Parkmead Regulatory News (PMG)

8 Feb 2008 07:00

Parkmead Group (The) PLC08 February 2008 8 February 2008 The Parkmead Group plc ("Parkmead" or the "Group") Interim Results for the 6 months ended 31 December 2007 under IFRS Interim results summary • Increasingly focused on the oil and gas sector as a principal investor, the Group has now made its first energy based investments with £7.7 million invested in exploration, production and geo science assets • Loss after taxation reduced to £28,897 (£455,499 (loss) for the twelve months ended 30 June 2007) • Disposal of Quayside Corporate Services Limited for up to £2,600,000 • Balance sheet remains strong with £4,889,001 cash and no debt. • Loss per share of 0.01 pence per share (as at 30 June 2007 0.11 pence (loss)) Significant events The Group's Chairman, Colin Goodall said, "Parkmead has a strong management teamwith in-depth expertise in the global energy industry. In line with ourstrategy, the Group is increasingly focused on investing in energy based assetsdemonstrated by the recent purchases of holdings in Faroe Petroleum plc, PAResources AB and Reservoir Exploration Technology ASA. We are actively workingon a range of investment opportunities covering exploration, production andenergy consulting with an emphasis on the Middle East and North Africa on whichwe hope to make announcements in due course." "Our advisory business was quieter during the six months ended 31 December 2007due to lower demand and therefore generated less revenue through success fees.However, we remain comfortable with our trading prospects for the advisorybusiness over the coming months. "With significantly reduced losses in the first half of the year and a strongbalance sheet with no debt, Parkmead is in a good position to continue toimplement its plans as an investor in energy opportunities, backed by a skilledcorporate advisory business." Ends Enquiries The Parkmead Group plc 020 7494 5770Niall Doran (Chief Executive)Gordon Ashworth (Chief Financial Officer) Rick Thompson 020 7149 6000Charles Stanley Securities Madano Partnership (PR to The Parkmead Group plc) 020 7593 4000Matthew Moth/Mark Way Financial Review The results for the six months ended 31 December 2007 have been prepared inaccordance with the accounting policies which will be adopted when the Group'sresults for the year ending 30 June 2008 are prepared (the "2008 Results"). The2008 Results will be prepared in accordance with International FinancialReporting Standards ("IFRS") as adopted by the European Union. Accordingly, theGroup has applied IFRS in respect of the six months ended 31 December 2007. Thecomparative amounts within these results have been restated, a reconciliation ofwhich has been set out in Note 2 to these statements. During the six months ended 31 December 2007 the Group recorded a loss after taxof £28,897 (2006: £633,882 (profit) restated and for the 12 months ended 30 June2007 a loss of £433,683 (restated)). At the operating level gross profitsdeclined to £156,167 on continuing business (2006: £3,116,473 (continuing) and£3,123,166 (continuing) for the 12 months ended 30 June 2007). This decline isexplained by the absence of success fees earned in the period by the Group'sadvisory business and also the inclusion within the comparative figures of thegross profits of Yospace Technologies Limited and of Quayside Corporate ServicesLimited, both now discontinued businesses. As noted, the Group has reasonableconfidence in the trading prospects of its corporate advisory division in thesecond half of the year. Administrative costs declined by 59% to £1,080,314 (compared with the 2006interims), emphasising the Group's attention to cost control, leaving anoperating loss of £911,795 (£570,233 profit (restated) (continuing)). Followingthe Group's disposal programme and the subsequent realisation of cash,implemented in 2006 and the early part of 2007, interest income increased by 47%to £338,295 (2006 interims: £229,682). A number of the Group's portfolioinvestee companies refinanced during the second half of the year and as a resultthe Group revalued upwards certain holdings in accordance with its accountingpolicy for fixed asset investments. As a consequence a credit of £340,839(2006: loss £303,264) was recorded leaving a loss overall for the period of£28,897. The loss per share was 0.01 pence (2006: 0.16 pence (profits)). The Group's balance sheet remains strong. The Group's fixed asset investmentsincreased to £10,905,944 