28th Mar 2008 07:02
Avanti Capital PLC28 March 2008 Group Review Interim Results for the six months ended31 December 2007 Avanti Capital Plc, the AIM quoted private equity company, announces interimresults for the six months ended 31 December 2007. HIGHLIGHTS - As at 31 December 2007, the Group had net assets (excluding the accounting effects of the consolidation of Eclectic Bars Limited) of £15.8 million or 197 pence per ordinary shares - As at 31 December 2007, the Group had net assets on a consolidated basis of £13.2 million or 164 pence per ordinary share. - mBlox Inc continues its successful expansion and completes $22.0 million fund-raising. - Eclectic Bars' business is robust with satisfactory performance in a challenging environment. Share buy back policy to continue. ENQUIRIES: Tel: 020 7299 1459 Avanti Capital Plc Julian Fellerman Richard Kleiner Adopted IFRS The Group's shares are traded on the Alternative Investment Market ('AIM') andthe AIM rules require that the next annual consolidated financial statements ofthe Group for the year ending 30 June 2008 be prepared in accordance with IFRS,as adopted by the European Union. This interim financial information has been prepared on the basis of therecognition and measurement requirements of Adopted IFRS that are anticipated tobe effective (or available) for adoption at 30 June 2008, the Group's firstannual reporting date at which it is required to use Adopted IFRS. Based onthose Adopted IFRS, the directors have applied the accounting policies, as setout in the restatement document referred in Appendix 1 of this interim financialinformation, which they expect to apply when the first annual IFRS financialstatements are prepared for the year ending 30 June 2008. However, the Adopted IFRS that will be effective (or available for earlyadoption) in the financial statements for the year ending 30 June 2008 are stillsubject to change and additional interpretations and therefore cannot bedetermined with certainty. Accordingly, the accounting policies for that annualperiod will be determined finally only when the annual financial statements areprepared for that year. Results of the Group As at 31 December 2007, the Group had net assets (excluding the accountingeffects of the consolidation of Eclectic Bars Limited of £15.8 million (2006:£15.2 million) or 197 pence per share (2006: 181 pence per share). It is theview of the board that this basis gives shareholders the most relevant measureof the underlying value of the net assets within the guidelines for thevaluation and disclosure of venture capital portfolios. As at 31 December 2007, the Group had net assets on a consolidated basis of£13.1 million (2006: £14.0 million) or 164 pence per share (2006: 166 pence pershare). In the period to 31 December 2007, the loss before exceptional items, excludingthe consolidation of Eclectic Bars Limited, was £942,000 (2006: £207,000). Theloss on a consolidated basis was £864,000 (2006: £499,000). The results include,within finance cost, an amount of approximately £900,000 being an adjustment tothe mBlox valuation pursuant to the terms of the fund-raising of $22.0 millionwhich completed in late November 2007 and which reflects the change in theinvestment climate. All of the above figures have been arrived at after making an adjustment in theprovision for the carried interest, which as at 31 December 2007 amounted to£1.679 million or 21 pence per share. The payment of such a carried interest isdependent upon the realisation of the individual assets being at values whichare, at least, equal to the values stated in these interim results. Net asset values (excluding the accounting effect of the consolidation ofEclectic Bars Limited), per Avanti share by category were: Investments Carrying value (pence per share) Espresso 5mBlox 97Medcenter 4PoNaNa (Eclectic Bars Limited) 95Others 1Net current assets including cash 16 -------Total 218 ------- Note: The total in the above table does not take account of any dilutory effect of theLong Term Incentive Share Scheme options or the carried interest under theinvestment advisory agreement. Details of the Long Term Incentive Share Schemeoptions and the carried interest were set out in the company's 2007 AnnualReport. Portfolio Investments Eclectic Bars During the six months to 31 December 2007, the bar and club