28th Oct 2011 07:00
COBURG GROUP PLC
("Coburg" or "the Company")
Preliminary Results Announcement
for the year ended 30 April 2011
Chairman's Statement
The results for the year as reflected in the Group Statement of Comprehensive Income shows a loss after of tax £146,000 compared with a profit of £124,000 (as restated) in the previous year. The loss was struck after providing for a write down £50,000 in the carrying value of goodwill in the balance sheet.
The results also include, as normal, costs of about £60,000 relating to the maintenance of the Company's listing on the AIM Market. Overheads were well controlled but the main problem was a sharp deterioration in gross margins caused by our inability to pass on to customers the full impact of the big rise in green coffee prices experienced during the period.
The directors still believe the coffee roasting business has good prospects and are confident that the business will return to profitability in due course.
Sales in the second half showed an improvement over the first half. Present indications suggest that sales for the current year will be approximately £2 million. However it is unlikely that the coffee business can return to sustained profitability until the price pressure
on raw coffee is reduced and price levels become more stable.
The directors are exploring various strategic scenarios to reduce the group's exposure to the coffee business. This may involve bringing in new investors or divesting all or part of the business so that future funding will no longer be the responsibility of Coburg Group plc shareholders.
Tudeley Holdings Ltd of which I am a director and major shareholder is a significant shareholder of the group, and has continued to provide a secured loan facility of £100,000 to the coffee roasting business. It has also agreed to provide some additional limited support should this be needed during this transition stage provided that Group's sales and cash flow continue broadly in line with the Group's forecasts.
In this way it is hoped that the AIM listed company can expand and develop in new directions. In due course this may require the Company to be 'reclassified' as an investing company which will require the approval of shareholders. The directors and major shareholders are hopeful that they will be able to identify suitable new opportunities for the Company.
K P LEGG
Chairman
Enquiries:
Konrad Legg | Coburg Group PLC | +44 (0)20 8317 0103 |
Colin Aaronson | Grant Thornton Corporate Finance | +44 (0)20 7383 5100 |
Nick Emerson | Simple Investments | +44 (0)14 8341 3500 |
Group Statement of Comprehensive Income
FOR THE YEAR ENDED 30 APRIL 2011
As restated | |||
2011 | 2010 | ||
£000 | £000 | ||
Revenue | 1,750 | 3,160 | |
Cost of sales | (1,174) | (2,300) | |
Gross profit | 576 | 860 | |
Distribution costs | (156) | (206) | |
Administrative expenses | (546) | (508) | |
Group operating (loss)/profit | (126) | 146 | |
Finance costs | (20) | (22) | |
(Loss)/ profit before tax | (146) | 124 | |
Tax | - | - | |
(Loss)/Profit after tax and total comprehensive income |
(146) |
124 | |
(Loss) / Profit per share expressed in pence per share: | |||
Basic | (51.84) | 44.02 | |
Diluted | (51.84) | 44.02 |
The (loss) / profit is attributable to equity holders
Group Statement of Changes in Equity
FOR THE YEAR ENDED 30 APRIL 2011
Issued | Share | ||||
share | premium |
Other |
Retained | ||
capital | account |
Reserves* |
earnings | Total | |
£000 | £000 | £000 | £000 | £000 | |
Balance as at 1 May 2009 | 1,190 | 418 | 426 | (1,754) | 280 |
Profit for the year as previously stated | - | - | - | 106 | 106 |
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Balance as at 30 April 2010 | 1,190 | 418 | 426 | (1,648) | 386 |
Balance as at 1 May 2010 | 1,190 | 418 | 426 | (1,648) | 386 |
Prior year adjustment (note 19) | - | - | - | 18 | 18 |
Balance as at 1 May 2010 As restated | 1,190 | 418 | 426 | (1,630) | 404 |
Loss for the year | - | - | - | (146) | (146) |
Shares issued in the year | 17 | 215 | - | - | 232 |
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Balance as at 30 April 2011 | 1,207 | 633 | 426 | (1,776) | 490 |
*At the 30 April 2011 the other reserves consists of the merger relief reserve brought forward. At 1 May 2009 other reserves included £9,000 in respect of the share option reserve.
