Challenger Energy Regulatory News (CEG)

3 Aug 2006 07:00

CORSIE GROUP PLC INTERIM RESULTS FOR THE SIX MONTHS TO 30 JUNE 2006 Highlights * Turnover from continuing operations up 7.8% at ‚£1.93m (2005, ‚£1.78m) * Gross profit from continuing operations up 19% at ‚£785,000 (2005, ‚£662,000) * Gross margin up 4% at 41% (2005, 37%) * Launch of E-Commerce platform - www.shopspa.co.uk * Solid platform for growth. CHAIRMAN'S REPORTIntroductionI was delighted to be appointed as Chairman of the company in June 2006.This is an exciting and positive time to be involved with the Corsie Group asthe opportunities for growth in the Company's markets are significant. TheCompany is a young company in the early stages of its development and with asupportive shareholder base is actively seeking further profitable routes forexpansion both organically and by acquisition.Admission to AIMThe Company's admission to AIM in June this year was a major event in theCompany's development and will provide both the profile and financial platformfor growth. The Corsie Group operates from the UK with customers worldwide andthe dynamic young management team is actively seeking new products anddistributorships for its worldwide leisure markets. The Group's improvedfinancial base is enabling the management team to consider many newopportunities for expansion. To position the group for anticipated growth, thebusiness is being relocated to a large adjacent property later in the year.FinancialsTurnover is up 7.8% at ‚£1.93m and gross profit up 19% at ‚£785000. Gross marginshave improved from 37% to 41%. The profit in the 6 months to June is a majormilestone which we expect to build on during the second half. The Corsie Groupis showing steady growth in its continuing business with improved turnover,margins and operating profits. The financial statements for the six monthperiod contain several one off charges associated with the Group'srestructuring and Admission to AIM but the underlying growth of the business issoundly based. All divisions of the Group have steady order flows and a seriesof additional product lines is helping to drive this growth .The introductionof the Group's e commerce facility should add to this trend.As the Company is in the development phase no interim dividend will be paid.Board and EmployeesThe Corsie Group has a small and highly motivated management team many of whomparticipate in the Group's EMI share option scheme. The Group is attractingyoung professional talent and with a senior management team who has largelyworked together for many years the Group has stability in its managementstructure. Over the period the business has been streamlined into threeoperating divisions which have reduced the Group's headcount and operatingcosts substantially.I should like to express my thanks to the employees of the Group who haveworked extremely hard to help bring about the AIM admission and to position theGroup for its expansion plans.OutlookThe Group is involved in the worldwide leisure market and is identifying manyopportunities for growth. Current trading is in line with expectations and withthe new found sense of purpose following the placing and admission to AIM. Ilook forward to the future with confidence.David Mathewson, 3 August 2006CHIEF EXECUTIVE'S REPORTI am pleased to report a trading improvement during the first half of thisfinancial year. The business performed well in its markets, with turnover,gross margin and profits comfortably ahead of the corresponding period on alike-for-like basis. The decision to focus on 3 key sectors within adistribution based model has been successful. It is our belief that this modeloffers the best top and bottom line growth going forward.The successful fundraising in June will enable the capacity of our businessmodel to increase by moving to larger premises on the same estate later thisyear. This will eliminate current space constraints and provide capacity toexecute our focussed distribution strategy. We have also increased our Spasales force and will continue to invest in this particular division in theshort term.Greengauge SportsOur Sports Division is the leading bowls distributor in the UK. The divisionperformed well during the period