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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Vision Media | LSE:VMG | London | Ordinary Share | GB00B23Z3283 | 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% | 1.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number : 8166X
Vision Media Group (Intl) PLC
30 June 2008
Press Release 30 June 2008
Vision Media Group (International) plc
("VMG", "the Group" or "the Company")
Preliminary Results
Vision Media Group (International) plc (AIM:VMG), the outdoor media contractor, announces its Preliminary Results for the year ended 31
December 2007.
Highlights
* Losses from continuing operations narrow to £4.6 million (2006: £6.1
million)
* Losses after tax narrow to £5.54 million (2006: £7.5 million)
* Revenue of £1.56 million (2006: £1.80 million)
* Commencement of restructuring and repositioning of the Group
Post Year End Highlights
* Completion of acquisition of Screen Media Networks Limited
* Significant contracts secured with Clear Channel Outdoor UK and Merlin
Entertainments Group
* Successfully raised in excess of £3 million, before costs, of new capital
and loans, with a further £1 million yet to be called down
* Completion of restructuring and repositioning of the Group
Commenting on the results, Mike Cottman, Executive Chairman, said: "After a year in which we changed shape and direction, a new business
is now emerging that has a sustainable future and can successfully grow. Vision Media Group is now well positioned to begin to deliver
shareholder value for its investors. We have a new strategy in place and a new executive management team to deliver it. We are now on a
sound financial footing and can look forward to profitability."
- Ends -
For further information:
Vision Media Group (International) plc
Mike Cottman, Executive Chairman Tel: +44 (0) 203 206 0001
mikec@visionmediagroupplc.com www.visionmediagroupplc.com
Seymour Pierce Limited
Stuart Lane / John Depasquale, Corporate Finance Tel: +44 (0) 20 7107 8000
stuartlane@seymourpierce.com www.seymourpierce.com
Media enquiries:
Abchurch Communications
Henry Harrison-Topham / Gareth Mead Tel: +44 (0) 20 7398 7710
gareth.mead@abchurch-group.com www.abchurch-group.com
CHAIRMAN'S STATEMENT
2007 can best be described as an annus horribilis for our Company. Having said this, it was the year that the Company changed shape and
direction and the year that finally saw a new business emerging; a business with a profitable and sustainable strategy and a platform from
which to successfully grow.
In view of the fact that our new Chief Executive Officer was not in place during 2007, I plan to cover the key elements of the Chief
Executive's Review within this statement.
Financial Results
Arriving in what was then ScreenFX at the beginning of 2007 was a daunting task. On the back of losing £7.5 million in 2006, the
business had been incurring costs of over £550,000 per month and had virtually no solid revenue stream. This year's results - a loss of
£5.54 million in 2007 - reflect the time it has taken to restructure the business whilst suffering the ongoing monthly losses referred to
and the costs associated with the restructure as the Company created the new profitable strategy for the future.
This is also the first year that the Company has been required to prepare its accounts in accordance with International Financial
Reporting Standards (IFRS) the impact of which largely relates to goodwill and is shown in note 5.
We have concentrated our efforts this year on increasing revenues and I am pleased to report that revenue from our digital network, via
local sales increased 92.7% to £1.36 million (2006: £0.70 million). At the same time we have exited from areas in which we were subscale
and with little prospect of profitable returns, such as our healthcare activities.
Business Risks
* Strategy: following the strategic review of the business, the Directors perceived that the existing company strategy could not be
successfully executed and a process of change was instigated, the details of which are covered later.
* Financial security: the business review process, combined with on going strategic advice provided by external experts, confirmed
that the working capital within the business in 2007 would be insufficient to enable the Company to continue to operate in the medium term
without additional funding. As such, a process of fund raising was instigated involving a series of equity and debt instruments from
myself, family and friends and our current institutional shareholders. This has subsequently been supplemented by borrowings from Trafalgar
Capital Advisers LLP as well as various rounds of fundraising which have been required as our liquidity was constantly under review by the
Company's management and professional advisors. I am pleased to report that, following a recent equity placement of a further 9,523,806
ordinary shares, we have concluded now in 2008 that we have sufficient funds to take the company into trading profitably.
* Minimum Rental Guarantees: the existing business model was predicated on the Company paying minimum rental guarantees to its
property partners irrespective of whether the Company enjoyed any revenue flow from advertising on the screens within the property owner's
estate. The Directors perceived this to be an extremely risky commercial relationship and instigated a process of re-negotiating all
commercial contracts to attempt to remove the minimum rental guarantees and replace them with a much more risk averse revenue share model.
At the time of writing this, I am pleased to confirm that the Company has been successful in this regard.
Key Performance Indicators (KPIs)
In view of the extreme circumstances that the Company found itself in during 2007 the Directors took the view that setting meaningful
KPIs against the existing business model was an inappropriate action at a time when the Company's very survival was its only true indication
of performance. With the Company newly repositioned, the Directors will be setting KPIs for performance measurement during the second half
of 2008.
