OCT.L Regulatory News (OCT)

25 September 2013 Suretrack Monitoring plc ("Suretrack") or (the "Company") Final Results for the year ended 31 March 2013 Chairman's statement The Company announced on 10 September 2013 that it had entered into aconditional Sale and Purchase Agreement to dispose of its wholly ownedsubsidiary IBP Limited ("IBP") and, subject to a proposed CapitalReorganisation, that it intends to raise approximately £250,000 before expensesby means of a subscription for 250,021,404 new ordinary shares at 0.1p perordinary share and that it intends to utilise those funds in connection withimplementing a proposed new investing policy for the Company. The Board reviewed the trading of the Company and as a result of the on-goinglosses at IBP felt that it was not sustainable or in the best interests ofshareholders to continue with the ownership of IBP as it could not support thecentral costs associated with the Company being quoted on AIM. IBP made a lossof £70,115 for the year to 31 March 2013 (14 months to 31 March 2012: loss of £5,173). The Company has previously announced that the major contract wins thatwere anticipated during the year have not come to fruition which means thatforecast revenues are extremely weak. As a result the Board are of the opinionthat the disposal of IBP and the related proposals represent the best chancefor the Company to realise future value for shareholders. The Group results show an operating loss for the year of £1,071,931 (2012: lossof £596,464) which includes a provision for the impairment of the carryingvalue of IBP of £885,028 for the reasons described above. The circular posted to shareholders on 10 September 2013 outlines the proposedCapital Reorganisation, the proposed subscription to raise approximately £250,000 before expenses and the proposed new investing policy for the Group.The proposed new Board will assess potential businesses and projects goingforward and will work hard to achieve shareholder value in the future. Summary and outlook Whilst the outcome for the Group over the last two years has been disappointingI hope that the new investment in the business will enhance shareholder valuein the future. S G Barrell Non-Executive Chairman 24 September 2013 Further enquiries: Suretrack Monitoring plc Simon Barrell Tel: 07850 934204 Sanlam Securities Limited (Nominated Adviser and Broker) Simon Clements Tel: 020 7628 2200 Consolidated Income Statement For the year ended 31 March 2013 Year 14 Months 14 Months 14 Months ended ended ended ended 31 March 31 March 31 March 31 March 2013 2012 2012 2012 £ £ £ £ Total Discontinued Continuing Total business business Revenue 202,439 478,578 466,399 944,977 Cost of sales (125,071) (305,435) (279,134) (584,569) GROSS PROFIT 77,368 173,143 187,265 360,408 Administrative expenses (264,271) (605,429) (332,130) (937,559) Exceptional items (885,028) - (19,313) (19,313) OPERATING LOSS (1,071,931) (432,286) (164,178) (596,464) Finance costs - - Finance income - 99 LOSS BEFORE INCOME TAX (1,071,931) (596,365) Income tax - - LOSS FOR THE PERIOD (1,071,931) (596,365) Loss attributable to: Owners of the parent (1,071,931) (596,365) Earnings per share expressed in pence per share Basic (0.15) (0.08) Diluted (0.15) (0.08) Consolidated Statement of Comprehensive Income For the year ended 31 March 2013 Year 14 Months ended ended 31 March 2013 31 March 2012 £ £ LOSS FOR THE PERIOD (1,071,931) (596,365) OTHER COMPREHENSIVE INCOME - - TOTAL COMPREHENSIVE INCOME FOR THE PERIOD (1,071,931) (596,365) Total comprehensive income attributable to: Owners of the parent (1,071,931) (596,365) Consolidated Statement of Financial Position As at 31 March 2013 As at As at 31 March 31 March 2013 2012 £ £ ASSETS NON-CURRENT ASSETS Goodwill - 885,028 Intangible assets 3,970 3,970 Property, plant and equipment 8,599 13,646 Long term loan note - 188,062 12,569 1,090,706 CURRENT ASSETS Inventories 13,175 25,444 Trade and other receivables 19,508 54,961 Cash and cash equivalents 101,174 228,930 133,857 309,335 TOTAL ASSETS 146,426 1,400,041 EQUITY SHAREHOLDERS' EQUITY Called up share capital 309,404 4,170,844 Share premium - 2,091,897 Other reserves - - Retained earnings (304,998) (5,006,961) TOTAL EQUITY 4,406 1,255,780 LIABILITIES CURRENT LIABILITIES Trade and other payables 142,020 144,261 Tax payable - - 142,020 144,261 TOTAL LIABILITIES 142,020 144,261 TOTAL EQUITY AND LIABILITIES 146,426 1,400,041 Consolidated Statement of Cash Flows For the year ended 31 March 2013 2013 2012 £ £ Cash flows from operating