12th Jan 2007 16:15
THE CORE BUSINESS PLC ("TCB" or the "Company") Preliminary Results for the half year to 30 November 2006
HIGHLIGHTS
* Continued expansion of our consultancy client portfolio of blue chip retailers * Strong flow of new projects from expanding network of contacts * Exciting opportunities for our distribution business
CHAIRMAN'S STATEMENT
The six months to 30 November 2006 has been another period of positive development for The Core Business.
One strategic objective upon flotation was to review and secure a licensing agreement to develop personal care brands. A key target was Ministry of Sound and although this was signed in late June it was unexpectedly terminated three months later. Despite this disappointment we are reviewing other licensing deals for the longer term and are now completely refocused on building the consultancy side of our business and on distributing brands.
We have tendered for projects with blue chip retailers and have many other consultancy proposals in place. We are also close to securing a distribution agreement with a brand that we have presented to a major retail chain. This has been enthusiastically received and our expectation is that this will launch in April 2007.
We are also reviewing many other distribution opportunities but will focus our efforts on one or two brands where sales volume can be achieved at speed.
The Company has learnt much since flotation and we are fully committed to our objective of building a total beauty management group through the three-pronged strategy of consultancy, distributing brands and finally building a portfolio of licensed, wholly owned or part owned personal care brands. We also have in place an acquisition strategy and are making significant progress in this direction.
FINANCIAL OVERVIEW
Turnover for the 6 months to 30 November 2006 was ‚£77,848 (6 months to 30 November 2005: ‚£65,530) and the loss for the half year was ‚£178,659 (6 months to 30 November 2005: ‚£17,059 profit) equivalent to 0.43 pence loss per share (6 months to 30 November 2005: 0.17 pence profit per share).
SUMMARY
Since the Company floated on AIM it has worked hard towards achieving its strategic goals. The next couple of years should see a major uplift in our business and we are excited at the massive potential leading into the next trading year. I would like to thank our Board, management team and staff who are working extremely hard to fulfil our business goals.
Mark Watson MitchellChairmanBALANCE SHEET
HALF YEAR ENDED 30 NOVEMBER 2006
As at As at As at 30/11/06 30/11/05 31/5/06 ‚£ ‚£ ‚£Assets Non-current assets Property, plant and equipment 1,325 1,010 740Financial assets 20,578 12,292 10,578Investment in associate company - - - ______ ______ ______ 21,903 13,302 11,318 Current Assets Trade receivables 17,537 18,193 19,156Other current assets 32,688 2,497 26,815Cash and cash equivalents 273,210 15,263 401,085 _______ ______ _______ 323,435 35,953 447,056 Total assets 345,338 49,255 458,374 Equity and liabilities Equity attributable to the Company's equity holders Share capital 211,982 100 201,383Share premium 411,913 - 337,719Retained earnings (310,904) 10,283 (132,245) _______ ______ _______ 312,991 10,383 406,857 Current liabilities Trade and other payables 32,347 18,116 51,517Current tax payable - 20,756 - ______ ______ ______ Total liabilities 32,347 38,872 51,517 Total equity and liabilities 345,338 49,255 458,374PROFIT AND LOSS ACCOUNTHALF YEAR TO 30 NOVEMBER 2006 6 months 6 months Year ended ended ended 30/11/06 30/11/05 31/5/06 ‚£ ‚£ ‚£Turnover Consultancy fees 77,848 68,530 122,157Overhead costs: Administration costs 144,828 36,346 195,540Staff costs 119,139 10,854 60,680Depreciation 442 271 541 _______ ______ _______(Loss)/profit from operations (186,561) 21,059 (134,604) Interest income 7,902 - 2,964Impairment of investment in associate company - - (1,714) _______ ______ _______ (Loss)/profit before tax (178,659) 21,059 (133,354) Income tax expense - (4,000) 12,190 _______ ______ _______ (Loss)/profit for the year (178,659) 17,059 (121,164) (Loss) / Earnings per share Basic (0.43pence) 0.17pence (0.66pence)Diluted (0.43pence) 0.17pence (0.66pence) CASH FLOW STATEMENTHALF YEAR TO 30 NOVEMBER 2006 Notes 6 months 6 months Year ended ended ended 30/11/06 30/11/05 31/5/06 ‚£ ‚£ ‚£Cash flows from operating activities: Cash generated from operating activities 3 (209,543) 27,313 (102,777)Interest paid - - -Tax paid - - (16,749) _______ ______ _______ (209,543) 27,313 (119,526) Cash flows from investing activities:
Purchases of property, plant and equipment (1,027) (595) (595) Investment in associate company
- - -Investment in financial asset (10,000) (10,578) (10,578)Interest received 7,902 - 2,964 _____ ______ _____ Net cash (used in) investing activities (3,125) (11,173) (8,209) Cash flows from financing activities: Net proceeds on issues of shares 84,793 - 539,002Dividends paid - (12,000) (21,305) ______ ______ _______
Net cash (used in)/from financing activities 84,793 (12,000) 517,697
Net increase/(decrease) in cash and (127,875) 4,140 389,962 cash equivalents
Cash and cash equivalents at beginning of year 401,085 11,123 11,123
_______ ______ _______
Cash and cash equivalents at end of year 273,210 15,263 401,085
Bank balances and cash 273,210 15,263 401,085 NOTESTO THE ACCOUNTS1. Accounting policies
The principal accounting policies are as set out in the May 2006 annual report.
