Cloudcoco Regulatory News (CLCO)

26 Jun 2007 07:01

Glen Group PLC26 June 2007 Glen Group plc Interim Results for the six months ended 31 March 2007 Glen Group plc, the Edinburgh based provider of integrated IT and communication services, today announces interim results for the six months ended 31 March 2007 Key points: • Turnover for the half year of £2,924,819 compares to £976,937 in the equivalent period last year - an increase of approximately 200% • Eclectic contributes £2,508,898 (2006 first half £588,856) and Glen Communications and Explore IT contribute £415,921 (2006 first half: £388,081) • Restructuring and development costs of £312,615 include £236,878 related to head count reduction, contractual termination costs and benefits paid to senior managers in Glen Communications/Explore IT and £75,737 of Microsoft and Oracle development costs in Eclectic • Before the restructuring and development costs, operating losses reduce to £252,735 from £323,756 • Post the restructuring and development costs, the operating loss increases to £565,350 • Eclectic becomes an Oracle Advanced Certified Partner, taking it into the elite group of Oracle partners • Successful acquisition of Pinnacle Group since the end of the half-year • Proposed Group name change to "ICT Acquisitions PLC" to reflect the nature of the Group's business of acquiring and developing companies in the information, communications and technology sectors Eric Hagman CBE, Chairman of Glen Group, commented: "The half year has been one of significant change and I believe that thesechanges, our renewed focus on profitable acquisitions and a determination tobuild a business of size and quality are all positive developments" Enquiries: Glen Group plcGraham J Duncan, Chief Executive Officer Tel: 0845 119 2100 Pelham PRAlex Walters Tel: 0203 17 0 7435 26 June 2007 Chairman's Statement The first half has been one of significant change. Our strategy is based on: • acquiring suitable IT and communications services businesses • integrating them fully and swiftly • developing them organically, supplemented by further acquisitions which are capable of adding long term value. This process itself involves change. During much of 2006 our strategy wasfrustrated when our share price fell below the nominal value of our shares,preventing us from issuing shares as purchase consideration or to raiseexpansion capital. This problem was resolved in February 2007 when wereorganised our share capital and since then we have been actively seekingacquisition opportunities. We recently announced the purchase of Pinnacle GroupLimited, a provider of telecommunications services to the SME market, and wecontinue to have an active acquisition deal flow in prospect. In order to betterposition Glen Group plc in the eyes of customers, shareholders and the publicgenerally, we intend changing its name, subject to shareholder approval which wewill seek later this year, to "ICT Acquisitions PLC". This will emphasise thatour business is firmly rooted in the Information, Communications and Technologyspace and our strategy is acquisition led. I can also announce today that wehave applied to the PLUS market to have our shares traded on this platform, aswell as retaining our listing on AIM, which we hope will provide additionalliquidity in the shares. A key objective of the business is to trade profitably. Following theacquisition of Explore IT Limited ("Explore") by Glen Communications Ltd ("GlenCommunications") last September, we have fundamentally restructured the SME sideof our business. Historically, Glen Communications has relied on project, ratherthan recurring, business particularly using a direct sales force for the sale ofmobile solutions to customers. Building the business required us to continue toincrease the size of the direct sales team, which involved material costs inmanagement time, training and recruitment. Following a review of this strategyafter the Explore acquisition, and a recognition that we needed to develop morerecurring income streams, we decided to modify this approach and limit the sizeof the direct sales team. We also decided that the majority of this team shouldbe IT centric rather than mobile centric. This