Gotech Group Regulatory News (GOT)

GoTech Group plc - Final Results and Notice of AGM

PR Newswire

London, March 26

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon publication of this announcement, this inside information is now considered to be in the public domain.

27 March 2018

GoTech Group plc

 (“GoTech”, the “Company” or the “Group”)

Final Results and Notice of AGM

GoTech, the cash shell admitted to trading on AIM, announces its final audited results for the year ended 30 September 2017.

Publication of annual report and notice of AGM

The Company hereby announces that its AGM will be held at the offices of Allenby Capital Limited situated at 5 St. Helen’s Place, London EC3A 6AB on 23 April 2018 at 2.00 p.m..

The Company's Annual Report and Financial Statements for the year ended 30 September 2017 will be posted to shareholders, along with the Notice of AGM, shortly and will be available thereafter at the Company's registered office, 27/28 Eastcastle Street, London, W1W 8DH and on its website: https://www.gotechgroup-plc.com/key-documents

For further information, please visit www.gotechgroup-plc.com or contact:

Chairman's Statement:

The Group's results for the year ended 30 September 2017 reflect the figures for GoTech Group Plc and its wholly owned subsidiary companies, Sportsdata Limited and Dataplay Holdings Limited.

GoTech Group PLC acquired these subsidiaries in May 2016. Both companies were loss making and had only been trading for a relatively short time when they were acquired. It was hoped that there would be a significant increase in turnover for both businesses during the year ended 30 September 2017 which would in turn result in them becoming profitable.

As has been announced during the year, this growth in turnover has not materialised despite various business initiatives being implemented and both businesses remained loss making during the period. Reluctantly, your board announced in December 2017 that it had decided that it was no longer worth investing further sums in these businesses and, as a consequence, the Company was deemed to be a cash shell under the AIM Rules. Your board took the view that it was better for shareholders to preserve cash and look to implement a reverse takeover.

As Sportsdata Limited has remained loss making, Marcus Yeoman and I, as the independent directors, have determined that it is in the Company's best interests to dispose of Sportsdata Limited and have agreed, subject to shareholders' approval, to a sale to Starnevesse Limited for £1. If the sale is approved, this will mean that Sportsdata will no longer be a cash drain for the Company and it will in addition make the Company a simpler proposition for pursuing a reverse takeover. As part of the sale agreement, Starnevesse Limited is obliged to continue to fund the Sportsdata business and honour all existing contractual obligations. At the expiry of these contracts, Starnevesse Limited is obliged to wind the company up in a solvent way. Additionally, in the unlikely event that a sale of Sportsdata Limited could be achieved by Starnevesse Limited, or a sale of the Sportsdata intellectual property rights were to be made, all net proceeds of such sales will be paid across to GoTech Group PLC. Simultaneously with the sale, GoTech Group PLC will settle the outstanding group indebtedness due to Starnevesse Limited in the amount of £183,000 by way of a cash settlement of £100,000 and the issuing of 8,375,000 new ordinary shares at a value of 0.4 pence each totalling £33,500. This settlement secures a discount of £49,500 compared to the liability in the year end group balance sheet.

Since the year end, two placings of ordinary shares have been completed which have raised £500,000 (before costs) and as at 22 February 2018 the Company had unaudited cash and cash equivalents of £579,000. This has put the Company in a stronger position to pursue a successful reverse takeover. In addition, a resolution has been included in the forthcoming Annual General Meeting which will, if passed, give the directors the authority to issue up to a further £250,000 of new ordinary shares at nominal value disapplying pre-emption rights. This is required in order to give the directors the flexibility to raise further funds if this is considered helpful for pursuing a successful reverse takeover.

As a result of the above disappointing trading, the Group's loss for the year was £494,000 (2016: loss £3,910,000).

Board changes

On 31 August 2017, Tony Humphreys resigned as a director and chairman of the Company. I replaced him as an Interim Chairman.

On 19 December 2017, Gail Ganney resigned as an executive director and Richard Thompson resigned as a director. On the same date, Marcus Yeoman re-joined the Board (having resigned earlier in the year) as a non-executive director. It is felt that Marcus Yeoman's experience in sourcing and executing reverse takeovers will be helpful to your Company as it pursues its current objective.

Your Board will keep shareholders abreast of any significant developments and are aiming to progress towards a successful reverse takeover in the first half of this calendar year.

