25th May 2006 07:00
Nanotech Energy plc25 May 2006 Nanotech Energy plc Unaudited preliminary results for the period ended 31 March 2006 Highlights: • Raised £650,000 before costs in successful placing and admission to AIM • New board of directors appointed • Loss of £204k for the period • Loss per share of 0.5 pence • Discussions concluded to make a strategic investment Directors' review Nanotech Energy plc presents its unaudited preliminary results for the periodfrom incorporation on 7 March 2005 to 31 March 2006. In the period the company has successfully been admitted to AIM, raising £650kbefore costs of £213k. On 12 December 2005 the board, having failed to find asuitable acquisition target in order to fulfill the company's originalinvestment strategy, was changed with the resignation of all the then existingdirectors, and the appointment of the current directors, Mr Robert Long and MrAdam Collins. On the same date the company' shares were suspended from tradingon AIM. The current directors have identified a strategic acquisition which will enableyour company to achieve its original stated goal. As announced on 21 April 2006,the directors intend to acquire Impact Funding (UK) Limited in a transactionwhich, due to the size of Impact Funding, will be classed as a reverse takeover.The company will acquire Impact Funding for £3.15m by way of the issue to ImpactFunding's existing shareholder, Impact Capital Limited of Australia, of newshares in Nanotech Energy plc. The directors also plan a placing to raiseadditional working capital to finance the business going forward. Details of theproposed acquisition and placing are set out in a separate announcement to bereleased today. Impact Funding is a disbursement funder, making loans to finance disbursementsincurred by claimants in legal actions such as industrial injury and employerliability cases. The company was incorporated in July 2004 and made its firstloans in December 2005. Although it is still at an early stage in the UK, themodel on which the business is based has been working successfully in Australiafor some 18 months, and the business operated by Impact Capital Limited inAustralia has built a loan book generating income of over A$250k per month atDecember 2005. Full details of this transaction are contained in a separate announcement to bereleased today. As a result the suspension of the company's shares to trading on AIM will beremoved at 8.00 a.m. today. The results for the period reflect the costs incurred, largely by the formerdirectors, in searching for suitable acquisitions as well as the costs ofadministering the company in the period. As a result the company has incurred aloss for the period of £204k. At the period end, the company held cash reservesof £305k to finance future operations. Your directors are confident that, if the proposals to be placed beforeshareholders shortly are approved, the company will be capable of showing strongprofitable growth in the next year. The directors expect to announce the date of the AGM shortly. R Long24 May 2006 Preliminary resultsUnaudited profit and loss account Note Period ended 31 Mar 2006 £ Turnover - _________Administrative expenses (209,330) _________Operating loss (209,330) Interest receivable 5,101 _________(Loss) on ordinary activities before tax (204,229) Taxation - _________(Loss) on ordinary activities after tax (204,229) _________Earnings per share - basic and fully diluted 13 (0.5)p _________ The operating loss for the period arises from the Company's continuingoperations. No separate Statement of Total Recognised Gains and Losses has been presented asall such gains and losses have been dealt with in the Profit and Loss Account. Preliminary results Unaudited balance sheet Note As at 31 Mar 2006 £ Current assetsDebtors 4 198Cash at bank and in hand 305,342 _______ 305,540 Creditors: Amounts falling due within one year 5 (72,307) _______Net current assets 233,233 _______Total assets less current liabilities 233,233 _______Net assets 233,233 _______ Capital and ReservesShare capital 7 216,667Share premium 8 220,795Profit and loss reserve 8 (204,229) _______ 233,233 _______ Preliminary resultsUnaudited cash flow statement Note Period ended 31 Mar 2006 £ Net cash outflow from operating activities 10.a (137,221) Returns on investments and servicing of finance 10.b 5,101 _______Cash outflow before financing (132,120) Financing 10.b 437,462 _______ Increase in cash in the period 305,342 _______ Reconciliation of net cash flow to movement in net debt Increase in cash in the period 305,342 Opening net funds - _______Closing net funds 10.c 305,342 _______ Notes to the preliminary results 1. Information in this preliminary announcement does not constitute statutory accounts of the Group within the meaning of Section 240 of the Companies Act 1985. The figures for theperiod ended 31 March 2006 are unaudited. The preliminary announcement is prepared on the same basis as set out in the interim statement for the period ended 30 September 2005. 