Interim results for six month

RNS Number : 6839E

Adalta Real PLC

29 December 2009

 



For immediate release                                                                                    29 December 2009

ADALTA REAL PLC (formerly DAWMED SYSTEMS PLC)

UNAUDITED INTERIM RESULTS 

FOR THE SIX MONTH PERIOD TO 30 SEPTEMBER 2009 

The Board of Adalta Real Plc ("Adalta Real" or "the Company"), the AIM listed company, today announces its Unaudited Interim Results for the six months period ended 30 September 2009 (the "Period").

During the Period, the Company disposed of its subsidiary, Dawmed International Limited ("DIL") whose principal activities were the design, manufacture, sale and servicing of healthcare decontamination equipment and consumables used by NHS Trust Hospitals, private hospitals, clinics and primary care practitioners. The Company now has no subsidiaries and, accordingly, the Unaudited Interim Accounts are presented on an unconsolidated basis, ie. as a single entity.

It should be noted that, whereas the audited consolidated accounts for the 18 months ended 31 March 2009 were prepared using International Financial Reporting Standards ("IFRS"), the parent company accounts for the same period were prepared using UK Generally Accepted Accounting Principles ("UK GAAP"). However, for consistency and in anticipation of expected requirements to prepare future single or consolidated accounts using IFRS, it has been decided to prepare these Unaudited Interim Accounts using IFRS.

In addition, the Company has changed its principal activity by adopting a New Investing Policy to enable it to pursue and exploit the following opportunities in the UK, viz:

• Commercial (including industrial) property agency services;

• Commercial property development (including acquisition and refurbishment opportunities) subject to pre-lets to prime covenant tenants;

• Sales of such completed and let property developments as profit generators;

• Future retention of its own completed and let commercial property developments, selected as held investments for medium and/or long term quality revenue generation;

• Subject to tenant's covenant status, future acquisition of selected existing completed and let commercial property as an active investor for long term quality revenue generation;

• Future acquisition of a compatible property company for potential expansion; 

• At a later stage the acquisition of existing individual residential properties with expansion and/or refurbishment potential for early profit; and

• At a later stage acquisition of land for development of high end value individual residential properties for profit generation.    

KEY POINTS:

• The sale of DIL was completed on 6 August 2009, following firstly the passing of a resolution at a General Meeting held on 30 July 2009, to approve the sale of all the issued share capital of DIL to Wassenburg & Co B.V ("Wassenburg") and secondly the passing of a further resolution to adopt the New Investing Policy as described in the Circular to shareholders dated 14 July 2009 and summarised above. 

• Also, on 6 August 2009 a second General Meeting was held at which a resolution was passed to change the name of the company from Dawmed Systems Plc to Adalta Real Plc.

• Of the six months from 1 April to 30 September 2009, four months were concerned with the continued operations of the previous core business of DIL (healthcare decontamination equipment) and with simultaneous negotiations leading to the sale of DIL. During this time no management charges were made to DIL. The two months thereafter were concerned with the application of procedures to implement the New Investing Policy following the completion of the sale on 6 August 2009. Accordingly, the Company had no revenue during that remaining two month period to 30 September 2009.

• Earnings before interest paid, tax, depreciation and amortisation ("EBITDA") shows a loss of £111,993 for the Period. This reflects the necessary administrative expenses of setting up and running the Company and adjustments in respect of the sale of DIL.

• The balance of shareholders' funds at 30 September 2009 was £739,284 - essentially reflecting the proceeds from the sale of DIL less the costs of the sale and the administrative costs of setting up the Company in new accommodation and running it with new employees for the two months to 30 September 2009.

• Future plans comprise the implementation of the New Investing Policy as summarised above, within the confines of serious UK recession, but with the anticipation firstly of a robust programme of commercial property agency instructions for acquisitions, sales and lettings and secondly of the growing opportunities for commercial property development, the latter subject of course to financial viability and the status of any tenant's covenant.

Kevin Gilmore, Executive Chairman of Adalta Real commented "I am pleased to report that the Completion Accounts in respect of the sale of DIL were finalised and agreed at a recent meeting between the Company and the Purchaser of DIL, resulting in a further cash payment to the Company of £95,400 falling due in accordance with the terms of the Share Purchase Agreement ("SPA"). Although the Company has had very little time between the completion of the sale of its subsidiary company on 6 August 2009 and the end of the six month period on 30 September 2009 within which to effectively re-start its business in the world of property, and notwithstanding the well documented problems in the overall property sector, I believe that the portents are favourable for the future of the Company, not least because of the Company's specific focus within that sector."