Strategy
At the beginning of the year, it became apparent that the then business model was flawed for a number of reasons. The original ScreenFX
vision for the digital opportunity for out-of-home 'TV style' screen based advertising was proving to be much slower to arrive in the UK
than had been historically forecast. Furthermore, the Company was setting out to approach the opportunity with a belief that it would be
able take on the outdoor advertising giants, who effectively monopolise the outdoor advertising market in the UK, whilst addressing a
variety of separate market sectors all at once. Essentially, the Company was over manned, over stretched and under performing; with
virtually zero revenue and very little real prospect of gaining any meaningful revenues.
The first task was to identify the business model flaws, create a fresh strategy to overcome them and to develop the financial solutions
that would allow us to survive whilst the new strategy was implemented. The Company refocused the business onto its core sector of shopping
mall digital advertising and we disposed of or mothballed our non-core brands. A dramatic reduction in headcount was undertaken, from over
80 to nearer 30 personnel, and a process of re-structuring was put in place including office closures, new systems etc.
Interestingly, early in this period, we also engaged in a process of exploring the potential sale of our mall assets to one of the major
outdoor advertising contractors. After several months, this process was eventually terminated without a deal being concluded; however, it
did confirm to management that there was and, as we now know is, great inherent value in our mall portfolio and the associated advertising
opportunity that this aspect of our business represents.
During the year the Company launched a new revenue stream centred on setting up a new regionally based sales force whose mission it was
to sell advertising slots on our shopping mall digital TV screens to local businesses in the proximity of those shopping malls. After
trialling a number of alternative routes to market, this initiative started to bear fruit in the second half of the year and is now
contributing well to our income stream - it now represents the first stream of sustainable shopping mall revenue flow into the business.
However, the key to success for our Company was then and always will be the ability to generate large volumes of national advertising
revenue onto our screens - something which has historically eluded us. The way to unlock this revenue was to completely change our shopping
mall business model by outsourcing the national sales effort to one of the major outdoor advertising contractors. In order to encourage one
of them to want to work with us in this way, we needed to change our original operational approach of providing landscape TV screens in
malls to one of providing portrait digital panels; a format the outdoor advertising industry is familiar with and one which would allow us
to be confident that national advertising revenue would then flow constantly. We approached this task in the second half of the year and
eventually succeeded in our goal at the time of the merging of the company with Screen Media Networks Limited, at the turn of the year. This
acquisition extended our real-estate portfolio into theme parks and convenience stores as well as bringing our new Chief Executive Officer and Sales and Marketing Director, Dominic Brookman
and Tim Ritson respectively. It was this acquisition which was the key to gaining our recently announced ten year contract with Clear
Channel Outdoor UK - the leading outdoor advertising contractor in the UK - the benefits of which will start to flow in the second half of
2008.
As part of the refocusing of our business, the Company agreed to accept an offer for its TrainFX business based on an overall value of
£2 million. At the turn of the year, this transaction was still uncompleted. The Company agreed to replace the original potential purchaser
of the trains business with a new acquirer for the same £2 million valuation using a mixture of primarily loan notes, preference shares and
an equity stake in the acquiring company. Negotiations are underway to turn these instruments into cash.
All of the initiatives that I have described above will produce a profitable business model in the future. However, as the results
show, 2007 still bears the financial brunt of the previous shortcomings. Re-structuring and re-financing our business has been costly and
difficult; including a period where we requested the suspension of our shares whilst we went through emergency re-financing. However, I am
pleased to report that the company succeeded in re-listing its shares in September last year and has now completed the final elements of our
re-financing programme in June 2008.
Outlook
Vision Media Group (International) Plc was born at the time of the acquisition of Screen Media Networks Limited. VMG is a company that
is now well positioned to deliver shareholder value for its investors. We have a new strategy in place and a new executive management team
to deliver it. We have a new strategic ten year national sales partnership with Clear Channel Outdoor UK and have renegotiated the majority
of our shopping mall contracts and our new five year Merlin Entertainments Group theme park contract to exclude the onerous minimum rental
guarantees of the past. All our new contracts are based on a revenue share arrangement with the estate owners; a much more attractive risk
profile for our Company. Our Company is now on a sound financial footing and can look forward to profitability at last.
I would like to close this statement by thanking all those who have stuck with us through this extremely difficult period - our
commercial partners and suppliers, our institutional investors and other shareholders and all of my colleagues in the business who have kept
the faith. Without all of your patience, commitment and above all trust, none of this turnaround would have been possible. We can now look
forward to the future with confidence. Thank you.
