £'000 £'000 Increase/(decrease) in cash in the period 665 (45) 66 Cash inflow from movement in debt (1,075) - (448) Capital element of finance leases repaid 4 - - Exchange differences (82) 17 (20) Debt acquired on acquisition of subsidiary (995) - - ------------- ------------- ------------- Movement in net debt in the period (1,483) (28) (402) Net (debt)/funds at beginning of period (170) 232 232 ------------- ------------- ------------- Net (debt)/funds at end of period (1,653) 204 (170) ====== ====== ====== RECONCILIATION OF MOVEMENTS IN GROUP SHAREHOLDERS' FUNDS Six months to Six months to Year ended 30 June 30 June 31 December 2006 2005 2005 Unaudited Unaudited Audited £'000 £'000 £'000 Loss for the financial period (413) (168) (497) --------------- --------------- --------------- (413) (168) (497) Exchange rate differences 4 17 (20)Share based payments 30 - -New shares issued in Cubus Lux Plc (net of issue costs) 4,343 - 246 --------------- --------------- ---------------Net movement in shareholders'funds 3,964 (151) (271) Opening shareholders' funds 267 538 538 --------------- --------------- ---------------Closing shareholders' funds 4,231 387 267 ======= ======= ======= NOTES TO THE REPORT AND FINANCIAL STATEMENTS 1. ACCOUNTING POLICIES (a) Basis of Preparation The financial information is prepared on the historical cost basis in accordance with the applicable accounting standards. It comprises the consolidated financial information of Cubus Lux Plc and itssubsidiaries. (b) Basis of Consolidation On 20 May 2004, the company purchased 100% of the issued sharecapital of Cubus Lux d.o.o., a company registered in the Commercial Court inRijeka, Croatia, by way of a share for share exchange. Under FinancialReporting Standard 6, merger accounting has been adopted as the basis ofconsolidation for this transaction. On 6 March 2006, the company purchased 100% of the issued sharecapital of Plava Vala d.o.o., a company registered in Croatia, by way of a sharefor share exchange. Under Financial Reporting Standard 6, acquisitionaccounting has been adopted as the basis of consolidation for this transaction. (c) Depreciation Depreciation is provided at rates calculated to write off thecost less estimated residual value of each asset by equal monthly instalmentsover its expected useful life as follows:- Motor Vehicles 25% per annum Office furniture, computers and casino equipment 10-25% per annum During the period ended 30 June 2006, the marina was underconstruction and therefore no depreciation has been charged. (d) Goodwill and amortisation Goodwill arising on consolidation, representing the excess of the fair value ofthe consideration given over the fair values of the identifiable net assetsacquired and is capitalised and amortised on a straight line basis over itsestimated useful economic life of 20 years. (e) Stocks Stocks are valued at the lower of cost and net realisable value. (f) Foreign Currencies Transactions in foreign currencies are recorded at the rate ofexchange at the date of the transaction. The results and balance sheets ofoverseas operations are translated at the rate of exchange rating at the balancesheet date. The rate of exchange used at 30 June 2006 was 10.4366 HRK to £1 (30June 2005: 10.9449 HRK to £1). (g) Turnover Turnover represents the invoiced amount of goods sold andservices provided in the year, net of value added tax. (h) Share based payments The Group is required to adopt FRS 20 "Share Based Payments" for the first timefor accounting periods commencing on or after 1st January 2006. FRS 20 requiresthe Group to recognise an expense in respect of the granting over shares toemployees and directors. This expense, which is calculated by reference to thefair value of the options granted, is recognised on a straight line basis overthe vesting period based on the Group's estimate of options that will eventuallyvest. The Directors have used the Black Scholes model to estimate the value ofoptions granted in the current and prior periods. NOTES TO THE REPORT AND FINANCIAL STATEMENTS (continued) 2. BUSINESS SEGMENT ANALYSIS The Group is