SWC.L Regulatory News (SWC)

29 Sep 2005 08:30

Sweet China PLC29 September 2005 Sweet China plc ('Sweet China' or 'the Company') Unaudited Interim Results for the Six Months to 30 June 2005 Key points Sweet China presents its interim results for the period from 11 March 2005 to 30June 2005. • Sweet China was admitted to trading on AIM on 31 March 2005. • The Company raised £672,000 before expenses through a placing of 1,920,001 shares at a price of 35p per share. • The Company raised pre-flotation funding of approximately £600,000 bringing the total monies raised at flotation to £1,272,000. • The purpose of the placing and the listing on AIM was to fund the costs of due diligence associated with prospective purchases and investments in companies or businesses engaged in the confectionery industry of China. • The interim results reflect the expenses of the launch and fund raising and the operating costs of the Company and its subsidiary for this period. • Since the period end Sweet China has appointed Martin Frost as Executive Deputy Chairman and has entered into a consultancy agreement with HongTa Innovation Partners to progress acquisitions in China and Hong Kong. • Negotiations are continuing with two parties with the view to acquisitions in line with the launch prospectus. Sweet China's Chairman, David Zulman, said: 'In the five months since our listing on AIM, we have stepped up our programmeof looking at potential acquisitions and investments and are optimistic that wewill be able to make our initial investment soon. China is the economic miracleof the new century. The opportunities it offers us - a low cost manufacturingbase and a history of adopting production technologies that match the best thatthe world has to offer, rapid economic growth and a fast growing and largeconsumer society - are unrivalled. 'We believe that we will be able to build an impressive business in China while,at the same time, creating value for our investors.' Enquiries Tim Allan 020 7404 5344 Chris Cleverly 020 7404 0777Portland Chief Executive Sweet China plc Sweet China plc('Sweet China' or 'the Company') Unaudited Interim Results for the Six Months to 30 June 2005 Chairman's Statement Current Trading These are the first interim results for your Company and cover the period fromits incorporation on 11 March 2005 to 30 June 2005 - a period of just over threemonths. The initial launch of the group and its introduction and placing on AIMexceeded the Board's expectations with £1,272,000 raised as initial capital.Expenses incurred in raising our initial capital amounted to £237,027 and havebeen written off against the share premium account. On 22 March 2005, prior to its introduction to AIM, the Company acquired SweetChina Trading Limited which had being carrying out preliminary investigationsinto trading in China and Hong Kong and which owned the Sweet China website.This has been accounted for in these interim accounts as an acquisition. The results reflect the operating costs of the Group for the period whilst anacquisition is being sought, and show a loss before taxation of £97,844. Thenet assets of the group at 30 June 2005 stood at £937,129 and cash balancesstood at £836,872. Future Prospects Since our flotation on AIM, we have identified a number of potentialacquisitions and investments in companies operating in the manufacturing andmarketing of products in the confectionery and gift food markets in mainlandChina and Hong Kong and are in the progress of initial negotiations with twospecific businesses. We are optimistic that we will be able to announce ourinitial investment soon. As part of this process we have entered into an agreement with HongTa InnovationPartners ('HTIP') to act as our advisors and agents to assist the Company innegotiations with an identified business opportunity on the Chinese mainland.HTIP is a dedicated private equity operation owned and managed by HongTa, one ofChina's largest companies. We have also entered into an exclusivity agreementwith the owners of a Hong Kong confectionery business for the purpose ofconducting due diligence with a view to purchasing that business. We have also been fortunate in securing the services of Martin Frost as ourExecutive Deputy Chairman. Martin has extensive experience of global consumerbusinesses through his career with the Unilever Group, PepsiCo, Inc. and TheSeagram Company Limited. At Seagram, he was President and Chief ExecutiveOfficer of Seagram Europe, Middle East and Africa. Martin has proved expert inthe field of global brand marketing and in fostering and pursuing the growthobjectives of those companies with which he has been associated. In bothaspects of these skills, he will prove highly valuable to us. We feel that China offers a wealth of opportunities to our Company in terms of alow cost manufacturing base, a history of adopting the most effective andefficient production technologies, rapid economic growth and a fast growing andlarge consumer society. We believe that we will be able to build a successful business in China while,at the same time, creating value for our investors. David ZulmanChairman29 September 2005 Unaudited Consolidated Profit and Loss Accountfor the period from 11 March 2005 to 30 