Professor M.P.Caine

Interim Chairman

Consolidated statement of comprehensive income  for the year ended 30 September 2017

Consolidated Statement of Financial Position  as at 30 September 2017

Consolidated Statement of Cash Flows  for the year ended 30 September 2017

Consolidated Statement of Changes in Equity  for the year ended 30 September 2017

While the financial information included in this preliminary announcement has been prepared in accordance with International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs. The Group has also published full financial statements that comply with IFRSs which will be shortly available on its website and also circulated.

The financial information set out in the announcement does not constitute the company’s statutory accounts for the years ended 30 September 2017 or 2016. The financial information for the year ended 30 September 2016 is derived from the statutory accounts for that year, which were prepared under IFRSs, and which have been delivered to the Registrar of Companies. The auditors reported on those accounts, their report was unqualified and did not contain a statement under either Section 498(2) or Section 498(3) of the Companies Act 2006.

We draw your attention to note 1.3, which has been included in the financial results for the year ended 30 September 2017, which describes the uncertainty surrounding the Group’s ability to continue as going concern. The proposed transactions outlined in note 1.3 are considered likely to happen. If the proposed transactions do not proceed, then this could cast doubt over the Group’s ability to continue as a going concern.

The financial information for the year ended 30 September 2017 is derived from the audited statutory accounts for the year ended 30 September 2017 on which the auditors have given an unqualified report, that did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006 and included the following matter to which the auditors drew attention by way of emphasis: 

Material uncertainty relating to going concern

We draw attention to note 1.3 in the financial statements, which explains that the subsidiary companies are being wound down subsequent to the year end. As stated in note 1.3, these events or conditions, along with the other matters as set forth in note 1.3, indicate that a material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

The statutory accounts will be delivered to the Registrar of Companies following the Company’s annual general meeting.

The accounting policies adopted in the preparation of this preliminary announcement are consistent with those set out in the latest Group Annual financial statements. There is no material seasonality associated with the Group’s activities.

Extracted Notes to the Accounts for the year ended 30 September 2017:

1.2 Basis of preparation and consolidation

The financial statements are prepared under the historical cost convention and have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and applied in accordance with the provisions of the Companies Act 2006 applicable to companies reporting under IFRS.

The Group financial statements consolidate the financial statements of the Company and its subsidiary undertakings made up to 30 September 2017. See note 1.6 for further details regarding the basis of consolidation.

The financial statements are presented in sterling, which is the functional currency of the Group and the Parent Company. Monetary amounts in these financial statements are rounded to the nearest £'000.

The principal accounting policies adopted by the Group are set out below.

1.3 Going concern

The Group has reported a loss of £494,000 for the year (2016 - £3,910,000).

During the previous year the Company acquired Sportsdata Limited and Dataplay Holdings Limited through a reverse takeover. At 30 September 2017 the Company held 100% of the ordinary shares of both of these businesses. 

As detailed in the Chairman's statement both these businesses are being wound down and there will be costs involved in achieving this.

In addition, there will be central and administration costs incurred by GoTech Group Plc.Since the balance sheet date the Company has raised £500,000 before costs by way of two placings of ordinary shares.

At the year end the Group had cash resources of £304,000. The Directors have prepared detailed working capital projections for the Company, Sportsdata Limited and Dataplay Holdings Limited which includes the Group's committed costs covering a period up until 30 September 2019. Based on these projections, the directors have a reasonable expectation that the Group's current cash resources are adequate to allow the Group to continue in operational existence for the foreseeable future and meet its liabilities as they fall due for at least a period of 12 months from the signing of these financial statements. The Group therefore continues to adopt the going concern basis in preparing its financial statements.

1.8 Revenue recognition

Revenue is recognised when the right to receive payment is established, to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured, regardless of when the payment is made. Revenue is measured at the fair value of the consideration received or receivable, excluding Value Added Tax.

The directors are of the opinion that this accounting policy accurately reflects commercial reality and the recording of revenue.

1.12 Impairment

(a) Impairment of Financial Assets

All financial assets (other than those categorised at fair value through profit or loss), are assessed at the end of each reporting period as to whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. For an equity instrument, a significant or prolonged decline in the fair value below its cost is considered to be objective evidence of impairment.

An impairment loss in respect of loans and receivables financial assets is recognised in profit or loss and is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the financial asset's original effective interest rate.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the financial asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

(b) Impairment of Non - Financial Assets

The carrying values of assets, other than those to which IAS 36 - Impairment of Assets does not apply, are reviewed at the end of each reporting period for impairment when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount of the assets is the higher of the assets' fair value less costs to sell and their value in use, which is measured by reference to discounted future cash flow.

An impairment loss is recognised in profit or loss immediately.

When there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in profit or loss immediately, unless the asset is carried at its revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.