TSTR.L Regulatory News (TSTR)

RNS Number : 4506Q

Canisp PLC

03 August 2010

 

3 August 2010

Canisp plc

("Canisp" or "the Company" or "the Group")

 

Preliminary results for the year ended 31 March 2010

 

Canisp (AIM:CN.) announces that the Company's annual report and accounts for the year ended 31 March 2010 have been posted to shareholders today and are also available to be viewed or downloaded from the Company's website at: www.canispplc.com.

 

Highlights

 

·; Canisp has not undertaken any trading activities during the year but has undertaken post completion obligations in relation to the disposal of The Airtime Group business and reviewed potential acquisition opportunities.

 

·; The Company's initial review of potential acquisition targets included technology businesses but none of these were considered to have sufficient merit to put before shareholders and the decision was taken to widen the search and to consider businesses from other sectors.

 

·; The Group no longer has any future requirement for The Airtime Group Limited (which has been effectively dormant since the disposal of its business on 31 March 2009) and steps are being taken to wind up the company.

 

·; The Group has recorded a loss for the year from continuing operations of £202,000 (2009: loss £41,000) and a profit from discontinued operations of £105,000 (2009: profit £228,000, including a profit on disposal of £274,000). The overall loss after taxation attributable to shareholders was £97,000 (2009: profit £187,000).

 

Post Balance Sheet Events

 

·; On 23 July 2010, the directors of Canisp (the "Directors") announced that the Company entered into a conditional agreement to acquire Tri-Star*, for a maximum consideration of £300,000 (the "Proposed Acquisition").

·; The consideration is to be satisfied as to £150,000 payable in cash on completion of the Proposed Acquisition, with a further £150,000 payable in cash subject to certain milestones being achieved.

 

Michael Hirschfield, Canisp's Executive Chairman, commented:"The Board believes that rare minerals will become an increasingly economically important sector and that the proposed acquisition of the antimony business will provide Canisp with the basis to build a new resource based business, and looks forward to making a further announcement in respect of the Proposed Acquisition later today."

 

 

Annual General Meeting

 

Notice is given that the annual general meeting ("AGM") of the members of the Company will be held at the offices of Fladgate LLP, 16 Great Queen Street, London, WC2B 5DG on Thursday 26 August 2010 at 11.00am. The AGM Notice, form of proxy and annual report and accounts will today be posted to all shareholders, and will shortly be available to be viewed or downloaded from the Company's website at www.canispplc.com.

 

\* The full name of Tri-Star is Üç Yildiz Antimon Madencilik Ithalet Ve Ihracat Sanayi ve Ticaret Anonim Sirketi.

 

www.canispplc.com

 

Enquiries:

 

Strand Hanson Limited (Nomad) James Harris / Paul Cocker / Liam Buswell	Tel: +44 (0)20 7409 3494
Keith, Bayley, Rogers & Co Limited (Broker) Simon Frost / Brinsley Holman	Tel: +44 (0)20 3100 8300
Hansard Communications Justine James /John Bick	Tel: +44 (0)20 7245 1100

 

 

CHAIRMAN'S STATEMENT

 

I present the Group's audited results for the year ended 31 March 2010. The Group has not undertaken any trading activities during this year but has undertaken post completion obligations in relation to the disposal of The Airtime Group business and reviewed potential acquisition opportunities.

 

Our initial review of potential acquisition targets included technology businesses, but none of these were considered to have sufficient merit to put before shareholders and the decision was taken to widen our search and to consider businesses from other sectors. On 23 July 2010, the Company was pleased to announce that an antimony mineral resource business based in Turkey had been identified (referred to as Tri-Star, the full name of Tri-Star is Üç Yildiz Antimon Madencilik Ithalet Ve Ihracat Sanayi ve Ticaret Anonim Sirketi.) and that Canisp entered into a conditional agreement to acquire Tri-Star for a maximum consideration of £300,000. A detailed announcement, AIM Admission document and Notice of General Meeting will be released later today in connection with this acquisition. In the circumstances, the Group no longer has any future requirement for The Airtime Group Limited (which has been effectively dormant since the disposal of its business on 31 March 2009) and steps are being taken to wind up the company.

