Last checked at 27 Feb 2019 16:00
27 February 2019
POLEMOS PLC
(AIM: PLMO)
Final Results for the Year to 31 December 2018
Polemos plc ("Polemos" or the "Company") announces its full year results for the year ended 31 December 2018. The Annual Report and Accounts will be available on www.polemos.co.uk and will be sent to shareholders shortly. Extracts are contained below.
Financial Overview
The Company incurred a loss before taxation of £250,000 during the year ended 31 December 2018 (2017: loss before taxation £1,471,000) and, as of that date, the Company's had net assets of £285,000 (2017: net liabilities £113,000).
As at 31 December 2018 the Company had cash and cash equivalents of £231,000 (2017: £46,000) and no borrowings (2017: nil).
Outlook
On 21 January 2019, the Company announced the intention to seek admission to trading following the reverse takeover of Digitalbox Publishing Holdings Limited, a digital media business based in the UK. Following approval of all resolutions at the General Meeting earlier today, admission to AIM is expected to occur on or around 28 February 2019. On admission, Polemos plc will be renamed Digitalbox plc. The Company intends to complete its first acquisition immediately on admission.
Annual Report
The Annual Report and Accounts for the year ended 31 December 2018 ("Annual Report") will be sent to shareholders today and will also be available on the website at www.polemos.co.uk. The full report is attached below.
Enquiries:
Polemos plc | www.polemos.co.uk |
Nigel Burton, Chairman
| +44 (0) 7785 234 447 |
WH Ireland Limited - Nominated Adviser |
www.whirelandcb.com |
Mike Coe / Chris Savidge | +44 (0) 117 945 3470 |
Peterhouse Capital Limited - Joint Broker | www.peterhousecap.com |
Lucy Williams | +44 (0) 20 7469 0930 |
Leander Capital Partners Limited - Joint Broker | www.leandercap.com |
Alex Davies | +44 (0) 20 7195 1458 |
Hugh Kingsmill Moore | +44 (0) 20 7915 1425 |
STRATEGIC REPORT
The Directors are pleased to present the Strategic Report on the Company for the year ended 31 December 2018, including a summary of subsequent events.
Since the Final Results for the Year to 31 December 2017, the Board has continued its efforts to effect a Reverse Takeover as required under the AIM Rules.
Suspension from trading
The Company announced on 8 March 2018 that it had with effect from that date been classified under the AIM Rules as an AIM Rule 15 cash shell and as such was required to make an acquisition or acquisitions which constituted a reverse takeover ("RTO") under AIM Rule 14 (including seeking re-admission as an investing company (as defined under the AIM Rules)) on or before the date falling six months from 8 March 2018 or be re-admitted to trading on AIM as an investing company under AIM Rule 8 (which requires the raising of at least £6 million in cash via an equity fundraising on, or immediately before, re-admission) failing which, the Company's Ordinary Shares would then be suspended from trading on AIM pursuant to AIM Rule 40. Admission to trading on AIM would be cancelled six months from the date of suspension should the reason for the suspension not have been rectified pursuant to AIM Rule 41. Accordingly, the Company's shares were suspended from trading on AIM on 10 September 2018.
Proposed acquisition
On 10 September 2018, the Company announced that the Board had considered a number of potential acquisition targets over the period and had agreed conditional heads of terms (the "Agreement") to acquire the entire issued share capital of Digitalbox Publishing (Holdings) Ltd ("Digitalbox"), subject to certain conditions and due diligence (the "Proposed Acquisition"). The Proposed Acquisition would constitute an RTO pursuant to AIM Rule 14, and the Company's shares would remain suspended pending the publication of the required AIM Admission Document and shareholder approval of the Acquisition.
Pursuant to the Agreement, it was announced that the parties proposed that the Company would acquire Digitalbox for new ordinary shares in the Company. For the purposes of the Agreement, the parties have agreed a valuation of the Company of 1.1p per ordinary share, subject to a cap of £1.1 million on a fully diluted basis, and the existing issued equity of Digitalbox at £10 million (before capitalisation of any existing shareholder loans to Digitalbox, then amounting in aggregate to £355,000).
