Interim Results
Braemar Group PLC
23 November 2007
Braemar Group plc ('Braemar' or 'the Group') is pleased to announce its
unaudited interim results for the six months ended 30 September 2007, during
which time the Group has made the following key achievements against a
deteriorating backdrop for residential property;
• Placing to raise £1.3m net of expenses in July
• Acquisition of The Armchair Property Investor Limited ('Armchair') in July
• Launch of Coronation V
• Preparation for launch of two new funds, further diversifying our business
• Expansion of apartment management operations, yielding secure income
followed by the recent acquisition of Main and Main's apartment management
division after the period end.
Summary
The directors believe that the Group's strategy, as stated at the time the Group
came to AIM in November 2005 is on track to deliver a balanced end-to-end real
estate investment and services group together with associated corporate finance.
The Group's more cyclical business areas are biased towards the second half of
the financial year (when historically the majority of our funds are raised and
fees drawn, as in the prior year), and although we are disappointed by the
extent of the loss in the first half, primarily due to deteriorating sentiment
towards residential property investment (affecting the newly acquired Armchair
and the core Coronation product), we continue to believe that our innovation in
real-estate structured products, soon to be evidenced by the launch of two new
diversified funds, means that it is too early for us to judge if and how the
slowdown affecting all property led companies will affect Braemar. The continued
growth of our apartment management business, now numbering almost 2,500 units
under management, is providing a stable cash flow for the business going forward
underpinning our working capital position despite the worse than expected first
half loss.
Financial results
The unaudited results for the six months to 30 September 2007 report revenue of
£269,000 (30 September 2006: £586,000) and a loss before taxation of £319,000
(30 September 2006: £187,000). The net assets of the Group stood at £3,348,000
at 30 September 2007 (30 September 2006: £2,217,000). Cash balances at 30
September 2007 were £1,013,000 (30 September 2006: £213,000) while net funds
stood at £429,000 (30 September 2006: net debt of £1,162,000). The comparative
figures for 2006 have now also been restated in accordance with International
Financial Reporting Standards ('IFRS').
The business is monitored internally by the performance of the two operating
divisions and the highlights for the period under review are as follows:
Fund and property management - Our fifth fund in the Coronation series was
launched in May and is due to close in December 2007 continuing the series of
tax efficient residential property funds. The fund raising for Coronation V had
been expected to close in August 2007, but after a positive start, the market
softened during the summer months as many IFAs had to contend with the impact of
MIFID on their businesses and determine whether or not they could continue to
invest in unregulated collective investment products such as Coronation.
Consequently, the fund raising for Coronation V has been extended until December
2007 but the continued reduction in confidence in the residential property
market has meant that funds raised are unlikely to equal those raised for
Coronation IV.
Property management has again contributed positively towards central costs in
the period under review and the business has successfully completed the
management of a £1.5 million development for Coronation IV. We continue to
maintain our track record for lettings management with an average occupancy rate
of 94% in the six months to 30 September 2007.
In July 2007, we acquired Armchair, a residential property investment
consultancy business, acting on behalf of registered clients to source and
negotiate deals from property developers. Armchair has built up a database of
over 10,000 residential property investors across the UK. It continues to trade
under its own name and provides Braemar with access to a database of residential
property investors, which is intended to increase the flow of new apartment and
property management and financial services business.
Armchair has experienced an adverse impact on its performance during the period,
in common with much of the sector. As the business was acquired largely for
deferred consideration payment conditional on profitability, the directors do
not expect to make such a payment this year, and are monitoring Armchair's cash
flow closely and are taking appropriate action to control costs in the event
that the adverse market conditions remain into the new year.
Our apartment management division provides maintenance, facilities management
and service charge collection for our own funds and an increasing number of
third party clients. Following the acquisition of the apartment management
division of the estate agency Main & Main in October 2007, this business now
manages c. 2,500 apartments, primarily in the North-West. We have now achieved
our objective of building sufficient scale to create a profitable business on a
standalone basis. This part of the Group provides valuable counter-cyclical,
recurring income and we continue to seek other opportunities to expand this
activity in other parts of the UK. We are pleased with how the initial
integration has gone, and expect, despite a large recent investment in systems
and enlarged accommodation, to deliver operational profitability from this
business in the current year.
