12 May 2009 11:17
LONGSHIPS PLC ("Longships" or the "Company")
ANNUAL REPORT FOR THE PERIOD ENDED 31st DECEMBER 2008
Longships is pleased to announce its annual results for the year ending 31st December 2008.
The accounts are today being posted to the shareholders in accordance with Rule 20 of the AIM Rules and are available on the Company's website, http://production.inventis.com/longships/ .
Enquiries:
Longships Plc Tel: 020 7389 5017
Charles Cannon-Brookes, Investment Director
Grant Thornton UK LLP (Nominated Adviser) Tel: 020 7383 5100
Colin Aaronson
CHAIRMAN'S STATEMENT
FOR THE PERIOD ENDED 31ST DECEMBER 2008
Dear Shareholder,
INCOME STATEMENT
FOR THE PERIOD ENDED 31st DECEMBER 2008
|
| ||
| Notes | 2008 | |
| £ | ||
| NET TRADING INCOME | - | |
| --------------- | ||
| Share based payment charge | (21,588) | |
| Other operating expenses | (78,999) | |
| ---------------- | ||
| Total operating expenses | (100,587) | |
| ---------------- | ||
| OPERATING LOSS | (100,587) | |
| Finance income | 109,729 | |
| ---------------- | ||
| PROFIT BEFORE TAXATION | 9,142 | |
| Taxation | 5 | 6,377 |
| ---------------- | ||
| PROFIT FOR THE PERIOD | 2,765 | |
| ============ | ||
| Earnings per share (pence) - basic and fully diluted | 6 | 0.02p |
| ======= | ||
All of the activities of the Company are classed as continuing.
BALANCE SHEET AS AT 31st DECEMBER 2008
| 2008 | ||
| Notes | £ | |
| CURRENT ASSETS | ||
| Trade and other receivables | 7 | 9,083 |
| Cash and cash equivalents | 3,355,556 | |
| ---------------- | ||
| 3,364,639 | ||
| CURRENT LIABILITIES | ||
| Trade and other payables | 8 | (22,524) |
| ---------------- | ||
| NET CURRENT ASSETS | 3,342,115 | |
| ---------------- | ||
| NET ASSETS | 3,342,115 | |
| =========== | ||
| EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY | ||
| Share capital | 9 | 230,800 |
| Share premium account | 3,086,962 | |
| Share based payment reserve | 21,588 | |
| Retained earnings | 2,765 | |
| ---------------- | ||
| TOTAL EQUITY | 3,342,115 | |
| ============= | ||
The financial statements were approved and authorised for issue by the directors on 11th May 2009 and were signed on their behalf by:
Craig Niven
Director
CASH FLOW STATEMENT
FOR THE PERIOD ENDED 31st DECEMBER 2008
| 2008 | ||
|
| ||
| Notes | £ | |
| Net cash outflow from operating activities | 10 | (71,935) |
| ---------------- | ||
| Cash flows from investing activities | ||
| Interest received | 109,729 | |
| ---------------- | ||
| Cash flows from financing activities | ||
| Net proceeds from issue of share capital | 3,317,762 | |
| ------------------ | ||
| Net increase in cash and cash equivalents | 3,355,556 | |
| Cash and cash equivalents at beginning of period | - | |
| ------------------ | ||
| Cash and cash equivalents at end of period | 3,355,556 | |
| ============= | ||
STATEMENT OF CHANGES IN NET EQUITY
FOR THE PERIOD ENDED 31st DECEMBER 2008
| | Share capital | Share premium | Share based payment reserve | Retained earnings | Total |
| | £ | £ | £ | £ | £ |
| | | | | | |
| At 20th December 2007 | - | - | - | - | - |
| Shares issued for cash | 230,800 | 3,173,200 | - | - | 3,404,000 |
| Profit for period | - | - | - | 2,765 | 2,765 |
| Share issue costs | - | (86,238) | - | - | (86,238) |
| Share-based payments | - | - | 21,588 | - | 21,588 |
| | ________ | _________ | _________ | __________ | _________ |
| At 31st December 2008 | 230,800 | 3,086,962 | 21,588 | 2,765 | 3,342,115 |
| | ======= | ======== | ======== | ========= | ======== |
NOTES TO THE FINANCIAL STATEMENTS
1. GENERAL
The Company was incorporated on 20th December 2007 as a public limited company, incorporated and domiciled in England and Wales. These financial statements are the first to be prepared by the Company, and cover the period from incorporation to 31st December 2008. As this is the first accounting period of the Company, there are no comparative figures to be presented.
