7th Mar 2008 07:01
Mission Capital PLC07 March 2008 7 March 2008 Mission Capital plc Preliminary Results for the year ended 30 September 2007 The consolidated results of the Company for the year ended 30 September 2007comprise turnover of £2.5 million (2006: £0.8 million), a loss on ordinaryactivities before taxation of £1.8 million (2006: loss £0.3 million),representing a basic and diluted loss per share of 1.798p (2006: loss 0.392p). As at 30 September 2007, the Company had consolidated net assets of £2.7 million(2006: £4.3 million), which equated to net assets per share of 2.59p (2006:4.28p). The Board will not be recommending the payment of a dividend to shareholders. Management This highly disappointing performance has led the Board to make substantialchanges to the Company's management. Chris Phillips was appointed a nonexecutive director on 5 February 2008. He is an experienced propertyprofessional. With the benefit of external advisers he is overseeing the Group'sproperty investments. Robert Burrow, who has considerable management experiencein commercial joint venture and operating businesses, has joined the board ofKarspace Management Limited ("KML"). On 5 February 2008, the Board terminatedthe service contracts of the Company's former Executive Chairman, Neil Sinclair,and of the Company's former Managing Director, Emma Sinclair. The Company iscurrently in litigation with the Sinclairs. With the wholehearted support of theteam at KML and the support of its professional advisers, the Board is takingsteps to secure the future of the Group. The Group The Company's investment portfolio consists of three assets -KML, which providesmanagement services to car park owning businesses, Mission Capital (Gloucester)Limited (a company whose sole asset is the freehold of a building in Gloucester)and a 20 per cent shareholding in Athens Investments Holding Group Limited("Athens"), a joint venture with Chelsfield Partners LLP ("Chelsfield"), whichholds a portfolio of four UK property assets. Karspace Management Limited In the eighteen months to 30 September 2007, KML reported gross revenues ofapproximately £7.5 million, profit before tax of approximately £0.39 million andprofit after tax of approximately £0.375 million. As at 30 September 2007, KMLhad net assets of approximately £0.78 million (31 March 2006: £0.6 million). KML's management, led by Mike Pennett, is a high quality, highly motivated teamwhich is seeking to expand its business. Like all businesses providing servicesto the public sector, contracts are put out to tender on a regular basis andfrom time to time such contracts are lost to other parties. We are confidentthat KML's management is well placed to win additional contracts and to continueto manage them effectively, but the results for the current financial year arelikely to show a significant reduction in pre-tax profits. Mission Capital (Gloucester) Limited Mission Capital (Gloucester) Limited owns a fully-let property on the southernside of Gloucester city centre. In the light of prevailing property marketconditions, your Board has decided to include an impairment provision of £100,000 in the accounts to 30 September 2007. This is based upon advice receivedfrom a firm of independent valuers of the readily realisable value which couldbe achieved today. This represents a diminution in net equity of that company ofabout 42 per cent. Athens Investment Holdings Group Limited In December 2006, the Company invested (including costs) £1.2 million for its 20per cent. stake in Athens. Your Directors believe that there is no net assetvalue to this investment now. The total acquisition costs for Athens of the fourproperties, which were described in detail in our last Annual Report, wereapproximately £38.25 million including costs. Athens' acquisition funding (otherthan the equity injected by the joint venture partners) was provided by bankborrowings. The bank borrowings today exceed the estimated realisable value ofthe assets owned by Athens. None of the targets produced by the Company's former executive management teamfor realisation of the assets of Athens have been achieved. It is highly unlikely that the Company will receive a significant return on itsinvestment in Athens. Furthermore, owing to the poor performance of the Athens'property portfolio, there are insufficient liquid resources within Athens to paythe management fees to the Company's subsidiary, Mission Real Estate Limited.Two of the Company's directors with relevant property experience will liaisewith our joint venture partner to manage the Athens portfolio. In our accountswe have provided for our investment in Athens in its entirety and for thereceivable from Athens to be written off. The future The Company will function primarily as a holding company. The Board has resolvedto retain the Company's investment in Athens with the intention of optimisingthe value for shareholders for the life of the joint venture. To reduceoutgoings, the Board is seeking the disposal of the Company's leasehold premisesat Malta House, Piccadilly. The Board will work closely with KML's management togrow and develop their business. The Board intends to update shareholders further on progress made at theCompany's Annual General Meeting. Consolidated