Corporate finance - It is now just over a year since Braemar Securities Limited
secured its regulatory approval from the FSA to act as a corporate finance
adviser. During the first half, the division has concentrated on in-house
activities, including the launch of our funds and managing the two acquisitions
that have been made, thereby significantly reducing the advisory costs borne by
the Group. As no funds have closed during the period the division has recorded
no income. Being the part of the Group most reliant on strong fund-raising
activities, the second half will show an improvement on the first.
Outlook
The performance of the Group for the period, whilst disappointing and behind
directors' expectations, largely due to market conditions, comes at a time when
we have been investing in the Group's future and diversifying our business
through new innovative real-estate structured products. The outlook for the
second half of the year is more encouraging, however we are uncertain as to
whether the performance will be sufficient to recover the losses from the first
half, particularly if the property slowdown continues. The fixed costs of the
Group are underpinned by recurring income from the property management division
where there is an encouraging pipeline of new business.
The two new funds being prepared for launch shortly are exciting, with the first
closing for each expected to be on 31 March 2008. The first is a UK farmland
fund and the second is a shared ownership fund offering homes to first time
buyers. Further Coronation funds are also being planned for early 2008.
Due to the heavy reliance on the second-half of the current year, the Group will
provide shareholders with an appropriate trading update in early April 2008, as
was provided last year.
Martin Robinson
Chairman
22 November 2007
CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2007
Unaudited Unaudited* Unaudited*
Six months Six months Year ended
ended ended 31 March 2007
30 September 2007 30 September
2006
Notes £'000 £'000 £'000
Revenue
Continuing operations 5 231 586 2,365
Acquisitions 38 - -
Cost of sales (325) (1,708)
(113)
Gross profit 156 261 657
Increase in fair value of investment 132 - -
properties
Administration Expenses (608) (444) (823)
Operating loss
Continuing operations (288) (183) (166)
Acquisitions (32) - -
(320) (183) (166)
Investment income 21 17 27
Finance costs (20) (21) (47)
Loss on ordinary activities before 5 (319) (187) (186)
taxation
Taxation - - 4
Loss attributable to equity holders of
parent (319) (187) (182)
Loss per share
from continuing operations - basic 6 0.23p 0.16p 0.16p
* Re-stated in accordance with IFRS.
CONSOLIDATED BALANCE SHEET
AT 30 SEPTEMBER 2007
Unaudited Unaudited* Unaudited*
30 September 30 September 31 March 2007
2007 2006
Notes £'000 £'000 £'000
Non-current assets
Property, plant and equipment 53 15 21
Investment properties 366 - 142
Goodwill 14 2,423 2,244 2,244
Other intangible assets 14 100 - -
Held-to-maturity investments 4 2 4
Available-for-sale investments 29 - 112
2,975 2,261 2,523
Current assets
Inventories - 1,114 -
Trade and other receivables 134 88 197
Prepayments 71 94 49
Cash and cash equivalents 12,13 1,013 213 767
1,218 1,509 1,013
Total assets 4,193 3,770 3,536
Equity and Liabilities
Issued capital 9 1,638 1,138 1,140
Share premium 10 2,945 1,954 1,957
Retained earnings 10 (1,189) (875) (870)
Other reserves 10 (46) - 30
Total equity 3,348 2,217 2,257
Non-current liabilities
Obligations under finance leases 18 - -
18 - -
Current liabilities
Trade and other payables 304 210 392
Interest bearing loans and borrowings 7 512 1,093 887
Obligations under finance leases 11 - -
Deferred consideration - 250 -
827 1,553 1,279
Total liabilities 845 1,553 1,279
Total equity and liabilities 4,193 3,770 3,536
* Re-stated in accordance with IFRS.