currently organised into two operating divisions - the casinos and the marina. This is thebasis on which the Group reports its primary segment information. Segmental information is presentedbelow: Period ended 30 June 2005: Casino Marina Central Total £'000 £'000 £'000 £'000RevenueExternal sales 191 - - 191 ====== ====== ==== ======LossSegment operating loss (54) - (93) (147)Net finance costs (21) -------------Loss before taxation (168) ======Assets and liabilitiesSegment assets 1,242 - 319 1,242Segment liabilities (1,061) - (113) (855) ------------ ------------- ------------- -------------Net assets 181 - 206 387 ======= ====== ====== ======Year ended 31st December 2005:RevenueExternal sales 571 - - 571 ======= ====== ====== =======LossSegment operating loss (240) - (240) (480)Net finance costs (17) ------------Loss before taxation (497) ======Assets and liabilitiesSegment assets 997 - 335 1,332Segment liabilities (982) - (83) (1,065) -------------- ------------ ------------- -------------Net assets 15 - 252 267 ======= ====== ====== ======Period ended 30 June 2006:RevenueExternal sales 315 12 - 327 ====== ====== ==== ======LossSegment operating loss (108) (30) (259) (397)Net finance costs (16) -------------Loss before taxation (413) ======Assets and liabilitiesSegment assets 759 1,872 5,005 7,636Segment liabilities (919) (2,314) (172) (3,405) --------------- ------------ ------------- -------------Net assets (160) (442) 4,833 4,231 ======= ====== ====== ====== NOTES TO THE REPORT AND FINANCIAL STATEMENTS (continued) 3. TAXATION The Company is controlled and managed by its Board in Croatia. Accordingly, theinteraction of UK domestic tax rules and the taxation agreement entered intobetween the U.K. and Croatia operate so as to treat the Company as solelyresident for tax purposes in Croatia. The Company undertakes no businessactivity in the UK such as might result in a Permanent Establishment for taxpurposes and accordingly has no liability to UK corporation tax. 4. INTANGIBLE FIXED ASSETS Goodwill £'000 Cost At 1st January 2006 - Additions 3,921 ---------------- At 30th June 2006 3,921 --------------- Amortisation At 1st January 2006 - Charge for the period 65 -------------- At 30th June 2006 65 -------------- Net Book Value At 30th June 2006 3,856 ======= At 31st December 2005 - ====== At 30th June 2005 - ====== On 6 March 2006, the company purchased the entire issued share capital ofPlava Vala d.o.o., a company registered in Croatia for a consideration of35,000,000 ordinary shares of £0.01 each valued at £0.10 each. At thisdate, Plava Vala d.o.o. had net liabilities of £421,000 creating goodwill of £3,921,000. 5. TANGIBLE FIXED ASSETS Leasehold Casino Marina premises assets assets Total £'000 £'000 £'000 £'000 Cost or valuation At 1st January 2006 51 801 - 852 Additions - 18 1,115 1,133 Acquired on acquisition - - 475 475 Exchange rate movements 3 48 31 82 -------------- ------------ ------------ ---------------- At 30th June 2006 54 867 1,621 2,542 --------------- ------------ ------------ --------------- Depreciation At 1st January 2006 16 246 - 262 Charge for the period 3 68 3 74 Exchange rate movements (1) (3) - (4) -------------- ------------ ------------ -------------- At 30th June 2006 18 311 3 332 -------------- ------------ ------------ -------------- Net Book Value At 30th June 2006 36 556 1,618 2,210 ======= ===== ===== ======= At 31st December 2005 35 555 - 590 ======= ===== ===== ====== At 30th June 2005 40 592 - 632 ======= ===== ===== ====== NOTES TO THE REPORT AND FINANCIAL STATEMENTS (continued) 6. CALLED UP SHARE CAPITAL 30 June 2006 £'000 Authorised: 100,000,000 ordinary shares of £0.01 each 1,000 2,000,000 deferred ordinary shares of £0.001 each 2 ------------ 1,002 ====== Allotted, called up and fully paid: 70,852,004 ordinary shares of £0.01 each 709 1,555,554 deferred ordinary shares of £0.001 each 2 ------------ 711 ====== On 6 March 2006, the company acquired 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. On 6 March 2006, the company placed 10,250,000 ordinary shares of £0.01 each at£0.10 per share. On 6 March 2006, the company issued 3 ordinary shares of £0.01 each at £0.10 pershare. On 7 March 2006, the company placed 500,000 ordinary shares of £0.01 each at£0.10 per share. On 13 March 2006, the company placed 400,000 ordinary shares of £0.01 each at£0.10 per share. On 27 April 2006 the Company granted options to Directors as follows: G Huber 2,000,000 M Janssen 1,000,000 L Nahon 1,000,000 H Ravid 1,000,000 E Abramovich 1,000,000 C Kaiser 1,000,000 All the above options are over £0.01 ordinary shares at the exercise price of10p and expire on 26 April 2011. 