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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Cmr Fuel | LSE:CMF | London | Ordinary Share | GB00B0MKQ219 | ORD 0.6P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 15.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
Hot Features
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Embargoed Release: 07:00hrs Tuesday 28 August 2007
CMR Fuel Cells Plc
(`CMR' or the `Company')
Interim Results for the six-month period ended 30th June 2007
CMR Fuel Cells plc, the Cambridge based compact fuel cell stack specialist, is
pleased to announce its second set of interim results since its successful
admission to trading on the AIM market in December 2005.
Highlights
* Entered into a Joint Development Agreement with Samsung SDI
* Entered into Collaborative DTI funded development partnership with Johnson
Matthey Plc and Accelrys Inc
* Developed and demonstrated a stack delivering a power density of greater
than 500 watts per litre
* Continued to operate well within budget, with strong cash reserves
Chairman's Statement
The six month period to 30 June 2007 has been one of continued progress for
CMR, and I am very pleased to report that we have strengthened our already
strong position with consumer electronics OEMs and suppliers around the world.
2006 saw the Company make great technical, organisational and corporate strides
which will be the foundation for deeper commercial engagement with our
partners. CMR continues to build respect and trust with its partners; essential
pre-requisites for building strong business relationships in our key Asian
markets.
Regular and close liaison with our potential customers has shown that as their
plans are becoming more tangible and focussed on obtaining workable power
solutions and less focussed on selecting specific technologies, CMR's
world-class team, superb facilities and clear commercial focus mean that we
have the flexibility and capability to be confident in our ability to provide
the solutions they require.
Demand for small, cost-effective and efficient portable fuel cell systems
continues to grow - driven by the need to overcome the stagnating power density
and safety issues associated with Lithium batteries. We believe that many OEMs
will field-trial Methanol powered portable fuel cell systems into Asian markets
in 2008/9 ahead of mass-market launches from 2010 onwards. However, price
volatility of platinum and ruthenium metals, commonly used to make catalysts,
is a significant concern for these OEMs, and the elimination of these materials
has become a key objective across the industry. This should enhance the
prospects for CMR. Our R&D program has already demonstrated very high
volumetric power density in our stacks and, as anticipated in our final results
for 2006, we have been successfully focussing on using lower cost materials and
achieving higher efficiencies. These will remain key activities for the
foreseeable future. We have continued to build strong relationships with
innovative suppliers of catalysts, membranes, membrane-electrode assemblies
(MEAs) and other key components whilst continuing to develop our own
capabilities in these areas.
The announcement of our Joint Development Agreement with Samsung SDI during the
period was a major endorsement of our proposition. Major OEMs have a history of
closely guarding their brand and do not normally allow such announcements. We
expect to be able to announce more of this type of agreement, both on the
customer and supplier sides of our business, in future reports.
We continue to invest funds and resources, as planned, to develop new and
improved technologies for future products. Our technical team is wholly
focussed on developing our first generation products, but having a credible
road-map of improved products is an essential part of being regarded as a
long-term partner by our customers. To this end we have continued to work with
Solvay SA and XAAR plc on novel low-cost, high-throughput MEA production, as
well as entering into collaboration with Johnson Matthey plc and Accelrys Inc.
to facilitate the discovery of better catalysts. These are not planned to feed
into the first generation products, but show our commitment to working with
market leaders in allied fields to attain and maintain the market leadership
position from which we aim to build CMR's future revenue streams.
The Company's finances continue to be tightly managed and the Company continues
to operate well within our budget. We currently anticipate that our cash
reserves are sufficient for planned operations until late 2009. At 31 June
2007, assets totalled £10.3m (June 2006: £12.1m), of which £9.6m was held in
cash and short term deposits (June 2006: £11.5m).
In accordance with the dividend policy disclosed at the time of the IPO, the
Board is not recommending payment of a dividend.
Michael Priestnall, one of CMR's founders, will be leaving the company to
pursue alternative opportunities. He will be continuing to provide
intellectual property services to the company on a consultancy basis. We wish
him well for the future and sincere thanks for his contribution to date.