Profit and Loss AccountFor the year ended 30 September 2007 Note 2007 2006 as restated £ £ Gross revenues 5,149,776 1,683,836Less: landlords' share of parking receipts (2,624,713) (869,287) ---------- --------- Net turnover 2,525,063 814,549 Cost of sales (1,337,513) (484,164) ---------- --------- Gross profit 1,187,550 330,385 Distribution costs (202,854) (43,894)Administrative expenses (1,855,500) (642,435) ---------- --------- Operating loss (870,804) (355,944) Share of loss in associated undertakings (497,944) -Other interest receivable and similar income 47,788 94,167Other interest receivable and similar 3,992 -income (associate)Interest payable and similar charges (55,792) (614)Interest payable and similar charges (450,966) -(associate) ---------- --------- Loss on ordinary activities before (1,823,726) (262,391)taxation Tax on loss on ordinary activities 8 - (11,355) ---------- --------- Loss on ordinary activities after (1,823,726) (273,746)taxation ---------- --------- Basic and diluted loss per share 7 1.798p 0.392p The profit and loss account has been prepared on the basis that all operationsare continuing operations. Consolidated Statement of Total Recognised Gains and LossesFor the year ended 30 September 2007 2007 2006 as restated £ £ Loss for the financial year (1,823,726) (273,746) Prior year adjustment (note 9) (87,023) - ---------- --------- Total gains and losses recognised since (1,910,749) (273,746)last financial statements ---------- --------- Balance Sheets at 30 september 2007 Group Company 2007 2006 2007 2006 as restated as restated £ £ £ £Fixed assetsIntangible assets 1,872,839 2,067,117 - -Tangible assets 100,843 89,787 42,780 1,574Investments - 648,166 3,160,549 3,904,355 --------- --------- --------- --------- 1,973,682 2,805,070 3,203,329 3,905,929 --------- --------- --------- ---------Current assetsStocks 1,100,000 1,200,000 - -Debtors 453,938 617,403 44,270 261,875Cash at bank and in hand 726,828 2,047,961 88,165 863,298 --------- --------- --------- --------- 2,280,766 3,865,364 132,435 1,125,173 Creditors: amounts falling (802,993) (1,080,086) (647,304) (320,582)due within one year --------- --------- --------- ---------Net current assets/ 1,477,773 2,785,278 (514,869) 804,591(liabilities) --------- --------- --------- ---------Total assets less current 3,451,455 5,590,348 2,688,460 4,710,520liabilities Creditors: amounts falling (777,024) (814,191) - -due after more than one year Provisions for liabilities - (500,000) - (500,000) --------- --------- --------- --------- 2,674,431 4,276,157 2,688,460 4,210,520 --------- --------- --------- ---------Capital and reservesCalled up share capital 1,030,672 998,203 1,030,672 998,203Share premium account 3,654,208 3,464,677 3,654,208 3,464,677Equity reserve 87,023 87,023 87,023 87,023Profit and loss account (2,097,472) (273,746) (2,083,443) (339,383) --------- --------- --------- ---------Shareholders' funds - 2,674,431 4,276,157 2,688,460 4,210,520equity interests --------- --------- --------- --------- Consolidated Cash Flow StatementFor the year ended 30 september 2007 Note 2007 2006 £ £ £ £ Net cash outflow from 2 (393,540) (168,585)operating activities Returns on investments andservicing of financeInterest received 47,788 94,167Interest paid (55,792) (614) --------- --------- Net cash (outflow)/inflow from (8,004) 93,553returns on investments andservicing of finance Taxation (57,013) - Capital expenditure andfinancial investmentPayments to acquire tangible (76,315) (6,670)assetsPayments to acquire (1,206,140) -investmentsReceipts from sales of 9,250 -tangible assetsReceipts from sales of 652,713 -investments --------- --------- Net cash outflow from capital (620,492) (6,670)expenditure Acquisitions and disposalsPurchase of subsidiary 6 (182,360) (887,649)undertakings (net of cashacquired) --------- --------- Net cash outflow from (182,360) (887,649)acquisitions and disposals --------- --------- Net cash outflow from (1,261,409) (969,351)management of liquid resources FinancingIssue of ordinary share capital - 3,178,001Cost of share issue - (181,286) --------- --------- Issue of shares - 2,996,715 --------- --------- Repayment of other long term loans (21,216) -Capital element of hire (14,235) (3,676)purchase contracts --------- --------- Decrease in debt (35,451) (3,676) --------- --------- Net cash (outflow)/inflow from (35,451) 2,993,039financing --------- --------- (Decrease)/increase in cash 3 (1,296,860) 2,023,688in the year --------- --------- NOTES 1 Basis of preparation The financial statements set out above in respect of 30 September 2007 does notconstitute statutory accounts as defined in Section 240 of the Companies Act1985. The financial information contained in this announcement has beenextracted from the 2007 financial statements upon which the auditor's opinion isunqualified and does not include any statement under Section 237 of theCompanies Act 1985. The preliminary announcement has been prepared in accordance with applicableaccounting standards and under the historical cost convention. The principal accounting policies of the Group are set out in the Group's 2006annual report and financial statements. The policies in this preliminaryannouncement have remained unchanged from the 2006 financial statements, withthe exception of the policy relating to the treatment of share based paymentswhich has been changed in accordance with the provisions of FRS 20 as set out innote 9 below. The financial statements have been prepared on a going concern basis whichassumes that the company will have adequate financial resources for theforeseeable future. The Board has considered forecasts for the next twelvemonths to ensure that the group can meet its liabilities as they fall due. Inthis connection, the Board has negotiated an additional bank facility, and hastaken steps to cut overhead costs and to sell certain property assets. 