The financial statements of The Core Business PLC have been prepared in accordance with International Financial Reporting Standards (IFRS), IFRIC interpretations endorsed by the European Union and with those parts of the Companies Act 1985 applicable to companies reporting under IFRS. These financial statements have been prepared under the historic cost convention.
The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates.
Earnings per share 6 months 6 months Year ended ended ended 30/11/06 30/11/05 30/5/06 ‚£ ‚£ ‚£
Earnings for the purpose of basic earnings (178,659) 17,059 (121,164) per share (net profit for the year)
Earnings for the purpose of diluted (178,659) 17,059 (121,164)earnings per share Number of shares 6 months 6 months Year ended ended ended 30/11/06 30/11/05 31/5/06 No. No. No.Weighted average number of ordinary shares:
- for the purposes of basic earnings per 41,736,175 10,000,000 18,392,429 share
- for the purposes of diluted earnings per 41,736,175 10,000,000 18,392,429 share
The dilutive effect of share warrants issued during the year has been disregarded as the average market value of ordinary shares during the year did not exceed the exercise price of the warrants issued.
Share capital 6 months 6 months Year ended ended ended 30/11/06 30/11/05 31/5/06 No. No. No.Authorised: Ordinary shares of ‚£0.005 each (30/11/05: 200,000,000 100,000,000 200,000,000‚£0.01 each) Issued and fully paid: Reported as at 1 June 40,276,625 100 10,000,000 Issue of shares 2,119,822 9,900 30,276,625 __________ ______ __________Reported as at end of period 42,396,447 10,000 40,276,625 6 months 6 months Year ended ended ended 30/11/06 30/11/05 31/5/06 ‚£ ‚£ ‚£Authorised: Ordinary shares of ‚£0.005 each 1,000,000 1,000,000 1,000,000 Issued and fully paid: Reported as at 1 June 201,383 100 100 Issue of shares 10,599 - 201,283 _______ ___ _______ Reported as at end of period 211,982 100 201,383
On 16 November 2005, each of the issued and unissued ordinary shares in the Company of ‚£1 each were subdivided into 100 ordinary shares of ‚£0.01 each, all such shares ranking pari passu in all respects.
On 10 February 2006, the Company issued 4,000 new ordinary shares of nominal value ‚£0.01 each.
On the same date:
* each of the issued and unissued ordinary shares of 1 penny each were subdivided in to 1,000 ordinary shares of 0.001 pence each, all such shares ranking pari passu in all respects. * the Company issued 10,800,000 new ordinary shares of nominal value 0.001 pence each at an issue price of 1 penny each. * the Company issued 5,200,000 new ordinary shares of nominal value 0.001 pence each at an issue price of 2.5 pence each. * the Company issued 499 bonus shares for each ordinary share held in the Company. * The ordinary shares of the Company were consolidated whereby for every 500 ordinary shares of nominal value 0.001 pence held, one share at nominal value 0.5 pence was issued.
On 8 March 2006, the Company raised ‚£411,065 before expenses of ‚£176,475 through the placing of 10,276,625 new ordinary shares of nominal value 0.5 pence each at a placing price of 4 pence each with institutional and other investors. This represented 26% of the enlarged issued share capital of the Company.
On 25 July 2006, the Company raised ‚£84,793 through the issue of 2,119,882 new ordinary shares of nominal value 0.5 pence each at a placing price of 4 pence each with one investor. This represented 5% of the enlarged issued share capital of the Company.
At 30 November 2006 warrants over 6,500,000 ordinary shares were outstanding.
Date of At Granted Exercised Forfeits At Exercise/ Exercise/Vesting
grant 1 June /vested 31 May Share price date 2005 2006 From ToWarrants 8.03.06 - 6,500,000 - - 6,500,000 6.0p 8.03.06 08.03.11
2. Status of financial information
The interim results for the 6 months ended 30 November 2006 and the 6 months ended 30 November 2005 are unaudited and do not constitute statutory accounts within the meaning of section 240 Companies Act 1985. The figures for the year ended 31 May 2006 have been extracted from the audited annual accounts.
3. Note to the cash flow statement
6 months 6 months Year ended ended ended 30/11/06 30/11/05 31/5/06 ‚£ ‚£ ‚£(Loss) / Profit for the year (178,659) 17,059 (121,164)Adjustments for: - Taxation - 4,000 (12,190)- Finance credits (7,902) - (2,964)- Depreciation 442 271 541Changes in working capital: - Charge for market value of warrants - - 5,000 issued during the year
- (Increase)/decrease in trade and other (4,254) 1,959 (11,139)
receivables - Decrease in financial assets - - 1,714
- Increase/(decrease) in trade and other (19,170) 4,024 37,425
payables _______ ______ _______
Cash generated from / (used in) operations (209,543) 27,313 (102,777)
THE CORE BUSINESS PLCRelated Shares:
Tern