22 Jan 2009 07:01
22 January 2009 Amteus plc ("Amteus" or "the Company") UNAUDITED PRELIMINARY RESULTS 2008
Amteus, the digital educational networking and media business, is pleased to announce its unaudited preliminary results for the year ended 30 September 2008.
Highlights:
* Development and launch of imJack - the world's first educational website to offer full communications, including video conferencing and enabling collaboration between students and teachers * MOU signed with Specialist Schools and Academies Trust ("SSAT") and e-Learning Foundation * Wide ranging acceptance of imJack from primary schools through to further education establishments, including significant acceptance by teachers * Sponsorship revenues to be shared with participating schools, creating clear financial incentive for schools along with all the benefits of imJack * Rapid growth of imJack user base to over 500,000 committed users in three months following launch * Appointment of Len Sanderson and Richard Addis as new CEO and Director respectively, following year end, to drive global growth of imJack and develop significant sponsorship opportunities
Michael Abrahams, Chairman of Amteus, said: "imJack has transformed Amteus into a digital educational networking and media business. The rapid acceptance of imJack across a wide range of educational establishments indicates the enormous potential of this product, enabling us to attract serious media heavyweights to the Board and create an exciting future for the business."
Enquiries:Amteus plc 01653 618016Michael Abrahams (Chairman) John East & Partners Limited 020 7628 2200John East/Simon Clements Rawlings Financial PR Ltd 01653 618016Catriona Valentine Chairman's Statement
I am pleased to announce the results for Amteus plc for the year ended 30 September 2008.
Results
Turnover in the year ended 30 September 2008 amounted to £198,282 (2007: £ 131,668). The loss before and after taxation was £3,539,038 (2007: £3,118,794). Under the Group's revenue recognition policy there was £231,290 (2007: £ 186,449) of deferred revenue held in the balance sheet as at 30 September 2008.
Business
imJack enables teachers and parents to communicate with and guide children, while removing the many dangers of using unregulated public sites. It operates on a secure system by separating a defined user network from general internet traffic and by using SSL encryption technology to maintain privacy and security for all users. Students can upload and download homework, share ideas and chat to their friends through messaging or video conferencing, which is an integral part of the system. imJack 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 also allows truly live interactive collaborative working with features including real-time drawing exchange, video conferencing and document management. In this way, teachers and pupils can exchange documents and sketches, while maintaining a video conference link.
imJack software is offered as a software package 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, etc.
The Company has strategic alliances through its reseller partner with the Specialist Schools and Academies Trust ("SSAT"), Leading edge Partnership Programme ("LEPP") and the e-Learning Foundation, the only national charity dedicated to ensuring that every child in the UK has home access to technology for their studies.
The Amteus business model provides imJack free to schools, colleges and universities and aims to generate income from both sponsorship and digital news. This income is shared with those schools, colleges and universities, providing them with an additional contribution on top of their funding from the private sector.
Since the launch of this product some two and a half months ago, the Company has acquired over 500,000 committed users.
Competition
The Directors believe that there is no direct competitor supplying communication and collaboration products in a secure and safe environment. Its communications are embedded in a Web 2.0 environment, where it is simple to plug in applications and content.
The only relevant competition to imJack falls into three general categories:
- do-it-yourself open-source systems which are technically difficult to implement with little direct support;
- public hosted systems with the inevitable security concerns and lack of direct support; and
- complex, expensive, integrated implementations supplied by major software suppliers with much less functionality.
Strategy
imJack has transformed Amteus from a business selling technology into a digital educational networking and media business, which is seeking to build revenues from sponsors targeting imJack's rapidly growing user base. The directors believe that the ability to profile users is already proving to be a major attraction to sponsors and, over the next 12 months, aim to introduce more effective ways to sell local as well as national sponsorship, so that both the participating schools and the sponsors receive maximum benefit.
The platform Amteus has developed is directly in line with the Government's educational strategy to involve parents, teachers and pupils more closely in the learning process and, during the year, our reseller partner signed a 10 year exclusive memorandum of understanding with the SSAT to promote imJack to schools.
Board Changes
I am also very pleased to report that the Company today announced the appointment of its new management team. Len Sanderson, who was previously managing director and main board director of Telegraph plc, has been appointed as the Company's new Chief Executive Officer. Richard Addis, who was previously assistant editor of the Financial Times, also joined Amteus as a Director, assuming the role of Editor in Chief and Director of Website Content.
These appointments are key to the Company's strategy to develop a successful, global media business, creating value for shareholders through a combination of innovative technology and the exploitation of commercial opportunities.