activities Cash used in operations (127,234) (465,382) Net cash used in operating activities (127,756) (465,382) Cash flows from investing activities Purchase of intangible fixed assets - (17,150) Purchase of tangible fixed assets (2,522) (9,860) Acquisition of business assets - (30,000) Proceeds from sale of fixed assets 2,000 10,136 Cash disposed off with subsidiary - (29,250) Interest received - 99 Net cash used by investing activities (522) (76,025) Cash flows from financing activities Share issues net of expenses - 249,375 Net cash from financing activities - 249,375 Decrease in cash and cash equivalents (127,756) (292,032) Cash and cash equivalents at beginning of period 228,930 520,962 Cash and cash equivalents at end of period 101,174 228,930 Consolidated Statement of Changes in Equity For the year ended 31 March 2013 Called up Profit Share Other Total share and loss premium reserves equity capital account £ £ £ £ £ Balance at 1 February 4,133,344 (2,273,917) 1,879,858 (2,148,000) 1,591,2852011 Changes in equity Issue of share capital 37,500 - 212,039 - 249,539 Total comprehensive - (596,365) - - (596,365)income Disposal of subsidiary - (2,148,000) - 2,148,000 - Share based payment - 11,321 - - 11,321charge Balance at 31 March 4,170,844 (5,006,961) 2,091,897 - 1,255,7802012 Changes in equity Cancellation of (3,802,670) 3,802,670 - - -deferred share capital Cancellation of share - 2,091,897 (2,091,897) - -premium account Purchase of own shares (58,770) (129,293) - - (188,063) Total comprehensive - (1,071,931) - - (1,071,931)income Share based payment - 8,620 - - 8,620charge Balance at 31 March 309,404 (304,998) - - 4,4062013 Notes to the Consolidated Financial Statements For the year ended 31 March 2013 1. BASIS OF PREPARATION The Group's consolidated financial statements are for the year ended 31 March2013. These financial statements have been prepared in accordance with InternationalFinancial Reporting Standards as adopted for use in the European Union andIFRIC interpretations and with those parts of the Companies Act 2006 applicableto companies reporting under IFRS. The financial statements have been preparedunder the historical cost convention, except that they have been modified toinclude the presentation of certain non-current financial assets andliabilities at fair value. The consolidated financial statements of Suretrack Monitoring plc are presentedin pounds sterling, which is also the functional currency of the Group. The financial statements have been prepared on a going concern basis. Thedirectors have considered the position of the Group and considered that thesale of IBP Limited and the raising of approximately £250,000 before expensesis the most appropriate action to ensure the business remains a going concern.The directors have received binding letters of subscription for the fullamount, subject to shareholder approval at the General Meeting to be held on 2October 2013, and have produced forecasts for the next 12 months to September2014. These forecasts contain various assumptions on the levels of expenditureover the period. The directors have also assumed the proposed disposal of IBPwill proceed with shareholder approval. The directors are satisfied that theGroup has adequate resources to continue in operational existence for theforeseeable future and accordingly, continue to adopt the going concern basisin preparing the financial statements. The financial information set out above does not constitute the Company'sstatutory accounts for the year ended 31 March 2013 or 14 month period ended 31March 2012, but is derived from those accounts. Statutory accounts for the 14month period ended 31 March 2012 have been filed with the Registrar ofCompanies. Statutory accounts for the year ended 31 March 2013 will bedelivered to the Registrar of Companies following the Company's Annual GeneralMeeting. The Auditors have reported on the accounts for the year ended 31 March2013; their reports were unqualified and did not contain any statements underCompanies Act 2006 section 498 (2) or (3), however the Auditors report didcontain the following emphasis of matter paragraph in relation to goingconcern: In forming our opinion on the financial statements, which is not qualified, wedraw attention to the disclosures made in Note 1 of the financial statementsconcerning the company's ability to continue as a going concern andspecifically that the sale of IBP Limited and the raising of £250,000 beforeexpenses is the most appropriate action to ensure the business remains a goingconcern although this is subject to shareholder approval on 2 October 2013.Notwithstanding that the directors believe it is appropriate to prepare thesefinancial statements on a going concern basis for the reasons outlined in Note1, the circumstances do indicate the existence of a material uncertainty thatmay cast doubt over the ability of the company to continue as a going concern.The financial statements do not include the adjustments that result if thecompany was unable to continue as a going concern. 