Interim Results
Traction Technology PLC
26 March 2007
FOR IMMEDIATE RELEASE 26 March 2007
TRACTION TECHNOLOGY PLC
('the Company')
INTERIM RESULTS FOR THE PERIOD
1 JULY 2006 TO 31 DECEMBER 2006
CHAIRMAN'S STATEMENT
Introduction
We present unaudited interim consolidated financial statements for Traction
Technology plc (formally known as Catalyst New Opportunities plc) for the period
1 July 2006 to 31 December 2006. The Company is focused on the design and
development of environmentally friendly, low emission Series Diesel Electric
Hybrid engine systems, aimed initially at the public transport sector.
Results
The group had a turnover of £1,269 (Period to 30.06.06 - £nil) for the period
under review. The operating loss on ordinary activities for the period amounted
to £351,804 (Period to 30.06.06 - £26,860)
The loss per share for the period was 5p (Period to 30.06.06 - 0p)
Current Trading
Traction Technology plc acquired Traction Technology Holdings Limited and its
subsidiary Traction Technology UK Limited on 30th November 2006 and the Combined
Group was admitted to trading on AIM with effect from 18th December 2006.
In accordance with the AIM Rules, the Company is publishing the interim
consolidated results for the six months ended 31st December 2006.
During the period under review Traction Technology UK Limited continued the
development of its series hybrid bus power units.
Prospects
Since the end of the period, the Group has continued to develop its business
plan and move the Company forward. To this end Traction Technology UK Limited is
currently running a number of trials of its hybrid system with potential
customers such as Transport for London ('TfL') operator Epsom Coaches, on an
Optare single-deck bus, and with Arriva North West, operating on Merseytravel's
CATCH Project. Further vehicles are scheduled to enter service within the next
quarter, and the Group remains optimistic regarding the successful adoption of
its technology by the public transport sector in the UK.
Nick Brayshaw
Chairman
26 March 2007
Copies of the report
Copies of this interim statement will be dispatched to shareholders and will
also be available to the public at Unit 6, Spring Copse Business Park, Slinfold,
West Sussex, RH13 0SZ and via the Company's website at www.ttplc.co.uk.
Enquiries:
Traction Technology Beaumont Cornish Parkgreen Communications
Plc Limited
Nick Brayshaw, Roland Cornish Brendan McNamara / Paul McManus
Chairman
+44 (0) 1403 791 392 +44 (0) 20 7628 3396 +44 (0) 20 7479 7933
www.ttplc.co.uk paul.mcmanus@parkgreenmedia.com
---------------------------------
TRACTION TECHNOLOGY PLC
Unaudited Interim Consolidated
Income Statement
for the Period 1 July 2006 to 31 December 2006
Period from 1.07.06 to 31.12.06 Period from 07.06.06 to 30.06.06
(unaudited) (audited)
£ £
Revenue 1,269 -
Cost of sales (48,217) (2,810)
Gross profit (46,948) (2,810)
Administrative
expenses (304,856) (24,050)
LOSS ON
OPERATING
ACTIVITIES (351,804) (26,860)
Interest
received 1,170 -
LOSS BEFORE (350,634) (26,860)
TAX
Taxation - -
RETAINED LOSS
FOR THE PERIOD (350,634) (26,860)
EARNINGS PER
SHARE (0.05) (0.00)
Basic and
Diluted loss
per share (see note 5)
TRACTION TECHNOLOGY PLC
Unaudited Consolidated Balance Sheet
At 31 December 2006
31.12.06 30.6.06
(unaudited) (audited)
Notes £ £ £ £
NON-CURRENT ASSETS
Goodwill 6 633,470 67,636
Plant and equipment 7 14,381 8,569
647,851 76,206
CURRENT ASSETS
Inventories 8 105,174 64,252
Trade and other 9 145,415 60,954
receivables
Cash and cash equivalents 792,683 409,856
1,043,272 545,562
TOTAL ASSETS 1,691,123 621,767
CURRENT LIABILITIES
Trade and other payables 10 (248,879) (23,075)
TOTAL LIABILITIES (248,879) (23,075)
NET ASSETS 1,442,244 598,662
EQUITY
Share capital 11 1,000,000 169,992
Share premium account 12 7,851,205 455,560
Retained losses 13 (377,495) (28,860)
Other reserves 12 (7,031,466) -
TOTAL EQUITY 13 1,442,244 598,662
TRACTION TECHNOLOGY PLC
Unaudited Interim Consolidated Cash Flow Statement
for the Period 1 July 2006 to 31 December 2006
Period from Period from
1.7.06 to 7.6.06 to
31.12.06 30.6.06
(unaudited) (audited)
