31st Jan 2007 11:16
Chariot (UK) PLC31 January 2007 Chariot (UK) plc 31 January 2007 Chariot (UK) plcUnaudited interim results for the 6 months ended 31 October 2006 Chariot (UK) plc ("Chariot" or the "Company") announces its results for the 6months ended 31 October 2006. Summary: • Chariot launched "monday - the charities lottery" game on 21 April 2006, and completed the first draw on 8 May 2006. • Initial sales were disappointing; the Company responded by reorganising the business and by reducing operating costs. The Company completed a placing on 6 July 2006 raising £2.65 million (before expenses) at 5p per share. • Sales levels continued to decline month on month following the launch of the game, in spite of strategic initiatives undertaken by the Company. These strategic initiatives included: the introduction of subscription play; improved website functionality; affiliate and on-line marketing initiatives; simplification of the game, the introduction of other games; and, the introduction of a promotional £1 million weekly draw. • While continuing to strive to reduce costs and simplify operations in order to reach break even, the Company undertook an exercise to find a strategic partner or investor to acquire the Company, to make further investment into the Company, or to purchase some or all of the Company's assets. • Despite a substantial effort by the Board and its advisers, it was not possible to secure a substantive transaction that would either allow its operations to continue, or realise significant value for shareholders. As an alternative to cessation of the business, on 19 January 2007 the Company sold the intellectual property rights attaching to "monday - the charities lottery", as well as Chariot's entire player database, to NetPlay TV plc for a total consideration of £140,500, in cash. NetPlay TV plc will continue to operate the game for the foreseeable future, thereby maintaining an opportunity for Chariot's charity partners and player base to continue to benefit from the game. • Chariot, having sold its principal operating assets, will wind down its remaining operations, with a view to becoming a listed cash shell. With effect from today Chariot will be treated as an investing company under rule 15 of the AIM Rules. In accordance with rule 15, the Board has, in line with its stated investment strategy, decided to seek a sustainable business to acquire and reverse into the Company. Such a business is expected to be in the wider leisure or consumer sectors. The Company now has positive net assets of approximately £500,000 which will enable it to implement its investment strategy. • With effect from today, Matthew Waterman (Chief Operating Officer and Finance Director) and Suzie Counsell (Non-Executive Director) have resigned from the board. Although Matthew Waterman's employment with the Company will also terminate with effect from today, he will continue to provide certain services to the Company in a consultancy role. In addition, also with effect from today, Philip Evans (Managing Director and Charities Director) is stepping down from his executive role, but will continue as a non-executive director of the Company, together with Peter Jones and John Finan. ENQUIRIES Chariot (UK) plc Noble & Company Limited Tel: 07770 504 934 Tel: 0207 763 2200Philip Evans Nick Naylor / Nick Athanas Chariot (UK) plc Chairman's statement I am pleased to present to you Chariot's interim financial information for thesix months ended 31 October 2006. In the Company's last annual report, published in July 2006, I described theCompany's difficult initial trading experience and the strategy that the Companywas undertaking in order to adapt to the circumstances in which it found itself. Unfortunately I have to report that the Company has continued to face severechallenges, principally with regard to continuing poor levels of sales, whichhave declined month on month since the launch of the game. In the period since launch, the Company's strategy has consisted of two primaryelements: firstly, an operating strategy to stabilise and increase revenues andto bring operating costs into line with income, in order to deliver profitabletrading, and secondly, attempts to identify an appropriate partner or investorto provide the financial resources required to ensure the long term future ofthe game. As regards the Company's operating strategy, in spite of a large number ofinitiatives, including: the introduction of subscription play; improved websitefunctionality; affiliate and on-line marketing initiatives; simplification ofthe game, the introduction of other games; and, the introduction of apromotional £1 million weekly draw, the Company has not been able to increase orsustain revenues or establish a break even position. As regards identifying a suitable partner or investor, in spite of extensivetalks with numerous interested parties, the Board has been unable to secure atransaction that would deliver a continuation of the Company's operations, and /or realise significant value for shareholders. In January 2007, the Company wastherefore forced to consider either cessation of the Company's operations or thesale of some or all of the Company's business or assets in order to avoid aninsolvency procedure. On 19 January 2007 the Company agreed the sale of the "monday" lottery game andits other principal operating assets to NetPlay TV plc for cash consideration of£140,500. NetPlay TV plc will continue to operate the game for the foreseeablefuture, with a view to including game