7. RESERVES Profit and Share Premium Other reserve Merger reserve Loss account Total £'000 £'000 £'000 £'000 £'000 As at 1 January 2006 1,321 - 347 (1,650) 18 Exchange rate - - - 4 4 Issue of shares (net of costs) 867 - - - 867 Share based payments - 30 - - - Retained loss for the period - - - (413) (413) Acquisition of subsidiary (net 3,014 - - - 3,014 of costs) ----------------- ----------------- ----------------- ------------------ ---------------- At 30 June 2006 5,202 30 347 (2,059) 3,520 ======== ======== ======== ========= ======== NOTES TO THE REPORT AND FINANCIAL STATEMENTS (continued) 8. LOSS PER SHARE The loss per share of 0.75p (31 December 2005: loss 2.15p; 30 June 2005: loss0.76p) has been calculated on the weighted average number of shares in issueduring the year namely 54,515,537 (31 December 2005: 23,120,334; 30 June 2005:22,102,001) and losses of £413,045 (31 December 2005: loss £496,852; 30 June2005: loss £167,985). The calculation of diluted loss per share of 0.72p (31 December 2005: loss2.14p; 30 June 2005: loss 0.72p) is based on the loss on ordinary activitiesafter taxation and the diluted weighted average of 56,977,075 (31 December 2005:23,190,334; 30 June 2005: 23,190,334) shares. INDEPENDENT REVIEW REPORT TO CUBUS LUX PLC We have been instructed by the Company to review the financial information forthe six months ended 30 June 2006, which comprise the Consolidated Profit andLoss Account, the Consolidated Statement of Total Recognised Gains and Losses,the Consolidated Balance Sheet, the Consolidated Cash Flow statement and therelated notes. We have read the other information contained in the interimreport and considered whether it contains any apparent misstatements or materialinconsistencies with the financial information. This report is made solely to the company in accordance with guidance containedin Bulletin 1999/4 'Review of interim financial information' issued by theAuditing Practices Board. To the fullest extent permitted by law, we do notaccept or assume responsibility to anyone other than the company, for our work,for this report, or for the conclusions we have formed. Respective responsibilities of directors The interim report, including the financial statements contained therein, is theresponsibility of, and has been approved by the directors. The directors areresponsible for preparing the interim report in accordance with the AIM Rules ofthe London Stock Exchange which require that the accounting policies andpresentation applied to the interim figures should be consistent with thoseapplied in preparing the preceding annual accounts except where any changes, andthe reasons for them are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board. A review consists principally of makingenquiries of management and applying analytical procedures to the financialinformation and underlying financial data and based thereon, assessing whetherthe accounting policies and presentation have been consistently applied andadequately disclosed. A review excludes audit procedures such as tests ofcontrols and verification of assets, liabilities and transactions. It issubstantially less in scope than an audit performed in accordance with AuditingStandards and therefore provides a lower level of assurance than an audit.Accordingly we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2006. haysmacintyre Fairfax HouseChartered Accountants 15 Fulwood PlaceRegistered Auditors London WC1V 6AY 20 September 2006 This information is provided by RNS The company news service from the London Stock Exchange