18 Aug 2010 11:23
18 August 2010
Insetco plc
Interim results for the six months ended 30 June 2010
Insetco Plc ("Insetco" or "the Company") which provides the opportunities and facilities to securitize life settlement policies announces its results for the six months ended 30 June 2010.
Chairman's statement
The Company was readmitted to trading on AIM on 12 April 2010 following completion of the Company Voluntary Arrangement (the "CVA"), a Fundamental Change of Investing Strategy, share capital reorganisation and change of name, which were approved by shareholders at a meeting on 1 April 2010. The Company also undertook areorganisation of its share structure, raising approximately £256,000 by way of the issue of 6,250 new ordinary shares and £250,000 convertible loan notes The Company announced on 19 July 2010 that it had raised a further £500,000 by way of an issue of additional convertible loan notes.
The results for the six months ended disclose a loss of some £121,000, which reflects the costs of the CVA and restructuring, and expenditure necessarily incurred as the Company works to pursue the stated investment strategy.
The Company is actively seeking opportunities to commercialise its strategy of securitising financial products, with a specific emphasis on life settlement policies. This is seen as an area which although relatively new, has evidenced significant growth and it is the intention of the Company to offer such products packaged together to create investment products such as open-ended funds, fixed income securities or individual units derived from the underlying policies.
The Company announced on 14 May 2010 that Company had received an order to acquire Life Settlement Polices with a final benefit of approximately US$30m on behalf of certain institutional investment clients. On the 25 May 2010 the Company announced that it had received a further order to acquire policies, on behalf of institutional investors, to a value of approximately US$50m. The Company announced that it anticipated total net of fees of approximately US$2.0m for its work in sourcing and structuring these transactions. The Company is continuing to process these orders, and has identified further similar opportunities. However, as announced on 16 August, it has become clear that the timescales to fully implement the structuring of the instruments will be significantly longer than originally anticipated. Consequently, revenues from fees for these services for the current year will be significantly lower than previously indicated,
Outlook
The Company intends to establish an infrastructure in London which the Board anticipates will become an important part of the Company's product development, sales and distribution. The early signs are promising and the Board anticipates that significant further progress will be achieved in the second half of the year.
Enquiries:
Insetco plc
Charles Woodworth +1 212 584 5667
Clive Cooke 020 7887 7450
Charles Stanley Securities
Nominated Adviser
Russell Cook / Dugald J. Carlean 020 7149 6000
Income Statement for the six months ended 30 June 2010
|
|
| 6 months ended |
| 18 months ended |
|
|
| 30 June 2010 |
| 31 December 2009 |
|
| Note | unaudited |
| audited |
|
|
| £ |
| £ |
| Operating expenses |
| (120,884) |
| (53,443) |
|
|
|
|
|
|
| Operating loss |
| (120,884) |
| (53,443) |
|
|
|
|
|
|
| Provision for investments |
| - |
| (9,608,325) |
|
|
|
|
|
|
| Loss before taxation |
| (120,884) |
| (9,661,768) |
|
|
|
|
|
|
| Taxation |
| - |
| - |
|
|
|
|
|
|
| Loss after taxation |
| (120,884) |
| (9,661,768) |
|
|
|
|
|
|
| Loss per share | 6 | £(0.01) |
| £(0.10) |
|
|
|
|
|
|
Balance sheet at 30 June 2010
|
| 30 June 2010 |
| 31 December 2009 |
|
| unaudited |
| audited |
| ASSETS | £ |
| £ |
| Current assets |
|
|
|
| Trade and other receivables | 4,476 |
| 110,000 |
| Cash | 185,942 |
| - |
|
|
|
|
|
| Total assets | 190,418 |
| 110,000 |
|
|
|
|
|
| EQUITY and LIABILITIES |
|
|
|
| Equity |
|
|
|
| Ordinary share capital | 566 |
| 1,617,636 |
| Deferred share capital | 1,617,633 |
| - |
| Share premium | 38,444,100 |
| 37,412,475 |
| Other reserves | 19,723 |
| 364,977 |
| Translation reserve | 2,063,676 |
| - |
| Accumulated deficit | (42,033,901) |
| (42,258,271) |
|
|
|
|
|
| Total equity | 111,797 |
| (2,863,183) |
|
|
|
|
|
| Current liabilities |
|
|
|
| Trade and other payables | 9,282 |
| 2,919,740 |
| Accruals | 35,689 |
| 53,443 |
|
|
|
|
|
|
| 44,971 |
| 2,973,183 |
|
|
|
|
|
| Non-current liabilities |
|
|
|
| Convertible loan notes | 33,650 |
| - |
|
|
|
|
|