restructuring also involved arationalisation of the middle management team, office moves in both Edinburghand Rotherham, and the introduction of new IT support systems, all of which havebeen completed in the first half. Following the acquisition of Pinnacle and theappointment of Alan Bonner as Managing Director of the SME focussed group ofcompanies, I can also announce that we are in the process of changing the nameof Glen Communications to "Pinnacle ICT Limited" and we have also acquired the50% shareholding in Pinnacle Mobile Limited and the 20% minority interests inSports Club Telecom Limited which we did not own in exchange for a total of4,863,636 shares in Glen Group plc issued at 0.55 pence per share. Applicationhas been made for the admission of these shares to trading on AIM which isexpected to occur on 29 June 2007. While in the half year we have incurred restructuring one-off costs of £236,878implementing the changes outlined above, we anticipate that these changes, allnow fully implemented, will drive annualised cost savings of over £400,000. Withthe addition of the Pinnacle group of companies, which trade profitably on abase of largely recurring income, we can now look forward to building this partof the business from a much stronger platform while continuing to seekprofitable acquisitions in this space. The greater part of our business is business intelligence ("BI") consultancy andtraining, which we market under the Eclectic brand. Since we acquired theEclectic business in February 2006 it has performed ahead of even our highestestimates and the half year is no exception. The business intelligence marketcontinues to grow at a significant pace and Eclectic is gaining clients in theenterprise, corporate and public sector markets with its niche focus.Historically, Eclectic has provided consultancy, implementation and training onBusiness Objects software platforms. In the half year, it was decided to expandthe software platforms. Eclectic has self-started Microsoft and Oracle practicesas both these vendors are increasingly targeting the BI space. In the half yearwe have incurred development costs of £75,737 (which have been expensed) inestablishing these new business units. Since the half year end, we have beendelighted to be awarded our first Oracle BI consultancy work and I can announcetoday that we have achieved the very prestigious status of Oracle AdvancedCertified Partner, which takes us into the elite group of Oracle partners. Onthe acquisition front, we continue to look at opportunities which can enhanceand expand our BI offering to clients, particularly those that can give uspresence in the London area and we remain active in seeking suitableacquisitions. One of the key performance indicators that your Board monitors is EBITDA. Forthe group as a whole, EBITDA remains negative and in the half-year, afterrestructuring and development costs, it was negative £503,768 (2006 half-year£355,942 negative). Before restructuring and development costs it was negative£191,153 (2006 half-year £306,075 negative). EBITDA generated by the operatingcompanies, excluding the costs of running the holding company has, historically,been negative since we listed in December 2004. Although a modest figure, I ampleased to note that the EBITDA generated by these companies, excluding therestructuring and development costs both outlined above, was positive at £34,050in the half year (2006 half-year £141,662 negative), which represents asignificant turnaround. Full details of the financial performance for the half year are contained in theChief Executive's Review. As I have already indicated, the half year has been one of significant change. Ibelieve that these changes, our renewed focus on profitable acquisitions and adetermination to build a business of size and quality are all positivedevelopments and your Board looks forward to implementing its plans. Eric M Hagman CBECHAIRMAN26 June 2007 Chief Executive's Review The half year can be characterised by one of change, not just in there-organisation of people in the business, but also in the changing mix ofservices sold to customers. 