2. ACCOUNTING POLICIES
Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the European Union and as issued by the International Accounting Standards Board.
Trading income
Trading income is recognised to the extent that it is probable that economic benefit will flow to the Company and the trading income can be reliably measured.
Cash and cash equivalents
Cash and cash equivalents are defined as cash in hand, demand deposits and short-term, highly liquid investments which are readily convertible to known amounts of cash, subject to insignificant risk of changes in value, and have a maturity of less than 3 months from the date of acquisition.
For the purposes of the cash flow statement, cash and cash equivalents consist of cash in hand and bank deposits.
Taxation
The tax currently payable is based on the taxable profit for the period. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other periods and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred taxation
Deferred income tax is provided for using the liability method on temporary timing differences at the balance sheet date between tax basis of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax liabilities are recognised in full for all temporary differences. Deferred tax assets are recognised for all deductible temporary differences carried forward of unused tax credits and unused tax losses to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and carry-forward of unused tax credits and unused losses can be utilised.
The carrying amount of deferred income tax assets is assessed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that is probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date.
Share-based payments
Certain Directors of the Company receive remuneration in the form of share-based payment transactions (equity-settled transactions).
The cost of equity-settled transactions is determined with reference to the fair value at the date on which they were granted. The fair value is determined by using the Black-Scholes option pricing model.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award ("the vesting date"). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company's best estimate of the number of equity instruments that will ultimately vest. The income statement charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.
The dilutive effect of the outstanding options is reflected as additional dilution in the computation of earnings per share.
Financial instruments
Financial assets and financial liabilities are recognised on the Company's balance sheet when the Company becomes a contractual party to the instrument.
Trade receivables
Trade receivables are recognised initially at their fair value which equates to their nominal value as reduced by appropriate provision for irrecoverable amounts and subsequently at amortised cost.
Trade payables
Trade payables are recognised initially at their fair value and subsequently at amortised cost.
Accounting judgements and key sources of estimation uncertainty
The preparation of financial statements in accordance with IFRSs requires management to make estimates and assumptions in certain circumstances that affect reported amounts. The most sensitive estimate affecting the financial statements is the area of share based payments. Actual outcomes may therefore differ from these estimates and assumptions.
In determining the fair value of equity settled share based payments and the related charge to the income statement, the Company makes assumptions about future events and market conditions. In particular, judgment must be made as to the likely number of shares that will vest and the fair value of each award granted. The fair value is determined using a valuation model which is dependent on further estimates including the Company's future dividend policy, employee turnover, the timing of the exercise of options and the future volatility in the price of the Company's shares. Such assumptions are based on publicly available information and reflect market expectations. Different assumptions from those used (which are disclosed in note 9) could materially affect the reported value of share based payments. The Company has recognised a corresponding increase in equity in accordance with IFRS 2: Share based payments by crediting "Share based payment reserve" (a component of equity) for the issue of shares in connection with the share options.
Standards and interpretations issued but not yet effective
The Company has not early adopted the following new and amended IAS, IFRS and IFRIC Interpretations issued. The relevant new and amended IAS, IFRS and IFRIC Interpretations will be adopted when they become effective.
IFRS 3 (Revised): Business combinations
IAS 1 (Revised): Presentation of financial statements
IAS 23: Borrowing costs
IFRIC 11/IFRS 2: Group and treasury share transactions
IFRIC 12: Service concession arrangements
IFRIC 13: Customer loyalty programs
IFRIC 14/IAS 19: The limit on a defined benefit asset, minimum funding requirements and their interaction
The directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material impact on the financial statements of the Company in its current form.
3. AUDITORS' REMUNERATION
| 2008 | |
| £ | |
| Services provided by the Company's auditors: | |
| Fees payable to the company's auditors for the audit of the company's financial statements | 10,000 |
| Fees payable to the company's auditors for other services: | |
| - Other services pursuant to legislation | 4,113 |
| - Corporate finance services | 9,400 |
| ====== |
Corporate finance fees relate to the share placing on the AIM market in April 2008 and have been included in the share issue costs charged to the share premium account.