2. SEGMENTAL REPORTING The Group had two key operating segments which are overseen by distinctmanagement teams and reported to the Board. These are the provision of trackingdevices, monitoring and recovery services thereon and the supply, assembly andinstallation of security equipment. The former was conducted through itssubsidiary company, Sure-Track Europe Limited and latter through its subsidiaryIBP Limited. Sure-Track Europe Limited was disposed of on 5 March 2012 andsince that time there has only been one reportable segment. Segmental analysis by reportable segments*: Sure-Track IBP Central adjustments Total Europe * 2013 2012 2013 2012 2013 2012 2013 2012 £ £ £ £ £ £ £ £ Revenue from - 478,578 107,642 276,755 - - 107,642 755,333UK Revenue from - - 94,797 189,644 - - 94,797 189,644Europe Total revenue - 478,578 202,439 466,399 - - 202,439 944,977 Interest - - - 99 - 99revenue Amortisation - 30,005 - - 885,028 - 885,028 30,005 Loss before - 411,153 70,117 5,173 1,001,814 180,039 1,071,931 596,365tax Total - - 20,840 38,495 121,180 105,766 142,020 144,261ExternalLiabilities Total - - 99,206 224,215 47,220 1,175,826 146,426 1,400,041ExternalAssets * The measurement of information in the table above that is reported to theBoard does not include consolidation adjustments or central costs. During the year IBP made sales to individual customers that exceed 10% of thetotal revenue. IBP made sales to four customers in excess of 10% at £57,049, £37,748, £20,973 and £20,541 respectively (2012: two customers of £124,235 and £123,957). In 2012 Sure-Track Europe made sales to one individual customer of £100,015. 3. INCOME TAX Analysis of the tax charge No liability to UK corporation tax arose on ordinary activities for the yearended 31 March 2013 nor for the period ended 31 March 2012. Factors affecting the tax charge The tax assessed for the period is higher than the standard rate of corporationtax in the UK. The difference is explained below: 2013 2012 £ £ Loss on ordinary activities before tax (1,071,931) (596,365) Loss on ordinary activities multiplied by the (214,386) (119,273)standard rate of corporation tax in the UK of 20 % Effects of: Disallowed items 181,158 47 Depreciation in excess of capital allowances on 190 (255)qualifying assets Losses utilised - 40 Unutilised losses 33,038 - Other tax adjustments - 119,441 Total income tax - - Factors that may affect future tax charges There is an unrecognised deferred tax asset of £192,129 (2012: £153,000). Thisrelates to estimated surplus trading losses carried forward which are availableto be relieved against future profits of the same trade amounting to £960,644(2012: £763,921). 4. EARNINGS PER SHARE Basic earnings per share is calculated by dividing the earnings attributable toordinary shareholders by the weighted average number of ordinary sharesoutstanding during the period. The diluted earnings per share is calculated using the weighted average numberof shares adjusted to assume the conversion of all dilutive potential ordinaryshares. The diluted loss per share is the same as the basic loss per share as theconversion of share options decreases the basis loss per share, thus beinganti-dilutive. Reconciliations are set out below. 2013 Earnings Weighted Per-share average number £ of shares amount pence Basic EPS Earnings attributable to ordinary (1,071,931) 694,692,433 (0.15)shareholders from continuing operations Effect of dilutive options - - - Diluted EPS Adjusted earnings (1,071,931) 694,692,433 (0.15) 2012 Earnings Weighted Per-share average number £ of shares amount pence Basic EPS Earnings attributable to ordinary (164,079) 704,331,161 (0.02)shareholders from continuing operations Earnings attributable to ordinary (432,286) 704,331,161 (0.06)shareholders from discontinuedoperations Effect of dilutive options - - - Diluted EPS Adjusted earnings (596,365) 704,331,161 (0.08) 5. INVESTMENTS Company Shares in Group undertakings £ COST At 1 February 2011 3,845,272 Disposal (2,148,000) At 31 March 2012 1,697,272 