1st Apr 2008 16:30
Conchango PLC01 April 2008 Conchango plc ("Conchango" or "the Company") Preliminary announcement of results for the year ended 31 December 2007 Conchango plc is pleased to announce its preliminary results for 2007. Chairman's Statement Review The Group continued to trade as an investment company throughout 2007 with aprofit before tax of £156,000. Acquisition The Board is pleased to have completed the reverse takeover of Conchango plc on15 January 2008, for a consideration of £30m. On the same day Harrier Group plcchanged its name to Conchango plc and was admitted to AIM. The Board were particularly impressed by Conchango's: Management Team; the team had successfully grown the business organically for 16years. During that period the team had shown their strength in dealing with themarket difficulties of 2001 and 2002, and then pursuing a long term strategy forgrowth. Track Record; Conchango has an excellent track record for delivering complex andinnovative technology projects to large organizations. In a market where projectdelivery can be problematic, Conchango have a great success rate and reputation. Client Base; Conchango work with some of the largest companies in the world.Their focus on the Retail, Financial Services, Energy and Media markets hasproved to be very successful. These large organizations, although verydemanding, are an excellent source of repeat business. Market Sector; Conchango work in one of the most exciting areas of newtechnology, the development of large transactional web sites. The sector hasstrong growth potential as organizations look to the web channel to increasesales and reduce cost. Growth Plans; Conchango plans to grow both organically and by acquisition. Themarket listing will facilitate this growth by providing access to capital fortargeted acquisitions in the UK. Conchango's trading results for the year ended 31 December 2007 and 2006 are setout in note 13 to the accounts. On turnover of £38m, Conchango delivered pre-taxprofits of £2.8m, an increase of 43% on its previous year's results. Current trading and outlook The Board remains positive about the outlook for 2008 and beyond. We willcontinue our strategy of focusing on growth in scale and market share in theretail and financial services markets and establishing a presence in the mediaand entertainment sector. The Board believes that the market for Conchango's services will continue togrow in 2008 assisted by the growth of the digital economy in Europe and the US.The Board also believes that the group is capable of establishing a leadershipin this field in the UK and exploiting further opportunities in the US. Board ChangesNew directors appointed upon completion of the acquisition were:JA Herring (Non-executive)MA Altendorf (Joint Chief Executive)AM Griffin FCA (Finance Director)RJ Poole (Operations Director)RN Thwaite (Joint Chief Executive) DA Alway resigned as a non-executive director on completion of the acquisition. ALR MortonChairman Further information is available at the Company website, www.conchango.com. Contacts: Conchango plcRichard Thwaite 020 7261 4444Michael Altendorf 020 7261 4444Bob Morton 07797 751 457 FinnCap, nominated adviserGeoff Nash 020 7600 1658 Threadneedle CommunicationsTrevor Bass 020 7936 9666 With effect from 1 March 2008 JMFinn Capital Markets Limited conducts business under the trading name of FinnCap Income statement for the year ended 31 December 2007 2007 2006 £000 £000Administration expenses (128) (143)Operating loss (128) (143)Finance income 284 224Fees relating to abortive merger - (19)Profit before taxation 156 62Taxation expense (184) (12)(Loss)/profit for the year (28) 50 (Loss)/earnings per share 2007 2006(pence)Basic (0.09) 0.16Diluted (0.09) 0.16 All operations relate to continuing activities. Balance Sheet as at 31 December 2007 AssetsCurrent assets 2007 2006 £000 £000Trade and other receivables 296 25Cash and cash equivalents 4,767 4,623Total assets 5,063 4,648 Equity and liabilitiesCurrent liabilities 2007 2006 £000 £000Trade and other payables 293 22Current tax liabilities 184 12Total liabilities 477 34 Capital and reserves 2007 2006 £000 £000Share capital 315 315Share premium 91 91Retained earnings 4,180 4,208Total equity 4,586 4,614Total equity and liabilities 5,063 4,648 Statement of changes in equity for the year ended 31 December 2007 Share Share Retained Total Capital Premium Earnings £000 £000 £000 £000Balance at 1 315 91 4,158 4,564January 2006Profit for the - - 50 50yearBalance at 31 315 91 4,208 4,614December 2006Loss for the year - - (28) (28)Balance at 31 315 91 4,180 4,586December 2007 Share capital is the amount subscribed for shares at nominal value. Share premium represents the excess of the amount subscribed for share capitalover the nominal value of these shares net of share issue expenses. Retained earnings represent the cumulative profit of the company attributable tothe equity shareholders. Cash Flow Statement for the year ended 31 December 2007 Operating activities 2007 2006 £000 £000Profit before taxation 156 62Adjustments to reconcile to net cash flowsNon-operating movementsFinance income (284) (224)Working capital movementsIncrease in trade and other (271) (20)receivablesIncrease/(decrease) in trade 271 (14)and other payablesTaxation paid (12) -Net cash flows from operating (140) (196)activities Investing activitiesInterest received 284 224Net cash flows from investing 284 