Last checked at 23 Oct 2009 07:00
23 October 2009
Oxeco Plc (the "Company" or the "Group")
Interim financial report for the six months ended 31 July 2009
Chairman's Statement
Oxeco Plc is a holding and management company which was established with a stated strategy of seeking investments in or acquiring assets, businesses or companies in the technology and science sectors. The Company currently has one subsidiary, Oxray Ltd ("Oxray"), which was acquired in June 2007 as a start up business which aimed to become a leading provider of molecular structure determination services to both industry and academic institutions.
By early this year Oxray had substantially completed the development of its novel X-ray crystallography structure determination software but the results of marketing efforts to establish a solid customer base had been disappointing. Also, Oxray had not been able to strengthen and develop its product service offering through bolt-on acquisitions in this field as originally envisaged in June 2007. The Directors therefore undertook a review of the Oxray business and concluded that this was not a market to which the Company intended to commit further significant resource.
Subsequent efforts to secure a commercial exit from this business were not successful and a decision was taken to stop any further investment in Oxray with an emphasis on preserving the Group's cash. Oxray has now become a dormant subsidiary whilst retaining control of the underlying intellectual property and its results for the period from 1 February 2009 have been classified within discontinued operations.
The unaudited consolidated loss before tax for the Group in the six months to 31 July 2009 amounted to £143,000, including a loss after tax from the discontinued Oxray activities of £83,000, compared to a consolidated loss of £102,000 for the comparable six months to 31 July 2008. Consolidated net assets at 31 July 2009 amounted to £2.38 million including cash balances of £2.42 million versus net assets of £2.52 million and cash balances of £2.53 million at the 31 January 2009.
Oxeco benefits from a solid balance sheet position whilst running a low cost base. Your Directors are continuing to evaluate a range of new commercial and acquisition opportunities within the general science and technology sector and I am confident that we will be successful in exploiting an investment opportunity during the next twelve months.
Michael Bretherton
Executive Chairman
Contact:
| +44 (0) 207099 7266 |
OXECO PLC
CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS TO 31 JULY 2009
| Notes | Six months to 31 July 2009 (Unaudited) | Six months to 31 July 2008 (Unaudited) | Year to 31 January 2009 (Audited) | |
| £000 | £000 | £000 | ||
| Continuing operations | ||||
| Revenue | - | 6 | 18 | |
| Administrative expenses | (66) | (188) | (376) | |
| Impairment of goodwill | - | - | (2,120) | |
| Operating Loss | (66) | (182) | (2,478) | |
| Interest receivable | 6 | 77 | 127 | |
| Loss before tax | (60) | (105) | (2,351) | |
| Taxation | 2 | - | 3 | 3 |
| Loss for the period from continuing operations | (60) | (102) | (2,348) | |
| Loss after tax from discontinued operations | 5 | (83) | - | - |
| Loss for the period | (143) | (102) | (2,348) | |
| Attributable to: | ||||
| Equity holders of the parent | (143) | (102) | (2,348) | |
| Earnings per share Basic and Diluted - post impairment of goodwill | 3 | (0.02)p | (0.02)p | (0.39)p |
| Basic and Diluted from continuing operations - post impairment of goodwill | 3 | (0.01)p | (0.02)p | (0.39)p |
| Basic and Diluted from continuing operations - pre impairment of goodwill | 3 | (0.01)p | (0.02)p | (0.04)p |
OXECO PLC
CONDENSED CONSOLIDATED CHANGES IN EQUITY
FOR THE SIX MONTHS TO 31 JULY 2009
| Attributable to the equity holders of the parent | ||||
| Share Capital £000 | Share Premium £000 | Revenue Reserve £000 | Total Equity £000 | |
| At 31 January 2008 | 600 | 4,333 | (63) | 4,870 |
