Norman Broadb Regulatory News (NBB)

28 Sep 2005 06:00

CONSTELLATION CORPORATION PLC INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2005 CHAIRMAN'S STATEMENTHerein are the interim results for the Company for the six months period ending30th June 2005.In broad terms we have managed to hold our own in this period. Turnover wasmuch the same as the same period last year (last year ‚£685k). Regrettably,before the end of this half year, we were unable to sign the contract referredto in the statement that went to the market on 3rd June. I am pleased toreport, however, that this contract was ultimately signed in July and, inaddition that a further significant and long-term contract was entered into inSeptember.In our first six months of 2005 we made a small operating profit of ‚£22k (2004‚£88k) and this was after accounting for more than ‚£40k of professional fees, inaddition to our operational costs. The pre-tax loss was ‚£36k (2004: profit ‚£30k).These professional costs represent essential costs that have been incurred inseeking professional advice as part of our search for new or replacement fundsand to ensure that in every regulatory respect your Company has been managedcorrectly.Net cash of ‚£34k (2004 ‚£123k) was generated from operations but this was morethan offset by net financing outflows of ‚£88k. Our balance sheet deficit hascontinued to increase to ‚£1.37m, up from ‚£1.33m at the end of 2004. Included increditors are some seriously overdue sums due to the HM Revenue & Customs.Our Company has been able to continue trading through the support of ourbankers and our creditors, all of whom have given this support in the beliefthat we can either trade our way through or refinance the business. Clearly wecannot rely on this situation continuing indefinitely. Shareholders should alsobe aware that the Chief Executive has again provided considerable financialsupport to the Company during this six month period and that his interests arevery heavily committed to finding a solution to the Company's problems. Inorder to try and begin the process of a financial reconstruction, we haveentered into discussions with our bankers and overdue creditors to seek a writeoff of part of the sums due to them.Two key aspects of our trading performance need to be highlighted. Firstly,that for the last 4‚½ years we have been repaying capital and interest to ourbank amounting to circa ‚£200,000. Couple this with the debts that arose fromthe acquisition from which we withdrew in 2002 and you will see we need tocreate significant funds over and above those needed to cover our operatingcosts, simply to stand still. Secondly, by the very nature of our business,our income and cash receipts are neither linear nor consistent, whereas ourpayment commitments are.Looking back at my remarks during my period as Chairman I have made consistentreference to our attempts to trade our way into a brighter and more reliablefuture, whilst at the same time searching constantly for a potential investorto enable us to reduce or eliminate debt and have the benefits of some workingcapital headroom.We continue to make every effort to find a solution and will keep shareholdersinformed if and when milestones are achieved. At this stage it is important topoint out that if such a transaction is feasible any debt that is exchanged forequity will have a dilutive impact on existing shareholders. I hope to be ableto report our progress in the coming weeks.Looking forward to the remainder of the year, prospects remain positive. Thefact remains, however, that the second half is going to reflect attention toseeking a solution to our balance sheet problems. In the meantime we willremain on the tightrope balancing our revenues and cashflows, as well as doingeverything in our power to win new business. In this context you will bepleased to hear that we have recently been joined by three new consultants; butdo understand it takes time for them to assimilate into our environment.To conclude, since the attempt in 1999 and 2000 to dispose of our retailestate, your Company has found itself in a classical `Catch 22' situation.Whilst we could not give full publicity to the attempts that we have made toattract new finance, please be assured that there has been a relentless drivein that direction. Clearly the opportunity cost of that drive has been thevital need to grow revenues and the ability to attract new talent to join us.In the event that any forthcoming restructuring is a success your Company canthen genuinely look forward to a more confident future.J BartleChairmanCONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE SIX MONTHS ENDED 30 JUNE 2005 Note Six months Six months Year ended ended ended 31 December 30 June 2005 30 June 2004 2004 (unaudited) (unaudited) (audited) ‚£'000 ‚£'000 ‚£'000 Turnover 688 685 1,280 Administrative expenses (666) (597) (1,291) -------- --------- --------- Total operating profit 22 88 (11) Interest payable and similar (58) (58) (141)charges -------- -------- --------- (Loss) / profit on ordinary (36) 30 (152)activities before