24th Nov 2006 07:01
Core Business PLC (The)24 November 2006 PRESS RELEASE For immediate release: 24 November 2006 The Core Business: Results - Year ended 31 May 2006 The Core Business PLC, ('the Company') the innovative beauty brand business,today announced its results for the year to 31 May 2006. Highlights: •Successful listing on AIM and raising of £235,000 after expenses. •Major consultancy projects undertaken for a range of personal, skin and hair care brands and lifestyle brands including: •Creation of a commercial and marketing strategy for Imedeen, the oral beauty supplement owned by Dutch pharmaceutical company Ferrosan Ltd •Development of a business proposition for a male grooming range for Ministry of Sound; •Development and launch of a range of professional hair care products for Racoon International; •Creation and development of hair care brands for Lucinda Ellery, Clipso and a skin care brand for Coco Ribbon; •Undertaking market research and preparing an entry plan to the UK market for Black Up, a premium ethnic cosmetics company and developing a marketing, communication and retail strategy for cosmetics brand Sleek International; •Overseeing and guiding the re-launch of Manicare, a nail treatment and beauty accessory brand, and introducing its ranges to major retailers including Boots, Superdrug and Ideal World TV; and •Distribution secured for sun care brand Blockhead (in which The Core Business has an equity stake) through World Duty Free, www.mankind.co.uk and a distributor in Ireland. Commenting on the results and outlook, Mark Watson-Mitchell, Chairman, said: "The successful AIM listing and fundraising has taken The Core Business to a newstage in its development, the benefits of which will become apparent over thenext year or so. The entire flotation process has helped to strengthensignificantly the management's ability to secure new business. And theheightening of the Company's corporate profile has boosted the number ofcompanies seeking its help in extending their own brands through theintroduction of ranges of personal care, skin care and grooming products. "This year is already showing enough progress to give the Board confidence inpredicting a beneficial outcome to end May 2007." ENDS For further information, please contact: The Core Business PLC www.thecorebusiness.co.ukStirling Murray, Chief Executive 020 7483 4300 Aquila Financial Ltd www.aquila-financial.comPeter Reilly 020 7202 2601 Notes to Editors The Core Business was established in May 2004 by Stirling Murray to create,develop, launch and distribute personal care and beauty brands. It also providesconsultancy and brand management services. The Company was listed on AIM inMarch 2006 under the ticker 'CORE.' Financial results BALANCE SHEETYEAR ENDED 31 MAY 2006 2006 2005 £ £----------------------------- --------- ---------AssetsNon-current assetsProperty, plant and equipment 740 686Financial assets 10,578 -Investment in associate company - 1,714----------------------------- --------- --------- 11,318 2,400 Current AssetsTrade receivables 19,156 12,033Other current assets 26,815 10,616Cash and cash equivalents 401,085 11,123----------------------------- --------- --------- 447,056 33,772----------------------------- --------- ---------Total assets 458,374 36,172----------------------------- --------- --------- Equity and liabilitiesEquity attributable to the Company's equity holdersShare capital 201,383 100Share premium 337,719 -Retained earnings (132,245) 5,224----------------------------- --------- --------- 406,857 5,324 Current liabilitiesTrade and other payables 51,517 14,092Current tax payable - 16,756----------------------------- --------- ---------Total liabilities 51,517 30,848----------------------------- --------- --------- Total equity and liabilities 458,374 36,172----------------------------- --------- --------- PROFIT AND LOSS ACCOUNTYEAR ENDED 31 MAY 2006 2006 2005 £ £----------------------------- --------- ---------TurnoverConsultancy fees 122,157 135,510 Overhead costsAdministration costs 195,540 34,946Staff costs 60,680 13,241Depreciation 541 343----------------------------- --------- ---------(Loss)/profit from operations (134,604) 86,980 Interest income 2,964 -Impairment of investment in associate company (1,714) ------------------------------ --------- ---------(Loss)/profit before tax (133,354) 86,980 Income tax expense 12,190 (16,756)----------------------------- --------- ---------(Loss)/profit for the year (121,164) 70,224----------------------------- --------- --------- (Loss) / Earnings per share Basic (0.66 pence) 0.70 pence Diluted (0.66 pence) 0.70 pence STATEMENT OF CHANGES IN EQUITYYEAR ENDED 31 MAY 2006 Share Capital Share Premium Retained Total Earnings £ £ £ £----------------------- ------- ------- ------- ------- Balance at 18 May2004 2 - - 2 Changes in equity for theyear to 31 May 2005 Issue of sharecapital 98 - - 98Profit for theyear - - 70,224 70,224Interim