Further details will follow in due course.
Finally I would like to thank all our staff for their commitment, innovation
and hard work that has produced the sustained progress that is central to the
success of the business and I look forward to reporting on their continued
success throughout the rest of the year.
Chief Executive's report
I am very pleased to report that the Company has made good progress in all of
the areas specified as key activities in the 2006 Annual Report.
During the period we have maintained a high level of commercial activity in our
target areas and CMR's direct approach to OEMs and system integrators continues
to be fruitful with closer ties being forged in a number of areas with major
industry players for both customer and supplier relationships. The highlight
of this was the announcement of a Joint Development Agreement with Samsung SDI,
a world leader in the delivery of innovative, leading-edge consumer products.
Samsung SDI is in the vanguard of major OEMs who recognise the potential that
fuel cells have to power the next generation of connected, feature rich,
`always on' electronic devices. I expect to be able to announce similar
agreements in future reports.
The Period also saw the Company's global reputation for technical
leadership further recognised, with invitations to deliver key-note
presentations at major industry events in Japan, USA and Taiwan. CMR also
exhibited at the two premier global fuel cell exhibitions where relationships,
new and old, were established and strengthened with particular interest in
CMR's stack demonstrator product which was the smallest on show at both events.
CMR remains the UK's only developer of direct methanol fuel cell stacks and one
of only a handful of such companies in the world. Our development team
continues to demonstrate the world-class capability for which they are
justifiably recognised. The stack supplied to Samsung SDI under the Joint
Development Agreement was delivered on time and was successfully accepted at
first time of testing.
We have continued to make significant progress in developing the small,
low-cost, efficient stacks that the market needs - during the Period the R&D
program targets of increasing fuel and air utilisation in the stack from C.25%
to C.50% and operation at lower temperatures were successfully met.
Rising Platinum and Ruthenium prices have become a major concern in the
industry and we are able to actively respond to this. Our team has the
capability to develop and use a wide variety of underlying technologies and we
are evaluating alternative catalysts in acid (proton exchange) and alkali
(anion exchange) environments. Additionally, we are working closely with
suppliers of Platinum and Ruthenium free catalysts to test and integrate their
products into our stacks. Developing solutions to such problems is not trivial,
but we believe that they are signs of a market that is maturing and moving
closer to reality. Whilst there is still much development to do, CMR's broad
technical strength positions the Company very well to meet our customers'
stringent requirements.
During the six month period, the adjusted loss before tax (that is, loss before
tax adjusted for the cost of share options) was £1.1m (June 2006: £0.6m),
reflecting the budgeted increased level of development activity during 2007.
The increased activity has required additional technical staff, equipment and
office space, the expenditure on which was in line with budget. At the balance
sheet date, staff numbers were 26 in total.
Our objectives for the remainder of 2007 remain as per those outlined in the
2006 annual report, with specific focus on:
* Developing and announcing more commercial agreements with OEMs
* Building valuable and committed relationships with suppliers
* Remaining responsive and market driven - providing solutions for our
customers
* Continuing to address key technical targets - including efficiency and
cost, by flexible use of our world-class technical capability
* Securing granted patents in key territories
The Company now has a world-class, motivated and dynamic team with clear
technical and commercial goals and we continue to believe that the portable
electronics market will embrace fuel cell technology as the next generation of
long running power supply.
