Final Results for year ended 31 Dec 2013
15 December 2014
CLEAR LEISURE PLC
("Clear Leisure" or "the Group" or "the Company")
FINAL CONSOLIDATED AUDITED RESULTS
For the year Ended 31 December 2013
Clear Leisure today announces its audited results for the year ended 31
December 2013.
Copies of the Company's Annual Report and Accounts will be sent to shareholders
will be sent to shareholders and will be available on the Company's website
www.clearleisure.com today. Further copies may be obtained directly from the
Company's registered office at Clear Leisure plc, 45 Pont Street, London SW1X
0BD.
For further information please contact:
Clear Leisure plc +39 02 4795 1642
Alfredo Villa, CEO
Cairn Financial Advisers LLP (Nominated Adviser) +44 (0) 20 7148 7900
Jo Turner / Liam Murray
Peterhouse Corporate Finance (Broker) +44 (0) 20 7469 0935
Heena Karani
Leander (Financial PR) +44 (0) 7795 168 157
Christian Taylor-Wilkinson
About Clear Leisure plc
Clear Leisure Plc (AIM: CLP) is an AIM listed investment company pursuing a
dynamic strategy to create a comprehensive portfolio of companies primarily
encompassing the leisure and real estate sectors mainly in Italy but also other
European countries. The Company may be either a passive or active investor and
Clear Leisure's investment rationale ranges from acquiring minority positions
with strategic influence through to larger controlling positions. For further
information, please visit, www.clearleisure.com
The financial information set out below does not constitute the Company's
statutory accounts for the periods ending 31 December 2013 or 31 December
2012. The financial information for 2013 and 2012 is derived from the
statutory accounts for those years. The statutory accounts for 2012 have been
delivered to the Registrar of Companies. The statutory accounts for 2013 will
be delivered to the Registrar of Companies following the Company's annual
general meeting. The auditors, Welbeck Associates, have reported on the 2013
and 2012 accounts. The report for 2013 was qualified as disclosed in the
Independent Auditors' Report. This preliminary announcement has been prepared
on the basis of the accounting policies as stated in the financial statements
for the period ended 31 December 2013. The information included in this
preliminary announcement is based on the Company's financial statements, which
are prepared in accordance with International Financial Reporting Standards
(IFRS).
CHAIRMAN'S STATEMENT
The past 12 months have been very challenging for the Company, mostly due to
the unforeseen closing and subsequent write-down of our tour operator and hotel
management company, ORH SpA, at the start of 2014. This loss was particularly
hard felt following ORH's positive contribution to the Group in the first six
months of 2013.
The Board's initial investigations in to the operations of the ORH Group
reveled that there were serious financial irregularities in its operations and
this left the Board with no option but to indefinitely suspend operations and
write down the entire investment to zero in 2013. This resulted an exceptional
charge of Euro 7.4 million. The Company will continue to pursue legal action
against the former directors and owners of ORH S.p.A through both civil and
criminal courts in Italy, with the view that compensation will be recovered in
due course.
The collapse of the Ora Hotel chain, together with the Board's decision to
adopt a more prudent approach to the valuations placed on the Group's other
assets, this had contributed to the delay in publishing the accounts for 2013.
The Italian economy continues to deteriorate, a situation that has been in
evidence since 2009, with acceleration in the last three years. This has
particularly impacted the leisure and hotel sectors, where the Company's assets
operate, leading to impairment losses and provisions of Euro 5.3 million, which
taken together with the write down of our investment in ORH, represents much of
the Company's loss for the year.
However and despite these events, the Company has continued its strategy to
restructure its holdings, reduce its debt position and overheads, establish a
more accurate valuation for each of its assets, and to create more desirable
conditions to improve the salability of certain assets, such as the Mediapolis
Investment.
The Board is pleased with the initial results of this strategy and expects to
be able to present to its shareholders a clearer and more positive financial
position and asset valuation.
Despite the adverse and difficult economic conditions in Italy in the past few
years the Board honored its undertaking to shareholders that was made in
February 2013, to not issue further Clear Leisure stock to support its business
activities.
The current Net Asset Value per share in the financial statements is 7 pence
per share, and is considerably higher than the last closing price of our stock
and above the 2013
STRATEGIC REPORT
The Directors present their Strategic Report on Clear Leisure plc and its
subsidiary undertakings ("the Group") for the year ended 31 December 2013.
The Strategic Report is a new statutory requirement under section 414A of the
Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013
and is intended to provide fair, balanced and understandable information that
enables the Directors to be satisfied that they have complied with section 172
of the Companies Act 2006, which sets out the Directors' duty to promote the
success of the Group and Company.
REVIEW OF THE BUSINESS AND DEVELOPMENTS DURING THE YEAR
During the year, the Group completed a placing of a zero coupon convertible
bond at a conversion price of 15p per share and issued at 78% of face value.
The Group sold €3,000,000 to different European institutions, with the
remaining €6,900,000 held in the Group's treasury account. The net proceeds of
the issue were used to buy back, at a discount, existing debt positions.
In October 2013 the Company announced that ORH Spa had temporarily suspended
operations pending an investigation into suspected financial irregularities
within the ORH group. The investigation confirmed the Board's suspicions that
there had been serious financial irregularities within the ORH group, and on 3
December 2013, the Group announced that legal action had resulted in the
settlement of its investment in the subsidiary. The settlement resulted in a
disposal of part of the Group's holding in ORH S.p.A. In addition a liquidator
was appointed by a tribunal in Milan on 2 February 2014. These two events have
resulted in the Group no longer holding a controlling interest in ORH S.p.A.