Jeffrey Morris, the founder and major shareholder of Amteus, having established the future direction of the Company and helped to identify and appoint the new management team, stepped down from the Board today to focus on his other business interests. His creative ability will continue to be available to the Company on a consultancy basis, as required. We thank him for his dedication to Amteus and his considerable investment in the business over the past four years.
Simon Duffy, who joined the Board as a Non-Executive Director in February 2007, resigned as a Director of Amteus plc on 31 March 2008 due to other commitments. We thank him for his contribution and wish him well in his new position.
People
Amteus employed 35 staff at the end of 2007. During the year, the decision was taken to outsource the development of the Web 2.0 product to The Media Buzz Limited, a company controlled by Jeffrey Morris, the major shareholder in and Executive Deputy Chairman of Amteus. Under the terms of the outsourcing agreement, Amteus pays The Media Buzz Limited royalties of 10 per cent of turnover. At the financial year end, Amteus employed 23 staff and this number has now been further reduced to 19.
On behalf of the Board, I would like to thank all of our staff for their hard work and their contribution to the considerable progress made by the Company in 2008.
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.
In December 2008, the Company raised £710,000 (after expenses) through the issue of shares, which were admitted to trading on AIM on 5 January 2009. The proceeds of the placing allows the Company to settle certain trade creditors and provide additional working capital for the next three months during which time the Directors anticipate income will be generated from sponsorship and from the strategic partnerships that are being cultivated.
The Directors have prepared a forecast to September 2010, 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 new Directors, Len Sanderson and Richard Addis, securing favourable sponsorship contracts.
In the forecasts, the Directors have also relied upon the current intention of the majority shareholder to not request repayment of his loans to the Company.
This uncertainty of achieving the forecast revenues and the continued shareholder support indicates the existence of 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 Group will continue in operational existence for the foreseeable future.
Further details are set out in note 1.
Outlook
Amteus has been transformed from a technology company to a digital educational networking and media business, whose rapidly growing user base provides an ideal platform to deploy the skills of the new leadership of the Board. They have an exceptional track record of monetising media content by attracting sponsors to large and growing web-based users.
The Directors believe that the Company, with its unique educational platform imJack, has substantial potential, both in the UK and overseas.
Michael D Abrahams CBE DLChairmanUNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNTFor the year ended 30 September 2008 Note Year ended Year ended 30 September 30 September 2008 2007 £ £ Unaudited Audited Turnover 198,282 131,668Cost of sales (313,087) (56,275) Gross (loss)/profit (114,805) 75,393 Administrative expenses (3,366,830) (3,209,526) OPERATING LOSS (3,481,635) (3,134,133) Investment revenue 10,421 48,708Finance costs (67,824) (33,369) LOSS BEFORE TAXATION (3,539,038) (3,118,794)Tax on loss on ordinary activities - - LOSS FOR THE PERIOD FROM CONTINUING (3,539,038) (3,118,794)OPERATIONS ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT COMPANY Loss per share - basic and diluted 4 (7.6p) (8.3p)
statement of total recognised gains and losses
There is no recognised income or expense for the financial period other than those shown in the consolidated income statement above and consequently no separate statement of recognised income and expense has been presented.
UNAUDITED CONSOLIDATED BALANCE SHEET30 September 2008 Note As at 30 As at 30 September September 2008 2007 £ £ Unaudited Audited NON-CURRENT ASSETS Intangible assets 51,232 23,349Property, plant and equipment 62,308 178,855 113,540 202,204 CURRENT ASSETS Inventories 189,600 480,096Trade and other receivables 486,987 267,720Cash and cash equivalents 4,250 626,360 680,837 1,374,176 TOTAL ASSETS 794,377 1,576,380 CURRENT LIABILITIES 5 Trade and other payables (1,967,368) (1,067,127)Obligations under finance leases (10,468) (37,129)Bank Overdraft (14,473) - (1,992,309) (1,104,256) NET CURRENT (LIABILITIES)/ASSETS (1,311,472) 269,920 NON-CURRENT LIABILITIES Obligations under finance leases 6 (10,291) (44,736) TOTAL LIABILITIES (2,002,600) (1,148,992) NET (LIABILITIES)/ ASSETS (1,208,223) 427,388 CAPITAL AND RESERVES Share capital 5,376,333 4,045,328Share premium 6,320,186 5,937,455Share options reserve 489,915 300,224Retained earnings (13,394,657) (9,855,619) TOTAL EQUITY (1,208,223) 427,388UNAUDITED CONSOLIDATED CASH FLOW STATEMENTFor the year ended 30 September 2008 Note Year ended Year ended 30 September 30 September 2008 2007 £ £ Unaudited Audited
Net cash used in operating activities 7 (2,403,896) (3,301,754)
Investing activities Interest received 10,421 48,708Proceeds on disposal of property, plant and 86,920 54,902equipment Purchase of property, plant and equipment (75,480) (87,133) Net cash generated from investing activities 21,861 16,477 Financing activities Finance cost (67,824) (57,853)Repayments of obligations under finance (61,106) (45,700)leases Proceeds on issue of shares 1,713,736 3,163,865Receipt/(Repayment) of related party loans 160,646 (68,633) Net cash generated from financing activities 1,745,452 2,991,679 Net decrease in cash and cash equivalents (636,583) (293,598) Cash and cash equivalents at beginning of 626,360 919,958year Cash and cash equivalents at end of year (10,223) 626,360NOTES TO THE FINANCIAL STATEMENTSYear ended 30 September 2008
1. Publication of non-statutory accounts
While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs. The Company expects to publish full financial statements that comply with IFRSs in March 2009.