4. PARTICULARS OF EMPLOYEES
The average number of employees of the company in the period was:
| 2008 | |
| Number | |
| Directors | 3 |
| ====== | |
| £ | |
| The directors' aggregate emoluments in respect of qualifying services were: | |
| Salary and short-term employment benefits | 15,875 |
| ====== | |
5. INCOME TAX EXPENSE
(a) Analysis of charge in the period
| | 2008 |
| | £ |
| Current tax: | |
| | |
| UK corporation tax based on the results for the period at 20.75% | 6,377 |
| | ---------------- |
| Total current tax | 6,377 |
| | ========== |
(b) Factors affecting the tax charge for the period
The tax assessed for the period does not reflect an expense equivalent to the profit before tax multiplied by the standard rate of corporation tax of 20.75%.
| 2008 | ||
| £ | ||
| Profit before tax | 9,142 | |
| ========= | ||
| Profit before tax multiplied by the standard rate of corporation tax | 1,897 | |
| Effects of: | ||
| Share options timing differences | 4,480 | |
| ------------ | ||
| Current tax for the period | 6,377 | |
| ========= | ||
6. EARNINGS PER SHARE
The calculation of earnings per share is based on the profit of £2,765 and on the number of shares in issue, being the weighted average number of shares in issue during the period of 16,641,695 ordinary £0.01 shares. There is no dilutive effect of share options on the basic earnings per share, as the option exercise prices are higher than the average market price in the period.
7. TRADE AND OTHER RECEIVABLES
| 2008 | |
| £ | |
| Prepayments | 9,083 |
| =============== |
The Directors consider that the carrying value of each class of receivable approximates its fair value.
8. TRADE AND OTHER PAYABLES
| 2008 | |
| £ | |
| Trade payables | 6,147 |
| Current tax payable | 6,377 |
| Accrued expenses | 10,000 |
| -------------------- | |
| 22,524 | |
| ============= |
9. SHARE CAPITAL
Share options
The Company granted and issued share options over ordinary shares in the Company as follows:
| Date granted | Parties | Exercise price | Number of shares | Final exercisable date |
| 21/04/08 | C Cannon-Brookes | 20p | 500,000 | 21/04/15 |
| 21/04/08 | C Niven | 20p | 500,000 | 21/04/15 |
| ------------------- | ||||
| 1,000,000 | ||||
| Options outstanding at 20/12/07 | - | |||
| ------------------- | ||||
| Options outstanding at 31/12/08 | 1,000,000 | |||
| ============= | ||||
The fair value of equity settle share options granted is estimated as at the date of grant using a Black-Scholes option pricing model, taking into account the terms and conditions upon which the options were granted. The following table lists the inputs into the model used for the period ended 31st December 2008:
| 2008 | |
| Dividend yield on underlying shares | 0% |
| Risk free rate | 4% |
| Expected volatility | 22.36% |
| Average time to expiry | 1 year |
| Weighted average share price of options | 20p |
| ========== |
The expected life of the options is based on an estimate and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not be the actual outcome.
Authorised share capital:
| 2008 | ||
| £ | ||
| 100,000,000 Ordinary shares of £0.01 each | 1,000,000 | |
| ========================================== |
Allotted, called up and fully paid:
| 2008 | ||
| £ | ||
| 23,080,002 Ordinary shares of £0.01 each | 230,800 | |
| =================================== |
On 20th December 2007, 2 subscriber shares were issued, on 28th February 2008, 8,080,000 shares were issued at 5 pence per share and on 21st April 2008, 15,000,000 shares were issued on floatation at 20 pence per share.
10. CASH FLOWS FROM OPERATING ACTIVITIES
| 2008 | |
| £ | |
| Profit before taxation | 9,142 |
| Adjustments for: | |
| Interest income | (109,729) |
| Equity-settled share options | 21,588 |
| -------------------- | |
| (78,999) | |
| Increase in receivables | (9,083) |
| Increase in payables | 16,147 |
| -------------------- | |
| Net cash from operating activities | (71,935) |
| ============= |
- END -