Final Results
Volvere PLC
22 March 2005
22 March 2005
VOLVERE PLC
FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2004
Volvere plc ('Volvere' or 'the Company'), the turnaround investment company,
announces its final results for the year ended 31 December 2004. The prior
period to 31 December 2003 reflected the results of the Company since
incorporation and approximately 7 months of trading from Vectra Group Limited
('Vectra'), acquired during 2003.
Highlights
• Turnover £10.5m (period to 31 December 2003: £7.06m), all arising from the
Group's subsidiary, Vectra Group Limited ('Vectra')
• Pre-tax and post-tax loss £0.21m (period to 31 December 2003 profit:
£0.55m), stated after crediting negative goodwill of £0.06m (period to 31
December 2003: £1.25m) and charging restructuring costs of £0.1m relating
to Vectra (period to 31 December 2003: £0.1m)
• Vectra profitable before Group management charges since first quarter of
year following successful turnaround and new business wins; average monthly
operating loss before Group management charges reduced to £4k (7 months to
31 December 2003: £63k)
• Net assets of £3.84m (31 December 2003: £4.0m; 2 July 2004: £3.83m)
• Cash on hand £3.00m (31 December 2003: £3.28m; 2 July 2004: £3.01m)
• Basic loss per share 5.82p (31 December 2003 profit: 16.53p; 2 July 2004
loss: 6.02p).
• No dividend proposed
Lord Kalms, Chairman of Volvere plc, said:
'I am pleased to report a continued improvement in Volvere's underlying
financial performance arising from the increasingly positive trading at the
Group's sole subsidiary, Vectra. Vectra has been profitable (before Group
management charges) since the end of the first quarter last year and we have
seen a reassuring start to 2005. We have several interesting potential
acquisitions and investment opportunities under review.'
For further information, please contact:
Jonathan Lander, Chief Executive Officer
Nick Lander, Chief Operating & Financial Officer
Volvere plc + 44 (0) 20 7979 7596
Terry Garrett
Weber Shandwick Square Mile + 44 (0) 20 7067 0700
Jeff Keating
Teather & Greenwood + 44 (0) 20 7426 9000
CHAIRMAN'S STATEMENT
I am pleased to report on the results for the year ended 31 December 2004.
Last year I reported how we believed that the changes we made to Vectra's
operations put it on a platform for growth and profitability. Vectra's
performance continues to improve and its turnaround is substantially complete.
We reported in our interim results that Vectra was profitable before group
management charges in the second quarter. I am pleased to report that
profitability continued in the third and fourth quarters.
As part of our commitment to see Vectra's performance increase further we have
strengthened the management team with the recruitment of a highly experienced
Managing Director. This has the further benefit of freeing Group management
from Vectra's day-to-day operations and permits increased focus on originating
follow-on corporate transactions.
OUTLOOK
The trading at Vectra has continued to be reassuring in the early part of 2005
and we remain confident for the rest of the year. The Group has significant
cash reserves, a strong balance sheet and a profitable subsidiary. I look
forward to new opportunities as they arise in the year ahead.
Lord Kalms
Chairman
22 March 2005
CHIEF EXECUTIVE STATEMENT
I have reported before on how the strength of equity markets and low levels of
interest rates have made it more difficult for us to find companies trading
below the realisable value of their net assets or alternatively that were in
distress. During the period we nevertheless identified one company that we felt
was undervalued, namely NMT Group PLC. At the year end we held approximately
3.7% of that company's share capital, which we acquired at an attractive price.
We reviewed a number of distressed companies during the period although none
have met our requirements for investment or acquisition. The number of proposals
that we have considered has however increased. We have set a high standard with
our acquisition of Vectra in 2003 and remain committed to further acquisitions.
I remain confident of the growth potential of Vectra.
OPERATING REVIEW - VECTRA
Vectra's turnover for the year ended 31 December 2004 was £10,501,000 (24 May
2003 to 31 December 2003 £7,061,000) and its operating loss before Group
management charges was £43,000 (see Table A) (24 May 2003 to 31 December 2003:
£444,000). This result is good, particularly since it is stated after
restructuring costs of £98,000 (24 May 2003 to 31 December 2003 £114,000).
Vectra's operating loss before Group management charges has continued to reduce,
with a monthly average for 2004 of less than £4,000. This compares very
favourably with a 2003 pre-acquisition loss of approximately £201,000 per month
and 2003 post-acquisition average loss of approximately £63,000 per month.