from £9,176,402 as at 31 December 2006 and £3,852,797as at 30 June 2007. This movement is explained by the sales of the formerportfolio assets and Quayside Corporate Services Limited and also theacquisitions of holdings in Faroe Petroleum plc, PA Resources AB and ReservoirExploration Technology ASA. In line with the investments and sale proceedsnoted above cash balances declined to £4,889,001 (£7,374,554 as at 31 December2006 and £12,758,804 as at 30 June 2007). The Group has no net debt. CONSOLIDATED INCOME STATEMENTFOR THE SIX MONTHS ENDED 31 DECEMBER 2007 Six months Six months Twelve to 31 to 31 months to December December 30 June 2007 2006 2007 (unaudited) (unaudited) (unaudited) RESTATED RESTATED £ £ £ NOTESRevenue 156,167 3,370,483 3,687,006Cost of sales - (254,010) (563,840) Gross Profit 156,167 3,116,473 3,123,166Administration expenses (1,080,314) (2,628,240) (8,683,225)Other operating income 12,352 82,000 150,987 Operating (loss)/profit (911,795) 570,233 (5,409,072)Finance income 338,295 229,682 527,887Finance costs (366) (182,436) (5,298)Profit on sale of subsidiaries/ 16,393 155,559 4,612,428investmentsProvisions released/(made) against 340,839 (303,264) (154,286)investments in the period (Loss)/Profit before tax (216,634) 469,774 (428,341)Taxation - (5,340) (5,342) (Loss)/Profit after tax- continuing (216,634) 464,434 (433,683)operationsProfit after tax- discontinued operations 3 187,737 169,448 (21,816) (Loss)/Profit after tax 2 (28,897) 633,882 (455,499) Attributable to:Equity shareholders (28,897) 580,137 (405,648)Minority interest - 53,745 (49,851) (Loss)/Profit per 5 pence ordinary share (pence)- basic 4 (0.01) 0.16 (0.11)- diluted 4 (0.01) 0.16 (0.11) CONSOLIDATED BALANCE SHEETAS AT 31 DECEMBER 2007 At 31 At 31 At 30 December December June 2007 2006 2007 (unaudited) (unaudited) (unaudited) RESTATED RESTATED NOTES £ £ £AssetsNon current assetsGoodwill 5 - 5,919,379 2,177,829Other intangibles - 309,073 -Property, plant and equipment 237,244 131,970 127,660Available for sale investments 10,668,700 2,815,980 1,547,308Total non-current assets 10,905,944 9,176,402 3,852,797 Current assetsTrade and other receivables 961,395 2,117,941 905,168Cash and cash equivalents 4,889,001 7,374,554 12,758,804Total current assets 5,850,396 9,492,495 13,663,972 Total assets 16,756,340 18,668,897 17,516,769 Current liabilitiesShort-term borrowings - (30,000) -Current portion of capital lease obligations (11,645) - -Trade and other payables (998,489) (1,695,740) (1,149,549)Short-term provisions - - (343,798)Total current liabilities (1,010,134) (1,725,740) (1,493,347) Non-current liabilitiesLong-term borrowings - (486,730) -Long-term capital lease obligations (18,070) - -Total non-current liabilities (18,070) (486,730) - Total liabilities (1,028,204) (2,212,470) (1,493,347) Net assets 15,728,136 16,456,427 16,023,422 EquityShare capital 18,417,089 18,417,089 18,417,089Merger reserve (952,109) (952,109) (952,109)Revaluation reserve (109,450) - 235,943Other reserve (1,128,008) (1,128,008) (1,128,008)Retained earnings (499,386) 385,316 (549,493)Shareholders' equity 2 15,728,136 16,722,288 16,023,422Minority interests - (265,861) -Total equity 15,728,136 16,456,427 16,023,422 CONSOLIDATED CASH FLOW STATEMENTFOR THE SIX MONTHS ENDED 31 DECEMBER 2007 Six months Six months Twelve to 31 to 31 months to December December 30 June 2007 2006 2007 (unaudited) (unaudited) (unaudited) RESTATED RESTATED NOTES £ £ £ Operating activitiesCash flow from operations- continuing activities 6 (966,491) (69,787) (650,040)Cash flow from operations- discontinued 899 (209,131) 386,379operationsInterest received 437,037 229,679 452,676Interest paid (366) (186,325) (138,592)Taxation paid - - (791,859)Net cash from operating activities (528,921) (235,564) (741,436) Investing activitiesSale of subsidiary 594,130 1,267,717 5,506,445Sale of investments - - 2,038,602Cash/(Overdraft) disposed of with subsidiary (15,684) 128,745 67,870Loan and finance leases acquired with subsidiary - 270,254 -Purchase of investments (7,715,905) - -Purchase of property, plant and equipment (165,818) (77,752) (113,104)Sale of property, plant and equipment 13,530 - 423Net cash from investing activities (7,289,747) 1,588,964 7,500,236 Financing activitiesIncome from debt and lease financing 37,564 - -Finance lease principal payments (5,217) - -Net cash from financing activities 32,347 - - (Decrease)/Increase in cash and cash equivalents (7,786,321) 1,353,400 6,758,800 Movement