Digitalbox Regulatory News (DBOX)

6 Sep 2005 06:57

Not for release, publication or distribution in or into or from the UnitedStates of America, Canada, Australia, Japan or the Republic of Ireland. PLUS MARKETS GROUP PLCPLACING OF UP TO 50,000,000 NEW ORDINARY SHARES AT 5 PENCE PER SHARE TO RAISEGBP2,500,000 (BEFORE EXPENSES) AND INTERIM RESULTS FOR THE SIX MONTHS TO 30JUNE 2005PLACINGPLUS Markets Group plc (the "Company") has raised up to GBP2.5 million in aconditional placing (the "Placing") with institutions and other investorsarranged by Numis Securities Limited ("Numis"). The Placing will involve theissue of up to 50,000,000 new ordinary shares ("Placing Shares") in the Companyat a price of 5p per share. The proceeds from the Placing will be used todevelop its trading services as outlined below. In response to demand from leading financial institutions and brokers theCompany intends, subject to obtaining all necessary regulatory consents, tobroaden markedly its existing trading services to encompass an extended rangeof securities. The enlarged trading service will allow brokers and investorsflexibility in selecting where they execute transactions and the directors ofthe Company (the "Directors") believe that it will focus more attention onexisting Ofex securities.The Company believes that it can offer a wider trading service that will becompetitive and will provide an efficient platform for brokers, retail serviceproviders and market makers, especially following the introduction of theMarkets in Financial Instruments Directive (also known as MiFID). The Companyis committed to the continued development of its technology platform andexpansion of its existing resources to achieve this. This will impactsignificantly on the Company's second half results, but in the longer term theDirectors believe that the enhancements to trading services should lead to anincrease in the volumes and values of securities being traded on the Company'splatform and raise the profile of securities traded upon that platform. Numis, as agent for the Company, has agreed conditionally to arrange thePlacing of up to 50,000,000 Placing Shares. The Placing is conditional uponshareholder approval at an Extraordinary General Meeting, which is due to takeplace on 29 September 2005, and a circular has been sent to shareholders today.It is expected that dealings will commence on AIM on 30 September 2005.Assuming full subscription under the Placing, the Placing Shares will represent37.17 per cent. of the Company's enlarged share capital.INTERIM RESULTS FOR THE SIX MONTHS TO 30 JUNE 2005The Group has today announced its interim results for the six months ended 30June 2005.Set out below is the text of the interim statement:HIGHLIGHTS* Comprehensive reforms of the Ofex market completed* Financial performance improved - losses reduced by more than 70%SUMMARYThe Company has carried out extensive reforms to the Ofex market as set out inthe Chairman's statement. At the same time its financial performance hasimproved with half-year losses reduced from GBP533,000 to GBP153,000. Thenumber of companies on the Ofex market has increased for the first time since2000.In response to demand from leading financial institutions, the Company intendsmarkedly to broaden its existing trading services to encompass a much widerrange of securities. The enhanced trading service will allow brokers andinvestors flexibility and choice of execution venue. Commenting on the results, Simon Brickles, CEO of the Company said:In our initial six months, the new management has refinanced, reformed andrebranded our core product. We have improved the Company's financial performance significantly.Following our reforms, the market is showing a net increase in the number ofmember companies for the first time in a quinquennium.Most importantly, this has been achieved at a time when the Company has beenadvancing ambitious plans for further development of its trading services.This is the start of a renaissance for PLUS Markets Group plc.CHAIRMAN'S