taxation Taxation - - (23) -------- -------- --------- (Loss) / profit for the financial (36) 30 (175)period Dividends (25) (25) (50) -------- -------- --------- Retained (loss) / profit for the (61) 5 (225)financial period -------- -------- --------- (Loss) / earnings per share 2 (0.01)p 0.00p (0.02)p(pence) - Basic and diluted -------- -------- ---------CONSOLIDATED BALANCE SHEET AT 30 JUNE 2005 At 30 June 2005 At 30 June 2004 At 31 December 2004 (unaudited) (unaudited) (audited) ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 Fixed assets Tangible assets 2 10 6 Investments 992 1,059 1,025 -------- -------- -------- 994 1,069 1,031 Current assets Debtors 309 319 175 Cash at bank and in hand - 6 30 -------- -------- -------- 309 325 205 Creditors: amounts (1,917) (2,015) (1,739) falling due within one year -------- -------- -------- Net current liabilities (1,609) (1,690) (1,534) --------- --------- --------- Total assets less current (614) (621) (503)liabilities Creditors: amounts (756) (905) (832)falling due after more than one year Provisions for - - -liabilities and charges --------- --------- --------- Total assets less current (1,371) (1,526) (1,335)liabilities ====== ===== ===== Capital and reserves Called up share capital 5,326 5,066 5,326 Share premium account 4,074 3,938 4,074 Other reserve 714 664 689 Profit and loss account (11,485) (11,194) (11,424) ---------- --------- -------- Shareholders' funds (1,371) (1,526) (1,335) ====== ===== ===== CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2005 Note Six months Six months Year ended ended 30 31 ended 30 June 2004 December June 2005 2004 (unaudited) (unaudited) (audited) ‚£'000 ‚£'000 ‚£'000 Net cash inflow/(outflow) from i 34 123 3operating activities Returns on investments and servicing of (58) (58) (115)finance Taxation - - - Capital expenditure and financial - - -investment Acquisitions and disposals - - - ---------- ---------- ---------- Net cash flow before use of liquid (24) 65 (112)resources and financing Financing (30) (73) 154 ---------- ---------- ---------- Increase / (decrease) in cash ii (54) (8) 42 ====== ====== ====== NOTES TO THE CASH FLOW STATEMENTi reconciliation of operating profit / (loss) to net cash FLOW Six months Six months Year ended ended 30 31 December ended 30 June 2004 2004 June 2005 (unaudited) (unaudited) (audited) ‚£'000 ‚£'000 ‚£'000 Operating (loss) / profit for the period 22 88 (11) Depreciation of tangible fixed assets 4 4 9 Amortisation of goodwill 33 33 69 (Increase) / decrease in debtors (134) (195) (55) (Decrease) / increase in creditors 109 193 (9) --------- --------- --------- Net cash inflow / (outflow) from operating 34 123 3activities ====== ====== ======ii Reconciliation of net cash flow to movement in net DEBT Six months Six months Year ended ended 30 31 ended 30 June 2004 December June 2005 2004 (unaudited) (unaudited) (audited) ‚£'000 ‚£'000 ‚£'000 (Decrease) / increase in cash in the period (54) (8) 42 Cash outflow from decrease in debt and lease - - -financing Net movement on secured loans 30 7 182 ---------- ---------- ---------- Change in net debt resulting from cash flows (24) (1) 224 Net debt at the beginning of the period (1,721) (1,945) (1,945) ---------- ---------- ---------- Net debt at the end of the period (1,745) (1,946) (1,721) ====== ====== ======iii Analysis of changes in net debt At 31 December Cash flow At 30 June 2004 2005 ‚£'000 ‚£'000 ‚£'000 Cash at bank and in hand 30 (30) - Bank overdraft (50) (24) (74) ----------- ---------- ----------- Total for cash at bank and in hand (20) (54) (74) Debt due within one year (552) (46) (598) Debt due after more than one year (832) 76 (756) Directors loan account (317) - (317) ------------ ---------- ------------ (1,721) (24) (1,745) ======= ====== =======NOTES TO THE UNAUDITED INTERIM REPORT 1. BASIS OF PREPARATIONThe results for the six months ended 30 June 2005, which are unaudited, havebeen prepared in accordance with applicable accounting standards and under thehistorical cost convention.The financial information set out in this document which has been neitheraudited nor reviewed does not comprise the statutory accounts of the Companywithin the meaning of section 240(5) of the Companies Act 1985.BASIS OF CONSOLIDATIONThe group financial statements consolidate those of the Company and of itssubsidiary undertaking Garner International Limited, a company incorporated inEngland and Wales. Profits or losses on intra-group transactions are eliminatedin full.2. EARNINGS PER ORDINARY SHAREThe calculation of the earnings per share is based on the loss attributable toordinary shareholders of ‚£61,000 (2004: ‚£5,000) and the weighted average numberof ordinary shares in issue during the period, being 1,167,118,360 (2004:922,808,968).3. DIVIDENDSThe dividend accrual represents the dividend due to the preference shareholdersfor the period to 30 June 2005.4. COPIES OF THE UNAUDITED INTERIM REPORTCopies of this report are available on request from the Company's registeredoffice at 6 Derby Street, London, W1J 7AD.ENDCONSTELLATION CORPORATION PLC