224activities SummaryNet increase in cash and cash 144 28equivalentsCash and cash equivalents at 1 4,623 4,595JanuaryCash and cash equivalents 31 4,767 4,623December Notes to the preliminary announcement 1. Basis of preparation The principal accounting policies of the company are set out in the company's2007 annual report and accounts 2. Taxation The major components of income tax expense for the years ended 31 December 2007and 2006 are: Taxation 2007 2006 £000 £000Current tax charge 34 12Adjustment for prior years 150 -Total 184 12 A reconciliation between income tax expense and the product of accounting profitmultiplied by the standard rate of corporation tax applicable to company in theUK is as follows: 2007 2006 £000 £000Profit before taxation 156 62At the standard small company 31 12rate of taxin the UK (20%)Adjustments in respect of 150 -previous yearsNon deductible expenses 3 -Income tax expense 184 12 3. Earnings per share Basic (loss) earnings / per share is calculated by dividing the (loss) / profitfor the year by the weighted average number of ordinary shares outstanding. 2007 2006(Loss) / profit for the year (£000) (28) 50Weighted average number of shares for 31,529,405 31,529,405basic EPS Basic (loss) / earnings per share (0.09) 0.16(pence) Diluted (loss) / earnings per share is calculated by adjusting the weightedaverage number of ordinary shares outstanding to assume conversion of alldilutive potential shares. The only potential shares relate to the outstanding share options in thecompany. For a loss making company such potential shares are anti-dilutive asany conversion would reduce the loss per share. Therefore, no adjustment is madeto the weighted average number of shares in this case. 2007 2006(Loss) / profit for the year (£000) (28) 50Weighted average number of shares 31,529,405 31,529,405outstanding Conversion of share options - 16,394Weighted average number of shares for 31,529,405 31,545,799diluted EPSDiluted (loss) / earnings per share (0.09) 0.16(pence) Note 5 details the issue of 149,437,060 fully paid new Ordinary 1p shares on 15January 2008 in relation to the acquisition of Conchango plc. The effect of thenew shares on the Basic and Diluted (loss)/ earnings per share is as follows: 2007 2006(Loss) / profit for the year (£000) (28) 50Weighted average number of shares at 31 31,529,405 31,529,405DecemberNew shares issued 15 January 2008 149,437,060 149,437,060Revised number of shares in issue at 15 180,966,465 180,966,485January 2008Revised Basic (loss) / earnings per (0.015) 0.028share (pence)Revised Diluted (loss) / earnings per (0.015) 0.028share (pence) 4. Share capital Authorised 2007 2006 £000 £00050,000,000 Ordinary shares of 1p each 500 50 Allotted, issued and fully paid Number £000At 1 January 2006, 31 December 2006 31,529,405 315and 31 December 2007 Note 5 details the issue of 149,437,060 new ordinary shares of 1p relating tothe acquisition of Conchango plc and for cash on 15 January 2008. After thesenew issues, the allotted, issued and fully-paid share capital was 180,966,465shares with a nominal value of £1.81m. In addition the share premium account increased by £26.76m due to the issue ofthe new shares at 18.91p per share. The share premium account of £0.09m at 31December 2007 increased to £26.85m at 15 January 2008. 5. Post Balance Sheet Events On 15 January 2008 Harrier Group plc acquired the entire share capital ofConchango plc through the issue of 144,352,431 Ordinary Shares at 18.91p pluscash of £1.5m and the issue of a further 5,084,629 ordinary shares via a placingat 18.91p. On the same day Harrier Group plc changed its name to Conchango plc andConchango plc changed its name to Conchango (Holdings) Limited. Conchango plcwas then readmitted to AIM. The estimated costs relating to this acquisition,placing and readmission were £0.74m and the acquisition is expected to generategoodwill of £24.7m due to the fair value of the consideration exceeding the fairvalue of the assets acquired. The final goodwill amount will be subject to anannual impairment review. The results of Conchango plc prior to its acquisition were as follows: Results for the year ended 31 2007 2006December * £000 £000Sales 37,849 32,760Cost of sales (25,448) (21,948)Gross profit 12,401 10,812Administration expenses (9,546) (8,902)Other operating income - 63Operating profit 2,855 1,973Net finance costs (102) (45)Profit before taxation 2,753 1,928Taxation (744) (598)Profit after taxation 2,009 1,330* All numbers are reported under IFRS 6. Publication of accounts The financial information set out in this preliminary announcement does notconstitute statutory accounts as defined in section 240 of the Companies Act1985. The income statement, balance sheet at 31 December 2007, statement of changes inequity, cash flow statement and associated notes have been extracted from theCompany's 2007 statutory financial statements upon which the auditors opinion isunqualified and which do not include any statement under section 237 of theCompanies Act 1985. Those financial statements have not been delivered to the registrar ofcompanies. Report and accounts for the financial period ended 31 December 2007 will be sentto Shareholders with details of the annual general meeting in due course. Copieswill also be available from the Company's website (www.conchango.com). This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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