The financial information for the year ended 30 September 2007 is derived from the statutory accounts for that year 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 s237(2) or (3) Companies Act 1985. The audit report included an emphasis of matter in respect of going concern. The emphasis of matter included the uncertainty in respect of the placing of ordinary shares being subject to shareholder approval and the dependency on the adequate continued financial support of the majority shareholder.
The audit of the statutory accounts for the year ended 30 September 2008 is not yet complete. These accounts will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies following the company's annual general meeting.
The directors have prepared a forecast, to September 2010, 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 new directors, Leonard Sanderson and Richard Addis, securing favourable sponsorship contracts
In the forecasts, the directors have also relied upon the current intention of the majority shareholder to not request repayment of his loans to the company.
These material uncertainties, being achievement of the forecast sponsorship revenues and JC Morris not requesting repayment of his loans to the company, may cast significant doubt on the entity's ability to continue as a going concern and, therefore, that it may be unable to realize 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.
The directors' current expectation is that the audit report on the statutory accounts is likely to be modified to include an emphasis of matter paragraph in respect of the material uncertainties regarding going concern.
2. ACCOUNTING POLICIES
Amteus has adopted revised accounting policies in accordance with IFRS and the financial statements have been prepared in accordance with these accounting policies, which have been published on the group's website www.amteus.com. The comparative financial information has been restated accordingly. Further details are set out in note 9.
3. DIVIDENDS
No dividends are proposed for the year ended 30 September 2008 (2007: nil).
4. LOSS PER SHARE
The calculations of loss per ordinary share are based on the loss for the financial year and the weighted average number of ordinary shares in issue during the year. Dilutive earnings per share is based on the weighted average number of ordinary shares in issue, adjusted to reflect conversion of all dilutive potential ordinary shares. Dilutive potential shares comprise share options granted to employees. For the years ended 30 September 2008 and 30 September 2007 the impact of share options is anti-dilutive and these have been excluded from the calculation of diluted weighted average share capital.
2008 2007 £ £ Unaudited Audited Loss for the year (3,539,038) (3,118,794) Number Number Weighted average number of shares 46,299,585 37,631,140 Pence Pence Basic and diluted loss per ordinary share (7.6) (8.3)5. CURRENT LIABILITIES 2008 2007 £ £ Unaudited Audited Trade and other payables Trade creditors 745,555 563,645Amounts due to related parties 196,276 25,442Accruals and deferred income 481,686 382,714Other taxes and social security 512,486 69,258Other creditors 31,365 26,068 1,967,368 1,067,127 Obligations under finance leases 10,468 37,129 Bank and cash 14,473 -6. NON-CURRENT LIABILITIES 2008 2007 £ £ Unaudited Audited Obligations under finance leases 10,291 44,736
7. NET CASHFLOW FROM OPERATING ACTIVITIES
2008 2007 £ £ Unaudited Audited Loss for the year (3,539,038) (3,118,794)Adjustments for: Investment revenue (10,421) (48,708)Finance cost 67,824 33,369Loss on disposal of property, plant and 2,502 6,649equipment Amortisation of intangible assets 14,229 790
Depreciation of property, plant and equipment 60,493 87,577
Employee share based payment 189,691 134,728
Operating cash outflows before movements in (3,214,720) (2,904, 389) working capital
Decrease/(Increase) in inventories 290,496 (394,971)Increase in receivables (209,079) (199,447)Increase in payables 729,407 197,053 (2,403,896) (3,301,754)
8. related party transactions
At the year end the group owed Hak Services Limited, HAK Developments Limited and The Media Buzz Limited (companies under common control) £389, £3,149 and £ 99,915 respectively (2007: £9,354, £3,149 and £7,264 respectively).
All amounts are repayable within one year and are interest free.
