RNS Number:0642N
Celltalk Group PLC
02 July 2003
CELLTALK GROUP PLC
2 JULY 2003
Celltalk Group plc
Preliminary Results for the year ended 31 March 2003
Chairman's Statement
I am pleased to inform shareholders that the Group's profitable trading position
as outlined in my interim report has continued. For the 12 month period to 31
March 2003 operating profit was #273,524 (2002: #105,229), before goodwill
amortisation of #200,000 (2002: #4,000,000) and exceptional items #Nil (2002:
#282,483). Turnover reduced to #8.3m from #24.4m. Earnings per share were
0.12p (2002: loss 17.4p). The comparative figures shown are for the 15 months
ending 31 March 2002, the period in which Celltalk plc, the trading arm, was
placed into administration and goodwill amortisation included an exceptional
impairment charge of #3m.
The directors are not recommending the payment of a dividend (2002: #Nil).
The Company Voluntary Arrangement (CVA) of Celltalk Plc agreed following the
cessation of the administration in May 2002 required total payments of #200,000
plus half the residual profits to be made to the supervisor over a 24 month
period. In return, any residual liabilities will be written off at the end of
the period. The schedule of payments to the supervisor have been maintained and
until these are fully met the liabilities shown in the Balance Sheet include the
full amount still owed to creditors less the amount already paid over to the
supervisor.
Following the turmoil in the telecoms industry and the outcomes of the
administration, the ambitions of the Group Board are necessarily curtailed. The
priority has been to maintain a profitable business, start to rebuild the cash
flow and to ensure that the terms of the administration continue to be met. For
the first 12 months of the administration arrangements, all these targets have
been achieved and the aim is to continue with this policy to ensure there is a
continuing and viable operation at the end of the 24 month period. This is not
going to be easy. Competition is increasing with the networks wanting to expand
their own supply chains and reducing the commission payable to sales agents.
The ability to diversify the services that we offer is restricted by our limited
financial resources. Despite these difficulties, the company's cash resources
now provide a platform to manage day-to-day trading.
My target is to be able to report in 12 months time that the Group has
successfully maintained its business, complied with the conditions of the CVA
and strengthened the balance sheet to underpin a future long term viable
business that can return value to shareholders.
Managing and working in a business under such financial and day-to-day pressures
is not easy. I want to take this opportunity to offer my thanks to my fellow
Directors and staff for all their hard work and commitment. I want to remind
them that we are still trading and optimistic for the future when many of our
competitors have disappeared.
Derek M Joseph
Chairman
Consolidated profit and loss account
for the year ended 31 March 2003
15 months ended
Year ended 31 March 2002
31 March 2003
# #
Turnover from continuing operations 8,329,146 24,474,169
Cost of sales (5,875,744) (17,077,692)
----------------- -----------------
Gross profit 2,453,402 7,396,477
Administrative expenses:
- exceptional impairment charge - (3,000,000)
- exceptional reorganisation costs - (282,483)
- other costs (2,379,878) (8,291,248)
----------------- -----------------
(2,379,878) (11,573,731)
----------------- -----------------
Operating profit/(loss) from continuing operations before
interest 73,524 (4,177,254)
Other interest receivable and similar income 53,605 92,585
Interest payable and similar charges (88,891) (135,479)
----------------- -----------------
Profit/(loss) on ordinary activities before taxation 38,238 (4,220,148)
Taxation on profit/(loss) on ordinary activities (9,317) -
----------------- -----------------
Retained profit/(loss) for the financial year 28,921 (4,220,148)
========== ==========
Earnings/(loss) per share:
- basic 0.12p (17.4p)
- diluted 0.12p (17.4p)
========== ==========
There were no recognised gains or losses in the current year or previous period
other than those reported above, and therefore no statement of total recognised
gains and losses has been presented.