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 3O SEPTEMBER 2007
Unaudited Unaudited* Unaudited*
Six months Six months Year ended
ended ended 31 March 2007
30 September 30 September
2007 2006
Notes £'000 £'000 £'000
Operating activities
Loss before tax (320) (187) (186)
Adjustments to reconcile loss before tax
to net cash flows for:
Depreciation of property, plant and 4 3 6
equipment
Share option charge 7 - -
Share-based income - - (53)
Increase in fair value of investment (132) - -
properties
Interest income (21) (18) (27)
Interest expense 20 21 47
Decrease in trade and other receivables 41 367 270
(Increase)/decrease in inventories - (989) 125
(Decrease)/increase in trade and other (132) (24) 153
payables
Interest paid (33) (1) (1)
Loss on sale of fixed assets - 5 6
Income tax received - - 19
Cash generated from operations (566) (823) 359
Cash flows from investing activities
Proceeds from the sale of property, plant - 8 10
and equipment
Interest received 21 18 27
Purchase of property, plant and equipment (35) - (13)
Purchase of held-to-maturity investments - - (2)
Purchase of available-for-sale - - (29)
investments
Purchase of investment property (92) - (142)
Acquisition of subsidiary 14 (29) - -
Net cash from/ (used in) investing (135) 26 (149)
activities
Cash flows from financing activities
Proceeds from issue of share capital 1,312 - 5
Transaction costs of issue of share (16) (4) (5)
capital
Proceeds from borrowings 26 - -
Repayment of borrowings (375) - -
Net cash from financing activities 947 (4) -
Net increase/(reduction)in cash and cash 246 (801) 210
equivalents
Cash and cash equivalents at 1 April 767 557 557
Cash and cash equivalents at 30 September 1,013 (244) 767
* Re-stated in accordance with IFRS.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY
Unaudited Unaudited Unaudited
Six months Six months Year ended
ended ended 31 March
30 September 30 September 2007
2007 2006
£'000 £'000 £'000
Shareholders' equity brought forward 2,257 2,409 2,409
Loss for the period (319) (220) (182)
New share capital issued 1,502 - 5
Share issue costs (16) (5) (5)
Other reserves movement due to share 7 -
options charge
Other reserves movement due to (83) - 30
available-for-sale investments
Total movement in shareholders' equity 1,091 (225) (152)
Shareholders' equity carried forward 3,348 2,184 2,257
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
Unaudited Unaudited Unaudited Year
Six months Six months ended
ended ended 31 March 2007
30 September 30 September
2007 2006
£'000 £'000 £'000
(Losses)/gains on available-for-sale (83) - 30
investments taken to equity
(Expense)/net income recognised (83) - 30
directly in equity
(Loss) for the period (319) - (182)
Total recognised income and expense
for the period (402) - (152)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2007
1 - BASIS OF PREPARATION
The Group's interim results for the six months to 30 September 2007 have been
prepared in accordance with IFRS for the first time and from the transition
date. As a consequence a number of the accounting policies adopted in the
preparation of these statements are different to those adopted in preparing the
financial statements for the year ended 31 March 2007, which were prepared in
accordance with UK Generally Accepted Accounting Practice (UK GAAP).
The figures shown for the year to 31 March 2007 are based on the Company's
statutory accounts for that period, restated for IFRS, though these statements
have not been audited. The statutory accounts as prepared under UK GAAP received
an unqualified audit report and have been filed with the Registrar of Companies.
The interim consolidated financial statements do not include all the information
and disclosures required in the annual financial statements, and should be read
in conjunction with the Company's annual financial statements as at 31 March
2007.
2 - TRANSITIONAL ARRANGEMENTS
The Group has adopted IFRS from 1 April 2006, the date of transition. The Group
is required to define its accounting policies under IFRS and then apply these
policies retrospectively in determining the opening balance sheet under IFRS at
the date of transition.
Reconciliations and descriptions of the effect of the transition from UK GAAP to
IFRS on the Group's net income and equity are included in note 4 of these
statements.
3 - ACCOUNTING POLICIES
The principal accounting policies adopted by the Group are as follows.
(a) Basis of consolidation
The consolidated income statement and balance sheet includes the financial
statements of the Company and its subsidiary undertakings made up to 30
September 2007. The results of subsidiaries sold or acquired are included in
the profit and loss account up to, or from, the date control passes. Intra-group
sales and profits are eliminated fully on consolidation.
(b) Revenue recognition
The revenue shown in the consolidated income statement comprises gross sale
proceeds of trading properties, gross rentals, commissions and sundry income and
the invoiced value of goods and services supplied by the Group net of VAT.