Mike Cottman
Executive Chairman
27 June 2008
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2007
2007 2006
As restated
Notes £ £
REVENUE from continuing operations 1 1,563,275 1,802,092
Cost of sales in respect of continuing operations (2,273,868) (2,578,262)
Gross loss from continuing operations (710,593) (776,170)
Administrative expenses in respect of continuing operations (3,900,406) (5,296,191)
LOSS FROM CONTINUING OPERATIONS (4,610,999) (6,072,361)
Finance costs in respect of continuing operations (401,395) (680,590)
Finance income in respect of continuing operations 29,661 9,429
LOSS BEFORE TAXATION before result for discontinued operations (4,982,733) (6,743,522)
Taxation - (6,992)
LOSS AFTER TAXATION before result for discontinued operations (4,982,733) (6,750,514)
Loss after taxation from discontinued operations 1 (561,611) (763,946)
LOSS FOR THE FINANCIAL YEAR ATTRIBUTABLE TO EQUITY
HOLDERS OF THE PARENT COMPANY (5,544,344) (7,514,460)
Loss per ordinary share - basic and diluted 6 (24.52)p (180.98)p
Loss per ordinary share continuing activities - basic and diluted 6 (22.04)p (162.58)p
Loss per ordinary share discontinued activities - basic and diluted 6 (2.48)p (18.40)p
All income and expenditure has been recognised in the income statement in both the current and prior years.
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2007
2007 2006
As restated
Notes £ £
ASSETS
Non-current assets
Property plant and equipment 1,538,214 2,452,099
Intangible assets 2 1,200,088 1,529,620
2,738,302 3,981,719
Current assets
Trade and other receivables 1,910,845 1,499,729
Cash and cash equivalents 36 3,393,369
1,910,881 4,893,098
Assets held for sale 3 573,877 -
Total assets 5,223,060 8,874,817
EQUITY AND LIABILITIES
Equity attributable to equity holders of the company
Share capital 6,967,611 6,610,748
Share premium 11,372,328 10,112,144
Retained earnings (18,556,661) (13,012,317)
Total equity (216,722) 3,710,575
Non-current liabilities
Trade and other payables - -
Financial liabilities 95,286 558,932
Total non-current liabilities 95,286 558,932
Current liabilities
Trade and other payables - continuing 3,249,644 3,506,644
activities
Financial liabilities - continuing 1,868,187 1,098,666
activities
Total current liabilities 5,117,831 4,605,310
Trade and other payables in respect of 3 161,570 -
the disposal group
Financial liabilities in respect of the 3 65,095 -
disposal group
Total liabilities 5,439,782 5,164,242
Total equity and liabilities 5,223,060 8,874,817
The financial statements were approved by the board of directors and authorised for issue on 27 June 2008 and are signed on their behalf
by:
M Cottman E Anstee
Director Director
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2007
Share
Share Premium Retained
Capital Account Earnings
Total
£ £ £ £
Group
At 1 January 2006 1,693,333 6,264,852 (5,497,857) 2,460,328
Proceeds of issue of shares 4,917,415 3,847,292 - 8,764,707
(net of costs)
Retained loss for the year as - - (7,053,610) (7,053,610)
previously stated
Prior period adjustment - - - (460,850) (460,850)
impairment charge
Loss for the period as - - (7,514,460) (7,514,460)
restated
At 31 December 2006 6,610,748 10,112,144 (13,012,317) 3,710,575
Proceeds of issue of shares 356,863 1,260,184 - 1,617,047
(net of costs)
Retained loss for the year - - (5,544,344) (5,544,344)
At 31 December 2007 6,967,611 11,372,328 (18,556,661) (216,722)
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2007
2007 2006
As restated
£ £
CASH FLOW FROM CONTINUING OPERATING ACTIVITIES
Loss before tax (4,982,733) (6,743,522)
Depreciation 787,832 881,769
Amortisation of intangible assets 94,412 40,778
Goodwill impairment 73,679 460,850
Finance costs 401,395 680,670
Finance income (29,661) (9,603)
Increase in trade and other receivables (493,537) (516,558)
Increase in trade and other payables 11,213 1,838,109
CASH USED IN CONTINUING OPERATIONS (4,137,400) (3,367,507)
Finance costs (401,395) (680,670)
Finance income 29,661 9,603
Taxation - (12,033)
NET CASH USED IN CONTINUING OPERATING ACTIVITIES (4,509,134) (4,026,541)
Net cash used in discontinued operating (538,608) (635,083)
activities
TOTAL CASH USED IN OPERATING ACTIVITIES (5,047,742) (4,661,624)
CASH FLOWS FROM CONTINUING INVESTING ACTIVITIES
Payments to acquire property, plant and equipment (156,473) (20,069)
Payments to acquire intangible assets (22,505) (408,673)
Payment to acquire subsidiary (6,613) (35,864)
Bank overdraft acquired with subsidiary - (9,928)
NET CASH USED IN CONTINUING INVESTING ACTIVITIES (185,591) (474,534)
Net cash used in discontinued investing (79,698) -
activities
TOTAL CASH USED IN INVESTING ACTIVITIES (265,289) (474,534)
CASH FLOWS FROM CONTINUING FINANCING ACTIVITIES
Proceeds on issue of ordinary shares 1,609,047 9,146,641
Issue costs 8,000 (381,934)
Proceeds of new borrowings 1,125,000 1,915,000
Repayment of borrowings (250,000) (1,690,000)
Repayment of bank borrowings (15,000) (15,000)
Invoice discounting (126,497) (69,077)
Capital element of finance leases repaid (595,198) (512,582)
Movement in group borrowings (854,579) (339,990)
NET CASH INFLOW FROM CONTINUING FINANCING 900,773 8,053,058
ACTIVITIES
Net cash inflow from discontinued financing 849,570 399,990
activities
TOTAL CASH INFLOW FROM FINANCING ACTIVITIES 1,750,343 8,393,048
Net (decrease)/increase in cash and cash (3,562,688) 3,256,890
equivalents
Cash & cash equivalents at the beginning of the 3,393,369 136,479
financial year
Net cash & cash equivalents at the end of the (169,319) 3,393,369