Further Information
John Halfpenny CMR Fuel Cells plc 01223 875 544
CEO
Andrew Tan Hansard Communications 020 7245 1100
Ltd
Account Director
Interim results for the 6 Months Ended 30th June 2007
Consolidated Interim Income Statement
For the six months ended 30 June 2007
Unaudited Unaudited Unaudited
6 months ended Restated Year ended
30 June 6 months 31 December
ended
2007 2006
30 June
2006
Note £'000 £'000 £'000
Revenue 17 - -
Share option costs (409) (390) (726)
Other administrative (1,351) (820) (1,825)
expenses
Administrative expenses (1,760) (1,210) (2,551)
Other operating income - - -
Operating loss (1,743) (1,210) (2,551)
Finance income 261 264 523
Loss on ordinary (1,482) (946) (2,028)
activities before taxation
Tax on loss on ordinary - - -
activities
Loss for financial period (1,482) (946) (2,028)
Loss per share - basic and 3 7.30p 4.66p 9.99p
diluted
Additional information on Unaudited Restated Unaudited
the Consolidated Income
statement 6 months ended 6 months Year ended
30 June ended 31 December
2007 30 June 2006
2006
£'000 £'000 £'000
Loss on ordinary (1,482) (946) (2,028)
activities after taxation
Share option costs 409 390 726
Adjusted loss before (1,073) (556) (1,302)
taxation
Basis of preparation
Further information is given in Note 1. No other gains or losses arose in the
year other than those reported above.
Consolidated Interim Balance Sheet
at 30 June 2007
Note Unaudited Unaudited Unaudited
30 June 30 June 31 December
2007 2006 2006
£'000 £'000 £'000
Non current assets
Other intangible assets - 30 52 41
patent applications
Property, plant and equipment 585 314 539
615 366 580
Current assets
Trade and other receivables 168 200 167
Cash and cash equivalents 4 9,545 11,533 10,587
9,713 11,733 10,754
Total assets 10,328 12,099 11,334
Current Liabilities
Trade and other payables 230 182 163
230 182 163
Shareholders' Equity
Share capital 2,030 2,030 2,030
Share premium 9,776 9,776 9,776
Merger reserve 1,335 1,335 1,335
Retained earnings (3,043) (1,224) (1,970)
Total Equity attributable to 10,098 11,917 11,171
shareholders
Total Shareholders' Equity 10,328 12,099 11,334
and Liabilities
Consolidated Interim Statement of changes in Shareholders' Equity
As at 30 June 2007
Share capital Share Premium Merger Reserve Retained Total
Earnings
Equity
£ '000 £ '000 £ '000 £ '000 £ '000
As at 1 January 2006 2,030 9,776 1,335 (668) 12,473
Loss for the period - - - (946) (946)
Share based payment - - - 390 390
charge
As at 30 June 2006 2,030 9,776 1,335 (1,224) 11,917
Loss for the period - - - (1,082) (1,082)
Share based payment - - - 336 336
charge
As at 31 December 2006 2,030 9,776 1,335 (1,970) 11,171
Loss for the period - - - (1,482) (1,482)
Share based payment - - - 409 409
charge
As at 30 June 2007 2,030 9,776 1,335 (3,043) 10,098
Consolidated Interim Cash Flow Statement
For the six months ended 30 June 2007
Unaudited Restated Unaudited
Unaudited
Six months year
ended Six months
ended ended
30 June
30 June 31 December
2007
2006 2006
£'000 £'000 £'000
Cash flows from operating
activities
Loss after tax (1,482) (946) (2,028)
Add back depreciation of property, 96 35 84
plant & equipment
Add back amortisation of intangible 11 11 22
fixed assets
Increases in receivables (61) (105) (74)
Increases/(decreases) in payables 66 (190) (207)
Finance income (261) (264) (523)
Add back tax charge - - -
Share based payment charge 409 390 726
Net cash used in operating (1,222) (1,069) (2,000)
activities
Investing activities
Interest received 322 264 523
Purchases of property, plant & (142) (302) (576)
equipment
Net cash received from/(paid out 180 (38) (53)
of) investing activities
Net cash raised from financing - - -
activities
Net decrease in cash and cash (1,042) (1,107) (2,053)
equivalents
Cash and cash equivalents at 10,587 12,640 12,640
beginning of period
Cash and cash equivalents at end of 9,545 11,533 10,587
period
Notes to the Financial Statements
For the six months ended 30 June 2007
1. Basis of Preparation
Basis of Accounting
The consolidated interim financial statements have been prepared in accordance
with the AIM Rules for Companies and on a basis consistent with the accounting
policies set out in note 2, which will be applied when the Group prepares its
first set of annual financial statements in accordance with International
Financial Reporting Standards (IFRS) as adopted by the EU for the financial
year ending 31 December 2007.