sector saw a fairamount of distress however, against this backdrop, the business traded well. Thesite EBITDA for the business for the six month period under review was £1.1million before Head Office costs. Whilst 2007 showed a reduction in turnover dueto the closure of loss-making Sites, the EBITDA was broadly in line with theinternal forecast made by management and on a like for like basis is broadly inline with the results for the pervious year. During the period the new site atLincoln was opened and has seen sales and site EBITDA ahead of forecast. Whilst the sector remains challenging, the management team continues to exploresound expansion opportunities both organically and by merger and acquisition. As at 31 December 2007, the carrying value of the Company's investment inEclectic Bars was £7.6 million or 95 pence per share. Espresso The business continues to perform in line with expectations. The Channel 4Learning acquisition made by Espresso in 2007 is progressing well and thebusiness has continued to expand its presence in the UK education market. Withover 10,000 schools now taking its primary school services, the acquisition hasenabled Espresso to begin marketing its services to the secondary schoolsmarket. During the past year, Espresso has received many industry accolades inaddition to winning both a Royal Television Society Award and a BAFTA. Thebusiness made its second consecutive appearance in the Sunday Times Tech Track100 league table which ranks Britain's fastest-growing private tech companiesbased on sales growth. The business has recently started international expansionby launching its services in Sweden. As at 31 December 2007, the carrying value of the Company's investment inEspresso was £366,000 or 5 pence per share. mBlox During the six months to 31 December 2007 mBlox continued its successfulexpansion. The 2007 year has seen revenues up over 40% on a like for like basis. With 12 offices covering North America, Europe, Asia Pacific and Africa, mBloxdelivered over 2 billion application-to-person transactions in 2007,demonstrating the continued appetite for mobile messaging-based services. Thesetransactions covered a wide range of applications including, mobile originatedand terminated messages and Premium SMS, powered mobile business, mobilemarketing and mobile entertainment worldwide. mBlox predicts that within three years, mobile carriers will more than doubletheir revenues from off-portal entertainment. Carrier revenues will grow to $8billion by 2011 compared to $3 billion in 2007. This growth will be derived fromproviding value added and enabling services to off-portal publishers. Theresearch, conducted in conjunction with Cambridge University's Judge BusinessSchool, found that this additional revenue will principally come from threenewly emerging areas: WAP billing, sender pays data and handset/subscriber data.These services will help off-portal content and service providers to meetgrowing consumer demand for rich mobile entertainment on the mobile internet. In February 2008, mBlox launched its global WAP Billing platform. Bringingtogether the next generation in mobile technology and mBlox's unrivalledstrength in mobile billing and delivery, the platform provides a user-friendlypayment experience which will fuel further growth for mobile content providers. In late November 2007, mBlox raised $22.0 million in a Series E round taken upby the principal existing investors and a substantial new late-stage investor.The Company invested $0.25 million. The terms of the investment (with itspreferences) reflect the change in the investment climate giving an impliedvaluation of the Company's interest in mBlox of £7.8 million. As at 31 December 2007, the carrying value of the Company's investments in mBloxwas £7.8 million or 97p per share. Medcenter Medcenter is a multinational pharmaceutical marketing company specialising ininnovative solutions that increase drug sales and business effectiveness. In the third quarter of 2007, Medcenter entered into a five year exclusivecollaboration and revenue sharing agreement with Web MD, to market and sell WebMD products throughout Latin America, Spain and Portugal and for Web MD tomarket and sell Medcenter products in the United States. The venture isco-branded as Medcenter / Medscape. Web MD is the largest internet provider