with good demand for current lines. Newproducts have been well received with demand for certain lines outstrippingsupply. The profile of our products was enhanced further this year through oursponsored players and employees. Alex Marshall, our northern sales manager,lifted a pairs Gold medal at the Commonwealth games in Melbourne and GregHarlow, our southern sales manager, was crowned World No 1 for the season 2006/07. The business continues to lead by design and innovation with new brandedproducts continually being developed in house.Greengauge SurfacesOur surfaces division historically addressed the bowls market only. Our salescontinued to grow in line with expectations. Over the past 12 months we havesuccessfully diversified into new markets such as multi-sports surfaces andsafety related surfaces, reducing our heavily weighted bowls revenue. Thisdiversification has been successful and we will continue to expand sales withinthose new markets which offer good growth potential.Overall surfaces delivered a good performance during the period. Overseasactivity was strong, with contracts recorded in Malaysia, Australia, NewZealand and Europe. New business wins continue, with some key contracts bookedin the second half of this financial year.Spa SolutionsThe core business is the supply of quality consumables to the Spa market in theUK and Ireland. The division is now gaining momentum following the recruitmentof additional sales resources and the arrival of new inventory. We areconfident the second half will show a positive step change following ourinvestment in additional resources. New client wins include Sheraton, RagdaleHall and Pennyhill Park. The spa business is the smallest within the group buthas good top and bottom line growth potential which we aim to exploit.Shop Spawww.shopspa.co.uk has been launched today offering luxury Spa and beautyproducts direct to the consumer. This was a logical extension to expanding oursales channels and increasing revenue accordingly.Richard Corsie, 3 August 2006GROUP UNAUDITED PROFIT AND LOSS ACCOUNTFor the six months ended 30 June 2006 Six months Six months Year ended ended ended 30-Jun 30-Jun 31-Dec 2006 2005 2005 (Unaudited) (Unaudited) (Audited) ‚£'000 ‚£'000 ‚£'000 Turnover Continuing 1,925 1,785 3,160 Discontinued 0 433 473 1,925 2,218 3,633 Cost of Sales Continuing 1,140 1,123 2,047 Discontinued 0 267 357 1,140 1,390 2,404 Gross Profit Continuing 785 662 1,113 Discontinued 0 166 116 785 828 1,229 Administration expenses (excluding exceptional items) Continuing 597 449 1,044 Discontinued 0 214 384 Total administration 597 663 1,428expenses Operating profit/(loss) 188 165 (199) Loss/(profit) on disposal of fixed 1 (2) (874)assets Net interest payable and similar 85 89 335charges Exceptional items (profit)/ (1,070) 72 0loss Profit/(loss) on ordinary activities before 1,172 6 340taxation Tax on profit on ordinary activities 0 0 159 Retained profit/(loss) for the 1,172 6 181period Earnings per ordinary share Basic earnings per share 0.01 0.13 3.82 Diluted earnings per share 0.01 0.07 2.09 GROUP UNAUDITED BALANCE SHEETAs at 30 June 2006 As at As at As at 30-Jun 30-Jun 31-Dec 2006 2005 2005 (Unaudited) (Unaudited) (Audited) ‚£'000 ‚£'000 ‚£'000 Fixed assets Tangible assets 127 126 119 Intangible 345 377 358 assets 472 503 477 Current assets Stocks 597 787 561 Debtors 1,417 648 243 Cash at bank 879 0 1,153 2,893 1,435 1,957 Creditors : amounts falling due within 2,566 2,472 2,641 one year Net current assets/ 327 (1,037) (684) (liabilities) Creditors : amounts falling due after 1,574 2,856 2,780 more than one year Provisions for liabilities and 366 0 366 charges Net assets/(liabilities) (1,141) (3,390) (3,353) Capital and reserves Called up share capital 167 116 116 Share premium account 990 0 0 Other reserves 435 435 435 Profit and loss account (2,733) (3,941) (3,904) Shareholders (1,141) (3,390) (3,353) funds GROUP UNAUDITED CASH FLOW STATEMENTFor the six months ended 30 June 2006 Six months Six months Year ended ended ended 30-Jun 30-Jun 31-Dec 2006 2005 2005 (Unaudited) (Unaudited) (Audited) ‚£'000 ‚£'000 ‚£'000 Net cash outflow from operating (343) (59) (63) activities Return on investments and servicing of finance Interest