Norman Broadb Regulatory News (NBB)

29 Jun 2005 14:55

Constellation Corporation plc (the "Company") Preliminary Results Chairman's StatementIntroductionAt first sight, the 2004 results of Constellation Corporation Plc aredisappointing primarily because turnover remained flat compared with theprevious year and a small loss replaced breakeven.You will see that costs have remained tightly under control so our commitmentas articulated a year ago to concentrate on revenue, reduce costs and debt hascontinued. We have spent more time than perhaps we would have hopedinvestigating various areas of improving our balance sheet. Invariably,however, the risk of unacceptable dilution has returned us to the hard and longterm task of trading through the current situation.The team in Garner International is now stronger than it has ever been and mynon-executive director colleagues have continued to be outstanding in theirsupport of our company. With this in mind, I look forward to announcing ourInterims shortly in the certain knowledge that everything has been andcontinues to be done to secure a strong future for our company.ResultsTurnover in the year was ‚£1,280,000 (2003: ‚£1,253,000), operating loss was ‚£11,000 (2003: profit of ‚£114,000) and pre tax loss ‚£152,000 (2003: profit of ‚£2,000). No dividend can be paid.Balance sheet net liabilities of the Group were ‚£1,335,000, with net debtstanding at ‚£1,721,000. Our balance sheet is a major problem for us and we areexploring ways in which liabilities might be mitigated. Our inability toservice these liabilities is a major disincentive to the team but we remaincommitted to overcoming these problems.Current trading and outlookGood progress has been made on a number of fronts in the current year and thisreflects our determination to resolve the difficulties of the past and drivethe business forward. The team has worked hard to increase business flows andwe are pleased to announce we are at an advanced stage in the negotiation of amajor new retainer relationship. As well as pushing ahead to expand ouroperational team and win new consultancy contracts we are also looking torestructure the Group's balance sheet to reduce our overall debt burden. Wewill report on specific progress made in these areas as and when they arise.The Board is hopeful of a satisfactory outturn for the first half to 30 June2005 and that continued progress will be made in the second half of thefinancial year.SummaryAs you may know, Andrew Garner's wife had been extremely ill since 1998. Sadly,she died just before Easter 2004. It is not possible to quantify, and he wouldnot want us to, the understandable diversion this has represented. Our thanksand appreciation are extended to Andrew, and indeed his team, for theircommitment and dedication.J BARTLEChairman29 June 2005CONSOLIDATED PROFIT AND LOSS ACCOUNTYear ended 31 December 2004 31 December 2004 31 December 2003 (restated) ‚£000 ‚£000 TURNOVER 1,280 1,253 ADMINISTRATIVE EXPENSES: Abortive costs on potential - 60acquisition Other administrative expenses (1,291) (1,199) (1,291) (1,139) TOTAL OPERATING (LOSS)/PROFIT (11) 114 Interest payable and similar (141) (112)charges (LOSS)/PROFIT ON ORDINARY (152) 2ACTIVITIES BEFORE TAXATION Tax on (loss)/profit on (23) -ordinary activities (LOSS)/PROFIT FOR THE FINANCIAL (175) 2YEAR Dividends - including other (50) (50)finance charges in respect of non-equity shares RETAINED LOSS FOR THE YEAR (225) (48) Loss per share - Basic (0.02)p 0.00p The format of the profit and loss account has been revised to reflect moreaccurately the nature of trading activities of the Group. The comparativefigures for 2003 have been restated in this new format.There are no recognised gains and losses other than the losses for the currentand previous years. Accordingly, no statement of total recognised gains andlosses is given.CONSOLIDATED BALANCE SHEET31 December 2004 31 December 2004 31 December 2003 ‚£000 ‚£000 ‚£000 ‚£000 FIXED ASSETS Intangible assets - Goodwill 1,025 1,092 Tangible assets 6 14 1,031 1,106 CURRENT ASSETS Debtors 175 121 Investments - - Cash at bank and in hand 30 12 205 133 CREDITORS: amounts falling due (1,739) (1,748) within one year NET CURRENT LIABILITIES (1,534) (1,615) TOTAL ASSETS