Company Statement of Changes in Equity
FOR THE YEAR ENDED 30 APRIL 2011
Issued | Share | ||||
share | premium |
Other |
Retained | ||
capital | account |
Reserves* |
earnings | Total | |
£000 | £000 | £000 | £000 | £000 | |
Balance as at 1 May 2009 | 1,190 | 418 | 426 | (1,933) | 101 |
Loss for the year | - | - | - | 11 | 11 |
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Balance as at 30 April 2010 | 1,190 | 418 | 426 | (1,922) | 112 |
Balance as at 1 May 2010 | 1,190 | 418 | 426 | (1,922) | 112 |
Loss for the year | - | - | - | (26) | (26) |
Shares issued in the year | 17 | 215 | - | 3 | 235 |
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Balance as at 30 April 2011 |
1,207 | 633 | 426 | (1,945) | 321 |
*At the 30 April 2011 the other reserves consists of the merger relief reserve brought forward. At 1 May 2009 other reserves included £9,000 in respect of the share option reserve.
Group Statement of Financial Position
AS AT 30 APRIL 2011
As restated | |||||||
2011 | 2010 | ||||||
£000 | £000 | ||||||
Assets | |||||||
Non-current assets | |||||||
Goodwill | 147 | 198 | |||||
Intangible assets | - | - | |||||
Property, plant and equipment |
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Investments | 19 | - | |||||
437 | 491 | ||||||
Current assets | |||||||
Inventories | 258 | 208 | |||||
Trade and other receivables | 291 | 452 | |||||
Cash and cash equivalents | 54 | 72 | |||||
603 | 732 | ||||||
Liabilities | |||||||
Current liabilities | |||||||
Trade and other payables | 438 | 713 | |||||
Financial liabilities - borrowings | |||||||
Bank overdrafts | 42 | 31 | |||||
Interest bearing loans and borrowings | 29 | 52 | |||||
509 | 796 | ||||||
Net current assets / (liabilities) | 94 | (64) | |||||
Non-current liabilities | |||||||
Trade and other payables | - | - | |||||
Financial liabilities - borrowings | 40 | - | |||||
Interest bearing loans and borrowings | 1 | 23 | |||||
41 | 23 | ||||||
Net assets | 490 | 404 | |||||
Shareholders' equity | |||||||
Called up share capital | 1,207 | 1,190 | |||||
Share premium | 633 | 418 | |||||
Other reserves | 426 | 426 | |||||
Retained earnings | (1,776) | (1,630) | |||||
Total equity | 490 | 404 |
Company Statement of Financial Position
AS AT 30 APRIL 2011
2011 | 2010 | ||
£000 | £000 | ||
Assets | |||
Non-current assets | |||
Goodwill | 21 | 97 | |
Investments | 77 | 59 | |
98 | 156 | ||
Current assets | |||
Trade and other receivables | 275 66 | 66 | |
Cash and cash equivalents | 40 | - | |
315 | 66 | ||
Liabilities | |||
Current liabilities | |||
Trade and other payables | 32 | 62 | |
Financial liabilities - borrowings Bank overdrafts
| - | - | |
Interest bearing loans and borrowings | 20 | 33 | |
52 | 95 | ||
Net current assets | 263 | (29) | |
Non current liabilities | |||
Interest bearing loans and borrowings | 40 | 15 | |
40 | 15 | ||
Net assets | 321 | 112 | |
Shareholders' equity | |||
Called up share capital | 1,207 | 1,190 | |
Share premium | 633 | 418 | |
Other reserves | 426 | 426 | |
Retained earnings | (1,945) | (1,922) | |
Total equity | 321 | 112 |
Group Statement of Cash Flows
FOR THE YEAR ENDED 30 APRIL 2011
2011 | 2010 | ||
£000 | £000 | ||
Cash flows from operating activities | |||
Cash generated from operations | (192) | 204 | |
Interest paid | (17) | (16) | |
Interest element of hire purchase payments paid | (3) | (6) | |
Net cash from operating activities | (212) | 182 | |
Cash flows from investing activities | |||
Purchase of tangible fixed assets | (33) | (29) | |
Sale of tangible fixed assets | 6 | - | |
Purchase of investments | (19) | - | |
Net cash from investing activities | (46) | (29) | |
Cash flows from financing activities | |||
Issue of ordinary share capital | 235 | - | |
Loans advanced in the year | 40 | - | |
Bank loan repayments in the year | (37) | (34) | |
Hire purchase repayments in year | (12) | (9) | |
Net cash from financing activities | 226 | (43) | |
Increase/(decrease) in cash and cash equivalents | (32) | 110 | |
Cash and cash equivalents at beginning of year | 42 | (68) | |
Cash and cash equivalents at end of year | 10 | 42 |
Company Statement of Cash Flows
FOR THE YEAR ENDED 30 APRIL 2011
2011 | 2010 | ||
£000 | £000 | ||
Cash flows from operating activities | |||
Cash generated from operations | (163) | 30 | |
Interest paid | (1) | (2) | |
Net cash from operating activities | (164) | 28 | |
Cash flows from investing activities | |||
Purchase of investments | (19) | - | |
Net cash from investing activities | (19) | - | |
Cash flows from financing activities | |||
Loans advanced in the year | 40 | 3 | |
New shares issued in the year | 235 | - | |
Capital repayments in year | (52) | (31) | |
Net cash from financing activities | 223 | (28) | |