2. Principal accounting policies The principal accounting policies adopted in the preparation of the financial information are set out below and have been consistently applied. Basis of accounting The financial information has been prepared under the historical cost convention, and in accordance with applicable accounting standards which have been consistently applied. Financial instruments Financial instruments are categorised as held for trading or held as hedges. The fair value of all instruments held for trading is recognised in the balance sheet and all unrealised profits and losses are taken to operating profit. All hedging instruments are matched with their underlying hedged item. Each instrument's gain or loss is brought into the profit and loss account and its fair value into the balance sheet, at the same time and in the same place as is the matched underlying asset, liability, income or cost. For foreign exchange and commodity instruments this will be in the operating profit matched against the relevant purchase or sale, and for interest rate instruments within interest payable or receivable over the life of the instrument or relevant interest period. The profit or loss on an instrument may be deferred if the hedged transaction is expected to take place or would normally be accounted for in a future period. Changes in the fair value of most financial instruments or the underlying hedged item are not recognised in the profit and loss account. All premiums or fees, paid or received in respect of a financial instrument are accounted for over the life of the matched underlying asset, liability, income or cost, even if the instrument has been sold. If the matched underlying asset, liability, income or cost ceases to exist, or is no longer considered likely to exist in the future, the hedging instrument is sold. Any profit or loss on the sale is recognised in the profit and loss account as part of operating profit. 3. Particulars of employees The average number of staff employed by the Company during the financial periodamounted to: Period ended 31 Mar 2006 Number of management 1 ______The aggregate payroll costs of the above were: £ Wages and salaries 14,688 ______ 4. Directors' remuneration Period ended 31 Mar 2006 £'000 Fees 14,688 ______ The director's fees above relate to services rendered by J McColl in hiscapacity as Chairman for the period in office. During the period, directors' fees were included within the management feestotalling £79,313 charged by Griffin Securities (UK) Limited, a companyassociated with certain of the previous directors of the Company (see note 6). Under the terms of their service contracts fees of £60,000 have been accrued forthe services of R Long and A Collins as directors for the period from 9 December2005 to 31 March 2006. 5. Debtors Period ended 31 Mar 2006 £ Prepayments and accrued income 198 ______ 6. Creditors: amounts falling due within one year Period ended 31 Mar 2006 £ Trade creditors 1,507Accruals and deferred income 70,800 ______ 72,307 ______ 7. Related party transactions On 22 March 2005 the Company paid £100,000 to Griffin Corporate Finance Limited("Griffin"), a company associated with the former directors of Nanotech, StephenDean and Vincent Nicholls, in respect of corporate finance fees in connectionwith the Company's initial admission to trading on AIM. On 22 March 2005 the Company entered into a corporate services agreement withGriffin . Under this agreement fees of £79,313 were paid to Griffin for theservices of the directors, together with administrative and financial managementservices during the period. This agreement was terminated on 12 December 2005when both directors resigned from the Company. On 19 May 2005 an amount of £250,000 was advanced to Griffin as a short termloan. The loan was unsecured and did not bear any interest, and was repaid on 26August 2005. On 27 October 2005 an amount of £50,000 was advanced to Ionian Estates plc, acompany of which Vincent Nicholls is a director. This transaction was in respectof a potential investment opportunity in Cyprus property which did notmaterialise and funds were remitted back to the Company in full on 13 December2005. On 31 October 2005 an amount of £160,000 was advanced to Camelot Realty Limited,a company associated with Ionian Estates plc by virtue of common directorships.The advance was for an intended investment in Cyprus property which did notmaterialise and the funds were remitted back to the Company in full on 13December 2005. 