CLP.L Regulatory News (CLP)

29 Jun 2006 17:47

Brainspark PLC29 June 2006 FOR IMMEDIATE RELEASE 29 June 2006 Brainspark plc ("Brainspark" or the "Company") Preliminary Announcement of results to 31 December 2005. The results show a loss of £0.9 M compared to a loss of £1.0M for the financialyear to 31 December 2004. The slight improvement is due to some extent to thereduction in running costs of the Company. These results are declared after amortisation of goodwill, our share of theassociates losses and amounts written off investments of £794,000 compared with£1,223,000 in the previous year. The remaining goodwill of £651,000 carried inthe balance sheet will be completely written-off in the current financial year.These amounts have no impact on group's cash position. The Year 2005 was a very important milestone for Brainspark, we hope that itrepresents a turnaround for the group and confirms the strategy implemented sofar by the Brainspark Board is heading in the right direction. The cost cutting measures begun in 2002, having further reduced the netoperating expenses to £22,000 per month this year, net of recovery of rent andcharges made to the portfolio companies. The Board during 2006 will continue to focus on reducing net operating expensesto below £20,000 per month. Brainspark's Strengths Brainspark current strengths include the positive cash balance, significantunutilised tax losses, management with a track record and capability to identifyattractive investment opportunities focused in the technology sector, anestablished network of contacts and relationships to source new potentialtargets for investment. Moreover, the company has achieved a major reduction inoperating expenses since inception. Brainspark has two Directors based in Milanwhich may result in the procurement of companies for the AIM market. A Directorlocated in the USA, two in the UK and one in China. As a result of the later thecompany has begun to investigate the viability of an IP2IPO model, like those inChina. Our Board Member, based in Beijing is highly instrumental in these typesof projects. In China, management believes there is extensive scope to secure excitingprojects on very attractive valuation and a viable enterprise can be builtreasonably quickly. The investment portfolio is in better shape now than it has been for some years.Easyart made an acquisition at the end of 2005 which has encouraged theDirectors at a time when the market is not easy. TraderServe has launched its new generation algorithmic trading platform capableof beating VWAP (the standard equity market benchmark). The platform hasachieved excellent trading results during H1 2006. The diamond in the Brainspark portfolio is Geosim. The Philadelphia reproductionon the cover of these accounts is taken from the library of Geosim and showsthe photorealism achieved by their 3D city modeling technology (for more details please visit their web-site www.geosim.co.il). It has moved to the nextstep in its evolution, since inception in 2000. The company develops high-tech3D city modeling technology and applies it to create high resolution photorealistic 3D models of cities. Applications include urban planning anddevelopment, tourism, estate agency, law enforcement, advertising,entertainment and the security and rescue services. During 2005 modeling of thefirst American university took place at UPENN in Philadelphia and new USinvestors have entered into an investment agreement. In April 2006, Crash LLC completed their $720,000 (£395,000) investmentcommitment in Geosim ($400,000 or £ 218,000 by 31st December 2005) and signedin June 2006 a new agreement for assisting the company to raise a further$2,000,000 (£1,097,000), the first $720,000 (£395,000 ) of which has beenraised by three US investors at a pre-money valuation for Geosim of $10,000,000(£5,482,000). On this basis the current Geosim investment is worth theequivalent of 0.73p for each Brainspark share ignoring all other companyassets; if other company assets are included the valuation increases to 1.22p ashare. Fortune Cookie, a high level web design company, continues to make encouragingprogress and made a profit for the second consecutive year on revenues above£1M. ACS based in Italy, continue to operate in their core businesses of softwaredevelopment for earth observation satellites, mission planning and management.In August 2005 Brainspark granted a call option to AISoftware SpA over theentire issued share capital of its wholly owned subsidiary, Infusion 2002Limited, which has a holding of 16.2% in ACS. An initial non-refundable amountof £300,000 was paid by way