Increase in cash and cash equivalents | 40 | - | |
Cash and cash equivalents at beginning of year | - | - | |
Cash and cash equivalents at end of year | 40 | - |
Notes to the Financial Statements
FOR THE YEAR ENDED 30 APRIL 2011
1. Notes
Basis of preparation These consolidated financial statements have been presented in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) and have been prepared in accordance with AIM rules and the Companies Act 2006, as applicable to companies reporting under IFRS.
These consolidated financial statements have been prepared in accordance with the accounting policies set out in the annual report and accounts for the year ended 30 April 2010, and under the historical cost convention, except where modified by the revaluation of certain financial instruments and commodities.
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The consolidated financial statements incorporate the financial statements of the company and all principal subsidiaries for the year ended 30 April 2011.
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The financial information set out in this announcement does not constitute the Company's statutory accounts for the year ended 30 April 2011 or 30 April 2010, but is derived from those accounts. The financial information set out above does not constitute the company's statutory accounts within the meaning of section 240 of the Companies Act 1985. The 2011 figures are based on unaudited accounts for the year ended 30 April 2011. The statutory accounts will be finalised on the basis of the financial information presented by the directors in the preliminary announcement and which will be delivered to the Registrar of Companies following the company's annual general meeting. Statutory accounts for the year ended 30th April 2010 have been delivered to the Registrar of Companies .The auditors have reported on those accounts; their reports were unqualified and did not contain statements under S237 (2) or (3) Companies Act 1985. Prior Year Adjustment A prior year adjustment has been made to correct a fundamental accounting error in accordance with International Accounting Standard 8 'Accounting policies, change in accounting estimates and errors' as overheads had not been correctly absorbed within stock as directed by International Accounting Standard 2 'Inventories'. The effect is to reduce the increase the previous year's closing stock figure and increase the previous years retained profit by £18,074.
Going concern Accounting standards require the directors to consider the appropriateness of the going concern basis when preparing the financial statements. The directors confirm that they consider that the going concern basis remains appropriate. The directors have taken notice of the Financial Reporting Council guidance 'Going Concern and Liquidity Risk: Guidance for Directors of UK Companies 2010' which requires the reasons for this decision to be explained. The Group made a net loss of £146,000 during the year to 30 April 2011, at that date the Group's statement of financial position showed net current assets of £94,000. The Group's financial projections indicate that the Group requires additional cash resources to continue to meet its liabilities as they fall due over the next 12 months.
These conditions indicate the existence of a material uncertainty which may cast significant doubt about the Company's and Group's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Company and Group were unable to continue as a going concern. The Directors are addressing the cash-flow shortages in the following manner: ·; Careful management of working capital requirements ·; Tudeley Holdings Limited, a company controlled by Konrad Legg a major shareholder and Director, has provided the group with £100,000 under a debenture facility. Tudeley Holdings Limited has confirmed that it will not call for repayment of this for at least 12 months from the date these financial statements are signed. In addition the Tudeley Holdings Limited will provide some limited support for the group provided that sales and cash flow continue broadly in line with the Group's forecasts. ·; The directors are exploring various strategic scenarios to reduce the group's exposure to the coffee business. This may involve bringing in new investors or divesting all or part of the business so that future funding will no longer be the responsibility of Coburg Group plc shareholders.
Despite the uncertainties highlighted above, as directors we have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus we have continued to adopt the going concern basis of accounting in preparing the annual financial statements.
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