At 31 March 2013 1,697,272 IMPAIRMENT At 1 February 2011 812,224 Charges - At 31 March 2012 812,224 Charges 885,048 At 31 March 2013 1,697,272 NET BOOK VALUE At 31 March 2013 - At 31 March 2012 885,048 At 31 January 2011 3,033,048 The investment in IBP Limited has been impaired in the year. The Group or the Company's investments at the balance sheet date in the sharecapital of companies include the following: Name Incorporated Percentage Nature of in Holding Business IBP Limited UK 100% Supply, assembly, install of security equipment 6. TRADE AND OTHER RECEIVABLES 2013 2012 £ £ Non Current: Long term loan - 188,062 2013 2012 £ £ Current: Trade receivables 5,403 22,431 Other receivables - 3,142 VAT 6,633 17,245 Prepayments and accrued income 7,472 12,143 19,508 54,961 Disclosure of credit risk The directors consider that the carrying amount of trade and other receivablesapproximates to their value. On 5 March 2012 the Company announced the disposal of Sure-Track EuropeLimited, to Will Hirons and Deborah Davis for a consideration of £188,062. On17 October 2012 the company received court approval for the capitalreorganisation and the Company enacted a Call Option on the former ChiefExecutives shares. On 22 November 2012 the Company completed the purchase of117,538,809 shares and this was settled by the cancellation of the long termloan of £188,062. The ageing of the trade receivables as at 31 March 2013 is detailed below: 2013 2013 2012 2012 Gross Allowance Gross Allowance £ £ £ £ 0 to 30 days 9,357 - 26,286 - 30 to 60 days 2,288 - 5,905 - 60 to 90 days 3,458 - - - Over 90 days (8,845) 855 (8,172) 1,588 6,258 855 24,019 1,588 The movement in allowance for doubtful debts in respect of trade receivables isdetailed below: 2013 2012 £ £ Opening Balance 1,588 5,391 Utilised in Period (733) (3,803) Closing balance 855 1,588 7. CASH AND CASH EQUIVALENTS 2013 2012 £ £ Bank accounts 101,174 228,930 101,174 228,930 8. CALLED UP SHARE CAPITAL Ordinary Shares Number of Nominal Value Total ordinary share Value £ £ Issued at 1 February 2011 661,347,670 0.0005 330,674 Placing August 2011 75,000,000 0.0005 37,500 Issued at 31 March 2012 736,347,670 0.0005 368,174 Purchase of own shares in conjunction (117,538,809) 0.0005 (58,770)with the sale of Sure-Track EuropeLimited Issued at 31 March 2013 618,808,861 0.0005 309,404 On 17 October 2012 the Company received court approval for the cancellation ofthe deferred shares and the share premium account. The Company enacted a CallOption on the former Chief Executives shares. On 22 November 2012 the Companycompleted the purchase of 117,538,809 shares and this was settled by thecancellation of the long term loan of £188,062. The shares issued on 1 August 2011 were issued at 0. 35p creating a premiumcredited to the share premium account of £211,875 net of expenses of £13,125. Deferred shares Since 31 July 2010 there have been 400,281,000 deferred shares at a nominalvalue of £0.0095. These shares were cancelled on 17 October 2012 following thecapital reconstruction. Total ordinary and deferred shares The issued share capital as at 31 March 2013 is as follows: Number Nominal Value Total of shares £ Value £ Ordinary shares 618,808,861 0.0005 309,404 309,404 On flotation to AIM, the company issued 261,066,670 shares with a nominal valueof £130,533 for a consideration of £1,566,400. The premium of £1,435,867 wascredited to the share premium account. Transaction costs of £312,467 were incurred on the issue of shares which weresettled in cash. These costs have been deducted from the share premium account. 9. RECONCILIATION OF LOSS BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS 2013 2012 £ £ Loss before income tax (1,071,931) (596,365) Depreciation and amortisation charges 4,819 45,573 Impairment of goodwill 885,028 - Loss on sale of fixed assets 750 385 (Profit)/loss on disposal of subsidiary - (19,337) Share based payment cost 8,620 11,321 Finance income - (99) (172,714) (558,522) (Increase) in inventories 12,270 (18,448) (Increase)/Decrease in trade and other receivables 35,451 25,240 Increase/(Decrease) in trade and other payables (2,241) 86,348 Cash used by operations (127,234) (465,382) 10. DIVIDEND The directors do not propose the payment of a dividend. 11. Availability of Report & Accounts Copies of the Report and Accounts will be posted to shareholders shortly, willbe available from the Company's registered office Wolfe Lodge, Farnham Road,Bordon, Hampshire GU35 0NH and will be available from the Company's websitewww.suretrackgroup.com.