Doriemus Regulatory News (DOR)

30 Sep 2010 07:00

30 September 2010 TEP Exchange Group PLC ("TEP" or "the Company") Half-yearly results for the six month period ended 30 June 2010

Chairman's Statement

I am duly reporting the unaudited results of the Company for the six month period ended 30 June 2010. Revenue for the period was £15,000 (six month period ended 30 June 2009: £10,000), an increase of 50 per cent. over the corresponding period last year. The Company incurred a loss from operations of £79,000, compared to a loss from operations of £72,000 in the same period last year. The loss before and after taxation was £92,000, compared to a loss before and after taxation of £76,000 in the first six months of last year.

Although the revenue achieved in the first half of 2010 was ahead of the revenue in the first half of 2009 the absolute figure is very low and this was due to extremely challenging market conditions in the traded endowment policy market. The turmoil in financial markets which commenced in the second half of 2008 resulted in a dramatic drop in demand for traded endowment policies from market makers. In 2010 there has been a modest increase in demand for traded endowment policies from market markers.

As set out in the Company's recently published Report and Accounts, the group relies on support from SL Investment Management Limited (a 48.26 per cent. shareholder in the Company). The Directors have recently agreed with SL Investment Management Limited that the repayment of the loan in the amount of £ 454,000 will not be repaid before 31 March 2011 unless otherwise agreed by both parties.

The Directors remain of the view that the Company's electronic platform is a cost effective method for market makers to source policies, particularly direct from the public and, in addition, the technology can be utilised for trading in other assets, particularly within the financial services sector. With this in mind the Directors are currently in the final stages of negotiations for the Company to licence the electronic platform and all technology to SL Investment Management Limited for a quarterly fee. Under these arrangements, TEP Exchange Limited, the Company's operating subsidiary, will continue to be able to utilise the electronic platform so that market makers can continue to source traded endowment policies.

Your Directors are not proposing an interim dividend.

George KynochChairman30 September 2010

For further information please contact:

TEP Exchange Group plc David Roxburgh 00 353 1 260 7746 Merchant Securities Limited John East/Simon Clements 020 7628 2200Consolidated Statement of Comprehensive Incomefor the six months ended 30 June 2010 Six months Six months Year ended ended ended 30 June 30 June 31 December 2010 2009 2009 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Revenue 15 10 10 Administrative expenses (94) (82) (216) Loss from operations (79) (72) (206) Finance costs (13) (4) (9) Loss before tax (92) (76) (215) Tax expense - - - Loss attributable to the equity holders (92) (76) (215)of the parent and total comprehensive income for the period Loss per share

Basic and diluted loss per share (note (0.02)p (0.02)p (0.05)p 3)

Consolidated Statement of Changes in Equityfor the six months ended 30 June 2010Attributable to equity holders of the Company Share Share Accumulated Total Capital Premium Losses Equity (unaudited) (unaudited) (unaudited) (unaudited) £'000 £'000 £'000 £'000 At 1 January 2009 2,263 3,952 (6,642) (427) Total comprehensive income - - (76) (76)for the period At 30 June 2009 2,263 3,952 (6,718) (503) Total comprehensive income - - (139) (139)for the period At 31 December 2009 2,263 3,952 (6,857) (642) Total comprehensive income - - (92) (92)for the period At 30 June 2010 2,263 3,952 (6,949) (734)

Share capital is the amount subscribed for ordinary shares and deferred shares at nominal value.

Share premium represents the excess of the amount subscribed for share capital over the nominal value of these shares net of share issue expenses.

Accumulated losses represent cumulative losses of the Company and its subsidiaries (together the "Group") attributable to equity holders.

Consolidated Statement of Financial Positionas at 30 June 2010 As at As at As at 30 June 30 June 31 December 2010 2009 2009 (unaudited) (unaudited) (audited) £'000 £'000 £'000 ASSETS Current assets Inventories 3 3 3Trade and other receivables 52 60 23Cash and cash equivalents 5 4 2 Total current assets 60 67 28 TOTAL ASSETS 60 67 28 LIABILITIES Current liabilities Short term borrowings (454) - (363)Trade and other payables (340) (298) (307)Total current liabilities (794) (298) (670) Non-current liabilities Trade payables - (272) - Total non-current liabilities - (272) - TOTAL LIABILITIES (794) (570) (670) TOTAL NET LIABILITIES (734) (503) (642) Equity attributable to equity holders of the parent Share capital 2,263 2,263 2,263Share premium reserve 3,952 3,952 3,952Accumulated losses (6,949) (6,718) (6,857) TOTAL EQUITY DEFICIT (734) (503) (642)Consolidated Cash Flow Statementfor the six months ended 30 June 2010 Six months Six months Year ended ended ended 30 June 30 June 31 December 2010 2009 2009 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Operating activities Loss before taxation (92) (76) (215) Finance costs 13 4 9 Loss from operations before changes in (79) (72) (206)working capital (Increase) / decrease in trade and other (29) 8 45receivables Increase / (decrease) in trade and other 20 42 (220)payable Cash used by operating activities (88) (22) (381) Financing activities Increase in borrowings 91 - 363 Interest paid - (3) (9)

