31st Jan 2008 07:01
Global Gaming Technologies PLC31 January 2008 31 January 2008 Global Gaming Technologies plc Preliminary Results for the year ended 31 July 2007 The Board of Global Gaming Technologies plc ("GGT") presents today the Group'sresults for the year ended 31 July 2007. The Group recorded a loss before tax of£878,247, after a share-based payments charge of £614,059 and the write off ofgoodwill of £100,000 (2006 : £12,771,340 after a share-based payments charge of£867,680 and the write off of goodwill of £10,539,668). There is a loss pershare of 0.46p (2006: loss per share: 6.84p). During the year costs within the business remained under strict controlfollowing the reorganization of the business in 2006 and the directors havetaken no salaries or fees. Change of strategy GGT announced on 27 April 2007 that it would be prudent to widen its remit forpotential acquisitions and to look at opportunities across a broader range ofbusinesses to source potential acquisitions which were not reliant on the gamingindustry and can demonstrate good potential growth characteristics. The Boardanticipates such acquisition or acquisitions will be in the natural resourcesand mining sector, in Africa, the Americas, Europe or Australasia. The Boardexpects such acquisition(s) to be of private companies where the existing ownersare willing to accept the Company's shares to satisfy all or part of thepurchase price. The Board expects that upon completion of any such majoracquisition, the management of the target company would take over management ofGGT and thus be an active manager of the acquired assets. The number ofacquisitions will depend, among other things, on the performance of the Companyand any acquired businesses. It is, however, expected that the number ofacquisitions will be between one and three in the 24 months following theCompany's annual general meeting referred to below (AGM). The Board has experience of evaluating businesses across a number of sectors.The Board will engage specialists to advise it, including geologists, productionengineers, accountants and lawyers. At the AGM, a resolution will be proposed to approve the above strategy. If theCompany has not within 12 months of the AGM made an acquisition or acquisitionsconstituting a reverse takeover or otherwise implemented its investmentstrategy, the Company's trading facility on AIM will be suspended for six monthsand if in that period it does not make an acquisition or acquisitions orotherwise does not implement its strategy, its trading facility on AIM will becancelled. The process of sourcing a potential acquisition has continued, however, to datethe Board has not identified a business which meets the Company's requirements.The Board therefore remains mindful that if a suitable acquisition cannot beconcluded then an alternative solution will have to be pursued. Loan facility During the year the Company was provided with additional working capital via aloan facility of up to £100,000 provided by Corvus Capital Inc. Amounts owed toCorvus Capital Inc under this facility together with any additional advancesaccrue interest at a rate of 2 per cent. above HSBC Bank plc's base rate, suchinterest being payable on the date the loan is repaid. The loan is, in certaincircumstances, convertible at par into ordinary shares of the Company. CorvusCapital Inc. already holds 43,930,196 ordinary shares in the Companyrepresenting 22.7 per cent. of the issued share capital in the Company. AsCorvus Capital Inc is a significant shareholder, the loan arrangementsconstitute a related party transaction under the AIM Rules. The Board, havingconsulted Canaccord Adams, the Company's nominated adviser, consider that theterms of the transaction are fair and reasonable insofar as the Company'sshareholders are concerned. Voting rights The Company's issued share capital consists of 193,294,385 ordinary shares witha nominal value of 0.25 pence each. GGT does not hold any ordinary shares inTreasury. Therefore, the total number of voting rights in the Company is193,294,385 and this figure may be used by shareholders as the denominator forthe calculations by which they will determine if they are required to notifytheir interest in, or a change to their interest in, the Company under theFinancial Service Authority's Disclosure and Transparency Rules. Loss of capital GGT's results show that the Company's net assets are less than half its paid upshare