Enquiries:

Adalta Real Plc

Kevin M Gilmore, Executive Chairman                                                     Tel: [phone]

                                                                                                                   Mob: [phone]

Beaumont Cornish Limited                                                                    Tel: [phone]

Roland Cornish

Bishopsgate Communications Limited                                                Tel: [phone]

Maxine Barnes

Siobhra Murphy

For further information please visit the Adalta Real Plc website at www.adaltareal.com

Chairman's Statement                                                                            

for the six month period ended 30 September 2009

I am pleased to present the Unaudited Interim Results of your Company for the six months period ended 30 September 2009 ("the Period"). 

During the Period, the Company disposed of its subsidiary, Dawmed International Limited ("DIL") whose principal activities were the design, manufacture, sale and servicing of healthcare decontamination equipment and consumables used by NHS Trust Hospitals, private hospitals, clinics and primary care practitioners. The Company now has no subsidiaries and, accordingly, the Unaudited Interim Accounts are presented on an unconsolidated basis, ie. as a single entity, the form which the Company intends to apply to the financial statements for the year to 31 March 2010.

It should be noted that, whereas the audited consolidated accounts for the 18 months ended 31 March 2009 were prepared using International Financial Reporting Standards ("IFRS"), the parent company accounts for the same period were prepared using UK Generally Accepted Accounting Principles ("UK GAAP"). However, for consistency and in anticipation of expected requirements to prepare future single or consolidated accounts using IFRS, it has been decided to prepare these Unaudited Interim Accounts using IFRS.

Financials

The proceeds from the sale of DIL to Wassenburg amounted to £1,045,400, being the original £950,000 gross plus an additional £95,400, including interest, which was an adjustment relating to the net assets of DIL as at 30 June 2009 in accordance with the terms of the SPA. 

The audited accounts of the parent company to 31 March 2009 showed a book value for the shares in DIL of £800,000, representing the best estimate at the time of £1,015,000 for the total proceeds less £215,000 to cover all the costs in connection with the disposal. In the event the result for the six months to 30 September 2009 was a loss of £10,560 comprising the additional £30,400 of proceeds less additional costs of the sale amounting to £40,960. This has been provided in the 30 September 2009 accounts. It is worth noting that, had the accounts been prepared on a consolidated basis, a profit in excess of £700,000 would have been reported. 

In the six months ended 30 September 2009, earnings after finance charges, but before interest paid, taxation, depreciation and amortisation ("EBITDA") were a loss of £111,993. This level of EBITDA reflects the normal administrative costs of running the company and the aforementioned costs in connection with the disposal of DIL. 

The balance of shareholders' funds at 30 September 2009 was £739,284, essentially comprising the proceeds from the sale of DIL less the costs of the sale and the administrative costs of running the company for the past three months.

Activities

For approximately the first four months of the Period the Company existed and operated as Dawmed Systems Plc with its then subsidiary DIL continuing as a Group, but during this time the parent company made no management charges to DIL. In the approximately two months of the Period remaining, the Board focussed on the implementation of the New Investing Policy, initially comprising the setting up of what is effectively a start up company requiring new office premises, personnel recruitment, communications arrangements and equipment, IT equipment and the like, in consequence of which no revenue for the then independent Adalta Real Plc company was earned in the Period. However, notwithstanding the needs described above, during the last two months of the Period a not insubstantial number of commercial property agency instructions were achieved and an encouraging number of development opportunities identified.

Remainder of the Year and Future Prospects

Since the end of the Period, the Board has concentrated its efforts on continuing the expansion of the commercial property agency instructions, which will produce a revenue stream of fees without requiring external funding, as well as pursuing a number of development opportunities which will be processed in a number of different ways in order to enable the Company to punch above its weight.

In view of the commercial property agency pipeline already established and the specific prospects already promised, I feel confident that the decision of the Board to vacate the previous core business and convert to a relatively different kind of property company, which was fully supported by the shareholders, will prove to be fully justified and represent a potentially exciting future for your Company.

Kevin M Gilmore FRICS

Executive Chairman

29th December 2009

  Income Statement

for the six months ended 30 September 2009

	Unaudited 6 months to 30 September 2009 £'000		Unaudited 6 months  to 30 September 2008 £'000
Continuing Operations
REVENUE	-		90.0
Cost of sales	-		-
Gross profit	-		90.0
Administrative expenses	(102.3)		(53.9)
OPERATING (LOSS)/PROFIT	(102.3)		36.1
Finance income	0.9		-
Finance costs	-		-
(LOSS)/PROFIT BEFORE TAXATION FROM CONTINUING OPERATIONS	(101.4)		36.1
Tax expense	-		-
(LOSS)/PROFIT AFTER TAXATION FROM CONTINUING OPERATIONS	(101.4)		36.1
Discontinued Operations
(LOSS) FOR THE PERIOD AFTER TAX FROM DISCONTINUED OPERATIONS	(10.6)		-
(LOSS)/PROFIT FOR THE PERIOD ATTRIBUTABLE TO SHAREHOLDERS	(112.0)		36.1
BASIC (LOSS)/PROFIT PER SHARE FROM CONTINUING OPERATIONS (Note 3)	(0.49p)		0.17p
DILUTED (LOSS)/PROFIT PER SHARE FROM CONTINUING OPERATIONS (Note 3)	(0.49p)		0.17p