| Loss for the period | - | - | (102) | (102) |
| At 31 July 2008 | 600 | 4,333 | (165) | 4,768 |
| Loss for the period | - | - | (2,246) | (2,246) |
| At 31 January 2009 | 600 | 4,333 | (2,411) | 2,522 |
| Loss for the period | - | - | (143) | (143) |
| At 31 July 2009 | 600 | 4,333 | (2,554) | 2,379 |
OXECO PLC CONDENSED CONSOLIDATED BALANCE SHEET
| Notes | 31 July 2009 | 31 July 2008 | 31 January 2009 | |
| (Unaudited) | (Unaudited) | (Audited) | ||
| £000 | £000 | £000 | ||
| ASSETS Non-current assets | ||||
| Property, plant and equipment | - | 1 | 2 | |
| Intangible assets - goodwill | - | 2,120 | - | |
| Total non-current assets | - | 2,121 | 2 | |
| Current assets | ||||
| Trade and other receivables | 18 | 38 | 28 | |
| Cash and cash equivalents | 2,416 | 2,641 | 2,534 | |
| Total current assets | 2,434 | 2,679 | 2,562 | |
| TOTAL ASSETS | 2,434 | 4,800 | 2,564 | |
| LIABILITIES | ||||
| Current Liabilities | ||||
| Trade and other payables | (55) | (30) | (42) | |
| Current taxation | - | (2) | - | |
| TOTAL LIABILITIES | (55) | (32) | (42) | |
| NET ASSETS | 2,379 | 4,768 | 2,522 | |
| EQUITY | ||||
| Attributable to equity holders of the parent | ||||
| Share capital | 4 | 600 | 600 | 600 |
| Share premium | 4,333 | 4,333 | 4,333 | |
| Revenue reserve | (2,554) | (165) | (2,411) | |
| TOTAL EQUITY SHAREHOLDERS' FUNDS | 2,379 | 4,768 | 2,522 |
Approved by the Board and authorised for issue on 23 October 2009.
M A Bretherton
Executive Chairman
OXECO PLC
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 31 JULY 2009
| Six months to 31 July 2009 | Six months to 31 July 2008 | Year to 31 January 2008 | |
| (Unaudited) | (Unaudited) | (Audited) | |
| £000 | £000 | £000 | |
| OPERATING ACTIVITIES | |||
| Operating loss from continuing operations | (66) | (182) | (2,478) |
| Loss before tax from discontinued operations | (83) | - | - |
| Depreciation of property, plant and equipment | 2 | 1 | 1 |
| Impairment of goodwill | - | - | 2,120 |
| Decrease/(increase) in trade and other receivables | 10 | (9) | 1 |
| Increase/(decrease) in trade and other payables | 13 | (7) | 4 |
| Tax paid | - | - | (2) |
| Net cash outflow from operations | (124) | (197) | (354) |
| INVESTING ACTIVITIES | |||
| Interest received | 6 | 77 | 127 |
| Net cash inflow from investing activities | 6 | 77 | 127 |
| DECREASE IN CASH AND CASH EQUIVALENTS | (118) | (120) | (227) |
| Cash and cash equivalents at start of period | 2,534 | 2,761 | 2,761 |
| CASH AND CASH EQUIVALENTS AT END OF PERIOD | 2,416 | 2,641 | 2,534 |
OXECO PLC
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 JULY 2009
1) SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The interim financial statements of Oxeco Plc are unaudited condensed consolidated financial statements for the six months to 31 July 2009. These include unaudited comparatives for the six months to 31 July 2008 together with audited comparatives for the year to 31 January 2009.
The condensed consolidated financial statements have been prepared under the historic cost convention in accordance with International Financial Reporting Standards as adopted by the European Union and incorporate the financials of Oxeco Plc for the period and its subsidiary undertaking from the date of acquisition.
The accounting policies adopted are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 January 2009.
The condensed consolidated financial statements do not constitute statutory accounts. The statutory accounts for the year to 31 January 2009 have been reported on by the Company's auditors and have been filed with the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under section 237(2) or 237(3) of the Companies Act 1985.
2) TAXATION
The accrued tax charge for the six month period is based on an estimated effective tax rate of nil, after allowance for utilisation of tax losses brought forward in subsidiaries, (period to 31 July 2008: effective tax rate nil, period to 31 January 2009: effective tax rate nil).