The Group made progress in settling creditors throughout the year. On 6
February 2013, the Group entered into a conditional agreement with certain
creditors to buy back £2,704,594 of Clear Leisure debt for a cash amount of £
1,576,165. The Group repaid debt of EUR 230,000 to an outstanding creditor by
issuing 3.2 million Clear Leisure Ordinary shares at a price of 6p per share.
The Group repaid clients of Eufingest S.A. the amount of £600,000 in settlement
of a short-term loan through the issue of 15 million Clear Leisure Ordinary
shares at a price of 4p per share.
Mr Alfredo Villa, CEO and Interim Chairman of the Group has offered to forgo
his salary of £120,000 for a period of one year. Mr Villa has also proposed
that the outstanding salary of £85,000 owed to him in this current financial
year, ending 31 December 2013, may be written-off or converted into Clear
Leisure Plc ordinary shares should the Company undertake a new equity placing
at any time in the next 12 months. Mr Villa made a loan to the Company of EUR
50,000 in conjunction with the external audit of ORH SpA and to expedite the
operational recovery of the hotel chain. Mr Villa has agreed to accept
repayment of the loan within the next 12 months, or that he may convert this
amount into Clear Leisure Plc ordinary shares.
The Group received an unsolicited, but binding and fully-financed offer from
Generali Investimenti Holding , a Milan based building contractor to acquire
the Company's entire holding (directly and indirectly held by the Company) in
Mediapolis S.p.A. The offer was between €20-€30m in cash or stocks based on
certain conditions and further details of this offer is available in the
regulatory news issued on that day.
Board changes
On 11 February 2013, the Group announced that Mr Enrico Petocchi and Mr Dominic
White both resigned as non-executive directors of the Company.
On 29 August 2013, the Group announced that Cesare Suglia, Executive Director,
stepped down from the Board and left the Company.
On 18 October 2013, the Group announced the resignation of Luke Johnson as
non-Executive Chairman and appointed Alfredo Villa as Interim Chairman.
Future developments
On 6 January 2014, the Group announced that it increased its interest in the
Italian sushi restaurant chain, Sosushi Company Srl from 51 per cent. to 100
per cent. Consideration will take the form of a credit compensation
agreement between the vendor and the Group with no additional cash payment
required.
On 7 January 2014, the Group announced that it received an additional
unsolicited, but binding offer to acquire the Group's entire holding (directly
and indirectly held by the Group) in Mediapolis S.p.A. by Fornest Ltd, a UK
investment company, which manages the interests of certain Italian investors.
On 13 January 2014, the Group announced that further to the announcements on
Mediapolis S.p.A. dated 22 November 2013 and 7 January 2014, the Group
submitted on 10 January 2014 to the Ivrea Tribunal, a formal proposal for the
restructuring of the Mediapolis debt, the "Concordato in Continuità ".
On 27 May 2014, the Group acquired a 100% interest in a specific vehicle which
controls the entire share capital of Hospitality & Leisure Fund (H&L Fund), an
Italian real estate fund regulated by the Italian financial authorities.
Risks and uncertainties
The Group's investments as at 31 December 2013 were all in unlisted
investments, as a result there is no readily available market for sale in order
to arrive at a fair value. The valuation of each investment is appraised on a
regular basis and requires a significant amount of judgement together with
reviewing the cash flows and budgets of the investee company in order to arrive
at a fair value.
The Group has raised funds during the period as discussed in the `Developments
during the year' above. The Directors feel that the amounts raised will not be
sufficient to meet their operating forecasts over the next 12 months, and
further funds will be required to meet the day to day operations of the Group.
Key performance indicators ("KPI's")
The key performance indicators are set out below:
PLC S 31 December 31 December Change %
2013 2012
Net asset value (less minority interests) €16,956,000 €29,455,000 -42.4%
Net asset value - fully diluted per share 0.085 0.1625 -47.7%
(€)
Closing share price 2.125p 4.500p -52.8%
Market capitalisation £4,237,449 £8,154,422 -48.0%
Assessment of business risk
The Board regularly reviews operating and strategic risks. The Group's
operating procedures include a system for reporting financial and non-financial
information to the Board including:
* reports from management with a review of the business at each Board
meeting, focusing on any new decisions/risks arising;
* reports on the performance of investments;
* reports on selection criteria of new investments;
* discussion with senior personnel; and
* consideration of reports prepared by third parties.
Financial risk management
Details of the Group's financial instruments and its policies with regard to
financial risk management are contained in note 25 to the financial statements.
Results for the year and dividends
The loss for the year from continuing operations was €7.4 million (2012: loss
of €2.5 million). Since the Group does not have any distributable reserves, the
Directors are unable to recommend the payment of a dividend.
Going concern
The Group's activities generated a loss from continuing operations of €
7,359,000 (2012: €2,491,000) and had net current liabilities of €16,330,000 as
at 31 December 2013. In addition the Company's shares are currently suspended
on the AIM Market. The Group's operational existence is still dependant on the
ability to raise further funding either through an equity placing on AIM, or
through other external sources, to support the on-going working capital
requirements.
After making due enquiries, the Directors have formed a judgement that there is
a reasonable expectation that the Group can secure further adequate resources
to continue in operational existence for the foreseeable future and that
adequate arrangements will be in place to enable the settlement of their
financial commitments, as and when they fall due.