capital. In the circumstances the directors of the Company are obliged bysection 142 Companies Act 1985 to convene a general meeting for the purpose ofconsidering whether any, and if so what, steps should be taken to deal with theCompany's current financial position. We propose to consider this matter at theCompany's annual general meeting, details of which are set out below, althoughno resolution will be put to the meeting on this issue. Annual general meeting A notice convening the AGM will be included in the 2007 annual report. The AGMwill be held at 10.00 a.m. on 4 March 2008 at the offices of Fladgate Fielder,25 North Row, London W1K 6DJ. A form of proxy will be enclosed for use at theAGM. Whether or not you intend to be present at the meeting, you are requestedto complete, sign and return the form of proxy to the Company's registrars assoon as possible and in any event so as to arrive not later than 10.00 a.m. on 2March 2008. The completion and return of a form of proxy will not preclude youfrom attending the AGM and voting in person should you subsequently wish to doso. I will report any progress to shareholders as and when it is appropriate to doso. Ron TrenterChairman31 January 2008 Consolidated Profit and Loss Account For the year ended 31 July 2007 Note 2007 2006 (restated) £ £ Net trading margin - (11,646) Impairment of goodwill (100,000) (10,539,668)Other administrative expenses (779,673) (2,269,588)Total administrative expenses (879,673) (12,809,256)Other operating income - 35,585 Operating loss (879,673) (12,785,317) Interest receivable and similar income 1,426 13,977 Loss on ordinary activities before (878,247) (12,771,340)taxation Tax on loss on ordinary activities 2 - - Loss on ordinary activities after 4 (878,247) (12,771,340)taxation Loss per share 3 (0.46)p (6.84)p- Basic and diluted (pence) Consolidated Balance Sheet at 31 July 2007 Note 2007 2006 (restated) £ £Fixed assetsIntangible assets - 100,000 Current assetsDebtors 22,898 23,799Cash at bank and in hand 29,809 56,941 52,707 80,740 Creditors: amounts falling due within one year (216,072) (90,037) Net current liabilities (163,365) (9,297) Total assets less current liabilities (163,365) 90,703 Capital and reservesCalled up share capital 483,236 471,673Share premium account 1,363,230 1,364,673Share-based payment reserve 1,534,915 920,856Profit and loss account (3,544,746) (2,666,499) Shareholders' (deficit) / funds - equity 4 (163,365) 90,703 Consolidated Cash Flow Statement For the year ended 31 July 2007 Note 2007 2006 (restated) £ £ Net cash outflow from operating activities 5 (144,553) (743,745) Returns on investments and servicing of financeInterest received 1,426 13,977 Net cash inflow from returns on investments and 1,426 13,977servicing of finance Capital expenditure and financial investmentReceipts from sales of tangible fixed assets - 380 Net cash inflow from capital expenditure and financial - 380investment Acquisitions and disposalsPurchase of subsidiary undertakings - 35,541 Net cash inflow from acquisitions and disposals - 35,541 Net cash outflow before financing (143,127) (693,847) FinancingIssue of ordinary share capital 10,120 210New loans received 105,875 - Net cash inflow from financing 115,995 210 Decrease in cash 6 (27,132) (693,637) 1 BASIS OF PREPARATION The preliminary announcement has been prepared in accordance with applicableUnited Kingdom accounting standards and under the historical cost convention.The principal accounting polices of the Group have remained unchanged from thoseset out in the Group's 2006 annual report and financial statements apart from inpreparing the financial statements for the current year the Group has adoptedfor the first time Financial Reporting Standard 20 (FRS 20) 'Share-basedpayments'. With the introduction of FRS 20 there has been a change to thetreatment of share-based payments. The effects of the changes shown in note 7to the preliminary announcement. Going concern The directors have prepared cashflow forecasts for the period ending 31 January2009. The forecasts assume that an acquisition of a business will not becompleted and that minimal costs will be incurred whilst an acquisition issought. If a potential acquisition is identified it will only be completed ifsufficient funding is available to fund the costs of the acquisition and theon-going working capital requirements of the enlarged group. The forecasts also assume that Corvus Capital Inc. (Corvus) and