£ £ £ £
NET CASH OUTFLOW FROM OPERATING
ACTIVITIES (see note 14) (264,910) (205,112)
INVESTING ACTIVITIES
Interest received 1,170 -
Purchase of tangible fixed assets (7,741) (7,457)
Cash at bank acquired with Traction
Technology UK Limited - 7,375
Cash at bank acquired with
Cash at bank acquired with Traction
Technology plc 11,674 -
Cost of acquisition of Traction
Technology plc (91,566) -
NET CASH USED IN INVESTING
ACTIVITIES (86,463) (82)
FINANCING ACTIVITIES
Proceeds of issue of ordinary share
capital 734,200 615,050
NET INCREASE IN CASH AND CASH
EQUIVALENTS 382,827 409,856
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 409,856 -
CASH AND CASH EQUIVALENTS AT
END OF PERIOD 792,683 409,856
TRACTION TECHNOLOGY PLC
Notes to the Unaudited Interim
Consolidated Financial Statements
for the Period 1 July 2006 to 31 December 2006
1. General information
Traction Technology plc was incorporated on 27 March 2004 in England & Wales.
The company changed its name from Catalyst New Opportunities plc on 6 December
2006. The interim consolidated financial statements for the period 1 July 2006
to 31 December 2006 relate to Traction Technology plc and its subsidiary
undertakings Traction Technology Holdings Limited and Traction Technology UK
Limited. The comparative amounts for the period 7 June 2006 to 30 June 2006 are
for the subsidiary undertakings only, for reasons given in note 3.
On 30 November 2006 the company became the parent company of Traction Technology
Holdings Limited and its subsidiary Traction Technology UK Limited. The
shareholders of Traction Technology Holdings Limited became the majority
shareholders of the enlarged share capital of Traction Technology plc. The
parent company's continuing operations and executive management were those of
Traction Technology Holdings Limited.
The interim consolidated financial statements do not constitute statutory
accounts as defined in section 240 of the Companies Act 1985. A copy of the
statutory accounts for Traction Technology Holdings Limited covering the period
ended 30 June 2006 was included in that company's AIM admission document. The
auditors' report on these accounts was not qualified and did not contain
statements under Section 237(2) or (3) of the Companies Act 1985.
2. Accounting policies
Basis of preparation
These interim consolidated financial statements have been prepared in accordance
with International Financial Reporting Standards (IFRS and IFRIC
interpretations) issued by the International Accounting Standards Board (IASB),
which will be endorsed by the European Commission, and with those parts of the
Companies Act 1985 applicable to companies preparing their accounts under IFRS.
Basis of consolidation
The interim consolidated financial statements consolidate the financial
statements of Traction Technology plc and the entities it legally controls (its
subsidiaries) for the period 1 July 2006 to 31 December 2006. Control comprises
the power to govern the financial and operating policies of the subsidiary, so
as to obtain benefit from its activities and is achieved through direct or
indirect ownership of voting rights. The financial statements of the
subsidiaries are prepared for the same reporting year as the parent company,
using consistent accounting policies. All inter-company balances and
transactions including unrealised profits arising from them are eliminated.
The acquisition of Traction Technology Holdings Limited and Traction Technology
UK Limited has been accounted for in the interim consolidated financial
statements as a reverse acquisition in accordance with IFRS 3. The profit and
loss account for the period 1 July 2006 to 31 December 2006 consolidates the
results of Traction Technology Holdings Limited and Traction Technology UK
Limited for the whole period and the results of Traction Technology plc from 30
November 2006, being the date of the reverse acquisition. IFRS 3 requires that
the comparatives are those of the subsidiaries, Traction Technology Holdings
Limited and Traction Technology UK Limited, for the period 7 June 2006 to 30
June 2006.
