14th Dec 2006 07:30
Future Internet Technologies PLC14 December 2006 14 December 2006 FUTURE INTERNET TECHNOLOGIES PLC (the "Company", "FIT") INTERIM RESULTS RESTATED UNDER IFRS FOR THE SIX MONTHS ENDED 31 DECEMBER 2005 Introduction The directors have elected to prepare the financial statements and annual reportof the Company for the year to 30 June 2006 in accordance with InternationalFinancial Reporting Standards ('IFRS'). Previously the Group has prepared itsFinancial Statements in accordance with UK Generally Accepted AccountingPrinciples ('UK GAAP'). The interim statement for the six months to 31 December 2005 was announced on 30March 2006 and was prepared in accordance with UK GAAP. As a result of theCompany adopting IFRS the Company is required to restate its interim report forthe six months to 31 December 2005 under IFRS. This document is the restatement of the interim report for the six months to 31December 2005 under IFRS. The one adjustment as a result of the transition to IFRS on the Company'sinterim results is due to the adoption of IFRS 2. IFRS 2 requires an expense tobe recognised for share based payments. The quantum of this expense shouldequate to the fair value of the services rendered for the receipt of the sharebased payment. During the six month period ended 31 December 2005, the Companyawarded warrants to professional advisors and the directors of the Company forservices rendered for the private placing of shares in November 2005. The fairvalue of these services has been estimated to be £336,000. The transition toIFRS has therefore increased the loss for the six month period ended 31 December2005 by £336,000. This adjustment has no effect on net assets. FUTURE INTERNET TECHNOLOGIES PLC INTERIM ACCOUNTS RESTATED UNDER IFRS FOR THE SIX MONTHS ENDED 31 DECEMBER 2005 INCOME STATEMENT 6 months Year 6 months ended ended ended 31 Dec 30 June 31 Dec 2005 2005 2004 Unaudited Audited Unaudited Notes £'000 £'000 £'000 Administrative expenses (489) (31) (16)Other operating income - 15 18Operating (loss) /profit (489) (16) 2 Investment revenues 37 25 13Other gains and losses - (15) - 37 10 13 (Loss) /profit for the period (4) (452) (6) 15 (Loss) /earnings per share in pence (1) (0.92) (0.03) 0.09 There were no recognised gains or losses other than the (loss) / profit for eachperiod as shown above. FUTURE INTERNET TECHNOLOGIES PLC INTERIM ACCOUNTS RESTATED UNDER IFRS FOR THE SIX MONTHS ENDED 31 DECEMBER 2005 BALANCE SHEET 31 Dec 30 June 31 Dec 2005 2005 2004 Unaudited Audited Unaudited Note £'000 £'000 £'000 Non-current assetsInvestments 18 18 33Current assetsTrade and other receivables 53 5 5Cash at bank and in hand 8,329 552 561 Total assets 8,382 557 566Current liabilitiesTrade and other payables (13) (16) (19)Net current assets 8,369 541 547 Net assets 8,387 559 580 EquityCalled up share capital (2) 1,761 4,654 4,654Share premium account 8,940 2,596 2,596Capital redemption reserve (2) 4,493 - -Share warrant reserve 336 - -Profit and loss account (7,143) (6,691) (6,670)Total equity 8,387 559 580 FUTURE INTERNET TECHNOLOGIES PLC INTERIM ACCOUNTS RESTATED UNDER IFRS FOR THE SIX MONTHS ENDED 31 DECEMBER 2005 CASH FLOW STATEMENT 6 months Year ended 6 months ended 30 June 2005 ended 31 Dec 2005 Audited 31 Dec 2004 Unaudited £'000 Unaudited £'000 £'000 Net cash used in operating activities (204) (23) (2) Investing activitiesInterest received 37 25 13 Net cash from investing activities 37 2 11Financing activitiesProceeds on issue of shares 7,944 - - Net cash from financing activities 7,944 - - Net increase in cash and cash equivalents 7,777 2 11 Cash and cash equivalents at beginning of year 552 550 550 Cash and cash equivalents at end of year 8,329 552 561 Notes to the cash flow statement 31 Dec 2005 30 June 2005 31 Dec 2004 Unaudited Audited Unaudited £'000 £'000 £'000 Loss from continuing operations (452) (6) 15Adjustments for: Investment revenues (37) (25) (13) Impairment of investment - 15 - Share based payment expense 336 - - Operating cash (outflows) / inflows before movements in working capital (153) (16) 2 (Increase) / decrease in receivables (48) 1 1 (Decrease) / increase in payables (3) (8) (5) Net cash outflow from operating activities (204) (23) (2) FUTURE INTERNET TECHNOLOGIES PLC INTERIM ACCOUNTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2005 NOTES TO THE ACCOUNTS 1. Earnings per share Earnings per share have been calculated on the basis of the loss after taxationof £452,000 (year ended 30 June 2005 £6,000 loss, six months ended 31 December2004 £15,000 profit) and the weighted average number of shares in issue in theperiod of 49,093,485 (year ended 30 June 2005 16,050,007, six months ended 31December 2004 16,050,007). 