Further information about Vectra's performance is contained in the Financial
Review below.
Following its establishment in late 2003, our Middle East office has delivered
new leads and new business with local clients. There and elsewhere we have won
new assignments and extensions to existing client projects including contracts
with Shell Group, JGC Corporation, BNFL, Dolphin Energy, Fluor, ProRail (The
Netherlands), Tube Lines, Metronet, Network Rail, QinetiQ, the London Boroughs
of Brent and Hillingdon and the Health and Safety Executive. Our main market
sectors remain: Nuclear, Oil and Gas, Transport and Property.
EMPLOYEES
We have recruited a new Managing Director for Vectra who joined in January 2005.
I am confident that this will allow us to build on the considerable work that
the management and employees of Vectra have put in over the last two years. The
level of professionalism as well as motivation and dedication of our staff
continues to be our strength. These are the reasons for the turnaround and for
which I thank them.
ACQUISITIONS AND FUTURE STRATEGY
The successful turnaround of Vectra shows that we can source, acquire and turn
round companies within an acceptable timescale and on attractive terms. We
remain committed to building our existing subsidiary into a very profitable
unit. At the same time we are looking to acquire other companies that offer
attractive returns at an acceptable level of risk.
Jonathan Lander
Chief Executive
22 March 2005
FINANCIAL REVIEW
This Financial Review covers the Group's performance during the year ended 31
December 2004. It should be read in conjunction with the Chairman's and Chief
Executive's statements.
TURNOVER AND OPERATING PERFORMANCE
As noted in the Chief Executive's report, Vectra's operating performance
continued to improve during the year. Table A below summarises key financial
information in relation to Vectra.
Turnover in the period was £10,501,000, all of which was generated by Vectra.
Vectra's average monthly turnover fell by 13% during the year when compared with
the seven month post-acquisition period from 24 May 2003 to 31 December 2003.
This was due principally to lower volumes in the Contract Recruitment and
Disaster Recovery businesses, following our decision to reduce our activities in
the former and exit the latter. Both businesses were not capable of achieving
suitable levels of profitability for the risks associated with them.
The Group's loss before tax for the year was £211,000 (2003: profit £546,000),
after realising £60,000 of negative goodwill (2003: £1,252,000). The reduction
compared to the prior period was a result of the underlying assets acquired,
which gave rise to the negative goodwill, having been turned substantially into
cash or consumed in the business.
Although the Group reported a loss before tax for the year as a whole, this was
less than that reported at the interim results for the first half of the year (2
July 2004: £218,000), the improved second half performance at Vectra resulting
in a small profit before tax being achieved overall in the second half. This
was achieved in spite of turnover being 7% lower in the second half of the year
(2nd Half £5,054,000, 1st Half £5,447,000), due principally to reduced billable
hours over the summer and Christmas vacation periods.
The gross margin was 45% for the year (2003: 42%), all of which was attributable
to Vectra. During the year, we saw margins increase between the first half
(44%) and second half (46%).
Table A Year ended 31 24 May
December 2003 to 31
2004 December
2003
£000 £000
Turnover 10,501 7,061
Average monthly turnover 875 1,009
Operating loss (notes 1 and 2) (43) (444)
Average monthly operating loss (notes 1 and 2) (4) (63)
Note 1: The operating loss for the year is before group management charges of
£480,000 (24 May to 31 December 2003: £616,000).
Note 2: The operating loss for the year is after restructuring costs of £98,000
(24 May to 31 December 2003: £114,000).
TAXATION
The Group had no tax charge in the year.
LOSS PER SHARE
The basic and diluted loss per share was 5.82p (2003 basic and diluted earnings
per share: 16.53p and 15.44p respectively). During the year the Group
implemented a share option scheme in which all staff are entitled to
participate, subject to certain conditions.
NEGATIVE GOODWILL
Negative goodwill arising on the acquisition of Vectra has been capitalised as
an intangible asset and credited to the profit and loss account during the
period in so far as the assets acquired have been consumed or realised as cash.
In the period an amount of £nil (2003: £1,402,000) was capitalised and £60,000
(2003: £1,252,000) credited to the profit and loss account.
CASH MANAGEMENT
The Group had no borrowings during the year. Cash balances totalled £3,003,000
(2003: £3,238,000). Although cash was lower than the prior period, the
reduction was after investments made in 2004 totalling £192,000.