1) Turnover Turnover for the half year was £2,924, 819 compared to £976,937 in theequivalent period last year, a rise of nearly 200%, due largely to theacquisition of Eclectic Group Limited in February 2006. The half-year turnoveralso compares favourably with turnover in the second half of last year, a morecomparable period, which was £2,721,308, representing a growth of 7.5% over thesix-month period ended 31st March 2007. In this half year Eclectic contributed £2,508,898 (2006 first half: £588,856)and Glen Communications, along with its wholly owned subsidiary Explore IT,contributed £415,921 (2006 first half: £388,081). Eclectic group turnover forthe first half also compares well against the second half turnover last year, amore comparable period, when it reached £2,144,288, an increase of 17% over thehalf-year period. Despite the disruption which is inevitably caused by anyrestructuring, it is pleasing to see that the SME business unit, comprising GlenCommunications Limited and Explore IT Limited, has lifted its turnover in whatis, historically, a less robust period compared to the second half. The restructuring of the SME business unit has been successfully refocused on ITservices. In the year ended 30 September 2006 approximately 30% of turnover fromthis unit came from the provision of IT services. In the half-year to 31 March2007, IT services represented about 65% of the unit's turnover. As well asundertaking project work, the SME business unit also delivers recurring revenuesfrom IT support contracts and from the provision of voice over broadbandservices (more commonly known as VoIP). Although turnover from VoIP isembryonic, it has been interesting to note that the level of interest in ourhosted VoIP service has lifted materially this year, compared to last, asawareness of the technology has been increased by the amount of press coverage. 2) Gross Margins The overall gross margin for the half year was £1,047,474 (2006 first half:£412,720 and 2006 full year: £1,332,349). Our gross margins remain very stable.For the half year we returned a gross margin across the three operatingbusinesses of 35.81%. This compares against the full year last year (a morecomparable period) of 36.03%. Eclectic's margin for the half year was 34.94%(2006 full year: 33.58%) while the SME business unit returned 41.08% (2006 fullyear: 42.96%). 3) Restructuring and Development Costs The operating result for the half year has been very materially affected byrestructuring and development costs totalling £312,615. As outlined in the Chairman's Statement, major changes have been made to theGlen Communications business. This has resulted in one-off costs of £236,878,the majority of which relates to the costs of a planned head count reduction,including contractual termination costs and benefits paid to senior managers andothers who have left the business. The development costs of £75,737 relate to the establishment of Microsoft andOracle practices in Eclectic, and mainly relate to the salary costs of keyindividuals hired to develop consultancy services based on softwareimplementation provided by these vendors. 4) Operating Loss In the half year we have incurred an operating loss before restructuring anddevelopment costs of £252,735 (2006 first half: £323,756). Much of theimprovement over 2006 is due to the performance of Eclectic which contributedprofits, before development costs, of £267,309 in the half year. After therestructuring and development costs, the group operating loss increases to£565,350 (2006 half year: £373,623). As acquisitions are concluded, certain duplicative costs can be removed from thebusiness, albeit usually at an initial cost to the business as these costs tendto be people based. The Board is mindful of the need to keep costs to a minimum,and not allow costs to build significantly ahead of revenue. However, anyorganic growth requires investment and our acquisition plans seek to limit thisinvestment by concentrating on being able to cross sell our services into newacquired customers. We will therefore continue to seek businesses with robustcustomer bases as the cost of sale can be materially lower when a captivecustomer is sold more, or different, services. It is interesting to note that, taken together, the operating companies (that isexcluding