in cash and cash equivalentsAt start of year 12,758,804 6,000,004 6,000,004(Decrease)/Increase (7,786,321) 1,353,400 6,758,800Effects of exchange rate changes (83,482) 21,150 -At end of year 7 4,889,001 7,374,554 12,758,804 STATEMENT OF CHANGES IN EQUITYFOR THE SIX MONTHS ENDED 31 DECEMBER 2007 Minority Total interest Equity Attributable to equity holders of the parent Merger Revaluation Other Retained reserve reserve reserve earnings Share Total capital £ £ £ £ £ £ £ £ At 1 July 2006 18,417,089 (952,109) - (1,128,008) (243,049) 16,093,923 337,231 16,431,154 Retained profit for the period - - - - 580,137 580,137 53,745 633,882Currency translation - - - - 20,577 20,577 - 20,577adjustment Total recognised incomeand expense for theperiod - - - - 600,714 600,714 53,745 654,459 Credit to equity forshare-based payments - - - - 27,651 27,651 - 27,651Disposal of subsidiary - - - - - - (656,837) (656,837) At 31 December 2006 18,417,089 (952,109) - (1,128,008) 385,316 16,722,288 (265,861) 16,456,427 At 1 July 2006 18,417,089 (952,109) - (1,128,008) (243,049) 16,093,923 337,231 16,431,154Retained loss for the - - - - (405,648) (405,648) (49,851) (455,499)periodCurrency translation ondisposal of subsidiary - - - - (9,772) (9,772) - (9,772)Revaluation of availablefor-sale investments - - 235,943 - - 235,943 - 235,943 Total recognised incomeand expense for theperiod - - 235,943 - (415,420) (179,477) (49,851) (229,328) Credit to equity forshare-based payments - - - - 108,976 108,976 - 108,976Disposal of subsidiary - - - - - - (287,380) (287,380) At 30 June 2007 18,417,089 (952,109) 235,943 (1,128,008) (549,493) 16,023,422 - 16,023,422 Retained loss for the - - - - (28,897) (28,897) - (28,897)periodRevaluation ofavailable-for-saleinvestments - - (345,393) - - (345,393) - (345,393) Total recognised incomeand expense for theperiod - - (345,393) - (28,897) (374,290) - (374,290) Credit to equityshare-based payments - - - - 79,004 79,004 - 79,004 At 31 December 2007 18,417,089 (952,109) (109,450) (1,128,008) (499,386) 15,728,136 - 15,728,136 Notes to the Interim financial statements for the six months to 31 December 2007 1 Basis of preparation The consolidated financial information has been prepared in accordance withaccounting policies which will be adopted in presenting the full year annualreport and accounts. The full year annual report and accounts will be preparedfor the first time in accordance with International Financial ReportingStandards (IFRS) as adopted by the European Union. The group has therefore applied IFRS for the six month period ended 31 December2007, with comparative figures for the six month period ended 31 December 2006also prepared under IFRS as adopted by the European Union. In preparing this consolidated financial information, the Group has elected totake advantage of provisions within IFRS 1"First-time adoption of InternationalFinancial Reporting Standards" ("IFRS 1"), which offer certain exemptions fromapplying IFRS to the opening IFRS balance sheet prepared at 1 July 2006. Inparticular: IFRS 3, "Business Combinations", has not been applied retrospectively tobusiness combinations that occurred prior to 1 July 2006. The carrying amount ofgoodwill in the opening IFRS balance sheet at 1 July 2006 is therefore itscarrying amount at that date under UK GAAP; The interim financial information is unaudited and does not constitute statutoryfinancial statements within the meaning of section 240 of the Companies Act1985. The Group's statutory consolidated financial statements for the year ended 30June 2007 were presented under UK GAAP, and have been delivered to the Registrarof Companies. The report of the auditors on those financial statements wasunqualified and did not contain a statement under section 237 (2) or (3) of theCompanies Act 1985. Comparative figures for the year ended 30 June 2007presented here are abridged and non-statutory, have been adjusted to reflect thetransition to IFRS and are unaudited. 