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Ultimate Sports Grp (CTNA)

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Thursday 28 June, 2018

Ultimate Sports Grp

Final Results and Notice of AGM

RNS Number : 9505S
Ultimate Sports Group PLC
28 June 2018
 

28 June 2018

Ultimate Sports Group PLC

("USG" or the "Company" or the "Group")

Final Results and Notice of AGM

 

Ultimate Sports Group PLC, the AIM listed investment vehicle, is pleased to announce its results for the year ended 31 December 2017.  The Company also gives notice that its Annual General Meeting ('AGM') will be held at the Hellenic Centre 16/18 Paddington Street, London W1U 5AS on 29 August 2018 at 11.30am.  Copies of the Notice of AGM together with the Annual Report for the year ended 31 December 2017 will be posted to shareholders and be available to view on the Company's website www.ultimatesportsgroup.me.

 

Chairman's Statement and Chief Executive's Review

 

Our continuing trading activities - primarily through our subsidiary Sport in Schools Limited (also known as The Elms Sport in Schools) - resulted in a combined turnover of £1,369,193 (2016 - £1,248,490) and an operating loss, before non-recurring and exceptional items, of £233,650 (2016 - £287,433).

 

The UltimatePlayer.me online platform is fully functional and operating satisfactorily. Whilst Ultimate Player took steps last year to expand the reach of its online platform, it became clear that it would require a substantial budget to cover marketing, promotion and advertising to secure its commercial viability.  With that in mind, your directors decided that it was appropriate to write off non-recurring and exceptional items relating to the development costs of the platform amounting to £563,325.

 

During the second half of 2017 your directors concluded that further funding was required for the company to promote its activities and seek to expand its horizons. Due to the limited marketability of the company's shares, any further fund raising for the company was unlikely to be achieved by share placings with private investors. Accordingly, your directors decided that any requirement for additional funds would need to be sourced by a party taking a strategic stake.

 

In December 2017, an initial meeting was held with Mr Richard Bernstein.  There followed in rapid succession a series of meetings, which, despite turbulent market conditions, resulted in a successfully negotiated transaction. Mr Bernstein offered and the company accepted (with shareholder approval) Mr Bernstein's proposal to take a strategic stake in the company. In addition, the company entered into an agreement with Mr Bernstein pursuant to which Mr Bernstein will seek to introduce the company to potential investment or acquisition opportunities.

 

The details of the entire transaction - which raised new funds of £537,500 before expenses - were announced in February 2018 and approved by shareholders at a General Meeting in March 2018.

 

Going forward your directors will continue to focus on the development of Sport in Schools Limited and carefully look for and appraise any and all acquisition opportunities, including those proposed by Mr Bernstein. In addition, Ultimate Player will explore new avenues designed to make its online platform commercially viable.

 

We are pleased that this strategy can be conducted from a firm financial base.

 

 

R L Owen (Chairman)

 

G M Simmonds (Managing Director)

 

27 June 2018

 

 

Consolidated statement of comprehensive income for the year ended 31 December 2017

 

 

 

2017

 

2016

 

Notes

 

£

 

£

 

 

 

 

 

     

Continued activities

 

 

 

 

 

Revenue

6

 

1,369,193

 

1,248,490

Cost of sales

 

 

(769,310)

 

(717,020)

 

 

 

 

 

 

Gross profit

 

 

599,883

 

531,470

Administrative expenses

 

 

  (833,533)

 

(818,903)

 

 

 

 

 

 

Operating Loss before exceptional items

 

 

(233,650)

 

(287,433)

 

Exceptional item and non- recurring costs

8

 

(563,325)

 

(141,763)

 

Operating loss

9

 

(796,975)

 

(429,196)

 

 

 

 

 

 

Finance income

11

 

-

 

1,602

Finance costs

12

 

(3,714)

 

(3,972)

Other gains and losses

13

 

20,497

 

-

Loss before taxation

 

 

(780,192)

 

(431,566)

 

 

 

 

 

 

Taxation

14

 

17,572

 

6,836

Loss after taxation from continuing activities

 

 

(762,620)

 

(424,730)

 

 

 

 

 

 

Profit/((loss) for the year from discontinued activities

7

 

53,567

 

(158,747)

 

 

 

(709,053)

 

(583,477)

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

Equity holders of the parent company

 

 

(709,470)

 

(566,581)

Non-controlling interests

 

 

417

 

(16,896)

 

 

 

(709,053)

 

(583,477)

 

 

 

 

 

 

Other comprehensive loss

 

 

 

 

 

Losses on available-for-sale investments taken to equity

 

 

(1,838)

 

(3,275)

 

 

 

 

 

 

Taxation on items taken directly to equity

14

 

331

 

618

 

 

 

 

 

 

Other comprehensive loss

 

 

(1,507)

 

(2,657)

 

 

 

 

 

 

Comprehensive loss attributable to:

 

 

 

 

 

Equity holders of the parent company

 

 

(710,977)

 

(569,238)

Minority interest

 

 

417

 

(16,896)

 

 

 

 

 

 

Total comprehensive loss

 

 

(710,560)

 

(586,134)

 

Loss per share (basic and diluted)

Loss from operations per share

15

 

(0.0319)p

 

(0.0318)p

Other comprehensive loss per share

 

 

(0.0001)p

 

(0.0001)p

Total comprehensive loss per share

 

 

(0.0320)p

 

(0.0319)p

 

The notes below form part of these financial statements.

 

 

Consolidated statement of financial position as at 31 December 2017

 

 

 

Notes

2017

 

2016

 

 

 

 

 

 

 

£

 

£

Non current assets

 

 

 

 

Goodwill and other intangibles

17

60,054

 

564,546

Property, plant and equipment

19

12,923

 

31,570

Total non-current assets

 

72,977

 

596,116

 

 

 

 

 

Current assets

 

 

 

 

Available-for-sale investments

20

-

 

25,998

Trade and other receivables

21

68,981

 

97,702

Cash and cash equivalents

 

129,611

 

129,437

Total current assets

 

198,592

 

253,137

 

 

 

 

 

Total assets

 

271,569

 

849,253

 

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

22

173,661

 

222,547

Borrowings

25

2,000

 

17,377

Total current liabilities

 

175,661

 

239,924

 

 

 

 

 

Non-current liabilities

 

 

 

 

Borrowings

25

-

 

30,562

Total non-current liabilities

 

-

 

30,562

 

 

 

 

 

Total liabilities

 

175,661

 

270,486

 

 

 

 

 

Net assets

 

95,908

 

578,767

 

 

 

 

 

Equity

 

 

 

 

Share capital

26

2,281,164

 

2,048,664

Share premium account

 

393,454

 

393,454

Merger reserve

 

325,584

 

325,584

Fair value reserve

 

-

 

(1,507)

Retained earnings

 

(2,840,795)

 

(2,123,512)

Equity attributable to shareholders' of the parent company

 

159,407

 

642,683

 

 

 

 

 

Non- controlling interests

 

(63,499)

 

(63,916)

 

 

 

 

 

Total Equity

 

95,908

 

578,767

 

The financial statements were approved and authorised for issue by the board on 27 June 2018 and signed on its behalf by:

 

R L Owen

Director

 

G Simmonds

Director

 

Company registration number 03882621

 

The notes below form part of these financial statements.