draws in programmes on an established TVnetwork. The board of Chariot is pleased to have been able to secure a futurefor the "monday" lottery and, therefore, maintain opportunities for both thecharity partners and the player base to continue to benefit from the game.Following the sale, the Company will close its remaining operations, with a viewto becoming a listed cash shell. With effect from today, Matthew Waterman (Chief Operating Officer and FinanceDirector) and Suzie Counsell (Non-Executive Director) have resigned from theboard. Although Matthew Waterman's employment with the Company will alsoterminate with effect from today, he will continue to provide certain servicesto the Company in a consultancy role. In addition, also with effect from today,Philip Evans (Managing Director and Charities Director) is stepping down fromhis executive role, but will continue as a non-executive director of the Companyand will replace Matthew Waterman as Company Secretary. As part of thewinding-down of the Company's operations, both Matthew and Philip have enteredinto settlement agreements with the Company in relation to the termination oftheir employment, pursuant to which they will receive sums of £66,900 and£30,700 respectively. The Company would like to thank Matthew and Suzie for their contributions to theCompany during their time with Chariot and also Philip, for his contribution inhis executive role with the Company. With effect from today Chariot will be treated under rule 15 of the AIM Rules asan investing company and will be required to make a suitable investment inaccordance with the investing strategy set out below. The AIM Rules requirethat the Company must complete an acquisition which constitutes a reversetakeover in accordance with that strategy within 12 months from the date oftoday's announcement. The Directors' key investment strategy is to acquire a company or companieswhose business is in the broader leisure or consumer sectors, although such abusiness will not necessarily be a lottery operation. In light of the continuinginternationalisation of AIM, the Company will target companies across a broadgeographical area. The Company now has positive net assets of approximately£500,000 which will enable it to implement its investment strategy. The key attributes that the Directors will look for in a prospective investmentor acquisition are: • an experienced management team with a strong track record; • an ability to generate revenue streams; and • strong growth prospects with the ability to generate shareholder value. The Board of Chariot (being Peter Jones, John Finan and Philip Evans) hascollectively advised or been involved in a number of businesses in the leisureand consumer sectors and intends to actively use its sector expertise andknowledge to identify and appraise investment opportunities, carry out duediligence and negotiate acquisitions. The Directors are currently reviewing potential investment and acquisitionopportunities within the leisure and consumer sectors but have not, at thisstage, carried out any due diligence nor entered into any firm commitment inconnection with any acquisitions or investments. The Directors are of theopinion that the Company will have the funds necessary to carry out such duediligence as will be required on potential acquisitions although any reversetakeover will require the Company to raise further funds for the enlarged group. If an acquisition or investment, which would constitute a reverse takeover, isnot completed by 31 January 2008, dealings in the ordinary shares of the Companywill be suspended. In these circumstances the Directors would anticipate givingshareholders the opportunity to consider the future of the Company at a dulyconvened extraordinary general meeting. Peter JonesChairman Chariot (UK) plc Profit and loss account for the 6 months ended 31 October 2006 Note 6 months ended 31 Year ended 30 6 months ended 31 October 2006 April 2006 October 2005 (Unaudited) (Audited) (Audited) £'000 £'000 £'000 Turnover 908 - - Cost of sales (182) - - Gross profit 726 - - Administrative expenses (8,714) (7,983) (957) Operating loss 2 (7,988) (7,983) (957) Interest receivable and similar income 49 126 2Interest payable and similar charges - (1) - Loss on ordinary activities before and after taxation (7,939) (7,858) (955) Loss per share- Basic and diluted (pence) 3 (15.23)p (103.90)p (25.83)p All amounts relate to discontinued activities. There are no recognised gains and losses for the periods other than those shownin the profit and loss account above. Chariot (UK) plc Balance sheet at 31 October 2006 Note 31 October 2006 30 April 2006 31 October 2005 (Unaudited) (Audited) (Audited) £'000 £'000 £'000 Fixed assetsIntangible assets 100 223 -Tangible assets 10 901 37 110 1,124 37 Current assetsDebtors 265 3,402 274Cash at bank and in hand 1,830 2,788 3,455 2,095 6,190 3,729 Creditors: amounts falling due withinone yearCreditors (807) (1,860) (909) Net current assets 1,288 4,330 2,820 Total Assets 1,398 5,454 2,857 Capital and reservesShare capital 5 710 160 -Share premium reserve 5 10,615 8,583 4,506Special reserve 5 2,186 2,186 -Profit and loss reserve 5 (12,113) (5,475) (1,649) Shareholders' funds 1,398 5,454 2,857 Chariot (UK) plcCash flow statement for the 6 months ended 31 October 2006 Note 6 months ended 31 Year ended 30 6 months ended 31 October 2006 April 2006 October 2005 (Unaudited) (Audited) (Audited) £'000 £'000 £'000 Net cash outflow from operating activities 6 (3,399) (9,144) (1,162) Returns on investment