Glen Group plc itself) have together produced a very modest loss ofjust £9,111 over the half-year period. Before depreciation (the EBITDA figure)this becomes a profit of £34,050. Although not yet producing sufficient EBITDAto cover the costs of Glen Group, which amounted to £243,624 in the half-year(2006 half-year: £159,413), it is nevertheless a step forward. The unauditedresult for the half-year can be further analysed as follows: CONSOLIDATED INCOME 6 Months 6 Months 12 MonthsSTATEMENT - UNAUDITED 31 March 31 March 30 September 2007 2006 2006Turnover:Eclectic 2,508,898 588,856 2,733,144Glen Communications/ExploreIT 415,921 388,081 965,101Totals 2,924,819 976,937 3,698,245Cost of Sales:Eclectic 1,632,268 349,238 1,815,364Glen Communications/ExploreIT 245,077 214,979 550,532Totals 1,877,345 564,217 2,365,896Gross Profit:Eclectic 876,630 239,618 917,780Glen Communications/ExploreIT 170,844 173,102 414,569Totals 1,047,474 412,720 1,332,349Overhead:Eclectic 609,321 164,541 769,839Glen Communications/ExploreIT 447,264 412,522 730,596Glen Group 243,624 159,413 371,269Totals 1,300,209 736,476 1,871,704Operating Profit before othercosts:Eclectic 267,309 75,077 147,941Glen Communications/ExploreIT (276,420) (239,420) (316,027)Glen Group (243,624) (159,413) (371,269)Totals (252,735) (323,756) (539,355)Restructuring & development costs: Eclectic (75,737) 0 0Glen Communications/ExploreIT (236,878) (49,867) (49,867)Totals (312,615) (49,867) (49,867)Operating Profit:Eclectic 191,572 75,077 147,941Glen Communications/ExploreIT (513,298) (289,287) (365,894)Glen Group (243,624) (159,413) (371,269)Totals (565,350) (373,623) (589,222) Notes: Eclectic has been consolidated from 15 February 2006, the date ofacquisition. Explore IT has been consolidated from 4 September 2006, the date of acquisition. 5) Financing During the half-year, the earn-out provisions associated with the acquisition ofEclectic in February 2006 crystallised. Eclectic delivered the maximum level ofprofits under the terms of the earn-out conditions and, accordingly, the Companyissued 73,825,818 shares at 1.0667p per share to satisfy the deferredconsideration payable to the vendors, all in accordance with the earn-outformula contained in the sale and purchase agreement. On 26 February 2007, following shareholder approval, the company's share capitalwas reorganised. Holders of ordinary shares of nominal 1 penny each received oneordinary share of nominal one-tenth of a penny and one deferred share of nominalnine-tenths of a penny. The conditions attaching to the deferred shares renderedthem worthless and the practical effect was to lower the nominal value of theordinary shares to one-tenth of a penny without changing the number of ordinaryshares in issue. This allows the company to issue shares in the future. This hadnot been possible throughout most of 2006 as the market price of the shares hadfallen below the original nominal value of 1 penny per share, and the issue ofshares at a discount to the nominal value is prohibited under the Companies Act1985. At the same time as the reorganisation became effective, the company raised afurther £500,000 (before expenses) in new equity, applied to expanding workingcapital, by the issue of 100,000,000 new ordinary shares at 0.50 pence pershare. Since the half-year end, the company has raised a further £350,000(before expenses) by the issue of a further 100,000,000 new ordinary shares at0.35 pence per share in order to assist acquisitions and provide further workingcapital in an expanding business. On 6 June 2007 the company announced theacquisition of Pinnacle Group Limited for a consideration of £700,000 satisfiedby the issue of 122,727,273 shares at 0.55 pence per share and £25,000 in cash.Since then, we have also completed the acquisition of the 50% shareholding inPinnacle Mobile Limited which we did not own in exchange for 1,000,000 shares inGlen Group plc, and the 20% minority interests in Sports Club Telecom Limited(part of the Pinnacle Group) which we did not own in exchange for a total of3,863,636 shares in Glen Group plc, all of which have been issued at 0.55 penceper share. We have made significant changes to the business in the first-half and we willnow