2. Share Capital On 22 December 2005 the Company bought back all of its issued deferred sharecapital comprising 900,447 shares with a nominal value of £4.99 each for a totalconsideration of 1 pence. The effect of this transaction has been to reduceissued share capital by £4,493,231 and create a capital redemption reserve ofthe same amount. 3. Status of these accounts The interim accounts for the six months to 31 December 2005 are unaudited. Thefinancial information set out in this statement does not constitute statutoryaccounts within the meaning of the Companies Act 1985. The comparative figuresfor the year ended 30 June 2005 are not the statutory accounts for that year butare abridged from those accounts which have been reported on by the Company'sformer auditors and delivered to the registrar of Companies. The report of theformer auditors was unqualified and did not contain a statement under section237(2) or (3) of the Companies Act 1985. The comparative figures have beenrepresented in an IFRS format, however, are not in compliance with IAS 34 'Interim Financial Reporting'. 4. Loss for the period The loss for the period ended 31 December 2005 is stated after charging £120,000of professional costs incurred in connection with an abortive acquisition. The loss for the year ended 30 June 2005 is stated after a provision for thediminution in value of the Company's holding of Magically Inc Series EConvertible Preferred Stock. 5. Events arising after the period end On 6 March 2006 the Company acquired 49% of the issued capital of Artilium N.V.("Artilium") for cash consideration of €7.5 million. As part of thetransaction the Company was granted an option to acquire the balance of theissued share capital of Artilium within 12 months for consideration of 6 millionordinary shares in the Company. This option was exercised on 21 June 2006. On 16 March 2006, trading in FIT's shares was suspended at the Company's requestpending the posting of a circular to shareholders providing further detail oncertain proposed transactions with Advance Global Communications, Inc ("AGC")and Artilium. The Company has been in continual consultation with the AIM teamof the London Stock Exchange concerning a possible extension to the applicationof Rule 41 of the AIM Rules which would otherwise result in the Company'slisting being terminated on 16 September 2006 due to the current suspensionhaving continued for more than a six month period. It has been agreed with theAIM team that the Company's shares will remain suspended pending the publicationof such a circular, which is now envisaged to be on or around 15 December 2006. On 13 October, after extensive discussions with the shareholders of AGC, it wasagreed between the parties that the Company would not proceed to acquire any ofthe share capital of AGC. However, the Company will complete the reversetakeover of Artilium on or around 4 January 2007 subject to the approval ofshareholders. On 11 September 2006, The Board of Directors agreed the sale, to FlasktentLimited ("Flasktent"), of certain of the Company's intellectual property andphysical assets pertaining to a potential consumer offering and the rightsrelated thereto. As a result of the sale of certain assets to Flasktent, theCompany will no longer pursue the creation of a consumer branded "UnifiedCommunication Service". Instead, the Company and its subsidiary, Artilium, (the"Group") will focus upon opportunities in the business-to-business ("B2B") andbusiness-to-business-to-customer ("B2B2C") communication sector based oncompletion of the transaction outlined above. On 10 September 2006, RobertBonnier resigned as Chief Executive and director of FIT