5 Jun 2009 12:16
5 June 2009
Amteus Plc
("Amteus" or the "Company")
Interim Results for the six months ended 31 March 2009
Chairman's statement
Amteus, the provider of digital educational networking and media business, announces its unaudited interim results for the six months ended 31 March 2009.
Results
Revenue in the six months to 31 March 2009 amounted to £172,585 (2008: £69,289) and the loss before and after tax was £969,419 (2008: £1,606,480). Under the Company's revenue recognition policy, there was £164,179 of deferred revenue held at the balance sheet date.
People
During the period the Company recruited a new management team. Len Sanderson was appointed as CEO and Richard Addis was appointed as Editor in Chief and Director. At the same time Jeffrey Morris stood down from the board. Peter Rackham resigned from the board on 20 May 2009.
The Company currently employs 24 staff the majority of whom work in sales and marketing.
Placing
On 19 May 2009, the Company raised, subject to inter alia shareholder approval which was received earlier today, £1.99 million (after expenses) through a placing of 32,844,866 new ordinary shares at 7p per share.
Post balance sheet events
The Company has entered into a number of agreements with both related and third parties. The Company also took the opportunity to reorganise its capital structure and to amend its articles of association. The details of all these arrangements and amendments are contained within the circular that was issued to existing shareholders on 20 May 2009. A copy of the circular is available on the Company's website www.imjack.com.
The Product
The Company's main product, imJack, is a Web 2.0 based communication and collaboration platform that enables teachers and parents to communicate securely with, and guide, students, while removing the many dangers of using unregulated public websites. It operates on what the Directors believe to be a secure system by separating a defined user network from general internet traffic and by using secure socket layer encryption technology to maintain privacy and security for all users.
Students can use imJack to upload and download homework, share ideas and collaborate with teachers and peers through messaging or video conferencing, which is an integral part of the system. The platform is centrally administered, so the school alone decides who can and cannot be part of the network. imJack automatically logs and creates a permanent record of communication between the parties on the system. This is only accessible by the administrator for safety, security and legal reasons.
imJack facilitates live interactive collaborative working with features including real-time drawing exchange, video conferencing and document management allowing teachers and pupils to exchange documents and sketches, while maintaining a video conference link. The software is offered as a package by Amteus hosted on open source technology. Additional modules include an interactive calendar, real time surveys and polls, as well as educational content, tutorials, news aggregation and explanatory journalism.
The Amteus business model is to provide imJack free to schools, colleges and universities and aims to generate income from both commercial sponsors and from add-on services such as bespoke applications, special training and affiliate partnerships. The Directors believe that offering the core product free to users will increase the rate at which imJack is taken by schools and, as such, increase the rate at which active users are secured. The Directors believe that a higher number of active users will increase the Company's potential to generate all types of revenue referred to above.
International Financial Reporting Standards ("IFRS")
As an AIM listed company Amteus complies with IFRS.
Outlook
The Company has secured approval from the Department for Children, Schools and Families ("DCSF") for all schools applying for redesignation through the Specialist Schools and Academies Trust ("SSAT") to be offered imJack. Each redesignating school taking up the imJack platform will be eligible for a £15,000 credit towards the £25,000 qualifying criteria for a £25,000 DCSF capital grant. The Government supported agreement with the SSAT covers over 80 per cent. of secondary schools in England. The SSAT has set an initial target to roll out imJack to 1,115 of its 5,000 schools by September 2009. At 5 June 2009 the Company has rolled out imJack to 353 schools.
The e-Learning Foundation ("e-LF"), a national charity dedicated to ensuring that every child in the UK has home access to technology for their studies, has also signed an agreement with the Company for the roll out of imJack to all 312 e-LF affiliated schools by the end of 2009. The Company has only recently started working with the e-LF and this agreement is expected to secure around 312,000 new imJack user licences by the end of 2009.
JD Connect Limited, on behalf of the Company, is also in negotiations with the British Olympic Association for a contract which could result in Amteus providing communication and training for all those participating in Olympic sports including schools, clubs and training academies, albeit there can be no guarantee that the agreement will be concluded or the actual terms of such agreement.
The Directors are confident that we can build on the success of these contracts as well continue to increase the number of educational establishments who have been signed-up to date.
Going concern
The Directors acknowledge that in light of recent credit market conditions, additional diligence on the part of preparers of accounts and members of audit committees is required, and in particular, the need for clarity as to the basis on which judgements have been exercised.
On 5 June 2009, the Company raised £1.99m (after expenses) through the issue of shares, which will be admitted to AIM on 8 June 2009. The proceeds allow the Company to settle certain creditors and provide additional working capital until forecast sponsorship revenue is achieved.