Where amounts are due conditional on the successful completion of fund-raising
for an investment vehicle revenue is recognised where, in the opinion of the
directors, there is a reasonable certainty that sufficient funds have been
raised to enable the successful operation of that investment vehicle. Amounts
due on an annual basis for the management of third party investment vehicles are
recognised on a time apportioned basis.
(c) Business combinations
Acquisitions are accounted for using the purchase method as required by IFRS 3
Business Combinations.
(d) Deferred taxation
Deferred tax is provided in full in respect of taxation deferred by timing
differences between the treatment of certain items for taxation and accounting
purposes. Deferred tax assets are recognised to the extent that it is regarded
as more likely than not that they will be recovered.
(e) Goodwill
Goodwill arising on the acquisition of subsidiary undertakings or businesses,
representing any excess of fair value of the consideration given over the fair
value of the identifiable assets and liabilities acquired, is recognised as an
asset. Goodwill is reviewed for impairment at least annually and any impairment
is to be recognised in the income statement and is not subsequently reversed.
Goodwill is carried at cost less accumulated impairment losses.
(f) Other intangible assets
Separately identifiable intangible assets are recognised at their fair value and
amortised over their useful economic lives:
customer databases - five years
(g) Tangible fixed assets and depreciation
Tangible fixed assets are stated at cost, net of depreciation and any provision
for impairment. Depreciation is calculated to write down the cost of assets to
their estimated residual values over their estimated useful economic life over a
period of 4 years on a straight line basis.
(h) Investment properties under development
Investment properties under development are stated at the lower of cost and net
realisable value. Cost comprises purchase price, acquisition and development
costs and interest that is directly attributable to the financing of the
property.
(i) Investment properties
Investment properties are measured at their fair value and any movement in the
fair value of the investment properties is recognised in the income statement.
(j) Held-to-maturity investments
Held-to-maturity investments are measured at amortised cost.
(k) Available-for-sale investments
Available-for-sale investments are measured at their fair value and any movement
in the fair value is taken directly to equity.
(l) Carried interest receivable
The Group earns a performance fee ('carried interest receivable') on funds it
manages on behalf of its investors. Carried interest receivable is recognised
where, at the balance sheet date, the performance criteria have been met based
on the valuations of the funds. Carried interest that has been earned, but
where the amounts are not yet due for payment is discounted to its present
value.
(m) Leasing and hire purchase
Assets obtained under hire purchase contracts and finance leases are capitalised
as tangible fixed assets. Assets acquired by finance lease are depreciated over
the shorter of the lease term and their useful lives. Assets acquired by hire
purchase are depreciated over their useful lives. Finance leases are those where
substantially all of the benefits and risks of ownership are assumed by the
Group. Obligations under such agreements are included in creditors net of the
finance charge allocated to future periods. The finance element of the rental
payment is charged to the profit and loss account so as to produce a constant
periodic rate of charge on the net obligation outstanding in each period.
(n) Operating leases
Rentals under operating leases are charged on a straight line basis over the
lease term.
Benefits received and receivable as an incentive to sign an operating lease are
recognised on a straight line basis over the period until the date the rent is
expected to be adjusted to the prevailing market rate.
(o) Pensions
The Group operates a defined contribution pension scheme and the pension costs
charged against profits represent the amount of contributions payable to the
scheme in the year. Differences between contributions payable and contributions
actually paid are shown as either accruals or prepayments in the balance sheet.
(p) Holiday pay
The Group recognises an asset or liability for holiday pay obligations at the
balance sheet date. Movements in the period are taken to the income statement.
(q) Share based payments
The Group issues equity-settled share-based payments to certain employees
(including directors) and suppliers. Equity-settled share-based payments are
measured at fair value at the grant date. The fair value determined at the
grant date of the equity-settled share-based payment is expensed on a
straight-line basis over the vesting period, together with a corresponding
increase in equity, based upon the Group's estimate of the shares that will
eventually vest.
Fair value is determined using the Black-Scholes pricing model. The expected
life used in the model has been adjusted, based on management's best estimate,
for the effects of non-transferability, exercise restrictions and behavioural
considerations.