  Balance Sheet

as at 30 September 2009

		Unaudited 30 September 2009 £'000		Unaudited 30 September 2008 £'000
ASSETS
NON CURRENT ASSETS
Plant and equipment		19.2		-
Investment in subsidiary		-		467.4
		19.2		467.4
CURRENT ASSETS
Amounts due from subsidiaries		-		2,219.1
Trade and other receivables		156.9		27.1
Cash and cash equivalents		744.2		9.1
		901.1		2,255.3
TOTAL ASSETS		920.3		2,722.7
EQUITY AND LIABILITIES
CAPITAL AND RESERVES
Called up Share capital		1,030.7		1,030.7
Share premium account		1,558.1		1,558.1
Profit and loss account		(1,849.5)		89.5
SHAREHOLDERS' EQUITY		739.3		2,678.3
CURRENT LIABILITIES
Trade and other payables		181.0		44.4
		181.0		44.4
TOTAL EQUITY AND LIABILITIES		920.3		2,722.7

  Cashflow Statement

for the six months ended 30 September 2009

		Unaudited 6 months to 30 September 2009 £'000	Unaudited 6 months to 30 September 2008 £'000
Cash flows from operating activities
(Loss)/Profit from operations		(112.9)	36.1
Adjustments for:
Depreciation and amortisation charges		0.1	-
Changes in working capital:
(Increase) in trade and other receivables		(102.3)	(13.9)
(Increase) in amounts due from subsidiary		-	(26.2)
Increase in trade and other payables		139.4	3.6
Cash (absorbed by) operating activities		(75.7)	(0.4)
Cash flows from investing activities
Interest receivable		0.9	-
Proceeds from sale of subsidiary, net of related costs		828.3	-
Purchase of non-current assets		(19.3)	-
Net cash generated by investing activities		809.9	-
Cash flows from financing activities		-	-
Net cash generated from financing activities		-	-
Net increase/(decrease) in cash and cash equivalents		734.2	(0.4)
Cash and cash equivalents at beginning of period		10.0	9.5
Cash and cash equivalents at end of period		744.2	9.1

Notes to the Unaudited Results for the Six Month Period to 30 September 2009

1    GENERAL INFORMATION

Adalta Real Plc is a public limited company ('Adalta Real' or the 'Company') incorporated in the United Kingdom, whose shares are publicly traded on the Alternative Investment Market ('AIM'). The Company is registered in the United Kingdom and its registered address is Church Court, Stourbridge Road, Halesowen, West Midlands, B63 3TT, United Kingdom.

The Group's principal activities at the start of the period were the design, development, manufacture, sale, distribution, testing and servicing of washer disinfectors and washer disinfector dryers for the primary and secondary healthcare sectors. During the period, the Company sold its wholly owned trading subsidiary Dawmed International Limited ("DIL") and adopted a New Investing Policy to enable it to change its activities to those of predominantly commercial property agency, development and investment.

2    BASIS OF ACCOUNTING

The financial information has been prepared on the historical cost basis. The accounting policies set out below have been applied consistently to all periods presented in this six month report.

BASIS OF PREPARATION

The company has prepared its annual financial statements in accordance with accounting standards adopted for use in the European Union (International Financial Reporting Standards (IFRS)). The same basis has been used for this statement.

Up to 31 March 2009, the Company prepared its unconsolidated accounts using UK GAAP. Following the disposal of DIL, it was decided to present unconsolidated accounts using IFRS. The transition from UK GAAP to IFRS has not given rise to any changes to the figures reported, although there are minor changes to descriptions and narrative relating to those figures. Accordingly, the directors consider that there is no need to produce a transition table.

This six month report has been prepared in accordance with the accounting policies set out below (which are expected to be applied in preparing the financial statements). The company has not adopted the reporting requirements of IAS 34 'Interim Financial Reporting'. 

The information relating to the six months ended 30 September 2009 and the six months ended 30 September 2008 is unaudited, and does not constitute statutory accounts.

The comparative figures for the six months ended 30 September 2008 are not the Company's statutory accounts for that financial year. The accounts for the 18 months to 31 March 2009 have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified, did not include references to any matter to which the auditors drew attention by way of emphasis without qualifying their report, and did not contain statements under section 237(2) or (3) of the Companies Act 1985. The financial information in this document does not constitute statutory financial statements within the meaning of the Act.

