Interim Results

28th Nov 2008 07:00



28 November 2008

Z GROUP plc

Interim Results for the six months ended 31 August 2008

Z GROUP plc (Z GROUP or the Company), the AIM listed cash shell, announces its unaudited interim results for the six months ended 31 August 2008.

Summary of Interim Results

Revenues in the period were £8,750 (2007: Nil) 

Administrative costs in the period were £113,230 (2007: £336,590)

Dividend income of £12,422,502 received from the Company's dormant subsidiary Z Group Investments Limited with a corresponding write down of investments

Finance income in the period was £41,575 (2007: £24,288)

As a result, the Company is reporting a six month loss before tax of £67,905 (2007: loss £261,762)

Loss per share of 0.29p (2007: loss of 1.10p)

£234,059 of cash was received in connection with the sale of Net2Roam Limited and Onshare Limited

Cash at bank as at 31 August 2008 £1,322,558 (2007: £1,213,365)

Further Enquiries

Z GROUP plc
Duncan Neale (Finance Director)	Tel: +44 (0) 20 7952 4043
John East & Partners Limited
Bidhi Bhoma / Simon Clements	Tel: +44 (0) 20 7628 2200

Chairman's statement

I am pleased to present the interim results of the Company for the six months ended 31 August 2008.

RESULTS

Revenue of £8,750 (2007: Nil) arose from the provision of management consultancy services in the period.

Administrative costs in the period were £113,230 (2007: £336,590). The reduction compared with the previous year reflects the fact that the disposal of Net2Roam Limited and Onshare Limited took place in January 2008. £94,474 of further cash consideration in relation to these disposals is expected to follow in the second half of this financial year. Following the disposals, the Company had no trading business and as a result the cost base was reduced significantly. 

The loss on ordinary activities after taxation for the year amounted to £67,905 (2007 - loss £261,762) representing a loss per share of 0.29 pence (2007 - loss 1.10 pence).

The Directors did not declare a dividend in the period.

CHANGES IN DIRECTORS DURING THE PERIOD

On 18 March 2008, Ian Smith was appointed as a non-executive director and Marcus Yeoman was appointed as a part-time executive director of the Company. On the same day, Jack Bekhor and Jamie True stepped down as joint CEOs and as executive directors of the Company.

CASH POSITION

The unaudited cash position as at 31 August 2008 was £1,322,558. The unaudited cash position at 25 November 2008, being the last practicable date prior to the publication of this document, was £1,256,891.

PROSPECTS

The directors' objective is to preserve cash resources while actively pursuing potential acquisitions, which are at various stages of discussion at this time. Under the AIM rules the Company's shares will be suspended from trading on AIM if a suitable acquisition has not been made in accordance with the investing strategy by 7 January 2009.

JON CLAYDON

Non-executive Chairman

28 November 2008

 

Income Statement

for the six months ended 31 August 2008

	Unaudited	Unaudited	Audited
	Six months  ended	Six months  ended	Year  ended
	31 August  2008	31 August  2007	29 February  2008
	£	£	£
Revenue	8,750	-	-
Cost of sales	(5,000)	-	-
Gross profit	3,750	-	-
Share based payments credit	-	-	383,667
Other administrative expenses	(113,230)	(336,590)	(860,830)
Proceeds on disposal of investments	-	-	60,000
Write down of investments	(12,422,502)	-	(4,638,803)
OPERATING LOSS	(12,531,982)	(336,590)	(5,055,966)
Finance income	41,575	24,288	53,404
Dividend income	12,422,502	-	-
Other income	-	50,540	91,231
LOSS BEFORE INCOME TAX	(67,905)	(261,762)	(4,911,331)
Income tax expense	-	-	816
LOSS FOR THE YEAR	(67,905)	(261,762)	(4,910,515)
Basic and diluted loss per share (pence) (Note 3)	(0.29)	(1.10)	(20.68)

  

Balance Sheet

at 31 August 2008

	Unaudited	Unaudited	Audited
	As at	As at	As at
	31 August	31 August	29 February
	2008	2007	2008
	£	£	£
Assets
Investments	-	16,991,305	-
Property, plant and equipment	8,935	116,016	10,898
Other intangible assets	-	2,012	-
Other receivables	117,500	117,500	117,500
Non-current assets	126,435	17,226,833	128,398
Trade and other receivables	160,091	3,510,494	374,552
Cash and cash equivalents	1,322,558	1,213,365	1,203,824
Current assets	1,482,649	4,723,859	1,578,376
Total assets	1,609,084	21,950,692	1,706,774
Equity and Liabilities
Capital and reserves attributable to equity holders of the Company
Share capital	1,187,294	1,187,294	1,187,294
Share premium account	5,967,758	5,966,858	5,967,758
Share option reserve	700,382	1,084,049	700,382
Retained losses	(6,367,099)	(1,650,440)	(6,299,194)
Total equity	1,488,335	6,587,761	1,556,240
Trade and other payables	120,749	15,362,931	150,534
Current liabilities	120,749	15,362,931	150,534
Total liabilities	120,749	15,362,931	150,534
Total equity and liabilities	1,609,084	21,950,692	1,706,774

