Neos Resources PLC Update (8853Y)

TIDMNEOS

RNS Number : 8853Y

Neos Resources PLC

30 January 2014

NEOS Resources plc

("NEOS" or the "Group")

Update

Further to the announcement dated 23 December 2013 the Directors of NEOS hereby confirm that the Group is continuing to work toward publication of the Annual Report for the year ended 30 June 2013 which shall be published in due course but not by the end of January 2014 as previously anticipated.

As announced on 15 October 2013, the Group's consolidated cash balance at 30 September 2013 was approximately GBP0.5 million. By 31 December 2013, the equivalent balance is circa GBP412,000 with GBP321,000 of that held by UK Group entities and GBP91,000 held by Indian subsidiaries.

The wind down of the Indian business has continued as anticipated in the announcement dated 15 October 2013 and previous announcements. As a consequence, the residual Indian oil seed inventory balances were liquidated in December 2013. The timing of any subsequent distribution/remittance from India to the Group remains uncertain as it will be tied into the dissolution of the local entities - a process that the Board has been advised should take twelve months to complete from now.

In the Annual report for the 18 month period ended 30 June 2012 and the interims to 31 December 2012, a contract settlement provision in the amount of GBP250,000 was disclosed. This provision had been established in respect of enquiries initiated by H M Revenue & Customs in relation to the Income Tax and National Insurance contributions paid by NEOS on certain employment contracts that were terminated in the 2008-9 and 2010-11 tax years. The Board now anticipates that a definitive assessment will be issued shortly. The Board estimates that the assessment will be in the region of GBP217,000 and that the liability will need to be settled during the next twelve months. Accordingly, the board anticipates that the Group's available cash balances will be reduced in the near future.

In April 2012, the Group sold certain assets to Quinvita N.V. and part of the consideration received was an interest bearing loan, to be repaid by April 2017. Although the Group's receivable is secured against the germplasm and animal feed intellectual property sold, the Directors will now provide against the recoverability of the GBP417,831 balance due as at 30 June 2013 as Quinvita has entered in to a judicial reorganisation procedure to seek protection from its creditors. Creditors will have an opportunity to vote on the judicial reorganisation plan in March 2014.

Following a review of the UCO contract that completed as expected in November 2013 the Board has concluded that it will not be possible to reach sustainable profitable volumes in the near future and therefore plans to develop the trade have been put on hold and all revenue generating activities within the Group have effectively ceased with effect from January 2014.

In recognition of the Group's cash position, the Board has resolved that the Group should not attempt to conduct any business other than safeguarding its remaining cash and therefore the Group has become an investing company for the purposes of Rule 8 of the AIM Rules for Companies. It is the directors' current intention to seek approval of an investing policy at the Group's next annual general meeting. In connection with this, the Board is continuing to investigate the circumstances under which the Group's tax losses might be available for future use. In the meantime, the Group has taken action to further reduce the cash burn rate and hereby confirms that the present directors have waived any rights to receive remuneration for 2014 until further notice.

In conclusion, the Board continues to work toward the completion of the overdue June 2013 Annual Report and whilst the Group remains solvent, it is acknowledged that it will require some additional funding for it to be considered as a going concern and to retain its AIM listing. To that end, the Board has entered into discussions with its major shareholders in respect of the future direction of the Group and its funding requirements for the next 12 months.

Enquiries:

 
 NEOS Resources plc                                 [phone] 
 Nicholas Myerson - Chief Executive 
  Officer 
 
 finnCap Ltd                                   [phone] 
 Stuart Andrews 
  Christopher Raggett 
 
 
 
 
 

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