HEDGING
It is not the Group's policy to enter into derivative instruments to hedge
interest rate risk.
DIVIDENDS
In accordance with the policy set out in our prospectus on our admission to AIM,
the Board does not currently intend to recommend payment of a dividend but
prefers to retain profits as they arise for investment in future opportunities.
Nick Lander
Chief Operating & Financial Officer
22 March 2005
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Year ended 31 December 2004 Period
from 5
Year July 2002
ended 31 to 31
December December
2004 2003*
Note £000 £000 £000 £000
TURNOVER 2 10,501 7,061
Cost of sales (5,787) (4,090)
Gross profit 4,714 2,971
Administrative expenses
- before realisation of negative goodwill (5,075) (3,768)
- realisation of negative goodwill 60 1,252
(5,015) (2,516)
OPERATING (LOSS)/PROFIT (301) 455
Finance income - interest receivable 90 91
(LOSS)/PROFIT ON ORDINARY ACTIVITIES BEFORE TAX 2 (211) 546
Tax on profit on ordinary activities 5 - -
(LOSS)/PROFIT ON ORDINARY ACTIVITIES AFTER
TAX, BEING RETAINED (LOSS)/PROFIT FOR THE
PERIOD 15 (211) 546
(LOSS)/EARNINGS PER ORDINARY SHARE OF
0.00001p:
- Basic 7 (5.82p) 16.53p
- Diluted 7 (5.82p) 15.44p
All results are derived from continuing operations.
There have been no recognised gains and losses attributable to the shareholders
other than the losses for the current and preceding financial period and
accordingly, no statement of total recognised gains and losses is shown.
* The consolidated profit and loss for the period from 5 July 2002 to 31
December 2003 includes the results of Vectra Group Limited for the period from
acquisition on 24 May 2003 to 31 December 2003.
BALANCE SHEETS
31 December 2004
2004 2003
Group Company Group Company
Note £000 £000 £000 £000
FIXED ASSETS
Intangible fixed assets - negative goodwill 8 (90) - (150) -
Tangible fixed assets 9 153 - 215 -
Investments 10 192 2,316 - 2,124
255 2,316 65 2,124
CURRENT ASSETS
Stocks 11 - 5 -
Debtors 12 2,790 78 2,937 645
Cash at bank and in hand 3,003 1,964 3,283 1,258
5,793 2,042 6,225 1,903
CREDITORS: amounts falling due within one
year 13 (2,208) (225) (2,289) (184)
NET CURRENT ASSETS 3,585 1,817 3,936 1,719
TOTAL ASSETS LESS CURRENT LIABILITIES 3,840 4,133 4,001 3,843
CAPITAL AND RESERVES
Called up share capital 14 50 50 50 50
Share premium account 15 50 50 - -
Profit and loss account 15 3,740 4,033 3,951 3,793
EQUITY SHAREHOLDERS' FUNDS 16 3,840 4,133 4,001 3,843
CONSOLIDATED CASH FLOW STATEMENT
Year ended 31 December 2004
Period from 5
July 2002 to
Year ended 31 31 December
December 2004 2003*
Note £000 £000
Net cash (outflow)/inflow from operating activities 17 (206) 1,356
Returns on investments and servicing of finance 18 90 91
Capital expenditure and financial investment 18 (214) (59)
Acquisitions and disposals 18 - (1,560)
Cash outflow before management of liquid resources and
financing (330) (172)
Financing 18 50 3,455
(Decrease)/increase in cash in the year (280) 3,283
* The consolidated cash flow statement for the period from 5 July 2002 to 31
December 2003 includes the results of Vectra Group Limited for the period from
acquisition on 24 May 2003 to 31 December 2003.
NOTES TO THE PRELIMINARY ANNOUCEMENT
Year ended 31 December 2004
The financial information set out in the announcement does not constitute the
company's statutory accounts for the year ended 31 December 2004 or the period
ended 31 December 2003. The financial information for the year ended 31 December
2003 is derived from the statutory accounts for that year which have been
delivered to the Registrar of Companies. The auditors reported on those
accounts; their report was unqualified and did not contain a statement under
s237(2) or (3) Companies Act 1985. The statutory accounts for the year ended 31
December 2004 will be delivered to the Registrar of Companies following the
company's annual general meeting.
