Interim Results

RNS Number : 6539E

Brainspark PLC

30 September 2008

 



FOR IMMEDIATE RELEASE                            30 SEPTEMBER 2008

BRAINSPARK Plc ('Brainspark' or 'the Company')

UNAUDITED INTERIM RESULTS FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2008

                Chairman's statement

In the six months ended 30 June 2008, the Company made a profit before taxation of £12k, compared to a profit of the comparative period last year of £4k. Brainspark's efforts were devoted to the launch of China IPO Group PLC, an investment company focusing on opportunities in China. Meanwhile Brainspark's management continue to realise value from the existing UK asset portfolio. Proceeds will be utilised to develop the Chinese operations.  

Financial Summary  

The consolidated net asset value at 30 June 2008 was £3,583k up from £3,571k at 31 December 2007. At 30 June 2008, Brainspark's mid-market share price of 0.4p valued the company at £1,320k against a consolidated net asset value of £3,583k.  

First Half 2008 Events. 

On 30 June the Company sold its 17.5% holding, 54,690 'A' ordinary shares,1490 warrants and £300k loan  in Easyart Holdings (UK) to Svenska Konstbolaget AB, being inter alia the Nordic venture capital company Verdane Capital, for £200k in cash. The transaction  valued Easyart at £857k. 

Brainspark's management remain committed to continue the positive trend of the Company during the final part of the year 

Portfolio Review 

At of 30 June 2008 Brainspark had holdings in 7 companies, 2 in the UK, 1 in Jersey, 2 in Italy, 1 in Israel and 1 in the United States. Its stakes range from nearly 0.5% to 42.71% in these companies. The portfolio covers a wide range of business sectors, including web services, application service providers, advanced IT solutions and an investment company. 

In April 2008 IPO Beijing Investment Consulting Ltd, a wholly owned subsidiary of China IPO Group PLC was incorporated It opened its first office in Beijing in June 2008 and also established a second office in Xi'an  Brainspark has provided   China IPO Group PLC with working capital loans of £155,000. 

China IPO Group fund raising continued in the first half of 2008 and despite adverse market conditions the Company remains confident that a first round of financing will be closed before the end of the year.

Further progress for the second half of 2008

During the second half of 2008 Brainspark continued the positive trend of the first six months.

During August 2008 Geosim (www.geosim.co.il), entered into a new agreement with two US shareholders which secured a $500,000 loan to the company. The company was reliant upon the completion of $3m funding, for its future development, having only secured $1.5m. The company is now entirely dependent on further funds to be made available from existing, or future investors. Sales of advertising contracts for the 3D Philadelphia website have begun and more efforts, subject to successful fund raising, will be devoted by the company on marketing and sales activities in Philadelphia.

The investment in Geosim is held in the company's book at £1.83m. and the Directors will need to review it in the event that Geosim fails to raise the necessary funding to sustain its business.

Prof. Francesco Gardin

Chairman

30 September 2008

Financial Statements

________________________________________________________

Consolidated Income Statement for the six months ended 30 June 2008

	Note	Six months to 30  June 2008 (Unaudited)	Six months to 30  June 2007 (Unaudited)	Year ended  31  December 2007 (Audited)
		£'000	£'000	£'000
Continuing operations
Investment revenue		8	9	15
Gain on disposal of investments		200	75	299
Share of profits of associates		-	-	7
Finance charges		-	-	(15)
Other operating expenses		(196)	(80)	(268)
Profit before tax		12	4	38
Tax		-	-	-
Profit for the period from continuing operations		12	4	38
Attributable to:
Equity holders of the parent		12	4	38
Earnings per share
Basic and diluted earnings per 0.01p ordinary share	3	0.003p	0.001p	0.01p

Consolidated Balance sheet at 30 June 2008

	Notes	Six months to 30 June 2008 (Unaudited) £'000	Six months to 30 June 2007 (Unaudited) £'000	Year Ended 31 December 2007 (Audited) £'000
Non-current assets
Investments in associates	4	1,830	2,023	1,830
Available for sale investments	5	919	818	919
Total non-current assets		2,749	2,841	2,749
Current assets
Trade and other receivables		560	626	563
Cash and cash equivalents		502	305	499
Total current assets		1,062	931	1,062
Current liabilities
Trade and other payables		(228)	(257)	(240)
Total current liabilities		(228)	(257)	(240)
Net current assets		834	674	822
Net assets		3,583	3,515	3,571
Equity
Share capital		1,936	1,936	1,936
Share premium account		29,186	29,186	29,186
Other reserves		6,813	6,813	6,813
Equity component of convertible instrument		32	32	32
Fair value adjustment to available for sale investments		22	-	22
Retained losses		(34,406)	(34,452)	(34,418)
Equity attributable to equity holders of the parent		3,583	3,515	3,571

Statement of changes in equity

For the six month period ended 30 June 2008

		Six months to 30 June 2008 (Unaudited) £'000	Six months to 30 June 2007 (Unaudited) £'000	Year ended  31 December 2007 (Audited) £'000
Profit for the period		12	4	38
Net addition in equity		12	4	38
Opening equity attributable to equity holders of the parent		3,571	3,511	3,533
Closing equity equity attributable to equity holders of the parent		3,583	3,515	3,571

