Last checked at 29 Jun 2009 15:00
29 June 2009
X-PHONICS PLC ("X-Phonics" or the "Company")
Interim Statement for the period ended 31st March 2009
CHAIRMAN'S STATEMENT
I present the financial statements for the six months to 31st March 2009.
It continues to be a difficult time for the music industry and there has been little improvement in the fortunes of smaller businesses such as ours that do not have established artists generating revenues with which to support the development of newer artists. As stated in my previous statement the market further deteriorated in the early part of 2009. The larger records labels, through which we had previously jointly developed our artists, have taken on very few new projects. Retail distribution in the high street is sparse with those active in the market only interested in selling established artist product. Alternative distribution channels are also concerned about taking on developing artists and offer less attractive returns when they do so.
Financial Commentary
Sales of £67,712 were primarily achieved from our earlier stage artists and from other non-music related activities that have been developed. Maeve O'Boyle has recorded her first album which is expected to be released through Linn Records in July 2009.
Overheads have been reduced substantially to offset, as far as is possible, the lack of sales. The directors are not drawing salaries and do not intend to do so under current circumstances. Other costs are being managed at a significantly lower level than in previous periods.
As I said in my statement published in April, given the company's current situation and its reliance upon the music industry, the directors believe that it is in the best interest of shareholders to limit any additional exposure in that sector other than to what is necessary to maintain the collection of cash from existing projects.
I also said that the directors believed it sensible to seek alternative opportunities that could make use of the company's infrastructure and listing on AIM in market sectors where there is scale, growth and a revenue model that is better suited to a public market. We continue to seek such opportunities and I hope to be able to report progress upon this in due course.
Robin Davies
Chairman
29 June 2009
X-Phonics plc
Consolidated Income Statement for six months ended 31st March 2009
| Note | 6 months ended 31 March 2009 | 6 months ended 31 March 2008 | Year ended 30 September 2008 | |||
| (unaudited) | (unaudited) | (audited) | ||||
| £ | £ | £ | ||||
| Revenue | 67,712 | 53,628 | 84,567 | |||
| Cost of Sales | (24,134) | (58,609) | (149,716) | |||
| Gross Profit/(Loss) | 43,578 | (4,981) | (65,149) | |||
| Administrative expenses | (82,077) | (212,163) | (739,245) | |||
| Operating Loss | (38,499) | (217,144) | (804,394) | |||
| Finance income | 1 | 618 | 653 | |||
| Finance costs | (221) | (651) | (882) | |||
| Loss on ordinary activities before taxation | (38,719) | (217,177) | (804,623) | |||
| Income tax expense | - | - | - | |||
| Loss for the period | (38,719) | (217,177) | (804,623) | |||
| Basic earnings per ordinary share | 3. | (0.06 pence) | (0.33 pence) | (1.22 pence) | ||
| Diluted earnings per ordinary share | 3. | (0.06 pence) | (0.33 pence) | (1.22 pence) | ||
All of the activities of the group are classed as continuing
X-Phonics plc
Consolidated Balance Sheet as at 31st March 2009
| 31 March 2009 | 31 March 2008 | 30 September 2008 | ||||
| (unaudited) | (unaudited) | (audited) | ||||
| £ | £ | £ | ||||
| Non-current assets | ||||||
| Intangible Assets - Goodwill | - | 327,639 | - | |||
| Property, plant and equipment | 27,120 | 52,459 | 36,782 | |||
| 27,120 | 380,098 | 36,782 | ||||
| Current assets | ||||||
| Trade and other receivables | 77,777 | 105,095 | 84,259 | |||
| Cash and cash equivalents | 5,618 | 21,869 | 6,359 | |||
| 83,395 | 126,964 | 90,618 | ||||
| Total assets | 110,515 | 507,062 | 127,400 | |||
| Liabilities and Equity | ||||||
| Current liabilities | ||||||
| Trade and other payables | 399,077 | 167,679 | 376,351 | |||
| Obligations under finance lease | 5,875 | 1,771 | 6,767 | |||
| 404,952 | 169,450 | 383,118 | ||||
| Non-current liabilities | ||||||
| Obligations under finance lease | - | 5,882 | - | |||
| Total liabilities | 404,952 | 175,332 | 383,118 | |||
| Equity | ||||||
| Called-up equity share capital | 2,803,119 | 2,803,119 | 2,803,119 | |||