financial year
NOTES TO THE PRELIMINARY ANNOUNCEMENT
FOR THE YEAR ENDED 31 DECEMBER 2007
GENERAL INFORMATION
The preliminary financial information does not constitute full accounts within the meaning of section 240 of the Companies Act 1985 but
is derived from accounts for the years ended 31 December 2007 and 31 December 2006. The figures for the year ended 31 December 2007 are
audited. The preliminary announcement is prepared on the same basis as set out in the statutory accounts for the year ended 31 December
2007. The auditors have issued an audit report modified by the inclusion of an emphasis of matter paragraph which highlights the existence
of a material uncertainty that casts doubt on the company's and group's ability to continue as a going concern. Their opinion is not
qualified in this respect. Further information is disclosed in the going concern note included as note 7 to this announcement. The Board
believes that the actions taken over the last six months have since significantly enhanced the financial position of the company.
While the financial information include in this preliminary announcement has been prepared in accordance with the recognition and
measurement criteria of International Financial Reporting Standards (IFRS), as adopted by the European Union (EU), this announcement does
not in itself contain sufficient information to comply with IFRS's.
Vision Media Group (International) plc is incorporated and domiciled in the United Kingdom.
SIGNIFICANT ACCOUNTING POLICIES
The Group's previous financial statements have been prepared under UK Generally Accepted Accounting Practice (UK GAAP). However for the
financial year ended 31 December 2007, the Group has prepared its annual consolidated financial statements in accordance with IFRS as
adopted by the European Union (EU) and implemented in the UK.
The presentation of financial information under IFRS is governed by IAS 1. In some cases this will require the presentation of an item
in a different position, or the use of a different description in the IFRS income statement or balance sheet to that adopted in the UK GAAP
profit and loss account or balance sheet. These reclassifications have been described in the explanatory notes.
An explanation of how the transition from UK GAAP to IFRS has affected the Group's results and income statement for the year ended 31
December 2006, and the equity and balance sheets as at 31 December 2005 and 31 December 2006 is set out in note 5.
Statutory accounts for the year ended 31 December 2006, which were prepared under accounting practices generally accepted in the UK,
have been filed with the Registrar of Companies. The auditor's report on those accounts was unqualified and did not contain any statement
under Section 237 (2) or (3) of the Companies Act 1985. It did contain however an explanatory paragraph dealing with a fundamental
uncertainty relating to going concern.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of the financial information in conformity with IFRS requires management to make judgement, estimates and assumptions
that affect the application of policies and the reported amounts of assets and liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the
circumstances, the results which form the basis of making the judgements about carrying values of assets and liabilities that are both
readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects
only that period or in the period of the revision and future periods if the revision affects both current and future periods.
INTERPRETATIONS AND STANDARDS WHICH BECAME EFFECTIVE DURING THE YEAR
The following accounting standards, interpretations and amendments thereto became effective during the period:
* IFRS 7 - Financial Instruments: Disclosure
* Amendment to IAS 1 - Capital disclosures
* IFRIC 10 - Interim financial reporting and impairment
* IFRIC 11 - IFRS 2 Group and treasury share transactions
During the period, the Group has adopted the disclosures of IFRS 7 and IAS 1 amended. The amendments are of a disclosure nature and as
such have had no material impact on the current or preceding periods' financial position or performance.
IFRIC 10 and IFRIC 11 also became effective during the period. The Group's accounting policies in the preceding accounting period were
consistent with the guidance issued and therefore implementation of these interpretations has had no effect upon the current or preceding
financial period.
The Group has adopted IFRS 8 Operating Segments early. However, as described in the notes to the accounts, this standard has had no
impact on the financial period due to the segments being below the reportable thresholds.
International Financial Reporting Standards and Interpretations issued but not yet effective
At the date the financial statements were authorised for issue, the following standards, interpretations and amendments thereto were in
issue but have not been adopted as they are not yet effective.
* IAS 1 'Presentation of financial statements' - Revision. Amendments to the standard include changes to titles of some of the
financial statements and presentational changes to the components of financial statements. The revision is effective for periods commencing
on or after 1 January 2009.
* IAS 23 'Borrowing costs' - Revision. This revision eliminates the option to expense borrowing costs to the income statement as
incurred and is effective for periods commencing on or after 1 January 2009.