June 2005 Period ended 30 June 2005 (Unaudited) Notes £ Turnover -Operating expenses 102,972Net operating loss (102,972)Interest receivable 5,128Loss on ordinary activities before taxation 2 (97,844)Taxation 3 -Loss on ordinary activities after taxation 5 (97,844) Loss per share PenceBasic and diluted 4 1.10 Continuing operations All amounts are derived from continuing operations. Statement of Total Recognised Gains and Losses There are no recognised gains or losses for the period other than those dealtwith in the Profit and Loss account. Unaudited Consolidated Balance Sheetas at 30 June 2005 30 June 2005 (Unaudited) Notes £Fixed assetsGoodwill 121,547 121,547Current assetsDebtors 41,285Cash at bank and in hand 836,872 878,157Creditors: amounts falling due within one year (62,575)Net current assets 815,582Total assets less current liabilities 937,129Total assets less liabilities 937,129 Capital and reservesCalled up share capital 100,801Share premium 934,172Profit and loss account (97,844)Equity shareholders' funds 5 937,129 This statement was approved by the Board of Directors on 28 September 2005 Unaudited Consolidated Cash Flow Statementfor the period from 11 March 2005 to 30 June 2005 Period ended 30 June 2005 (Unaudited) Notes £ Net cash outflow from operating activities 6 (128,097)Return on investment and servicing of financeInterest received 5,128Taxation -AcquisitionsNet cash acquired with subsidiary undertaking 209,868Net cash inflow before management of liquid resources andfinancing 86,899Management of liquid resourcesCash on deposit and money market (704,872)Net cash outflow before financing (617,973)FinancingIssue of ordinary share capital 982,000Share issue costs (232,027)Net receipts from issue of share capital 749,973Increase in cash in period 7 132,000 Notes to the Interim Results 1. Basis of preparation The interim statement covers the period from incorporation on 11 March 2005 to30 June 2005 and is unaudited. The results have been prepared under this historical cost convention and inaccordance with applicable UK accounting standards, using accounting bases andpolicies that it is intended will be used for the preparation of the financialstatements of the Group for the period ending 31 December 2005. The financial statements contained in this report do not constitute statutoryaccounts within the meaning of Section 240 Companies Act 1985. The principal accounting policies used are as follows: Acquisition of Sweet China Trading Limited Sweet China Trading Limited has been included in the consolidated financialstatements using the acquisition method of accounting. Accordingly, theConsolidated Profit and Loss Account and Cash Flow Statement include the resultsof Sweet China Trading Limited for the period since its acquisition on 22 March2005. The purchase consideration has been allocated to the assets andliabilities on the basis of fair value at the date of acquisition. Goodwill Goodwill arising on the acquisition of Sweet China Trading Limited is shown as afixed asset and is being amortised through the profit and loss account over 5years, being the directors' estimate of its useful life. Deferred taxation Deferred tax balances are recognised in respect of all timing differences thathave originated but not reversed by the balance sheet date except that therecognition of deferred tax assets is limited to the extent that the companyanticipates to make sufficient taxable profits in the future to absorb thereversal of the underlying timing difference. Deferred tax balances are notdiscounted. 2. Loss on ordinary activities before taxation The loss for the period is stated after charging goodwill amortisation of£7,191. 3. Taxation No deferred tax asset has been recognised on the losses incurred during theperiod as there is uncertainty as to when the Group will be able to utilisethese losses. 4. Loss per ordinary share The calculation of the basic loss per share is based on the loss after taxationof £97,844 and on 8,877,948 ordinary shares, being the weighted average numberof ordinary shares in issue during the period. There is no difference betweenthe basic loss per share and the loss per share on a fully diluted basis. 5. Reconciliation of movement in shareholders' funds Period ended 30 June 2005 £ Loss for the financial period (97,844)Funds from issue of ordinary shares 1,272,000Costs of issue (237,027)Net additions to shareholders' funds 937,129Opening shareholders' funds -Shareholders' funds at 30 June 2005 937,129 6. Net cash outflow from operating activities Period ended 30 June 2005 £ Operating loss (102,972)Amortisation of goodwill 7,191Increase in debtors (31,329)Decrease in creditors (987)Net cash flow absorbed by operating activities (128,097) 7. Reconciliation of net cash flow to movement in net funds Period ended 30 June 2005 £ Opening cash at bank and in hand -Increase in cash in period 132,000 132,000Cash on deposit and money market at 30 June 2005 704,872Cash in bank and in hand at 30 June 2005 836,872 This statement is being sent to the shareholders of the Company and will beavailable at the Company's UK offices at 91-94 Saffron Hill, London, EC1N 8PT. This information is provided by RNS The company news service from the London Stock Exchange