6th Apr 2006 07:01
Commoditrade Inc.06 April 2006 6 April 2006 Commoditrade Inc. Preliminary results for the period from 6 January 2005 to 31 December 2005 Proposed acquisition and placing of 144,000,000 ordinary shares Application for admission and re-admission to trading on the AIM market Chairman's Statement I am pleased to present the first full set of results for Commoditrade coveringthe period from incorporation on 6 January 2005 to 31 December 2005. The Companywas admitted to AIM on 8 March 2005 through an initial placing of 10.3 millionordinary shares that generated net funds for the Company of £370,000. TheCompany was created to build, through investment and acquisition, a groupspecialising in the commodities sector. The Company did not trade in the period covered by these results and the onlyactivity during this period has been the investigation of various potentialacquisition opportunities and the related due diligence undertaken thus far. On12 July 2005, Commoditrade announced that it had entered into heads of agreementand a period of exclusivity to acquire a UK-based company engaged in thebrokerage of commodities and derivatives ("Brokerage"). On 31 October 2005, afurther announcement was made by the Company that negotiations in relation tothe acquisition of the Brokerage were at an advanced stage. On 16 January 2006,the Company confirmed that negotiations to acquire the Brokerage wereprogressing and that, in addition, it had been granted an option by Tambelan toacquire Tambelan's interest in its contract with the Brokerage in respect ofmetals trading by the Brokerage's LME trading team ("LME Trading Team") on theLondon Metal Exchange ("Tambelan Interest"). The Board has made significant progress in respect of the proposed acquisitionof the Brokerage and, whilst it still believes that the Brokerage represents aviable acquisition opportunity, it has decided to terminate discussions in thisregard in order to pursue the proposed acquisition of the Tambelan Interestwhich the Directors believe will create greater value for Shareholders. TheBrokerage is regulated by the FSA and as such, an application for change ofcontroller had been submitted to the FSA, which as a result of termination ofdiscussions has now been withdrawn. Accordingly, the Board announced today that the Company has exercised its optionto acquire the Tambelan Interest for an initial aggregate consideration of £24.4million, to be satisfied as to the payment of £14 million in cash and by theissue of 83.4 million new ordinary shares at 12.5p each ("Acquisition"). Inaddition, 6 million deferred consideration shares may be issued on theachievement of certain performance criteria. In order to satisfy the cashconsideration in respect of the Acquisition, and to provide working capital forthe enlarged group, the Company's brokers have conditionally placed 144 millionnew ordinary shares with institutional investors at 12.5p per share, to raise£18 million before expenses. The Directors believe that the Acquisition represents a substantial investmentopportunity which will allow Commoditrade to receive the benefit of the revenuestream generated by the LME Trading Team and which will deliver enhancement ofshareholder value. The LME Trading Team is well established and successful, withan in-depth knowledge of the markets on which it is represented and hasdeveloped strong client and market relationships. This has resulted in theachievement of strong growth in the level of profits achieved by the LME TradingTeam over recent years. Dealings in the Company's existing ordinary shares were suspended, at theBoard's request, on 12 July 2005 at a mid-market price of 12.25 pence per share.This suspension has now been lifted following publication of an admissiondocument in respect of the Acquisition and related proposals. The Board is pleased with the progress made by the Company to date and looksforward to the future with confidence. Graham ButtChairman 6 April 2006 PROFIT AND LOSS ACCOUNTFor the period ended December 2005 Note Period from 6 January 2005 to 31 December 2005 £'000 Administrative expenses (180) Operating loss and loss on ordinary activities before taxation (180) Taxation 2 - Loss on ordinary activities after taxation and retained loss 4 (180) Loss per ordinary share (pence)- basic 3 (0.20)p BALANCE SHEETAt 31 December 2005 31 December Note 2005 £'000 Current assetsDebtors 1,087Cash at bank 179 1,266 Creditors:Amounts falling due within one year (984) Net current assets, total assets less current liabilities and net assets 282 Capital and reservesCalled up share capital 103Share premium account 359Profit and loss account (180)Shareholders' funds 4 282 CASH FLOW STATEMENTFor the period ended 31 December 2005 Note Period from 6 January 2005 to 31 December 2005 £'000 Net cash outflow from operating activities 5 (283) Net cash outflow before financing (283) FinancingIssue of shares 607Share issue costs (145) Net cash inflow from financing 462 Increase in cash 6 179 NOTES TO THE PRELIMINARY ANNOUNCEMENTFor the period ended 31 December 2005 1 BASIS OF PREPARATION The preliminary announcement has been prepared in accordance with applicableaccounting standards and under the historical cost convention. The Company was incorporated as a Corporation in the Cayman Islands which doesnot prescribe the adoption of any particular accounting framework. Accordingly,the Board have resolved the Company will follow UK Accounting Standards andapply the Companies Act 1985 when preparing its annual financial statements.The principal accounting policies are set out in the Company's 2005 annualreport and financial statements. 2 TAXATION ON LOSS ON ORDINARY ACTIVITIES There is no tax charge for the period. The Company does not operate within theUK and there is no tax arising on its operations. 3 LOSS PER SHARE The calculation of the basic loss per share is based on the loss on ordinaryactivities after tax of £180,000 divided by the weighted average number ofordinary shares in issue during the period of 89,529,528. The impact of thewarrants on the loss per share is anti-dilutive. 4 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS Period from 6 January 2005 to 31 December 2005 £'000 Loss for financial period (180)Issue of ordinary share capital (net of issue costs) 462Net increase in shareholders' funds 282Equity shareholders' funds brought forward -Equity shareholders' funds carried forward 282 5 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS Period from 6 January 2005 to 31 December 2005 £'000 Operating loss (180)Increase in debtors (1,087)Increase in creditors 984Net cash outflow from operating activities (283) 6 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS Period from 6 January 2005 to 31 December 2005 £'000 Increase in cash for the period 179 Change in net funds resulting from cashflows 179 Net funds brought forward -Net funds carried forward 179 7 ANALYSIS OF CHANGES IN NET DEBT On Cash flow 31 December 2005 incorporation £'000 £'000 £'000 Cash at bank - 179 179 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 balance sheet at 31 December 2005 and the profit and loss account, cash flowstatement and associated notes for the period then ended have been extractedfrom the Company's 2005 statutory financial statements upon which the auditors'opinion is unqualified and does not include any statement under Section 237 ofthe Companies Act 1985. -------------------------- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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