For this reason, the Directors continue to adopt the going concern basis in
preparing the financial statements. Whilst there are inherent uncertainties in
relation to future events, and therefore no certainty over the outcome of the
matters described, the Directors consider that, based upon financial
projections and dependant on the success of their efforts to complete these
activities, the Group will be a going concern for the next twelve months. If it
is not possible for the Directors to realise their plans, over which there is
significant uncertainty, the carrying value of the assets of the Group is
likely to be impaired.
By order of the Board.
Alfredo Villa
Director
15 December 2014
DIRECTORS' REPORT
The Directors present their report together with the audited financial
statements for the year ended 31 December 2013.
Principal Activity
The principal activity of the Group is that of an investment company pursuing a
strategy to create a portfolio of companies within the leisure, entertainment,
interactive media and financial services sectors.
Directors
The present members of the Board of Directors together with brief biographies
are shown on page 2.
The board comprised the following directors who served throughout the year and
up to the date of this report save where disclosed otherwise beside their name:
Alfredo Villa
Luke Johnson (Resigned 18 October 2013)
Cesare Suglia (Resigned 29 August 2013)
Nilesh Jagatia
Francesco Emiliani
Enrico Petocchi (Resigned 11 February 2013)
Dominic White (Resigned 11 February 2013)
Directors' interests
No Director had a material interest in any contract of significance to the
Company or any of its subsidiaries during the period. No Directors of the
Company have any beneficial interests in the shares of its subsidiary companies
other than Mr. Villa who holds shares in Mediapolis Investments SA.
The interests of the directors who served at the end of the year in the share
capital of the Company at 31 December 2013 and 31 December 2012 were as
follows:
Executive Directors 31 December 2013 Holding 31 December 2012
(2.5p ordinary % (2.5p ordinary
shares) shares)
Alfredo Villa 28,279,039 15.61 28,279,039
The closing market price of the ordinary shares at 31 December 2013 was 2.125p
and the highest and lowest closing prices during the year were 5.165p and
1.310p respectively.
There have been no changes in the Directors' interests between the year end and
30 November 2014.
Remuneration
Remuneration receivable by each Director during the year was as follows:
2013 2013 2013 2012
Board Salary Total Total
fees
€'000 €'000 €'000 €'000
Executive Directors
Alfredo Villa - 140 140 147
Cesare Suglia - - - 82
Nilesh Jagatia - 99 99 40
Non-executive Directors
Gabriele Gresta - - - 12
Edward Burman - - - 24
Haresh Kanabar - - - 24
Alessandro Malacart - - - 24
Justin Drummond - - - 32
Enrico Petocchi - - - 24
Dominic White - - - 103
Total - 239 239 512
None of the Directors had any pension entitlement.
Directors' interests in share options and warrants
At 31 December 2013 no Director had any interest in share options in the
Company.
All former share option plans had lapsed and no options were exercised in any
of the last three financial years.
Significant shareholders
As at 15 December 2014 so far as the directors are aware, the parties who are
directly or indirectly interested in 3 per cent or more of the nominal value of
the Company's share capital are as follows:
Number of ordinary shares %
Eufingest 56,500,000 28.3
Afredo Villa - Chairman 28,279,039 14.2
Luke Johnson 25,000,000 12.5
Conficont Compagn 15,000,000 7.5
TMS-EKAB 11,000,000 5.5
HSBC Global Custody Nominee (UK 9,305,980 4.7
Regilco S.R.L 7,190,000 3.6
Corporate Governance
As an AIM-listed Company, the Company is not required to follow the provisions
of the Corporate Governance Code as set out in the Financial Conduct
Authority's Listing Rules. However, the Directors recognise the importance and
support the principles of good governance.
Directors' liability insurance and indemnity
The Company is in the process of arranging insurance cover in respect of
potential legal action against its Directors. To the extent permitted by UK
law, the Company also intends to indemnify the Directors.
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report of the Directors
and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the directors have prepared the Group and Parent
Company financial statements in accordance with International Financial
Reporting Standards ("IFRS") as adopted by the European Union ("EU"). Under
Company law the directors must not approve the financial statements unless they
are satisfied that they give a true and fair view of the state of affairs of
the Group and the Company and of the profit or loss of the Group for that
period. The Directors are also required to prepare financial statements in
accordance with the AIM rules of the London Stock Exchange.
In preparing these financial statements, the directors are required to:
* select suitable accounting policies and then apply them consistently
* make judgments and accounting estimates that are reasonable and prudent
* state whether applicable IFRSs as adopted by the European Union have been
followed, subject to any material departures disclosed and explained in the
financial statements; and
* prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Group will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group's transactions and disclose with
reasonable accuracy at any time the financial position of the Group and Company
and enable them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the assets of
the Group and Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Group's website.
Legislation in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions. The
Group is compliant with AIM Rule 26 regarding the Group's website.
Disclosure of information to auditor
In the case of each person who was a Director at the time this report was
approved:
* so far as that director is aware there is no relevant audit information of
which the Group's auditor is unaware: and
* that director has taken all steps that the director ought to have taken as
a director to make himself aware of any relevant audit information and to
establish that the Group's auditor is aware of that information.
Events after the reporting period
Details of events after the reporting period have been disclosed in Note 33.
Independent auditor
Welbeck Associates, having expressed their willingness to continue in office,
will be deemed reappointed for the next financial year in accordance with
section 487(2) of the Companies Act 2006 unless the Company receives notice
under section 488(1) of the Companies Act 2006.
