TIDMCHA
RNS Number : 2047A
Concha plc
22 December 2017
22 December 2017
RNS Announcement: The information communicated in this
announcement contains inside information for the purposes of
Article 7 of Regulation 596/2014.
Concha PLC
("Concha" or the "Company")
Final Results for the year ended 30 June 2017
Concha (AIM: CHA), the AIM quoted investment company focussed on
investing in media, communications and technology companies,
announces its audited results for the year ended 30 June 2017.
A copy of the Annual Report and Accounts for the year ended 30
June 2017 will be posted to shareholders today and made available
on the Company's website in accordance with the AIM Rules for
Companies; www.concha-plc.com .
Enquiries:
Concha PLC
Chris Akers, Executive Chairman chris.akers@srgplc.com
SPARK Advisory Partners Limited (Nominated Adviser)
Mark Brady / Andrew Emmott Tel: 0203 368 3550
CHAIRMAN'S STATEMENT
Despite the challenges that followed the appointment of
administrators to Ve Interactive Limited in April of this year, in
the months following this reporting period, Concha has sought to
add to its investment portfolio and bolster its cash reserves via
the placing of new equity.
Ve Interactive Limited ("Ve")
On 3 October 2017, we updated the market as to the status of the
current challenges to the appointment of the administrators of Ve.
At the time of writing this statement, Martin King, a former
director of Ve, has been declared bankrupt and David Brown, Ve's
former CEO is pursuing a similar path and has filed for bankruptcy.
On 30 November 2017, both Messrs Brown and King were made the
subject of a High Court Order, under which each was deemed to owe
certain creditors personally including a lending institution the
sum of GBP3.5m. In addition, the ruling sought to freeze the
worldwide assets of both former directors in a case where the judge
referenced "strong evidence" for "unacceptably low standards of
commercial morality." This latest development in combination with
numerous other allegations levied against both Messrs King and
Brown in connection with the demise of Ve have been well documented
in the British press.
As outlined in our October 2017 release, in the event that
Messrs Brown and King's applications for bankruptcy were
successful, any ability for Concha to instigate legal proceedings
against these former Ve executives would be met with limited
success. Given these rulings and the protections afforded by the
bankruptcy process, your Board sees little merit in furthering any
claims against Brown and King personally.
As you will also be aware, certain former shareholders of Ve had
sought to challenge the process by which the administrators were
appointed following its collapse in April of this year. The first
of these challenges is due to be heard in January 2018. It is
anticipated that if this initial challenge is successful, certain
of the former shareholders of Ve may be offered the opportunity to
join this shareholder action in an arrangement that would require a
commitment to the ongoing legal and professional fees associated
with continuing the action in exchange for participation in any
settlement arrangements that may result. Your Board will closely
monitor developments and advise on any future participation in due
course.
UcaDO
In October 2017, Concha was pleased to announce that it had
invested GBP175k by way of a convertible loan note in TheBuyerPool
Limited t/a UcaDO, a company that has developed a proprietary
platform to facilitate the free listing of both owned and rented,
residential and commercial property, by property owners and
landlords to prospective buyers and tenants alike. As the market
share for these new virtual or hybrid estate agents increases, the
Board believes that UcaDO's "peer to peer", free to use property
listing service will initially offer a compelling supplement to any
sales or rental initiative, and in time a genuine "go to"
destination for all property transactors.
Since the loan was advanced UcaDO has continued to refine its
mobile app in preparation for launch in 2018. The management team
has been supplemented by some strong recruitment hires in the key
areas of sales, marketing and development and extensive dialogue
has been established with many of the UK's housebuilders whose new
inventory would extend both the depth and breadth of properties
accessible via UcaDO's platform. UcaDO has also sought to
supplement its non-executive representation, and is now in advanced
discussions with a number of seasoned industry professionals whose
depth of knowledge will provide invaluable support to the executive
management team.
UcaDO is also assessing a number of strategic alliances with
certain other virtual or hybrid agencies. In securing a greater
presence in this growing sector, the board of UcaDO feel that its
"peer to peer" platform would not only extend the reach of a hybrid
or virtual agency but also provide it with access to a greater
depth of property inventory and an established user base
particularly within the rental sector.
Your Board will continue to update you with regards to UcaDO's
progress as it prepares for launch early next year.
Equity Fund Raising
In order to further strengthen its balance sheet, the Company
raised GBP0.42 million in September 2017 by way of a subscription
for 120,000,000 new ordinary shares at 0.35p per share.
The Works
After a challenging couple of years, impacted by the various
bribery and corruption scandals that reverberated through a number
of the major International Sports Federations and resulted in more
rigorous and extended tender processes, we are pleased to report
that despite these market conditions, Works has cemented its
position with many of the leading global sports federations. In the
six months to October 2017 revenues at Works reflect a 22% year on
year uplift and monthly return on sales are returning near double
digit performances.