of a set-off agreement and a further payment of£1,130,000 is payable on exercise of the Option, which expires on 31st July2006. Metapack is planning to launch their new ASP platform in the second half of2006, which should help the company to reach a larger number of customers. Brainspark has reached a stage where, because of the above results and currentassets could prove attractive to third parties. Including companies who mightview Brainspark as the ideal vehicle for an AIM reverse, as in the case ofGeosim, if and when their international expansion warrants such. The Report & Accounts will be posted to all shareholders tomorrow. Financial Statements________________________________________________________ +------------------------------------------+--------+--------------+-------------+|Consolidated profit and loss account | | 2005| 2004|| | | | ||For the year ended 31 December 2005 | | £'000| £'000|| | | | || | | | |+------------------------------------------+--------+--------------+-------------+| | | | |+------------------------------------------+--------+--------------+-------------+|Turnover | | -| -|| | | | |+------------------------------------------+--------+--------------+-------------+|Net operating expenses - recurring | | (258)| (395)|+------------------------------------------+--------+--------------+-------------+|Net operating income - exceptional | | 122| -|+------------------------------------------+--------+--------------+-------------+| | | | |+------------------------------------------+--------+--------------+-------------+| | | | |+------------------------------------------+--------+--------------+-------------+|Total net operating expenses/Group | | (136)| (395)||operating loss | | | || | | | |+------------------------------------------+--------+--------------+-------------+| | | | |+------------------------------------------+--------+--------------+-------------+|Share of operating loss of associated | | (675)| (1,186)||undertakings | | | |+------------------------------------------+--------+--------------+-------------+| | | | || | | | ||Total operating loss: Group and share of | | | ||associated undertakings | | | || | | (811)| (1,581)|| | | | |+------------------------------------------+--------+--------------+-------------+|Profit on disposal of associated | | -| 558||undertakings | | | |+------------------------------------------+--------+--------------+-------------+|Loss on ordinary activities before | | (811)| (1,023)||interest | | | || | | | |+------------------------------------------+--------+--------------+-------------+|Net interest payable | | -| (11)|+------------------------------------------+--------+--------------+-------------+|Amounts written off investments | | (119)| (37)|+------------------------------------------+--------+--------------+-------------+|Loss on ordinary activities before | | (930)| (1,071)||taxation | | | || | | | |+------------------------------------------+--------+--------------+-------------+| | | | |+------------------------------------------+--------+--------------+-------------+|Tax on loss on ordinary activities | | -| -|| | | | |+------------------------------------------+--------+--------------+-------------+|Loss on ordinary activities after taxation| | (930)| (1,071)|| | | | |+------------------------------------------+--------+--------------+-------------+| | | | || | | | ||Retained loss for the financial year | | (930)| (1,071)|| | | | |+------------------------------------------+--------+--------------+-------------+| | | | |+------------------------------------------+--------+--------------+-------------+|Loss per 0.01p ordinary share | | | || | | | ||Basic and diluted earnings per share | | (0.48p)| (0.56p)|| | | | || | | | |+------------------------------------------+--------+--------------+-------------+ The loss for the year is derived wholly from continuing activities. +--------------------------------------------+-------+-------------+-------------+|Consolidated statement of total recognised | | 2005| 2004||gains and losses | | | || | | £'000| £'000||For the year ended 31 December 2005 | | | || | | | || | | | |+--------------------------------------------+-------+-------------+-------------+|Loss for the financial year | | (930)| (1,071)|+--------------------------------------------+-------+-------------+-------------+| | | | || | | | ||Total recognised gains and losses for the | | (930)| (1,071)||year | | | |+--------------------------------------------+-------+-------------+-------------+ There are no differences between the results disclosed and the historical