2 Reconciliation of operating loss to net cash outflow from operating activities 2007 2006 £ £ Operating loss (870,804) (355,944)Depreciation of tangible assets 57,702 19,320Amortisation of intangible assets 98,638 33,603Impairment of interest in associated undertaking 261,222 -Profit on disposal of tangible assets (1,693) -Profit on disposal of investments (4,547) -Decrease in stocks 100,000 -Decrease/(increase) in debtors 163,465 (205,023)(Decrease)/increase in creditors within one year (197,523) 252,436Share based payments - 87,023 ---------- ---------Net cash outflow from operating activities (393,540) (168,585) ---------- --------- 3 Analysis of changes in net (debt)/funds At 1 Cash flow At 30 October September 2006 2007 £ £ £Net cash:Cash at bank and in hand 2,047,961 (1,321,133) 726,828Bank overdrafts (24,273) 24,273 - ---------- ---------- --------- 2,023,688 (1,296,860) 726,828 ---------- ---------- ---------Finance leases (22,997) 14,235 (8,762)Debts falling due within one year (31,367) (4,090) (35,457)Debts falling due after one year (802,330) 25,306 (777,024) ---------- ---------- --------- (856,694) 35,451 (821,243) ---------- ---------- ---------Net (debt)/funds 1,166,994 (1,261,409) (94,415) ---------- ---------- --------- 4 Reconciliation of net cash flow to movement in net (debt)/funds 2007 2006 £ £ (Decrease)/increase in cash in the year (1,296,860) 2,023,688Cash outflow from decrease in debt 35,451 3,676Loans and hire purchase contracts acquired on - (860,370)acquisition -------- ----------Movement in net (debt)/funds in the year (1,261,409) 1,166,994Net funds at 1 October 2006 1,166,994 - -------- ----------Net (debt)/funds at 30 September 2007 (94,415) 1,166,994 -------- ---------- 5 Major non-cash transactions On 9 November 2006 the company issued 1,481,481 ordinary shares at 6.75p pershare as part of the deferred consideration on the acquisition of KarspaceManagement Limited. On 10 August 2007 the company issued 1,481,481 ordinary shares at 6.75p pershare as part of the deferred consideration on the acquisition of KarspaceManagement Limited. On 10 August 2007 the company issued 283,871 ordinary shares at 7.75p per shareas part of the deferred consideration on the acquisition of Karspace ManagementLimited. 6 Acquisitions The cash outflow in respect of the purchase of subsidiary undertakings of£182,360 in the period comprised £4,360 additional costs in respect of thepurchase in the prior year of Mission Capital (Gloucester) Limited, and £178,000payment of deferred consideration in respect of Karspace Management Limited,also acquired in the prior year. 7 Earnings per Share The calculation of loss per share is based on the loss after taxation for theperiod divided by 101,404,654 (2006: 69,850,811) shares, being the weightedaverage of shares in issue during the year. Fully diluted loss per share is also based upon the above figures as there areno potential dilutive ordinary shares in issue. 8 Taxation 2007 2006 as restated £ £Domestic current period taxUK corporation tax - 11,355 -------- -------Current tax charge - 11,355 -------- ------- 2007 2006 as restated £ £Factors affecting the tax charge for the yearLoss on ordinary activities before taxation (1,823,726) (262,391) -------- ------- Loss on ordinary activities before taxation (346,508) (49,854)multiplied by standard rate of UK corporation tax 19% (2006: 19%) Expenses not deductible for tax purposes 27,681 1,236Differences between capital allowances and 10,963 7,927depreciationGoodwill amortisation and impairment 57,908 -Share of losses of associated undertaking 180,293 -Share option charge - 16,534Consolidation adjustments 47,112 -Creation of tax losses 24,348 -Other tax adjustments (1,797) 35,512 -------- -------Current tax charge - 11,355 -------- ------- Tax losses of some £125,000 (2006: £nil) are available to carry forward againstfuture taxable profits. 9 FRS 20 The group has adopted FRS 20 this year. Under the new standard, warrants areexpensed during the vesting period, and this has resulted in a restatement ofthe comparative figures as a share based payment charge of £87,023 has beenrecognised. The comparative operating loss has increased from £268,921 to£355,944. There is no change in opening shareholders' funds. 10 Report and accounts Copies of the annual report and accounts will be posted to the shareholdersshortly and will be available at www.missioncapitalplc.com. Enquiries: Michael Sandler 020 7796 4133Husdon Sandler Tom Griffiths 020 7012 2000Arbuthnot This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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