and left the Company.Paul Gratton, Executive Chairman of FIT, has assumed the role of acting ChiefExecutive. Pursuant to the transaction, Flasktent acquired certain assets whichhad yet to become revenue generating and had a capitalised value ofapproximately £1.3 million. In consideration for the assets, Flasktent assumedapproximately £3.0 million of existing FIT obligations of which £1.2 millionwere currently due at the date of the transaction. FIT may also receive up to£15 million of deferred consideration, which is contingent upon a realisation ofequity in Flasktent for value within three years of the transaction date.Certain personnel also transferred from FIT to Flasktent. FIT agreed to make afurther payment in respect of the development costs of Flasktent's proposition,the net effect to the Group being approximately £0.1 million. Flasktent willassume the future commitments relating to the assets thus removing any furtherobligations from the Company. On 8 December 2006 resolutions were passed at an EGM to reorganise the sharecapital of the Company. The effect of the capital reorganisation is to removeshareholders holding less than 20 shares from the Company's share register. 6. Explanation of transition to IFRS This is the first period that the company has presented its financial statementsunder IFRS and the table below sets out the effect of the transition to IFRS onthe interim statement for the six months to 31 December 2005. There have been no adjustments to profit after tax and shareholders' equity at 1July 2004, 31 December 2004 and 30 June 2005 required when reconciling suchamounts recorded in the accounts to the corresponding amounts in accordance withIFRS. The profit reported under UK GAAP and the profit reported under IFRS for the 6months ended 31 December 2004 and the loss for the year ended 30 June 2005, isthe same. The Company's equity reported under UK GAAP and the Company's equityreported under IFRS at both 1 July 2004, 31 December 2004 and at 30 June 2005 isalso the same. Reconciliation of equity at 31 December 2005 Effect of Transition UK GAAP to IFRS IFRSNon-current assetsInvestments 18 - 18Total non-current assets 18 - 18 Current assetsTrade and other receivables 53 - 53Cash and cash equivalents 8,329 - 8,329 Total current assets 8,382 - 8,382 Total assets 8,400 - 8,400 Current liabilitiesTrade and other payables (13) - (13) Net assets 8,387 - 8,387 EquityShare capital 1,761 - 1,761Share premium 8,940 - 8,940Capital redemption reserve 4,493 - 4,493Share warrant reserve - 336 336Retained earnings (6,807) (336) (7,143) Total equity 8,387 - 8,387 Notes to the reconciliation of equity at 31 December 2005 The adoption of IFRS has required an estimate of £336,000 relating to the fairvalue of the warrants granted to advisors and directors in December 2005. Thedecrease in retained earnings is offset by the creation of a share warrantreserve and therefore there is no effect on the Company's total equity. Reconciliation of loss for six months to 31 December 2005 Effect of Transition UK GAAP to IFRS IFRS Revenue - - -Cost of sales - - - Gross profit - - - Administrative expenses (33) (456) (489)Other operating income - - -Exceptional items (120) 120 - Operating loss (153) (336) (489) Investment revenues 37 - 37Other gains and losses - - - Loss before tax (116) (336) (452)Tax - - -Loss for the period (116) (336) (452) Notes to the reconciliation of loss for the six months to 31 December 2005 The adoption of IFRS has required an estimate of £336,000 relating to the fairvalue of the warrants granted to advisors and directors in December 2005. Thishas led to an increase in loss for the period of £336,000. 7. Availability of Interim Accounts Copies of the Interim Accounts will be available from the Company's registeredoffice at 7th Floor, CityPoint, One Ropemaker Street, London EC2Y 9AW. For further information please contact: Future Internet Technologies plc Via Financial DynamicsPaul Gratton, Executive ChairmanTony Lynch, Finance Director Financial Dynamics Tel: 020 7831 3113Harriet Keen/James Melville-Ross/Matt Dixon This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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