ofmedical intelligence in the United States and enjoys a 95 % market share. Thecollaboration represents Web MD's first move outside of the United States and,to date, has exceeded the expectations of both parties in terms of sales andmarket reception. Both companies are in discussions to extend the collaborationto other countries. In late 2007, Medcenter completed a capital raising of $8.0 million from certainexisting investors at a value which is about 10% higher than when the Companymade its investment. Subject to market conditions, Medcenter is considering a stock exchange listingwithin the next 12 months, but continues to believe that the value of its assetswould be best exploited and maximised by being comprised within a larger group.With this objective, Medcenter continues to be in discussions with respect tovarious potential business combinations As at 31 December 2007, the carrying value of the Company's investment inMedcenter was £303,000 or 4 pence per share. This carrying value does notreflect the terms of the 2007 capital raising. Others In relation to the remainder of the legacy investments in the Group's portfolio,the Board continues to seek ways of maximising value to the group. As at 31December 2007, the aggregate carrying value of these investments was £86,000. J M Fellerman R H Kleiner 28 March 2008 Consolidated Income Statement for the six months ended 31 December 2007 Unaudited Unaudited Unaudited 6 months ended 12 months ended 6 months ended 31 Dec 2006 30 Jun 2007 Notes 31 Dec 2007 (restated to IFRS) (restated to IFRS) £000 £000 £000 Revenue 3 4,970 6,973 12,607Cost of sales (804) (1,158) (2,112)Gross profit 4,166 5,815 10,495Administrative expenses - others 4,063 (5,839) (13,194)Operating profit/(loss) (pre-exceptional 103 (24) (2,699)items)Administrative expenses - exceptional 5 (161) (698) (1,471)Operating loss (post-exceptional items) (58) (722) (4,170)Other income 57 - 105Operating loss (1) (722) (4,065)Gain on disposal of tangible assets - - 374Finance revenue 70 41 3,571Finance cost (933) - (5)Loss on ordinary activities before taxation (864) (681) (125)Taxation - - -Minority interest - 182 -Loss for the period (864) (499) (125)Loss per share - basic and diluted 4 (10.77)p (5.90)p (1.51)p Group Review Interim Results for the six months ended31 December 2007 Unaudited Unaudited Unaudited 6 months ended 12 months ended 6 months ended 31 Dec 2006 30 June 2007 31 Dec 2007 (restated to (restated to IFRS) IFRS) £000 £000 £000AssetsNon current assetsGoodwill 4,454 4,397 4,454Property, plant & equipment 1,176 1,406 871Financial assets held at fair value through income 8,560 6,411 9,276statement 14,190 12,214 14,601Current AssetsInventories 126 163 80Trade and other receivables 1,043 1,233 967Cash and cash equivalents 1,044 1,690 1,457 2,213 3,086 2,504Current liabilitiesBank overdrafts (509) - (117)Finance leases (4) (4) (4)Trade and other payables (1,056) (1,305) (1,144) (1,569) (1,309) (1,265)Net current assets 644 1,777 1,239Total assets less current liabilities 14,834 13,991 15,840Non-current liabilitiesFinance leases (3) (10) (5)Provisions (1,679) - (1,819) (1,682) (10) (1,824)Net Assets 13,152 13,981 14,016Capital and ReservesCalled up share capital 4,815 5,060 4,815Capital redemption reserve 1,409 1,164 1,409Merger reserve 2,045 2,045 2,045Retained earnings 4,883 5,894 5,747Avanti Group shareholders equity 13,152 14,163 14,016Minority interests - (182) -Total equity 13,152 13,981 14,016 Approved by the board on 28 March 2008 Richard Kleiner Julian Fellerman Consolidated Statement of Cash flowsFor the period ended 31 December 2007 Unaudited Unaudited Unaudited 6 months ended 6 months ended 12 months ended 31 Dec 2007 31 Dec 2006 30 Jun 2007 £000 £000 £000 Cash flows from operating activitiesOperating loss for the period (1) (722) (4,065)Depreciation 152 181 362Provision against fixed asset investment (74) - 635(including exchange loss)Increase/(decrease) in provision for carried (140) - 1,819interest(Increase)/decrease in inventories (46) 38 121(Increase) in trade and other receivables (76) (387) (121)Increase/(decrease) in trade and other payables (88) 1,189 1,024Cash (outflow)/inflow generated from operating (273) 299 (225)activitiesCash from operating activitiesInterest received 70 41 71Interest paid (20) - (5)Net cash from operating activities (223) 340 (159)Cash flows from investing activitiesPurchase of property, plant & equipment (457) (74) (87)Purchase of intangible assets - (183) (334)Purchase of investments (128) (52) (52)Proceeds from sale of property, plant & equipment - 3 3Proceeds from sale of intangible fixed assets - - 740Receipts from sales of fixed asset investments 3 - 94Net cash outflows used in investing activities (582) (306) 364Cash flows from financing activitiesPurchase of own shares - (147) (668)Net cash generated from financing activities - (147) (668)Net decrease in cash and cash equivalents (805) (113) (463)Cash and cash equivalents at start of period 1,340 1,803 1,803Cash and cash equivalents at end of period 535 1,690 1,340 Statement of changes in Equity (unaudited) Capital Share Merger Redemption Minority Retained Capital Reserve Reserve Interest Earnings Totals £000 £000 £000 £000 £000 £000 At 1 July 2006 5,131 2,045 1,093 1 6,540 14,810Own shares acquired (71) - 71 - (148) (148)Loss for the period - - - (183) (498) (681)At 31 December 2006 5,060 2,045 1,164 (182) 5,894 13,981Own shares acquired (245) - 245 - (520) (520)Loss for the period - - - 182 373 555At 30 June 2007 4,815 2,045 1,409 - 5,747 14,016Loss for the period - - - - (864) (864)At 31 December 2007 4,815 2,045 1,409 - 4,883 13,152 Notes to the accounts 1. Basis of preparation of interim financial information The financial information for the 6 months ended 31 December 2006 and 31December 2007 does not constitute statutory accounts for the purposes of S240 ofthe Companies Act 1985 and has not been audited. For the year ended 30 June 2007, and previous accounting periods, the Groupprepared its audited full year and unaudited financial statements under UKGenerally Accepted Accounting Principles ("UK GAAP"). From 1 July 2007, theGroup is required to prepare its published financial statements in accordancewith International Financial Reporting Standards ("IFRS") as adopted by theEuropean Union ("EU") and implemented in the UK, as well as those parts of theCompanies Act 1985 that are applicable to companies reporting under IFRS. UKGAAP differs in some areas from IFRS. The Company's transition date for adoption of IFRS is 1 July 2006 and theCompany has prepared its opening IFRS balance sheet at that date. The interim financial statements of the Group for the six months ended 31December 2007 have been prepared in accordance with the principal accountingpolicies set out in Appendix 1 - these policies have been consistently appliedto all periods presented. The interim financial statements have been prepared inaccordance with those IFRS standards, as adopted by the EU, and IFRICInterpretations issued and effective as at the time of issuing these interimfinancial statements. The IFRS standards and IFRIC Interpretations that will beapplicable at 30 June 2008, including those that will be applicable on anoptional basis, are not known with certainty at the time of preparing theseinterim financial statements. The changes to accounting policies are explained in Appendix 2, together with areconciliation of the balance sheets at 30 June 2006, 31 December 2006 and 30June 2007, and of the profit and loss account for the periods at 31 December2006 and 30 June 2007, as reported under UK GAAP to the balance sheet and incomestatement under IFRS, as reported in these financial statements. The note alsoincludes a reconciliation of net assets at the date of transition. 2. Accounting policies The accounting policies used in the preparation of the financial information forthe 6 months ended 31 December 2007 are the IFRS accounting principles asexpected to be applied to the Group's first IFRS financial statements for theyear ended 30 June 2008, as set out in the IFRS transition statements on pages13 to 15. 