paid 85 89 169 Dividends on shares classed as 0 0 90 liabilities (85) (89) (259) Taxation (36) 0 (60) Capital expenditure Payments to acquire tangible 26 0 9 fixed assets Proceeds from the disposal of tangible (2) 0 (875) fixed assets (24) 0 866 Financing Cash received from issue of shares (net 1,041 0 0 of expenses) 1,041 0 0 Increase in cash in the period 553 (148) 484 Reconciliation of operating profit to net cash outflow from operating activities Operating profit 1,228 63 (199) Depreciation 16 20 31 Amortisation 12 12 34 Gain on sale of fixed 1 0 0 assets (Increase)/Decrease in (36) 44 255 stock (Increase)/Decrease in (1,174) (152) 261 debtors Increase/(Decrease) in (390) (46) (445) creditors Net cash inflow from operating (343) (59) (63) activities Reconciliation of net cash movement to net funds Increase in cash in the 553 (148) 484 period Movement in net funds during the 553 (148) 484 period Net funds at start of (2,134) (2,625) (3,719) the period Net funds at end of the (1,581) (2,773) (3,235) period NOTES TO THE UNAUDITED FINANCIAL STATEMENTSFor the six months ended 30 June 2006 1. Basis of preparation The interim financial information does not constitute statutory accounts forthe purpose of section 240 of the Companies Act 1985. The figures for the yearended 31 December 2005 have been extracted from the Group accounts for thatyear. Those financial statements have been delivered to the Registrar ofCompanies and included an auditors' report, which was unqualified.The interim financial information has been prepared using the same accountingpolicies and estimation techniques as set out in the Group accounts for theyear ended 31 December 2005. 2. First period of trading The Company, which was incorporated on 28 February 2006, did not trade until 5June 2006, following the acquisition of Company 91 Limited (formerly CorsieGroup Limited). From this date until 30 June 2006, the following financialinformation is available: Period 5-Jun to 30-Jun 2006 (Unaudited) ‚£'000 Turnover 260 Gross Profit 108 Retained profit for the period (including 1023 exceptionals) 3. Earnings per share Basic and diluted earnings per ordinary share is calculated by dividing theearnings attributable to ordinary shareholders by the weighted average numberof ordinary shares in issue during the period.For the first reporting period to 30 June 2006, the shares on issue atflotation were treated as if they had been in issue for the whole financialyear. Profit for Weighted Earnings average the period per number of share ‚£000 shares ‚£ Year to 31 December 181 47,332 3.82 2005 Period to 30 June 2005 6 47,332 0.13 Period to 30 June 2006 1172 86,228,499 0.01 If all outstanding share options were exercised in full there would be a dilution of EPS as defined in FRS 14 as shown below: Profit for Weighted Dilutive Diluted average the period ordinary earnings number of per share ‚£000 shares shares ‚£ Year to 31 December 181 47,332 39,277 2.09 2005 Period to 30 June 2005 6 47,332 39,277 0.07 Period to 30 June 2006 1172 86,228,499 510,856 0.01 4. Reconciliation of movement in shareholders' funds 5. Six months ended 30-Jun 2006 (Unaudited) ‚£'000 Profit for the 1,172 financial year Share premium on shares issued 1,522 Costs of shares issue (482) Net addition to shareholders' 2,212 equity deficit Opening shareholders' equity (3,353) deficit Closing shareholders' equity (1,141) deficit 5. Restated comparatives The interim statements of the Group have been prepared using merger accounting.This represents a change in approach from that adopted in our consolidatedaccounts for the year ended 31 December 2005, which were prepared underacquisition accounting.Although it is the Group's preference to report the results on a consistentbasis, we have adopted this approach to reflect current accounting treatmentfor group reorganisations.The audited financial statements for the year ended 31 December 2005 and theunaudited six months ended 30 June 2005, have been restated using mergeraccounting. 6. Availability of accounts Copies of the interim statement are available from the registered office of theCompany during office hours, at Newhailes Industrial Estate, Musselburgh, EastLothian EH21 6SY.ENDCORSIE GROUP PLC