 

 

 

Consolidated statements of changes in equity

 

Share

capital

Share

premium

Merger reserve

Fair value reserve

Retained earnings

 

 To equity holders of the parent company

Non-controlling interest

 

 

Total

 

£

£

£

£

£

 

£

£

 

£

Balance at 1 January 2016

1,526,164

401,039

325,584

1,150

(1,569,380)

 

684,557

951

 

685,508

Issue of new shares

522,500

18,000

-

-

-

 

540,500

-

 

540,500

Share issue costs

-

(25,585)

-

-

-

 

(25,585)

-

 

(25,585)

Released on sale of available for sale investments

-

-

-

(3,275)

-

 

(3,275)

-

 

(3,275)

Deferred tax on items taken directly to equity

-

-

-

618

-

 

618

-

 

618

 

 

 

 

 

 

 

 

 

 

 

Adjustment for non-controlling  interest

-

-

-

-

-

 

-

(47,971)

 

(47,971)

Share based payment

-

-

-

-

12,449

 

12,449

-

 

12,449

Loss for the year

-

-

-

-

(566,581)

 

(566,581)

(16,896)

 

(583,477)

Reserves at 1 January 2017

2,048,664

393,454

325,584

(1,507)

(2,123,512)

 

642,683

(63,916)

 

578,767

Issue of new shares

232,500

-

-

-

-

 

232,500

-

 

232,500

Share issue costs

-

-

-

-

(7,813)

 

(7,813)

-

 

(7,813)

Released on sale of available for sale investments

-

-

-

1,838

-

 

1,838

-

 

1,838

Deferred tax on items taken directly to equity

-

-

-

(331)

-

 

(331)

-

 

(331)

Loss for the year

 

 

 

 

(709,470)

 

(709,470)

417

 

(709,053)

At 31 December 2017

2,281,164

393,454

325,584

-

(2,840,795)

 

159,407

(63,499)

 

95,908

 

 

Company statement of financial position as at 31 December 2017

 

Notes

2017

 

2016

 

 

£

 

£

Non current assets

 

 

 

 

Investment in subsidiaries

18

516,468

 

606,571

Property, plant and equipment

19

1

 

20,915

Total non-current assets

 

516,469

 

627,486

 

 

 

 

 

Current assets

 

 

 

 

Available-for-sale investments

20

-

 

1,688

Trade and other receivables

21

342,203

 

971,993

Cash and cash equivalents

 

81,459

 

175,789

Total current assets

 

423,662

 

1,149,470

 

 

 

 

 

Total assets

 

940,131

 

1,776,956

 

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

22

284,317

 

283,073

Borrowings

25

-

 

13,877

Total current liabilities

 

284,317

 

296,950

 

 

 

 

 

Non-current liabilities

 

 

 

 

Borrowings

25

-

 

28,562

Total non-current liabilities

 

-

 

28,562

 

 

 

 

 

Total liabilities

 

284,317

 

325,512

 

 

 

 

 

Net assets

 

655,814

 

1,451,444

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

Share capital

26

2,281,164

 

2,048,664

Share premium account

 

393,454

 

393,454

Merger reserve

 

325,584

 

325,584

Retained earnings

 

(2,344,388)

 

(1,316,258)

 

 

 

 

 

Total equity

 

655,814

 

1,451,444

 

The financial statements were approved and authorised for issue by the board on 27 June 2018 and signed on its behalf by:

 

R L Owen

Director

 

G Simmonds

Director

 

Company registration number 03882621

 

The notes below form part of these financial statements.

 

Company statement of changes in equity

 

Share

capital

Share

premium

Merger reserve

Retained earnings

 

Total

 

£

£

£

£

£

 

 

 

 

 

 

At 1 January 2016

     1,526,164

401,039

325,584

(1,034,493)

1,218,294

 

 

 

 

 

 

Issue of new shares

522,500

18,000

-

-

540,500

 

 

 

 

 

 

Share issue costs

-

(25,585)

-

-

(25,585)

 

 

 

 

 

 

Loss for the year

-

-

-

 (294,214)

(294,214)

 

 

 

 

 

 

Share based payment

   -      

-

-

12,449

12,449

At 1 January 2017

     2,048,664

393,454

325,584

(1,316,258)

1,451,444

 

 

 

 

 

 

Issue of new shares

232,500

-

-

-

232,500

 

 

 

 

 

 

Share issue costs

-

-

-

(7,813)

(7,813)

 

 

 

 

 

 

Loss for the year

-

-

-

(1,020,317)

(1,020,317)

 

 

 

 

 

 

At 31 December 2017

    2,281,164

393,454

325,584

(2,344,388)

655,814

 

 

Consolidated statement of cash flows for the year ended 31 December 2017

 

 

Note

 

2017

 

2016

 

 

 

 

£

 

£

 

 

 

 

 

 

 

Cash flow from all operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before taxation from continuing activities

 

 

 

(780,192)

 

(431,566)

Profit/(loss) before taxation from discontinued activities

 

33c

 

53,567

 

(158,747)

 

 

 

 

(726,625)

 

(590,313)

 

 

 

 

 

 

 

Adjustments for:

 

 

 

 

 

 

Finance income

 

 

 

-

 

(1,602)

Finance expense

 

 

 

3,714

 

3,972

Impairment and amortisation of intangible assets

 

 

 

520,792

 

57,089

Other gains and losses

 

 

 

(103,097)

 

-

Depreciation

 

 

 

26,145

 

53,406

Profit on sale of tangible assets

 

 

 

(30,865)

 

-

Share based payments

 

 

 

-

 

12,448

 

 

 

 

 

 

 

Operating cash flow before working capital movements

 

 

 

(309,936)

 

(465,000)

Increase in receivables

 

 

 

28,720

 

84,552

Decrease in payables

 

 

 

(48,886)

 

(162,567)

 

 

 

 

 

 

 

Net cash absorbed by operations

 

 

 

(330,102)

 

 

(543,015)

 

 

 

 

 

 

 

Taxation

 

 

 

17,241

 

7,454

 

 

 

 

 

 

 

Cash flow from investing activities

 

 

 

 

 

 

Finance income

 

 

 

-

 

1,602

Property, plant and equipment acquired

 

 

 

(9,820)

 

(4,001)

Intangible asset development costs

 

 

 

        (16,300)

 

          (134,614)

Acquisition of non- controlling interest

 

 

 

-

 

(47,970)

Proceeds on sale of property, plant and equipment

 

 

 

33,187

 

-

Net proceeds on sale of business

 

 

 

82,600

 

-

Proceeds on disposal of available for sale investments

 

 

 

48,334

 

-

Net cash from investing activities

 

 

 

138,001

 

(184,983)

 

 

 

 

 

 

 

Cash flow from financing activities

 

 

 

 

 

 

Finance expense

 

 

 

(3,714)

 

(3,972)

Funds from share issue

 

 

 

224,687

 

514,915

Repayment of borrowings

 

 

 

(45,939)

 

(18,877)

Net cash from financing activities

 

 

 

175,034

 

492,066

 

 

 

 

 

 

 

Net increase/(decrease) in cash and cash equivalents in the year

 

33b

 

174

 

(228,478)

 

 

 

 

 

 

 

Cash and cash equivalents at the beginning of the year

 

 

 

129,437

 

357,915

 

 

 

 

 

 

 

Cash and cash equivalents at the end of the year

 

 

 

129,611

 

129,437

 

A statement of cash flows from discontinued activities is set out in note 33c.

 

The notes below form part of these financial statements.