Net cash inflow / (outflow) from financing 91 (3) 354 activities

Increase / (decrease) in cash and cash 3 (25) (27)equivalent Cash and cash equivalents at beginning of 2 29 29period Cash and cash equivalents at end of period 5 4 2 Cash and cash equivalents comprise: Cash available on demand 5 4 2

Notes to the half-yearly results

1. Basis of preparation

As permitted IAS 34, `Interim Financial Reporting' has not been applied to these Half-yearly Results. The financial information of the Group for the six months ended 30 June 2010 have been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively "IFRS") issued by the International Accounting Standards Board ("IASB") as adopted by the European Union ("adopted IFRS") and are in accordance with IFRS as issued by the IASB. The condensed interim financial information has been prepared using the accounting policies which will be applied in the Group's statutory financial statements for the year ending 31 December 2010.

The financial information shown in this publication is unaudited and does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The comparative figures for the financial year ended 31 December 2009 have been derived from the statutory accounts for 2009. The statutory accounts have been delivered to the Registrar of Companies. The auditors have reported on those accounts; their report was unqualified and did not contain statements under the section 498(2) or 498(3) of the Companies Act 2006. The auditors' report on the statutory accounts for 2009 referred to a matter concerning the company's ability to continue as a going concern to which the auditors drew attention by way of emphasis without qualifying their report. The details concerning this matter are given in note 4 below.

2. Dividends

No dividend is proposed for the six months ended 30 June 2010.

3. Loss per share

The loss per share has been calculated by dividing the loss after taxation for the period of £92,000 (six month period ended 30 June 2009: loss of £76,000 and year ended 31 December 2009: loss of £215,000) by the weighted average number of Ordinary Shares of 399,999,999 (six month period ended 30 June 2009: 399,999,999 and year ended 31 December 2009: 399,999,999) in issue during the period.

The options and warrants in issue at 30 June 2009, 31 December 2009 and 30 June 2010 are anti-dilutive and have therefore been excluded from the calculation of diluted earnings per share. However, such options may be dilutive in future periods.

4. Going Concern

During the six month period ended 30 June 2010 the Group incurred a loss of £ 92,000 (year ended 31 December 2009 loss of £215,000) and at 30 June 2010 had net liabilities of £734,000 (31 December 2009 net liabilities of £642,000).

The Group relies on support from SL Investment Management Limited (a 48.26 per cent. shareholder in the Company). The Directors have recently agreed with SL Investment Management Limited that the repayment of the loan in the amount of £ 454,000 will not be repaid before 31 March 2011 unless otherwise agreed by both parties.

In 2010 the Directors are anticipating increased demand for traded endowment policies from market makers particularly from SL Investment Management Limited. In addition, the Directors are currently in the final stages of negotiations for the Company to receive quarterly fees from licensing the electronic platform and all the technology to SL Investment Management Limited. Accordingly, the Directors are anticipating improved trading results for the period up to 30 June 2011 and have projected cash flows information which show creditors can be paid out of cash flow. The projected cash flow information assumes that the total amount due at 31 December 2009 to HM Revenue & Customs of £165,026 will be paid over a period of nine months from February 2010, in accordance with the written agreement with HM Revenue & Customs. Should the new licensing agreement not be completed as anticipated, the Company will need to raise funds from other sources.

On the basis of the above, and all other available information, the Directors consider that the Group will be able to operate within the cash flow forecasts and therefore that it is appropriate to prepare the interim financial statements on the going concern basis.

These conditions indicate the existence of a material uncertainty which may cast significant doubt about the Company's ability to continue as a going concern. The interim financial statements do not include any adjustments that would result from the going concern basis of preparation being inappropriate.