By order of the Board.
Alfredo Villa
Director
15 December 2014
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CLEAR LEISURE PLC
We have audited the financial statements of Clear Leisure plc for the year
ended 31 December 2013 which comprise the group statement of comprehensive
income, the group and parent company statements of changes in equity, the group
and parent company statements of financial position, the group and parent
company statements of cash flows, and the related notes. The financial
reporting framework that has been applied in the preparation of the Group and
Parent Company financial statements is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the European Union.
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we are
required to state to them in an auditor's report and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the company and the company's members as a body, for our
audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the statement of Directors' responsibilities set out
on page 8, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view. Our
responsibility is to audit and express an opinion on the financial statements
in accordance with applicable law and International Standards on Auditing (UK
and Ireland). Those standards require us to comply with the Auditing Practices
Board's (APB's) Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the
financial statements sufficient to give reasonable assurance that the financial
statements are free from material misstatement, whether caused by fraud or
error. This includes an assessment of: whether the accounting policies are
appropriate to the Company's circumstances and have been consistently applied
and adequately disclosed; the reasonableness of significant accounting
estimates made by the directors; and the overall presentation of the financial
statements. In addition, we read all the financial and non-financial
information in the Chairman's statement, strategic report and Directors' report
to identify any information that is apparently materially incorrect based on,
or materially inconsistent with, the knowledge acquired by us in the course of
performing the audit. If we become aware of any apparent material misstatements
or inconsistencies we consider the implication for our report.
A description of the scope of an audit of financial statements is also provided
on the APB's website at www.frc.org.uk/apb/scope/private.cfm.
Basis for qualified opinion on financial statements
The audit evidence available to us was limited due to restrictions placed on
the scope of our work as a result of two separate issues.
Firstly, an issue arose as a result of a pending investigation into the
financial irregularities of the subsidiary ORH S.p.A. ("ORH"), the Board
decided to dispose of the Group's investment on 3 December 2013. ORH has since
the year end been put into voluntariy liquidiation which was authorised by the
Milan Tribunal on 2 February 2014, with a liquidator appointed on the same day.
Unfortunately given the irregularities, the situation has resulted in our audit
not being able to obtain sufficient appropriate audit evidence in the Group
financial statements concern:
* the existence of the assets held by ORH, which through the Group's 73.43%
investment had a carrying value of €nil as at 31 December (2012: €19.915m),
within the Group's financial statements.
* the completeness of the liabilities arising from the trading activities of
ORH, which through the Group's 73.43% investment has a carrying value of €
nil as at 31 December 2013 (2012: €15.839m), within the Group's financial
statements.
As such we are unable to confirm the total loss relating to the discontinued
operations in ORH of €7.358m, as discosed in Note 13 and the total loss on
disposal of the investment in the Company accounts of €5.345m, as disclosed in
Note 29.
Secondly, as a result of the Directors not being able to provide confirmation
of the asset position of the various funds managed by Cambria Limited in which
the Group have both direct and indirect interests including their holding in
Cambria Equity Partners LP, we have been unable to obtain sufficient
appropriate audit evidence in the Group financial statements concerning:
* the existence of the assets held by the Group in relation to these
investments, which had a carrying value of €nil as at 31 December 2013
(2012: €nil) within the Group financial statements.
* the impairment of the investment valuation which during the year to 31
December 2013 was €nil (2012: €305,500).
As such we are unable to confirm whether the value attributable to these
investments included within the Group financial statements at €nil is true and
fair, and accordingly whether the accounting treatment adopted by the Company
as outlined above is in accordance with IFRS.
Qualified opinion on the financial statements
In our opinion, except for the possible effects of the matters described in the
Basis for qualified opinion paragraph:
* the financial statements give a true and fair view of the state of the
group's and of the parent company's affairs as at 31 December 2013 and of
the group's loss for the year then ended;
* the group and parent company financial statements have been properly
prepared in accordance with IFRS as adopted by the European Union; and
* the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Opinion on matters prescribed by the Companies Act 2006
In our opinion the information given in the report of the directors for the
financial year for which the financial statements are prepared is consistent
with the financial statements.
Opinion
Emphasis of matter - Going concern
We draw your attention to the disclosure made in note 3 to the financial
statements concerning the Group's ability to continue as a going concern.
These conditions, along with other matters explained in note 3 to the financial
statements, indicate the existence of a material uncertainty which may cast
doubt about the ability of the Group to continue as a going concern. The
Directors have plans to manage the cash flows of the Group to enable it to
continue as a going concern. These plans include the necessary additional
fundraising required to provide the operational working capital requirement for
the next 12 months. The financial statements do not include the adjustments
that would result if the Group was unable to continue as a going concern.
Matters on which we are required to report by exception
In respect solely of the limitation on our work to the assessment of the
accuracy of the accounting records used in the preparation of the financial
statements, described above, we have not obtained all the information and
explanations that we considered necessary for the purpose of the audit.
We have nothing else to report in respect of the following matters where the
Companies Act 2006 requires us to report to you if, in our opinion:
* adequate accounting records have not been kept by the parent company, or
returns adequate for our audit have not been received from branches not
visited by us; or
* the parent company financial statements are not in agreement with the
accounting records and returns; or
* certain disclosures of directors' remuneration specified by law are not
made; or
* we have not received all the information and explanations we require for
our audit.