These are the Group's first interim financial statements prepared under the
recognition and measurement requirements of those IFRSs expected to be
applicable to the 31 December 2007 financial statements and therefore IFRS 1
`First-time Adoption of International Financial Reporting Standards' has been
applied. An explanation of the transition to IFRS is provided in note 2 below.
As permitted, the Group has chosen not to adopt IAS 34 `Interim Financial
Statements' in preparing these interim financial statements and therefore the
interim financial information is not in full compliance with IFRS.
The interim financial statements are unaudited and do not constitute statutory
accounts within the meaning of Section 240 of the Companies Act 1985.
The financial information for the year ended 31 December 2006 has been derived
from the published statutory accounts as restated by the IFRS adjustments set
out in note 2. A copy of the full accounts for that period, on which the
auditors issued an unqualified report that did not contain statements under
Section 237 (2) or (3) of the Companies Act 1985, has been delivered to the
Registrar of Companies.
The results for the six months ended 30 June 2006 have been restated as IFRS 2
(FRS 20) was not applied when the results were originally published.
The Board of CMR Fuel Cells plc approved this interim report on 24 August 2007.
Use of estimates and judgements
The preparation of financial statements which comply with IFRS requires the use
of estimates and assumptions, and for management to exercise its judgement in
the process of applying the Group's accounting policies. Critical judgements
and key estimates and assumptions are disclosed below.
These judgements and estimates are based on management's best knowledge of the
relevant facts and circumstances, having regard to prior experience, but actual
results may differ from the amounts included in the financial report about such
judgements and estimation is contained in the accounting policies and/or the
notes to the financial report and the key areas are summarised below:
a. Recognition of the carrying value or write off of research and development
expenditure
b. Review of asset carrying values and impairment charges
c. Recognition of deferred tax asset on losses
Research and Development
In the opinion of the directors, the Group's expenditure on fuel cell
development falls into the category of `development of new products'. The
elements of uncertainty inherent in considering whether development expenditure
should be deferred and matched against future revenue are considerable. In the
opinion of the directors, whilst recognising that the majority of the criteria
(as detailed below in note 2 accounting policies) have been met, it would be
imprudent at this stage of the Group's development to form the opinion that
commercial viability has yet been established and that expenditure on
development should hence be carried forward.
Impairment charges
In 2004, the Group made a particular purchase from Sagentia Limited (formerly
Scientific Generics Limited) of intellectual property in respect of certain
patent applications for a total consideration of £111,000 which were recorded
as an intangible asset. The Group estimated at the time of purchase, that the
useful economic life of the patents acquired would be two years post
production, which implied a total life of five years. This asset was recorded
at cost. In the opinion of the directors, as at the interim balance sheet date,
the estimated useful economic life of the intellectual property acquired was
not materially different from that originally estimated at the time of
purchase.
2. Significant Accounting Policies
First time adoption of IFRS
These are the Group's first financial statements prepared in accordance with
the recognition and measurement requirements of those IFRSs expected to be
applicable to the 31 December 2007 financial statements. Accordingly, IFRS 1
'First Time Adoption of International Financial Reporting Standards' has been
applied. The Group's transition date to IFRS is 1 January 2006, and the Group
prepared its opening balance sheet at that date in accordance with IFRS
effective at 31 December 2007 except as specified below. In preparing these
financial statements, the Group applied mandatory exceptions and certain of the
optional exemptions available in IFRS 1 from the full retrospective application
IFRS exemptions
IFRIC 11 'IFRS 2 - Group and Treasury Share Transactions' was early adopted in
the 2006 financial year. Where the parent company grants rights to its equity
instruments to employees of a subsidiary, the parent recognises the share based
payment transaction in its separate financial statements as an increase in
equity and in the cost of its investment in that subsidiary.