GOING CONCERN

The directors have reviewed the cash flow commitments that will be required during the year to 31 March 2010 to implement the new Investing Policy of the company. The review indicated that the cash generated during the period from the sale of DIL will provide adequate resources to meet the ongoing requirements of the company until the company has sufficient sales and funding to meet the ongoing requirements of the Company in the implementation of its New Investing Policy. In addition, the directors have conducted a further review of the cash flow commitments that will be required in the twelve months following the date of approval of this report, and concluded that the company has adequate resources to meet the ongoing requirements of the company over that period. On this basis, the directors consider it appropriate to prepare the accounts on a going concern basis.

REVENUE RECOGNITION

Revenue is the fair value of the consideration received or receivable by the Company for goods supplied and services provided, excluding VAT and trade discounts.

Interest income is accrued on a time-apportioned basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount.

LOSS FROM OPERATIONS

The operating loss is stated after depreciation and amortization but before finance income and finance costs.

PLANT & EQUIPMENT

Plant and equipment assets are stated at cost less accumulated depreciation and any recognised impairment loss.

Depreciation is charged so as to write off the cost of assets on a straight line basis, over their estimated useful economic lives. The rates used for each major asset category, which are reviewed annually, are:

Computer equipment                                        -    20%

Other plant and equipment                               -    10%

The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the income statement.

INVESTMENT IN SUBSIDIARIES

Investment in subsidiaries is stated at cost less any provision for impairment. 

IMPAIRMENT OF ASSETS

At each balance sheet date the company reviews the carrying value of its non current assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss.

An impairment loss is only reversed if there is a subsequent increase in the recoverable amount that can be related objectively to an event occurring after the impairment loss was recognised. 

TAXATION

The tax expense represents the sum of the current tax expense and deferred tax expense.

For the current period there is no tax liability on account of available losses.

Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which temporary differences can be utilised. At the balance sheet date there was no deferred tax liability.

FINANCIAL INSTRUMENTS

Financial assets or liabilities are recognised when, and only when the company becomes a party to the contractual provisions of the instrument.

Classification of financial instruments

Financial instruments are classified as financial assets, financial liabilities or equity instruments.

Following the adoption of IAS 32, financial instruments issued by the Company are treated as equity only to the extent that they meet the following two conditions:

• They include no contractual obligations upon the Company to deliver cash or other financial assets that are potentially unfavourable to the Company; and

• Where the instrument will or may be settled in the Company's own equity instruments, it is either a non-derivative that includes no obligation to deliver a variable number of the Company's own equity instruments or is a derivative that will be settled by the Company exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.

Recognition and valuation of financial assets

Trade Receivables

Trade receivables do not carry interest and are reduced by appropriate allowances for estimated irrecoverable amounts.

Cash and cash equivalents

Cash and cash equivalents comprise cash in hand and at bank and exclude overdrafts.

Financial liabilities and equity

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.

Trade payables

Trade payables are not interest bearing and are stated at their amortised cost.

Equity instruments

Equity instruments are initially measured at fair value.

SHARE BASED PAYMENT

The Company has applied the requirements of IFRS 2 Share-based Payment. In accordance with the IFRS1 exemption, IFRS 2 has been applied to all grants of equity instruments after 7 November 2002 that had not been vested prior to 1 October 2007.

The Company issues equity-settled share-based payments to certain employees, whereby employees render services in exchange for share options.

Where employees are rewarded using share based payments, the fair values of employees' services are determined indirectly by reference to the fair value of the instrument granted to the employee. This fair value is appraised at the grant date using an option-pricing model (Black-Scholes) and excludes the impact of non-market vesting conditions.

Equity-settled share based payments are expensed in the income statement.  Upon exercise of share options, the proceeds received net of attributable transaction costs are credited to share capital, and where appropriate share premium.

3    EARNINGS PER SHARE

The calculation of basic loss per share is based upon the loss of £101,433 (2008: profit £36,048) and on 20,613,292 shares (2008: 20,613,292 shares), being the weighted average number of shares in issue during the period.

Since the exercise price of the 1,560,000 share options is above the average fair price for the six months ended 30 September 2009 (2008: 2,846,676 share options), the diluted loss per share is equivalent to the basic loss per share.

4    EARNINGS BEFORE INTEREST PAID, TAX, DEPRECIATION AND AMORTISATION ("EBITDA")

Earnings before interest paid, tax, depreciation and amortisation comprises the loss from operations of £111,993 (2008: profit £36,048).

5    APPROVAL OF THE INTERIM HALF YEAR REPORT

The Unaudited Interim Report for the six month period to 30 September 2009 was approved by the board of directors on 24 December 2009.  

6    WEBSITE

The half year Unaudited Report and Accounts are being posted to shareholders and will be available on the website: www.adaltareal.com 

 

END

 

 

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