Annual Report and Accounts

Readybuy PLC 29 September 2004 READYBUY PLC FINAL RESULTS FOR THE PERIOD ENDED 30 APRIL 2004 CHAIRMAN'S STATEMENT Our first set of results since flotation show that we have started to manufacture and sell our range of chilled ready meals to the retail multiple supermarkets. It has taken some time to secure listings and progress has been slower than initially anticipated however the quality of the products has been well received and we have been working to achieve the necessary price points in order to secure further listings Results Turnover in the period was Â£19,000 producing a loss before tax of Â£343,000 and a loss per share of 2.2p As at 30 April 2004, the Group had net cash of Â£169,000. Your board does not intend to declare a dividend at this stage of the company's development. Strategy Our objective remains to develop a top quality range of chilled ready meals providing the very best in authenticity and as near to restaurant quality as possible. We will continue with product development to extend the range on offer. Trading During the year, limited sales were achieved and significant cost was incurred in factory overheads during product development and product trials. Staff We have recruited key staff in product development and production to support the anticipated increase in volumes. All our staff have worked extremely hard this year to launch the business and I would like to thank them for all their efforts. Prospects Since the year-end, we have secured further listings and we would hope to see the number of stores in which the products are retailed expand during the course of the current year. There is still a considerable amount of work to do before we will have an established customer base and we will endeavour to achieve this as soon as possible. C E Davies Chairman READYBUY PLC CONSOLIDATED PROFIT & LOSS ACCOUNT PERIOD FROM 29 APRIL 2003 TO 30 APRIL 2004 Note Â£'000 Turnover Continuing operations 2 19 Cost of sales (38) ______ Gross Loss (19) Distribution costs (3) Administrative expenses (321) ______ Operating Loss Continuing operations 3 (343) ______ Loss on ordinary activities before interest (343) Interest receivable 5 6 Interest payable 6 (6) ______ Loss on ordinary activities before taxation (343) Taxation 7 (45) ______ Loss for the financial period (298) Dividends - ______ Retained loss for the period 8 (298) ______ Earnings per share - basic and diluted 9 (2.2p) ______ Dividends per share - ______ The Group has no recognised gains or losses other than the results for the period as set out above. READYBUY PLC CONSOLIDATED & COMPANY BALANCE SHEETS PERIOD FROM 29 APRIL 2003 TO 30 APRIL 2004 Group Company 2004 2004 Note Â£'000 Â£'000 Fixed assets Intangible assets 10 646 - Tangible assets 11 218 - Investments 12 - 435 ______ ______ 864 435 ______ ______ Current assets Stocks 13 7 - Debtors 14 82 669 Cash at bank and in hand 429 428 ______ ______ 518 1,097 Creditors: amounts falling due within one year 15 (323) (241) ______ ______ Net current assets 195 856 ______ ______ Total assets less current liabilities 1,059 1,291 Creditors: amounts falling due after more than one year 16 (25) - ______ ______ 1,034 1,291 ______ ______ Capital and reserves Called up share capital 19 90 90 Share premium account 20 1,242 1,242 Profit and loss account 20 (298) (41) ______ ______ Equity shareholders' funds 21 1,034 1,291 ______ ______ The financial statements were approved by the board of directors on 28 September 2004 and signed on its behalf by: B P Bennett Chief Executive READYBUY PLC CONSOLIDATED & COMPANY BALANCE SHEETS PERIOD FROM 29 APRIL 2003 TO 30 APRIL 2004 2004 Note Â£'000 Net cash outflow from operating activities 22 (407) _____ Returns on investments and servicing of finance Interest paid (3) Interest element of finance lease payments (3) Interest received 6 _____ Net cashflow from servicing of finance - _____ Capital expenditure and financial investment Purchase of tangible fixed assets (77) Sale of tangible fixed assets 35 _____ Net cash outflow from capital expenditure and financial investment (42) _____ Acquisition and disposals Purchase of subsidiary undertaking expenses and flotation (272) expenses Net cash/(overdraft) acquired with subsidiary 12 (6) undertakings _____ Net cash outflow from acquisitions and disposals (278) _____ Net cash outflow before use of liquid resources and (727) financing _____ Financing Proceeds on issue of shares 1,169 Repayment of term loans (220) Capital element of finance lease payments (19) _____ Net cash inflow from financing 930 _____ Increase in cash in the year 24 203 _____ READYBUY PLC NOTES TO THE ACCOUNTS PERIOD FROM 29 APRIL 2003 TO 30 APRIL 2004 1 ACCOUNTING POLICIES The financial statements are prepared in accordance with applicable accounting standards in the United Kingdom. The particular accounting policies adopted by the Group are described below. Basis of Consolidation The Group financial statements consolidate the financial statements of the Company and its subsidiary undertaking at 30 April 2004 using acquisition accounting. The results of the subsidiary undertaking acquired during the financial period are included from the effective date of acquisition. On acquisition of a subsidiary, all of the subsidiary's assets and liabilities existing at the date of acquisition are recorded at their fair values reflecting their condition at that date. Profits or losses on intra-group transactions are eliminated in full. Turnover Turnover represents the amounts derived from the provision of goods and services during the period stated net of Value Added Tax. Financial Instruments Financial assets are recognised in the balance sheet at the lower of cost and net realisable value. Provision is made for diminution in value. Income and expenditure arising on financial instruments is recognised on the accruals basis and charged or credited to the profit and loss account in the period to which it relates. Amortisation Amortisation is calculated so as to write off the cost of an asset less its estimated residual value over the useful economic life of that asset as follows: Research & development - Amortised over period from which the Group is expected to benefit. Goodwill Goodwill representing the difference between the fair values of consideration given and net assets acquired is capitalised and amortised through the profit and loss account over its estimated useful economic life up to a maximum of twenty years. Fixed Assets and Depreciation Depreciation is provided to write off the cost of tangible fixed assets over their useful economic lives as follows:- Leasehold improvements Over the life of the lease Plant and machinery 15 years Fixtures and fittings 15 years reducing balance Motor vehicles 4 years Computer equipment 3 years READYBUY PLC NOTES TO THE ACCOUNTS PERIOD FROM 29 APRIL 2003 TO 30 APRIL 2004 1 ACCOUNTING POLICIES /Continued ... Investments Investments held as fixed assets are stated at cost less provision for any impairment. Impairment The Group evaluates its fixed assets for financial impairment where events or circumstances indicate that the carrying amount of such asset may not be fully recoverable. When such evaluations indicate that the carrying value of an asset exceeds its recoverable value, the impairment loss is recognised in the profit and loss account. Stocks Stocks are valued at the lower of cost and estimated net realisable value. Deferred Taxation Deferred taxation is provided in full on timing differences that result in an obligation at the balance sheet date to pay more tax, or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in financial statements. Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered. Deferred tax assets and liabilities are not discounted. Leased Assets Assets held under finance leases and hire purchase contracts are capitalised at their fair value on inception of the lease and depreciated over the shorter of the period of the lease and the estimated useful economic lives of the assets. The finance charges are allocated over the period of the lease in proportion to the capital amount outstanding and are charged to the profit and loss account. The rental costs arising from operating leases are charged to the profit and loss account as the related expenditure is incurred. READYBUY PLC NOTES TO THE ACCOUNTS PERIOD FROM 29 APRIL 2003 TO 30 APRIL 2004 2 TURNOVER The turnover, operating loss and net assets of the Group are attributable to one class of business which was acquired during the period as set out in note 12. All the Group's turnover was within the United Kingdom. 