Consolidated balance sheet
at 31 March 2003
2003 2002
# #
Fixed assets
Intangible assets - goodwill 800,000 1,000,000
Tangible assets 207,114 370,962
----------------- -----------------
1,007,114 1,370,962
Current assets
Stocks 145,686 404,154
Debtors 1,643,642 1,483,344
Cash at bank and in hand 614,696 197,533
----------------- -----------------
2,404,024 2,085,031
Creditors: amounts falling due within one year (2,206,233) (3,596,526)
----------------- -----------------
Net current assets/(liabilities) 197,791 (1,511,495)
----------------- -----------------
Total assets less current liabilities 1,204,905 (140,533)
Creditors: amounts falling due after more than one year (1,429,197) (112,680)
----------------- -----------------
Net liabilities (224,292) (253,213)
========== ==========
Capital and reserves
Called up share capital 4,862,000 4,862,000
Share premium account 1,701,741 1,701,741
Merger reserve 18,050,000 18,050,000
Profit and loss account (24,838,033) (24,866,954)
----------------- -----------------
Equity shareholders' funds (224,292) (253,213)
========== ==========
Consolidated cash flow statement
for the year ended 31 March 2003
Year ended 15 months ended
31 March 31 March
2003 2002
# #
Net cash inflow from operating activities 622,252 59,564
Returns on investments and servicing of finance (35,286) (42,894)
Taxation - (31,662)
Capital expenditure 21,075 160,336
----------------- -----------------
Cash inflow before financing 608,041 145,344
Financing (190,878) (140,705)
----------------- -----------------
Increase in cash in the period 417,163 4,639
========== ==========
Reconciliation of net cash flow to movement in net debt
for the year ended 31 March 2003
Year ended 15 months ended
31 March 31 March
2003 2002
# #
Increase in cash in the period 417,163 4,639
Cash inflow from financing 190,878 140,705
----------------- -----------------
Change in net debt resulting from cash flows 608,041 145,344
New finance leases - (182,000)
----------------- -----------------
Movement in net debt in the period 608,041 (36,656)
Net debt at beginning of period (1,859,403) (1,822,747)
----------------- -----------------
Net debt at end of period (1,251,362) (1,859,403)
========== ==========
Reconciliation of movements in shareholders' funds
for the year ended 31 March 2003
Group Company
Year ended 15 months ended Year ended 15 months ended
31 March 31 March 31 March 31 March
2003 2002 2003 2002
# # # #
Profit/(loss) for the financial year 28,921 (4,220,148) 50,128 (4,260,010)
----------------- ----------------- ----------------- -----------------
Net addition to/(reduction in)
shareholders' funds 28,921 (4,220,148) 50,128 (4,260,010)
Opening shareholders' funds (253,213) 3,966,935 2,608,920 6,868,930
----------------- ----------------- ----------------- -----------------
Closing shareholders' funds (224,292) (253,213) 2,659,048 2,608,920
========== ========== ========== ==========
Notes:
1. Turnover and operating profit/(loss)
The turnover and operating profit/(loss) are wholly attributable to
the company's principal activity. The turnover arises entirely in the UK.
2 Profit/(loss) on ordinary activities before taxation
Year ended 15 months ended
31 March 31 March
2003 2002
# #
Profit/(loss) on ordinary activities before taxation is stated
after charging:
Auditors' remuneration
Audit 17,250 26,750
Other services- fees paid to the auditor and its associates - 4,100
Depreciation and other amounts written off tangible fixed assets
Owned 135,383 231,737
Leased 4,000 47,465
Amortisation of goodwill 200,000 1,000,000
Loss on disposal of fixed assets 3,390 -
Hire of plant and machinery - rentals payable under operating leases 34,661 92,771
Hire of other assets - operating leases 39,036 183,917
Exceptional costs
Impairment charge - 3,000,000
Reorganisation costs - 282,483
========== ==========
3. Debtors
Group Group Company Company
2003 2002 2003 2002
# # # #
Trade debtors 52,175 266,128 - -
Other debtors 20,000 50,000 - -
Amounts owed by group undertakings - - 1,657,854 1,582,916
Prepayments and accrued income 421,467 17,216 10,540 9,396
Deposit securing loan notes 1,150,000 1,150,000 1,150,000 1,150,000
-------------- -------------- -------------- --------------
1,643,642 1,483,344 2,818,394 2,742,312
======== ======== ======== ========
The deposit securing the loan notes is in relation to shareholder loan notes
(see note 4).
