CLP.L Regulatory News (CLP)

30 Sep 2005 11:25

Brainspark PLC30 September 2005 FOR IMMEDIATE RELEASE 30 SEPTEMBER 2005 BRAINSPARK Plc ("Brainspark" or "the Company") INTERIM RESULTS FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2005 CHAIRMAN'S STATEMENT In the six months ended 30 June 2005, the Company incurred a loss beforetaxation of £551k, compared to a loss for the comparative period last year of£556k. Of the loss of £551k, £133k principally represents operating costs and£418k is mainly attributable to the amortization of goodwill on acquisitions. Operating costs for the period ended 30 June 2005 of £130k represent a decreaseof £64k from the comparative period last year. Actions for raising capital to support the first part of the above expansionhave been launched during the period and we expect these to be completed in thesecond half of 2005. Financial Summary The consolidated net asset value at 30 June 2005 was £2,216 k - down from £2,767k at 31 December 2004. The Group's cash reserves at 30 June 2005 stood at £57k compared with £28k at 31 December 2004. Investments Review As of 30 June 2005 Brainspark had holdings in 8 companies, 5 in the UK, two inItaly and one in Israel. Its stakes range from nearly 5% to 50.3% of therelevant portfolio companies. The portfolio covers a wide range of businesssectors, including web services, application service providers and advanced ITsolutions. Outlook At 30 June 2005, Brainspark's mid-market price per share of 0.3p valued theCompany's issued capital at £576k against a consolidated net asset value of£2,216k. A convertible loan for £305k has been approved by the Board. All the convertibleloan has been subscribed and paid for in August 2005. Moreover an agreement has been entered into with AISoftw@re SpA ("AIS"), anItalian software company listed on the Milan Stock Exchange, which grants AISthe right to buy Brainspark's stake in ACS, a Brainspark portfolio company; foran amount of £1,430k. Of that amount, £300k has already been paid in settlementof existing debts and financial commitments of the Company. The Agreement issubject to a number of conditions including a condition that, by 31 October 2005, Infusion 2002 Limited, the vehicle through which Brainspark holds its take inACS, will have no assets or liabilities other than its investment in ACS. Mr. Alfredo Villa has been appointed Brainspark Board Member on 2nd July 2005;we believe that his 20 year experience in Asset Management will be very valuablefor the definition and implementation of the Company's new strategy. A Formal termination notice has been sent to the Landlord of the Company'scurrent office premises in order for the Company to exit the existing leaseagreement at the end of March 2006. This will result will result in annual costsavings of £240k(1) Finally, a Memorandum of Understanding has been signed on between Geosim SystemsLtd (an Israeli company 50.3% owned by Brainspark) and an undisclosed USinvestor. This transaction will provide, not only additional funds for Geosim,but also a strategic partner to pursue opportunities in the US market. While all the above actions represent an important step forward for the Companywe continue facing the future with guarded optimism. Prof. Francesco GardinChairman29 September 2005 FINANCIAL STATEMENTSCONSOLIDATED PROFIT AND LOSS ACCOUNTFOR THE PERIOD ENDED 30 JUNE 2005 Notes Six months to Six months to Year ended 30 June 30 June 31 December 2005 2004 2004 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000-------------------------------------------------------------------------------- Turnover 2a - - -Net operatingexpenses -recurring (130) (194) (395)-------------------------------------------------------------------------------- Total net operatingexpenses/Groupoperating loss (130) (194) (395) Share of operating loss of associatedundertakings 3 (418) (362) (1,186)--------------------------------------------------------------------------------Total operating loss: Group and share ofassociated undertakings (548) (556) (1,581)Profit on disposal ofassociated undertakings - - 558-------------------------------------------------------------------------------- Loss on ordinaryactivities beforeinterest (548) (556) (1,023)Net interest payable (3) (5) (11)Amounts written offinvestments - - (37)--------------------------------------------------------------------------------Loss on ordinaryactivities beforetaxation (551) (561) (1,071) Tax on loss on ordinary - - -activities --------------------------------------------------------------------------------Loss on ordinaryactivitiesafter taxation (551) (561) (1,071)--------------------------------------------------------------------------------Retained loss for thefinancial period (551) (561) (1,071)--------------------------------------------------------------------------------Loss per 1pordinary share 4 (0.29p) (0.29p) (0.56p)Basic and diluted-------------------------------------------------------------------------------- The loss for period is derived wholly from continuing activities. The Company has no recognised gains