costequivalents. +---------------------------------------+--------+--------+--------+---------+---------+|Balance sheets at 31 December 2005 | | Group| Group| Company| Company|| | | | | | || | | 2005| 2004| 2005| 2004|| | | | | | || | | £'000| £'000| £'000| £'000|| | | | | | || | | | | | |+---------------------------------------+--------+--------+--------+---------+---------+| | | | | | |+---------------------------------------+--------+--------+--------+---------+---------+|Fixed assets | | | | | || | | | | | |+---------------------------------------+--------+--------+--------+---------+---------+|Tangible assets | | 9| 44| -| -|+---------------------------------------+--------+--------+--------+---------+---------+|Investments in subsidiary undertakings | | -| -| 1,180| 1,617|+---------------------------------------+--------+--------+--------+---------+---------+|Investments in associated undertakings | | 1,023| 1,451| -| -|+---------------------------------------+--------+--------+--------+---------+---------+|Other investments | | 1,130| 1,549| -| -|+---------------------------------------+--------+--------+--------+---------+---------+| | | | | | |+---------------------------------------+--------+--------+--------+---------+---------+| | | 2,162| 3,044| 1,180| 1,617|+---------------------------------------+--------+--------+--------+---------+---------+| | | | | | |+---------------------------------------+--------+--------+--------+---------+---------+|Current assets | | | | | || | | | | | |+---------------------------------------+--------+--------+--------+---------+---------+|Debtors (amounts falling due within one| | 267| 352| 2,242| 1,127||year) | | | | | |+---------------------------------------+--------+--------+--------+---------+---------+|Debtors (amounts falling due after more| | 60| 110| -| -||than one year) | | | | | |+---------------------------------------+--------+--------+--------+---------+---------+|Cash at bank and in hand | | 446| 28| -| -|+---------------------------------------+--------+--------+--------+---------+---------+| | | 773| 490| 2,242| 1,127|+---------------------------------------+--------+--------+--------+---------+---------+|Creditors: amounts falling due within | | (461)| (645)| (245)| (364)||one year (including convertible debt) | | | | | |+---------------------------------------+--------+--------+--------+---------+---------+|Net current assets / (liabilities) | | 312| (155)| 1,997| 763|| | | | | | |+---------------------------------------+--------+--------+--------+---------+---------+|Total assets less current liabilities | | 2,474| 2,889| 3,177| 2,380|| | | | | | |+---------------------------------------+--------+--------+--------+---------+---------+|Provisions for liabilities and charges | | -| (122)| -| -|| | | | | | |+---------------------------------------+--------+--------+--------+---------+---------+|Net assets | | 2,474| 2,767| 3,177| 2,380|+---------------------------------------+--------+--------+--------+---------+---------+| | | | | | |+---------------------------------------+--------+--------+--------+---------+---------+|Capital and reserves | | | | | || | | | | | |+---------------------------------------+--------+--------+--------+---------+---------+|Called up share capital | | 1,936| 1,923| 1,936| 1,923|+---------------------------------------+--------+--------+--------+---------+---------+|Share premium account | | 29,186| 28,562| 29,186| 28,562|+---------------------------------------+--------+--------+--------+---------+---------+|Other reserves | | 6,813| 6,813| -| -|+---------------------------------------+--------+--------+--------+---------+---------+|Profit and loss account (deficit) | |(35,461)|(34,531)| (27,945)| (28,105)|+---------------------------------------+--------+--------+--------+---------+---------+|Total equity shareholders' funds | | 2,474| 2,767| 3,177| 2,380|+---------------------------------------+--------+--------+--------+---------+---------+ +------------------------------------+-------+---------+--------+---------+---------+|Reconciliation of movements in | | Group| Group| Company| Company||shareholders' funds | | | | | || | | 2005| 2004| 2005| 2004||For the year ended 31 December 2005 | | | | | || | | £'000| £'000| £'000| £'000|| | | | | | || | | | | | || | | | | | || | | | | | || | | | | | |+------------------------------------+-------+---------+--------+---------+---------+| | | | | | |+------------------------------------+-------+---------+--------+---------+---------+|(Loss)/gain for the period | | (930)| (1,071)| 