 

Results

 

Throughout this period of restructuring the Board has been committed to maintaining low operating costs. Accordingly, the Group has recorded a loss for the year from continuing operations of £202,000 (2009: loss £41,000) and a profit from discontinued operations of £105,000 (2009: profit £228,000, including a profit on disposal of £274,000). The overall loss after taxation attributable to shareholders was £97,000 (2009: profit £187,000). No dividend is proposed.

 

Board Changes

 

On 21 September 2009 Ian Tickler stepped down from the board as non-executive director and I would like to thank Ian for his contribution to the Company and wish him well in the future with his other business interests. I should like to welcome Joanna Unden who was appointed to the board on 21 September 2009. Further board changes are proposed as part of the acquisition of Tri-Star and details will be sent out in the AIM Admission document which will also include the notice of annual general meeting.

 

Outlook

 

The Board believes that rare minerals will become an increasingly economically important sector and that the proposed acquisition of the antimony business will provide Canisp with the basis to build a new resource based business. At the forthcoming annual general meeting a resolution will be proposed to change the name of the Company to Tri-Star Resources plc.

 

 

Mike Hirschfield

Chairman

3 August 2010

 

 

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 March 2010

 

			2010	2009
	Note		£'000	£'000
Administrative expenses			(270)	(156)
Total administrative expenses			(270)	(156)
Unrealised fair value gain on financial liabilities at fair value through profit and loss			-	48
Loss from operations			(270)	(108)
Finance income			72	244
Finance costs			(2)	(177)
Loss before taxation			(200)	(41)
Taxation expense	2		(2)	-
Loss for the year from continuing activities			(202)	(41)
Trading profit/(loss) from discontinued operations	4		58	(46)
Profit on disposal of discontinued operations	4		47	274
Profit from discontinued operations			105	228
(Loss)/profit after taxation and (loss)/profit attributable to the equity holders of the Company			(97)	187
Other comprehensive income			-	-
Total comprehensive (expenditure)/income for the period			(97)	187
Basic and diluted (loss)/earnings per ordinary share (pence)
Continuing operations	3		(0.04p)	(0.04p)
Discontinued operations			0.02p	0.21p
Total			(0.02p)	0.17p

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

At 31 March 2010

 

	Share capital	Share premium	Other reserves	Retained  earnings	Total  equity
	£'000	£'000	£'000	£'000	£'000
At 1 April 2008	1,054	4,017	129	(6,760)	(1,560)
Issue of share capital	161	-	-	-	161
Transactions with owners	161	-	-	-	161
Profit for the year	-	-	-	187	187
Transfer of reserves	-	-	(129)	129	-
Total comprehensive income for the year	-	-	(129)	316	187
Balance at 31 March 2009	1,215	4,017	-	(6,444)	(1,212)
Issue of share capital	1,005	75	-	-	1,080
Transactions with owners	1,005	75	-	-	1,080
Loss for the year	-	-	-	(97)	(97)
Total comprehensive income for the year	-	-	-	(97)	(97)
Balance at 31 March 2010	2,220	4,092	-	(6,541)	(229)

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 31 March 2010

 

			2010	2009
	Note		£000	£000
ASSETS
Current assets
Cash at bank and in hand			199	264
Trade and other receivables			81	347
Total current assets			280	611
Total assets			280	611
LIABILITIES
Current liabilities
Convertible loan	5		386	1,383
Trade and other payables			123	440
Total current liabilities			509	1,823
Total liabilities			509	1,823
EQUITY
Share capital	6		2,220	1,215
Share premium			4,092	4,017
Retained earnings			(6,541)	(6,444)
Total equity attributable to equity holders of the Company			(229)	(1,212)
Total equity and liabilities			280	611

 

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 31 March 2010

 

			2010	2009
			£000	£000
Cash flows from operating activities
Continuing operations
Loss after taxation			(202)	(41)
Unrealised fair value gain on financial liabilities at fair value through profit and loss			-	(48)
Finance costs			2	177
Finance income			(72)	(11)
Net gain on modification of convertible loan			-	(233)
Decrease in trade and other receivables			294	-
(Decrease)/increase in trade and other payables			(270)	43
Net cash outflow from operating activities from continuing operations			(248)	(113)
Discontinued operations
Net cash inflow/(outflow) from operating activities from discontinued operations			30	(96)
Net cash outflow from operating activities			(218)	(209)
Cash flows from investing activities
Continuing operations
Finance cost			(2)	-
Finance income			3	11
			1	11
Discontinued operations
Net cash inflow from financing activities from discontinued operations			-	593
Net cash inflow from investing activities			1	604
Cash flows from financing activities from continuing operations
Proceeds from issue of share capital			570	-
Share issue costs			(15)	-
New loans			-	31
Repayment of loans			(403)	-
Net cash inflow from financing activities			152	31
Net change in cash and cash equivalents			(65)	426
Cash and cash equivalents at beginning of period			264	(162)
Cash and cash equivalents at end of period			199	264