 

 

Company statement of cash flows for the year ended 31 December 2017

 

Notes

 

2017

 

2016

 

 

 

£

 

£

 

 

 

 

 

 

Cash flow from operating activities

 

 

 

 

 

 

 

 

 

 

 

Loss before tax

 

 

(1,020,317)

 

(294,213)

 

 

 

 

 

 

Adjustments for:

 

 

 

 

 

Finance income

 

 

(16,500)

 

(16,500)

Finance expense

 

 

3,714

 

3,972

Other gains

 

 

(1,034)

 

-

Provision for impairment in value of investments in subsidiaries

 

 

 

90,103

 

 

10,765

Provision for intra group indebtedness

 

 

889,245

 

-

Depreciation

 

 

18,592

 

27,888

Profit on sale of tangible assets

 

 

(30,865)

 

-

Share based payments

 

 

-

 

12,448

 

 

 

 

 

 

Operating cash flow before working capital movements

 

 

(67,062)

 

(255,640)

 

 

 

 

 

 

Decrease/(increase) in receivables

 

 

(242,954)

 

(269,926)

Increase in payables

 

 

1,244

 

41,993

 

 

 

 

 

 

Net cash absorbed by operations

 

 

(308,772)

 

(483,573)

 

 

 

 

 

 

Cash flow from investing activities

 

 

 

 

 

 

 

 

 

 

 

Investment acquired

 

 

-

 

(47,000)

Proceeds on sale of property, plant & equipment

 

 

33,187

 

-

Proceeds on sale of investments for resale

 

 

2,721

 

-

Net cash inflow/(outflow) from investing activities

 

 

35,908

 

(47,000)

 

 

 

 

 

 

Cash flow from financing activities

 

 

 

 

 

 

 

 

 

 

 

Funds from share issue

 

 

224,687

 

514,915

Finance expense

 

 

(3,714)

 

(3,972)

Hire purchase repayments

 

 

(42,439)

 

(13,877)

 

 

 

 

 

 

Net cash from financing activities

 

 

178,534

 

497,066

Net decrease in cash and cash equivalents in the year

33b

 

(94,330)

 

(33,507)

 

 

 

 

 

 

Cash and cash equivalents at the beginning of the year

 

 

175,789

 

209,296

 

 

 

 

 

 

Cash and cash equivalents at the end of the year

 

 

81,459

 

175,789

 

The notes below form part of these financial statements

 

 

Notes to the group and parent company financial statements

 

1.            General information

 

Ultimate Sports Group Plc is a public company limited by shares, domiciled and incorporated in England and Wales and its activities are as described in the chairman's statement and directors' report on page 2 and page 4 respectively.

 

These financial statements are prepared in pounds sterling being the currency of the primary economic environment in which the group operates.

 

Basis of Preparation

 

The condensed Group financial statements for the year ended 31 December 2017 included in this report do not constitute statutory accounts.  The condensed Group financial statements are extracted from the Group's statutory financial statements for the year ended 31 December 2017.  The auditor has reported on those statutory financial statements; their report was unqualified and did not contain statements under s498(2) or (3) Companies Act 2006 or equivalent preceding legislation.

 

While the financial information included in this announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs.

 

The condensed Group financial statements have been prepared on a basis consistent with that adopted in the previous year's published financial statements and in accordance with IFRSs.

 

The Group expects to publish statutory financial statements for the year ended 31 December 2017 that comply with both IFRSs as adopted for use in the European Union and IFRSs as compliant with the Companies Act 2006 and Article 4 of the EU IAS Regulations based on the information presented in this announcement.

 

The condensed financial statements were approved by the Board on 27 June 2018.

 

Audited statutory accounts for the year ended 31 December 2016 have been delivered to the registrar of companies.  The Independent Auditors' Report on the Annual Report and Financial Statements for 2016 was unqualified, did not contain a statement under 498(2) or 498(3) of the Companies Act 2006, but did contain a paragraph of emphasis of matter relating to going concern without qualifying their report.

 

2.            Basis of Accounting

 

The consolidated financial statements of the group and the financial statements of the parent company for the year ended 31 December 2017 have been prepared under the historical cost convention except for the revaluation of available-for-sale investments to fair value and are in accordance with International Financial Reporting standards ("IFRS") as adopted by the EU. These policies have been applied consistently except where otherwise stated.

 

Future standards in place but not yet effective:

 

At the date of authorisation of these financial statements, the following Standards were effective for annual periods beginning on or after 1 January 2018:

•              IFRS 9 - Financial Instruments

•              IFRS 15 - Revenue from Contracts with Customers

 

At the date of authorisation of these financial statements, the following Standards were effective for annual periods beginning on or after 1 January 2019:

•              IFRS 16 - Leases

 

The following amendments to Standards are all effective for annual periods beginning on or after 1 January 2018:

•              IFRS 2 - Classification and measurement of share-based payment transactions

•              IFRS 4 - Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts

 

Except for IFRS 16, see below, the directors do not believe that there will be a material impact on the financial statements from the adoption of these standards / interpretations

 

IFRS 16 requires the recognition of an asset and liability by introducing a lessee accounting model.  As at 31 December 2017, the group has an asset and liability in respect of leases accounted for on the basis of IFRS 16 of approximately £80,000.

 

There were no material changes in the financial statements as a result of adopting new or revised accounting standards during the year.

 

3.            Significant accounting policies

 

(a)          Basis of consolidation

 

The financial statements of the group incorporate the financial statements of the company and entities controlled by the company, which are its subsidiary undertakings.  Control is achieved where the company has the power to govern the financial and operating policies of its subsidiary undertakings so as to benefit from their activities.

 

Details of subsidiary undertakings are set out in note 18.

 

All intra-group transactions and balances have been eliminated in preparing the consolidated financial statements.

 

(b)          Revenue

 

Revenue arises from the disposal of available-for-sale investments and income from sports and leisure activities undertaken by the company and its subsidiary undertakings. In the case of sports and leisure activities it represents invoiced and accrued amounts for services supplied in the year, exclusive of value added tax and trade discounts.

 

(c)           Intangible assets

 

Goodwill arising on consolidation represents the excess of the cost of acquisition over the group's interest in the fair value of the identifiable assets and liabilities of subsidiary entities at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses. Goodwill which is recognised as an asset is reviewed for impairment at least annually. Any impairment is recognised immediately in the statement of comprehensive income and is not subsequently reversed.

 

For the purpose of impairment testing, goodwill is allocated to each of the group's cash generating units expected to benefit from synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.

 

On disposal of a subsidiary, associate or jointly controlled entity, the amount of goodwill is included in the determination of the profit or loss on disposal.

 

Goodwill arising on acquisitions before the date of transition to IFRS's has been retained at the previous UK GAAP amounts subject to being tested for impairment at that date.

 

Development costs are expensed in arriving at the operating profit or loss for the year unless the directors are satisfied as to the technical, commercial and financial viability of individual project. In this situation, the expenditure is recognised as an asset and is reviewed for impairment on an annual basis.

 

Any impairment is recognised immediately in the income statement and is not subsequently reversed.

Development costs recognised as an asset are amortised over a 10 year life, which commenced in   September 2015 with the initial launch of the website.

 

(d)          Plant and equipment

               

Plant and equipment are stated at cost less depreciation.  Depreciation is provided at rates calculated to write off the cost less their estimated residual value over their expected useful lives.

 

The rates applied to these assets are as follows:

 

Plant & equipment

25%  & 10% straight line

Motor vehicles

33.3%  straight line

 

(e)          Operating leases

               

Rentals applicable to operating leases, where substantially all of the benefits and risks of ownership remain with the lessor, are charged against revenue as and when incurred.

 

(f)           Deferred taxation

               

Deferred taxation is provided in full in respect of timing differences between the treatment of certain items for taxation and accounting purposes.  The deferred tax balance is not discounted.

               

The recognition of deferred tax assets is limited to the extent that the group anticipates making sufficient taxable profits in the future to absorb the reversal of the underlying timing differences.

 

 (g)         Trade receivables

               

Trade receivables are recognised at fair value.  A provision for impairment of trade receivables is established where there is objective evidence that the company or group will not be able to collect all amounts due according to the original terms of the receivables.  Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or liquidation and default or delinquency of payments are considered indicators that the trade receivable is impaired.  The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash flows. The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the income statement within administrative expenses.  When a trade receivable is uncollectable it is written off against the allowance account for trade receivables.