* IAS 27 'Consolidated and separate financial statements' - Revision. The main amendments relate to the accounting for minority
interests and the loss of control of a subsidiary. The revision is effective for periods commencing on or after 1 July 2009.
* IAS 32 'Financial Instruments: Presentation' - Revision. This revision provides guidance in relation to the presentation of
certain puttable financial instruments and financial instruments that impose an obligation on the entity to deliver a pro rata share of the
net assets of the entity on liquidation. The revision is effective for periods commencing on or after 1 January 2009.
* IFRS 2 'Share based payment' - Revision. The amendment redefines vesting conditions and clarifies the accounting treatment in
respect of cancellations and non-vesting conditions. The revision is effective for periods commencing on or after 1 January 2009.
* IFRS 3 'Business combinations' - Revision. The board proposes changes to the scope of the standard, the accounting for goodwill,
the cost of the business combination and the accounting for business combinations achieved in stages. The revision is effective for periods
commencing on or after 1 July 2009.
* IFRIC 12 'Service concession arrangements' provides guidance on the accounting treatment relating to service arrangements over
public infrastructures and is effective for periods beginning on or after 1 January 2008.
* IFRIC 13 'Customer loyalty programmes' provides guidance on the accounting treatment of rewards awarded as part of a customer
loyalty programme and is effective for periods beginning on or after 1 July 2008.
* IFRIC 14 'IAS 19 - the limit on a defined benefit asset, minimum funding requirements and their interaction' provides guidance on
accounting for a pension surplus and is effective for periods beginning on or after 1 January 2008.
The directors anticipate that the adoption of these Standards and Interpretations will have no material impact on the financial
statements when the relevant Standards and Interpretations come into effect.
BASIS OF CONSOLIDATION
The consolidated financial statements incorporate those of Vision Media Group (International) plc and all of its subsidiary undertakings
for the year. Subsidiaries acquired are consolidated using the acquisition/purchase method. Their results are incorporated from the date
that control passes. Control is achieved where the company has the power to govern the financial and operating policies of an entity in
which it invests, so as to obtain benefits from its activities. The results of subsidiaries acquired or sold are consolidated for the
periods from or to the date on which control passed. All intra group transactions, balances, income and expenses are eliminated on
consolidation. The fair value of the shares issued to acquire the trading subsidiaries was assessed as market value. The acquired
identifiable assets, liabilities and contingent liabilities that meet the for recognition under IFRS3 are recognised at their fair value at
the acquisition date, except for non-current assets that are classified as held for resale in accordance with IFRS5 Non-Current Assets Held for Sale and Discontinued Operations, which are recognised and measured at
the lower of cost and fair value less cost to sell.
All financial statements are made up to 31 December.
GOODWILL
Goodwill arising on consolidation represents the excess of the cost of acquisition over the group's interest in the fair value of the
identifiable assets and liabilities of a subsidiary, associate or jointly controlled entity at the date of acquisition. Goodwill is
initially recognised as an asset at cost and is subsequently measured at cost less any impairment losses.
For the purposes of impairment testing, goodwill is allocated to each of the group's cash-generating units expected to benefit from the
synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more
frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the
carrying value of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and
then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised
for goodwill is not reversed in a subsequent period. At each balance sheet date, the group reviews the carrying amounts of its tangible 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 group estimates the recoverable amount of the cash generating unit to which the asset belongs. An intangible asset with an
indefinite useful life is tested for impairment annually and whenever there is an indication that the asset may be impaired a write down is
made. Impairment charges are recognised in the income statement.
REVENUE
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services
provided in the normal course of business, net of discounts and other sales related taxes.
Revenue and cost of sales are recorded according to the contracted value of each transaction in a given period. The typical length of a
contract for local advertising Revenues is twelve or twenty four months and Revenues and profits are recognised monthly over the life of the
contract. National Advertising Revenues and banner revenues are contracted over much shorter campaign periods and are accounted for at the
end of each period of broadcast or, in the case of banners, display.
COST OF SALES
Cost of Sales, including sales agent commissions which are recognised at the time of the sale, are all accounted for against specific
Revenue contracts.
SEGMENTAL REPORTING
An operating segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns
that are different from those of other operating segments.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. Cost comprises
purchase price and other directly attributable costs. Depreciation is charged so as to write off the cost or valuation of assets to their
residual values over their estimated useful lives, using the straight-line method, on the following bases:
Leasehold improvements 20% on cost
Ipods and plasma screens 20% on cost
Computer equipment 33% on cost
Fixtures, fittings and office equipment 15% on cost
Concession rights 16.7% on cost
Software 20% on cost
Motor vehicles 25% on cost
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the
carrying amount of the asset and is recognised in the income statement.
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An asset's carrying
amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable
amount.
IMPAIRMENT
At each balance sheet date, the Group reviews the carrying amounts of its property, plant and equipment 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). Each section of the company's business which has a separate
identifiable cash flow stream is assessed separately. 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.
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 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.
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 years. A reversal of an impairment loss is
recognised as income immediately.