3. Segmental information Unaudited Unaudited Unaudited 6 months ended 12 months ended 6 months ended 31 Dec 2006 30 Jun 2007 31 Dec 2007 (restated to (restated to IFRS) IFRS) £000 £000 £000 Revenue by products and servicesBars and nightclubs 4,970 6,934 12,548Rental income - 39 59 4,970 6,973 12,607 4. Earnings per share Unaudited Unaudited Unaudited 6 months ended 12 months ended 6 months ended 31 Dec 2006 30 Jun 2007 31 Dec 2007 (restated to (restated to IFRS) IFRS) £000 £000 £000 Loss for the period (864) (499) (125)Basic weighted and diluted number of 8,025,752 8,457,265 8,031,887sharesEarnings per share (pence) - Basic and (10.77) (5.90) (1.51)diluted 5. Exceptional items Unaudited Unaudited Unaudited 6 months ended 12 months ended 6 months ended 31 Dec 2006 30 Jun 2007 31 Dec 2007 (restated to (restated to IFRS) IFRS) £000 £000 £000 Provision for impairment of fixed asset 2 - 88investmentsDeal and merger costs:- Redundancy costs - 340 552- Cost on share buy back - 1 7- Cost of abortive deals 70 23 17Restructuring charges 89 334 807 161 698 1,471 6.Pro-forma information The Accounting Standards require the Group to consolidate Eclectic Bars Limited.Shareholders may find it useful to see the separate trading results and netassets of Avanti Capital plc and Eclectic Bars Limited as shown in thispro-forma. The adjustments shown within the pro-forma financial information enables areconciliation to be made to the consolidated interim results which comprise theusual consolidation items including fees and interest charged by the Group toEclectic Bars Limited and the inclusion within the pro-forma Profit and Loss, ofEBITDA for Eclectic Bars Limited for the 26 week period ended 30 December 2007. Eclectic Avanti Bars Group Capital plc Limited Adjustments TotalIncome Statement £000 £000 £000 £000 Revenue 53 4,970 (53) 4,970 53 4,970 (53) 4,970Less: cost of sales - (804) - (804)Gross profit 53 4,166 (53) 4,166Operating expenses (286) (3,818) 53 (4,051)Other income 2 55 - 57EBITDA (231) 403 - 172Depreciation (1) (151) - (152)Finance cost (913) (153) 133 (933)Finance revenue 203 - (133) 70Loss/(profit) on ordinary activities before (942) 99 - (843)Taxation and exceptional itemsExceptional items - other 138 (159) - (21)(Loss) on ordinary activities before (804) (60) - (864)taxationTaxation - - - -(Loss) on ordinary activities after (804) (60) - (864)taxationMinority interest - - - -(Loss) for the period After minority (804) (60) - (864)interest AssetsNon-current assetsGoodwill - 6,476 (2,022) 4,454Property, plant & equipment 4 1,172 - 1,176Financial assets held at fair values the 16,136 - (7,576) 8,560through income statement 16,140 7,648 (9,598) 14,190Current assetsInventories - 126 - 126Trade & other receivables 331 846 (134) 1,043Cash and cash equivalents 1,044 - - 1,044 1,375 972 (134) 2,213Current liabilitiesBank overdrafts - 509 - 509Finance leases - 4 - 4Trade & other payables 57 1,133 (134) 1,056 57 1,646 (134) 1,569Net current assets/(liabilities) 1,318 (674) - 644Total assets less current liabilities 17,458 6,974 (9,598) 14,834 Creditors: amounts falling due after oneyearShareholders' loan - (7,576) 7,576 -Finance leases - (3) - (3)Provisions (1,679) - - (1,679)Net assets 15,779 (605) (2,022) 13,152Represented by:Called up share capital 4,815 - - 4,815Capital redemption reserve 1,409 - - 1,409Merger reserve 2,045 - - 2,045Retained earnings 7,510 (605) (2,022) 4,883Shareholders' funds 15,779 (605) (2,022) 13,152 Appendix 1 Summary of significant accounting policies The principal accounting policies applied in the preparation of theseconsolidated financial statements are set out below. These policies have beenconsistently applied to all periods presented. 1. Basis of consolidation The Group financial statements consolidate those of the Company and itssubsidiary undertakings drawn up to 31 December 2007. Subsidiaries are entitiesover which the Group has the power to control the financial and operatingpolicies so as to obtain benefits from its activities. The Group obtains andexercises control through voting rights. The purchase method of accounting is used to account for the acquisition ofsubsidiaries by group companies. The cost of an acquisition is measured as thefair value of assets given, equity instruments issued and liabilities incurredor assumed at the date of acquisition, plus costs directly attributable to theexpansion. Identifiable assets acquired and liabilities and contingentliabilities assumed in a business combination are measured initially at theirfair values at the acquisition date. The excess acquired is recorded asgoodwill. If the cost of acquisition is less than the fair value of net assetsacquired, the difference is recognised directly in the income statement. 