| Total liabilities | 78,621 |
| 2,973,183 |
|
|
|
|
|
| Total equity and liabilities | 190,418 |
| 110,000 |
Statement of changes in equity: 1 January 2010 - 30 June 2010
|
| Ordinary share capital | Deferred share capital | Share premium | Other reserves | Translation reserve | Accumulated deficit | Total |
|
| £ | £ | £ | £ | £ | £ | £ |
| At 1 January 2010 | 1,617,636 | - | 37,412,475 | 364,977 | - | (42,258,271) | (2,863,183) |
| Loss after taxation | - | - | - | - | - | (120,884) | (120,884) |
| Reorganisation of equity | (1,617,633) | 1,617,633 | - | (345,254) | - | 345,254 | - |
| Issue of shares for cash | 8 | - | 6,425 | - | - | - | 6,433 |
| Issue of shares to creditors | 10 | - | 773,730 | - | - | - | 773,740 |
| Exercise of convertible notes | 189 | - | 216,162 | - | - | - | 216,351 |
| Exercise of warrants | 356 | - | 35,308 | - | - | - | 35,664 |
| Translation movements | - | - | - | - | 2,063,676 | - | 2,063,676 |
|
|
|
|
|
|
|
|
|
| At 30 June 2010 | 566 | 1,617,633 | 38,444,100 | 19,723 | 2,063,676 | (42,033,901) | 111,797 |
|
|
|
|
|
|
|
|
|
Statement of changes in equity: 1 July 2008 - 31 December 2009
|
| Ordinary share capital | Share premium | Other reserves | Accumulated deficit | Total |
|
| £ | £ | £ | £ | £ |
| At 1 July 2008 | 411,861 | 37,317,111 | 364,977 | (32,596,503) | 5,497,446 |
| Loss after taxation | - | - | - | (9,661,768) | (9,661,768) |
| Issue of shares for cash | 176,364 | 66,136 | - | - | 242,500 |
| Share issue expenses | - | (2,500) | - | - | (2,500) |
| Other share issues | 1,029,411 | 31,728 | - | - | 1,061,139 |
|
|
|
|
|
|
|
| At 31 December 2009 | 1,617,636 | 37,412,475 | 364,977 | (42,258,271) | (2,863,183) |
|
|
|
|
|
|
|
Ordinary share capital is the amount subscribed for equity shares at nominal value.
Deferred share capital is the amount subscribed for non-equity shares at nominal value.
Share premiumrepresents the excess of the amount subscribed for share capital over the nominal value of those shares net of share issue expenses.
Other reserves comprise a convertible loan reserve and a capital redemption reserve
Translation reserve represents the effect of exchange differences on translating assets, liabilities and equity not denominated in the Company's presentational currency
Accumulated deficit represent the cumulative loss of the Company attributable to equity shareholders.
Cash flow statement for the six months ended 30 June 2010
|
| 6 months ended |
| 18 months ended |
|
| 30 June 2010 |
| 31 December 2009 |
|
| unaudited |
| audited |
|
| £ |
| £ |
| Loss before taxation | (120,884) |
| (9,661,768) |
| Effects of reorganisation | (2,035,999) |
| - |
| Translation movements | 2,063,676 |
| - |
| Write-off inter-company debtor and intangibles | - |
| 5,977,428 |
|
|
|
|
|
| Net cash outflow from operating activities before changes in working capital | (93,207) |
| (3,684,340) |
| Increase in trade and other receivables | (4,476) |
| (109,311) |
| (Decrease)/increase in trade and other payables | (8,472) |
| 480,542 |
|
|
|
|
|
| Net cash outflow from operating activities | (106,155) |
| (3,313,109) |
| Financing activities |
|
|
|
| Issue of convertible notes | 250,000 |
| 2,402,983 |
| Exercise of warrants | 35,664 |
| - |
| Issue of shares | 6,433 |
| 242,500 |
| Share issue costs | - |
| (2,500) |
|
|
|
|
|
| Net cash flow from financing activities | 292,097 |
| 2,642,983 |
|
|
|
|
|
| Net increase/(decrease) in cash and cash equivalents | 185,942 |
| (670,126) |
| Opening cash and cash equivalents | - |
| 670,126 |
|
|
|
|
|
| Closing cash and cash equivalents | 185,942 |
| - |
|
|
|
|
|
Notes to the interim financial statements
1. Corporate information
Insetco is a company incorporated in England and Wales, under registration number 05114024. The Company is quoted on the AIM Market of the London Stock Exchange.
2. Basis of preparation
These interim financial statements for the six months ended 30 June 2010 have been prepared using accounting policies consistent with International Financial Reporting Standards "(IFRSs") and comply with the requirements of IAS 34 "Interim Financial Statements".
The same accounting policies, presentation and methods of computation as utilised in the audited financial statements for the eighteen month period ended 31 December2009 have been applied consistently in these condensed financial statements.
These condensed financial statements do not constitute statutory financial statements under the Companies Act 2006, have not been audited and do not include all information required for full annual financial statements.