or losses other than the loss for theperiod. CONSOLIDATED BALANCE SHEET AT 30 JUNE 2005 Notes Six months to Six months to Year ended 30 June 30 June 31 December 2005 2004 2004 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000-------------------------------------------------------------------------------- Fixed assetsTangible assets 26 62 44Investments inassociatedundertakings 5 1,059 2,277 1,451Otherinvestments 6 1,549 1,567 1,549-------------------------------------------------------------------------------- 2,634 3,906 3,044-------------------------------------------------------------------------------- Current assetsDebtors 402 219 462Cash at bankand in hand 57 41 28-------------------------------------------------------------------------------- 459 260 490Creditors: amountsfalling due within one year (755) (767) (645)--------------------------------------------------------------------------------Net current liabilities (296) (507) (155)--------------------------------------------------------------------------------Total assets less current liabilities 2,338 3,399 2,889Provisions forliabilitiesand charges (122) (122) (122)--------------------------------------------------------------------------------Net assets 2,216 3,277 2,767-------------------------------------------------------------------------------- Capital and reservesCalled upshare capital 1,923 1,923 1,923Share premiumaccount 28,562 28,562 28,562Other reserves 6,813 6,813 6,813Profit and loss account (deficit) (35,082) (34,021) (34,531)--------------------------------------------------------------------------------Total equity shareholders'funds 2,216 3,277 2,767-------------------------------------------------------------------------------- RECONCILIATION OF MOVEMENTS IN GROUP SHAREHOLDERS' FUNDSFOR THE PERIOD ENDED 30 JUNE 2005 -------------------------------------------------------------------------------- Notes Six months to Six months to Year ended 30 June 30 June 31 December 2005 2004 2004 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000--------------------------------------------------------------------------------Loss for the period (551) (561) (1,071)-------------------------------------------------------------------------------- Net reduction inshareholders'funds (551) (561) (1,071)Opening shareholders'funds 2,767 3,838 3,838--------------------------------------------------------------------------------Closingshareholders'funds 2,216 3,277 2,767-------------------------------------------------------------------------------- CONSOLIDATED CASH FLOW STATEMENTFOR THE PERIOD ENDED 30 JUNE 2005 -------------------------------------------------------------------------------- Notes Six months Six months to Year ended to 30 June 30 June 2004 31 December 2005 (Unaudited) 2004 (Unaudited) (Audited) £'000 £'000 £'000-------------------------------------------------------------------------------- Net cash flow from operating activities 7 - 47 (240) Returns on investments andservicing of financeInterest paid on 5%Convertible bond - - (2)--------------------------------------------------------------------------------Net cash outflow fromreturns on investmentsand servicingof finance - - (2)-------------------------------------------------------------------------------- Acquisitions and disposalsSale of investments inassociated undertakings 55 - 360Purchase of investments in associated undertaking - (147) (70)Loans to associatedundertakings (26) - (110)--------------------------------------------------------------------------------Net cash inflow (outflow) from acquisitionsand disposals 29 (147) 180--------------------------------------------------------------------------------Net cash inflow (outflow)before financing 29 (100) (62)--------------------------------------------------------------------------------Financing--------------------------------------------------------------------------------Repayment of 5% Convertible bond issue - - (50)--------------------------------------------------------------------------------Loan from majorshareholder - - 110--------------------------------------------------------------------------------Partial repayment ofloan to major shareholder - - (38)--------------------------------------------------------------------------------Short term loans - 110 ---------------------------------------------------------------------------------Repayment of short term loans - (37) ---------------------------------------------------------------------------------Net cash inflow from financing - 73 22--------------------------------------------------------------------------------Increase (decrease) in net cash forthe period 29 (27) (40)--------------------------------------------------------------------------------Reconciliation of cash flowto movement in net fundsNet cash at beginning of period 28 68 68Increase (decrease) innet cash in the period 29 (27) (40)--------------------------------------------------------------------------------Net cash at end of period 57 41 2830 June NOTES TO THE FINANCIAL STATEMENTS 1. Basis of