LESS CURRENT (503) (509)LIABILITIES CREDITORS: amounts falling due (832) (978)after more than one year PROVISIONS FOR LIABILITIES AND - -CHARGES NET LIABILITIES (1,335) (1,487) CAPITAL AND RESERVES Called up share capital 5,326 5,066 Share premium account 4,074 4,007 Other reserve 689 639 Profit and loss account (11,424) (11,199) TOTAL SHAREHOLDERS' FUNDS (1,335) (1,487) ANALYSIS OF SHAREHOLDERS' (DEFICIT)/ FUNDS Equity shareholders' deficit (2,095) (2,197) Non-equity shareholders' funds 760 710 (1,335) (1,487) CONSOLIDATED CASH FLOW STATEMENTYear ended 31 December 2004 Year ended Year ended 31 December 31 December 2004 2003 ‚£000 ‚£000 Net cash flow from operating activities 3 200 Returns on investment and servicing of (115) (111)finance Taxation - - Capital expenditure and financial - -investment Acquisitions and disposals - - Cash flow before use of liquid resources (112) 89and financing Financing 154 (107) Decrease in net cash in the period 42 (18) Notes 1. The financial information set out above does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. Statutory accounts for the previous year ended 31 December 2003 have been delivered to the Registrar of Companies. Statutory accounts for the year 31 December 2004 will be delivered to the Registrar of Companies and sent to shareholders. An unqualified auditors' report has been given on such accounts. 2. The Directors have not recommended the payment of a dividend. 3. The nature of the Group's business is such that there can be considerable unpredictable variations in trading compared to forecasts. The directors have prepared projected cash flow information for the current financial year and the following two financial years. In preparing the cash flows the directors have taken into account that a number of long overdue creditors exist which amount in total to ‚£371,000. The directors have held discussions with these creditors with a view to offering them shares in the Group in part satisfaction of their debts and / or agreeing with them further periods of extended credit. These negotiations are ongoing and their successful outcome is an important factor to the achievement of the forecasts. In addition, the forecasts assume the securing of additional revenue and new contracts. Whilst the directors are confident in being able to secure this new work their ability to achieve this is critical to the forecasts being achieved. On the basis of this cash flow information, the overdraft facility whichcontinues to be subject to a quarterly review and discussions with the Group'sbankers, the directors have formed a judgement at the time of approving thefinancial statements that the Company will be able to work within agreedoverdraft facilities. On this basis, the directors consider it appropriate toprepare the financial statements on the going concern basis. However, thetimings of cash flows may sometimes result in the Group having insufficientfacilities to meet its obligations. The financial statements do not include anyadjustments that would result from not meeting current forecasts. 4. In accordance with FRS 14, loss per ordinary share of (0.02)p (2003: 0.00p) has been calculated by dividing the loss on ordinary activities after taxation and non-equity dividends of ‚£226,000 (2003: ‚£48,000) by 1,045,967,675 (2003: 907,118,360), being the weighted average number of ordinary shares in issue and ranking for dividend during the period. There were no preference shares at 31 December 2004 (2003: nil) available for conversion and so diluted loss per ordinary share is also (0.02)p. 5. The Annual General Meeting of the Company has been convened for Wednesday 28 September 2005 at 10.30 am at the Company's registered office. 6. The Annual Report and Accounts will be mailed to registered shareholders at their registered address and from the date of release copies of the Annual Report will be made available to the public free of charge for one month at the Company's registered office, 6 Derby Street, London W1Y 7HD and at the offices of City Financial Associates Limited, Pountney Hill House, 6 Laurence Pountney Hill, London EC4R 0BL. These may also be viewed on the Company's website at www.constellationcorporation.com. ENDCONSTELLATION CORPORATION PLC