Standards and Interpretations to Standards not yet effective
The following Standards and Interpretations have been issued, but are not yet
effective and have not been early
adopted by the Group:
IFRS 8 'Operating Segments'
IAS 23 'Borrowing Costs'
IFRIC 7 'Applying the Restatement Approach under IAS 29 Financial Reporting in
Hyperinflationary Economies'
IFRIC 8 'Scope of IFRS 2'
IFRIC 9 'Reassessment of Embedded Derivatives'
IFRIC 10 'Interim Financial Reporting and Impairmenf
IFRIC 12 'Service Concession Arrangements'
Optional exemptions to full retrospective restatement elected by the Group
(i) Business combinations exemption
The Group has taken the business combination exemption, which allows that IFRS
3 not be applied to business combinations that took place prior to 1 January
2006, the date of transition to IFRS.
(ii) Share-based payments
The Group has elected to apply IFRS 2 'Share-based Payments', only to awards of
equity instruments made after 7 November 2002, which had not vested by 1
January 2006. The Group had previously elected to apply IFRS 2 in the audited
financial statements for the year ended 31 December 2006.
Mandatory exceptions to full retrospective restatement applied by the Group
Estimates exception
Estimates under IFRS at the date of transition are consistent with estimates
made at the same date under UK GAAP. Reconciliations and explanations of the
effect of the transition from UK GAAP to IFRS on the Group's equity and its
profit or loss are provided in note 6.
Basis of Consolidation
This consolidated financial report incorporates the financial results, assets,
liabilities and cash flows of the Company and its subsidiary up to 30 June
2007.
Subsidiaries are entities which are controlled by the Group. Control is deemed
to exist when the Group has the power, directly or indirectly to govern the
financial and operating policies of an entity so as to obtain benefits from its
activities. The results of subsidiaries acquired during the period are included
in the consolidated income statement from the effective date of acquisition.
Where necessary, adjustments are made to the financial results of subsidiaries
to bring the accounting policies used into line with those used by the group.
All intra-group transactions, balances, income and expenses are eliminated on
consolidation.
Business Combinations
On acquisition, the assets and liabilities and contingent liabilities of a
subsidiary are measured at their fair values at the date of acquisition. Any
excess of the cost of acquisition over the fair values of the identifiable net
assets acquired is recognised as goodwill. Any deficiency of the cost of
acquisition below the fair value of the identifiable net assets acquired,
referred to as `Negative Goodwill', is credited to the profit and loss account
in the period of acquisition.
Foreign currencies
Transactions in currencies other than the functional currency (the currency of
the primary economic environment in which a business entity is operating) are
recorded at the rates of exchange prevailing on the dates of transactions.
Monetary assets and liabilities denominated in such other currencies are
retranslated at the rates prevailing on the balance sheet date. Profits and
losses arising from exchange are included in the income statement for the
period.
Operating leases
The costs of all operating leases are charged against operating profit on a
straight-line basis at existing rental levels. Any incentives to sign operating
leases are recognised in the income statement in equal instalments over the
terms of the lease.
Finance leases
Leases are classified as finance leases where the terms of the lease transfer
substantially all the risks and rewards of ownership to the Group. All other
leases are classified as operating leases.
Property, plant and equipment held under finance leases are recognised as
assets in the balance sheet at their fair values or, if lower, at the present
value of the minimum lease payments, both determined at the inception of the
lease. The corresponding obligation is recorded as finance lease obligations
and presented within borrowings. The interest element of leasing payments
represents a constant proportion of the capital balance outstanding and is
charged to the income statement over the period of the lease.
Research and Development
Expenditure on research (or the research phase of an internal project) is
recognised as an expense in the period in which it is incurred.