its subsidiaryundertakings, a substantial shareholder in the Company, will not seek repaymentof its £125,853, owed by the Group at 31 July 2007 until it has sufficient fundsto repay its loan and will provide sufficient funding to support the Group'sfunding requirement on the basis that no acquisition of a business is completed. Corvus has provided written confirmation that it will not seek repayment ofamounts owed and of the additional funding to be provided. On this basis the financial statements have been prepared on a going concernbasis. The financial statements do not include any adjustments that would resultif the assumptions detailed above are not met. 2 TAX ON LOSS ON ORDINARY ACTIVITIES The tax charge is based on the loss for the year and represents: 2007 2006 (restated) £ £Current tax Loss on ordinary activities before taxation (878,247) (12,771,340) Loss on ordinary activities before taxation multiplied by standard rate of UK (263,474) (3,831,402)corporation tax of 30%Effects of:Expenses not deductible for tax purposes 214,218 3,592,047Depreciation for period in excess of capital allowances - 3,439Movement in tax losses 49,256 235,916Current tax charge - - The Group has estimated losses of £2,208,913 (2006 : £2,044,726) which areavailable to carry forward against future trading profits of the same trade. Noprovision has been made for corporation tax on this basis. 3 LOSS PER SHARE The calculation of the basic loss per share is based on the loss of ordinaryactivities after taxation of £878,247 (2006 as restated: £12,771,340) and on aweighted average number of 188,986,494 (2006 : 186,808,822) ordinary shares inissue during the year. There was no dilutive effect from the share options outstanding during the yeardue to the losses incurred. 4 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' (DEFICIT)/FUNDS Group 2007 2006 (restated) £ £ Loss for the financial year (as previously stated) (878,247) (11,903,660)Prior year adjustment - (867,680) Loss for the financial year (as restated) (878,247) (12,771,340)New share capital subscribed 10,120 210Share-based payment charge 614,059 920,856 Net decrease in shareholders' funds (254,068) (11,850,274) Opening shareholder's funds 90,703 11,940,977 Closing shareholders' (deficit) / funds (163,365) 90,703 5 NET CASH OUTFLOW FROM OPERATING ACTIVITIES 2007 2006 (restated) £ £ Operating loss (879,673) (12,785,317)Depreciation of tangible fixed assets - 624Amortisation of intangible fixed assets - 572,996Impairment of intangible fixed assets 100,000 10,539,668Share-based payment charge 614,059 920,856Profit on disposal of tangible fixed assets - 840Decrease in debtors 901 31,943Increase/(decrease) in creditors 20,160 (25,355) Net cash outflow from operating activities (144,553) (743,745) 6 ANALYSIS OF NET FUNDS/(DEBT) 1 August 2006 Cash flow 31 July 2007 £ £ £Cash at bank and in hand 56,941 (27,132) 29,809Debt due within 1 year - (105,875) (105,875) 56,941 (133,007) (76,066) 7 PRIOR YEAR ADJUSTMENT The Group is required to adopt the provisions of Financial Reporting Standard20: Share-based payments, which has given rise to a charge in the profit andloss account in the current year and prior year resulting in a prior yearadjustment. For the year ended 31 July 2006 an estimate of the share-based payment charge of£53,176 was processed through the profit and loss reserve, however this has beenreversed and replaced with an increase in the loss of £920,856 and the creationin the balance sheet of a share-based payment reserve of £920,856 on adoption ofFRS 20. For the year ended 31 July 2007 the change in accounting policy has resulted ina charge to the profit and loss account of £614,059. At 31 July 2007, theshare-based payment reserve amounted to £1,534,915. 8 PUBLICATION OF NON-STATUTORY ACCOUNTS The financial information set out in this preliminary announcement does notconstitute statutory accounts as defined in section 240 of the Companies Act1985. The summarised balance sheet at 31 July 2007 and the summarised profit and lossaccount, summarised cash flow statement and associated notes for the year thenended have been extracted from the Group's 2007 statutory financial statementsupon which the auditors opinion is unqualified and does not include anystatement under Section 237 of the Companies Act 1985. -------------------------- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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