4. Creditors: amounts falling due within one year
Group Group Company Company
2003 2002 2003 2002
# # # #
Trade creditors 806,345 1,061,600 - -
Corporation tax 9,317 - 8,909 -
Other taxes and social security 62,916 217,048 - -
Other creditors - 254,154 - -
Accruals and deferred income 166,320 119,468 28,307 21,675
Shareholder loan notes 1,150,000 1,150,000 1,150,000 1,150,000
Directors' loans - 700,000 - -
Obligations under finance leases and hire
purchase contracts 11,335 94,256 - -
-------------- -------------- -------------- --------------
2,206,233 3,596,526 1,187,216 1,171,675
======== ======== ======== ========
The shareholder loan notes are secured against the deposit shown in note 3.
On 28 January 2002 Begbies Traynor were appointed as administrators of Celltalk
Plc, which is the wholly owned subsidiary of The Celltalk Group Plc. On 22
February 2002 the administrators agreed a Company Voluntary Arrangement (CVA)
with the creditors. The creditors of Celltalk Plc as at 28 January 2002 have
agreed to accept consideration of #200,000, payable over the next 24 months,
plus half of any annual profits in excess of #100,000 in lieu of their existing
balances at that date of #1,061,600. The company came out of administration on
16 August 2002.
By 31 March 2003 the company had repaid #187,126 of the CVA creditors. The
balance of #874,474 has been retained in creditors, as the gross obligation that
would fall due should the terms of the CVA be breached, and split:
#
Trade creditors
- due within one year 150,000
- due after more than one year 724,474
--------------
874,474
========
5. Creditors: amounts falling due after more than one year
Group Company
2003 2002 2003 2002
# # # #
Trade creditors 724,474 - - -
Directors' loans 700,000 - - -
Obligations under finance leases and hire purchase
contracts 4,723 112,680 - -
-------------- -------------- -------------- --------------
1,429,197 112,680 - -
======== ======== ======== ========
The maturity of obligations under finance leases and hire purchase contracts is
as follows:
Group Company
2003 2002 2003 2002
# # # #
Within one year 11,335 94,256 - -
In the second to fifth years 4,723 112,680 - -
-------------- -------------- -------------- --------------
16,058 206,936 - -
======== ======== ======== ========
6. Intangible assets
Goodwill
#
Group
Cost
At beginning and end of year 24,151,224
========
Amortisation and impairment
At beginning of year 23,151,224
Charged in year 200,000
--------------
At end of year 23,351,224
========
Net book value
At 31 March 2003 800,000
========
At 31 March 2002 1,000,000
========
Company
The company holds no intangible fixed assets
7. Earnings/(loss) per share
Profit/(losses) and numbers of shares used in the calculations of earnings/
(loss) per ordinary share are set out below:
Basic
Year ended 15 months ended
31 March 2002
31 March 2003
Profit/(loss) after tax 28,291 (4,220,148)
Weighted average number of shares 24,310,000 24,310,000
Earnings/(loss) per share 0.12p (17.4p)
======== ========
Diluted
For 2002 the calculation of diluted loss per ordinary share is identical to that
used for the basic loss per ordinary share. This is because the exercise of
these options would have the effect of reducing the loss per ordinary share and
is therefore not dilutive under the terms of FRS 14.
For 2003 the diluted earnings per share was 0.12p.
8. Reconciliation of operating profit/(loss) to operating cashflows
Year ended 15 months ended
31 March 2003 31 March 2002
# #
Operating profit/(loss) 73,524 (4,177,254)
Depreciation charge 139,383 279,202
Loss on disposal of fixed assets 3,390 -
Decrease in stocks 258,468 426,707
(Increase)/decrease in debtors (160,298) 854,479
Increase/(decrease) in creditors 107,785 (1,323,570)
Amortisation and impairment of goodwill 200,000 4,000,000
-------------- --------------
Net cash inflow from operating activities 622,252 59,564
======== ========
9. The financial information set out above does not constitute the
statutory accounts for the period ended 31 March 2003 but is derived from those
accounts. Statutory accounts for the year ended 31 March 2002 have been
delivered to the registrar of companies, and those for the period ended 31 March
2003 will be delivered following the annual general meeting. The auditors have
reported on those accounts; their reports were unqualified and did not contain
statements under section 237(2) or (3) of the Companies Act 1985.
10. Copies of the Report & Accounts will be posted to shareholders shortly
and will be available from the offices of The Celltalk Group plc, 24th Floor
Sunley Tower, Piccadilly Plaza, Manchester M1 4BT.
End.
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