Jonathan Bradley Hoare (Senior statutory auditor)
for and on behalf of Welbeck Associates
Chartered Accountants and Registered Auditors
London, United Kingdom
15 December 2014
GROUP STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2013
2013 2012
*Restated
Continuing operations €'000 €'000
Revenue 1,291 1,499
Cost of sales (515) (253)
776 1,246
Other operating income - 3,244
Administration expenses (2,285) (1,562)
Operating (loss) / profit (1,509) 2,928
Other gains and losses (5,342) (4,693)
Finance income - 8
Finance charges (468) (687)
Loss before tax (7,319) (2,444)
Tax (40) (47)
Loss for the year from continuing operations (7,359) (2,491)
(Loss)/profit from discontinued operations (7,358) 105
Loss for the year (14,717) (2,386)
Other comprehensive income
Revaluation of land and buildings - 3,000
Exchange translation differences (2) (4)
Total other comprehensive income (2) 2,996
TOTAL COMPREHENSIVE INCOME FOR THE YEAR (14,719) 610
Loss attributable to:
Owners of the parent (13,607) (2,300)
Non-controlling interests (1,110) (86)
Total comprehensive income attributable to:
Owners of the parent (13,609) (221)
Non-controlling interests (1,110) 831
Earnings per share:
Basic and fully diluted loss from continuing (€0.04) (€0.02)
operations
Basic and fully diluted loss from discontinued (€0.04) -
operations
Basic and fully diluted loss per share (€0.08) (€0.02)
*The comparative results of the Group for 2012 have been restated to reflect
the disposal of subsidiary undertakings.
STATEMENTS OF FINANCIAL POSITION AT 31 DECEMBER 2013
Group Group Company Company
2013 2012 2013 2012
€'000 €'000 €'000 €'000
Non-current assets
Goodwill 9 6,652 - -
Other intangible assets 235 4,510 - -
Property, plant and 39,044 41,565 - -
equipment
Available for sale 7,556 7,894 - -
investments
Other receivables - 1,670 23,119 33,495
Total non-current assets 46,844 62,291 23,119 33,495
Current assets
Inventories 135 266 - -
Available for sale - 320 - -
investments
Trade and other receivables 2,106 16,264 - 663
Cash and cash equivalents 1,477 1,843 - 15
Total current assets 3,718 18,693 - 678
Current liabilities
Trade and other payables (6,605) (23,357) (1,014) (3,512)
Borrowings (13,443) (15,340) (2,331) (340)
Total current liabilities (20,048) (38,697) (3,345) (3,852)
Net current (liabilities)/ (16,330) (20,004) (3,345) (3,174)
assets
Total assets less current 30,514 42,287 19,774 30,321
liabilities
Non-current liabilities
Borrowings (4,959) (2,222) (2,368) (1,681)
Deferred liabilities and (1,380) (499) - -
provisions
Total non-current (6,339) (2,721) (2,368) (1,681)
liabilities
Net assets 24,175 39,566 17,406 28,640
Equity
Share capital 6,074 5,536 6,074 5,536
Share premium account 42,856 42,457 42,856 42,457
Other reserves 10,869 10,698 466 293
Retained losses (42,843) (29,236) (31,990) (19,646)
Equity attributable to 16,956 29,455 17,406 28,640
owners of the Company
Non-controlling interests 7,219 10,111 - -
Total equity 24,175 39,566 17,406 28,640
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2013
Group Share Share Other Retained Total Non-controlling Total
capital premium reserves losses interests equity
account
€'000 €'000 €'000 €'000 €'000 €'000 €'000
At 1 January 2013 5,536 42,457 10,698 (29,236) 29,455 10,111 39,566
Loss for the year - - - (13,607) (13,607) (1,111) (14,718)
Other comprehensive - - (2) - (2) - (2)
income
Total comprehensive - - (2) (13,607) (13,609) (1,111) (14,720)
income for the year
Acquisition of - - - - - (109) (109)
non-controlling
interests in
subsidiary
Disposal of - - - - - (1,672) (1,672)
subsidiary
Issue of convertible - - 173 - 173 - 173
bond
Issue of shares in 538 399 - - 937 - 937
the year
At 31 December 2013 6,074 42,856 10,869 (42,843) 16,956 7,219 24,175
Company
At 1 January 2013 5,536 42,457 293 (19,646) 28,640 - 28,640
Loss and total - - - (12,344) (12,344) - (12,344)
comprehensive income
for the year
Issue of convertible - - 173 - 173 - 173
bond
Issue of shares in 538 399 - - 937 - 937
the year
At 31 December 2013 6,074 42,856 466 (31,990) 17,406 - 17,406
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2012
Group Share Share Other Retained Total Non-controlling Total
capital premium reserves losses interests equity
account
€'000 €'000 €'000 €'000 €'000 €'000 €'000
At 1 January 2012 1,370 31,749 9,511 (26,382) 16,248 - 16,248
Exchange 31 701 181 (554) 359 - 359
translation
adjustments
At 1 January 2012 1,401 32,450 9,692 (26,936) 16,607 - 16,607
(restated)
Loss for the year - - - (2,300) (2,300) (86) (2,386)
Other comprehensive - - 2,079 - 2,079 917 2,996
income
Total comprehensive - - 2,079 (2,300) (221) 831 610
income for the year
Non-controlling - - - - - 9,280 9,280
interests in
subsidiary
undertakings
acquired
Conversion of loan - - (1,073) - (1,073) - (1,073)
note
Issue of shares in 4,135 10,007 - - 14,142 - 14,142
the year
At 31 December 2012 5,536 42,457 10,698 (29,236) 29,455 10,111 39,566
Company
At 1 January 2012 1,370 31,749 1,365 (19,428) 15,056 - 15,056
Exchange 31 701 1 (429) 304 - 304
translation
adjustments
At 1 January 2012 1,401 32,450 1,366 (19,857) 15,360 - 15,360
(restated)
Total comprehensive - - - 211 211 - 211
income for the year
Conversion of loan - - (1,073) - (1,073) - (1,073)
note
Issue of shares in 4,135 10,007 - - 14,142 - 14,142
the year
At 31 December 2012 5,536 42,457 293 (19,646) 28,640 - 28,640
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2013
Group Group Company Company
2013 2012 2013 2012
Restated Restated
€'000 €'000 €'000 €'000
Net cash (outflow) / inflow from (2,703) (762) (2,161) 54