dividendspaid - - (65,000) (65,000)----------------------- ------- ------- ------- -------Balance as at 31May 2005 100 - 5,224 5,324 Changes in equity for theyear to 31 May 2006 Loss for the year - - (119,450) (119,450)Associate companyequity movement - - (1,714) (1,714)----------------------- ------- ------- ------- ------- - - (121,164) (121,164)Credit on issue ofwarrants - - 5,000 5,000Interim dividendspaid - - (21,305) (21,305)----------------------- ------- ------- ------- -------Total recognisedincome and expensefor the year - - (137,469) (137,469) Issue of sharecapital 201,283 447,822 - 649,105Issue costs - (110,103) - (110,103)----------------------- ------- ------- ------- -------Balance as at 31May 2006 201,383 337,719 (132,245) 406,857----------------------- ------- ------- ------- ------- CASH FLOW STATEMENTTO 31 MAY 2006 2006 2005 £ £----------------------------- --------- ---------Cash flows from operating activitiesCash generated from operating activities (102,777) 78,766Interest paid - -Tax paid (16,749) ------------------------------ --------- --------- (119,526) 78,766Cash flows from investing activitiesPurchases of property, plant and equipment (595) (1,029)Investment in associate company - (1,714)Investment in financial asset (10,578) -Interest received 2,964 ------------------------------ --------- ---------Net cash (used in) investment activities (8,209) (2,743) Cash flows from financing activitiesNet proceeds on issues of share 539,002 100Dividends paid (21,305) (65,000)----------------------------- --------- ---------Net cash (used in)/from financing activities 517,697 (64,900) Net increase/(decrease) in cash and cash equivalents 389,962 11,123 Cash and cash equivalents at beginning of year 11,123 ------------------------------ --------- ---------Cash and cash equivalents at end of year 401,085 11,123----------------------------- --------- --------- Bank balances and cash 401,085 11,123----------------------------- --------- --------- Presentation of financial statementsThe financial statements of The Core Business PLC have been prepared inaccordance with International Financial Reporting Standards (IFRS), IFRICinterpretations endorsed by the European Union and with those parts of theCompanies Act 1985 applicable to companies reporting under IFRS. These financialstatements have been prepared under the historic cost convention. The preparation of financial statements in conformity with generally acceptedaccounting principles requires the use of estimates and assumptions that affectthe reported amounts of assets and liabilities at the date of the financialstatements and the reported amounts of revenues and expenses during thereporting period. Although these estimates are based on management's bestknowledge of the amount, event or actions, actual results ultimately may differfrom those estimates. Accounting policiesThe principal accounting policies adopted in the preparation of these financialstatements are set out below. Basis of preparationThese financial statements are for the year ended 31 May 2006 and are covered byIFRS 1, 'First-time Adoption of International Accounting Standards'. Thefinancial statements have been prepared in accordance with IFRS standards. The policies set out below have been consistently applied to all the periodspresented. The Company financial statements were prepared in accordance with UK GenerallyAccepted Accounting Principles (GAAP) until 31 May 2005. GAAP differs in someareas from IFRS. In preparing The Core Business PLC's 2006 financial statements,management has amended certain accounting and valuation methods applied in theGAAP financial statements to comply with IFRS. The comparative figures inrespect of year end 31 May 2005 have been restated to reflect these adjustments. Revenue recognitionRevenue comprises the fair value of the consideration received or receivable forthe sale of goods and services provided in the ordinary course of the Company'sactivities. Revenue derived from the Company's principal activities (which isshown exclusive of applicable sales taxes, where applicable) is recognised asfollows: Consultancy fees are recognised as income in the accounting period in which theconsultancy is provided. Interest income is accrued on a time basis, by reference to the principaloutstanding and at the interest rate applicable. Foreign currenciesTransactions in foreign currencies are initially recorded at the rates ofexchange prevailing on the dates of the transactions. Monetary assets andliabilities denominated in such currencies are retranslated at the ratesprevailing on the balance sheet date. Profits and losses arising on exchange areincluded in the net profit or loss for the year. TaxationThe charge for current tax is based on the results for the year as adjusted foritems which are non-assessable or disallowed. It is calculated using rates thathave been enacted or substantively enacted by the balance sheet date. Deferred tax is