3 OPERATING LOSS The operating loss is stated after charging:- 2004 Â£'000 Depreciation of tangible fixed assets 24 Amortisation of goodwill 22 Research & development costs written off 30 Loss on disposal of tangible fixed assets 6 Operating lease charges - land and buildings 4 Directors' remuneration 72 Auditors' remuneration - audit services 8 - other services 4 _____ In addition to the above, the auditors also received Â£17,500 in respect of work undertaken in connection with various issues of shares during the period. These costs have been charged against the share premium account. 4 PARTICULARS OF EMPLOYEES The average number of persons (including Directors) employed by the Group during the period was: 2004 No. Production 2 Selling, distribution and administration 6 ____ 8 ____ Employee numbers are for the period since Oriental Fine Foods Limited has been a member of the Group. The Company uses sub-contract labour for much of its production. Staff costs incurred during the period in respect of these employees were: 2004 Â£'000 Wages and salaries 76 Social security costs 10 Pension costs 6 ____ 92 ____ READYBUY PLC NOTES TO THE ACCOUNTS PERIOD FROM 29 APRIL 2003 TO 30 APRIL 2004 4 PARTICULARS OF EMPLOYEES/Continued... Directors' remuneration Salary/ Benefits Pension Fees in kind Paid Total 2004 2004 2004 2004 Â£'000 Â£'000 Â£'000 Â£'000 B P Bennett 43 7 4 54 K M Yeung 6 - - 6 K W Salisbury 6 - - 6 C E Davies 6 - - 6 ______ ______ ______ ______ 61 7 4 72 ______ ______ ______ ______ The number of directors at 30 April 2004 accruing retirement benefits under money purchase schemes was 1. The interests of the directors in share options were as follows: Name Date of grant Exercise price No. of ordinary Exercise period per ordinary shares under share (p) option B P Bennett 26 August 2003 12.2p 1,079,640 Aug 2006 to Aug 2013 5 INTEREST RECEIVABLE AND SIMILAR INCOME 2004 Â£'000 Interest receivable 6 ___ 6 INTEREST PAYABLE AND SIMILAR CHARGES 2004 Â£'000 Interest on bank overdraft 3 Interest element of finance lease payments 3 ___ 6 ___ READYBUY PLC NOTES TO THE ACCOUNTS PERIOD FROM 29 APRIL 2003 TO 30 APRIL 2004 7 TAX ON PROFIT ON ORDINARY ACTIVITIES Analysis of Tax Credit on Ordinary Activities 2004 Â£'000 Current taxation: UK Corporation tax charge for the period - Deferred taxation: Origination and reversal of timing differences (45) ____ Tax on profit on ordinary activities (45) ____ Factors Affecting Tax Credit Loss on ordinary activities before tax (343) ____ Loss on ordinary activities by rate of tax of 19% (66) Effects of trading losses carried forward (66) ____ Corporation tax charge for the period - ____ At 30 April 2004, the Group had Â£349,000 of unrelieved taxable losses to carry forward against future trading profits. 8 LOSS ATTRIBUTABLE TO MEMBERS OF THE PARENT COMPANY As permitted by Section 230 of the Companies Act, the profit and loss account of the parent company is not presented as part of these accounts. The parent company's loss for the financial period amounted to Â£41,000. 9 EARNINGS PER SHARE The calculation of earnings per share is based upon the loss after taxation of Â£298,000 divided by the weighted average number of ordinary shares in issue during the period which was 13,585,434. READYBUY PLC NOTES TO THE ACCOUNTS PERIOD FROM 29 APRIL 2003 TO 30 APRIL 2004 10 INTANGIBLE FIXED ASSETS Goodwill Â£'000 Cost Additions and at 30 April 2004 668 ____ Amortisation Charge for the period and at 30 April 2004 22 ____ Net Book Value At 30 April 2004 646 ____ 11 TANGIBLE FIXED ASSETS Fixtures, Leasehold Plant & fittings & Motor equipment improvements machinery Vehicles Total Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Cost On acquisition of subsidiary 90 298 26 414 - Additions 4 71 25 55 155 Disposals (59) (20) (79) - - _____ _____ _____ _____ _____ At 30 April 2004 94 310 51 35 490 _____ _____ _____ _____ _____ Depreciation On acquisition of subsidiary 49 221 15 - 285 Charge for the period 