build on the momentum that we have created. We fully expect to be able tocomplete further acquisitions in the second half in accordance with our buy andbuild strategy. Graham J Duncan MA CACHIEF EXECUTIVE26 June 2007 CONSOLIDATED INTERIM INCOME STATEMENT - UNAUDITEDfor the six months ended 31st March 2007 6 months to 6 months to 12 months to 31st March 31st March 30th September 2007 2006 2006 Note £ £ £--------------------- ----- --------- -------- --------- RevenueContinuing operations 2,924,819 388,081 942,582Discontinued operations - - 22,519Acquisitions - 588,856 2,733,144--------------------- ----- --------- -------- --------- 2 2,924,819 976,937 3,698,245Cost of sales (1,877,345) (564,217) (2,365,896)--------------------- ----- --------- -------- --------- Gross profit 1,047,474 412,720 1,332,349Other operating charges (1,612,824) (786,343) (1,921,571)--------------------- ----- --------- -------- --------- Operating loss 3 (565,350) (373,623) (589,222) Interest payable (32,893) (9,319) (23,620)Interest receivable 500 2,551 3,054--------------------- ----- --------- -------- ---------Finance costs (32,393) (6,768) (20,566) Loss before taxation (597,743) (380,391) (609,788) Taxation - - (3,803)--------------------- ----- --------- -------- ---------Loss for the period (597,743) (380,391) (613,591)--------------------- ----- --------- -------- --------- Loss per share 4- basic and fully diluted (1.64) (0.34) (0.28) CONSOLIDATED INTERIM BALANCE SHEET - UNAUDITEDas at 31st March 2007 31st March 31st March 30th September 2007 2006 2006 Note £ £ £--------------------- ----- --------- --------- --------- AssetsNon-current assetsGoodwill 3,564,504 3,925,682 3,562,740Intangible assets 90,000 - 100,000Property, plant and equipment 139,072 103,408 112,667--------------------- ----- --------- --------- ---------Total non-current assets 3,793,576 4,029,090 3,775,407--------------------- ----- --------- --------- --------- Current assetsInventories 46,475 16,603 26,752Trade and other receivables 1,703,122 1,407,107 1,571,471Cash and cash equivalents 111,022 311,966 1,075--------------------- ----- --------- --------- ---------Total current assets 1,860,619 1,735,676 1,599,298--------------------- ----- --------- --------- --------- Total assets 5,654,195 5,764,676 5,374,705--------------------- ----- --------- --------- --------- LiabilitiesCurrent liabilitiesShort term borrowings 658,925 103,680 578,731Trade and other payables 543,912 939,632 939,817Accruals and deferred income 948,064 465,258 238,247Other creditors 187,606 143,097 164,139--------------------- ----- --------- --------- ---------Total current liabilities 2,338,507 1,651,667 1,920,934--------------------- ----- --------- --------- --------- Non-current liabilitiesLong-term borrowings 85,235 93,828 87,557--------------------- ----- --------- --------- ---------Total non-current liabilities 85,235 93,828 87,557--------------------- ----- --------- --------- --------- Total liabilities 2,423,742 1,745,495 2,008,491--------------------- ----- --------- --------- --------- Net assets 3,230,453 4,019,181 3,366,214--------------------- ----- --------- --------- --------- EquityShare capital 4,115,089 3,276,831 3,276,831Share premium account 1,262,434 879,473 860,817Shares to be issued - 787,500 787,500Other reserve 29,635 8,500 20,028Fair Value Adjustment (417,221) - (417,221)Profit and loss reserve 5 (1,759,484) (933,123) (1,161,741)--------------------- ----- --------- --------- ---------Total equity 3,230,453 4,019,181 3,366,214--------------------- ----- --------- --------- --------- CONSOLIDATED INTERIM CASH FLOW STATEMENT - UNAUDITEDfor the six months ended 31st March 2007 6 months 6 months 12 months to to to 30th 31st March 31st March September 2007 2006 2006 £ £ £------------------------ ---------- -------- ---------Operating loss before restructuringand development costs (252,735) (323,756) (539,355)Restructuring costs (236,878) (49,867) (49,867)Development costs (75,737) - ------------------------- ---------- -------- ---------Cash flows from operatingactivities (565,350) (373,623) (589,222) Adjustments forDepreciation and amortisation 54,744 14,274 49,596Other non-cash items 9,607 5,000 