8. Share capital As at 31 Mar 2006 £Authorised200,000,000 ordinary shares of 0.5p each 1,000,000 _________ Allotted, called up and fully paid43,333,333 ordinary shares of 0.5p each 216,667 _________ On incorporation, the Company had an authorised share capital of £1,000,000divided into 100,000,000 ordinary shares of 1p each of which two subscribershares were issued to the subscribers. From the date of incorporation to 31 March 2006 the following transactions werecompleted: On 16 March 2005: • the Company issued a further 4,999,998 ordinary shares of 1p each at nominal value which were fully paid up, and the two subscriber shares were paid up to the same amount; and • the ordinary shares of 1p each were sub-divided into 2 ordinary shares of 0.5p each. On 16 March 2005 the Company issued a total of 5,000,000 warrants to GriffinSecurities (UK) Limited. Each warrant entitles the holder to subscribe for oneordinary share at 1p. These were subsequently exercised on 30 June 2005 and 8July 2005 respectively in batches of 2,500,000 ordinary shares for cash at aprice of 1p per share. On 18 March 2005 the Company issued a further 15,000,000 ordinary shares forcash at an issue price of 1p per ordinary share. On 23 March 2005 a further 13,333,333 ordinary shares of 0.5p each were issuedon admission of the Company to the Alternative Investment Market at 3p perordinary share. Warrants: On 22 March 2005 the Company issued warrants to subscribe for 2,500,000 ordinaryshares to Griffin Securities (UK) Limited, exercisable at any time within theperiod of three years from admission at a subscription price of 3p per ordinaryshare. On 19 July 2005 the Company issued warrants to a former director, Mr JA McColl,to subscribe for 8,000,000 ordinary shares of 0.5p each at a subscription priceof 3p per share at any time up to 18 July 2008. 9. Reserves Share premium Profit and loss account account £ £ At the beginning of the period - - Retained loss for thefinancial period - (204,229)Premium on shares issued inthe period 433,333 -Costs incurred (212,538) - _________ _________At the end of the period 220,795 (204,229) _________ _________ 10. Reconciliation of movement in shareholders' funds As at 31 Mar 2006 £ Loss for the financial period (204,229) New equity share capital subscribed 216,667Premium on shares issued in the period 433,333Costs incurred (212,538) _________Net addition to shareholders' funds 233,233 Opening shareholders' equity funds - _________Closing shareholders' equity funds 233,233 _________ 11. Cash flows a) Reconciliation of operating loss to net cash outflow from operating activities Period ended 31 Mar 2006 £ Operating loss (209,330)Increase in debtors (198)Increase in creditors 72,307 _________Net cash outflow from operating activities (137,221) _________ b) Analysis of cash flows for headings netted in the cash flow Returns on investment and servicing of finance Period ended 31 Mar 2006 £ Interest receivable 5,101 _________Net cash inflow from returns on investments & servicing of finance 5,101 _________ Financing Period ended 31 Mar 2006 £ Issue of shares 650,000Expenses of share issues (212,538) _________Net cash inflow from financing 437,462 _________ c) Analysis of debt Period ended 31 Mar 2006 £ Cash in hand and at bank 305,342 _________ 12. Financial instruments The financial instruments employed by the Company other than short term debtorsand creditors are used to fund its operations and comprise cash in a currentaccount. The Company's policy during the period ended 31 March 2006 was to place all cashwith its bankers. Surplus funds are intended to support the Company's workingcapital requirements. The Company finances its operations through raising moneyon flotation to AIM. It is not the Company's policy to enter into financialderivatives for speculative or trading purposes. The Company's exposure to interest rate risk is limited to its loan facility andcash deposits which are typically floating rate. As permitted by FinancialReporting Standard ("FRS") No. 13 the disclosures below exclude short-termdebtors and creditors. Interest rate risk profile of financial assets The interest rate profiles of financial assets of the Company over the periodwere as follows: Period ended 31 Mar 2006 £ Floating rate financial assets 305,342 _________ Fair values of financial assets and financial liabilities The fair values, based upon the market value or discounted cash flows of thefinancial instruments detailed above were not materially different from theirbook values. 13. Earnings per share The calculation of basic earnings per share is based on losses of £204,229 andon 40,599,828 ordinary shares being the weighted average number of shares inissue in the period. The loss for the period and the weighted average number of shares in issue forcalculating the diluted earnings per share are identical to those used for thebasic earnings per share. This is because the outstanding options and warrantswould have the effect of reducing the loss per ordinary share and wouldtherefore not be dilutive under Financial Reporting Standard 22. 14. Control In the opinion of the Directors there is no single controlling party. 15. Other information The board of directors of Nanotech Energy plc approved the preliminary resultson 24 May 2006. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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