The Directors have prepared a forecast, to September 2011, which assumes a certain level of sponsorship revenue being achieved. In preparing the forecasts the Directors have taken into account the experience and expertise of the two Directors Len Sanderson and Richard Addis, in securing favourable sponsorship contracts.
In the forecasts, the Directors have also relied upon the £500,000 loan facility that the major shareholder has made available to the Company to provide working capital.
The uncertainty of both achieving the forecast sponsorship revenue and of the availability of shareholder support indicate material uncertainties. Nevertheless after making enquiries and considering the uncertainties described above, the Directors have concluded that the going concern basis is appropriate and that the Company will continue in operational existence for the foreseeable future.
Further details are set out in note 1 to the interim report.
Michael Abrahams CBE DL
Chairman
5 June 2009
Independent review report to Amteus
We have been engaged by the Company to review the condensed set of financial statements in the interim financial report for the six months ended 31 March 2009 which comprises the condensed income statement, statement of recognised income and expense, consolidated balance sheet, cash flow statement and related notes 1 to 8. We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the Company those matters we are required to state to them in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.
Directors' responsibilities
The interim financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the interim financial report in accordance with the AIM Rules of the London Stock Exchange.
As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this interim financial report have been prepared in accordance with the accounting policies the Group intends to use in preparing its next annual financial statements.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the interim financial report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the interim financial report for the six months ended 31 March 2009 is not prepared, in all material respects, in accordance with the AIM Rules of the London Stock Exchange.
Emphasis of matter - going concern
In forming our opinion on the interim financial statements, which is not qualified, we have considered the adequacy of disclosures made in the interim financial statements concerning the Group's ability to continue as a going concern. These include the following material uncertainties:
the dependency on the forecast sponsorship revenues being achieved; and
the availability of the £500,000 loan facility from the major shareholder.
The existence of these material uncertainties may cast significant doubt about the Company's ability to continue as a going concern and, therefore that it may be unable to realise its assets and discharge its liabilities in the normal course of business.
In view of the significance of the fact that the preparation of the interim financial statements on the going concern basis depends upon achieving the forecast sponsorship revenues and the availability of shareholder support, we consider that these disclosures should be brought to your attention.
The Directors have prepared these interim financial statements on the going concern basis. If the adoption of the going concern basis was inappropriate, adjustments, which it is not practicable to quantify, would be required, including those to write down assets to their recoverable value, to reclassify fixed assets as current assets and to provide for any further liabilities that may arise.
Deloitte LLP
CONDENSED CONSOLIDATED INCOME STATEMENT
For the six months ended 31 March 2009
| Note | Unaudited 31 March 2009 (6 months) £ | Unaudited 31 March 2008 (6 months) £ | Audited 30 September 2008 (12 months) £ | |
| Continuing operations | ||||
| Revenue | 2 | 172,585 | 69,289 | 198,282 |
| Cost of sales | (122,331) | (55,365) | (313,087) | |
| Gross profit | 50,254 | 13,924 | (114,805) | |
| Administrative expenses | (1,015,348) | (1,593,152) | (3,366,830) | |
| OPERATING LOSS | (965,094) | (1,579,228) | (3,481,635) | |
| Investment revenue | 48 | 4,377 | 10,421 | |
| Finance costs | (4,373) | (31,629) | (67,824) | |
| LOSS BEFORE TAXATION | (969,419) | (1,606,480) | (3,539,038) | |
| Tax | 3 | - | - | - |
| LOSS FOR THE PERIOD FROM CONTINUING OPERATIONS ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT COMPANY | (969,419) | (1,606,480) | (3,539,038) | |
| Loss per share - basic and diluted | 4 | (1.7p) | (4.0p) | (7.6p) |
STATEMENT OF RECOGNISED INCOME AND EXPENSE
There is no recognised income or expense for the financial period other than those shown in the condensed consolidated income statement above and consequently no separate statement of recognised income and expense has been presented.