| Share premium account | 743,474 | 743,474 | 743,474 | |||
| Merger reserve | (738,578) | (738,578) | (738,578) | |||
| Retained earnings | (3,102,452) | (2,476,286) | (3,063,733) | |||
| Total Equity | (294,437) | 331,729 | (255,718) | |||
| Total Liabilities and Equity | 110,515 | 507,061 | 127,400 | |||
X-Phonics plc
Consolidated Statement of Changes in Equity as at 31st March 2009
| Share Capital | Share Premium | Merger Reserve | Retained Earnings | Total Equity | |||||
| £ | £ | £ | £ | £ | |||||
| Balance at 1 October 2007 | 2,803,119 | 743,474 | (738,578) | (2,259,110) | 548,905 | ||||
| Loss for period | - | - | - | (217,177) | (217,177) | ||||
| At 31 March 2008 | 2,803,119 | 743,474 | (738,578) | (2,476,287) | 331,728 | ||||
| Loss for period | - | - | - | (587,446) | (587,446) | ||||
| At 30 September 2008 | 2,803,119 | 743,474 | (738,578) | (3,063,733) | (255,718) | ||||
| Loss for period | - | - | - | (38,719) | (38,719) | ||||
| At 31 March 2009 | 2,803,119 | 743,474 | (738,578) | (3,102,452) | (294,437) | ||||
X-Phonics plc
Consolidated Cash Flow Statement for six months ended 31st March 2009
| 6 months ended 31 March 2009 | 6 months ended 31 March 2008 | Year ended 30 September 2008 | |||
| (unaudited) | (unaudited) | (audited) | |||
| £ | £ | £ | |||
| Net cash (outflow)/inflow from operating activities | 370 | (110,261) | (124,690) | ||
| Investing activities | |||||
| Purchases of property, plant and equipment | - | (1,216) | (1,217) | ||
| Net cash flow before financing activities | 370 | (111,477) | (125,907) | ||
| Financing activities | |||||
| Interest paid | (221) | (651) | (882) | ||
| Interest received | 1 | 618 | 653 | ||
| Capital element of finance leases repaid | (891) | (3,340) | (4,224) | ||
| Net cash used in financing activities | (1,111) | (3,373) | (4,453) | ||
| Net (decrease)/increase in cash and cash equivalents | (741) | (114,850) | (130,360) | ||
| Opening net cash and cash equivalents | 6,359 | 136,719 | 136,719 | ||
| Closing net cash and cash equivalents | 5,618 | 21,869 | 6,359 | ||
| Reconciliation of operating loss to net cash outflow/inflow from operating activities | 6 months ended 31 March 2009 | 6 months ended 31 March 2008 | Year ended 30 September 2008 | ||
| £ | £ | £ | |||
| Operating Loss | (38,499) | (217,144) | (804,394) | ||
| Depreciation | 9,661 | 14,198 | 29,875 | ||
| Impairment of goodwill | - | - | 327,639 | ||
| Operating cash flows before movements in working capital | (28,838) | (202,946) | (446,880) | ||
| Decrease/(increase) in receivables | 6,483 | 34,818 | 55,651 | ||
| Increase/(decrease) in payables | 22,725 | 57,867 | 266,539 | ||
| Net movement in working capital | 29,208 | 92,685 | 322,190 | ||
| Net movement in cash flow | 370 | (110,261) | (124,690) | ||
| Income taxes paid | - | - | - | ||
| Net cash (outflow)/inflow from operating activities | 370 | (110,261) | (124,690) | ||
Notes to the unaudited financial statements
1. Basis of prepapration
The financial information included in this report does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The consolidated interim financial statements for the six months ended 31 March 2009 have been prepared under applicable International Financial Reporting Standards adopted by the European Union ("IFRS"). The financial information for the period ended 30 September 2008 has been extracted from the statutory accounts for that period. The auditors' report on the full statutory accounts for the period ended 30 September 2008 was unqualified with an emphasis of matter with regards going concern. The financial information for the six months ended 31 March 2008 and 31 March 2009 has not been audited.
2. Principal Accounting Policies
The principal accounting policies adopted are consistent with those of the annual financial statements for the year ended 30 September 2008 and are those expected to be applied for the year ended 30 September 2009.
3. Earnings per Share
The earnings per ordinary share have been calculated on the ordinary activities after taxation of £38,719 (31 March 2008 - £217,177, 30 September 2008 - £804,623) using the weighted average number of ordinary shares in issue during the period being 66,214,920 (31 March 2008 - 66,214,920, 30 September 2008 - 66,214,920). The weighted average number of diluted ordinary shares in issue during the period was 66,214,920 (31 March 2008 - 66,214,920, 30 September 2008 - 66,214,920).