160| (1,981)|+------------------------------------+-------+---------+--------+---------+---------+|New share capital issued | | 637| -| 637| -|+------------------------------------+-------+---------+--------+---------+---------+| | | | | | |+------------------------------------+-------+---------+--------+---------+---------+|Net (decrease)/increase in | | (293)| (1,071)| 797| (1,981)||shareholders' funds | | | | | |+------------------------------------+-------+---------+--------+---------+---------+|Opening shareholders' funds | | 2,767| 3,838| 2,380| 4,361|+------------------------------------+-------+---------+--------+---------+---------+|Closing shareholders' funds | | 2,474| 2,767| 3,177| 2,380|+------------------------------------+-------+---------+--------+---------+---------+ +-------------------------------------------+-------+-------------+-------------+|Consolidated cash flow statement | | 2005| 2004|| | | | ||For the year ended 31 December 2005 | | £'000| £'000|| | | | || | | | |+-------------------------------------------+-------+-------------+-------------+| | | | |+-------------------------------------------+-------+-------------+-------------+|Net cash outflow from operating activities | | (297)| (240)|+-------------------------------------------+-------+-------------+-------------+| | | | |+-------------------------------------------+-------+-------------+-------------+|Returns on investments and servicing of | | | ||finance | | | || | | | |+-------------------------------------------+-------+-------------+-------------+|Interest paid on 5% convertible bond | | -| (2)|+-------------------------------------------+-------+-------------+-------------+|Interest paid on shareholder loan | | (11)| -|+-------------------------------------------+-------+-------------+-------------+|Net cash outflow from returns on | | | ||investments and servicing of finance | | | || | | (11)| (2)|+-------------------------------------------+-------+-------------+-------------+| | | | |+-------------------------------------------+-------+-------------+-------------+| | | | |+-------------------------------------------+-------+-------------+-------------+|Acquisitions and disposals | | | || | | | |+-------------------------------------------+-------+-------------+-------------+|Sale of investments in associated | | 105| 360||undertakings | | | |+-------------------------------------------+-------+-------------+-------------+|Purchase of investments in associated | | -| (70)||undertaking | | | |+-------------------------------------------+-------+-------------+-------------+|Loans to associated undertakings | | (56)| (110)|+-------------------------------------------+-------+-------------+-------------+|Net cash inflow from acquisitions and | | 49| 180||disposals | | | || | | | |+-------------------------------------------+-------+-------------+-------------+| | | | |+-------------------------------------------+-------+-------------+-------------+|Net cash outflow before financing | | (259)| (62)|| | | | |+-------------------------------------------+-------+-------------+-------------+| | | | |+-------------------------------------------+-------+-------------+-------------+|Financing | | | || | | | |+-------------------------------------------+-------+-------------+-------------+|Receipts from convertible loan issue | | 850| -|+-------------------------------------------+-------+-------------+-------------+|Repayment of 5% Convertible bond issue | | -| (50)|+-------------------------------------------+-------+-------------+-------------+|Loan from major shareholders and others | | -| 110|+-------------------------------------------+-------+-------------+-------------+|Repayment of loans to major shareholders | | (173)| (38)||and others | | | |+-------------------------------------------+-------+-------------+-------------+|Net cash inflow from financing | | 677| 22|| | | | |+-------------------------------------------+-------+-------------+-------------+| | | | |+-------------------------------------------+-------+-------------+-------------+|Increase /(decrease) in net cash for the | | 418| (40)||period | | | |+-------------------------------------------+-------+-------------+-------------+ The audited financial statements, from which the figures and the Chairman'sstatement contained in this announcement have been extracted will be posted to shareholders. Theywill be available from the Company's registered office at The Lightwell, 12-16Laystall Street, Clerkenwell, London EC1R 4PF for a period of 30 days from thedate hereof. This information is provided by RNS The company news service from the London Stock Exchange