Development costs incurred on specific projects are capitalised when all the
following conditions are satisfied:
* completion of the intangible asset is technically feasible so that it will
be available for use or sale
* the group intends to complete the intangible asset and use or sell it
* the group has the ability to use or sell the intangible asset
* the intangible asset will generate probable future economic benefits. Among
other things, this requires that there is a market for the output from the
intangible asset or for the intangible asset itself, or, if it is to be
used internally, the asset will be used in generating such benefits
* there are adequate technical, financial and other resources to complete the
development and to use or sell the intangible asset, and
* the expenditure attributable to the intangible asset during its development
can be measured reliably
Development costs not meeting the criteria for capitalisation are expensed as
incurred. Careful judgement by the directors is applied when deciding whether
the recognition requirements for development costs have been met. This is
necessary as the economic success of any product development is uncertain and
may be subject to future technical problems at the time of recognition.
Judgements are based on the information available at each balance sheet date.
In addition, all internal activities related to the research and development of
new products are continuously monitored by the directors.
Provisions
A provision is recognised when, as a result of a past event, the Group has a
legal or contractual obligation, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation, and a
reliable estimate of the amount of such an obligation can be made.
Provisions are measured at the best estimate of the expenditure required to
settle the obligation at the balance sheet date. When the effect is material,
the expected future cash flows required to settle the obligation are discounted
at the pre-tax rate that reflects the current market assessments of the time
value of money and the risks specific to the obligation.
Provision is made for the present value of any onerous element recognised in an
operating lease. Provision is also made for the estimated cost of dilapidation
repairs arising from wear and tear to leased properties where the Group has a
present legal obligation to repair based on terms of the lease agreement.
Taxation
The taxation expense is the tax currently payable and represents the sum of
current tax and deferred tax. Tax balances are not discounted.
The tax currently payable is based on taxable profit for the period. Taxable
profit differs from net profit as reported in the income statement because it
excludes items of income or expense that are taxable or deductible in other
periods and it further excludes items that are never taxable or deductible. The
liability for current tax is calculated using tax rates that have been enacted
or substantively enacted by the balance sheet date in the country in which
operation are based.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial report
and the corresponding tax bases used in the computation of taxable profit, and
is accounted for using the balance sheet liability method. Deferred tax
liabilities are recognised for all taxable temporary differences and deferred
tax assets are recognised to the extent that it is probable that taxable
profits will be available against which deductible temporary differences can be
utilised. Such assets and liabilities are not recognised if the temporary
difference arises from the initial recognition of goodwill or from the initial
recognition (other than in a business combination) of other assets and
liabilities in a transaction that affects neither the tax profit nor the
accounting profit. The carrying amount of deferred tax assets is reviewed at
each balance sheet date and reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to allow all or part of the
asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset is realised based on tax
rates and laws enacted or substantially enacted at the balance sheet date.
Deferred tax is charged or credited in the income statement, except when it
relates to items charged or credited directly to equity, in which case the
deferred tax is also dealt with in equity. The tax base of an item takes into
account its intended method of recovery by either sale or use.
Property, plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any
recognised impairment loss.
Depreciation on plant and machinery is charged so as to write off the cost less
residual values of assets over the estimated lives of the asset using the
straight-line method. Depreciation on office equipment is over a period of 3 to
4 years. The gain or loss arising on the disposal of an asset is determined as
the difference between the sales proceeds and the carrying amount of the asset
and is recognised in income.
Methods of depreciation, residual values and useful lives are reviewed and
adjusted, if appropriate, at each balance sheet date.
Intangible assets
Identifiable intangible assets acquired as part of a business combination are
initially recognised separately from goodwill if the asset's fair value can be
measured reliably, irrespective of whether the asset had been recognised by the
acquiree before the business combination. An intangible asset is considered
identifiable only if it is separable or if it arises from contractual or other
legal rights, regardless of whether those rights are transferable or separable
from the entity or from other rights and obligations. Where intangible assets
are regarded as having limited useful economic lives, they are amortised over
those lives.
Impairment of property, plant and equipment and intangible assets
At each balance sheet date the Company reviews the carrying amounts of its
property, plant and equipment and intangible assets to determine whether there
is any indication that those assets have suffered an impairment loss. If any
such indication exists, the recoverable amount of the asset is estimated in
order to determine the extent of the impairment loss (if any). Where the asset
does not generate cash flows that are independent from other assets, the
Company estimates the recoverable amount of the cash-generating unit to which
the asset belongs.