ACCOUNTING POLICIES
A summary of the principal accounting policies, all of which have been applied
during the period from incorporation, is set out below.
Basis of accounting
The financial statements and preliminary announcement are prepared under the
historical cost convention and in accordance with applicable United Kingdom
accounting standards and on the basis of the accounting policies set out in the
audited accounts to 31 December 2003.
The group financial statements consolidate the financial statements of Volvere
plc and its subsidiary undertaking drawn up to 31 December 2004. The results of
subsidiaries acquired or sold are consolidated for the periods from or to the
date on which control passed. Acquisitions are accounted for under the
acquisition method.
Goodwill
Goodwill, representing the excess of the fair value of consideration given over
the fair value of separable net assets acquired, is capitalised as an intangible
asset and is amortised over a period of 20 years, being the directors assessment
of its likely future life. Provision is made for any impairment.
Negative goodwill, representing the excess of the fair value of the separable
net assets acquired over the fair value of the consideration given, is
capitalised as an intangible asset and credited to the profit and loss account
over the periods in which the assets acquired are consumed or realised as cash.
Tangible fixed assets
The cost of tangible fixed assets is their purchase cost, together with any
incidental costs of acquisition. Depreciation is calculated so as to write off
the cost of tangible fixed assets, less their estimated residual values, on a
straight line basis over the expected useful economic lives of the assets
concerned. The principal annual rates used for this purpose are:
Improvements to short leasehold property Over the life of the lease
Plant and machinery 20% - 33%
Investments
Investments are carried in the balance sheet at cost less provision for
diminution in value.
Stocks and work in progress
Stock is valued at the lower of cost and net realisable value. Provision is
made for obsolete, slow moving and defective stocks. Net realisable value is
based on estimated selling price less the estimated cost of disposal.
Amounts recoverable on contracts
Amounts recoverable on short-term contracts include the cost of direct materials
and labour plus attributable overheads. Full provision is made on uncompleted
contracts for anticipated losses to completion.
Turnover
Turnover is recognised on a basis appropriate to the nature of the income
source. Turnover earned on time and materials contracts is recognised as costs
are incurred. Income from fixed price contracts is recognised in proportion to
the stage of completion of the relevant contract.
NOTES TO THE PRELIMINARY ANNOUCEMENT (CONTINUED)
Year ended 31 December 2004
1. ACCOUNTING POLICIES (CONTINUED)
Taxation
Current tax, including UK corporation tax and foreign tax, is provided at
amounts expected to be paid (or recovered) using the tax rates and laws that
have been enacted or substantially enacted by the balance sheet date.
Deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date where transactions or
events that result in an obligation to pay more tax in the future, or a right to
pay less tax in the future, have occurred at the balance sheet date. Timing
differences are differences between the group's taxable profits and its results
as stated in the financial statements. These arise from including gains and
losses in different periods from those recognised in the financial statements.
A net deferred tax asset is regarded as recoverable and therefore recognised
only when, on the basis of all available evidence, it can be regarded as more
likely than not that there will be suitable taxable profits from which the
future reversal of the underlying timing difference can be deducted.
Deferred tax is measured at the average tax rates that are expected to apply in
the periods in which the timing differences are expected to reverse based on tax
rates and laws that have been enacted or substantially enacted by the balance
sheet date. Deferred tax is measured on a non-discounted basis.
Foreign currencies
All transactions denominated in foreign currencies are translated into sterling
at the actual rate of exchange ruling on the date of the transaction. Assets
and liabilities denominated in foreign currencies are translated into sterling
at rates of exchange ruling at the balance sheet date at the end of the
financial year. All exchange differences arising are taken to the profit and
loss account in the year in which they arise.
Investment income
Income from investments is included in the profit and loss account on an
accruals basis, before deduction of any related tax credit.
Pension costs
The group's subsidiary undertaking, Vectra, operates a defined contribution
scheme. Vectra's contributions are charged against profits in the years in
which they fall due. The assets of the scheme are held separately from those of
the company and group in independently administered funds.
The group provides no other post retirement benefits to its employees.
Operating leases
Costs in respect of operating leases are charged to the profit and loss account
on a straight line basis over the lease term.
2. TURNOVER AND (LOSS)/PROFIT ON ORDINARY ACTIVITIES BEFORE TAX
The turnover is attributable to the continuing operations and principal activity
of safety, risk and other consulting and field services.