operating activities
Cash flows from investing
activities
(Increase)/decrease in loan to - - (394) (4,426)
subsidiary undertakings
Acquisition of subsidiary - (1,348) - -
undertakings
Cash balances of subsidiaries - 1,828 - -
acquired
Purchase of available for sale - (1,786) - -
investments
Purchase of intangible fixed (191) - - -
assets
Purchase of property, plant and (10) - - -
equipment
Interest received - 40 - -
Net cash (outflow) from investing (201) (1,266) (394) (4,426)
activities
Cash flows from financing
activities
Proceeds from issues of new - 4,810 - 4,810
ordinary shares (net of expenses)
Proceeds of issue of convertible 2,340 - 2,340 -
bond
Proceeds of short term loans 200 - 200
Interest paid - (389) - -
Net cash inflow from financing 2,540 4,421 2,540 4,810
activities
Net (decrease) /increase in cash (364) 2,393 (15) 438
for the year
Cash and cash equivalents at 1,843 8 15 8
beginning of year
Exchange differences (2) (558) - (431)
Cash and cash equivalents at end 1,477 1,843 - 15
of year
NOTES TO THE FINANCIAL STATEMENTS
1. General Information
Clear Leisure plc is a company incorporated in the United Kingdom under the
Companies Act 2006. The Company's ordinary shares are traded on AIM of the
London Stock Exchange. The address of the registered office is given on the
Company information page. The nature of the Group's operations and its
principal activities are set out in the Directors' report.
2. Accounting policies
The principal accounting policies are summarised below. They have all been
applied consistently throughout the period covered by these consolidated
financial statements.
Basis of preparation
The consolidated Financial Statements of Clear Leisure plc have been prepared
in accordance with International Financial Reporting Standards (IFRS) and IFRS
Interpretations Committee (IFRS IC) as adopted by the European Union and the
parts of Companies Act 2006 applicable to companies reporting under IFRS.
The financial statements have been prepared under the historical cost
convention except in respect of revalued properties (as permitted by IFRS 1),
and for certain available for sale investments that are stated at their fair
values and land and buildings that have been revalued to their fair value.
The preparation of Financial Statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group's accounting
policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the consolidated
Financial Statements are disclosed in Note 3.
The Consolidated Financial Statements are presented in Euros (€), the
presentational and functional currency, rounded to the nearest €'000.
Going Concern
Any consideration of the forseeable future involves making a judgment, at a
particular point in time, about future events which are inherently uncertain.
The ability of the Group to carry out its planned business objectives is
dependent on its continuing ability to raise adequate financing from equity
investors and/or the achievement of profitable operations.
Nevertheless, at the time of approving these financial statements and after
making due enquiries, the Directors have a reasonable expectation that the
Group has adequate resources to continue operating for the forseeable future.
For this reason they continue to adopt the going concern basis of preparing the
Group's financial statements.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Group and entities controlled by the Group (its subsidiaries) made up to 31
December each year. Control is achieved where the Group has the power to govern
the financial and operating policies of an investee entity so as to obtain
benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are
included in the consolidated income statement from the effective date of
acquisition or up to the effective date of disposal, as appropriate. Where
necessary, adjustments are made to the financial statements of subsidiaries to
bring the accounting policies used into line with those used by the group. All
intra-group transactions, balances, income and expenses are eliminated on
consolidation.
Non-controlling interests in subsidiaries are identified separately from the
Group's equity therein. Those interests of non-controlling shareholders that
are present ownership interests entitling their holders to a proportionate
share of net assets upon liquidation may initially be measured at fair value or
at the non-controlling interests' proportionate share of the fair value of the
acquiree's identifiable net assets. The choice of measurement is made on an
acquisition-by-acquisition basis. Other non-controlling interests are initially
measured at fair value. Subsequent to acquisition, the carrying amount of
non-controlling interests is the amount of those interests at initial
recognition plus the non-controlling interests' share of subsequent changes in
equity. Total comprehensive income is attributed to non-controlling interests
even if this results in the non-controlling interests having a deficit balance.
Changes in the Group's interests in subsidiaries that do not result in a loss
of control are accounted for as equity transactions. The carrying amount of the
Group's interests and the non-controlling interests are adjusted to reflect the
changes in their relative interests in the subsidiaries. Any difference between
the amount by which the non-controlling interests are adjusted and the fair
value of the consideration paid or received is recognised directly in equity
and attributed to the owners of the Group.