 

 

1 ACCOUNTING POLICIES

Basis of Preparation

The Group financial statements have been prepared under the historical cost convention and in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS). The Company's shares are listed on the AIM market of the London Stock Exchange.

 

The principal accounting policies of the Group, which have been applied consistently, are set out in the annual report and financial statements.

Going concern

The Directors have prepared cash flow forecasts for the period ending 31 December 2011, which assume the acquisition of the business referred to as Tri-Star, which had the right to exploit an antimony mine in Turkey and that funding will be obtained to carry out an initial assessment of that antimony mine. The funding to settle the initial consideration for the acquisition by Tri-Star is to come from a share subscription and the funding for the initial assessment of the antimony mine will be provided by a third party funder. If the economic viability of the antimony mine is confirmed by the initial assessment, further funding will be secured to fully develop and exploit the antimony mine. The Directors have also secured confirmation from the convertible debt holder, that it will not seek repayment of the amount due to it for a period of at least twelve months from the date of signing the financial statements. The forecasts supported by the share subscription, the funding and the agreement from the convertible debt holder demonstrate that the Group has sufficient finance facilities available to allow it to continue in business for a period of at least twelve months from the date of approval of these financial statements. Accordingly, the financial statements have been prepared on a going concern basis.

 

In the unlikely event that shareholder approval for the acquisition of Tri-Star is not obtained, the Directors believe that the company has adequate resources to meet its existing liabilities as they fall due.

 

2 Taxation

There was a tax charge for the year of £2,000 (2009: £nil).

 

Unrelieved tax losses of approximately £5.1million (2009: £5.1 million) remain available to offset against future taxable trading profits. The unprovided deferred tax asset at 31 March 2010 is £1,436,000 (2009: £1,428,000) which has not been provided on the grounds that it is uncertain when taxable profits will be generated by the Group to utilise those losses.

 

The tax assessed for the period differs from the standard rate of corporation tax in the UK as follows:

 

		2010	2010	2009	2009
		£'000	%	£'000	%
(Loss)/profit before taxation:	`
Continuing operations		(200)		(41)
Discontinued operations		105		228
		(95)		187
(Loss)/profit multiplied by standard rate of corporation tax in the UK		(26)	(28)	52	28
Effect of:
Expenses not deductible for tax purposes		19	20	26	14
Capital allowances in excess of depreciation		-	-	(5)	(3)
Income not assessable for tax		(16)	(17)	(68)	(36)
Other short-term timing differences		-	-	(7)	(4)
Deferred tax asset not recognised		23	25	2	1
Adjustment in respect of prior years		(2)	(2)	-	-
Total tax charge for year		(2)	(2)	-	-

 

3 (LOSS)/EARNINGS PER SHARE

The calculation of the basic (loss)/earnings per share is calculated by dividing the consolidated (loss)/profit attributable to the equity holders of the Company by the weighted average number of ordinary shares in issue during the year.

 

 

		2010	2009
		£'000	£'000
Loss attributable to equity holders of the Company
Continuing operations		(202)	(41)
Discontinued operations		105	228
		(97)	187

 

		2010	2009
		Number	Number
Weighted average number of ordinary shares		425,204,809	108,538,782

 

The impact of the convertible loan on the (loss)/earnings per share is anti dilutive.

 

4 PROFIT from discontinued operations

On 31 March 2009, The Airtime Group Limited ('TAG', a wholly owned subsidiary of Canisp plc) disposed of certain trade and assets for consideration of £652,000 plus deferred consideration of £335,000. Of the deferred consideration, £235,000 (net of £97,000 provision) related to trade receivables and £100,000 was held in escrow until 31 March 2010, assuming that no valid claims were made by the purchaser under the indemnities and warranties included in the sale and purchase agreement. As this business represented the whole of the Group's telecommunications activities it was considered to be a discontinued operation.