By Destination and Origin 2004 2003
£000 £000
United Kingdom 8,599 6,197
Rest of Europe 1,187 555
United States of America - 23
Other 715 286
10,501 7,061
Loss)/Profit on ordinary activities before taxation is stated after charging/
(crediting):
2004 2003
£000 £000
Profit on sale of fixed assets - 1
Depreciation on owned assets 84 80
Realisation of negative goodwill (see note 8) (60) (1,252)
Auditors' remuneration:
- audit services 35 48
- non-audit services 7 24
Operating lease costs
- plant and machinery 163 131
- other 438 218
Exchange loss/(gain) 2 (19)
Auditors' remuneration in respect of the company was £14,500 (2003: £24,000).
3. DIRECTORS' EMOLUMENTS
The remuneration of the directors was as follows:
2004 2003
£000 £000
Emoluments 136 91
The services of Jonathan Lander, Nick Lander and Richard Kalms are provided
under the terms of a Service Agreement dated 19 December 2002 with Dawnay, Day
Lander Limited. The amount charged under this agreement (which is included in
the amount stated above) for the period amounted to £100,000.
None of the directors were members of the group's defined contribution pension
plan in the year.
4. STAFF COSTS
2004 2003
£000 £000
Wages and salaries 5,691 4,111
Social security costs 666 429
Pension costs 251 148
6,608 4,688
The average monthly number of persons employed by the group during the period
was 124 of which management and administration numbered 30 and consultants and
other chargeable staff totalled 94 (2003: 184 being management and
administration 38, consultants and other chargeable staff 146).
The group's subsidiary undertaking, Vectra, operates a defined contribution
pension plan to which it and its employees contribute.
5. TAX ON (LOSS)/PROFIT ON ORDINARY ACTIVITIES
2004 2003
£000 £000
UK corporation tax - -
The standard rate of tax for the year, based on the UK standard rate of
corporation tax is 30% (2003: 30%). The actual tax charge for the year exceeds
the standard rate for the reasons set out in the following reconciliation.
2004 2003
£000 £000
(Loss)/profit on ordinary activities before tax (211) 546
Tax charge on loss on ordinary activities at standard
rate
63 (164)
Factors affecting charge for the period:
Income not chargeable for tax purposes (3) 336
Capital allowances in excess of depreciation 17 (3)
Tax losses not recognised (83) (167)
Movement in short term timing differences 6 (2)
Total actual amount of current tax - -
At 31 December 2004 a deferred tax asset has not been recognised in respect of
timing differences relating to capital allowances, revenue losses and other
short term timing differences as there is insufficient evidence that the asset
will be recovered against future taxable profits. The amount of the asset not
recognised is £543,421 (2003: £396,000).
6. PROFIT ATTRIBUTABLE TO THE COMPANY
The profit for the financial year dealt with in the financial statements of the
parent company was £240,000 (2003: £388,000). As permitted by Section 230 of
the Companies Act 1985, no separate profit and loss account is presented in
respect of the parent company.
7. EARNINGS PER SHARE
The weighted average number of shares and earnings used to calculate earnings
per share are given below:
2004 2003
Number Number
Number of shares used for basic earnings per share 3,628,525 3,303,602
Number of shares deemed to be issued at nil consideration
under incentive share scheme (see note 14) 185,820 232,053
Number of shares used for diluted earnings per share 3,814,345 3,535,655
2004 2003
£000 £000
(Loss)/earnings attributable to shareholders (211) 546
At the end of the period 3,638,440 ordinary shares (2003: 3,609,720) were in
issue. In addition, 99,470 convertible shares (2003: 100,000) were in issue and
options for 237,741 shares (2003: 145,691). FRS14 requires presentation of
diluted EPS when a company could be called upon to issue shares that would
decrease net profit or increase net loss per share. For a loss making company
with outstanding share options net loss per share would only be increased by the
exercise of out-of-the-money share options. Accordingly, no adjustment has been
made to diluted EPS for out-of-the-money share options.
8. INTANGIBLE FIXED ASSETS - NEGATIVE GOODWILL
Negative
Goodwill
£000
Cost
At 1 January 2004 (1,402)
At 31 December 2004 (1,402)
Amortisation
At 1 January 2004 1,252
Realised in the year 60
At 31 December 2004 1,312
Net book value
At 31 December 2004 (90)
At 31 December 2003 (150)
The balance of negative goodwill is being realised over the periods in which the
assets to which it relates are consumed by the Group. This period is expected
to extend out four years.