3) LOSS PER SHARE
| Six months to 31 July 2009 | Six months to 31 July 2008 | Year to 31 January 2009 | |
| (Unaudited) | (Unaudited) | (Audited) | |
| Post impairment of goodwill | £'000 | £'000 | £'000 |
| Profit/(loss) for the period represented by: | |||
| Continuing operations | (60) | (102) | (2,348) |
| Discontinued operations | (83) | - | - |
| Total | (143) | (102) | (2,348) |
| Weighted average number of shares | Number | Number | Number |
| Weighted average number of shares in issue during the period | 600,000 | 600,000 | 600,000 |
| Earnings per share | |||
| Basic and diluted on profit/(loss) for period | (0.02)p | (0.02)p | (0.39)p |
| Basic and diluted on profit/(loss) for period from continuing operations | (0.01)p | (0.02)p | (0.39)p |
| Six months to 31 July 2009 | Six months to 31 July 2008 | Year to 31 January 2009 | |
| (Unaudited) | (Unaudited) | (Audited) | |
| Pre impairment of goodwill | £'000 | £'000 | £'000 |
| Profit/(loss) for the period represented by: | |||
| Continuing operations | (60) | (102) | (228) |
| Discontinued operations | (83) | - | - |
| Total | (143) | (102) | (228) |
| Weighted average number of shares | Number | Number | Number |
| Weighted average number of shares in issue during the period | 600,000 | 600,000 | 600,000 |
| Earnings per share | |||
| Basic and diluted on profit/(loss) for period | (0.02)p | (0.02)p | (0.04)p |
| Basic and diluted on profit/(loss) for period from continuing operations | (0.01)p | (0.02)p | (0.04)p |
| 4) SHARE CAPITAL | Number | £'000 |
| Authorised ordinary shares of 1p: | ||
| At 31 July 2009, 31 January 2009 and 31 July 2008 | 1,000,000,000 | 1,000 |
| Allotted, issued and fully paid ordinary shares of 1p: | ||
| At 31 July 2009, 31 January 2009 and 31 July 2008 | 600,000,000 | 600 |
5) CLOSURE OF SUBSIDIARY BUSINESS
In June 2007 the Company acquired 100 per cent. of the issued share capital in Oxray Limited, a start up business that aimed to became a leading provider of molecular structure determination services. By early this year Oxray had substantially completed the development of its novel X-ray crystallography structure determination software but the results of marketing efforts to establish a solid customer base had been disappointing. Also, Oxray had not been able to strengthen and develop its product service offering through bolt-on acquisitions in this field as originally envisaged in June 2007.
The Company's investment in Oxray was written down to nil in its Financial Statements for the year ended 31 January 2009 as released on 17 April 2009. Subsequent efforts to secure a commercial exit from the Oxray business were not successful and the Directors therefore concluded in July 2009 that the most prudent course of action in the current economic climate was to stop any further investment in Oxray with an emphasis on preserving the Group's cash. Oxray has now become a dormant subsidiary whilst retaining control of the underlying intellectual property ("IP"). In addition, the Company has transferred an equity stake of 15 per cent. in this subsidiary to Oxray's former Commercial Manager, Richard Cooper, as an incentive to help potentially realise some future value from the IP.
The results of Oxray for the period from 1 February 2009 have been classified within discontinued operations in the consolidated financial statements and comprise revenue of £12,000 with related loss after tax of £83,000.
6) RELATED PARTY TRANSACTIONS
During the period the Company entered into the following transactions with Ora Capital Limited (formerly Ora Capital Partners Plc) which as at 31 July 2009 held 45.25% of the Company's issued share capital.
| Six months to 31 July 2009 | Six months to 31 July 2008 | Year to 31 January 2009 | |
| (Unaudited) | (Unaudited) | (Audited) | |
| £000 | £000 | £000 | |
| Management consultancy fees charged by ORA | 8 | 6 | 12 |
During the period the Company's wholly owned subsidiary, Oxray Ltd, borrowed £73,000 (31 July 2008: £nil) from the Company for working capital purposes. The loan is non-interest bearing, is repayable on demand and the outstanding balance at 31 July 2009 was £373,000 (31 July 2008: £200,000), however a provision of £300,000 was made against this loan in the year to 31 January 2009 and a further £73,000 provision made in the half year to 31 July 2009.
7) INTERIM FINANCIAL REPORT
A copy of this interim report will be distributed to shareholders and is also available on the Company's website at www.oxecoplc.com.