2. Segmental reporting A business segment is a group of assets and operations engaged in providingproducts or services that are subject to risks and returns that are differentfrom those of other business segments. Save for the product and servicesanalysis of turnover asset out in Note 3 to the half yearly results the Boardconsiders that the Group's activities are derived from UK. 3. Revenue recognition Turnover comprises the value of goods and services provided during the period,excluding value added tax. Each element of turnover is recognised when: (i) Supply of goods and services has taken place; (ii) There are no significant obligations remaining to be delivered; and (iii) Collection of the amount due from the customers is reasonablyassured. Income which is recognised in turnover but not invoiced at the period end isrecorded in prepayments and accrued income in debtors. Where invoices are raisedin advance of the provision of services they are recorded as deferred income increditors. 4.Property, plant and equipment All property, plant and equipment is shown at cost less accumulated depreciationand any accumulated impairment losses. Cost excludes expenditure that isdirectly attributable to the acquisition of the items. Depreciation is provided to write off the costs, less estimated residual values,of all fixed assets over its estimated useful life: a. Leasehold property Life of lease b. Leasehold improvements 4 years c. Furniture and fittings 4 years d. IT equipment 3 years e. Motor vehicles 3 to 5 years 5. Financial assets All investments undertaken by the Group are classified as financial assets heldat fair through the income statement. Any fair valuations, including impairment,are taken to the income statement. 6. Intangible assets - goodwill Goodwill represents the excess of cost of the purchase or certain assets andliabilities from a company that was under administration at the date ofpurchase. This goodwill is tested annually for impairment and carried at costless accumulated impairment losses. This goodwill is not allocated to a cash-generating unit as the group is notable to recognise if a benefit would arise from such treatment. 7. Trade receivables Trade receivables are recognised at fair value less provision for impairment. Aprovision for impairment is established when there is objective evidence thatthe group will not be able to collect all amounts due on the original terms ofthe receivables. 8. Cash and cash equivalents Cash and cash equivalents includes cash in hand, cash in transit, deposits heldat call with banks, other short-term liquid investments with original maturitiesless than three months or less. 9. Financial instruments and derivatives The Group's financial instruments comprise cash and cash equivalents and otheritems, such as trade receivables and trade payables that arise directly from itsoperations. The main purpose of these financial instruments is to provideworking capital and raise finance for the Group's operations. The group does not enter into derivative transactions such as interest rateswaps and forward contracts. 10.Trade payables Trade payables are recognised at fair value. 11. Borrowings Borrowings, including bank overdrafts, are recognised at fair value, net oftransaction costs incurred. Borrowings are classified as current liabilitiesunless the Group has an unconditional right to defer settlement of the liabilityfor at least one year after the balance sheet date. 12.Provisions Provisions for liabilities are recognised when the company has a present legalor constructive obligation as a result of past event, and it is considered morelikely than not that an outflow of resources will be required to settle thatobligation, and the amount can be reliably estimated. Provisions are measured atthe present value of the directors' best estimate of the expenditure required tosettle the obligation at the balance sheet date. 13. Deferred taxation Deferred tax balances are recognised in respect of all timing differences thathave originated but not reversed at the balance sheet date where transactions orevents that result in an obligation to pay more tax in the future or a right topay less tax in the future have occurred at the balance sheet date. Deferred tax assets are regarded as recoverable and recognised in the financialstatements when, on the basis of available evidence, it is more likely than notthere will be suitable taxable profits from which the future reversal of thetiming differences can be deducted. The recoverability of tax losses is assessedby reference to forecasts which have been prepared and approved by the Board.The deferred tax assets and liabilities are not discounted. 