9. TANGIBLE FIXED ASSETS
Group Short
leasehold Plant and
property machinery Total
£000 £000 £000
Cost
At 1 January 2004 414 994 1,408
Additions 5 20 25
Disposals - (29) (29)
At 31 December 2004 419 985 1,404
Depreciation
At 1 January 2004 294 899 1,193
Charge for the year 24 60 84
Disposals - (26) (26)
At 31 December 2004 318 933 1,251
Net book value
At 31 December 2004 101 52 153
At 31 December 2003 120 95 215
10. FIXED ASSET INVESTMENTS
2004 2003
Group Company Group Company
£000 £000 £000 £000
Subsidiary undertaking - 2,124 - 2,124
Other investments 192 192 - -
192 2,316 - 2,124
The Company's investments represent 100% of the ordinary share capital of Vectra
Group Limited and 3.7% of the ordinary share capital of NMT Group PLC.
Subsidiary undertakings Group Company
£000 £000
Cost and Net Book Value
1 January 2004 - 2,124
Additions - -
31 December 2004 - 2,124
Other investments Group Company
£000 £000
Cost and Net Book Value
1 January 2004 - -
Additions 192 192
31 December 2004 192 192
Group Company
£000 £000
Listed investments included above 192 192
Aggregate market value as at 31 December 2004 172 172
11. STOCKS
2004 2003
Group Company Group Company
£000 £000 £000 £000
Finished goods and goods for resale - - 5 -
12. DEBTORS
2004 2003
Group Company Group Company
£000 £000 £000 £000
Trade debtors 1,643 - 1,383 -
Amounts recoverable on contracts 876 - 1,231 -
Amounts due from subsidiary undertaking - 69 - 636
Other debtors 13 - 49 -
Prepayments and accrued income 258 9 274 9
2,790 78 2,937 645
13. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2004 2003
Group Company Group Company
£000 £000 £000 £000
Trade creditors 735 128 655 32
Corporation tax - - 12 -
Other taxes and social security 174 - 211 -
VAT payable 388 32 402 90
Other creditors 263 - 277 -
Accruals and deferred income 648 65 732 62
2,208 225 2,289 184
14. CALLED UP SHARE CAPITAL
Company 2004 2003
£000 £000
Authorised
100,100,000 Ordinary shares of £0.0000001 each - -
50,000 A shares of £0.49999995 each 25 25
50,000 B shares of £0.49999995 each 25 25
4,999,999,500,000 Deferred shares of £0.00000001 each 50 50
Issued, called-up and fully paid
3,638,440 ordinary shares of £0.0000001 each (2003: 3,607,720) - -
49,735 A shares of £0.49999995 each (2003: 50,000) 25 25
49,735 B shares of £0.49999995 each (2003: 50,000) 25 25
2,649,998,554 Deferred shares of £0.00000001 each (2003: nil) - -
On 7 May 2004 28,985 £0.0000001 ordinary shares were issued at £1.725 each,
giving rise to share premium on issue of £49,999.
The A and B class shares rank pari passu with the ordinary shares on a return of
capital and have equal voting rights. The A and B shares became capable of
being converted into ordinary shares at the option of the holder on or after 24
December 2003 and 24 December 2004 respectively, on a predetermined conversion
formula based upon share price performance, whereby 15% of the growth in market
capitalisation of Group is attributable to the holders of the A and B shares.
On 24 August 2004 265 A shares were converted into 591 ordinary shares and the
these, along with the holding of 265 ordinary shares held before conversion of
the A shares, were redeemed by the company for a consideration of £1,455.
Based on the closing share price of £1.525 at 31 December 2004, the A and B
class shares would be capable of converting into 185,820 ordinary shares (2003:
232,053). The deferred shares carry no rights to participate in the profits or
assets of the Company and carry no voting rights.
Option scheme Date of grant Exercise price
(pence) Number
Volvere plc EMI Plan 30 June 2004 187.5 78,594
31 December 2004 190.0 92,050
Unapproved 13 April 2004 187.5 31,000
24 December 2002 100.0 36,097
237,741
Options granted under the Volvere plc EMI Plan vest subject to certain
performance and time-based criteria and are exercisable between 3 and 10 years
following grant.
The Unapproved options granted on 13 April 2004 vest as to 10,334 on each of 8
December 2004 and 8 December 2005 and 10,332 on 8 December 2006. Those granted
on 24 December 2002 can be exercised at any time until 24 December 2007.