2 Explanation of transition to IFRS This note presents and explains the unaudited restatement to an IFRS basis ofthe Group's results and shareholders' equity for the six months ended 31December 2006 and the year ended 30 June 2007, and shareholders' equity at 1July 2006, the date of transition to IFRS, which were previously reported underUK Generally Accepted Accounting Practice ('UK GAAP'). The restated figures forthe year ended 30 June 2007 will form the comparative information for theGroup's first annual IFRS financial statements for the year ending 30 June 2008. A reconciliation of the changes is as follows: Six months ended/as at Year ended/as at As at 31 December 2006 30 June 2007 1 July 2006 Profit/(Loss) Shareholders' Loss after Shareholders' Shareholders' after tax equity tax equity equity £ £ £ £ £ As reported under UK GAAP (117,904) 18,514,554 (458,671) 16,030,022 16,093,923 Provision for share options1 (27,651) - - - - Other share based awards2 476,713 (2,092,851) - - - Staff holidays3 (5,054) (5,054) (6,600) (6,600) - Exchange gain4 - - 9,772 - - Goodwill amortisation5 307,778 305,639 - - - As restated under IFRS 633,882 16,722,288 (455,499) 16,023,422 16,093,923 1. Provision for share options IFRS 2 requires that a charge to the value of outstanding share options be madeover their vesting period. In the period ended 31 December 2006 this charge was£27,651. No adjustment is needed at 1 July 2006 or 30 June 2007 as these havealready been made in the 30 June 2007 accounts when FRS 20 was adopted. 2. Other share based awards The adoption of IFRS 2/FRS 20 has meant that a share award previously disclosedas a loan is now disclosed in equity. At 31 December 2006 a provision had beenmade against this loan, this provision is no longer required and has beenreversed. 3. Staff holidays IAS 19 requires that all liabilities in respect of employees are recognised, theprovisions made at 31 December 2006 and 30 June 2007 represent unclaimed holidayentitlement. 4. Exchange gain IAS 21 requires that on disposal cumulative translation differences relating toa foreign entity are transferred to the income statement and included in gain ondisposal. 5. Goodwill amortisation IFRS 3 requires that goodwill is assessed by impairment reviews which means thatthe amortisation that was calculated under UK GAAP has to be reversed. 3 Discontinued operations The results of discontinued operations were as follows: Six months Six months Twelve to 31 to 31 months to December December 30 June 2007 2006 2007 (unaudited) (unaudited) (unaudited) RESTATED RESTATED £ £ £ Revenue 62,982 2,816,283 3,960,081Cost of sales 92,111 (1,741,233) (1,741,234) Gross Profit 155,093 1,075,050 2,218,847Administration expenses 32,455 (901,710) (2,107,369) Operating profit 187,548 173,340 111,478Finance income 189 - -Finance costs - (3,892) (133,294) Profit/(Loss) before tax 187,737 169,448 (21,816)Taxation - - - Profit/(Loss) after tax 187,737 169,448 (21,816) 4 Earnings per share Six months ended Six months ended Year ended 31 December 31 December 30 June 2007 2006 2007 (Loss)/Profit attributable toordinary shareholders (£) (28,897) 580,137 (405,648) Weighted average number ofshares - number-Basic 368,341,780 368,341,780 368,341,780-Diluted 368,341,780 373,222,362 368,341,780 (Loss)/Profit per 5 penceordinary shares (pence)-Basic (0.01) 0.16 (0.11)-Diluted (0.01) 0.16 (0.11) 5 Goodwill £Deemed cost on transition to IFRS at 1 July 2006 7,841,211Disposed of with subsidiary (1,557,681)Disposals (364,151) At 31 December 2006 5,919,379Disposals (58,900)Impairment (3,682,650) At 30 June 2007 2,177,829Disposals (2,177,829) At 31 December 2007 - 6 Reconciliation of operating profit to net cash from operating activities Six months to Six months to Twelve months 31 December 31 December to 30 June 2007 2006 2007 (unaudited) (unaudited) (unaudited) RESTATED RESTATED £ £ £Operating (loss)/profit (911,795) 570,233 (5,409,072)Depreciation 31,812 12,056 72,688Impairment of goodwill - - 3,682,650Gain on disposal on property, plant and equipment (3,624) - (1,144)Provision for share based payments 79,003 27,651 108,976(Increase)/Decrease in debtors (210,789) 142,048 856,095Increase/(Decrease) in creditors 392,700 (821,775) (204,031)(Decrease)/Increase in other provisions (343,798) - 243,798Net cash from operations- continuing activities (966,491) (69,787) (650,040) 7 Cash and cash equivalents Six months to 31 Six months to 31 Twelve months to 30 December 2007 December 2006 June 2007 (unaudited) (unaudited) (unaudited) RESTATED RESTATED Cash at bank and in hand 4,889,001 7,374,554 12,758,804 4,889,001 7,374,554 12,758,804 Interim statement Copies of the Interim statement will be available to the public free of chargefrom the Company's registered office: 2nd Floor, 1-4 Vigo Street, London W1S3HT. A copy of the Interim statement will also be made available on the Group'swebsite, www.parkmeadgroup.com. This information is provided by RNS The company news service from the London Stock Exchange