19,213(Increase)/decrease in inventories (19,723) (6,490) (16,639)Increase in trade and otherreceivables (131,651) (1,198,391) (1,362,845)Increase in trade payables,accruals and other creditors 324,942 1,309,347 1,099,760------------------------ ---------- -------- ---------Net cash outflow from operatingactivities (327,431) (249,883) (800,137)------------------------ ---------- -------- --------- Cash flows from investingactivitiesPurchase of property, plant andequipment (71,149) (67,365) (56,573)Sale of property, plant andequipment - - 414Acquisition of subsidiary, net ofcash acquired (1,763) (2,204,764) (2,412,933)------------------------ ---------- -------- ---------Net cash used in investingactivities (72,911) (2,272,129) (2,469,092)------------------------ ---------- -------- --------- Cash flows from financingactivitiesInterest paid (net) (32,393) (6,768) (20,566)Issue of shares 500,000 3,012,500 3,012,500Receipt of bank finance 15,000 50,000 84,215Repayment of borrowing (22,019) (9,688) (32,612)Receipt from/(repayment of)shareholders loans - (40,000) (40,000)Receipt from/(repayment of) formerdirector's loan (25,000) 25,000 50,000Receipt from finance leases lessrepayment 13,223 - 9,547Expenses paid in connection withshare issue (47,625) (413,737) (432,393)------------------------ ---------- -------- ---------Net cash used in financingactivities 401,186 2,617,307 2,630,691------------------------ ---------- -------- --------- Net increase in cash 844 95,295 (638,538)Cash and bank overdrafts atbeginning of period (475,547) 162,991 162,991------------------------ ---------- -------- ---------Cash and bank overdrafts at end ofperiod (474,703) 258,286 (475,547)------------------------ ---------- -------- --------- Cash and bank overdrafts compriseCash and cash equivalents 111,022 311,966 1,075Bank overdrafts (585,725) (53,680) (476,622)------------------------ ---------- -------- --------- (474,703) 258,286 (475,547)------------------------ ---------- -------- --------- Analysis of changes in net debt At 30th September At 31st March 2006 Cash Flows 2007 £ £ £------------------------ -------- -------- --------- Cash 1,075 109,947 111,022Bank overdraft (476,622) (109,103) (585,725)------------------------ -------- -------- --------- (475,547) 844 (474,703)------------------------ -------- -------- --------- Debt (189,666) 18,797 (170,869)------------------------ -------- -------- --------- Net debt (665,213) 19,641 (645,572)------------------------ -------- -------- --------- CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITYfor the six months to 31st March 2007 Share Share Shares Other Fair Retained Total Capital premium to be reserve Value earnings issued At 1 October2005 600,000 957,541 - 3,500 - (552,732) 1,008,309 Recogniseddirectly inequity Share Issue 2,676,831 - - - - - 2,676,831 Shares to beissued aspart - - 787,500 - - - 787,500ofacquisition Premium onshare issue - 335,669 - - - - 335,669 Expensesincurred onshare issue - (413,737) - - - - (413,737) Share basedpayments - - - 5,000 - - 5,000 -------- ------- ------- ------- ------- ------- --------Net changedirectly inequity 2,676,831 (78,068) 787,500 5,000 - - 3,391,263 Loss for theyear - - - - - (380,391) (380,391) -------- ------- ------- ------- ------- ------- --------Totalmovements 2,676,831 (78,068) 787,500 5,000 - (380,391) 3,010,872 -------- ------- ------- ------- ------- ------- --------Equity at 31March 2006 3,276,831 879,473 787,500 8,500 - (933,123) 4,019,181 -------- ------- ------- ------- ------- ------- -------- At 1 October2006 3,276,831 860,817 787,500 20,028 (417,221) (1,161,741) 3,366,214 Recogniseddirectly inequity Share Issue 838,258 - (738,258) - - - 100,000 Shares to be - - - - - -issued aspart ofacquisition Premium onshare issue - 449,242 (49,242) - - - 400,000 Expensesincurred onshare issue - (47,625) - - - - (47,625) Share basedpayments - - - 9,607 - - 9,607 ------- ------- ------- ------ ------- -------- -------Net changedirectly inequity 838,258 401,617 - 9,607 - - 461,982 Loss for theyear - - - - - (597,743) (597,743) ------- ------- ------- ------ ------- -------- -------Totalmovements 4,115,089 401,617 (787,500) 9,607 (597,743) (135,761) ------- ------- ------- ------ ------- -------- -------Equity at 31March 2007 4,115,089 1,262,434 - 29,635 (417,221) (1,759,484) 3,230,453 ------- ------- ------- ------ ------- -------- ------- Notes to the financial statements 1. Basis of preparation This interim financial information has been prepared in accordance with theCompany's accounting policies as disclosed in the financial statements for theyear ended 30 September 2006. The Interim statements were approved by the Boardof Directors on 26 June 2007. 