CONDENSED CONSOLIDATED BALANCE SHEET
31 March 2009
| Unaudited 31 March 2009 £ | Unaudited 31 March 2008 £ | Audited 30 September 2008 £ | ||
| NON-CURRENT ASSETS | ||||
| Intangible assets | 35,551 | 52,903 | 51,232 | |
| Property, plant and equipment | 56,329 | 132,162 | 62,308 | |
| 91,880 | 185,065 | 113,540 | ||
| CURRENT ASSETS | ||||
| Inventories | 189,591 | 400,334 | 189,600 | |
| Trade and other receivables | 479,756 | 211,942 | 486,987 | |
| Cash and cash equivalents | 2,234 | 63 | 4,250 | |
| 671,581 | 612,339 | 680,837 | ||
| TOTAL ASSETS | 763,461 | 797,404 | 794,377 | |
| CURRENT LIABILITIES | ||||
| Trade and other payables | (2,114,990) | (1,829,429) | (1,967,368) | |
| Obligations under finance leases | (10,468) | (25,677) | (10,468) | |
| Bank overdraft | - | - | (14,473) | |
| (2,125,458) | (1,855,106) | (1,992,309) | ||
| NET CURRENT LIABILITIES | (1,453,877) | (1,242,767) | (1,311,472) | |
| NON-CURRENT LIABILITIES | ||||
| Obligations under finance leases | (5,355) | (27,249) | (10,291) | |
| TOTAL LIABILITIES | (2,130,813) | (1,882,355) | (2,002,600) | |
| NET LIABILITIES | (1,367,352) | (1,084,951) | (1,208,223) | |
| EQUITY | ||||
| Share capital | 6,126,333 | 4,045,328 | 5,376,333 | |
| Share premium | 6,289,936 | 5,937,455 | 6,320,186 | |
| Share options reserve | 580,455 | 394,365 | 489,915 | |
| Retained earnings | (14,364,076) | (11,462,099) | (13,394,657) | |
| TOTAL EQUITY | (1,367,352) | (1,084,951) | (1,208,223) | |
D Lynde
Director
5 June 2009
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 31 March 2009
| Note | Unaudited 31 March 2009 (6 months) £ | Unaudited 31 March 2008 (6 months) £ | Audited 30 September 2008 (12 months) £ | ||
| Net cash from operating activities | 5 | (644,561) | (922,656) | (2,403,896) | |
| INVESTING ACTIVITIES | |||||
| Interest received | 48 | 4,377 | 10,421 | ||
| Proceeds on disposal of property, plant and equipment | - | 43,950 | 86,920 | ||
| Purchase of intangible assets | (3,955) | (40,365) | (42,112) | ||
| Purchase of property, plant and equipment | (6,575) | (28,603) | (33,368) | ||
| Net cash used in investing activities | (10,482) | (20,641) | 21,861 | ||
| FINANCING ACTIVITIES | |||||
| Finance cost | (4,373) | (31,629) | (67,824) | ||
| Proceeds on issue of shares | 719,750 | - | 1,713,736 | ||
| Repayments of obligations under finance leases | (4,936) | (28,939) | (61,106) | ||
| (Repayment)/receipt of related party loans | (42,941) | 377,568 | 160,646 | ||
| Net cash used in financing activities | 667,500 | 317,000 | 1,745,452 | ||
| Net increase/(decrease) in cash and cash equivalents | 12,457 | (626,297) | (636,583) | ||
| Cash and cash equivalents at beginning of period | (10,223) | 626,360 | 626,360 | ||
| Cash and cash equivalents at end of period | 2,234 | 63 | (10,223) | ||
NOTES TO THE INTERIM REPORT
For the six months ended 31 March 2009
1. BASIS OF PREPARATION
The results for the six months ended 31 March 2009 and 31 March 2008 have been reviewed, but not audited, by the auditors.
As Amteus is listed on the Alternative Investment Market ("AIM") the consolidated financial statements are required to be presented in accordance with International Financial Reporting Standards ("IFRS"). The interim financial statements have been prepared in accordance with accounting policies consistent with IFRS. The same accounting policies, presentation and methods of computation are followed in the interim financial statements as applied in the Group's latest annual audited financial statements.
The financial information for the year ended 30 September 2008 does not constitute statutory accounts for the purposes of section 240 of the Companies Act 1985 but are derived from the statutory accounts for that year. The statutory financial statements for the year ended 30 September 2008 received an unqualified auditors' report, contained no statement under section 237(2) or (3) of the Companies Act 1985 and have been filed with the Registrar of Companies.
The auditors have included an emphasis of matter paragraph in their audit report, for the year ended 30 September 2008, to draw attention to the material uncertainties associated with the dependency on the forecast sponsorship revenues being achieved and the commitment of the major shareholder to not request repayment of his loans to the company.
The existence of these material uncertainties may cast significant doubt about the Company's ability to continue as a going concern.
Going concern
The interim financial statements have been prepared on the going concern basis, which assumes that the Group will continue in operational existence for the foreseeable future.
