Crawshaw Group Regulatory News (CRAW)

28 Feb 2005 07:02

Felix Group PLC28 February 2005 28 February 2005 Felix Group plc Interim Results for the Six Months Ended 30 November 2004 Chairman's Statement The four months since publication of our Annual Report and Financial Statementshave seen a great deal of activity within Felix as we continue to progress theGroup's business through to commercial sales. At this stage in the company'sdevelopment I will not make detailed comment on financial performance but I ampleased to say that whilst overheads have increased as planned we havemaintained close control over our cash resources through the period. During the period, we have successfully undertaken additional site trials of theEveryone's A Winner (EAW) proposition including with Herald Inns & Bars Limited(its Brannigans brand as well as other selected bars within its managed estate)making further tests of the machine installation process, the hardware and thesoftware, all in a live environment. As a direct consequence of our trial activities and through additional customerresearch we have obtained some key feedback both in terms of the presentationof the cabinet itself and consumer product preferences. Further considerationhas also been given to the financial dynamics of operating different businessmodels to maximise our margin - more on this below. Product Development It is clear from our research and focus groups that a 'one size fits all'approach to our hardware manufacture isn't what the market requires. As a directconsequence, we can now offer customers three types of cabinet, two of which wewill aim to promote through traditional leisure machine venues such as pubs andclubs. I'm pleased to report that we have now agreed a new manufacturingcontract for these two types of cabinets with Revolution Entertainment Systems.In addition to these cabinets, one of which can either be free-standing orwall-mounted, we are in advanced discussions with Scorpion Gaming SystemsLimited with a view to agreeing contractual terms for their T2 cabinet which wewill target towards the retail sector. EAW Prizebank I'm also delighted to report that we have taken the opportunity to significantlyenhance our product offering. The requirement for more prizes redeemable on the'high street' became obvious after further analysis of the trials showed a muchwider demographic of player and a much higher female participation percentagethan anticipated. In addition to our existing high street brands (Dixons, B&Q,Currys, The Link, PC World, Woolworths, MVC, UGC Cinemas and BigW) we have nowreached an agreement with Project Link Motivation, the UK's fastest growingprovider of third party customer promotions solutions. This agreement sees ourhigh street redemption venues increase from just over 4,000 to over 12,000following the inclusion of Marks and Spencer, Burton, Wallis, Boots, TOPSHOP,Debenhams, TOPMAN, Miss Selfridge, Outfit, Dorothy Perkins, Gap, Halfords,Evans, HMV, Mothercare, Next, Selfridges, WH Smith as well as Thistle Hotels. This continued research and development activity culminating in the product andprizebank enhancements outlined above will be of significant benefit and valueas we move forward. Business Development As a marketing and content-led innovation it is clear that EAW has to appeal totwo audiences: traditional machine buyers as well as marketeers or brandmanagers. We are now rightly focusing even more heavily on the marketeers andbrand managers within our target customers and this has already had a positiveimpact upon our progress. We have now agreed a trial with Luminar LeisureLimited, the largest operator of licensed late-night venues in the UnitedKingdom and are in advanced discussions with a range of other leading tenantedand managed pub companies. As a consequence of enjoying 'first mover' advantage we have to also accept thatsome customers will want to trial the proposition before committing to a fullroll-out. One of the ways in which we may accelerate market penetration, whichwe are currently evaluating, is to finance our own machines 'off balance sheet'.This option may also become more attractive as the anticipated cost of broadbandconnectivity reduces and may provide us with an alternative route to market inaddition to traditional machine operators. Our aim for the business continues to be three-fold; to continually enhance theEAW offer to our consumers, to place volumes of cabinets in the most efficientand profitable way and to build long term value for our shareholders. I would like to thank our staff for their continued dedication and supportduring this time. Michael Neville Non-Executive Chairman 25 February 2005 GROUP PROFIT AND LOSS ACCOUNT FOR THE SIX MONTHS ENDED 30 NOVEMBER 2004 Period from 6 Months 7.5.03 ended to 30.11.04 31.5.04 Note £'000 £'000 Turnover 8 2Cost of Sales (88) (50) Gross Loss (80) (48) Administrative expenses (779) (454)Depreciation and amortisation (669) (333)Other operating income 10 5 Operating lossContinuing operations (1,518) (497)Acquisitions - (333) (1,518) (830) Interest receivable 9 19Interest payable (40) (22) Loss on ordinary activities before taxation (1,549) (833) Taxation - - Loss on ordinary activities after taxation retained for the period (1,549) (833) Loss per share : Basic (pence) 1 (1.5874)p (3.0935)p 1 - Loss per shareThe calculation of basic loss per share is based upon the loss for the period and the weighted-average number of97,594,952 (2003: 26,927,697) shares in issue during the period.Given the loss for the period, no fully diluted earnings per share is disclosed. 