When the Group loses control of a subsidiary, the profit or loss on disposal is
calculated as the difference between (i) the aggregate of the fair value of the
consideration received and the fair value of any retained interest and (ii) the
previous carrying amount of the assets (including goodwill), less liabilities
of the subsidiary and any non-controlling interests. Amounts previously
recognised in other comprehensive income in relation to the subsidiary are
accounted for (i.e. reclassified to profit or loss or transferred directly to
retained earnings) in the same manner as would be required if the relevant
assets or liabilities are disposed of. The fair value of any investment
retained in the former subsidiary at the date when control is lost is regarded
as the fair value on initial recognition for subsequent accounting under lAS 39
Financial Instruments: Recognition and Measurement or, when applicable, the
costs on initial recognition of an investment in an associate or jointly
controlled entity.
Business Combinations
Acquisitions of subsidiaries and businesses are accounted for using the
acquisition method. The consideration for each acquisition is measured at the
aggregate of the fair values (at the date of exchange) of assets given,
liabilities incurred or assumed, and equity instruments issued by the Group in
exchange for control of the acquiree. Acquisition-related costs are recognised
in profit or loss as incurred.
Where applicable, the consideration for the acquisition includes any asset or
liability resulting from a contingent consideration arrangement, measured at
its acquisition-date fair value. Subsequent changes in such fair values are
adjusted against the cost of acquisition where they qualify as measurement
period adjustments (see below). All other subsequent changes in the fair value
of contingent consideration classified as an asset or liability are accounted
for in accordance with relevant IFRSs. Changes in the fair value of contingent
consideration classified as equity are not recognised.
Where a business combination is achieved in stages, the Group's previously-held
interests in the acquired entity are remeasured to fair value at the
acquisition date (i.e. the date the Group attains control) and the resulting
gain or loss, if any, is recognised in profit or loss. Amounts arising from
interests in the acquiree prior to the acquisition date that have previously
been recognised in other comprehensive income are reclassified to profit or
loss, where such treatment would be appropriate if that interest were disposed
of.
The acquiree's identifiable assets, liabilities and contingent liabilities that
meet the conditions for recognition under IFRS 3(2008) are recognised at their
fair value at the acquisition date, except that:
* deferred tax assets or liabilities and liabilities or assets related to
employee benefit arrangements are recognised and measured in accordance
with lAS 12 Income Taxes and lAS 19 Employee Benefits respectively;
* liabilities or equity instruments related to the replacement by the Group
of an acquiree's share-based payment awards are measured in accordance with
IFRS 2 Share-based Payment, and
* assets (or disposal groups) that are classified as held for sale in
accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued
Operations are measured in accordance with that Standard.
If the initial accounting for a business combination is incomplete by the end
of the reporting period in which the combination occurs, the Group reports
provisional amounts for the items for which the accounting is incomplete. Those
provisional amounts are adjusted during the measurement period (see below), or
additional assets or liabilities are recognised, to reflect new information
obtained about facts and circumstances that existed as of the acquisition date
that, if known, would have affected the amounts recognised as of that date.
The measurement period is the period from the date of acquisition to the date
the Group obtains complete information about facts and circumstances that
existed as of the acquisition date, and is subject to a maximum of one year.
3. Critical accounting judgements and key sources of estimation uncertainty
The preparation of Financial Statements in conformity with IFRSs requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expenses. Estimates and judgements are continually evaluated and are based
on historical experience and other factors including expectations of future
events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting
accounting estimates will, by definition, seldom equal the related actual
results. The estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below
Impairment of goodwill
Goodwill has a carrying value of €9,000 (2012: €6,652,000). The Group tests
annually whether goodwill has suffered any impairment, in accordance with the
accounting policy stated in Note 2. The recoverable amounts of cash-generating
units have been determined based on value-in-use calculations.
Management has concluded that an impairment charge to the carrying value of
goodwill of €1,303,000 was necessary during the year. See Note 15 to the
Financial Statements.
Fair value measurement
Management uses valuation techniques to determine the fair value of financial
instruments (where active market quotes are not available) and non-financial
assets. This involves developing estimates and assumptions consistent with how
market participants would price the instrument. Management bases its
assumptions on observable data as far as possible but this is not always
available. In that case management uses the best information available.
Estimated fair values may vary from the actual prices that would be achieved in
an arm's length transaction at the reporting date.
In order to arrive at the fair value of investments a significant amount of
judgement and estimation has been adopted by the Directors as detailed in the
investments accounting policy. Where these investments are un-listed and there
is no readily available market for sale the carrying value is based upon future
cash flows and current earnings multiples for which similar entities have been
sold.
Going Concern
The Group's activities generated a loss from continuing operations of €
7,359,000 (2012: €2,491,000) and had net current liabilities of €16,330,000 as
at 31 December 2013. In addition the Company's shares are currently suspended
on the AIM Market. The Group's operational existence is still dependant on the
ability to raise further funding either through an equity placing on AIM, or
through other external sources, to support the on-going working capital
requirements.
After making due enquiries, the Directors have formed a judgement that there is
a reasonable expectation that the Group can secure further adequate resources
to continue in operational existence for the foreseeable future and that
adequate arrangements will be in place to enable the settlement of their
financial commitments, as and when they fall due.
For this reason, the Directors continue to adopt the going concern basis in
preparing the financial statements. Whilst there are inherent uncertainties in
relation to future events, and therefore no certainty over the outcome of the
matters described, the Directors consider that, based upon financial
projections and dependant on the success of their efforts to complete these
activities, the Group will be a going concern for the next twelve months. If it
is not possible for the Directors to realise their plans, over which there is
significant uncertainty, the carrying value of the assets of the Group is
likely to be impaired.