(r) Deferred consideration
Deferred consideration is the amount, in the opinion of the directors, of
additional consideration that will be paid in cash or satisfied by the issue of
shares in respect of acquisitions previously made. If the effect is material,
deferred consideration is determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of the time
value of money.
4 - EXPLANANTION OF TRANSITION TO IFRS
This note sets out the changes in accounting policies which have arisen from the
adoption of IFRS. The re-stated balance sheets as at 1 April 2006, 30 September
2006 and 31 March 2007 have been included, together with the re-stated income
statements for the six months ended 30 September 2006 and the year ended 31
March 2007.
Differences between IFRS and UK GAAP
Goodwill amortisation - IFRS 3, Business Combinations
Goodwill is no longer amortised but is subject to regular impairment reviews.
An adjustment has been made to remove the goodwill amortisation charge under UK
GAAP.
Available -for-sale investments - IAS 39, Financial Instruments: Recognition and
Measurement
Available-for-sale investments are included in the balance sheet at their fair
value and any movement is taken directly to equity.
(a) Reconciliation of consolidated balance sheet and equity at 1 April 2006
UK GAAP Adjustments IFRS
Audited Re-stated
£'000 £'000 £'000
Non-current assets
Property, plant and equipment 31 - 31
Investment properties - - -
Goodwill 2,244 - 2,244
Held-to-maturity investments 2 - 2
Available-for-sale investments - - -
2,277 - 2,277
Current assets
Inventories 125 - 125
Trade and other receivables 460 - 460
Prepayments 88 - 88
Cash and cash equivalents 557 - 557
1,230 - 1,230
Total assets 3,507 - 3,507
Equity and Liabilities
Issued capital 1,138 - 1,138
Share premium 1,959 - 1,959
Retained earnings (688) (688)
Other reserves - - -
Total equity 2,409 - 2,409
Non-current liabilities
Obligations under finance leases - -
Deferred consideration - -
- - -
Current liabilities
Trade and other payables 211 211
Interest bearing loans and borrowings 637 637
Obligations under finance leases - - -
Deferred consideration 250 250
Total liabilities 1,098 1,098
Total equity and liabilities 3,507 3,507
(b) Reconciliation of consolidated balance sheet and equity at 30 September 2006
UK GAAP Goodwill IFRS
Unaudited Re-stated
£'000 £'000 £'000
Non-current assets
Property, plant and equipment 15 - 15
Investment properties - - -
Goodwill 2,187 57 2,244
Held-to-maturity investments 2 - 2
Available-for-sale investments - - -
2,204 57 2,261
Current assets
Inventories 1,114 - 1,114
Trade and other receivables 88 - 88
Prepayments 94 - 94
Cash and cash equivalents 213 - 213
1,509 - 1,509
Total assets 3,713 57 3,770
Equity and Liabilities
Issued capital 1,138 - 1,138
Share premium 1,954 - 1,954
Retained earnings (932) 57 (875)
Other reserves - - -
Total equity 2,160 57 2,217
Non-current liabilities
Obligations under finance leases - - -
Deferred consideration - - -
- - -
Current liabilities
Trade and other payables 210 - 210
Interest bearing loans and 1,093 - 1,093
borrowings
Obligations under finance leases - - -
Deferred consideration 250 - 250
1,553 - 1,553
Total liabilities 1,553 - 1,553
Total equity and liabilities 3,713 57 3,770
(c) Reconciliation of consolidated balance sheet and equity at 31 March 2007
UK GAAP Goodwill Investments IFRS
Audited Re-stated
£'000 £'000 £'000 £'000
Non-current assets
Property, plant and equipment 21 - - 21
Investment properties 142 - - 142
Goodwill 2,130 114 - 2,244
Held-to-maturity investments 4 - - 4
Available-for-sale investments 82 - 30 112