On 11 June 2009, TAG assigned the amounts held in escrow to Canisp plc for consideration of £1. At 31 March 2010, £70,000 of the amount held in escrow remained within other receivables, which has subsequently been received.

 

In respect of the deferred consideration, an additional £58,000 which had previously been provided against was received by TAG during the year, resulting in a reduction in the bad debt provision of £58,000. The trade receivables balances were provided for within the discontinued operations line at 31 March 2009, therefore the reduction in provision has been disclosed as a trading profit from discontinued operations on the statement of comprehensive income.

 

On 10 January 2010, TAG appointed RSM Tenon Recovery to act as nominee for completion of a Company Voluntary Arrangement. As a result of this, the Group is no longer liable for the equity shareholder deficit of TAG (£49,000 at 10 January 2010) and therefore a profit of £47,000 has been recognised within the consolidated statement of comprehensive income. The profit relates to discontinued operations therefore has been disclosed as such.

5 CONVERTIBLE LOAN and other loans

At 31 March 2008, a convertible loan of £528,000 and other loans of £1,041,000 were due to Corvus Capital Inc. ("Corvus"), which was a substantial shareholder in the Company. There were no fixed terms of repayment for these loans and no interest was payable. The convertible loan was convertible at the option of the holder into a variable number of shares in the Company. An embedded derivative of £48,000 was recognised at 31 March 2008 in respect of this conversion option.

 

In April 2008 the Company received a further loan of £31,000 from Corvus, increasing the total amount owed to £1,600,000. On 22 May 2008 the Company agreed with Corvus that Corvus may convert all or part of the amount owed up to the amount of £1,600,000.The option may be exercised by the holder to convert the loan at any time at 1p per share. If the conversion did not occur by 31 December 2009, the loan would become interest bearing at two percent per annum, and would be repayable on demand. The loan remained capable of being converted after 31 December 2009 on the above terms.

 

This conversion option represents equity, however, the option has not been recognised as the market value of the Company's shares at the grant date of the option in May 2008 was below par and, therefore, the directors do not consider the value of this option to be material to the financial statements.

 

The revision of the repayment terms attached to the convertible loan in May 2008 represented a substantial modification of this agreement. Accordingly, the financial liability of £1,600,000 held at the date of the revision was derecognised and the fair value of the revised convertible loan, being £1,367,000 was recognised in the financial statements. The net gain of £233,000 in respect of this modification was recognised in the consolidated statement of comprehensive income within finance income. In addition interest of £177,000 was recognised in the consolidated statement of comprehensive income increasing the fair value of the loan to £1,544,000. The convertible loan has subsequently been measured at amortised cost.

 

On 19 January 2009, £161,500 of the convertible loan was converted into ordinary shares in the Company at par. After the interest expense on this loan, the balance at 31 March 2009 was £1,382,500.

 

The following conversions into ordinary shares were made during the current year; £300,000 on 18 May 2009, £50,000 on 10 July 2009, £85,000 on 19 October 2009, £50,000 on 16 November 2009 and £40,000 on 9 February 2010. Loan repayments of £405,000 were made during the year including interest charges of £2,000 in respect of the period 1 January to 31 March 2010. During the year there was a write off of £125,000 of the loan outstanding and the £56,000 fair value adjustment made in 2009 was released as most of this loan has now been converted. The outstanding loan balance at 31 March 2010 was therefore £385,500.

6 share capital

		2010	2009
		£'000	£'000
Authorised
4,500,000,000 deferred shares of 0.1p (nil)		4,500	-
500,000,000 ordinary shares of 0.1p (500,000,000 ordinary shares of 1p each)		500	5,000
		5,000	5,000
Allotted, issued and fully paid
1,363,925,475 deferred shares of 0.1p		1,364	-
856,547,275 ordinary shares of 0.1p (2009: 121,547,275 ordinary shares of 1p)		856	1,215
		2,220	1,215

 

The movement in the ordinary share capital is analysed as follows:

 

	Ordinary shares		Deferred shares
	No.	£'000	No.	£'000
Allotted, issued and fully paid
At 1 April 2009	121,547,275	1,215	-	-
Issue of shares	30,000,000	300	-	-
	151,547,275	1,515	-	-
Impact of share split	-	(1,364)	1,363,925,475	1,364
	151,547,275	151	1,363,925,475	1,364
Issue of shares	705,000,000	705	-	-
At 31 March 2010	856,547,275	856	1,363,925,475	1,364

 

 

The number of 0.1p ordinary shares in issue is in excess of the authorised number of 0.1p shares. A resolution is being put to shareholders to remove the restriction as to the maximum authorised share capital.