Issue of Convertible Loan Notes
On 9 November 2018 the Company announced a conditional Placing (the "Placing") of £220,000 via Convertible Unsecured Loan Notes ("CLNs") by the Company's broker, Peterhouse Capital. The CLNs had a term of 3 months, since extended to 31 March 2019, and no coupon.
The issue of the CLNs is conditional on the Company completing a Reverse Takeover and on the Admission of the enlarged ordinary share capital to trading on a Recognised Investment Exchange. When issued, the CLNs will have a conversion price of 25% discount to the price on Re-admission.
The net proceeds of this Placing, combined with the Company's current cash resources and after meeting previously undisclosed liabilities that came to light after the appointment of the current directors, satisfy its commitment as part of the agreed terms with Digitalbox to have a minimum cash balance of £500,000 (before transaction costs) immediately before completion of the proposed RTO with Digitalbox.
Financial Review
During the year, the Company made a comprehensive loss of £250,000 (2017: £1,254,000). There was a weighted loss per share from continuing operations of 0.262p (2017: loss per share of 4.0p).
Cash and cash equivalents at 31 December 2018 amounted to £231,000 (31 December 2017: £46,000).
Events subsequent to the year-end are set out in Note 20.
Key Performance Indicators ("KPIs")
The Board monitors the activities and performance of the Company on a regular basis. Given the current Investing Policy there were no relevant KPIs during the accounting period or at the year end.
Risks and Uncertainties
The principal risks facing the Company are set out below. Risk assessment and evaluation is an essential part of the Company's planning and an important aspect of the Company's internal control system.
Financial Risk
The risks faced by the Company include interest rate, credit risk and liquidity risk. Directors have in place a process of regularly reviewing risks to the business and monitoring associated controls, actions and contingency plans. The Company's financial risk management policies are set out in note 3.
Business Risk
The Board regularly evaluates and reviews all business risks when reviewing project timelines. The types of risks reviewed also include:
· Regulatory and compliance obligations
· Legal risks relating to contracts, licences and agreements
· Insurance risks.
The key business risk in 2018 was considered to be the ability of the Company to complete the proposed RTO of Digitalbox, as described above. Based on the progress made during the year, the Directors remained confident that the transaction was likely to succeed. As explained below, admission to AIM is expected to occur on or around 28 February 2019.
Outlook
The Company is required to complete a reverse takeover within 6 months of becoming a rule 15 company.
On 21 January 2019, the Company announced the intention to seek admission to trading following the reverse takeover of Digitalbox Publishing Holdings Limited, a digital media business based in the UK. Following approval of all resolutions at the General Meeting on 27 February 2019, admission to AIM is expected to occur on or around 28 February 2019. On admission, Polemos plc will be renamed Digitalbox plc. The Company intends to complete its first acquisition immediately on admission.
Nigel Burton
Chairman
27 February 2019
FINANCIAL STATEMENTS
STATEMENT OF COMPREHENSIVE INCOME YEAR ENDED 31 DECEMBER 2018
Year ended 31 December 2018 | Year ended 31 December 2017 | ||
£'000 | £'000 | ||
Revenue | - | - | |
Administrative expenses | (354) | (319) | |
Investment income | - | 1 | |
Operating (Loss) | (354) | (318) | |
Realised profit/(loss) on available for sale assets | 65 | (244) | |
Impairment reversal/(provision) on available for sale assets | 39 | (879) | |
Share based payment | - | (30) | |
(Loss) before Taxation | (250) | (1,471) | |
Taxation | - | - | |
(Loss) for the Year attributable to equity holders of the Company | (250) | (1,471) | |
Other Comprehensive Income: | |||
Other comprehensive income Items that may be subsequently reclassified to profit or loss: | |||
Transfer to income statement | - | 217 | |
Total other comprehensive income | - | 217 | |