 

(h)          Investments

 

Investments are classified as available for sale, and are measured at fair value. Gains or losses in changes in fair value are recognised directly in equity, until the security is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in the net profit or loss for the period. Impairment losses recognised in profit or loss are not subsequently reversed through profit or loss.

 

Fair value of quoted investments is based on current bid prices. If an investment is suspended from trading, fair value is based on quoted bid prices on the first day that trading recommences following suspension.

 

Investments in subsidiary undertakings are stated at cost less provision for impairment in the parent company balance sheet.

 

(i)           Cash and cash equivalents

 

Cash and cash equivalents include cash in hand and deposits held at call with banks.  Bank overdrafts are shown as borrowings within current liabilities.

 

(j)           Financial liabilities and equity

 

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into.  An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

 

Ordinary shares are classified as equity. Incremental costs directly attributable to new shares are shown in equity as a deduction from the proceeds.

 

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

 

Borrowings are recognised initially at fair value, net of transaction costs incurred.  Borrowings are subsequently stated at amortised cost, any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowing using the effective interest method.

 

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the date of the statement of financial position.

 

4.            Critical accounting judgements and key sources of estimation uncertainty

 

The preparation of the group's financial statements require the directors to make judgements, estimates and assumptions that effect the application of policies and reported amounts in the financial statements. These judgements and estimates are based on the director's best knowledge of the relevant facts and circumstances. Information about such judgements and estimation is contained in the accounting policies and/or notes to the financial statements.

 

Deferred tax asset

 

At the present time the directors' do not consider that there is sufficient certainty regarding the utilisation of tax losses available in the group. As a result, no deferred tax asset has been recognised.

 

Impairment of goodwill

 

Determining whether goodwill is impaired requires an estimation of the value in use of the cash generating units to which the goodwill has been allocated. The value in use calculation requires the entity to estimate the future cash flows expected to arise from the cash generating unit and a suitable discount rate in order to calculate present value. The carrying amount of goodwill is the deemed cost on first time application of IFRS.

 

Details of the impairment review calculation are given in note 17.

 

Impairment of investment in subsidiary undertakings

 

The company holds listed investments through various subsidiary undertakings. The values of these investments have been assessed based on their current quoted market value. These values have been used to estimate the recoverable value of the subsidiary undertakings. Where the estimated recoverable value of the company's investments in these subsidiary undertakings is less than the carrying value, the investment has been written down to the estimated recoverable value.

 

Impairment of intangible assets

 

The carrying value of intangible assets comprising unamortised website costs are determined by reference to an assessment of future income generated by the UltimatePlayer.me platform. Having regard to the Board's decision to delay future plans for further website development, all unamortised costs be fully impaired in the year as an exceptional item (note 8).

 

5.            Going concern

               

The directors have prepared financial forecasts covering the 12 months following approval of these financial statements, which show the Group, following the issue of new shares raising £537,500, can continue to carry on trading within its existing finance facilities over that period. 

 

In view of the above, the directors consider it appropriate to prepare the financial statements on a going concern basis.

 

6.            Business segment analysis

 

Segmental information with regard to continuing and non- continuing activities is disclosed below and is based on the different business activities in the group.

 

All turnover, profits, losses, assets and liabilities relate to operations undertaken in the UK.

 

Year ended 31 December 2017

Sports and leisure

 

Social media website

 

Consolidated

 

£

 

£

 

£

 

 

 

 

 

 

Revenue

1,368,710

 

483

 

1,369,193

 

 

 

 

 

 

Segment operating profit/(loss)

28,255

 

(587,536)

 

(559,281)

 

 

 

 

 

 

Group operating expenses*

 

 

 

 

(237,694)

 

 

 

 

 

 

Operating loss

 

 

 

 

(796,975)

Other gains and losses

 

 

 

 

20,497

Finance revenues less finance costs

 

 

 

 

(3,714)

 

 

 

 

 

 

Loss before taxation

 

 

 

 

(780,192)

 

 

 

 

 

 

Taxation relating to the social media website

 

 

 

 

 

17,572

Loss after taxation from continuing activities

 

 

 

 

(762,620)

 

 

 

 

 

 

Discontinued activities

53,567

 

 

 

53,567

 

(53,567)

 

 

 

(709,053)

 

 

 

 

 

 

Year ended 31 December 2016

Sports and leisure

 

Social media website

 

Consolidated

 

£

 

£

 

£

 

 

 

 

 

 

Revenue

1,246,888

 

1,602

 

1,248,490

 

 

 

 

 

 

Segment operating profit/(loss)

122,535

 

(164,256)

 

(41,721)

 

 

 

 

 

 

Group operating expenses*

 

 

 

 

(387,475)

 

 

 

 

 

 

Operating loss

 

 

 

 

(429,196)

Other gains and losses

 

 

 

 

-

Finance revenues less finance costs

 

 

 

 

(2,370)

 

 

 

 

 

 

Loss before taxation

 

 

 

 

(431,566)

 

 

 

 

 

 

Taxation relating to the social media website

 

 

 

 

 

6,836

Loss after taxation from continuing activities

 

 

 

 

(424,730)

 

 

 

 

 

 

Discontinued activities

(158,747)

 

 

 

(158,747)

 

(158,747)

 

 

 

(583,477)

 

* 'Group operating expenses' represent the costs of running the group as a whole. The directors consider that the costs of running Pantheon Leisure Plc of £53,370 (2016: £54,677) form part of these costs as opposed to forming part of the segmental costs of the sports and leisure division.

 

 

 

 

 

 

 

Financial position at 31 December 2017

 

 

 

 

 

 

Sports and leisure

 

Social media website

 

Consolidated

 

£

 

£

 

£

Segment assets

55,714

 

        1,846

 

57,560

 

 

 

 

 

 

Non segmental assets

 

 

 

 

214,009

 

 

 

 

 

 

Consolidated total assets

 

 

 

 

271,569

 

 

 

 

 

 

Segment liabilities

158,457

 

       4,162

 

162,619

 

 

 

 

 

 

Non segmental corporate liabilities

 

 

 

 

13,042

 

 

 

 

 

175,661

 

 

 

 

 

 

Capital additions

9,820

 

16,300

 

 

Depreciation/amortisation and impairment

7,552

 

520,792

 

 

 

 

 

 

 

 

Financial position at 31 December 2016

 

 

 

 

Consolidated

 

£

 

£

 

£

Segment assets

77,264

 

     519,065

 

596,329

 

 

 

 

 

 

Non segmental assets

 

 

 

 

252,924

 

 

 

 

 

 

Consolidated total assets

 

 

 

 

849,253

 

 

 

 

 

 

Segment liabilities

197,053

 

      19,168

 

216,221

 

 

 

 

 

 

Non segmental corporate liabilities

 

 

 

 

54,265

 

 

 

 

 

270,486

 

 

 

 

 

 

Capital additions

4,001

 

134,614

 

 

Depreciation charge

53,406

 

57,089

 

 

 

 

 

 

 

 

 

Non segmental assets include group cash balances of £129,611 (2016: £129,437), plant and equipment of £Nil (2016: £20,915), goodwill of £59,954 (2016: £59,954), other assets and receivables of £24,444 (2016: £42,618). Non segmental liabilities include trade and other payables of £13,042 (2016: £54,265), hire purchase liabilities attributable to the parent company of £Nil (2016: £42,439).

 

Segment assets include £2,727 (2016: £6,013) from discontinued activities. Segment liabilities include £8,638 (2016: £65,937) from discontinued activities.