6 5 3 10 24 On disposals - (33) - (4) (37) _____ _____ _____ _____ _____ At 30 April 2004 55 193 18 6 272 _____ _____ _____ _____ _____ Net Book Value At 30 April 2004 39 117 33 29 218 _____ _____ _____ _____ _____ Hire purchase agreements Included within the net book value of Â£218,000 is Â£52,000 relating to assets held under hire purchase agreements. The depreciation charged to the financial statements in the year in respect of such assets amounted to Â£7,000. READYBUY PLC NOTES TO THE ACCOUNTS PERIOD FROM 29 APRIL 2003 TO 30 APRIL 2004 12 INVESTMENTS Investment in subsidiary undertaking Â£'000 Cost and net book value Acquired in the period and at 30 April 2004 435 ____ On 26 August 2003, the Group acquired the entire issued ordinary share capital of McDonald Yang Limited, a company incorporated in England & Wales, whose name was subsequently changed to Oriental Fine Foods Limited. The principal activity of that company is a manufacturer of chilled foods. The fair value of assets and liabilities acquired on acquisition was as follows: - Â£'000 Tangible fixed assets 129 Intangible fixed assets 30 Debtors 10 Bank overdraft (6) Bank loan (220) Other creditors (176) ____ Net liabilities acquired (233) Goodwill 668 ____ Consideration 435 ____ Comprising: Net value of shares issued 435 ____ The summarised profit and loss account of Oriental Fine Foods Limited (formerly McDonald Yang Limited) for the year ended 30 April 2003 and the period prior to acquisition are set out below. Year to Period to 30/4/2003 26/8/2003 Â£'000 Â£'000 Turnover - - ____ ____ Operating profit 1 3 ____ ____ Profit before interest and taxation 1 3 Net interest payable (10) (7) ____ ____ Loss on ordinary activities before taxation ( 9) ( 4) Taxation - - ____ ____ Loss after taxation ( 9) ( 4) ____ ____ There were no material recognised gains and losses in the period to 26 August 2003 other than the loss on ordinary activities after taxation. READYBUY PLC NOTES TO THE ACCOUNTS PERIOD FROM 29 APRIL 2003 TO 30 APRIL 2004 13 STOCKS Group Company 2004 2004 Â£'000 Â£'000 Raw materials and consumables 7 - _____ _____ 14 DEBTORS Group Company 2004 2004 Â£'000 Â£'000 Due within one year: Trade debtors 10 - Other debtors 3 - Deferred taxation (Note 18) 45 9 Prepayments and accrued income 24 4 Due after one year: Amounts owed by group undertaking - 656 _____ _____ 82 669 _____ _____ 15 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR Group Company 2004 2004 Â£'000 Â£'000 Bank overdraft (see below) 226 225 Obligations under hire purchase (Note 16) 34 - Trade creditors 32 - Other taxes and social security 4 - Accruals and deferred income 27 16 _____ _____ 323 241 _____ _____ Overdraft facilities are supported by a cash collateral arrangement of similar size together with unlimited cross guarantees given by the Company and its subsidiary undertaking. 16 CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR Group Company 2004 2004 Â£'000 Â£'000 Obligations under hire purchase - one to two years 22 - - two to five years 3 - _____ _____ 25 - _____ _____ Obligations under hire purchase agreements, some of which are guaranteed by the parent company, are secured on the relevant assets. READYBUY PLC NOTES TO THE ACCOUNTS PERIOD FROM 29 APRIL 2003 TO 30 APRIL 2004 17 FINANCIAL INSTRUMENTS The Group's treasury activities are designed to provide suitable, flexible funding arrangements to satisfy the Group's requirements. The Group uses financial instruments comprising borrowings, cash, liquid resources and items such as trade debtors and creditors that arise directly from its operations. The main risks arising from the Group financial instruments are interest rate and liquidity risks. The board reviews policies for managing each of these risks and they are summarised below. The Group finances its operations through a combination of cash resources, financial leases and bank borrowings. Short term flexibility is satisfied by overdraft facilities which are repayable on demand and due for renewal in August 2004. Exposure and interest rate fluctuations on its borrowings are managed by the use of both fixed and floating facilities. The Group also mixes the duration of its deposits and borrowings