The statutory financial statements for the eighteen months ended 31 December 2009, which included a disclaimer of opinion by the auditors, have been delivered to the Registrar of Companies.
3. Total comprehensive expense
There are no additional items of income or expense which are not included in the income statement for the period.
4. Segmental analysis
A segment is a defined component of the Company that is engaged in providing products or services to a particular business sector (business segment), or in providing products or services to a particular economic environment (geographic segment), which is subject to risks and rewards that are different in those other segments.
In the period, the Company operated in one segment, the development of business within financial products, with a particular focus on the life insurance settlement market, and in one geographical market, the United States of America. The disclosures required by IFRS8 relating to profits, losses, assets and liabilities of the segment are therefore disclosed by the financial statements as a whole.
5. Movement in issued share capital
| Ordinary shares | |||||||
|
| Nominal |
|
|
|
|
|
|
|
| value |
| Number |
| Issued £ |
|
|
| At 1 January 2010 | £0.01 |
| 161,763,636 |
| 1,617,636 |
|
|
|
|
|
|
|
|
|
|
|
| 1 April 2010 (note 1) | £5.50 |
| 294,116 |
| 1,617,636 |
|
|
|
|
|
|
|
|
|
|
|
| 1 April 2010 (note 2)
| £0.00001 |
| 294,116 |
| 3 |
|
|
| 1 April 2010 issue of shares for cash |
|
| 807,585 |
| 8 |
|
|
| 1 April 2010 issue of shares to creditors |
|
| 1,000,000 |
| 10 |
|
|
| 21 April 2010 part exercise of convertible loan notes |
|
| 850,000 |
| 9 |
|
|
| 30 April 2010 exercise of warrants |
|
| 34,400,000 |
| 344 |
|
|
| 30 April 2010 part exercise of convertible loan notes |
|
| 18,000,000 |
| 180 |
|
|
| 14 June 2010 exercise of warrants |
|
| 1,265,170 |
| 12 |
|
|
| Translation movements |
|
| - |
| - |
|
|
|
|
|
|
|
|
|
|
|
| At 30 June 2010 |
|
| 56,616,871 |
| 566 |
|
|
|
| |||||||
| Deferred shares | |||||||
|
| Nominal |
|
|
|
|
|
|
|
| value |
| Number |
| Issued £ |
|
|
| At 1 January 2010 | - |
| - |
| - |
|
|
|
|
|
|
|
|
|
|
|
| 1 April 2010 (note 1) | - |
| - |
| - |
|
|
|
|
|
|
|
|
|
|
|
| 1 April 2010 (note 2)
| £5.49999 |
| 294,116 |
| 1,617,633 |
|
|
| 1 April 2010 issue of shares for cash |
|
| - |
| - |
|
|
| 1 April 2010 issue of shares to creditors |
|
| - |
| - |
|
|
| 21 April 2010 part exercise of convertible loan notes |
|
| - |
| - |
|
|
| 30 April 2010 exercise of warrants |
|
| - |
| - |
|
|
| 30 April 2010 part exercise of convertible loan notes |
|
| - |
| - |
|
|
| 14 June 2010 exercise of warrants |
|
| - |
| - |
|
|
| Translation movements |
|
| - |
| - |
|
|
|
|
|
|
|
|
|
|
|
| At 30 June 2010 |
|
| 294,116 |
| 1,617,633 |
|
|
Note 1: consolidation of existing ordinary shares on the basis of 1 new ordinary share of £5.50 each for 550 shares of £0.01 each.
Note 2: sub-division of existing ordinary shares of £5.50 each into one ordinary share of £0.00001 and one deferred share of £5.49999.
6. Loss per share
The calculation of the loss per share for the six months ended 30 June 2010 is as follows:
|
| 6 months ended |
| 18 months ended |
|
| 30 June 2010 |
| 31 December 2009 |
|
| unaudited |
| audited |
| Loss after taxation attributable to equity shareholders | (120,884) |
| (9,661,768) |
|
|
|
|
|
| Weighted average number of shares in issue | 19,251,643 |
| 94,943,932 |
|
|
|
|
|
| Loss per ordinary share | £(0.01) |
| £(0.10) |
7. Post balance sheet events
On 19 July 2010, the Company announced the issue of £500,000 of Convertible Unsecured Loan Notes, bearing interest at 8% pa. The Loan Notes are due for repayment by 31 July 2012, or on the election of the note holders, may be converted in whole or in part at a conversion price of 40p per ordinary share. In the event that the Company's share price trades for ten consecutive business days at 80p per share or more, conversion of the Loan Notes will be automatic.
8. Copies of the interim results statements for the six months ended 30 June 2010 will be available shortly from the Company's registered office at Finsgate, 5-7 Cranwood Street, London EC1V 9EE and are on the Company's website www.insetco.com.