 

7.            Discontinued Operations

 

 

2017

 

2016

 

 

£

 

£

Revenue

 

          11,015

 

      373,935

Cost of sales and expenses

 

        (40,048)

 

     (532,682)

Operating loss

 

        (29,033)

 

     (158,747)

Net proceeds on disposal

 

         82,600

 

           -

 

 

         53,567

 

     (158,747)

Football Partners Limited ceased small-sided football league activities in December 2016 and subsequently disposed of its trade for £100,000.

 

8.    Exceptional item and non- recurring costs

 

 

2017

 

 

2016

 

£

 

£

Exceptional item:

Development cost - full impairment

 

        462,073

 

 

-

Non recurring costs:

Website expenditure and amortisation

101,252

 

141,763

 

563,325

 

141,763

 

9.            Operating loss

 

2017

 

 

2016

£

 

£

 

 

 

20,875

 

25,840

13,507

 

10,905

26,145

 

53,406

58,719

 

57,089

462,073

 

-

 

Included in the audit fee for the group is an amount of £6,700 (2016: £6,000) in respect of the Company.

 

The auditors received fees of £1,250 (2016: £1,250) in respect of the provision of services in connection with advice relating to the group's interim results, and general advice.

 

10.          (a) Staff Costs

Employee benefit costs were as follows:

Group

 

2017

 

2016

 

£

 

£

Wages and salaries

1,128,737

 

1,185,972

Social security costs

67,549

 

80,716

Pension contributions

7,019

 

8,169

Share based payment

-

 

12,448

 

1,203,305

 

1,287,305

 

The average numbers of employees, including directors during the year, was as follows:-

 

 

No.

 

No.

Administration, sales and coaching staff             

   91

 

   80

 

 (b) Directors' remuneration

 

 

2017

 

2016

An analysis of directors' remuneration

(who are the key management personnel) is set out below:

 

 

£

 

 

£

Salary and consultancy fees

 

32,859

 

106,951

 

 

 

 

 

Executive directors:

 

 

 

 

Salaries

 

15,000

 

40,000

Car benefits

 

17,859

 

23,951

Consultancy fees

 

-

 

30,500

 

 

32,859

 

94,451

Non-executive directors:

 

 

 

 

Salaries and benefits

 

-

 

8,750

Consultancy fees

 

-

 

3,750

 

 

-

 

12,500

 

 

2017

 

2016

Directors consultancy fees comprise:

£

 

£

 

 

 

 

G Simmonds and Simmonds & Co

-

 

22,500

D Hillel

-

 

8,000

D J Coldbeck

-

 

3,750

 

-

 

34,250

 

The total cost of key management personnel being the executive directors and including employers' national insurance was £32,859 (2016: £94,451).

 

The following amounts were paid for the services of the directors in the year:

 

2017

 

 

2017

 

 

2016

 

£

 

£

 

£

 

Salaries and benefits

 

Total

 

Total

R L Owen

15,996

 

15,996

 

41,403

G Simmonds

16,863

 

16,863

 

45,048

D Hillel

-

 

-

 

8,000

J Zucker

-

 

-

 

6,250

D J Coldbeck

-

 

-

 

6,250

 

32,859

 

32,859

 

106,951

 

11.          Finance income

 

 

 

2017

 

2016

 

£

 

£

Interest revenue - bank deposits

-

 

102

Dividends received

-

 

1,500

 

-

 

1,602

 

12.          Finance costs

 

 

 

2017

 

2016

 

£

 

£

Interest on obligations under hire purchase agreements

3,714

 

3,972

 

13.          Other gains and losses

 

 

 

2017

 

2016

 

£

 

£

Profit on disposal of available for sale investments (note 20)

20,497

 

-

 

 

 

 

 

14.          Taxation

 

2016

 

2016

 

£

 

£

Deferred tax (credit)/charge

 

 

 

Origination and reversal of temporary differences

(331)

 

618

 

 

 

 

Total deferred tax (credit)/(charge

(331)

 

618

Research and development tax credits

(17,241)

 

(7,454)

 

Tax credit in income statement

(17,572)

 

(6,836)

 

No income tax charge arises based on the loss for the year (2016: nil).

 

The group has unutilised tax losses of £6,311,000 (2016: £7,315,000) which includes £2,364,000 (2016: £2,982,000) in relation to the company's subsidiary undertakings. Where it is anticipated that future taxable profits will be available to utilise these losses a deferred tax asset or a reduction in deferred tax liability is recognised as appropriate.

 

Factors affecting the tax charge in the year

 

 

2017

 

2016

 

£

 

£

 

 

 

 

Loss on ordinary activities before taxation

(724,787)

 

(590,313)

 

 

 

 

Loss on ordinary activities before taxation at the standard rate of UK corporation tax of 19.25% (2016: 20%)

(139,521)

 

(118,063)

 

 

 

 

Effects of:

 

 

 

Expenses not deductible for tax purposes

-

 

3,016

Dividend income

-

 

(300)

Temporary differences in respect of  depreciation and capital allowances not reflected in deferred tax

97,121

 

21,140

Unutilised tax losses not recognised as a deferred tax asset

42,400

 

94,207

Adjustment on available-for-sale investments

(331)

 

618

Research and development tax credits

(17,241)

 

(7,454)

 

 

 

 

Tax credit

(17,572)

 

(6,836)

 

In recognition of the effects on taxation arising from the revaluation of the group's available-for-sale investments, a deferred tax adjustment to the provision by £331 (2016: £618) has been made and reflected as an adjustment to equity. During the year claims for tax credits in relation to research and development costs were made giving rise to cash credits of £17,241. These claims related to expenditure incurred to December 2015.

 

15.          Loss per share

 

Basic loss per share has been calculated on the group's loss attributable to equity holders of the parent company of £709,470 (2016: £566,581) and on the weighted average number of shares in issue during the year, which was 22,211,434 (2016:17,809,583).

 

Comprehensive loss per share is based on the same number of shares and on the comprehensive loss for the year attributable to the equity holders in the parent company of £710,977 (2016: £569,238).

 

In view of the group loss for the year, share warrants and options to subscribe for ordinary shares in the company are anti-dilutive and therefore diluted earnings per share information is not presented. There are options outstanding at 31 December 2017 on 210,000 ordinary shares.

 

16.          Loss for the financial year

 

As permitted by Section 400 of the Companies Act 2006, the profit and loss account for the company is not presented as part of these financial statements.

 

The consolidated loss for the year of £709,053 (2016: loss: £583,477) includes a loss of £1,020,317 (2016: loss £294,214) dealt with in the accounts of the company.

 

17.          Goodwill, intangibles and development costs

 

2017

 

2017

 

2017

 

2016

 

£

 

£

 

£

 

£

 

Website development

 

Goodwill and other intangibles

 

Total

 

Total

 

 

 

 

 

 

 

 

Cost  at 1 January

570,887

 

60,054

 

630,941

 

496,327

Additions in the year

16,300

 

-

 

16,300

 

134,614

Cost at 31 December

587,187

 

60,054

 

647,241

 

630,941

 

 

 

 

 

 

 

 

Amortisation at 1 January

66,395

 

-

 

66,395

 

9,306

Charged in the year

58,719

 

-

 

58,719

 

57,089

Impairment write off

462,073

 

-

 

462,073

 

-

Amortisation at 31 December

587,187

 

-

 

587,187

 

66,395

 

 

 

 

 

 

 

 

Carrying value at 31 December

-

 

60,054

 

60,054

 

564,546

         

Goodwill of £59,954 included above relates to the acquisition of Pantheon Leisure Plc which is included at its deemed cost on first time application of IFRS.