Total Comprehensive (loss) for the Year attributable to equity holders of the Company | (250) | (1,254) | |
Earnings per Share Attributable to the Equity Holders of the Company during the Year | |||
Pence | Pence | ||
Earnings per share - Basic and diluted | (0.262) | (4.000) |
STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2018
31 December 2018 | 31 December 2017 | ||
£'000 | £'000 | ||
Assets | |||
Current Assets | |||
Available-for-sale financial assets | - | - | |
Trade and other receivables | 437 | 49 | |
Cash and cash equivalents | 231 | 46 | |
Total Assets | 668 | 95 | |
Current Liabilities | |||
Trade and other payables | (163) | (208) | |
Borrowings | (220) | - | |
Total Liabilities | (383) | (208) | |
Net Assets | 285 | (113) | |
Equity attributable to shareholders | |||
Share capital | 20,488 | 19,823 | |
Share premium | 19,164 | 19,181 | |
Share based payment reserve | 32 | 62 | |
Available-for-sale asset reserve | - | - | |
Retained earnings | (39,399) | (39,179) | |
Total Equity | 285 | (113) |
STATEMENT OF CHANGES IN EQUITY YEAR ENDED 31 DECEMBER 2018
Attributable to equity shareholders
Share Capital | Share Premium | Share based Payment reserve | Available for sale asset reserve | Retained Earnings |
Total | |
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
At 1 January 2017 | 19,459 | 18,618 | 63 | (217) | (37,739) | 184 |
Shares issued | 364 | 631 | - | - | - | 995 |
Share issue costs | - | (68) | - | - | - | (68) |
Share options issued | - | - | 30 | - | - | 30 |
Share options cancelled | - | - | (31) | - | 31 | - |
Total contributions by and distributions to owners of the Company | 364 | 563 | (1) | - | 31 | 957 |
Transfer to income statement | - | - | - | 217 | - | 217 |
(Loss) for the year | - | - | - | - | (1,471) | (1,471) |
Total Comprehensive Income for the Year | - | - | - | 217 | (1,471) | (1,254) |
At 31 December 2017 | 19,823 | 19,181 | 62 | - | (39,179) | (113) |
Shares issued | 665 | 25 | - | - | - | 690 |
Share issue costs | - | (42) | - | - | - | (42) |
Share options cancelled | - | - | (30) | - | 30 | - |
Total contributions by and distributions to owners of the Company | 665 | (17) | (30) | - | 30 | 648 |
(Loss) for the year | - | - | - | - | (250) | (250) |
Total Comprehensive Income for the Year | - | - | - | - | (250) | (250) |
At 31 December 2018 | 20,488 | 19,164 | 32 | - | (39,399) | 285 |
STATEMENT OF CASH FLOWS YEAR ENDED 31 DECEMBER 2018
Note | 31 December 2018 | 31 December 2017 | |
£'000 | '000 | ||
Cash Flows from Operating Activities | |||
Operating loss | (354) | (318) | |
(Increase) in trade and other receivables | (163) | (8) | |
(Decrease)/increase in trade and other payables | 4 | 82 | |
Net Cash generated from/(used in) Operating Activities | (513) | (244) | |
Cash Flows from Investing Activities | |||
Purchases of available-for-sale financial assets | - | (879) | |
Sales of available for sale financial assets | 50 | 67 | |
Net Cash Used in Investing Activities | 50 | (812) | |
Cash Flows from Financing Activities | |||
Proceeds from share issues | 690 | 995 | |
Share issue costs | (42) | (68) | |
Net cash generated from Financing Activities | 648 | 927 | |
Net Increase/(decrease) in Cash and Cash Equivalents | 185 | (129) | |
Cash and cash equivalents at beginning of year | 46 | 175 | |
Cash and Cash Equivalents at End of Year | 231 | 46 |
NOTES
1. Basis of Preparation
The Financial Statements of Polemos plc have been prepared under the historical cost convention and in accordance with International Financial Reporting Standards (IFRS) and IFRS Interpretations Committee (IFRSIC) as adopted by the European Union and the Companies Act 2006 applicable to companies reporting under IFRS.
The preparation of Financial Statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant in the Financial Statements are disclosed in Note 4 of the Annual Report.
The financial information set out in this announcement does not comprise the Group's statutory accounts for the years ended 31 December 2018 or 31 December 2017. The financial information has been extracted from the statutory accounts of the Company for the years ended 31 December 2018 and 31 December 2017.
The Annual Report will be posted to shareholders shortly and will be available from the Company's website (www.polemos.co.uk) later today.