2 - Comparative periodThe comparative period is from 7 May 2003 to 31 May 2004, which includes the trading figures for the main subsidiaryfor the period from 8 March 2004 to 31 May 2004. GROUP BALANCE SHEET AS AT 30 NOVEMBER 2004 As at As at 30.11.04 31.5.04 £'000 £'000Fixed assetsTangible assets 82 112Intangible assets 11,997 12,645 12,079 12,757Current assetsStock 35 27Debtors 217 217Cash at hand and in bank 1,885 566 2,137 810Creditors: amounts due within one year (717) (661) Net current assets 1,420 149 Total assets less current liabilities 13,499 12,906 Creditors: amounts due after more than one year (36) (737) Total assets less liabilities 13,463 12,169 Capital and reservesCalled up share capital 1,070 950Share premium account 14,775 12,052Profit and loss account (2,382) (833) Equity shareholders' funds 13,463 12,169 1- Basis of preparationThe interim financial information has been prepared on the basis of the accounting policies set out in the accounts forthe period ended 31 May 2004. The interim financial information is unaudited. The financial information does not constitute statutory accounts asdefined by section 240 of the Companies Act 1985. Full accounts of the company for the year ended 31 May 2004 on whichthe Auditors gave an unqualified report, have been delivered to the Registrar of Companies. These accounts consolidatethe accounts of Felix Group Plc and all of its wholly owned subsidiaries. 2 - Copies of reportCopies of this interim statement will be despatched to shareholders and will be available to the public at theRegistered Office, Cherry Tree House, Cherry Tree Lane, Rostherne, Cheshire, WA14 3RZ. 3- Approval of Interim Statement The interim statement was approved by the Board on 25th February 2005 GROUP CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 NOVEMBER 2004 Period from 6 Months 7.5.03 ended to Note 30.11.04 31.5.04 £'000 £'000 Net cash outflow from operating activities 1 (1,077) (994) Returns on investment and servicing of finance Interest received 9 19 Interest paid (65) (22) (56) (3) Capital expenditure and financial investment Payments to acquire tangible assets (4) (21) Receipts from sale of tangible fixed assets 12 - 8 (21)Acquisitions Net cash acquired with subsidiary undertaking - 66 Net cash outflow before financing (1,125) (952) Financing Issue of shares (net of costs) 2,843 1,516 Repayment of loans (395) - New hire purchase agreement - 11 Repayment of finance lease and hire purchase contract (4) (9) Net cash inflow from financing 2,444 1,518 Increase in cash 1,319 566 NOTES TO THE GROUP CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 NOVEMBER 2004 Period from1. Reconciliation of operating loss to net cash outflow from operating 6 Monthsactivities 7.5.03 Ended to 30.11.04 31.5.04 £'000 £'000 Operating loss (1,518) (830)Depreciation 20 9Loss on sale of fixed assets 1 -Amortisation 648 324Costs exchanged for shares - 86Movement in stocks (8) -Movement in debtors - 16Movement in creditors (220) (599) Net cash outflow from operating activities (1,077) (994) 2. Reconciliation of net cashflow to movement in net funds/(debt) £'000 £'000Increase in cash in period 1,319 500Cash outflow from decrease in debt 395 513Acquisitions - (1,288) Change in net debt arising from cashflows 1,714 (275)Hire purchase 6 (11) 1,720 (286)Opening net debt (286) - Closing net funds/(debt) 1,434 (286) 3.Analysis of changes in net (debt)/funds At 1.6.04 Cashflows At 30.11.04 £'000 £'000 £'000 Cash at bank and in hand 566 1,319 1,885 Debt due within one year:Loans (102) (305) (407)Hire purchase (13) 5 (8) (115) (300) (415)Debt due after more than one year:Loans (700) 700 -Hire purchase (37) 1 (36) (737) 701 (36) Net (debt)/funds (286) 1,720 1,434 Enquiries:Felix Group plc Mike Wallwork Tel: 01565 831 100 Mob: 07795 613 844 e-mail: mike@felixcorp.comHolborn John Bick Tel: 020 7929 5599PR for Felix Group plc e-mail: info@holbornpr.co.uk Note to Editors Felix Group plc (Reuters FLX.L Bloomberg FLX LN) www.felixgroupplc.com Felix Group's ordinary shares were admitted to trading on AIM on 8 March 2004.Felix Group has developed a new form of sales promotion through a directconsumer interactive medium called Everyone's A Winner. Everyone's A Winner is asales promotion channel for the retail and leisure industry with data collectioncapacity. Everyone's A Winner is presented as a "game" where the participant is asked tostop a clock in a given time frame to obtain a prize, failing which the prizewill be selected for them. By utilising retailers' advertising and salespromotion budgets, Everyone's A Winner enables participants to be allocated anon-cash prize guaranteed to have a retail value of at least twice the cost ofparticipating. This information is provided by RNS The company news service from the London Stock Exchange