 

The Group acquired £100 of intangible assets in 2013 at the time of acquisition of a subsidiary.

 

Goodwill acquired in a business combination is allocated, at acquisition, to cash generating units ("CGUs") that are expected to benefit from that business combination. The carrying amount of goodwill relates wholly to the leisure activities business segment.

 

The recoverable amounts of the CGUs are determined from value in use calculations. The key assumptions for the value in use calculations are those regarding forecast revenues and operating costs. Management have taken into account the following two elements:

 

(i)   Based on current assessments of the Sport in Schools activities made by the directors, they consider that revenues will continue to grow in 2018 and 2019; and

 

(ii)  Operational costs are monitored and controlled

 

Development costs

 

Ultimate Player Limited continued to operate the UltimatePlayer.me platform during the year. As a result of the decision taken by the Board to delay future plans for further website development, unamortised  development costs have been fully impaired and written off as an exceptional item (see note 8).

 

18.          Investments in Subsidiaries

Company

2017

 

2016

 

£

 

£

Cost of shares

1,947,932

 

1,947,932

Loan notes

220,000

 

220,000

At 31 December

2,167,932

 

2,167,932

 

 

 

 

Impairment

 

 

 

At 1 January

1,561,361

 

1,550,596

Increase of provision in year

90,103

 

10,765

At 31 December

1,651,464

 

1,561,361

 

 

 

 

Carrying value at 31 December

516,468

 

606,571

 

Included in investments is £220,000 of loan notes which carry an interest coupon of 7.5% and are repayable on demand at par. 

 

The following companies were subsidiaries at the balance sheet date and the results and year end position of these companies has been included in these consolidated financial statements.

 

Subsidiary undertakings

Description and proportion of share capital owned

Country of incorporation or registration

Nature of business

 

 

 

 

Westside Acquisitions Limited

Ordinary 100%

England & Wales

Holding company

Reverse Take-Over Investments Limited *

Ordinary 100%

England & Wales

Acquisition and development of shell companies

Westsidetech Limited

Ordinary 100%

England & Wales

Dormant

Westside Mining Plc

Ordinary 100%

England & Wales

Investment - inactive

Westside Sports Limited

Ordinary 100%

England & Wales

Holding company

Ultimate Player Limited

Ordinary 100%

England & Wales

Social media website

Football Data Services Limited

Ordinary 100%

England & Wales

Website data services - inactive

FootballFanatix Limited

Ordinary 100%

England & Wales

Social media website - inactive

Pantheon Leisure Plc **

Ordinary 85.87%

England & Wales

Holding company

Sport in Schools Limited ***

Ordinary 85.87%

England & Wales

Sports coaching in schools

Football Partners Limited ***

Ordinary 85.87%

England & Wales

Non trading

The Elms Group Limited  ***

Ordinary 85.87%

England & Wales

Dormant

Footballdirectory.co.uk Limited ****

Ordinary 85.87%

England & Wales

Dormant

 

*              331/3% held indirectly through Westside Acquisitions Limited

**           held indirectly through Westside Sports Limited

***         held indirectly through Pantheon Leisure Plc

****       held indirectly through The Elms Group Limited

 

Pantheon group of companies

 

2017

2016

 

 

£

£

Net liabilities

 

      (49,529)

       (52,479)

Profit/(loss) for the year

 

         2,950

     (119,389)

 

Figures above incorporate the consolidated results of Pantheon Leisure Plc, Sport in Schools Limited, Football partners Limited and the Elms Group Limited for the year ended 31 December 2017.

 

19.          Property, plant and equipment

 

Group

Plant and equipment

 

Motor Vehicles

 

Total

 

£

 

£

 

£

Cost

 

 

 

 

 

At 1 January 2016

144,442

 

83,662

 

228,104

Additions

4,001

 

-

 

4,001

Disposals

-

 

-

 

-

Cost at 31 December 2016

148,443

 

83,662

 

232,105

Additions

9,820

 

-

 

9,820

Disposals

(63,691)

 

(83,662)

 

(147,353)

At 31 December 2017

94,572

 

-

 

94,572

 

 

 

 

 

 

Depreciation

 

 

 

 

 

At 1 January 2016

112,269

 

34,860

 

147,129

Charge for the year

25,518

 

27,888

 

53,406

Disposals

-

 

-

 

-

At 31 December 2016

137,787

 

62,748

 

200,535

Charge for the year

7,553

 

18,592

 

26,145

Disposals

(63,691)

 

(81,340)

 

(145,031)

At 31 December 2017

81,649

 

-

 

81,649

 

 

 

 

 

 

Carrying value

 

 

 

 

 

At 31 December 2017

12,923

 

-

 

12,923

 

 

 

 

 

 

At 31 December 2016

10,656

 

20,914

 

31,570

 

Company

Plant and equipment

 

Motor Vehicles

 

Total

 

£

 

£

 

£

Cost

 

 

 

 

 

At 1 January 2016

1,848

 

83,662

 

85,510

Additions

-

 

-

 

-

Disposals

-

 

-

 

-

Cost at 31 December 2016

1,848

 

83,662

 

85,510

Additions

-

 

-

 

-

Disposals

-

 

(83,662)

 

(83,662)

At 31 December 2017

1,848

 

-

 

1,848

 

 

 

 

 

 

Depreciation

 

 

 

 

 

At 1 January 2016

1,847

 

34,860

 

36,707

Disposals

-

 

-

 

-

Charge for year

-

 

27,888

 

27,888

At 31 December 2016

1,847

 

62,748

 

64,595

Disposals

-

 

(81,340)

 

(81,340)

Charge for the year

 

 

18,592

 

18,592

At 31 December 2017

1,847

 

-

 

1,847

 

 

 

 

 

 

Carrying value

 

 

 

 

 

At 31 December 2017

1

 

-

 

1

 

 

 

 

 

 

At 31 December 2016

1

 

20,914

 

20,915

 

The company was party to hire purchase agreements in respect of its motor vehicles during the year.

Depreciation charged on assets subject to hire purchase agreements in the year was £18,592 (2016: £27,888).  The net book value of these assets at the end of the year was £Nil  (2016: £20,914).

 

20.          Available-for-sale investments

 

The group holds the following investments which are stated at fair value:

 

 

Group

 

Company

               

2017

 

2016

 

2017

 

2016

 

Investments admitted to trading on AIM:

£

 

£

 

£

 

£

Current assets

 

 

 

 

 

 

 

Aeorema Communications Plc

-

 

7,650

 

-

 

-

SigmaRoc Plc

-

 

18,348

 

-

 

1,688

 

 

 

 

 

 

Total

-

 

25,998

 

               -

 

        1,688

 

Investments in AIM listed companies were disposed of in the year giving rise to gains of £20,497 before fair value adjustments of £1,838 recognised in the Statement of Other Comprehensive Income.

 

21.     Receivables and loan notes

 

Non-current assets

 

Company

 

In 2017, amounts due within one year included £220,000 of loan notes (2016 - £220,000). The loan notes are convertible into 50 million new shares in Pantheon Leisure Plc (the borrower) at any time before redemption. The loan notes carry an interest coupon of 7.5% and are repayable on demand at par.

 

Pantheon Leisure Plc is a subsidiary undertaking of Ultimate Sports Group Plc.

 

The loan notes are included in investments.

 

Group

 

The group has no receivables and loan notes classified as non-current assets.

