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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Broca | LSE:BROC | London | Ordinary Share | GB00B1R2V686 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 11.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMBROC RNS Number : 0479N Broca Plc 10 February 2009 10 February 2009 Broca plc Final Results for the year ended 31 August 2008 Broca Plc (the "Company"). the provider of secure advanced messaging technology, today announces results for the year ended 31 August 2008. Extracts of the financial statements appear below and the full version is available on the Company's website - www.brocaplc.com For further information contact: +-------------------------+----------------------------+ | Ian Price, | Andrew Dunn/Lulu Bridges | | Managing Director | | +-------------------------+----------------------------+ | Broca Plc | Tavistock Communications | +-------------------------+----------------------------+ | Tel: 0845 0066661 | Tel: 020 7920 3150 | +-------------------------+----------------------------+ | | | +-------------------------+----------------------------+ | Fiona Owen | Rupert Krefting | +-------------------------+----------------------------+ | Grant Thornton UK LLP | Numis Securities Limited | +-------------------------+----------------------------+ | Nominated Adviser | Broker | +-------------------------+----------------------------+ | Tel: 020 7383 5100 | Tel: 020 7260 1000 | +-------------------------+----------------------------+ Chairman's statement The Board is pleased with the technological progress made by the Group during the year. The main investment phase has been largely completed; additional patents and trademarks have been secured. However, despite a number of successful pilots, there has been insufficient momentum carrying through to converting the Group's innovative technology into substantive contracts. The Board remains of the view that the Group's products have a very promising future and sees increasing signs of market readiness. SAMS, the Group's secure SMS product, was implemented by a major international bank for a pilot which involved transmitting sensitive data via SMS to a number of individuals in different countries. The success to date of this pilot has proven not just the security of the Group's technology, but also its ability to track and guarantee message delivery. The pilot also demonstrates the growing readiness of the banking industry to use the Group's technology in the increasingly important area of data security. In addition to the continued trialling of Broca's security products, the period also saw the initiation of two significant pilots of the Group's data capture technology. One pilot was for Sony Ericsson, one of the world's leading mobile handset manufacturers, which has embedded the Group's technology directly into its trial handsets. This was accompanied by an additional pilot with Sony Ericsson, run jointly with T-Mobile (UK). In terms of market readiness for the Company's technology, it is the directors' view that the awareness of issues regarding the security of data in the mobile telecommunication market has started to increase within the police, Governments and regulatory bodies. The market for systems dealing with the security and management of privacy of information, particularly with respect to mobile communications, is set to increase, in part due to the drive to make events such as the 2012 Olympics paperless. Mobile payment services, transportation and ticketing all have a massive part to play in this type of event and Broca's unique technology has the ability to address many of the security concerns raised. The directors believe that the Group has built a world-class security system capable of complementing other mobile technologies to deliver mobile payments, ticketing, transportation and medical services. Nevertheless, post year end and despite securing additional revenues for pilot activity for mobile banking services in partnership with Telnet in Africa, there has been significant slippage in the completion of a number of key licence contracts. Consequently, in its efforts to secure additional funding to support the Group's ongoing investment plans, the directors have explored a number of options. The Board has received an offer of acquisition from 2ergo Group plc (2ergo) and considers that the proposed acquisition by 2ergo will allow the Group to continue to develop its portfolio of technology products and reach full scale commercialisation. As announced on 5 February 2009, the independent directors of the Group have therefore recommended the offer and it is proposed that this is effected by means of a Scheme of Arrangement under Part 26 of the Companies Act 2006. The 2ergo directors believe that the intellectual property assets of the Group can be exploited more effectively by the Group becoming a part of the enlarged 2ergo group. The existing routes to market, sales networks and geography of the 2ergo group will, in addition to the existing sales network of Broca, enable the Group's products to be marketed effectively across Europe, the Americas and (following 2ergo's partnership announcement on 26 January 2009) Asia. The 2ergo directors consider the technology developed within Broca to have significant potential to generate future earnings as part of the 2ergo group and to complement, and further differentiate, the existing suite of services that 2ergo currently offers to its customer base. The 2ergo directors believe that in the current economic climate the development constraints experienced by Broca will be eased within an enlarged 2ergo group. In addition, whilst the 2ergo Board believes that Broca's patented technology could provide security solutions for most mobile phone networks globally, it has recognised demand and feels that there is particularly strong potential