Whilst Concha was able to support its investee business during
this period of instability, the business is now cash generative and
its performance is such that it is now able to provide a return to
those providers of finance who have supported the business over the
last couple of years.
In recent months, Works has successfully tendered for projects
including the FIFA Women's World Cup 2019, FEI World Championships
2018, FIBA Basketball World Cup 2018 and FIFA's World Cup Russia
2018 competition rollout and further extended the number of
sporting federations it has now worked with. In order to scale more
rapidly, the management of Works believes that it must now offer
itself as a consolidation target where Work's extensive sports
related engagements could complement a combined or group offering.
Concha has actively supported this strategic thinking and has
initiated a number of discussions with prospective suitors where
Works services and client portfolio would clearly extend their
existing offerings.
Future
As a consequence of the regulatory interpretation of the recent
events at Ve, Concha became an AIM Rule 15 Cash Shell with effect
from 3 October 2017. As such Concha has six months from the date it
became an AIM Rule 15 Cash Shell to either make an acquisition or
acquisitions that either constitute a reverse takeover ("RTO") in
accordance with AIM Rule 14 or convert into an AIM Rule 8 Investing
Company or face its shares being suspended from trading.
Your Board is obviously keen to react to this change of status
and is currently considering the merits of a number of businesses
as suitable RTO targets. Whilst your Board is giving appropriate
consideration to the opportunities for shareholders afforded by an
RTO, it will only do so on the basis that it can agree terms with a
target in which it feels will provide its shareholder base with a
genuine opportunity for an uplift in shareholder value.
In the event that it is not able to progress these discussions
to a positive conclusion, your Board is also considering migrating
its listing to an alternative recognized investment exchange in
order to further its preferred strategic direction of being able to
secure "early stage" equity interests in innovative concepts of a
disruptive nature where the opportunities for growth and mass user
adoption are significant.
Despite the challenges faced, your Board will continue to seek
to ensure that not only are these short term obstacles overcome but
that most importantly Concha is re-positioned to restore
shareholder value and exploit certain of the various opportunities
that it has identified in recent months.
I would finally like to close by thanking our shareholders and
advisers for their continued patience during what has been a
difficult period and for their ongoing support for both the Board
and its intentions for the future.
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF CONCHA PLC
Opinion
We have audited the financial statements of Concha plc for the
year ended 30 June 2017 which comprise the Statement of
Comprehensive Income, Statement of Financial Position, Statement of
Changes in Equity, Cash flow statement and notes to the financial
statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union.
In our opinion, the financial statements:
-- give a true and fair view of the state of the company's
affairs as at 30 June 2017 and of the company's loss for the year
then ended;
-- have been properly prepared in accordance with IFRSs as
adopted by the European Union; and
-- have been prepared in accordance with the requirements of the
Companies Act 2006.
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an Auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the Company
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our
opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in
relation to which the ISAs (UK) require us to report to you
where:
-- the directors' use of the going concern basis of accounting
in the preparation of the financial statements is not appropriate;
or
-- the directors have not disclosed in the financial statements
any identified material uncertainties that may cast significant
doubt about the company's ability to continue to adopt the going
concern basis of accounting for a period of at least twelve months
from the date when the financial statements are authorised for
issue.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Our assessment of risks of material misstatement
Risk Area: Going Concern
Income is derived from investments which depend on products
generating future revenue. Should these products not generate
expected future revenue there is an increased risk that the company
may cease to be a going concern.
Our Response: Going Concern
We reviewed cash flow projections prepared by the directors, for
which they are solely responsible, for the period ended 31 December
2018 and considered the reasonableness of the cash expenditure
projected by the directors over that period. We also considered and
discussed with the directors the discretion that they had over the
nature and level of expenditure to be incurred in the event that
actual events materially deviated from their expectations during
the period ending 31 December 2018. We also considered the income
levels forecast by the directors as well as the likely alternative
sources of finance should the directors need to raise additional
funding during the period ending 31 December 2018.
Risk Area: Valuation of investments
The company holds unlisted shares and securities for which there
are no quoted market prices and which require valuation techniques
to be used which are not based on observable market data.
Accordingly, such valuations are subject to judgement by the
directors.
Our Response: Valuation of investments
We reviewed the basis of the valuations prepared by the
directors and considered the reasonableness of the judgements made
by them. We discussed with and challenged the directors on the
bases adopted when valuing the unlisted shares and securities. We
also considered the reasonableness of the valuation approaches
adopted.