 

Current assets

 

 

Group

 

Company

               

2017

 

2016

 

2017

 

2016

 

£

 

£

 

£

 

£

 

 

 

 

 

 

 

 

Trade receivables

24,371

 

41,763

 

-

 

-

Other receivables

17,375

 

34,612

 

 

 

5,364

Amounts due from subsidiary undertakings

-

 

-

 

318,053

 

955,667

Prepayments and deferred expenditure

27,235

 

21,327

 

24,150

 

10,962

 

68,981

 

97,702

 

342,203

 

971,993

 

The average credit period given for trade receivables at the end of the year is 6 days (2016:9 days). Trade receivables are stated net of a provision for irrecoverable amounts of £Nil (2016: £Nil).

 

Amounts due from subsidiary undertakings are stated net of provisions for irrecoverable amounts which total £1,375,864 (2016: £576,722).

 

The total charge in the year in respect of irrecoverable receivables in the group accounts was £Nil (2016: £Nil).

 

As at 31 December, the ageing analysis of trade receivables, all of which are due and not impaired is as follows:

 

 

 

 

 

 

£

 

 

 

 

 

<3 months

 

 

 

 

 

 

2017

 

 

 

 

24,371

2016

 

 

 

 

41,763

 

22.          Trade and other payables

 

 

Group

 

Company

               

2017

 

2016

 

2017

 

2016

 

£

 

£

 

£

 

£

 

 

 

 

 

 

 

 

Trade payables

982

 

29,102

 

-

 

-

Other payables

1,216

 

48,263

 

-

 

-

Taxes and social security

74,981

 

71,960

 

-

 

-

Amounts due to subsidiary undertakings

-

 

-

 

273,573

 

273,573

Accruals and deferred income

96,482

 

73,222

 

10,744

 

9,500

 

173,661

 

222,547

 

284,317

 

283,073

 

The average credit period taken for trade payables at the end of the year is 1 day (2016: 12 days).

 

23.          Bank overdraft

 

Sport in Schools Limited and Football Partners Limited have bank overdraft facilities of £50,000 and £20,000 respectively which are secured by guarantees of up to £50,000 and £20,000 for each company given by Ultimate Sports Group Plc. Both overdrafts are repayable on demand.

 

24.          Deferred tax

 

The following are the deferred tax liabilities and assets recognised by the group and movements during the current and previous year:

 

 

Deferred tax liabilities

Fair value gains

Tax losses offset

Total

 

£

£

£

 

 

 

 

At 1 January 2016

287

(287)

-

 

 

 

 

Charged in the income statement

-

618

618

Credited directly to equity 

(618)

-

(618)

 

 

 

 

At 31 December 2016

(331)

331

-

 

 

 

 

Credited in the income statement

331

-

331

Charged directly to equity 

-

(331)

(331)

 

 

 

 

At 31 December  2017

-

-

-

 

25.          Borrowings

 

 

Group

 

Company

               

2017

 

2016

 

2017

 

2016

 

£

 

£

 

£

 

£

Due within one year

 

 

 

 

 

 

 

Interest free loans

2,000

 

3,500

 

-

 

-

Hire purchase finance

-

13,877

-

13,877

 

 

 

 

 

Total due within one year

2,000

17,377

-

13,877

 

 

 

 

 

Due after more than one year

 

 

 

 

Interest free loans

-

2,000

-

-

Hire purchase finance

-

28,562

-

28,562

 

 

 

 

 

Total due after more than one year

-

30,562

-

28,562

 

 

 

 

 

Total borrowings

2,000

 

47,939

 

-

 

42,439

 

26.     Issued and fully paid share capital

 

Shares of 10p each

 

Number of shares

 

£

 

 

 

 

At 1 January 2016 

        15,261,638

 

        1,526,164

Shares issued in the year 

          5,225,000

 

           522,500

 

 

 

 

At 1 January 2017 

20,486,638

 

2,048,664

Shares issued in the year 

2,325,000

 

232,500

 

 

 

 

At 31 December 2017

22,811,638

 

2,281,164

 

In March 2017, the company raised £212,500 before costs from a placing at a price of 10p per share resulting in the issue of a further 2,125,000 shares of 10p each.

 

In June 2017, the company issued a further 200,000 shares at 10p per share in consideration of £20,000 of professional fees. 

 

At 31 December 2017 the company's issued shares carry no rights to fixed income.

 

The market price of the company's shares at 31 December 2017 was 8.5p and the price range during the financial year was 8.5p and 15.0p.

 

Share options and warrants

 

On 17 January 2011 the company adopted an unapproved share option scheme details of which are given in note 31.

 

To date the company has granted 577,500 to key executives and employees engaged in the development of the social network. At the year end and at the date of this report there are 210,000 options to acquire ordinary share.

 

27.          Financial commitments

 

The group is committed to making the following future minimum lease payments under non-cancellable operating leases which fall due as follows:

 

 

       2017

    2016

 

          £

      £

Within one year

 

 

Land and buildings

      16,358

   14,091

 

 

 

Between two and five years

 

 

Land and buildings

      47,193

   49,732

 

 

 

After five years

 

 

Land and buildings

      35,321

   46,189

 

      98,872

 110,012

 

28.         Reserves

 

Retained earnings represent the cumulative retained profit or loss of the group.

 

Share premium is the amount subscribed for share capital in excess of nominal value and is a capital reserve required by UK company law.

 

The merger reserve is a non-statutory reserve and represents the difference between the fair value and nominal value of the shares exchanged for shares on acquisition of Reverse Take-Over Investments Plc which took place in 2003.

 

The fair value reserve represents the cumulative surplus and deficits on recognition of available-for-sale investments at fair value, less tax attributable to the net surplus.

 

29.         Post balance sheet events

 

Since the year end, the company raised a further £537,500 in March 2018 by an issue of 10,750,000 ordinary shares of 1p each at 5p per share following a reorganisation of the share capital with the sub-division of each 10p ordinary share into one new ordinary of 1p each and one deferred share of 9p each. The funds were raised to increase the working capital of the group.

 

There are no other post balance sheet events to be disclosed by way of note.

 

30.          Related parties

 

Details of the remuneration of directors are given in note 10. In addition to the information given in that note, the following provides further details of related party transactions involving the company and its directors.

 

The directors are considered to be the key management personnel of the group.

 

Simmonds & Co 

 

The group made payments of £38,904 [excluding VAT] (2016 - £35,080) as contributions towards office and secretarial costs to Simmonds & Co, Chartered Accountants, a practice in which G Simmonds is sole proprietor. No amounts were due at 31 December 2017 (2016 - £Nil).

 

R Owen

 

The company paid for office facilities of £23,686 (2016 - £ 22,431). No amounts were due to R Owen at the 31 December 2017 (2016- Nil).

 

31.          Share-based payment transaction

 

At the date of this report, 577,500 share options have been granted to employees or key executives involved in the group's trading operations.

 

During 2017 185,000 share options lapsed (2016 - 182,500). 

 

At the date of this report there remained share options to acquire 210,000 shares (2016 - 392,500) that are exercisable.

 

Details of share options granted are:

 

Share options to acquire 210,000 shares were originally awarded in 2011 and amended in 2012.

Share options to acquire 367,500 shares were awarded to employees and key executives in 2014.

 

Options are valued using the Black-Scholes option pricing model.  The fair value per option granted and the assumptions used in the calculation are as follows:

 

Grant date

17 January 2011

6 March 2014

30 April 2014

Share price at grant date

25p per share

27.5p per share

27.5p per share

Exercise price

25p per share

27.5p per share

27.5p per share

Shares under option

210,000

167,500

200,000

Expected volatility

17.0%

20.9%

20.9%

Option life (years)

10 years

7 Years

7 Years

Expected life (years)

10 Years

7 Years

7 Years

Risk-free interest rate

2.0%

2.0%

2.0%

Fair value per option

0.4p

0.07p

0.07p

Annual charge under IFRS 2

£8,970

£1,586

£1,892

 

In accordance with IFRS2, the fair value of the share options issued and recognised as a charge in the accounts for the year is £Nil (2016 - £12,448).