FINANCIAL ASSET - INVESTMENTS
Investments consist of the Group's subsidiary undertakings. Investments are initially recorded at cost, being the fair value of the
consideration given and including acquisition expenses associated with the investment. Subsequently they are reviewed for impairment if
events or changes in circumstances indicate the carrying value may not be recoverable.
FINANCIAL INSTRUMENTS
Financial assets and financial liabilities are recognised on the balance sheet when the company has become a party to the contractual
provisions of the instrument.
Trade and other receivables
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using effective interest
method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that
the company will not be able to collect all amounts due according to the original terms of receivables. The amount of provision is the
difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the effective interest
rate.
Financial liabilities
Financial liabilities consist of bank borrowings and other loans. Financial liabilities are classified according to the substance of the
contractual arrangements entered into. An instrument will be classified as a financial liability when there is a contractual obligation to
deliver cash or another financial asset to another enterprise.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand, deposits held at call with banks. Bank overdrafts are shown within
borrowings in current liabilities on the balance sheet.
Borrowings
Borrowings comprise of interest bearing bank loans and overdrafts. Interest-bearing bank loans and overdrafts are initially recorded at
fair value, which represents the fair value of the consideration received, net of any issue costs associated with other borrowings.
Borrowings are subsequently stated at amortised cost.
Finance charges, including premiums payable on settlement or redemption, are accounted for on an accrual basis and are added to the
carrying amount of the instrument to the extent that they are not settled in the period in which they arise.
Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for
at least 12 months after the balance sheet date.
Derecognition of financial instruments
The derecognition of financial instruments takes place when the company no longer controls the contractual rights that comprise the
financial instrument, which is normally the case when the instrument is sold, or all of the cash flows attributable to the instrument are
passed through to an independent third party.
Convertible loans
Convertible loans are regarded as compound instruments, consisting of a liability component and an equity component only when the
instrument will or may be settled through the issue of a pre-determined quantity of equity instruments. At the date of issue, the fair value
of the liability component is estimated using the prevailing market interest rate for similar non-convertible debt. The difference between
the proceeds of issue of the convertible loan notes and the fair value assigned to the liability component, representing the embedded option
to convert the liability into equity of the company, is included in equity.
Issue costs are apportioned between the liability and equity components of the convertible loan notes based on their relative carrying
amounts at the date of issue. The portion relating to the equity component is charged directly against equity.
The interest expense on the liability component is calculated by applying the prevailing market interest rate for similar
non-convertible debt to the instrument. The difference between this amount and the interest paid is added to the carrying value of the
convertible loan.
LEASING COMMITMENTS
Finance leases, which transfer to the group substantially all the risks and benefits incidental to ownership of the leased item, are
capitalised at the inception of the lease at the fair value of the leased item or, if lower, at the present value of the minimum lease
payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate
of interest on the remaining balance of the liability.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.
Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease.
TAXATION
Current tax is the expected corporation tax payable or receivable in respect of the taxable profit/loss for the financial year using tax
rates enacted or substantively enacted at the balance sheet date, less any adjustments to tax payable or receivable in respect of previous
periods.
Deferred tax is recognised in respect of all temporary differences between the carrying amounts of assets and liabilities included in
the financial statements and the amounts used for tax purposes that will result in an obligation to pay more, or a right to pay less or to
receive more tax, with the following exceptions:
No provision is made relating to the initial recognition of assets or liabilities that affect neither accounting nor taxable profit
other than those acquired as part of a business combination, or on the initial recognition of goodwill.
Provision is made for deferred tax that would arise on all taxable temporary differences associated with investments in subsidiaries and
interests in joint ventures, except where the Company can control the reversal of the temporary differences.
Deferred tax assets are recognised only to the extent that the directors consider that it is probable that there will be suitable
taxable profits from which the future reversal of the underlying temporary differences and unused tax losses and credits can be deducted.
Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which the asset is
realised or liability is settled, based on tax rates and laws enacted or substantively enacted at the balance sheet date.
PROVISIONS
Provisions are recognised when the Company has a present obligation as a result of a past event which it is probable will result in an
outflow of economic benefits that can be reliably estimated.
DEFINED CONTRIBUTION PLANS
Obligations for contributions to defined contribution retirement benefit plans are charged as an expense as they fall due.
SHARE-BASED PAYMENTS
The company has applied the requirements of IFRS 2 Share-based payment.
The Company issues equity-settled share-based payments to certain employees. The company also issues warrants which will be settled with
equity as part of its financing arrangements with certain funders. Equity-settled share-based payments are measured at fair value at the
date of grant. The fair value determined at the grant date of equity-settled share-based payments is expensed on a straight line basis over
the vesting period, based on the Company's estimate of share options or warrants that will eventually vest and a corresponding amount
credited to retained earnings.
Fair value is measured by use of the Black-Scholes model. The expected life used in the model has been adjusted, based on management's
best estimate, for the effect of non-transferability, exercise restrictions and behavioural considerations.