2. Analysis of revenue 6 months to 6 months to 12 months to 31st March 31st March 30th September 2007 2006 2006 £ £ £------------------------- -------- -------- -------- By business sectorMobile services 149,011 244,372 631,003Information technology 2,775,808 709,146 3,041,633Phone cards 0 22,519 22,519Other communication services 0 900 3,090------------------------- -------- -------- -------- Total revenue 2,924,819 976,937 3,698,245------------------------- -------- -------- -------- By destinationUnited Kingdom 2,924,819 976,937 3,698,245------------------------- -------- -------- -------- Total revenue 2,924,819 976,937 3,698,245------------------------- -------- -------- -------- By originGlen Communications - continuingoperations 149,011 365,562 942,582Glen Communications - discontinuedoperations 0 22,519 22,519Explore IT 266,910 0 0Eclectic 2,508,898 588,856 2733144------------------------- -------- -------- -------- Total revenue 2,924,819 976,937 3,698,245------------------------- -------- -------- -------- The interim results for 2006 include the initial contribution from Eclecticacquired on 15th February 2006. 3. Analysis of operating loss 6 months to 6 months to 12 months to 31st March 31st March 30th September 2007 2006 2006 £ £ £------------------------- -------- -------- --------By business sectorMobile services (505,104) (284,095) (368,510)Information technology (60,246) (62,780) (199,272)Phone cards 0 (25,719) (10,920)Other communication services 0 (1,029) (10,520)------------------------- -------- -------- -------- Operating loss (565,350) (373,623) (589,222)------------------------- -------- -------- -------- By destinationUnited Kingdom (565,350) (373,623) (589,222)------------------------- -------- -------- -------- Operating loss (565,350) (373,623) (589,222)------------------------- -------- -------- -------- By originGlen Group (243,625) (159,413) (371,269)Glen Communications (492,692) (289,287) (365,894)Explore IT (20,606) - -Eclectic 191,573 75,077 147,941------------------------- -------- -------- -------- Operating loss (565,350) (373,623) (589,222)------------------------- -------- -------- -------- 4. Loss per share 6 months to 6 months to 12 months to 30th 31st March 31st March September 2007 2006 2006 £ £ £------------------------- -------- -------- --------Loss per shareBasic (0.16) (0.34) (0.28)Fully diluted (0.15) (0.33) (0.28)------------------------- -------- -------- -------- Loss for the period attributable toshareholders: Losses basic and fully diluted (597,743) (380,391) (613,591)-------------------------- -------- -------- -------- Weighted average number of shares inissueBasic 364,595,986 111,280,513 219,481,795Adjustment for share options 42,891,160 4,833,334 19,065,128------------------------ --------- --------- --------- Fully diluted 407,187,146 116,113,847 234,731,795------------------------ --------- --------- --------- 5. Profit and loss reserve 6 months to 6 months to 12 months to 31st March 31st March 30th September 2007 2006 2006 £ £ £------------------------- -------- -------- -------- Opening reserve / (deficit) (1,161,741) (552,732) (548,150)Loss for the period (597,743) (380,391) (613,591)------------------------- -------- -------- -------- Closing reserve / (deficit) (1,759,484) (933,123) (1,161,741)------------------------- -------- -------- -------- 6. Availability of Interim Report Copies of these results are being sent to shareholders and will also beavailable from the Company's registered office at 8-10 New Fetter Lane, LondonEC4A 1RS. 7. Statutory Accounts These financial statements do not constitute statutory accounts. Although theinformation has been reviewed by the auditors, it is unaudited. The statutoryaccounts