to reduce the impact of interest rate fluctuations. At 30 April 2004 borrowings comprised: â€¢ Â£226,000 overdraft representing 79% of borrowings at an interest rate of 1% per annum where cash balances of an equal amount or greater exist, at base rate plus 2% per annum where the aggregate balance is equal to the total facility of Â£230,000 and at 29.5% per annum on any amounts in excess of this. At 30 April 2004 the Group had Â£4,000 undrawn committed borrowing facilities in respect of the overdraft. â€¢ Fixed interest hire purchase agreements of Â£59,000. The agreements are secured on the assets to which they relate. There is no material difference between the fair values and book values of the Groups financial instruments. Short term debtors and creditors have been excluded from the above disclosures as permitted by FRS 13. 18 DEFERRED TAXATION The balance of the deferred taxation account consists of the tax effect of timing differences in respect of: Group Company 2004 2004 Â£'000 Â£'000 Accelerated capital allowances 21 - Tax losses available (66) (9) _____ _____ (45) (9) _____ _____ Deferred tax charged to the profit and loss account and provision at 30 April 2004 (45) _____ READYBUY PLC NOTES TO THE ACCOUNTS PERIOD FROM 29 APRIL 2003 TO 30 APRIL 2004 19 SHARE CAPITAL 2004 Â£'000 Authorised: Equity: 40,000,000 Ordinary shares of 0.5p each 200 Non-Equity: 50,000 Redeemable shares of Â£1 each 50 _______ 250 _______ Allotted, issued and fully paid: 17,994,010 Ordinary shares of 0.5p each 90 _______ On incorporation, the company had an authorised share capital of Â£1,000 divided into 1,000 Ordinary Shares of Â£1 each of which one subscriber share was issued fully paid. From the date of incorporation to 30 April 2004, the following transactions were completed: On 17 June 2003: . the existing issued ordinary shares and each of the existing un-issued ordinary shares of Â£1 were sub-divided into 20,000 ordinary shares of 0.005p each; . the authorised share capital was increased from Â£1,000 to Â£250,000 by the creation of 3,980,000,000 ordinary shares of 0.005p each and 50,000 redeemable shares of Â£1 each; . the company issued 14,980,000 ordinary shares of 0.005p credited as fully paid up at par and 50,000 redeemable preference shares of Â£1 each, one quarter paid. On 4 August 2003, the Company: . issued a further 15,000,000 ordinary shares of 0.005p each at 5p per share. . the company made a bonus issue of 40 ordinary shares of 0.005p for every share held by each member. This resulted in the creation of a further 1,200,000,000 ordinary shares of 0.005p each; . following this, the company consolidated every 100 ordinary shares of 0.005p each into 1 ordinary share of 0.5p and, . redeemed the 50,000 redeemable shares of Â£1 each for cash at par. On 20 August 2003, a further 1,640,000 ordinary shares of 0.5p each were issued in bundles of 41 shares at Â£5.00 per bundle. On 26 August 2003, a further 3,598,802 ordinary shares of 0.5p were issued in connection with the acquisition of Oriental Fine Foods Limited (formerly McDonald Yang Limited) (Note 12). On 8 September 2003, a further 455,208 ordinary shares of 0.5p each were issued on admission of the Company to the Alternative Investment Market at 48p per share. Ordinary share options granted and subsisting at 30 April 2004 were as follows: Date of grant Option price Number of shares Exercisable between 26 August 2003 12.2p 1,259,580 Sept 2006 - Sept 2013 READYBUY PLC NOTES TO THE ACCOUNTS PERIOD FROM 29 APRIL 2003 TO 30 APRIL 2004 20 RESERVES Share Profit & Premium Loss Â£'000 Â£'000 Group Loss for the period - (298) Premium on shares issued in the period 1,574 - Share premium utilised on bonus issue (60) - Costs incurred (272) - ______ _____ At 30 April 2004 1,242 (298) ______ _____ Company Loss for the period - (41) Premium on shares issued in the period 1,574 - Share premium utilised on bonus issue (60) - Costs incurred (272) - ______ _____ At 30 April 2004 1,242 (41) ______ _____ 21 RECONCILIATION OF MOVEMENT IN EQUITY SHAREHOLDERS FUNDS 2004 Â£'000 Loss for the financial period (298) Equity shares issued in the period 90 Share premium on equity shares issued 1,574 Share premium utilised