Turnover
Turnover represents net invoices sales of goods, excluding value added tax.
Operating leases
Rentals paid under operating leases are charged to the profit and loss account
as incurred.
Goodwill
Goodwill arising on the acquisition of subsidiaries represents the excess of the
cost of acquisition over the fair value of the assets and liabilities acquired.
Goodwill is included in intangible fixed assets and reviewed for impairment at
least annually. Any impairment is recognised immediately in arriving at the
profit or loss.
TRACTION TECHNOLOGY PLC
Notes to the Unaudited Interim
Consolidated Financial Statements
for the Period 1 July 2006 to 31 December 2006
2. ACCOUNTING POLICIES (continued)
Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off
each asset over its estimated useful life.
Plant and machinery - 25% of cost
Office equipment - 25% of cost
Stocks
Stocks are valued at the lower of cost and net realisable value.
Deferred tax
Deferred tax is fully provided in respect of all timing differences that have
originated but not reversed at the balance sheet date.
Equity instruments
Instruments that evidence a residual interest in the assets of the group after
deducting all of its liabilities are classified as equity instruments. Issued
equity instruments are recorded at proceeds received net of direct issue costs.
3. ACCOUNTING FOR THE REVERSE ACQUISITION
As described in notes 1 and 2 the entire share capital of Traction Technology
Holdings Limited was acquired by Traction Technology plc on 30 November 2006.
IFRS 3 requires that consolidated financial statements are issued under the name
of the legal parent, though they are a continuation of the financial statements
of the legal subsidiary. In order to comply with IFRS 3, the following have been
reflected in the consolidated financial statements:
(a) the assets and liabilities of Traction Technology Holdings Limited and
Traction Technology UK
Limited have been recognised at their net book values immediately prior to the
reverse acquisition;
(b) the pre-acquisition retained losses recognised in the interim
consolidated financial statements are those
of Traction Technology Holdings Limited and Traction Technology UK Limited;
(c) the amount recognised as issued equity instruments in the interim
consolidated financial statements is the sum of:
(i) the issued share capital of Traction Technology Holdings Limited immediately
before the reverse
acquisition, and;
(ii) the cost of achieving the combination;
(d) the equity structure appearing in these consolidated financial
statements (i.e. the number and type of equity instruments issued) reflects the
equity structure of Traction Technology plc; and
(e) comparative information presented in these consolidated financial
statements is that of Traction
Technology Holdings Limited (incorporated on 7 June 2006) and its subsidiary
Traction Technology UK Limited.
4. AVAILABILITY OF THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Copies of the interim consolidated financial statements are being sent to all
shareholders and will be available to the public at the company's registered
office.
TRACTION TECHNOLOGY PLC
Notes to the Unaudited Interim
Consolidated Financial Statements
for the Period 1 July 2006 to 31 December 2006
5. Earnings per share from continuing operations
The basic loss of 5p per share (0p for the period to 30 June 2006) is based on a
loss after tax of £350,634 (£26,860 for the period to 30 June 2006) and on the
basic weighted average of 7,073,957 ordinary shares (169,992,000 for the period
to 30 June 2006) in issue during the period.
6. GOODWILL
£
Goodwill arising on the acquisition of the share capital
of Traction Technology (UK) Limited by Traction
Technology Holdings Limited on 14 June 2006 67,636
Goodwill arising on the acquisition of the share capital
of Traction Technology Holdings Limited by Traction
Technology plc on 30 November 2006 (see below) 565,834
633,470
The goodwill arising on the acquisition of the share capital of Traction
Technology Holdings Limited consists of the following:
£
Cost of acquisition 562,056
Net liabilities acquired 3,778
565,834
7. PLANT & EQUIPMENT
£
COST
At 1 July 2006 8,819
Additions 7,741
At 31 December 2006 16,560
DEPRECIATION
At 1 July 2006 250
Charge for the period 1,929
At 31 December 2006 2,179
NET BOOK VALUE
At 31 December 2006 14,381
At 30 June 2006 8,569
TRACTION TECHNOLOGY PLC
Notes to the Unaudited Interim
Consolidated Financial Statements
for the Period 1 July 2006 to 31 December 2006
8. INVENTORIES
31.12.06 30.6.06
£ £
Finished goods and goods for resale 105,174 64,252
9. TRADE AND OTHER RECEIVABLEs
31.12.06 30.6.06
£ £
Called up share capital not paid 10,500 28,500
Other debtors 62,799 15,860
Prepayments and accrued income 25,283 16,594
VAT 46,833 -
145,415 60,954
10. TRADE AND OTHER PAYABLES
31.12.06 30.6.06
£ £
Trade payables 138,975 1,496
Taxes and social security costs 10,052 10,950
Accruals and deferred income 99,852 10,629
248,879 23,075
11. SHARE CAPITAL
The authorised, issued and fully paid share capital for Traction Technology plc
is stated as £1,000,000, being 33,333,333 ordinary shares of 3p each.