The Directors have prepared a forecast, to September 2011, which assumes a certain level of sponsorship revenue being achieved. In preparing the forecasts the Directors have taken into account the experience and expertise of the two Directors Len Sanderson and Richard Addis, in securing favourable sponsorship contracts.
In the forecasts, the Directors have also relied upon the £500,000 loan facility that the major shareholder has made available to the Company to provide working capital.
These material uncertainties, being the achievement of the forecast sponsorship revenues and the availability of shareholder support, may cast significant doubt on the entity's ability to continue as a going concern and, therefore, that it maybe unable to realise its assets and discharge its liabilities in the normal course of business.
Nevertheless after making enquiries and considering the uncertainties described above, the Directors have concluded that the going concern basis is appropriate. If the adoption of the going concern basis was inappropriate, adjustments, which it is not practicable to quantify, would be required, including those to write down assets to their recoverable value, to reclassify fixed assets as current assets and to provide for any further liabilities that may arise.
2. segment information
Analysis between activities is not presented as the Group's operations comprise a single class of business. The Group's operations are located in Great Britain.
3. tax on loss on ordinary activities
There is no tax charge for the period.
NOTES TO THE INTERIM REPORT
For the six months ended 31 March 2009
4. LOSS PER SHARE
Loss per share is calculated by dividing the loss after taxation by the weighted average number of ordinary shares in issue of 57,760,576 (31 March 2008: 40,453,278 shares and 30 September 2008: 46,299,585 shares).
5. NET CASH FROM OPERATING aCTIVITIES
| Unaudited 31 March 2009 (6 months) £ | Unaudited 31 March 2008 (6 months) £ | Audited 30 September 2008 (12 months) £ | |
| Loss for the period | (969,419) | (1,606,480) | (3,539,038) |
| Adjustments for: | |||
| Investment revenue | (48) | (4,377) | (10,421) |
| Finance costs | 4,373 | 31,629 | 67,824 |
| (Profit)/loss on disposal of property, plant and equipment | - | (852) | 2,502 |
| Amortisation of intangible assets | 19,636 | 1,922 | 14,229 |
| Depreciation of property, plant and equipment | 12,554 | 41,087 | 60,493 |
| Employee share based payment | 90,540 | 94,141 | 189,691 |
| Operating cash flows before movements in working capital | (842,364) | (1,442,930) | (3,214,720) |
| Decrease in inventories | 9 | 79,762 | 290,496 |
| (Increase)/decrease in receivables | (2,957) | 55,778 | (209,079) |
| Increase in payables | 200,751 | 384,734 | 729,407 |
| Net cash from operating activities | (644,561) | (922,656) | (2,403,896) |
6. DIVIDENDS
No dividends are proposed for the six months ended 31 March 2009 (six months ended 31 March 2008: £nil, year ended 30 September 2008: £nil).
7. DISTRIBUTION OF INTERIM REPORT TO SHAREHOLDERS
The interim report will be available for inspection by the public at the registered office of the Company during normal business hours on any weekday and from the Company's website www.imjack.com. Further copies are available on request.
8. POST BALANCE SHEET EVENTS
On 5 June 2009, the Company raised an additional £1.99m net of expenses through a placing of 32,844,866 new shares at 7p per share. These shares will be admitted to trading on AIM on 8 June 2009. The Company's founder and major shareholder, JC Morris, has been providing financial support to the Company. As part of the placing JC Morris has capitalised his loans to the Company amounting to £110,000. On 19 May 2009, JC Morris made available a loan facility of £500,000.
NOTES TO THE INTERIM REPORT
For the six months ended 31 March 2009
As part of this placing the Company reorganised its share capital. Ordinary 10p shares were converted into 1p ordinary shares and 9 deferred shares of 1p each. In addition the authorised share capital was increased to £11m.
The Company has entered into a conditional agreement to acquire The Day Limited, a company which has researched and developed a new approach to news media, for consideration of up to 10,000,000 new ordinary shares. In the financial year ended 31 May 2008, The Day Limited reported an unaudited loss before tax of £35,045, an accumulated carried forward loss of £79,041 and has net liabilities of £76,984. The vendors of The Day Limited have agreed to transfer the company free of all liabilities.
For further information, please contact:
| Amteus Plc Len Sanderson, CEO | Tel: 01653 618016 www.imjack.com |
| Strand Partners Limited (Nomad) James Harris / Paul Cocker | Tel: 020 7409 3494 |
| Daniel Stewart & Company Plc (Broker) Martin Lampshire / Stewart Dick | Tel: 020 7776 6550 |
| Rawlings Financial PR Limited Catriona Valentine | Tel: 01653 618016 |