on bonus issue (60) Costs incurred (272) _______ Shareholders' funds at 30 April 2004 1,034 _______ 22 RECONCILIATION OF OPERATING PROFIT TO NET CASHFLOW FROM OPERATING ACTIVITIES 2004 Â£'000 Operating loss (343) Depreciation of tangible fixed assets 24 Loss on disposal of tangible fixed assets 6 Research and development costs written off 30 Amortisation of goodwill 22 Increase in stocks (7) Increase in debtors (27) Decrease in creditors (112) _____ Net cash outflow from operating activities (407) _____ READYBUY PLC NOTES TO THE ACCOUNTS PERIOD FROM 29 APRIL 2003 TO 30 APRIL 2004 23 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS 2004 Â£'000 Increase in cash in period 203 Cash outflow in respect of hire purchase 19 ____ Change in net debt arising from cash flows 222 Other changes not arising from movements in cash (78) ____ Net Funds at 30 April 2004 144 ____ 24 ANALYSIS OF CHANGES IN NET DEBT Other non- As at 30 Cash April Cash flows Movements 2004 Â£'000 Â£'000 Â£'000 Cash in hand and at bank 429 - 429 Overdraft (226) - (226) _____ _____ _____ 203 - 203 Hire purchase 19 (78) (59) _____ _____ _____ Total 222 (78) 144 _____ _____ _____ Non cash transaction In August 2003, the Company acquired the whole of the issued share capital of Oriental Fine Foods Limited (formerly McDonald Yang Limited). The consideration of Â£435,000 was satisfied by the issue of ordinary shares in the Company. 25 COMMITMENTS Capital commitments The Group had no capital commitments at the end of the financial period. Operating Lease Commitments At 30 April 2004, the Group was committed to making the following payments during the next year in respect of operating leases for land and buildings expiring:- Group Company 2004 2004 Â£'000 Â£'000 Between two and five years 26 - _______ _______ Although the Company has an annual commitment in respect of the rent for its leasehold premises, the amount payable has been waived from 1 May 2004 until further notice (Note 26). READYBUY PLC NOTES TO THE ACCOUNTS PERIOD FROM 29 APRIL 2003 TO 30 APRIL 2004 26 RELATED PARTY TRANSACTIONS During the period, rent payable of Â£4,420 was accrued as owing to the K M & K S Yeung Partnership. The annual commitment of Â£26,500 due under the terms of this lease has been waived with effect from 1 May 2004 until further notice. K S Yeung and K M Yeung each own 10% of the company's issued share capital and K M Yeung is a non-executive director of the Company. Purchases totalling Â£5,129 were made from the Yang Sing Restaurant which is owned by K S & K M Yeung. The balance outstanding at the year end was Â£1,401. Consultancy fees of Â£5,833 were paid to K S Yeung. The balance outstanding at the year end was Â£833. The Company has entered into a consultancy agreement, dated 20 August 2003, with Zeus Partners ('Zeus') of which K W Salisbury is a partner. Under this agreement, Zeus has agreed to provide the services of K W Salisbury as non-executive director to the Company and specifically to monitor the performance of the Company from a shareholder perspective Fees totalling Â£109,333 were paid to Zeus for services rendered during the period. 27 CONTINGENT LIABILITIES The Company is party to an unlimited cross guarantee in respect of the bank borrowings of its subsidiary and, on net basis, there were no such borrowings at 30 April 2004. The Company is also party to a guarantee in respect of certain hire purchase indebtedness of its subsidiary. At 30 April 2004, this contingency amounted to Â£40,579. The Company is a member of a group registration for Value Added Tax purposes. Under the terms of this registration, each member is jointly and severally liable for the Value Added Tax liability for all members. There was no VAT liability at 30 April 2004. A copy of the Annual Report and Account for the period ended 30 April 2004 will be despatched to shareholders today and copies will be available from the Company's registered office 332-340 Chester Road, Old Trafford, Manchester M16 9EZ. For further information contact: Colin Davies Tel: 01904 520850 This information is provided by RNS The company news service from the London Stock Exchange

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