In arriving at the above:-

The expected volatility is based on historical volatility, the expected life is the average expected period to exercise and the risk-free rate of return is the yield on a zero-coupon UK government bond for a term consistent with the assumed option life.

 

32.          Capital management and financial instruments 

 

The group is mainly equity funded which together with interest free borrowings of £2,000 represents the group's capital.

 

The group's objectives when maintaining capital are:

 

-    To safeguard the entity's ability to continue as a going concern, so that it can begin to provide returns for shareholders and benefits for other stakeholders; and

-    To provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.

 

The group sets the amounts of capital it requires in proportion to risk. The group manages its capital structure and makes adjustments to it in light of changes in economic conditions and risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

 

Capital for the group comprises all components of equity - share capital of £2,281,164 (2016: £2,048,664), share premium of £385,641 (2016: £393,454), other reserves of £325,584 (2016: £324,077), the retained deficit of £2,832,982 (2016: £2,123,512) and debts which comprises loans of £2,000 (2016: £5,500) and hire purchase commitments of £Nil (2016: £42,439).

 

During the year ended 31 December 2016 the group's strategy was to preserve net cash resources by limiting cash absorbed from losses and through good cash management.

 

Financial assets and financial liabilities are recognised in the group's balance sheet when the group becomes a party to the contractual provision of the instrument.

 

At 31 December 2017 and 31 December 2016, there were no material differences between the fair value and the book value of the group's financial assets and liabilities other than the interest free loan which has a carrying value of £2,000 and a fair value of approximately £1,500. Relevant financial assets and liabilities are set out below.

 

 

 

 

 

Group

 

 

Company

               

2017

 

2016

 

2017

 

2016

 

£

 

£

 

£

 

£

Financial assets

 

 

 

 

 

 

 

Available-for-sale investments

-

 

25,998

 

-

 

1,688

Cash and cash equivalents

129,611

 

129,437

 

81,459

 

175,789

Due from subsidiary undertakings

-

 

-

 

318,053

 

955,667

Trade and other short term receivables

32,571

 

53,615

 

-

 

-

 

 

 

 

 

 

 

 

 

162,182

 

209,050

 

399,512

 

1,133,144

Financial liabilities

(which are included at amortised cost)

 

 

 

 

 

 

 

Trade and other short term payables

2,198

 

77,365

 

-

 

-

Due to subsidiary undertakings

-

 

-

 

273,573

 

273,573

Hire purchase obligations

-

 

42,439

 

-

 

42,439

Loans

2,000

 

5,500

 

-

 

-

 

 

 

 

 

 

 

 

 

4,198

 

125,304

 

273,573

 

316,012

 

The group's financial instruments comprise available-for-sale investments, cash and cash equivalents, receivables, payables, loans and hire purchase obligations that arise directly from its operations.

 

Amounts shown in trade and other short term receivables exclude prepayments and deferred expenditure for the group of £27,235 (2016: £21,327) and VAT recoverable of £9,175 (2016: £22,760) for the group and £16,292 (2016: £10,962) of short term receivables and VAT recoverable of £7,430 (2016: £5,364) for the company.

 

Trade and short term payables exclude deferred income and accruals of £96,482 (2016: £73,222), tax and social security creditors of £74,981 (2016: £71,960) company for tax and accruals of £10,744 (2016: £9,500).

 

The group has not adopted a policy of using financial derivatives and does not rely on the use of interest rate hedges.

 

In common with other businesses, the group is exposed to risks that arise from its use of financial instruments.  There have been no substantive changes to the group's response to financial instrument risk and the methods used to measure them from previous periods.

 

The main risks arising from the group's financial instruments are market, credit and liquidity risks.

 

Market risk arises mainly from uncertainty about future prices of available-for-sale investments held by the group. The board monitors movements in the carrying value of its investments on a regular basis. As there are no remaining investments there is no longer any market risk attributable to investments.

 

Credit risk arises from trade receivables where the party fails to discharge their obligation in relation to the instrument. To minimise this risk, management have appropriate credit assessment methods to establish credit worthiness of new customers and monitor receivables by regularly reviewing aged receivable reports. There is no concentration of credit risk other than in respect to cash held on deposit at the company's bank as set out above.

 

 

The amount exposed to risk in respect of trade receivables at 31 December 2017 was £24,371 (2016: £41,763).

 

Liquidity risk arises in relation to the group's management of working capital and the risk that the company or any of its subsidiary undertakings will encounter difficulties in meeting financial obligations as and when they fall due.  To minimise this risk the liquidity position and working capital requirements are regularly reviewed by management.

 

The directors do not consider changes in interest rates have a significant impact on the group's cost of finance or operating performance.

 

As the group's operations are conducted in the United Kingdom, risks associated with foreign currency fluctuations are not relevant.

 

33.         Notes to statements of cash flows

 

a)            Analysis of net funds

 

 

At 1 January

2017

£

Cash Flow

£

At 31 December

2017

£

Group

 

 

 

 

 

 

 

Cash and cash equivalents

129,437

174

129,611

 

 

 

 

Borrowings 

(47,939)

45,939

(2,000)

 

 

 

 

Net funds

81,498

46,113

127,611

 

 

 

 

Company

 

 

 

 

 

 

 

Cash and cash equivalents

175,789

(94,330)

81,459

 

 

 

 

Borrowings 

(42,439)

42,439

-

 

 

 

 

Net funds

133,350

(51,891)

81,459

 

  (b) Reconciliation of net cash flow to movement in net funds

 

 

 

Group

£

 

Company

£

Increase/(decrease) in cash & cash equivalents in the year

174

 

(94,330)

Cash outflow on borrowings repaid in the year

45,939

 

42,439

 

 

 

 

Movement in net funds/(debt)

46,113

 

(51,891)

 

(c) Statement of cash flows from discontinued activities

 

 

2017

 

2016

 

£

 

£

Cash flow from discontinued activities

 

 

 

 

 

 

 

Profit/(loss) before tax

53,567

 

(158,747)

 

 

 

 

Adjustments for:

 

 

 

Depreciation and impairment of fixed assets

-

 

15,530

Gain on disposal of trade

(82,600)

 

-

 

 

 

 

Movements in working capital

 

 

 

(Increase)/decrease in debtors

(914)

 

47,593

(Decrease)/increase in creditors

(42,084)

 

101,229

 

 

 

 

Cash (absorbed)/generated from operations

(72,031)

 

5,605

 

 

 

 

Investing activities

 

 

 

Net proceeds on disposal of trade

82,600

 

-

 

 

 

 

Net cash used in investing activities

82,600

 

-

 

 

 

 

Financing activities

 

 

 

Repayment of borrowings

(2,000)

 

(2,000)

 

 

 

 

Net cash used in financing activities

(2,000)

 

(2,000)

 

 

 

 

 

Net cash increase in cash and cash equivalents

 

8,569

 

 

3,605

 

 

 

 

Cash and cash equivalents at the beginning of the year

(22,434)

 

(26,039)

 

 

 

 

Cash and cash equivalents at the end of the year

(13,865)

 

(22,434)

 

 

 

 

 

 

* * ENDS * *

 

For further information, please visit www.ultimatesportsgroup.me or contact:

Ultimate Sports Group PLC

Geoffrey Simmonds, Managing Director

 

 +44 (0)20 7935 0823

 

St Brides (Financial PR)

Isabel de Salis

 

+44 (0)20 7236 1177

Cantor Fitzgerald Europe (Nomad and Joint Broker)

Marc Milmo / Catherine Leftley

 

+44 (0)20 7894 7000

 

 

 


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