Our application of materiality
The scope and focus of our audit was influenced by our
assessment and application of materiality. We define materiality as
the magnitude of misstatement that could reasonably be expected to
influence the readers and the economic decisions of the users of
the financial statements. We use materiality to determine the scope
of our audit and the nature, timing and extent of our audit
procedures and to evaluate the effect of misstatements, both
individually and on the financial statements as a whole.
Due to the nature of the company we considered the value of the
investments to be the main focus for the readers of the financial
statements, accordingly this consideration influenced our judgement
of materiality. Based on our professional judgement, we determined
materiality for the company to be GBP38k based on 2% of gross
assets of the draft financial statements.
On the basis of our risk assessments, together with our
assessment of the overall control environment, our judgement was
that performance materiality (i.e. our tolerance for misstatement
in an individual account or balance) for the company was 75% of
materiality namely GBP28.5k.
We agreed to report to the Audit Committee all audit differences
in excess of GBP1.9k, as well as differences below that threshold
that, in our view warranted reporting on a qualitative grounds. We
also reported to the Audit Committee on disclosure matters that we
identified when assessing the overall presentation of the financial
statements.
An overview of the scope of our audit
A description of the scope of an audit of the financial
statements is provided on the FRC's website at
www.frc.org.uk/auditscopeukprivate.
The audit was scoped by obtaining an understanding of the
Company and its environment, including the Company's system of
internal control, and assessing the risks of material misstatement
at Company level. Audit work to respond to the assessed risks was
performed directly by the Company audit engagement team which
performed full scope audit procedures. The audit work was executed
at a level of materiality noted above.
In order to maintain our knowledge of the company and the risks
it faces, the senior statutory auditor and the audit manager met a
senior member of the company's finance team.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the annual
report, other than the financial statements and our auditor's
report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We
have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the strategic report and the
directors' report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
-- the strategic report and the directors' report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and
the parent company and its environment obtained in the course of
the audit, we have not identified material misstatements in the
strategic report or the directors' report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act
2006 requires us to report to you if, in our opinion:
-- adequate accounting records have not been kept by the
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the financial statements are not in agreement with the
accounting records and returns; or
-- certain disclosures of directors' remuneration specified by
law are not made; or
-- we have not received all the information and explanations we
require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities
statement, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true
and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at: www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor's report.
Laura Mott (Senior Statutory Auditor)
10 Queen Street Place
London
For and on behalf of
haysmacintyre, Statutory Auditors
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 30 JUNE 2017
2017 2016
GBP000's GBP000's
Revenue 8 15
----------------- -------------
GROSS PROFIT 8 15
Administrative expenses (583) (1,006)
----------------- -------------
LOSS FROM OPERATIONS BEFORE
EXCEPTIONAL ITEM (575) (991)
Exceptional items (4,347) -
----------------- ------------
LOSS FROM OPERATIONS (4,922) (991)
Investment income - 7
----------------- ------------
LOSS BEFORE TAX (4,922) (984)
Tax - -
---------------- -------------
RETAINED LOSS AFTER TAX FOR THE
YEAR (4,922) (984)
======== ======
RETAINED LOSS ATTRIBUTABLE
TO
Owners of the company (4,922) (984)
------------- ------------
LOSS FOR THE YEAR (4,922) (984)
====== ======
TOTAL COMPREHENSIVE LOSS ATTRIBUTABLE
TO:
Owners of the company (4,922) (984)
------------- --------------
TOTAL COMPREHENSIVE LOSS FOR
THE YEAR (4,922) (984)
====== =======
Loss per share
Basic (0.00303) (0.00062)
====== =======
Diluted (0.00303) (0.00062)
====== =======
STATEMENT OF FINANCIAL POSITION
AT 30 JUNE 2017
2017 2016
GBP000's GBP000's
ASSETS
Non-current assets
Property, plant & 26 -
equipment
Investments 514 514
--------------- -------------
540 514
--------------- -------------
CURRENT ASSETS
Trade and other receivables 331 4,509
Cash and cash equivalents 505 1,255
--------------- -------------
836 5,764
--------------- -------------
TOTAL ASSETS 1,376 6,278
====== ======
EQUITY AND LIABILTIES
EQUITY
Share capital 1,623 1,623
Deferred share capital 1,795 1,795
Share premium reserve 21,563 21,563
Share based payment
reserve 593 583
Retained loss (24,289) (19,367)
--------------- ---------------
TOTAL EQUITY 1,285 6,197
--------------- ---------------
CURRENT LIABILITIES
Trade and other payables 91 81
--------------- ---------------
TOTAL EQUITY AND
LIABILITIES 1,376 6,278
====== ======
STATEMENT OF CHANGES IN EQUITY
FOR THE YEARSED 30 JUNE 2016 AND 2017