 

On 18 May 2009, 30,000,000 Ordinary Shares of 1p each were issued at par following the conversion of £300,000 of the convertible loan in accordance with the convertible loan facility agreement.

 

Following the approval of its shareholders at the Company's annual general meeting on 23 June 2009 of the share division of all existing issued and un-issued ordinary shares in the capital of the Company ('Ordinary Shares') of 1p each into one Ordinary Share of 0.1p each and nine deferred shares of 0.1p each, application was made for 151,547,275 Ordinary Shares of 0.1p each to be admitted to trading on AIM. Admission of these 151,547,275 Ordinary Shares of 0.1p each occurred at 8.00 am on 21 July 2009. At 31 March 2010 there were 856,547,275 Ordinary Shares of 0.1p each in issue (each of which are voting share). The deferred shares have no voting rights and are not eligible for dividends.

 

On 10 July 2009, 50,000,000 Ordinary Shares of 0.1p each were issued at par following the conversion of £50,000 of the convertible loan in accordance with the convertible loan facility agreement.

 

On 19 October 2009, 85,000,000 Ordinary Shares of 0.1p each were issued at par following the conversion of £85,000 of the convertible loan in accordance with the convertible loan facility agreement.

 

On 16 November 2009, 50,000,000 Ordinary Shares of 0.1p each were issued at par following the conversion of £50,000 of the convertible loan in accordance with the convertible loan facility agreement and 450,000,000 Ordinary shares of 0.1p each were issued at par for cash.

 

On 9 February 2010, 40,000,000 Ordinary Shares of 0.1p each were issued at par following the conversion of £40,000 of the convertible loan in accordance with the convertible loan facility agreement.

 

On 22 October 2009, 30,000,000 Ordinary Shares of 0.1p each were issued at 0.4p per share for cash.

 

7 post balance sheet events

On 23 July 2010, the directors of Canisp (the "Directors") announced that the Company entered into a conditional agreement to acquire Tri-Star*, for a maximum consideration of £300,000 (the "Proposed Acquisition").

Tri-Star, which is incorporated in Turkey, holds licences and permits in respect of the mining and exploitation of mineral rights to the Goynuk antimony mine (the "Goynuk Mine"), in the Gediz district of Turkey. The exploitation licences grant the company the right to exploit non-ferrous metals and covers base and precious metals such as copper, lead, zinc, arsenic, antimony, gold and silver.

In the financial year ended 31 December 2009, Tri-Star generated a loss of 17,124 Turkish Lira (approximately £7,316) and had net assets of 466,368 Turkish Lira (approximately £199,256) as at that date.

The consideration is to be satisfied as to £150,000 payable in cash on completion of the Proposed Acquisition, with a further £150,000 payable in cash subject to certain milestones being achieved (the "Deferred Consideration").

The Proposed Acquisition constitutes a reverse takeover under the AIM Rules for Companies, and accordingly is subject to shareholder approval. Assuming the Waiver is granted, a detailed circular, comprising an AIM admission document, containing full details of the Waiver and the Proposed Acquisition, will be sent to the Company's shareholders, seeking shareholder approval for, inter alia, the Waiver, and the Proposed Acquisition and a change in the name of the Company to Tri-Star Resources plc.

As a part of the Proposed Acquisition, the Company intends to effect a number of board changes, with the appointment of a number of directors with relevant resources expertise, further details of which are set out in the Company's AIM admission document.

 

8 publication of non-statutory accounts

The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in section 434 of the Companies Act 2006.

 

The consolidated statement of financial position at 31 March 2010 and consolidated statement of comprehensive income, consolidated statement of changes in equity, consolidated statement of cash flows and associated notes for the year then ended have been extracted from the Group's 2010 financial statements upon which the auditors opinion is unqualified.

 

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