in emerging markets such as Asia, Africa and South America. For example, in Asia the 2ergo directors believe these opportunities will be best exploited via 2ergo's partnership with ActiveMedia Technologies, a partner with direct connectivity to the Indian mobile network operators, which opens access for 2ergo and Broca to over 300 million subscribers, a number which is increasing by up to 10 million subscribers per month. The acquisition is also expected to enable material cost savings to be made in the operation of Broca's existing business including the elimination of certain central costs associated with Broca's listing on AIM. 2ergo also expects that further acquisitions will be made pursuant to its stated acquisition strategy which will bring further complementary benefits to the Broca product suite. Peter Harvey Chairman Consolidated income statement +----------------------------------+-----------+-----------------+---------------------+------------------+ | | | | For the year | For the 7 months | | | | | ended | ended | | | | | 2008 | 2007 | +----------------------------------+-----------+-----------------+---------------------+------------------+ | | Note | | GBP | GBP | | | | | | | +----------------------------------+-----------+-----------------+---------------------+------------------+ | Revenue | 2 | | 31,746 | 1,200 | +----------------------------------+-----------+-----------------+---------------------+------------------+ | Cost of sales | | | (24,393) | (765) | +----------------------------------+-----------+-----------------+---------------------+------------------+ | | | | | | +----------------------------------+-----------+-----------------+---------------------+------------------+ | Gross profit | | | 7,353 | 435 | +----------------------------------+-----------+-----------------+---------------------+------------------+ | | | | | | +----------------------------------+-----------+-----------------+---------------------+------------------+ | Administrative costs | | | (1,676,504) | (725,333) | +----------------------------------+-----------+-----------------+---------------------+------------------+ | Negative goodwill | 11 | | 73,815 | - | +----------------------------------+-----------+-----------------+---------------------+------------------+ | | | | | | +----------------------------------+-----------+-----------------+---------------------+------------------+ | Operating loss | 3 | | (1,595,336) | (724,898) | +----------------------------------+-----------+-----------------+---------------------+------------------+ | | | | | | +----------------------------------+-----------+-----------------+---------------------+------------------+ | Finance income | 5 | | 23,434 | 20,697 | +----------------------------------+-----------+-----------------+---------------------+------------------+ | Finance cost | 5 | | (34,387) | - | +----------------------------------+-----------+-----------------+---------------------+------------------+ | | | | | | +----------------------------------+-----------+-----------------+---------------------+------------------+ | Loss before tax | | | (1,606,289) | (704,201) | +----------------------------------+-----------+-----------------+---------------------+------------------+ | | | | | | +----------------------------------+-----------+-----------------+---------------------+------------------+ | Taxation | 6 | | (164,995) | 164,995 | +----------------------------------+-----------+-----------------+---------------------+------------------+ | | | | | | +----------------------------------+-----------+-----------------+---------------------+------------------+ | Loss for the period | | | (1,771,284) | (539,206) | +----------------------------------+-----------+-----------------+---------------------+------------------+ | | | | | | +----------------------------------+-----------+-----------------+---------------------+------------------+ | Loss per share | | | | | +----------------------------------+-----------+-----------------+---------------------+------------------+ | Basic | 7 | | (4.69)p | (1.43)p | +----------------------------------+-----------+-----------------+---------------------+------------------+ | Diluted | 7 | | (4.69)p | (1.43)p | +----------------------------------+-----------+-----------------+---------------------+------------------+ All activities relate to continuing operations. Consolidated balance sheet +----------------------------------+-----------+-----------------+-----------------+------------------+ | | | | 2008 | 2007 | +----------------------------------+-----------+-----------------+-----------------+------------------+ | | Note | | GBP | GBP | | | | | | | +----------------------------------+-----------+-----------------+-----------------+------------------+ | Non-current assets | | | | | +----------------------------------+-----------+-----------------+-----------------+------------------+ | Intangible assets | 9 | | 2,757,813 | 2,817,934 | +----------------------------------+-----------+-----------------+-----------------+------------------+ | Property, plant and equipment | 10 | | 61,634 | 64,166 | +----------------------------------+-----------+-----------------+-----------------+------------------+ | Deferred tax asset | 16 | | - | 164,995 | +----------------------------------+-----------+-----------------+-----------------+------------------+ | | | | | | +----------------------------------+-----------+-----------------+-----------------+------------------+ | | | | 2,819,447 | 3,047,095 | +----------------------------------+-----------+-----------------+-----------------+------------------+ | | | | | | | Current assets | | | | | +----------------------------------+-----------+-----------------+-----------------+------------------+ | Trade and other receivables | 12 | | 70,580 | 49,101 | +----------------------------------+-----------+-----------------+-----------------+------------------+ | Cash and cash equivalents | 17 | | 59,888 | 964,956 | +----------------------------------+-----------+-----------------+-----------------+------------------+ | | | | | | +----------------------------------+-----------+-----------------+-----------------+------------------+ | | | | 130,468 | 1,014,057 | +----------------------------------+-----------+-----------------+-----------------+------------------+ | | | | | | +----------------------------------+-----------+-----------------+-----------------+------------------+ | Total assets | | | 2,949,915 | 4,061,152 | +----------------------------------+-----------+-----------------+-----------------+------------------+ | | | | | | +----------------------------------+-----------+-----------------+-----------------+------------------+ | Current liabilities | 13 | | (216,105) | (448,873) | | Trade and other payables | | | | | +----------------------------------+-----------+-----------------+-----------------+------------------+ | Borrowings | 14 | | (420,000) | - | +----------------------------------+-----------+-----------------+-----------------+------------------+ | Provisions | 15 | | - | (100,000) | +----------------------------------+-----------+-----------------+-----------------+------------------+ | | | | | | +----------------------------------+-----------+-----------------+-----------------+------------------+ | | | | (636,105) | (548,873) | +----------------------------------+-----------+-----------------+-----------------+------------------+ | | 14 | | (500,000) | - | | Non-current liabilities | 15 | | - | (350,000) | | Borrowings | | | | | | Provisions | | | | | +----------------------------------+-----------+-----------------+-----------------+------------------+ | | | | | | | | | | (500,000) | (350,000) | +----------------------------------+-----------+-----------------+-----------------+------------------+ | | | | | | +----------------------------------+-----------+-----------------+-----------------+------------------+ | Total liabilities | | | (1,136,105) | (898,873) | +----------------------------------+-----------+-----------------+-----------------+------------------+ | | | | | | +----------------------------------+-----------+-----------------+-----------------+------------------+ | Net assets | | | 1,813,810 | 3,162,279 | +----------------------------------+-----------+-----------------+-----------------+------------------+ | | | | | | +----------------------------------+-----------+-----------------+-----------------+------------------+ | Equity | | | | | +----------------------------------+-----------+-----------------+-----------------+------------------+ | Share capital | 18 | | 390,932 | 376,298 | +----------------------------------+-----------+-----------------+-----------------+------------------+ | Share premium | 18 | | 3,567,081 | 3,567,081 | +----------------------------------+-----------+-----------------+-----------------+------------------+ | Merger reserve | | | (572,306) | (857,672) | +----------------------------------+-----------+-----------------+-----------------+------------------+ | Share option reserve | | | 738,593 | 615,778 | +----------------------------------+-----------+-----------------+-----------------+------------------+ | Retained losses | | | (2,310,490) | (539,206) | +----------------------------------+-----------+-----------------+-----------------+------------------+ | | | | | | +----------------------------------+-----------+-----------------+-----------------+------------------+ | Total equity | | | 1,813,810 | 3,162,279 | +----------------------------------+-----------+-----------------+-----------------+------------------+ | | | | | | +----------------------------------+-----------+-----------------+-----------------+------------------+ These financial statements were approved by the Board on 9 February 2009 and signed on its behalf by P Harvey Director I Price Director Consolidated statement of changes in equity +-------------------------------------------------------+----------------+---------------------------+------------------+------------------------+--------------------+-------------+ | | Share capital | Share premium account | Merger reserve | Share option reserve | Retained losses | Total | +-------------------------------------------------------+----------------+---------------------------+------------------+------------------------+--------------------+-------------+ | | GBP | GBP | GBP | GBP | GBP | GBP | +-------------------------------------------------------+----------------+---------------------------+------------------+------------------------+--------------------+-------------+ | | - | - | - | - | - | - | | Balance at 1 February 2007 | | | | | | | +-------------------------------------------------------+----------------+---------------------------+------------------+------------------------+--------------------+-------------+ | | | | | | | | +-------------------------------------------------------+----------------+---------------------------+------------------+------------------------+--------------------+-------------+ | Loss for the period | - | - | - | - | (539,206) | (539,206) | +-------------------------------------------------------+----------------+---------------------------+------------------+------------------------+--------------------+-------------+ | | | | | | | | +-------------------------------------------------------+----------------+---------------------------+------------------+------------------------+--------------------+-------------+ | Total recognised income and expense for the period | - | - | - | - | (539,206) | (539,206) | +-------------------------------------------------------+----------------+---------------------------+------------------+------------------------+--------------------+-------------+ | | | | | | | | +-------------------------------------------------------+----------------+---------------------------+------------------+------------------------+--------------------+-------------+ | Issue of share capital | 376,298 | 3,825,124 | - | - | - | 4,201,422 | +-------------------------------------------------------+----------------+---------------------------+------------------+------------------------+--------------------+-------------+ | Share issue costs | - | (258,043) | - | - | - | (258,043) | +-------------------------------------------------------+----------------+---------------------------+------------------+------------------------+--------------------+-------------+ | Arising on consolidation | - | - | (857,672) | - | - | (857,672) | +-------------------------------------------------------+----------------+---------------------------+------------------+------------------------+--------------------+-------------+ | IFRS 2 share based expense | - | - | - | 615,778 | - | 615,778 | +-------------------------------------------------------+----------------+---------------------------+------------------+------------------------+--------------------+-------------+ | | | | | | | | +-------------------------------------------------------+----------------+---------------------------+------------------+------------------------+--------------------+-------------+ | Balance at 31 August 2007 | 376,298 | 3,567,081 | (857,672) | 615,778 | (539,206) | 3,162,279 | +-------------------------------------------------------+----------------+---------------------------+------------------+------------------------+--------------------+-------------+ | | | | | | | | +-------------------------------------------------------+----------------+---------------------------+------------------+------------------------+--------------------+-------------+ | Loss for the year | - | - | - | - | (1,771,284) | (1,771,284) | +-------------------------------------------------------+----------------+---------------------------+------------------+------------------------+--------------------+-------------+ | | | | | | | | +-------------------------------------------------------+----------------+---------------------------+------------------+------------------------+--------------------+-------------+ | Total recognised income and expense for the year | - | - | - | - | (1,771,284) | (1,771,284) | +-------------------------------------------------------+----------------+---------------------------+------------------+------------------------+--------------------+-------------+ | | | | | | | | +-------------------------------------------------------+----------------+---------------------------+------------------+------------------------+--------------------+-------------+ | Issue of share capital | 14,634 | - | 285,366 | - | - | 300,000 | +-------------------------------------------------------+----------------+---------------------------+------------------+------------------------+--------------------+-------------+ | IFRS 2 share based expense | - | - | - | 122,815 | - | 122,815 | +-------------------------------------------------------+----------------+---------------------------+------------------+------------------------+--------------------+-------------+ | | | | | | | | +-------------------------------------------------------+----------------+---------------------------+------------------+------------------------+--------------------+-------------+ | Balance at 31 August 2008 | 390,932 | 3,567,081 | (572,306) | 738,593 | (2,310,490) | 1,813,810 | +-------------------------------------------------------+----------------+---------------------------+------------------+------------------------+--------------------+-------------+ Consolidated cash flow statement +---------------------------------------------+-----------------+-----------------+------------------+ | | | 2008 | 2007 | +---------------------------------------------+-----------------+-----------------+------------------+ | | | GBP | GBP | | | | | | +---------------------------------------------+-----------------+-----------------+------------------+ | Cash flows from operating activities | | | | +---------------------------------------------+-----------------+-----------------+------------------+ | Loss before tax | | (1,606,289) | (704,201) | +---------------------------------------------+-----------------+-----------------+------------------+ | Adjustments for: | | | | +---------------------------------------------+-----------------+-----------------+------------------+ | Depreciation | | 34,386 | 11,882 | +---------------------------------------------+-----------------+-----------------+------------------+ | Amortisation | | 295,600 | - | +---------------------------------------------+-----------------+-----------------+------------------+ | Share based expense | | 122,815 | 59,528 | +---------------------------------------------+-----------------+-----------------+------------------+ | Finance income | | (23,434) | (20,697) | +---------------------------------------------+-----------------+-----------------+------------------+ | Finance cost | | 34,387 | - | +---------------------------------------------+-----------------+-----------------+------------------+ | Negative goodwill | | (73,815) | - | +---------------------------------------------+-----------------+-----------------+------------------+ | Increase in trade and other receivables | | (20,677) | (49,101) | +---------------------------------------------+-----------------+-----------------+------------------+ | (Decrease)/increase in trade and other payables | (267,368) | 448,873 | +---------------------------------------------------------------+-----------------+------------------+ | | | (1,504,395) | (253,716) | | Net cash flows from operating activities | | | | +---------------------------------------------+-----------------+-----------------+------------------+ | | | | | +---------------------------------------------+-----------------+-----------------+------------------+ | Cash flows from investing activities | | | | +---------------------------------------------+-----------------+-----------------+------------------+ | Purchase of subsidiary undertaking, net of cash acquired | (49,309) | - | +---------------------------------------------------------------+-----------------+------------------+ | Payments to acquire property, plant and equipment | (31,854) | (76,048) | +---------------------------------------------------------------+-----------------+------------------+ | Payments to acquire intangible assets | | (235,479) | (2,367,934) | +---------------------------------------------+-----------------+-----------------+------------------+ | | | (316,642) | (2,443,982) | | Net cash flows from investing activities | | | | +---------------------------------------------+-----------------+-----------------+------------------+ | | | | | +---------------------------------------------+-----------------+-----------------+------------------+ | Cash flows from financing activities | | | | +---------------------------------------------+-----------------+-----------------+------------------+ | Proceeds from share issue | | - | 3,900,000 | +---------------------------------------------+-----------------+-----------------+------------------+ | Expenses of public offering | | - | (258,043) | +---------------------------------------------+-----------------+-----------------+------------------+ | Proceeds from borrowings | | 920,000 | - | +---------------------------------------------+-----------------+-----------------+------------------+ | Interest received | | 23,434 | 20,697 | +---------------------------------------------+-----------------+-----------------+------------------+ | Interest paid | | (27,465) | - | +---------------------------------------------+-----------------+-----------------+------------------+ | | | 915,969 | 3,662,654 | | Net cash flows from financing activities | | | | +---------------------------------------------+-----------------+-----------------+------------------+ | | | | | +---------------------------------------------+-----------------+-----------------+------------------+ | Net (decrease)/increase in cash and cash | | (905,068) | 964,956 | | equivalents in the year | | | | +---------------------------------------------+-----------------+-----------------+------------------+ | Cash and cash equivalents at beginning of | | 964,956 | - | | year | | | | +---------------------------------------------+-----------------+-----------------+------------------+ | | | 59,888 | 964,956 | | Cash and cash equivalents at end of year | | | | +---------------------------------------------+-----------------+-----------------+------------------+ Publication of non-statutory accounts The financial information set out in this announcement does not constitute the Group's statutory accounts for the year ended 31 August 2008, as defined in Section 240 of the Companies Act 1985, but is derived from those accounts, which are prepared in accordance with International Financial Reporting Standards. The financial statements for the year ended 31 August 2008 have not yet been filed at Companies House, but will be in due course. The auditors have reported on those accounts; their report was unqualified but included an emphasis of matter paragraph concerning a material uncertainty regarding going concern. Notes to the consolidated financial statements (extract) 1 Accounting policies (extract) Basis of preparation The consolidated financial statements have been prepared in accordance with applicable International Financial Reporting Standards as issued by the International Accounting Standards Board and adopted by the EU (IFRS). The presentational currency of the Group and functional currency of the Company is Sterling. The financial statements have been prepared on a going concern basis under the historical cost convention. The directors have also prepared a forecast which identified that the Group will have insufficient working capital to continue trading beyond 31 March 2009. However, the Group has announced that it has received an offer from 2ergo Group plc to acquire the entire issued share capital of the Company. In addition, the GBP1,000,000 loan facility provided by 2ergo Limited in July 2008 has been extended to GBP1,300,000. The independent directors of the Group have recommended the offer and it is proposed that this is effected by means of a Scheme of Arrangement under Part 26 of the Companies Act 2006. The acquisition will only be completed if certain conditions, including that the Scheme is sanctioned by the Court and approved by shareholders, are satisfied, or if permitted, waived. At the date of this report all of these conditions have not yet been satisfied or waived. Subject to satisfaction of these conditions, 2ergo Group plc has indicated its willingness to provide sufficient funding to allow the Group to meet its debts as they fall due for a period of at least 12 months from the expected date of completion of the proposed acquisition. However there is a risk that these conditions will not be satisfied or waived and therefore the necessary funding from 2ergo Group plc will not be forthcoming. For the reasons set out above this creates a material uncertainty over the ability of the Group to pay its debts as they fall due which casts significant doubt over the Group's ability to continue as a going concern. These financial statements do not include any adjustments that would result if the going concern basis of preparation was inappropriate. This information is provided by RNS The company news service from the London Stock Exchange END FR CKCKQFBKDDBK
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