At the year end there is an amount owed from Countrylarge Limited (a company under common control) of £10,188 (2007: £11,770). This amount is receivable within one year and accrues no interest.
At 30 September 2008 there are amounts of £92,823 (2007: £5,675) owed to J C Morris. Of this amount £nil is due in more than 12 months from the balance sheet date. All amounts are repayable within one year and are interest free. Subsequent to the year end J C Morris has provided further funds of £24,676 to the Company. The highest amount due to J C Morris during the year was £286,602. J C Morris has confirmed his current intention to not request repayment of his loans from the Company.
All amounts at both 30 September 2007 and 30 September 2008 due to related parties are unsecured.
During the year the group incurred recharges of £26,914 (2007: 46,657) from Hak Services Limited and recharged costs of £Nil (2007: £400) to Hak Services Limited.
During the year the group incurred recharges of £7,473 (2007: £3,069) from Countrylarge Limited and recharged costs of £1,257 (2007: £8,499) to Countrylarge Limited.
During the year the group incurred recharges of £326,835 (2007: £35,940) from The Media Buzz Limited and recharged costs of £146,388 (2007: £10,959) to The Media Buzz Limited.
9. first time adoption of ifrs
The year ending 30 September 2008 is the first year that the group will present its consolidated financial statements under IFRS. The last consolidated financial statements under UK GAAP were for the year ended 30 September 2007. The Group's date of transition to IFRS was therefore 1 October 2006. The adoption of IFRS does not affect the cash flows of the group. The disclosures required in the period of transition are given below:
Reconciliation of equity at 30 September 2007
UK GAAP Effect of Restated 30 transition Under IFRS September 2007 £ £ £ NON-CURRENT ASSETS Intangible assets - 23,349 23,349Property, plant and equipment 202,204 (23,349) 178,855 202,204 - 202,204 CURRENT ASSETS Inventories 480,096 - 480,096Trade and other receivables 267,720 - 267,720Cash and cash equivalents 626,360 - 626,360 1,374,176 - 1,374,176 TOTAL ASSETS 1,576,380 - 1,576,380 CURRENT LIABILITIES Trade and other payables (1,067,127) - (1,067,127)Obligations under finance leases (37,129) - (37,129) (1,104,256) - (1,104,256) NET CURRENT ASSETS 269,920 - 269,920 NON-CURRENT LIABILITIES Obligations under finance leases (44,736) - (44,736) TOTAL LIABILITIES (1,148,992) - (1,148,992) NET ASSETS 427,388 - 427,388 CAPITAL AND RESERVES Called up share capital 4,045,328 - 4,045,328Share premium 5,937,455 - 5,937,455Share options reserve 300,224 - 300,224Profit and loss account (9,855,619) - (9,855,619) TOTAL EQUITY 427,388 - 427,388
The adoption of IAS 38 requires computer software to be recognised as an intangible asset. Computer software under UK GAAP was capitalised and recorded as property, plant and equipment.
Reconciliation of equity at 1 October 2006
UK GAAP Effect of Restated 1 October transition under IFRS 2006 to IFRS £ £ £ NON-CURRENT ASSETS Intangible assets - 15,478 15,478Property, plant and equipment 178,715 (15,478) 163,237 178,715 - 178,715 CURRENT ASSETS Inventories 85,125 - 85,125Trade and other receivables 59,774 - 59,774Cash and cash equivalents 919,958 - 919,958 1,064,857 - 1,064,857 TOTAL ASSETS 1,243,572 - 1,243,572 CURRENT LIABILITIES Trade and other payables (1,169,350) - (1,169,350)Obligations under finance leases (25,547) - (25,547) (1,194,897) - (1,194,897) NET CURRENT LIABILITIES (130,040) - (130,040) NON-CURRENT LIABILITIES Trade and other payables (577,342) - (577,342)Obligations under finance leases (15,744) - (15,744) (593,086) - (593,086) TOTAL LIABILITIES (1,787,983) - (1,787,983) NET LIABILITIES (544,411) - (544,411) EQUITY Share capital 3,447,458 - 3,447,458Share premium 2,579,460 - 2,579,460Share options reserve 165,496 - 165,496Retained earnings (6,736,825) - (6,736,825) TOTAL EQUITY (544,411) - (544,411)
The adoption of IAS 38 requires computer software to be recognised as an intangible asset. Computer software under UK GAAP was capitalised and recorded as property, plant and equipment.
Reconciliation of profit for the year ended 30 September 2007
The reclassification of computer software from property, plant and equipment to intangible assets required a corresponding reclassification of the related depreciation charge to amortisation. This has no impact on the operating loss recorded for this year.
10. Copies of the Report and Accounts will be sent to shareholders in due course and a further announcement will be made at that time.
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