and servicing of finance 7 49 125 3Capital expenditure and financial investment 7 (190) (1,178) (39) Cash outflow before use of liquid resources (3,540) (10,197) (1,198)and financing Management of liquid resources 7 1,226 (1,788) - Financing 7 2,582 12,982 4,315 Increase in cash 268 997 3,117 Chariot (UK) plc Notes forming part of the financial information for the 6 months ended 31October 2006 1 Interim Financial Information The unaudited interim financial information for the 6 month period ended 31October 2006 does not constitute statutory accounts within the meaning ofsection 240 of the Companies Act 1985. The interim financial information hasbeen prepared on the basis of the accounting policies set out in the auditedfinancial statements for the year ended 30 April 2006, with the addition of: Turnover Turnover represents the commission receivable in relation to the Company's roleas on-line retailer of society lottery tickets. Basis of preparation The comparatives in this report for the year ended 30 April 2006 and the 6 monthperiod ended 31 October 2005 are not the full statutory accounts for thoseperiods. Copies of the statutory accounts for the year ended 30 April 2006 havebeen delivered to the Registrar of Companies. The Auditors' report on thoseaccounts was unqualified, but did contain an emphasis of matter concerning theuncertainty as to the ability of the Company to continue as a going concern.The auditors' report did not contain a statement under Section 237(2) - (3) ofthe Companies Act 1985. 2 Operating loss The operating loss is stated after:- impairment charges totalling £965,000 towrite down the carrying values of the Company's intangible and tangible fixedassets to the directors' estimate of their recoverable amounts; and, share-basedpayment expenses totalling £1,301,000. 3 Loss per share 6 months ended Year ended 6 months ended 31 October 30 April 31 October 2006 2006 2005 (Unaudited) (Audited) (Audited) £'000 £'000 £'000 NumeratorLoss used for calculation of basic and diluted loss per share (7,939) (7,858) (955) DenominatorWeighted average number of shares used in basicand diluted loss per share calculation 52,132,728 7,561,473 14,790 Adjustment for bonus issue on 17 November 2005 - - 3,682,809 Adjusted weighted average number of shares used in basicand diluted loss per share calculation 52,132,728 7,561,473 3,697,599 None of the potential ordinary shares are considered to be dilutive. Chariot (UK) plc Notes forming part of the financial information for the 6 months ended 31October 2006 (continued) 4 Dividends There were no dividends paid or declared during the period. 5 Share capital and reserves Share capital Share Special Profit and premium reserve loss reserve reserve £'000 £'000 £'000 £'000 As at 1 May 2005 - 85 - (694)Shares issued in October 2005 - 4,421 - -Loss for the period - - - (955) At 31 October 2005 (audited) - 4,506 - (1,649) Bonus issue of shares in November 2005 76 (76) - -Reduction of share capital - (4,430) 2,186 2,244Shares issued in February 2006 84 9,519 - -Costs of share issue - (936) - -Share based payment expense - - - 833Loss for the period - - - (6,903) At 30 April 2006 (audited) 160 8,583 2,186 (5,475) Shares issued in July 2006 550 2,200 - -Costs of share issue - (168) - -Share based payment expense - - - 1,301Loss for the period - - - (7,939) At 31 October 2006 (unaudited) 710 10,615 2,186 (12,113) On 3 July 2006 the Company raised additional shareholders' equity of 53 millionshares at 5p per share by means of a private placing. Funds of £2,650,000 beforecosts were received. In addition, there was a further subscription for 2 million shares inconsideration for the release of the Company's obligations to pay certain feesfor advice received from the Company's nominated adviser in connection with theprivate placing. Chariot (UK) plc Notes forming part of the financial information for the 6 months ended 31October 2006 (continued) 6 Reconciliation of operating loss to net cash outflow in the cash flowstatement 6 months ended Year ended 30 6 months ended 31 October April 2006 31 October 2005 2006 (Audited) (Audited) (Unaudited) £'000 £'000 £'000 Operating loss (7,988) (7,983) (957) Adjustments for: Depreciation and impairment of tangible fixed assets 1,074 29 4 Loss on disposal of fixed assets 7 - - Amortisation and impairment of intangible fixed assets 123 27 - Share based payment expense 1,301 833 - Decrease / (increase) in debtors 3,137 (3,392) (264) (Decrease) / increase in creditors (1,053) 1,342 55 Net cash outflow from operating activities (3,399) (9,144) (1,162) 7 Analysis of cash flows for headings netted in the cash flow statement 6 months ended 31 Year ended 30 6 months ended October 2006 April 2006 31 October 2005 (Unaudited) (Audited) (Audited) £'000 £'000 £'000 Returns on investment and servicing of finance Interest received 49 126 3 Interest paid - (1) - 49 125 3 Capital expenditure Payments to acquire intangible fixed assets - (250) - Payments to acquire tangible fixed assets (190) (928) (39) (190) (1,178) (39) Management of liquid resources Cash placed on short-term deposit 1,226 (1,788) - FinancingIssue of ordinary shares (net of issue costs) 2,582 13,088 85Proceeds from short-term loans - - 126Repayment of short-term loans - (106) (85) 2,582 12,982 126 8 Copies of this announcement will be available, free of charge, for a periodof one month, from the Company's nominated adviser, Noble & Company Limited, 120Old Broad Street, London, EC2N 1AR. 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