2,379 114 30 2,523
Current assets
Inventories - - - -
Trade and other receivables 197 - - 197
Prepayments 49 - - 49
Cash and cash equivalents 767 - - 767
1,013 - - 1,013
Total assets 3,392 114 30 3,536
Equity and Liabilities
Issued capital 1,140 - - 1,140
Share premium 1,957 - - 1,957
Retained earnings (984) 114 - (870)
Other reserves - - 30 30
Total equity 2,113 114 30 2,257
Non-current liabilities
Obligations under finance leases - - - -
Deferred consideration - - - -
- - - -
Current liabilities
Trade and other payables 392 - - 392
Interest bearing loans and 887 - - 887
borrowings
Obligations under finance leases - - - -
Deferred consideration - - - -
1,279 - - 1,279
Total liabilities 1,279 - - 1,279
Total equity and liabilities 3,392 114 30 3,536
(d) Reconciliation of consolidated income for the six months ended 30 September 2006
Unaudited UK Goodwill IFRS Re-stated
GAAP
£'000 £'000 £'000
Revenue
Continuing operations 586 - 586
Acquisitions - - -
Cost of sales (325) - (325)
Gross profit 261 - 261
Other gains and losses - - -
Administration Expenses (501) 57 (444)
Operating loss
Continuing operations (240) 57 (183)
Acquisitions - -
(240) 57 (183)
Investment income 17 - 17
Finance costs (21) - (21)
Loss on ordinary activities before (244) 57 (187)
taxation
Taxation - - -
Loss attributable to equity
holders of parent (244) 57 (187)
(e) Reconciliation of consolidated income for the year ended 31 March 2007
Audited UK Goodwill IFRS
GAAP Re-stated
£'000 £'000 £'000
Revenue
Continuing operations 2,365 - 2,365
Acquisitions - - -
Cost of sales (1,708) - (1,708)
Gross profit 657 - 657
Other gains and losses - -
Administration Expenses (937) 114 (823)
Operating loss
Continuing operations (280) 114 (166)
Acquisitions - -
(280) 114 (166)
Investment income 27 - 27
Finance costs (47) - (47)
Loss on ordinary activities before (300) 114 (186)
taxation
Taxation 4 - 4
Loss attributable to equity holders
of parent (296) 114 (182)
5 SEGMENTAL ANALYSIS
Revenue Unaudited Unaudited Unaudited
Six months ended Six months ended Year ended
30 September 2007 30 September 2006 31 March 2007
£'000 £'000 £'000
Property and Fund Administration 264 355 642
Corporate Finance - - 198
Other 5 231 1,525
269 586 2,365
Profit/(loss) before tax Unaudited Unaudited Unaudited
Six months ended Six months ended Year ended
30 September 2007 30 September 2006 31 March 2007
£'000 £'000 £'000
Property and Fund Administration 53 121 160
Corporate Finance (58) - 106
Other (314) (308) (452)
(319) (187) (186)
The total revenue of the Group for the year has been derived wholly from
activity undertaken in the United Kingdom.
Included within other is property trading and any gains or losses on investment
properties.
6 LOSS PER SHARE
Unaudited Unaudited Unaudited
Six months ended Six months ended Year ended
30 September 2007 30 September 2006 31 March 2007
£'000 £'000 £'000
Loss for the period 319 187 182
Weighted average number of ordinary 136,924,486 113,795,000 113,795,978
shares
Loss per ordinary share - basic 0.23p 0.16p 0.16p
There are 33,289,778 potentially issuable shares that have not been included in
a diluted EPS calculation as they are anti-dilutive.
7 BORROWINGS
Debt repayment
In accordance with the terms of the loan notes issued as part of the
consideration of the acquisition of The Braemar Group Limited, Marc Duschenes
and Jennie Duschenes redeemed, on 10 April 2007, four convertible loan notes at
par paid as deferred consideration. This resulted in £203,000 being paid to each
of Marc Duschenes and Jennie Duschenes by the Group in cash.