accounted for using the balance sheet liability method inrespect of temporary differences arising from differences between the carryingamount of assets and liabilities in the financial statements and thecorresponding tax basis used in the computation of taxable profit. In principle,deferred tax liabilities are recognised for all taxable temporary differencesand deferred tax assets are recognised to the extent that it is probable thattaxable profits will be available against which deductible temporary differencescan be utilised. Such assets and liabilities are not recognised if the temporarydifference arises from goodwill (or negative goodwill) or from the initialrecognition (other than in a business combination) of other assets andliabilities in a transaction which affects neither the tax profit nor theaccounting profit. Deferred tax liabilities are recognised for taxable temporary differencesarising on investments in subsidiaries and associates, and interest in jointventures, except where the Company is able to control the reversal of thetemporary difference and it is probable that the temporary difference will notreverse in the foreseeable future. Deferred tax is calculated at the rates that are expected to apply when theasset or liability is settled. Deferred tax is charged or credited in the incomestatement, except when it relates to items credited or charged directly toequity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when they relate to income taxeslevied by the same taxation authority and the Company intends to settle itscurrent tax assets and liabilities on a net basis. Property, plant and equipmentOffice equipment is stated at cost less accumulated depreciation. Depreciation is charged so as to write off the cost or valuation of assets overtheir estimated useful lives, using the straight-line method, on the followingbasis: Office equipment 33.33% The assets' residual values and useful lives are reviewed, and adjusted ifappropriate, at each balance sheet date. An asset's carrying amount is writtendown immediately to its recoverable amount if the asset's carrying amount isgreat than its estimated recoverable amount. Gains and losses on disposals are determined by comparing the disposal proceedswith the carrying amount and are included in the income statement. Financial instrumentsThe Company classifies its financial instruments in the following categories: atfair value through profit or loss, held to maturity, loans and receivables, andavailable-for-sale. The classification depends on the purpose for which thefinancial instrument was acquired. Management determines the classification ofits financial instruments at initial recognition and re-evaluates thisdesignation at each financial year end. When financial assets are recognisedinitially, they are measured at fair value, being the transaction price plusdirectly attributable transaction costs. Interest in associatesThe Company's interest in associates, being those entities over which it hassignificant influence and which are neither subsidiaries or joint ventures, isaccounted for using the equity method of accounting. Under the equity method, the investment in an associate is carried in thebalance sheet at cost plus post acquisition changes in the Company's share ofnet assets of the associate, less distributions received and less any impairmentin value of individual investments. The Company income statement reflects theshare of the associate's results after tax. The Company's statement of changesin equity reflects the Company's share of its associate's changes in equity. Trade receivablesTrade receivables are recognised initially at fair value less provision forimpairment. A provision for impairment of trade receivables is established whenthere is objective evidence that the Company will not be able to collect allamounts due according to the original terms of receivables. The amount of theprovision is the difference between the asset's carrying amount and the presentvalue of estimated future cash flows, discounted at the effective interest rate.The amount of the provision is recognised in the income statement. Cash and cash equivalentsCash and cash equivalents are carried in the balance sheet at cost. Cash andcash equivalents comprise cash in hand, deposits held at call with banks, othershort term, highly liquid investments with original maturities of three monthsor less, and bank overdrafts. Bank overdrafts are included within borrowings incurrent liabilities on the balance sheet. Trade payablesTrade payables are initially measured at fair value and are subsequentlymeasures at amortised cost, using the effective interest rate method. Equity instrumentsEquity instruments are recorded at the proceeds received, net of direct issuecosts. Dividend distributionDividend distribution to the Company's shareholders is recognised as a liabilityin the Company's financial statements in the year in which they are approved. ProvisionsProvisions