for the year ended 30 September 2006, contained an unqualified auditreport and are filed with the Registrar of Companies. INDEPENDENT REVIEW REPORT to GLEN GROUP plc Introduction We have been instructed by the Company to review the financial information forthe six months ended 31 March 2007 which comprises the consolidated interimincome statement, consolidated interim balance sheet, consolidated interimcashflow statement, accounting policies and the related notes. We have read theother information contained in the interim report which comprises only thehighlights, Chairman's statement and Chief Executive's review, and consideredwhether it contains any apparent misstatements or material inconsistencies withthe financial information. This report is made solely to the company in accordance with guidance containedin APB Bulletin 1999/4 "Review of Interim Financial Information". Our reviewwork has been undertaken so that we might state to the Company those matters weare required to state to them in a review report and for no other purpose. Tothe fullest extent permitted by law, we do not accept or assume responsibilityto anyone other than the Company, for our review work, for this report, or forthe conclusion we have formed. Directors' responsibilities The interim report including the financial information contained therein is theresponsibility of, and has been approved by, the directors. The directors areresponsible for preparing the interim report in accordance with The ListingRules of the Financial Services Authority. They are responsible preparing theinterim report and ensuring that the accounting policies and presentationapplied to the interim figures should be consistent with those applied inpreparing the preceding annual accounts except where any changes, and thereasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4"Review of Interim Financial Information" issued by the Auditing Practices Boardfor use in the United Kingdom. A review consists principally of making enquiriesof management and applying analytical procedures to the financial informationand underlying financial data and, based thereon, assessing whether theaccounting policies and presentation have been consistently applied unlessotherwise 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 withInternational Standards on Auditing (UK and Ireland) and therefore provides alower level of assurance than an audit. Accordingly, we do not express an auditopinion 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 31 March 2007. GRANT THORNTON UK LLPCHARTERED ACCOUNTANTSEDINBURGH 26 June 2007 The maintenance and integrity of the Glen Group plc website is theresponsibility of the Directors: the interim review does not involveconsideration of these matters and, accordingly, the Company's reportingaccountants accept no responsibility for any changes that may have occurred tothe interim report since it was initially presented on the website. Legislationin the United Kingdom governing the preparation and dissemination of the interimreport differ from legislation in other jurisdictions DIRECTORS, SECRETARY AND ADVISERS DirectorsEric M Hagman CBE, Non-Executive ChairmanGraham J Duncan, Chief Executive OfficerPeter J Ford, Non-Executive Director Company SecretaryPeterkinsSolicitors100 Union StreetAberdeen AB10 1QR Registered Office8-10 New Fetter LaneLondon EC4A 1RS Nominated AdvisorSeymour Pierce Limited20 Old BaileyLondonEC4M 7EN BrokerEllis Stockbrokers LimitedTalisman HouseJubilee WalkThree BridgesCrawleyWest Sussex RH10 1LQ SolicitorsNeil C Hunter100 Union StreetAberdeen AB10 1QR Charles Russell LLP8-10 New Fetter LaneLondon EC4A 1RS Auditors and Reporting AccountantsGrant Thornton UK LLP1-4 Atholl CrescentEdinburgh EH3 8LQ BankersThe Royal Bank of ScotlandCommercial Centre100 West George StreetGlasgow G2 1PP Bank of Scotland47 High StreetDalkeithMidlothian EH22 1JA Financial PRHalogen Communications4 Queen StreetEdinburgh EH2 1JE Investor RelationsPelham PRNo 1 CornhillLondon EC3V 3ND RegistrarsComputershare Investor Services PLCPO Box 82The PavilionsBridgwater RoadBristol BS99 7NH Company Number5259846 This information is provided by RNS The company news service from the London Stock Exchange