A liability equal to the portion of the deemed value received is recognised at the current fair value determined at each balance sheet
date for cash-settled share based payments.
1 SEGMENTAL INFORMATION
The Group's income and loss before taxation were all derived from its principal activity, undertaken wholly in the United Kingdom.
During the year the group arranged the sale of part of its digital business run through TrainFX Limited and this segment is shown below as
discontinued (see also note 4).
1a. Sales originated from the following networks:
Other,
Including
healthcare
Banners Digital network and 2007
media Total
£ £ £ £
Revenue from continuing 124,880 1,357,176 81,219 1,563,275
operations
Cost of sales in respect of
continuing (217,167) (2,016,163) (40,538) (2,273,868)
operations
Gross (loss)/profit from
continuing (92,287) (658,987) 40,681 (710,593)
operations
Administrative expenses in
respect (100,246) (3,776,853) (23,307) (3,900,406)
of continuing operations
(Loss)/profit from continuing
operations (192,533) (4,435,840) 17,374 (4,610,999)
Finance costs in respect of
continuing operations (9,060) (392,335) - (401,395)
Finance income in respect of
continuing operations 143 29,518 - 29,661
(Loss)/profit before taxation
for (201,450) (4,798,657) 17,374 (4,982,733)
continuing operations
Taxation - - - -
Loss after taxation before
result for (201,450) (4,798,657) 17,374 (4,982,733)
discontinued operations
Loss after tax from
discontinued operations (Note (561,611)
1b)
Loss for the financial year (5,544,344)
Revenue from continuing 265,061 704,152 832,879 1,802,092
operations
Cost of sales in respect of
continuing (189,126) (1,886,436) (502,700) (2,578,262)
operations
Gross profit / (loss) from
continuing 75,935 (1,182,284) 330,179 (776,170)
operations
Administrative expenses in
respect (130,719) (4,327,807) (837,665) (5,296,191)
of continuing operations
Loss from continuing (54,784) (5,510,091) (507,486) (6,072,361)
operations
Finance costs in respect of
continuing operations (9,459) (671,131) - (680,590)
Finance income in respect of
continuing operations 276 9,153 - 9,429
Loss before taxation for
continuing (63,967) (6,172,069) (507,486) (6,743,522)
operations
Taxation (6,992) - - (6,992)
Loss after taxation before
result for (70,959) (6,172,069) (507,486) (6,750,514)
discontinued operations
Loss after tax from
discontinued (763,946)
operations (Note 1b)
Loss for the financial year (7,514,460)
Net operating assets are reconciled to equity funds as follows:
2007 2006
£ £
Gross operating assets
Banners 97,632 112,648
Digital Network 4,551,551 8,138,259
4,649,183 8,250,907
Discontinued activities Note 3 573,877 623,910
Gross operating assets 5,223,060 8,874,817
Gross liabilities
Banners 561,254 374,820
Digital Network 4,651,863 4,452,141
5,213,117 4,826,961
Discontinued activities Note 3 226,665 337,281
Gross liabilities 5,439,782 5,164,242
Other networks, including healthcare and media had no assets or liabilities at either balance sheet date being an agency division of the
Group.
Capital expenditure to acquire property, plant and 2007 2006
equipment
Banners 23,750 -
Digital networks 132,723 330,092
156,473 330,092
Discontinued operations 79,698 539,431
236,171 869,523
Impairment losses against goodwill have been recognised in the income statement amounting to £73,679 (2006: £460,850) in respect of an
element of the Group's digital network.
1b.
LOSS AFTER TAXATION FROM DISCONTINUED OPERATIONS
2007 2006
£ £
REVENUE 34,169 43,433
Cost of sales (46,022) (106,800)
Gross loss (11,853) (63,367)
Administrative expenses (549,922) (700,673)
LOSS FROM OPERATIONS (561,775) (764,040)
Finance costs (13) (80)
Finance income 177 174
LOSS BEFORE TAXATION (561,611) (763,946)
Taxation - -
LOSS AFTER TAXATION (561,611) (763,946)
2 INTANGIBLE ASSETS
Concession rights
software &
development costs
Goodwill Total
£ £ £
Cost - 2007
At 1 January 2007 1,758,633 542,425 2,301,058
Additions 73,679 22,505 96,184
Transfer - assets held for - (325,000) (325,000)
sale
At 31 December 2007 1,832,312 239,930 2,072,242
Amortisation - 2007
At 1 January 2007 709,591 61,847 771,438
Impairment charge 73,679 94,412 168,091
Transfer Assets - (67,375) (67,375)
At 31 December 2007 783,270 88,884 872,154
Net book value
At 31 December 2007 1,049,042 151,046 1,200,088
Cost- 2006
At 1 January 2006 1,297,783 133,752 1,431,535
Additions 460,850 408,673 869,523
At 31 December 2006 1,758,633 542,425 2,301,058
Amortisation - 2006
At 1 January 2006 248,741 21,069 269,810
Impairment charge 460,850 40,778 501,628
At 31 December 2006 709,591 61,847 771,438
Net book value
At 31 December 2006 1,049,042 480,578 1,529,620
At 1 January 2006 1,049,042 112,683 1,161,725
Goodwill is carried at cost less any impairment. Impairment testing has been carried out by comparing goodwill plus associated operating
assets with the value in use, calculated as the net present value of discounted anticipated future cash flows as forecast by the directors.