The recoverable amount is the higher of fair value less costs to sell and value
in use. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to
the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to
be less than its carrying amount, the carrying amount of the asset
(cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognised as an expense immediately, unless the relevant asset is carried
at a revalued amount, in which case the impairment loss is treated as a
revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the
asset (cash-generating unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss been
recognised for the asset (cash-generating unit) in prior periods. A reversal of
an impairment loss is recognised as income immediately, unless the relevant
asset is carried at a revalued amount, in which case the reversal of the
impairment loss is treated as a revaluation increase.
Financial instruments
Financial assets and financial liabilities are recognised on the balance sheet
when the Company becomes a party to the contractual provisions of the
instrument.
Finance income
Interest receivable on cash or cash equivalents is recognised in the Income
Statement as it becomes due.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into. An equity instrument is
any contract that evidences a residual interest in the assets of the Company
after deducting all of its liabilities.
Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received,
net of direct issue costs.
Receivables
Receivables are initially recorded at their fair value and thereafter, if
appropriate, recorded at amortised cost. As they are non-interest bearing this
approximates to their invoiced amount.
Payables
Payables are initially recorded at their fair value and thereafter, if
appropriate, recorded at amortised cost. In most cases this approximates to
their invoiced amount.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash balances and short term investments
that are accessible at up to three months notice.
IFRS 2 `Share-based payments'
Where share options are granted to employees as part of their remuneration, the
fair value of options granted is recognised as an employee expense in the
income statement with a corresponding increase in equity. The fair value of
options is measured at the grant date, using a Black-Scholes option valuation
model, and expensed through the income statement over the period during which
the employees become unconditionally entitled to the options. The amount
recognised in the income statement is adjusted each year for the expected and
actual number of options vesting.
The proceeds received, net of any directly attributable transaction costs, are
credited to share capital and share premium when the options are exercised.
3. Loss Per Share
Unaudited Unaudited Unaudited
Six months Six months Year
Ended ended ended
30 June 30 June 31 December
2007 2006 2006
£'000 £'000 £'000
Loss per share has been calculated 1,482 946 2,028
on the loss of:
The weighted average number of 20,304,846 20,304,846 20,304,846
shares used was:
As the Group was making losses throughout the period the loss per share and the
diluted loss per share are the same.
The weighted average number of shares is derived from the number of shares in
issue throughout the relevant period. Because the Group was making losses
throughout the period, the weighted average number of shares excludes the
effect of any unexercised share options.
4. Cash and Cash equivalents
Unaudited Unaudited Unaudited
Six Months ended Six Months ended Year ended
30 June 30 June 31 December
2007 2006 2006
£ '000 £ '000 £ '000
Cash 195 133 262
Short term investments 9,350 11,400 10,325
Total cash and cash equivalents 9,545 11,533 10,587
5. Restatement of June 2006 Income Statement
6 months ended Adjustments Restated
30 June 6 months ended
2006 30 June
(as previously 2006
stated)
£'000 £'000 £'000
Turnover - - -
Share option costs - (390) (390)
Other administrative (820) - (820)
expenses
Administrative expenses (820) (390) (1,210)
Other operating income - - -
Operating loss (820) (390) (1,210)
Interest receivable 264 - 264
Loss on ordinary activities (556) (390) (946)
before taxation
Tax on profit on ordinary - - -
activities
Loss for financial period (556) (390) (946)
Loss per share - basic and 2.74p 1.92p 4.66p
diluted
The results for the six months ended 30 June 2006 have been restated as IFRS 2
(FRS 20) was not applied when the results were originally published.
6. Reconciliation of UK GAAP and IFRS
The Company first adopted IFRS with effect from 1 January 2006. With the
exception of the restatement of the 30 June 2006 income statement (for the
reasons detailed above in note 5), there are no items within the income
statements or balance sheets of the Company which require restating as a result
of the transition to IFRS.
END
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