STATEMENTINTRODUCTIONI was appointed Chairman on 20 January 2005 following the commencement of theperiod under review. I took over the role at a period of great flux in London'sequity markets. There are major changes to the regulation of primary andsecondary markets, with the introduction of the Prospectus Directive and withthe Markets in Financial Instruments Directive ("MiFID") on the horizon, aswell as changes in the technologies being deployed by markets and possiblechanges of ownership.In the midst of so much change, the Company's principles are clear andconstant. We stand for an independent market, focussed on the needs of smallercompanies and based on an appropriate trading platform. Accordingly, we havekept developments in the Ofex rules resulting from the Prospectus Directive toa minimum to avoid imposing undue burdens upon issuers.I believe the Company is well positioned to take advantage of the currentchanges.FINANCIAL PERFORMANCEFirst half losses have been reduced by more than 70 per cent. to GBP153,000(2004: GBP533,000).Turnover for the period was GBP774,000 (2004: GBP570,000). The development ofthe Company's trading services (as detailed below) generated one off income ofGBP160,000; and the underlying operational income of GBP614,000 was 8 per cent.up on the prior year.Operating expenditure was GBP974,000 (2004: GBP1,103,000) including GBP55,000of initial spend in respect of the development of the Company's tradingservices. Excluding this, the level of operating expenditure was 17 per cent.below the prior year.This is a most encouraging set of results from the new management, especiallyat a time when they have been effecting so many fundamental reforms.IMPROVEMENTS TO THE MARKETA market needs appropriate rules and regulations to ensure that these areupdated in line with commercial requirements. In January of this year, Ofexconfirmed that it had comprehensively re-written its rules. The new rules de-regulated wherever it was prudent so to do but also introduced important newsafeguards for investors. On the basis of these rule reforms, a number of thekey institutional investors in smaller companies have publicly declared thatthey are now prepared to invest in appropriate Ofex securities. This hasresulted in more companies and more advisers participating in Ofex.BUSINESS DEVELOPMENTUpon its appointment, the new management set up a dedicated businessdevelopment team with a proven track record. The team has carried out athorough re-branding exercise and led the development of our new web-site whichgives Ofex companies a unique opportunity of using our data to create the basisof an investor relations web-site of their own.The team has also produced a number of new guides to the market. Importantly,these include a new tax guide produced in conjunction with BDO Stoy Hayward,which details for the first time the extensive tax benefits from whichinvestors may benefit when investing in Ofex securities.OPERATIONSWe have now launched Newstrack PLUS, a fast, effective and secure mechanism forOfex companies and their advisers to submit announcements.I am delighted that we have recruited Peter Sheridan, who formerly headed upthe retail trading desk of a large investment bank, to head our operationsarea. Peter has taken steps already to strengthen our IT team to assist in thedevelopment of our trading services detailed below. Following the terrorist attacks on 7 July 2005 (just after the period coveredby this interim statement), the Company was forced to evacuate its offices atshort notice. I am pleased to advise that the market remained operationalthroughout and that additional measures to ensure business continuity are beingimplemented.THE DEVELOPMENT OF OUR TRADING SERVICESIn response to demand from leading financial institutions and brokers, subjectto all necessary regulatory consents, the Company intends to markedly broadenits existing trading services to encompass an extended range of securities. Theenlarged trading service will allow brokers and investors flexibility inselecting