14. Foreign currencies Transactions in foreign currencies are recorded at the rate of exchange rulingat the date of the transaction. Monetary assets and liabilities denominated inforeign currencies are translated to sterling with the rate of exchange rulingat the balance sheet date. Differences on exchange arising from theretranslation of the opening net investments are taken to reserves and reportedin the statement of recognised gains and losses. All foreign exchangedifferences are taken to the income statement. 15. Operating leases Operating lease rentals are charged to the income statement on an accrual basisover the term of the lease. 16. Shares Ordinary shares are classified as equity. Incremental costs directlyattributable to the issue of new shares are shown equity as a deduction from theproceeds of the issue. This is applied to all share buybacks retrospectively. Appendix 2Explanations of transition to IFRS The tables below show the main impact of IFRS on: i. the consolidated income statements for the year ended 30 June 2007 (date oflast UK GAAP statements) and the six months ended 31 December 2006 (half yearcomparative period) and; ii. the consolidated balance sheets as at 1 July 2006 (date of transition toIFRS), 30 June 2007 (date of last UK GAAP statements) and 31 December 2006 (halfyear comparative period). The main areas of these financial statements impacted by the transaction to IFRSare detailed below. Consolidated Income Statement UK GAAP to IFRS reconciliation 6 months Effect of 6 months 12 months Effect of 12 months ended transition ended ended transition ended 31.12.2006 to IFRS 31.12.006 30.06.2007 to IFRS 30.06.2007 Notes £000 £000 £000 £000 £000 £000 Revenue 6,973 - 6,973 12,607 - 12,607Cost of sales (1,158) - (1,158) (2,112) - (2,112)Gross profit 5,815 5,815 10,495 10,495Administrative expenses - i (6,160) 321 (5,839) (13,821) 627 (13,194)othersOperating loss (345) 321 (24) (3,326) (2,699)(pre-exceptional items)Administrative expenses - (698) - (698) (1,471) - (1,471)exceptionalOperating loss (1,043) 321 (722) (4,797) 627 (4,170)(post-exceptional items)Other income - - - 105 - 105Operating loss (1,043) (722) (4,692) 627 (4,065)Gain on disposal of - - - 374 - 374tangible assetsFinance revenue ii 41 - 41 71 3,500 3,571Finance costs - - - (5) - (5)Loss on ordinary activities (1,002) 321 (681) (4,252) 4,127 (125)before taxationIncome tax expense - - - - - (1,002) (681) (4,252) 4,127 (125)Attributable to:Equity holders of the (820) 321 (499) (4,252) 4,127companyMinority interest (182) (182) - - (1,002) 321 (681) (4,252) 4,127 (125) Consolidated Balance Sheet UK GAAP to IFRS reconciliation At 30 June 2006 At 31 December 2006 At 30 June 2007 Effect Effect Effect UK GAAP of IFRS IFRS UK GAAP of IFRS IFRS UK GAAP of IFRS IFRS Notes £000 £000 £000 £000 £000 £000 £000 £000 £000 AssetsNon current assetsGoodwill i 4,214 - 4,214 4,076 321 4,397 3,827 627 4,454Property, plant & 1,513 - 1,513 1,406 - 1,406 871 - 871equipmentFinancial assets held at 6,362 - 6,362 6,411 - 6,411 9,276 - 9,276fair value throughincome statement 12,089 - 12,089 11,893 321 12,214 13,974 627 14,601Current AssetsInventories 201 - 201 163 - 163 80 - 80Trade and other 846 - 846 1,233 - 1,233 967 - 967receivablesCash and cash 1,803 - 1,803 1,690 - 1,690 1,457 - 1,457equivalents 2,850 - 2,850 3,086 - 3,086 2,504 - 2,504Current liabilitiesBank overdrafts - - - - - - (117) - (117)Finance leases - - - (4) - (4) (4) - (4)Trade and other payables (129) - (129) (1,305) - (1,305) (1,144) - (1,144) (129) - (129) (1,309) - (1,309) (1,265) - (1,265)Net current assets 2,721 - 2,721 1,777 - 1,777 1,239 - 1,239Total assets less 14,810 - 14,810 13,670 321 13,991 15,213 627 15,840current liabilitiesNon-current liabilitiesFinance leases - - - (10) - (10) (5) - (5)Provisions - - - - - - (1,819) - (1,819) - - (10) - (10) (1,824) - (1,824)Net Assets 14,810 - 14,810 13,660 321 13,981 13,389 627 14,016Capital and ReservesCalled up share capital 5,131 - 5,131 5,060 - 5,060 4,815 - 4,815Capital redemption 1,093 - 1,093 1,164 - 1,164 1,409 - 1,409reserveRevaluation reserve ii 1,984 (1,984) - 1,984 (1,984) - 5,484 (5,484) -Merger reserve 2,045 - 2,045 2,045 - 2,045 2,045 - 2,045Minority interests 1 - 1 (182) - (182) - - -Retained earnings 4,556 1,984 6,540 3,589 2,305 5,894 (364) 6,111 5,747Total equity 14,810 - 14,810 13,660 321 13,981 13,389 627 14,016 Notes IFRS adjustments i) IFRS 3 Business Combinations Under UK GAAP, goodwill arising on a business combination was amortised over itsestimated economic life. Under IFRS, goodwill is not amortised but is tested forimpairment at least annually. The adjustments therefore related to the writeback of goodwill amortisation charged from the date of transition to IFRS. ii) Financial income Financial assets held at fair value through profit and loss which werepreviously classified as fixed assets investments under UK GAAP and therevaluation taken to revaluation reserves. Under IFRS, these amounts arereflected in the income statement. Consolidated Cash Flow UK GAAP to IFRS reconciliation In relation to cash flow reporting, under UK GAAP the Group has previouslyreported its cash flows in accordance with FRS 1 (Revised 1996) 'Cash FlowStatements'. The objectives and principles of this standard are similar to thoseset out in the equivalent IFRS standard, IAS 7 'Cash Flow Statements'. Otherthan the differences in respect of classification of cash flow items, reportingunder IAS 7 has had no significant effect on the reports net cash flows for theyear ended 30 June 2007 (date of last UK GAAP statements) and the six monthsended 31 December 2006 (half year end comparative). Copies of this Announcement will be available, free of charge, from theCompany's office at 25 Harley Street, London W1G 9BR for a period of 1 monthfrom the date of this Announcement. A copy of this Announcement will also beavailable on the Company's website at www.avanticap.com. Independent review report to Avanti Capital plc Introduction We have been engaged by the Company to review the condensed set of financialstatements in the Interim Report for the six months ended 31 December 2007 whichcomprises the Group income statement, the Group statement of recognised incomeand expense, the Group balance sheet and the Group cash flow statement and therelated notes 1 to 5. We have read the other information contained in theInterim Report and considered whether it contains any apparent misstatements ormaterial inconsistencies with the information in the condensed set of financialstatements. This report is made solely to the Company in accordance with guidance containedin ISRE 2410 (UK and Ireland) "Review of Interim Financial Information Performedby the Independent Auditor of the Entity" issued by the Auditing PracticesBoard. To the fullest extent permitted by law, we do not accept or assumeresponsibility to anyone other than the Company, for our work, for this report,or for the conclusions we have formed. Directors' responsibilities The Interim Report is the responsibility of, and has been approved by, thedirectors. The directors are responsible for preparing the Interim Report inaccordance with the AIM Rules issued by the London Stock Exchange which requirethat it is presented and prepared in a form consistent with that which will beadopted in the company's annual accounts having regard to the accountingstandards applicable to such annual accounts. The condensed set of financial statements included in this Interim Report hasbeen prepared in accordance with the basis of preparation outlined in note 1 andwith the AIM Rules issued by the London Stock Exchange. Our responsibility Our responsibility is to express to the Company a conclusion on the condensedset of financial statements in the Interim Report based on our review. Scope of review We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, "Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity" issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making enquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly, wedo not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believethat the condensed set of financial statements in the Interim Report for the sixmonths ended 31 December 2007 is not prepared, in all material respects, inaccordance with the basis of preparation outlined in note 1 and in accordancewith the AIM Rules issued by the London Stock Exchange. Ernst & Young LLP London 28 March 2008 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
AVA.L