8 SHARE-BASED PAYMENT
In June 2007 a Share Option Scheme was established and options granted to
certain employees (including directors) of the Group. Under the terms of this
scheme 3,501,900 share options have been granted with an exercise price of
3.25p, which was the average market price of the shares for the three days prior
to grant. The options are exercisable without condition from the third
anniversary of grant and expire on the tenth anniversary. There are no cash
settlement options. The fair value of options granted during the six months
ended 30 September 2007 was estimated using the Black Scholes Method and
amortised over three years. The fair value of options granted was estimated
using the following assumptions:
Dividend yield (%) nil
Expected volatility (%) 40%
Risk-free interest rate (%) 5.75%
Strike price 3.25p
Expected life (years) 3
9 SHARE CAPITAL
The following issue of ordinary shares of 1p took place in the year:
No of Shares Issue Price
2 July 2007- Consideration shares 6,080,000 3.125p
13 July 2007 - Placing for cash 43,733,332 3p
10 RESERVES
Share Premium Account Unaudited Unaudited Unaudited
2007 2006 31 March 2007
£'000 £'000 £'000
At 1 April 1,957 1,959 1,959
Shares issued during the period 1,004 - 3
Share issue costs (16) (5) (5)
At 30 September 2,945 1,954 1,957
Profit & Loss Account Unaudited Unaudited Unaudited
2007 2006 31 March 2007
£'000 £'000 £'000
At 1 April (870) (688) (688)
Loss for the period (319) (187) (182)
At 30 September (1,189) (875) (870)
Other reserves Unaudited Unaudited Unaudited
2007 2006 31 March 2007
£'000 £'000 £'000
At 1 April 30 - -
Available-for-sale investments (83) - 30
Amortisation of share option expense 7 - -
At 30 September (46) - 30
11 RELATED PARTY TRANSACTIONS
In accordance with the terms of the loan notes issued as part of the
consideration of the acquisition of The Braemar Group Limited, Marc Duschenes
and Jennie Duschenes redeemed, on 10 April 2007, four convertible loan notes at
par paid as deferred consideration. This resulted in £203,000 being paid to each
of Marc Duschenes and Jennie Duschenes by the Group in cash.
12 ANALYSIS OF NET DEBT
Unaudited Unaudited Unaudited
Six months ended Six months ended Year ended
30 September 2007 30 September 2006 31 March 2007
£'000 £'000 £'000
Cash at bank and in hand 1,013 212 767
Bank overdraft - (456) -
Hire purchase obligations (29) - -
Convertible loan notes (512) (637) (887)
Convertible loan notes accrued (43) (31) (55)
interest
Deferred consideration - (250) -
Net funds/(debt) 429 (1,162) (175)
13 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS/ (DEBT)
Unaudited Unaudited Unaudited
Six months ended Six months ended Year ended
30 September 2007 30 September 2006 31 March 2007
£'000 £'000 £'000
Opening net (debt) (175) (340) (340)
Increase /(decrease) in cash 246 (801) 210
Net repayment of borrowings 346 - -
Non cash movement in debt 12 (21) (45)
Closing net funds/(debt) 429 (1,162) (175)
14 ACQUISITION OF SUBSIDIARY UNDERTAKING
On 2 July 2007 the Group acquired 100% of The Armchair Property Investor Limited
for initial consideration comprising the issue of 6,080,000 Ordinary Shares at
3.125p per share (£190,000), and up to a further value of £2,000,000 of
Ordinary Shares on deferred terms. The fair value of the total consideration is
estimated by the directors as £219,000.
Acquisitions are accounted for using the purchase method as required by IFRS 3
Business Combinations. Goodwill of £119,000 arose on the acquisition.
The following table sets out the fair values to the Group of the identifiable
assets and liabilities acquired as at 2 July 2007:
Non-current assets £'000
Intangibles 160
Current assets -
Total assets 160
Current liabilities
Trade and other payables (60)
Total liabilities (60)
Net assets acquired 100
Goodwill arising 119
Satisfied by:
Shares issued 190
Directly attributable acquisition costs 29
219
Net cash outflows in respect of the acquisition comprised:
Directly attributable acquisition costs 29
Net cash outflow 29
The Armchair Property Investor Limited had no income or expenses prior to the
acquisition.
15 POST BALANCE SHEET EVENTS
On 31 October 2007 the Group acquired the business and certain related assets of
the residential apartment management division of Main and Main (Developments)
Limited for a cash consideration of £525,000.
16 BOARD APPROVAL
The interim statement was approved by the Board on 22 November 2007.
17 COPIES OF INTERIM STATEMENT
Copies of this statement will be sent to shareholders shortly and are available
to the public from the Registered Office at: Richmond House, Heath Rd, Hale,
Cheshire, WA14 2XP.
This information is provided by RNS
The company news service from the London Stock Exchange
Friday, 17th May 2024
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