their execution venue and should focus more attention on existingOfex securities.The Company believes that it can offer a wider trading service that will bevery competitive and will provide an efficient platform for brokers, retailservice providers and market makers, especially following the introduction ofMiFID. The Company is committed to the continued development of its technologyplatform to achieve this. This will impact significantly our second halfresults but in the longer term the Directors believe that the enhancements toour trading services should lead to an increase in the volumes and values ofsecurities being traded on our platform and raise the profile of securitiestraded upon that platform. Further details of the securities to be traded andthe institutions involved will be announced in due course.An additional investment of at least GBP1,800,000 is required to enable theCompany to develop its trading services as outlined above. The Company hasdecided that a placing is the most efficient way to raise this sum. Placeeshave been found but the placing is conditional upon shareholder approval as itwill be necessary to disapply pre-emption rights. Shareholder approval will besought at an Extraordinary General Meeting to be held on 29 September 2005.Stephen Hazell-SmithChairman6 September 2005PLUS MARKETS GROUP PLCCONSOLIDATED PROFIT AND LOSS ACCOUNTFOR THE SIX MONTHS ENDED 30 JUNE 2005 * Six months Six months Year ended 31 December 2004 * ended ended Audited * 30 June 2005 30 June 2004 GBP'000 * Unaudited Unaudited Notes GBP'000 GBP'000 TURNOVER 2 774 570 1,141 ***** ***** ***** OPERATING COSTS Staff costs (461) (567) (1,346) Other operating (513) (536) (1,116) charges ----- ----- ----- 2 (974) (1,103) (2,462) ----- ----- ----- OPERATING LOSS (200) (533) (1,321) Interest 47 8 20 receivable Interest payable - (8) (20) ----- ----- ----- LOSS ON ORDINARY (153) (533) (1,321) ACTIVITIES ----- ----- ----- RETAINED LOSS (153) (533) (1,321) FOR THE PERIOD ***** ***** ***** Loss per share * 4 (0.18p) (2.47p) (4.17p) basic and diluted ***** ***** *****PLUS MARKETS GROUP PLCCONSOLIDATED BALANCE SHEET30 JUNE 2005 * As at As at As at * 30 June 30 June 31 December * 2005 2004 2004 Notes Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 FIXED ASSETS Intangible - Intellectual Property Rights 500 500 500 Tangible 198 292 246 Investments 1 1 1 ----- ----- ----- 699 793 747 ----- ----- ----- CURRENT ASSETS Debtors 6 232 207 457 Prepayments 136 121 65 Cash at bank 1,918 475 2,352 and in hand ----- ----- ----- 2,286 803 2,874 ----- ----- ----- CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR Bank Loan - (67) (167) Creditors (345) (201) (500) Amounts due to related party - JP Jenkins Ltd - (36) - Deferred income 5 (446) (441) (607) ----- ----- ----- (791) (745) (1,274) ----- ----- -----NET CURRENT ASSETS 1,495 58 1,600 ----- ----- -----CREDITORS: AMOUNTSFALLING DUE AFTER MORE THAN ONE YEARAmounts due to relatedparty - JP Jenkins Ltd - (138) - Bank Loan - (133) - ----- ----- ----- - (271) - ----- ----- ----- NET ASSETS 2,194 580 2,347 ***** ***** ***** CAPITAL AND RESERVES Called up share capital 3 4,227 1,077 4,227 Share premium 3 1,469 2,064 1,469 Profit and loss account 3 (3,502) (2,561) (3,349) ***** ***** ***** EQUITY SHAREHOLDERS' FUNDS 3 2,194 580 2,347 ***** ***** *****PLUS MARKETS GROUP PLCCOMPANY BALANCE SHEET30 JUNE 2005 * As at As at As at * 30 June 30 June 31 * 2005 2004 December Notes Unaudited Unaudited 2004 GBP'000 GBP'000 Audited GBP'000 FIXED ASSETS Investments in subsidiaries 6 2 2 2 ----- ----- ----- CURRENT ASSETS Amounts owed by group undertakings - due after one year 509 284 210 Debtors and prepayments 19 17 15 Cash at bank and in hand 1,838 284 2,269 ----- ----- ----- 2,366 585 2,494 ----- ----- ----- CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR (2) (7) (147) ----- ----- ----- NET ASSETS 2,366 580 2,347 ***** ***** ***** CAPITAL AND RESERVES Called up 3 4,227 1,077 4,227 share capital Share premium 3 1,469 2,064 1,469 Reserves (3,330) (2,561) (3,349) ***** ***** ***** EQUITY 2,366 580 2,347 SHAREHOLDERS' FUNDS ***** ***** *****PLUS MARKETS GROUP PLCNOTES TO THE ACCOUNTSFOR THE SIX MONTHS ENDED 30 JUNE 20051. BASIS OF PREPARATIONThese interim accounts, which are unaudited, have been prepared on the basis ofthe accounting policies set out in the statutory accounts for the year ended 31December 2004 of PLUS Markets Group plc and on the going concern basis.The financial information contained in this interim report does not constitutethe Group's statutory accounts within the meaning of section 240 of theCompanies Act 1985. The comparative information contained in this report forthe period ended 31 December 2004 does not constitute the statutory accountsfor that financial period. Those accounts have been reported on by thecompany's auditors, Deloitte & Touche LLP, and delivered to the Registrar ofCompanies. The report of the auditors was unqualified and did not contain astatement under section 237 (2) or (3) of the Companies Act 1985.2. TURNOVERThe development of the Company's trading services generated one off income ofGBP160,000, which is included within turnover. A total of GBP55,000 wasincluded within operating costs in respect of the development of the Company'strading services.3. MOVEMENT ON SHAREHOLDERS' FUNDS * Share Profit and * Share Premium Loss * Capital Account Account Total GBP'000 GBP'000 GBP'000 GBP'000As at 31 December 2004 Loss for the period 4,227 1,469 (3,349) 2,347 * * (153) (153) ***** ***** ***** ***** 4,227 1,469 (3,502) 2,194 **--- ----- ----- -----4. LOSS PER ORDINARY SHAREBasic loss per share has been calculated by dividing the loss on ordinaryactivities after taxation by the weighted number of shares in issue during theperiod. Diluted loss per share is basic loss per share adjusted for the effectof conversion into fully paid shares of the weighted average number of shareoptions in existence during the period. As the Group has made a loss during theperiod, under FRS14 no dilution effect has been calculated. * Six months * Six months ended Year ended 31 ended 30 June December 2004 30 June 2004 GBP'000 2005 GBP'000 GBP'000 Loss on ordinary activities after taxation (153) (533) (1,321) ***** ***** ***** Number Number Number Weighted average 84,532,701 21,532,701 31,715,792 number of shares ***** ***** ***** Pence Pence Pence Loss per share (0.18) (2.47) (4.17) ***** ***** *****PLUS MARKETS GROUP PLCNOTES TO THE ACCOUNTSFOR THE SIX MONTHS ENDED 30 JUNE 20055. DEFERRED INCOMEIssuers and corporate adviser members pay an annual fee. The fee is payable inadvance. The deferred income provision recognises that these members have paidfees for periods that extend beyond 30 June 2005 and therefore the income willbe accounted for in a future accounting period.6. DEBTORSThe balance at 30 June 2005 includes a rental deposit of GBP35,250 that waspaid to the landlord of the premises that the Company moved into in April 2004.The deposit becomes repayable five years after the lease commencement date of10 February 2004.7. INVESTMENT IN SUBSIDIARIESThe amount comprises the investment of GBP1,000 in Ofex plc and GBP1,000 inKudosoption plc, a dormant subsidiary.8. SHARE OPTION SCHEMESThe total number of share options outstanding under the Ofex Plans as at 30June 2005 was 5,269,106: Number of Share Exercise Grant Date Earliest Exercise Expiry Options Price Date Date 300,000 25p 01/04/2003 01/04/2006 31/03/2013 541,833 29.5p 11/03/2004 11/03/2007 10/03/2014 290,909 6.875p 11/03/2005 11/03/2008 10/03/2015 3,409,091 7.25p 17/03/2005 17/03/2008 16/03/2015 727,273 6.875p 04/05/2005 04/05/2008 03/05/2015Copies of the circular will be available free of charge during normal businesshours on weekdays (excluding public holidays) from the date hereof until 6October 2005 from the offices of Field Fisher Waterhouse, 35 Vine Street,London EC3N 2AAFor further information, please contact:Conduit PR on 020 7618 8760Leesa Peters / Pam SpoonerPLUS Markets Group plc: 020 7553 2000Darren Francis, Chief Financial OfficerENDPLUS Markets Group plc