Interim Results
Reflexion Cosmetics PLC
25 November 2004
For immediate release 25 November 2004
Reflexion Cosmetics plc
('Reflexion' or 'the Company')
Interim Results for the period ending 30 September 2004
Reflexion Cosmetics plc (AIM: RFX), the company formed earlier this year to
acquire businesses in the toiletries and cosmetics sector, is pleased to
announce its maiden interim results for the period ending 30 September 2004.
• Reflexion Cosmetics joined the Alternative Investment Market (AIM)
in March this year as the initial step in the creation of an international
cosmetics and toiletries business through an acquisitive growth strategy.
• During the period, the Company pursued its strategy by identifying
and evaluating potential acquisitions, a process that has allowed the Company to
move closer to its first acquisition.
• The Directors believe that the cosmetics and toiletries sector,
which in the UK alone was worth £5.8 billion in 2002, offers attractive, niche
acquisition opportunities.
• Reflexion's financial performance in the period was in line with the
Company's expectations. The Company reported a pre- and post-tax loss of
£151,000 and had net cash of £249,000 as of 30 September 2004.
Ratan Daryani, Chief Executive of Reflexion Cosmetics, commented: 'We have
pursued our strategy during our first months as a quoted company by identifying
and evaluating potential acquisitions. We have been delighted by the quality and
number of opportunities available to us and look forward to reporting further
progress in due course.'
For further information contact:
Reflexion Cosmetics
Ratan Daryani, Chief Executive Tel: 07748 146 839
W.H. Ireland Tel: 0121 616 2101
Tim Cofman
Buchanan Communications Tel: 020 7466 5000
Mark Court
Accounting policies
Basis of preparation
The interim financial statements have been prepared under the historical cost
convention and in accordance with applicable United Kingdom accounting
standards. This financial information is based on the transactions of the
Company from incorporation on 12 February 2004 to 30 September 2004.
The interim financial statements have been reviewed by the company's auditors.
A copy of the auditors' review report is attached to this interim statement.
The principal accounting policies are set out below.
Turnover
Turnover represents net invoiced sales of goods, excluding value added tax.
Deferred taxation
Deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date. Deferred tax is
recognised on all timing differences when the transactions or events that give
the company an obligation to pay more tax in the future or a right to pay less
tax in the future, have occurred by the balance sheet date. Deferred tax assets
are recognised when it is more likely than not that they will be recovered.
Deferred tax is measured using rates of tax that have been enacted or
substantially enacted by the balance sheet date.
Pensions
The Company does not operate a pension scheme. Contributions payable to
Directors' individual pension schemes for the period are charged in the profit
and loss account.
Leasing
Rentals payable under operating leases are charged to the profit and loss
account on a straight line basis over the period of the lease.
Foreign exchange
Transactions in foreign currencies are translated at the exchange rate ruling at
the date of the transaction. Monetary assets and liabilities in foreign
currencies are translated at the rates of exchange ruling at the balance sheet
date.
Profit and loss account for the period ended 30 September 2004
2004
Notes £'000
Turnover 1 -
Cost of sales -
Gross profit -
Administrative expenses (156)
Operating (loss) 1 (156)
Interest receivable and similar income 3 5
(Loss) on ordinary activities before taxation (151)
Taxation 4 -
(151)
(Loss) for the financial year
Retained profit brought forward -
(Loss) retained carried forward (151)
Basic (loss) per share - pence 5 (1.78)
Diluted (loss) per share - pence 5 -
-
Continuing Operations
None of the company's activities were acquired or discontinued during the
period.
Total recognised gains and losses
There were no recognised gains or losses other than the profits for the period.
Balance Sheet as at 30 September 2004
2004
Notes £'000
Current assets
Debtors 6 5
Cash at bank and in hand 249
254
Creditors: amounts falling due within one year 7 (21)
Net assets 233
Capital and reserves
Called up share capital 8 88
Share premium account 9 296
Profit and loss account 9 (151)
Equity shareholders' funds 10 233
Cash flow statement for the period ended 30 September 2004
2004
Notes £'000
Net cash (outflow) from operating activities 11 (140)
Returns on investments and servicing of finance 5
(135)
Financing 384
Increase in cash in the period 12 249
Notes to the financial information
1 Turnover and loss on ordinary activities before taxation
The loss on ordinary activities before taxation is stated after:
2004
£'000
Auditors remuneration 4
Pension costs 1
Directors remuneration 54
Amounts paid to third parties for directors services 15
Pension contributions to money purchase scheme 1
The number of directors to whom retirement benefits were accruing was
as follows:
Money purchase schemes 1
Information regarding the highest paid director:
Emoluments etc 43
Pension contributions to money purchase schemes -
2 Employees
Staff costs including directors during the period were as follows:
2004
£'000
Wages and salaries 54
Social security costs 6
Other pension costs 1
61
The average number of employees of the Company during the period were as
follows:
2004
Number
Average number 2
3 Interest
2004
£'000
Bank interest receivable 5
5
4 Taxation
2004
£'000
Corporation tax at 19% -
Factors affecting the tax charge in each year
Where the effective rate of corporation tax for each year is different from the
smaller companies rate of corporation tax in the United Kingdom of 19%
applicable to the Company, the differences are explained below:
2004
£'000
Loss on ordinary activities before taxation (151)
2004
£'000
Loss on ordinary activities before taxation (29)
multiplied by the smaller companies rate of
corporation tax in the UK of 19%
Effect of:
Disallowed expenditure 2
Losses not recognised 28
-
The company has losses of approximately £140,000 available for offset against
future trading losses.