Deferred Share Share
based
Share Share Premium Payment Retained
Capital Capital Account Reserve Loss Total
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
Balance at
1 July 2015 1,478 1,795 21,043 314 (18,383) 6,247
Loss for the
year - - - - (984) (984)
---------- ------------- --------- ------------ -------------- ------------
Total comprehensive
loss for 2016 - - - - (984) (984)
Share capital
issued 145 - 520 - - 665
Share based
payments - - - 269 - 269
---------- ------------- ------------- ------------ -------------- ------------
Balance at
30 June 2016 1,623 1,795 21,563 583 (19,367) 6,197
===== ====== ====== ====== ======= ======
Deferred Share Share
based
Share Share Premium Payment Retained
Capital Capital Account Reserve Loss Total
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
Balance at
1 July 2016 1,623 1,795 21,563 583 (19,367) 6,197
Loss for the
year - - - - (4,922) (4,922)
---------- ---------- ------------- ------------ -------------- ------------
Total comprehensive
loss for 2017 - - - - (4,922) (4,922)
Share based
payments - - - 10 - 10
---------- ---------- ------------- ------------ -------------- ------------
Balance at
30 June 2017 1,623 1,795 21,563 593 (24,289) 1,285
===== ===== ====== ====== ======= ======
CASH FLOW STATEMENT
FOR THE YEARED 30 JUNE 2017
2017 2016
GBP000's GBP000's
Loss for the year (4,922) (984)
Share based payments 10 269
Investment income - (7)
Depreciation 2 -
Exceptional items 4,347 -
----------------- -----------------
Operating cash flows before
movements in
working capital (563) (722)
Increase in receivables (169) (115)
Increase in payables 10 27
----------------- -----------------
(722) (810)
Investment income - 7
----------------- -----------------
Net cash flow from operating
activities (722) (803)
----------------- -----------------
Cash flow from investing
activities
Purchase of investments - (4,154)
Purchase of property, (28) -
plant & equipment
----------------- -----------------
Net cash outflow from
investing activities (28) (4,154)
----------------- -----------------
Cash flow from financing
activities
Net proceeds from issue
of share capital - 665
------------------ ------------------
Net cash inflow from financing
activities - 665
------------------ ------------------
Net cash outflow for the
year (750) (4,292)
------------------ ------------------
Cash and cash equivalents
at start of year 1,255 5,547
------------------ ------------------
Cash and cash equivalents
at the end of the year 505 1,255
======== ========
NOTES TO THE FINANCIAL STATEMENTS
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Consolidated financial statements exemption
As an investment company, Concha PLC is exempted from the
obligation of preparing consolidated results despite its group
status. Its 100% subsidiary entity, Concha Investments Limited is
recognised at fair value with all movements in the market value
going through the statement of comprehensive income. All
investments are held as Level 3 in the fair value hierarchy, being
financial instruments whose fair value is determined in whole or in
part using valuation techniques based on assumptions that are not
supported by prices from observable market transactions in the same
instrument and not based on available observable market data. In
this instance the historic cost is deemed to be the fair value.
Going Concern
The directors have prepared and reviewed cash flow projections
for the period ending 31 December 2018 and we are optimistic that
the company will make significant progress towards these targets.
Having considered these forecast cash flows together with the
availability of other potential financing sources, including equity
finance, the directors have concluded that the Company will have
access to sufficient resources to meet its working capital
commitments for at least the next 12 month from the date of this
report. Furthermore, the directors believe that investments made
post the year end could be realised in part thus providing further
liquidity.
Therefore, based on the developments disclosed above, the
directors have reasonable expectation that the Company have
adequate resources to continue in operational existence for the
foreseeable future. For this reason, they continue to adopt the
going concern basis in preparing the financial statements.
The financial statements do not include any adjustments that
would be necessary should this basis not be appropriate.
EXCEPTIONAL ITEMS 2017 2016
GBP000's GBP000's
Exceptional items comprise the
following:
Provision in respect of amounts 4,347 -
owed by subsidiary and investee
companies
----------- ------------
4,347 -
===== =====
POST BALANCE SHEET EVENTS
On 19 September 2017, 120,000,000 0.1p Ordinary shares were
issued for a cash consideration of GBP420,000.
On 3 October 2017, a total of 115,000,000 share options granted
under the Concha PLC 2016 Unapproved Share Option Incentive Scheme
to the directors of the Company were cancelled. The cancelled
Options were originally granted with an exercise price of 1.18p and
were voluntarily surrendered by the holders for no
consideration.
With effect from 3 October 2017, Concha was deemed to be an AIM
Rule 15 Cash Shell.
The Directors were not aware of any significant post balance
sheet events other than those set out above.
The full financial statements including all notes are available
in PDF download on the Company's website www.concha-plc.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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December 22, 2017 04:40 ET (09:40 GMT)
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