preparation Principal accounting policies The financial statements have been prepared under the historical cost conventionmodified to include certain investments at valuation, and in accordance withapplicable accounting standards. Fixed annual charges are appointed to theinterim period on the basis of time elapsed and other expenses are accrued inaccordance with the same principles used in the preparation of the annualaccounts. The financial information contained in this interim statements isunaudited and does not constitute statutory accounts as defined in Section 240of the Companies Act 1985. The comparative information for the year ended 31 December 2004 is an abridgedversion of the statutory accounts for that year and those accounts, upon whichthe auditors issued an unqualified opinion. 2. Profit and Loss Six months to Six months to Year ended 30 June 2005 30 June 2004 31 December 2004 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 TurnoverGroup turnover including share of associated 238 206 669undertakingsLess: share ofassociated (238) (206) (669)undertakings -------------------------------------------------------------------------------- - - --------------------------------------------------------------------------------- 3. Share of operating loss of associated undertakings Six months to Six months to Year ended to 30 June 2005 30 June 2004 31 December 2004 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Share of operating loss of associated Undertakings - (39) (11)Amortisation of goodwill on acquisition (418) (323) (836)Impairment of goodwill - - (339)-------------------------------------------------------------------------------- (418) (362) (1,186)-------------------------------------------------------------------------------- 4. Basic and diluted loss per 1p ordinary share Six months to Six months to Year ended 30 June 2005 30 June 2004 31 December 2004 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Loss attributable toordinary shareholders (551) (561) (1,071)--------------------------------------------------------------------------------Adjusted loss (551) (561) (1,071)--------------------------------------------------------------------------------Weighted average number of ordinary shares 192,273 192,273 192,273Adjusted weighted average number of ordinary shares 192,273 192,273 192,273Basic loss per share (0.29p) (0.29p) (0.56p)Diluted loss per share (0.29p) (0.29p) (0.56p)-------------------------------------------------------------------------------- 5. Investments in associated undertakings Six months to Six months to Year ended 30 June 2005 30 June 2004 31 December 2004 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000Share of net assetsAt beginning of period 28 61 61Disposal - - (22)Share of loss for the period - (39) (11)--------------------------------------------------------------------------------At period end 28 22 28--------------------------------------------------------------------------------GoodwillAt beginning of period 1,313 2,578 2,578Adjustment - - (90)Amortisation of goodwill (418) (323) (1,175)--------------------------------------------------------------------------------At period end 895 2,255 1,313--------------------------------------------------------------------------------Loans to associatedundertakingsAt beginning of period 410 300 300Further advances in theperiod 26 - 110Provisions against loans anddisposal (300) (300) (300)--------------------------------------------------------------------------------At period end 136 - 110--------------------------------------------------------------------------------Net book amount at period end 1,059 2,277 1,451-------------------------------------------------------------------------------- 6. Other investments Six months to Six months to Year ended 30 June 2005 30 June 2004 31 December (Unaudited) (Unaudited) 2004 £'000 £'000 (Audited) £'000At beginning of period 1,549 1,567 1,567Additions - - 19Amounts written off inthe year - - (37)--------------------------------------------------------------------------------At period end 1,549 1,567 1,549-------------------------------------------------------------------------------- 7. Reconciliation of operating loss to net cash inflow from operating activities Six months to Six months to Year ended 30 June 2005 30 June 2004 31 December (Unaudited) (Unaudited) 2004 £'000 £'000 (Audited) £'000 Operating loss (133) (194) (395)Depreciation charge 18 18 36Rental income converted into shares ininvestments - - (19)Decrease in debtors 5 76 53Increase in creditors 110 147 85--------------------------------------------------------------------------------Net cash flow from operating activities - 47 (240)-------------------------------------------------------------------------------- 8. Ultimate controlling party The group has no ultimate controlling party. 9. Availability of Interim Results Copies of the interim results will be available from The Lightwell, 12-16Laystall Street, London EC1R 4PF. This information is provided by RNS The company news service from the London Stock Exchange