4. Segment information
IFRS 8 requires reporting segments to be identified on the basis of internal
reports about components of the Group that are regularly reviewed by the chief
operating decision maker.
Information reported to the Group's chief operating decision maker for the
purposes of resource allocation and assessment of segment performance is
specifically focused on the geographical segments within the Group.
Information regarding the Group's reportable segments is presented below:
2013 2012
UK Italy Total UK Italy Total
Continuing operations €'000 €'000 €'000 €'000 €'000 €'000
Revenue - 1,291 1,291 - 1,499 1,499
Cost of sales - (515) (515) - (253) (253)
Gross Profit 776 776 - 1,246 1,246
Gain on disposal of - - - 1,367 1,877 3,244
investment
Finance Income - - - - 8 8
Finance charges (311) (133) (468) (337) (350) (687)
Other operating expenses (1,506) (803) (2,285) (817) (745) (1,562)
Other gains and losses - (5,342) (5,342) - (4,693) (4,693)
Loss for the financial (1,817) (5,502) (7,319) 213 (2,657) (2,444)
year
2013 2012
Segment Segment Net Net assets/ Segment Segment Net Net assets/
assets liabilities additions (liabilities) assets liabilities Additions (liabilities)
to to
non-current non-current
Assets assets
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
UK 60 (7,458) - (7,398) 15 (7,896) - (7,881)
Italy 50,502 (18,929) - 31,573 72,881 (33,537) 8,103 47,447
50,562 (26,387) - 24,175 72,896 (41,433) 8,103 39,566
5. Earnings per share
The basic earnings per share is calculated by dividing the loss attributable to
equity shareholders by the weighted average number of ordinary shares in issue
during the period. Diluted earnings per share is computed using the weighted
average number of shares during the period adjusted for the dilutive effect of
share options and convertible loans outstanding during the period.
The loss and weighted average number of shares used in the calculation are set
out below:
2013 2012
Per Per
Loss Weighted share Loss Weighted share
€'000 average no. Amount €'000 average no. Amount
of shares Euro of shares Euro
000's 000's
Basic and fully
diluted earnings per
share
Continuing (7,359) 197,564 (€0.04) (2,491) 92,327 (€0.02)
operations
Discontinued (7,358) 197,564 (€0.04) 105 92,327 -
operations
Total operations (14,717) 197,564 (€0.08) (2,386) 92,237 (€0.02)
IAS 33 requires presentation of diluted earnings per share when a company could
be called upon to issue shares that would decrease earnings per share. In
respect of 2012 and 2013 the diluted loss per share is the same as the basic
loss per share as the loss for each year has an anti-dilutive effect.
6. Share capital and share premium
ISSUED AND FULLY PAID: Number of Ordinary Share Total
ordinary share premium
shares capital
€'000 €'000 €'000
At 1 January 2012 45,847,710 1,370 31,749 33,119
Exchange translation adjustments - 31 701 732
At 1 January 2012 (adjusted) 45,847,710 1,401 32,450 33,851
Issue of new ordinary shares of 135,361,667 4,135 10,007 14,142
2.5p each
At 31 December 2012 181,209,377 5,536 42,457 47,993
Issue of new ordinary shares of 18,200,000 538 399 937
2.5p each
At 31 December 2013 199,409,377 6,074 42,856 48,930
The following shares were issued during the year:
On 6 February 2013 the Company issued 3,200,000 ordinary shares at 6p each in
settlement of a creditor amount of €230,000 (£192,000) and the Company issued
15,000,000 ordinary shares at 4p each in settlement of a short term loan.
7. Other reserves
The Group considers its capital to comprise ordinary share capital, share
premium, retained losses and its convertible bonds. In managing its capital,
the Group's primary objective is to maintain a sufficient funding base to
enable the Group to meet its working capital and strategic investment needs. In
making decisions to adjust its capital structure to achieve these aims, through
new share issues, the Group considers not only their short-term position but
also their long-term operational and strategic objectives.
Group Merger Revaluation Exchange Loan Total
reserve translation equity other
reserve reserve reserve Reserves
€'000 €'000 €'000 €'000 €'000
At 1 January 2012 8,146 - - 1,365 9,511
Exchange translation adjustments 179 - - 2 181
At 1 January 2012 (adjusted) 8,325 - - 1,367 9,692
Revaluation of land & buildings - 2,083 - - 2,083
Exchange translation difference - - (4) - (4)
Conversion of loan notes - - - (1,073) (1,073)
At 31 December 2012 8,325 2,083 (4) 294 10,698
Exchange translation difference - - (2) - (2)
Issue of convertible loan notes - - - 173 173
At 31 December 2013 8,325 2,083 (6) 467 10,869
Company Merger Revaluation Exchange Loan Total
reserve translation equity other
reserve reserve reserve Reserves
€'000 €'000 €'000 €'000 €'000
At 1 January 2012 - - - 1,365 1,365
Exchange translation adjustments - - - 2 2
At 1 January 2012 (adjusted) - - - 1,367 1,367
Conversion of loan notes - - - (1,074) (1,074)
At 31 December 2012 - - - 293 293
Issue of convertible loan notes - - - 173 173
At 31 December 2013 - - - 466 466
7. Other reserves
Copies of the final results will be available from the Group´s web site at
www.clearleisure.com and will be posted to shareholders shortly.
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