  

Statement of Changes in Equity

for the six months ended 31 August 2008

	Share capital	Share premium	Share based payments reserve	Retained earnings	Total
	£	£	£	£	£
Balance at 1 March 2008	1,187,294	5,967,758	700,382	(6,299,194)	1,556,240
Loss for the period	-	-	-	(67,905)	(67,905)
Total recognised income and expense for the period	-	-	-	(67,905)	(67,905)
Balance at 31 August 2008	1,187,294	5,967,758	700,382	(6,367,099)	1,488,335

  

Cash Flow Statement

for the six months ended 31 August 2008

	Unaudited	Unaudited	Audited
	six months ended	six months ended	Year  ended
	31 August	31 August	29 February
	2008	2007	2008
	£	£	£
Cash flows from operating activities
Operating loss	(12,531,982)	(336,590)	(5,055,966)
Depreciation	1,963	19,860	32,711
Amortisation	-	25	510
Share option expense	-	-	(383,667)
Dividend income	12,422,502	-	16,991,305
Decrease / (Increase) in trade and other receivables	214,462	(747,681)	2,388,261
(Decrease) / (Increase) in trade and other payables	(29,080)	795,734	(14,417,368)
Write down of web development costs and domain names	-	-	1,807
Cash generated from / (used in) operations	77,865	(268,652)	(442,407)
Income tax credit	-	-	816
Net cash generated from / (used in) operating activities	77,865	(268,652)	(441,591)
Cash flows from investing activities
Purchase of property, plant and equipment	-	-	(5,340)
Proceeds from the sale of property, plant and equipment	-	2,323	99,649
Interest received	41,575	24,288	53,404
Other income	-	50,540	91,231
Net cash generated from investing activities	41,575	77,151	238,944
Cash flows from financing activities
Credit on issue of share expenses	-	(900)	-
Net cash generated from financing activities	-	(900)	-
Net increase / (decrease) in cash and cash equivalents	119,440	(192,401)	(202,647)
Cash and cash equivalents at the beginning of the period	1,203,118	1,405,766	1,405,765
Cash and cash equivalents at the end of the period	1,322,558	1,213,365	1,203,118

 

Notes to the Interim report

for the six months ended 31 August 2008

1.  Basis of preparation

The financial information for the six months ended 31 August 2008 and 31 August 2007 has been prepared in accordance with the International Financial Reporting Standards ("IFRS"), and is unaudited. The comparative figures for the year ended 29 February 2008 were derived from the Group's audited financial statements for that period as filed with the Registrar of Companies as restated for IFRS. The financial information does not constitute the financial statements for that period. Those accounts received an unqualified audit report which did not contain any statement under s237 (2) or (3) of the Companies Act 1985.

2. Summary of Significant Accounting Policies

(a) Property Plant and Equipment

Property, plant and equipment are initially recorded at cost of purchase and are depreciated on a straight-line basis over their estimated useful lives, as follows:

Computer equipment, office equipment, fixtures and fittings 4 years

(b) Impairment of tangible and intangible assets 

At each balance sheet date, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indications exist, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). An intangible asset with an indefinite useful life is tested for impairment annually and whenever there is an indication that the asset may be impaired.

The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates for future cash flows have been adjusted.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a re-valued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is carried at a re-valued amount, in which case the impairment loss is treated as revaluation increase. 

(c) Revenue recognition

Revenue is stated net of Value Added Tax and net of any applicable discounts or rebates.

(d) Share based payments

The Company has applied the requirements of IFRS 2 Share-based Payments. In accordance with the transitional provisions, IFRS 2 has been applied to all grants of equity instruments after 7 November 2002 that were unvested as of 1 March 2006.

The Company issues share options to certain employees. These options are measured at fair value at the date of the grant, using the Black-Scholes option-pricing model. The fair value of the options is expensed on a straight-line basis over the vesting period, based on the Company's estimate of when shares will vest, applying the assumptions on a consistent basis with those used in the audited financial statements for the year ended 28 February 2007.

3. Earnings per share

The calculation of basic earnings per share is based upon the profit after tax divided by the weighted average number of shares in issue during the period.

The calculation of fully diluted earnings per share is based upon the profit after tax divided by the weighted average number of shares in issue during the period after taking into account the dilutive effect of share options.

Basic & diluted loss per share	Loss after tax £	Weighted average number of shares	EPS (pence)
6 months ended 31 August 2008	(67,905)	23,745,879	(0.29)
6 months ended 31 August 2007	(261,762)	23,745,879	(1.10)
12 months ended 29 February 2008	(4,910,595)	23,745,879	(20.68)

Due to the loss incurred in the above periods, there is no dilutive effect from the issue of share options.

4. Interim results

Copies of the Interim results are available from the Company's registered office, 31 Vernon Street, London W14 0RN and on the Company's website www.zgroupplc.com

ENDIR BIBDBBGDGGIR

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