are recognised when the Company has a present obligation as a resultof a past event which it is probable will result in an outflow of economicbenefits that can be reasonably estimated. Share based paymentsThe cost of warrant based equity transactions is measured with reference to thefair value of the services provided for which the warrant was granted and isrecognised as an expense at the date on which the warrant becomes exercisable. Earnings per share Earnings 2006 2005 £ £--------------------------------- --------- ---------Earnings for the purpose of basic earnings per share(net profit for the year) (121,164) 70,224Earnings for the purpose of diluted earnings pershare (121,164) 70,224 Number of shares 2006 2005--------------------------------- --------- ---------Weighted average number of ordinary shares:--------------------------------- --------- --------- - for the purposes of basic earnings per share 18,392,429 10,000,000 - for the purposes of diluted earnings per share 18,392,429 10,000,000 The dilutive effect of share warrants issued during the year has beendisregarded as the average market value of ordinary shares during the year didnot exceed the exercise price of the warrants issued. Share capital 2006 2005 2006 2005 No. No. £ £----------------- ---------- --------- --------- ---------Authorised:Ordinary shares of 0.5 penceeach (2005: £1 each) 200,000,000 1,000,000 1,000,000 1,000,000----------------- ---------- --------- --------- ---------Issued and fully paidReported as at 1 June 10,000,000 2 100 2Issue of shares 30,276,625 98 201,283 98----------------- ---------- --------- --------- ---------Reported as at 31 May 40,276,625 100 201,383 100----------------- ---------- --------- --------- --------- On 16 November 2005, each of the issued and unissued ordinary shares in theCompany of £1 each were subdivided in to 100 ordinary shares of £0.01 each, allsuch shares ranking pari passu in all respects. On 10 February 2006, the Company issued 4,000 new ordinary shares of nominalvalue £0.01 each. On the same date: - each of the issued and unissued ordinary shares of 1 penny each weresubdivided in to 1,000 ordinary shares of 0.001 pence each, all such sharesranking pari passu in all respects. - the Company issued 10,800,000 new ordinary shares of nominal value0.001 pence each at an issue price of 1 penny each. - the Company issued 5,200,000 new ordinary shares of nominal value0.001 pence each at an issue price of 2.5 pence each. - the Company issued 499 bonus shares for each ordinary share held inthe Company. - the ordinary shares of the Company were consolidated whereby forevery 500 ordinary shares of nominal value 0.001 pence held, one share atnominal value 0.5 pence was issued. On 8 March 2006, the Company raised £411,065 before expenses of £176,475 throughthe placing of 10,276,625 new ordinary shares of nominal value 0.5 pence each ata placing price of 4 pence each with institutional and other investors. Thisrepresented 26% of the enlarged issued share capital of the Company. At 31 May 2006 warrants over 6,500,000 ordinary shares were outstanding. Date of At Granted Exercised Forfeits At Exercise/ Exercise/Vesting grant 1 June /vested 31 May Share date price 2005 2006 From To--------------------------------------------------------------------------------Warrants8.03.06 - 6,500,000 - - 6,500,000 6.0p 8.03.06 08.03.11-------------------------------------------------------------------------------- Share-based payment WarrantsOn 8 March 2006, upon admission to AIM, the Company issued for nil considerationwarrants to subscribe for 6,500,000 ordinary shares at an exercise price payableon exercise of 6 pence per share. The terms of the warrant instrument providethat the warrants are exercisable at any time from admission to the fifthanniversary of admission. Of this total, warrants to subscribe for 300,000 ordinary shares were issued inconsideration for services supplied to the Company in preparing for admission toAIM. The total market value of these services was £5,000. Expenses charged to the profit and loss in the year in respect of share basedpayments are as follows: 2006 2005 £ £----------------------------- --------- ---------Expense arising from issue of share option warrants 5,000 Nil----------------------------- --------- --------- At 31 May 2006 none of the warrants had been exercised. Dividends paid 2006 2005 £ £----------------------------- --------- ---------Declared and paid during the year:Equity dividends on ordinary shares 21,305 65,000----------------------------- --------- --------- The interim dividends were all paid during the period up to admission to AIM andfrom distributable reserves as shown in the accounts included within theAdmission Document. The Company did not file interim accounts at Companies Houseprior to payment of the dividends. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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