In accordance with IFRS 3 the comparative amount of £169,992 relates to the
subsidiary being Traction Technology Holdings Limited. The authorised share
capital of Traction Technology Holdings Limited as at 30 June 2006 consisted of
2,500,000,000,000 shares of 0.1p each, which is £2,500,000,000 at par. The
allotted, issued and fully paid share capital at 30 June 2006 consisted of
169,992,000 ordinary shares of 0.1p each, being £169,992 at par.
During the period Traction Technology plc issued 28,539,536 shares to the
shareholders of Traction Technology Holdings Limited and 3,010,462 shares to
other shareholders. All shares were issued at 28p.
TRACTION TECHNOLOGY PLC
Notes to the Unaudited Interim
Consolidated Financial Statements
for the Period 1 July 2006 to 31 December 2006
12. CONSOLIDATED EQUITY INSTRUMENTS
Share Share Other Total
capital premium reserve £
£ account £
£
Traction Technology
Holdings Limited 169,992 445,060 - 615,052
Eliminated on
consolidation (169,992) (445,060) - (615,052)
Traction Technology plc
(see below) 1,000,000 7,851,205 - 8,851,205
Reverse acquisition of
adjustment - - (7,031,466) (7,031,466)
1,000,000 7,851,205 (7,031,466) (1,819,739)
The equity instruments of Traction Technology plc consist of:
Share Share Total
capital premium
£ £ £
At 1 July 2006 53,500 164,000 217,500
Issued to the shareholders of Traction
Technology Holdings Limited 856,186 6,950,226 7,806,412
Issued to other investors 90,314 736,979 827,293
1,000,000 7,851,205 8,851,205
The issued equity instruments of the holding company may be reconciled to the
consolidated equity instruments as follows:
£ £
Issued equity instruments of holding company 8,851,205
Reverse acquisition adjustment:
Equity instruments issued to the shareholders of
Traction (7,991,074)
Technology Holdings Limited
Equity instruments of the holding company on (217,500)
acquisition
Equity instruments of Traction Technology Holdings
Limited on 615,052
acquisition
Cost of acquisition 562,056
(7,031,466)
Consolidated equity instruments 1,819,739
TRACTION TECHNOLOGY PLC
Notes to the Unaudited Interim
Consolidated Financial Statements
for the Period 1 July 2006 to 31 December 2006
13. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS AND RESERVES
Equity Profit Total
instruments and loss £
(see note 12) account
£ £
Traction Technology Holdings Limited 615,052 (367,512) 247,540
Share capital eliminated on
consolidation (615,052) - (615,052)
Issue of share capital by Traction
Technology plc 8,851,205 - 8,851,205
Reverse acquisition of adjustment (7,031,466) - (7,031,466)
Loss for the period - (9,983) (9,983)
1,819,739 (377,495) (1,442,244)
14. NOTE TO THE SUMMARY CONSOLIDATED CASH FLOW STATEMENT
Period from Period from
1.7.06 to 7.6.06 to
31.12.06 30.6.06
(unaudited) (audited)
£ £
Loss from operating activities (351,804) (26,860)
Adjustment for depreciation 1,929 250
Operating cash outflows before movement in working
capital (349,875) (26,610)
Increase in inventories (40,922) -
Increase in receivables (84,461) (44,281)
Increase/(Decrease) in payables 225,804 (134,221)
Non-cash assets and liabilities acquired with
Traction (15,456) -
Technology plc
Net cash outflow from operating activities (264,910) (205,112)
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