Consolidated cash flow statements

For the six months ended 30 June 2008

		Six months to 30 June 2008 (Unaudited) £'000	Six months to 30 June 2007 (Unaudited) £'000	Year ended 31 December 2007 (Audited) £'000
Net cash used in operating activities		(205)	(89)	(225)
Cash flows from investing activities
Interest received		8	9	15
Proceeds from sale of investments in associates		200	75	375
Purchase of investments		-	(100)	(76)
Net cash generated from investing activities		208	(16)	314
Increase/(Decrease) in net cash for the period		3	(105)	89
Cash and cash equivalents at beginning of period		499	410	410
Cash and cash equivalents at end of the period		502	305	499

Notes to the financial statements

1                   Accounting policies

 

Basis of preparation

The interim financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards and in accordance with International Accounting Standard (IAS) 34 Interim Financial Reporting.

 

The financial information contained in this interim statement is unaudited and does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985 and have not been audited by the company’s auditors. The financial statements for the year ended 31 December 2007 have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain a statement under s.237(2) or (3) of the Companies Act 1985. 

 

Significant accounting policies

The interim financial statements have been prepared under the historical cost convention, except for the revaluation of certain properties and financial instruments.

The same accounting policies, presentation and methods of computation are followed in these interim financial statements as were applied in the preparation of the Group’s financial statements for the year ended 31 December 2007.

2                   Segment reporting

The Group carries on its business in five geographical locations, namely the UK, Italy, Israel, United States and China. Its principal activity is the investment in technology start up businesses.

Based on risks and returns, the Directors consider that the Group had only one business segment during the period ended 30 June 2008, that of investing in technology start up companies. Therefore the disclosure for the primary segment has already been given in these financial statements.

The secondary reporting would be as shown below.

	Six month to  30 June 2008 (Unaudited)	Six month to  30 June 2007 (Unaudited)	Year ended  31 December 2007 (Audited)
	Segment assets	Segment assets	Segment assets
	£'000	£'000	£'000
United Kingdom	960	834	1,053
Continental Europe	630	688	630
Middle East	1,830	1,830	1,830
China	105	105	-
United States	58	58	58
	3,583	3,515	3,571

3                   Earnings per share

The basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is computed using the same weighted average number of shares during the period adjusted for the dilutive effect of share warrants and convertible loans outstanding during the period.

Notes to the financial statements

The profit and weighted average number of shares used in the calculation are set out below:

	Six months to 30 June 2008 (Unaudited) £'000	Six months to  30 June 2007 (Unaudited) £'000	Year ended 31 December 2007  (Audited)   £'000
Profit attributable to ordinary shareholders	12	4	38
Adjusted profit	12	4	38
Weighted average number of ordinary shares	330,697	330,697	330,697
Adjusted weighted average number of ordinary shares	330,697	330,697	330,697
Basic profit per share	0.003p	0.001p	0.01p
Diluted profit per share	0.003p	0.001p	0.01p

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 or increase net loss per share. For a loss making company with outstanding share options and warrants, net loss per share would only be increased by the exercise of out-of-the money options and warrants. Since it seems inappropriate that option holders would act irrationally, no adjustment has been made to diluted earnings per share for out-of-the money options and warrants in the comparatives. There are no other diluting share issues, in either financial period, consequently diluted earnings per share equals basic earnings per share.

4        Investments in associates 

	Six months to  30 June 2008 (Unaudited) £'000	Six months to  30 June 2007 (Unaudited) £'000	Year ended 31 December 2007  (Audited)   £'000
Share of assets
At beginning of period	-	145	145
Transfer	-	-	(103)
Disposal	-	-	(42)
At period end	-	145	-
Goodwill
At beginning of period	1,830	1,878	1,878
Capitalisation of loans	-	-	(48)
At period end	1,830	1,878	1,830
	-	-	-
Carrying value at period end	1,830	2,023	1,830

Notes to the financial statements

5    Available for sale investments

	Six months to 30 June 2008 (Unaudited) £'000	Six months to 30 June 2007 (Unaudited) £'000	Year ended 31 December 2007  (Audited)   £'000
At beginning of period	919	718	718
Additions	-	100	76
Fair value adjustment	-	-	22
Transfer	-	-	103
At period end	919	818	919

6      Related party transactions

Prof. Francesco Gardin and 'S.I.C.I. sas di F. Gardin' are paid £80,000 per annum for the provision of services. Financial Fun Limited, of which Mr. Bailey is Chairman, is paid £20,000 per annum for the provision of Mr. Bailey's services.

7      Board Approval

The Interim Statement was approved by the Board on 30 September 2008.

8      Availability of Interim Results

Copies of the Interim Results will be available from the Lightwell, 12-16 Laystall Street, London,
EC1R 4PF and from the Company's website, www.brainspark.com.

For further information, please contact:

Francesco Gardin, Brainspark plc, telephone: [phone]

Roland Cornish, Beaumont Cornish Limited, telephone: [phone]

 

END

 

 

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