5 Loss per share
The calculation of the basic earnings per share is based on the earnings
attributable to ordinary shareholders divided by the weighted average number of
shares in issue during the period.
Reconciliations of the earnings and weighted average number of shares used in
the calculation is set out below.
Earnings
ttributable to
ordinary
shareholders
Earnings £'000 (151)
Weighted average number of shares 8,475,034
Per share amount - pence (1.78)
There is no diluted earnings per share.
6 Debtors
2004
£'000
Other debtors 2
Prepayments & accrued income 3
5
7 Creditors : amounts falling due within one year
2004
£'000
Trade creditors 10
Social security and other taxes 4
Accruals and deferred income 7
21
8 Called up share capital
2004
Number £'000
Authorised
Ordinary £0.01 shares 200,000,000 2,000
Issued
Ordinary £0.01 shares 8,846,154 88
Allotments during the period
The company issued 5,000,000 ordinary shares at par on incorporation. On 8
March 2004 an additional 3,846,154 shares were issued and placed by WH Ireland
at a price of £0.13 per share. Placing costs of £166,000 were charged against
the share premium account.
9 Share premium and reserves
Share premium Profit and
account loss account
£'000 £'000
At 12 February 2004 - -
Premium on allotment during the period 462 -
Placing costs charged against share premium account (166) -
Loss for the period - (151)
At 30 September 2004 296 (151)
10 Reconciliation of movement in equity shareholders' funds
2004
£'000
Loss for the financial year (151)
Net (reduction) to shareholders' funds (151)
Equity shareholders' funds at 12 February 50
Placing of New Shares 500
Placing Costs charged to Share Premium Account (166)
Equity shareholders' funds at 30 September 233
11 Reconciliation of operating profit to net cash flow from operating
activities
2004
£'000
Operating loss (156)
(Increase)/decrease in debtors (5)
Increase/ (decrease) in creditors 21
Net cash outflow from operating activities (140)
12 Reconciliation of net cash flow to movement in net cash funds
2004
£'000
Increase in cash in the year 249
Change in net funds resulting from cash flows 249
Movement in net funds 249
Net cash funds at 12 February 0
Net cash funds at 30 September 249
13 Analysis of net cash funds
2004
£'000
Increase in cash in the period 249
Change in net funds resulting from cash flows 249
Movement in net funds in the period 249
Net funds at 12 February 0
Net funds at 30 September 249
14 Transactions with directors
On March 2004, the Company entered into an agreement with NRG Capital
Investments Ltd, under which NRG Capital Investments Ltd agreed to advise in
respect of its fund-raising strategy. Upon Admission, the Company paid to NRG
Capital Investments Ltd a fee of £50,000. Both Nigel Robertson and John
Vergopoulos are interested by way of their interest in NRG Capital Investments
Ltd, an offshore investment company, which holds 1,210,400 Ordinary Shares under
their names.
15 Pensions
The Company does not, as yet, operate a pension scheme. Pension contributions
for Directors' are paid into private personal pension funds. Contributions are
charged to the profit and loss as they are incurred. The amount charged to
profit and loss account during the period was £784.
16 Publication of non-statutory accounts
The financial information set out in this interim statement does not constitute
statutory accounts as defined by section 240 of the Companies Act 1985. Copies
of this interim statement will be sent to shareholders in due course.
The interim report was approved by the Board on 24 November 2004.
INDEPENDENT REVIEW REPORT TO REFLEXION COSMETICS PLC
Introduction
We have been instructed by the company to review the financial information for
the six months ended 30 September 2004 which comprises the Accounting Policies,
Profit and Loss Account, Balance Sheet, Cash Flow Statement and the related
notes 1 to 16. Our responsibilities do not extend to any other information.
This report is made solely to the company's members, as a body, in accordance
with guidance contained in APB Bulletin 1999/4 'Review of Interim Financial
Information'. Our review work has been undertaken so that we might state to the
company's members those matters we are required to state to them in a review
report and for no other purpose. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than the company and the
company's members as a body, for our review work, for this report, or for the
conclusion we have formed.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority, which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
'Review of Interim Financial Information' issued by the Auditing Practices Board
for use in the United Kingdom. A review consists principally of making
enquiries of management and applying analytical procedures to the financial
information and underlying financial data and, based thereon, assessing whether
the accounting policies and presentation have been consistently applied unless
otherwise disclosed. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with United
Kingdom auditing standards and therefore provides a lower level of assurance
than an audit. Accordingly, we do not express an audit opinion on the financial
information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the period ended 30
September 2004.
GRANT THORNTON UK LLP
CHARTERED ACCOUNTANTS
LONDON
24 November 2004
--------------------------
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