15. SHARE PREMIUM AND RESERVES
Group Profit and
Share loss
premium account Total
£000 £000 £000
At beginning of period - 3,951 3,951
(Loss) transferred for the year - (211) (211)
Premium on share issues (net of expenses) 50 - 50
At end of period 50 3,740 3,790
Company Profit and
Share loss
premium account Total
£000 £000 £000
At beginning of period - 3,793 3,793
Profit transferred for the year - 240 240
Premium on share issues (net of expenses) 50 - 50
At end of period 50 4,033 4,083
16. RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS
2004 2003
Group Company Group Company
£000 £000 £000 £000
Opening shareholders' funds 4,001 3,843 - -
Issue of share capital 50 50 3,610 3,610
Expenses associated with issue of share capital - - (155) (155)
(Loss)/profit for the period (211) 240 546 388
Closing shareholders' funds 3,840 4,133 4,001 3,843
17. RECONCILIATION OF OPERATING (LOSS)/PROFIT TO OPERATING CASH FLOWS
2004 2003
£000 £000
Operating (loss)/profit (301) 455
Depreciation 84 80
Realisation of negative goodwill (60) (1,252)
Loss on sale of fixed assets - 1
Decrease/(increase) in stocks 5 (5)
Decrease in debtors 147 1,489
(Decrease)/increase in creditors (81) 588
Net cash (outflow)/inflow from operating activities (206) 1,356
18. ANALYSIS OF CASH FLOWS
Group 2004 2003
£000 £000
Returns on investments and servicing of finance
Interest received 90 91
Net cash inflow from returns on investments and
servicing of finance 90 91
Capital expenditure and financial investment
Purchase of tangible fixed assets (25) (64)
Sale of tangible fixed assets 3 5
Purchase of equity investment (192) -
Net cash outflow from capital expenditure and
financial investment (214) (59)
Acquisitions and disposals
Acquisition of subsidiary undertaking - (2,124)
Net cash acquired on acquisition of subsidiary undertaking - 564
Net cash outflow from acquisition and disposals - (1,560)
Financing
Issue of share capital 50 3,610
Costs associated with issue of share
capital - (155)
Net cash inflow from financing 50 3,455
Vectra Group Limited's net cash outflow from operating activities for the year
was £907,000 (2003: inflow £1,510,000), received £12,000 (2003: £10,000) in
respect of net returns on investment and servicing of finance, paid £nil (2003:
£nil) in respect of taxation and utilised £25,000 (2003: £64,000) for capital
expenditure.
19. ANALYSIS AND RECONCILIATION OF NET FUNDS
Group
31 December 31 December
2003 Cashflow 2004
£000 £000 £000
Cash in hand at bank, being net funds 3,283 (280) 3,003
The group had no debt during the year or at 31 December 2004.
20. COMMITMENTS AND CONTINGENCIES
Operating leases
The group has the following annual commitments under non-cancellable operating
leases:
2004
Plant and
machinery Other
£000 £000
Expiry date
- within one year 17 175
- between two and five years 88 232
105 407
21. RELATED PARTIES
The company has taken advantage of the exemption available to it under FRS8
paragraph 3(c) relating to transactions and balances with subsidiaries.
As stated in note 3 above, the company's Executive Directors are provided under
the terms of a Service Agreement dated 19 December 2002 with Dawnay, Day Lander
Limited. The amount paid under this agreement in the period amounted to
£100,000. In addition, pursuant to a Facilities Agreement dated 19 December
2002 with Dawnay, Day Lander Limited, the company is provided with certain
administrative and support services. The amount paid under this agreement
during the period amounted to £35,000.
22. SUBSIDIARY UNDERTAKINGS
The subsidiary undertakings at 31 December 2004 are shown below. All subsidiary
undertakings are registered in the United Kingdom and prepare accounts to 31
December each year.
Principal Activity Holding
Vectra Group Limited Provision of safety, risk and other consulting 100%
and field services
Vectra Partners Limited Dormant 100%
Vectra (Middle East) Limited Provision of safety, risk and other consulting 100%
and field services
The investments in Vectra Partners Limited and Vectra (Middle East) Limited are
held by Vectra Group Limited. The proportion of voting rights held is
equivalent to the equity shareholdings.
This information is provided by RNS
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