The goodwill of Point of Purchase TV Limited (POP) was reassessed by the Directors during the year following the recognition that this
company's revenues and resultant cash flows were distinctly different from those relating to the Shopping Malls. This reassessment was
undertaken following the collapse of discussions with a major outdoor advertising company who had proposed to acquire the company for cash.
Consequently the goodwill impairment of £460,850 was corrected to the 2006 accounts when POP was acquired. A further sum of £73,679 of
contingent purchase consideration was also impaired in the year.
Key assumptions used in goodwill impairment reviews are based on previous experience and are:
* Cash flow forecasts for a three year period have been used for the cash generating unit which comprises the acquired businesses.
* Growth in turnover assumptions amount to achievement of plans for the Clear Channel contract in 2008/9 and thereafter.
* The rate used to discount the forecast cash flows is 10 per cent
The impairment charge is recognised within administrative expenses in the income statement. The allocation of Goodwill is summarised
as:
High Profile Limited 955,240
Big FX Limited 93,802
At 31 December 2007 1,049,042
3 ASSETS AND LIABILITIES HELD FOR SALE - GROUP
The assets held for sale relate to the TrainFX business unit, see note 4.
2007
Property, plant and equipment and intangibles
- cost 648,232
- accumulated depreciation (126,524)
At 31 December 2007 521,708
Trade and other receivables
Trade receivables 12,349
Other receivables 803
Other taxation and social security 6,540
Prepayments and accrued income 32,477
At 31 December 2007 52,169
Total - assets held for sale 573,877
Liabilities in respect of the TrainFX business unit are:
Trade payable 38,805
Other taxation and social security 17,624
Accrued and deferred income 105,141
At 31 December 2007 161,570
Finance leases 1,253
Bank borrowing 63,842
At 31 December 2007 65,095
Total liabilities - discontinued activities 226,665
4 POST BALANCE SHEET EVENTS
At the Extraordinary General Meeting held on 28 December 2007, members approved, amongst other things, the acquisition of the entire
share capital of Screen Media Networks Limited, a privately owned outdoor media contractor that combines both traditional and digital media
services. Screen Media Networks Limited has a digital panel network of approximately 120 screens installed within the four major theme parks
across the UK. The acquisition was completed on 23 January 2008 for a consideration to be settled wholly by the issue of a maximum of
29,600,392 ordinary shares of 10 pence each (of which 12,983,728 were issued on completion), subject to the vendors fulfilling certain
conditions. Those conditions have since been satisfied and the full amount of consideration has been issued as further set out below.
Also on 23 January 2008, the Group announced agreement had been reach with one of the world's leading outdoor advertising contractors,
(subsequently confirmed as being Clear Channel Outdoor UK following the signing of the ten year agreement on 11 March 2008), for the
procurement of advertising across the Group's nationwide mall network of digital screens and with support for all future mall that the Group
develops in the years to come.
On 2 January 2008 the company issued 525,000 new ordinary shares of 10 pence at par for the payment of fees relating to the acquisition
of Screen Media Networks Limited.
Also on 2 January 2008 M Cottman, E Anstee and another loan note holder converted existing loans plus accrued interest and redemption
premiums totalling £655,074 into 4,564,432 new ordinary shares of 10 pence each.
On 28 February 2008 the company issued 537,037 ordinary shares of 10p each for the payment of professional fees.
On 13 March 2008, 16,616,664 new ordinary shares of 10 pence each were subsequently issued as settlement for the deferred consideration
in respect of the completion of the acquisition of Screen Media Networks Limited and the successful completion of the closing of the ten
year Clear Channel Outdoor UK agreement.
On 14 March 2008, the company issued and allotted 9,412,963 new ordinary shares of 10 pence each at par raising £941,296 (before
expenses). This extra funding was raised to provide working capital to the Group.
On 17 March 2008, the company concluded its discussions, announced on 28 September 2007, to sell its transport division, being certain
assets of its subsidiary company, TrainFX Limited to New Planet Investments Limited, a new company specifically established for the purpose
in which M Cottman has a 25% interest in the common stock, for a total consideration of £2 million that will be paid in a combination of
primarily loan notes and preference shares and a 25% equity stake in New Plant Investments Limited. Discussions are underway to convert part
of the proceeds to cash.
At the Extraordinary General Meeting held on 2 June 2008 each of the of the issued and unissued deferred shares of 10p each were
sub-divided and re-designated as 10 deferred shares of 1p each and each of the issued ordinary shares of 10p each were sub-divided and
re-designated into 1 ordinary share of 1p each and 9 deferred shares of 1p each, and each of the authorised but unissued ordinary shares of
10p were sub-divided and re-designated into 10 ordinary shares of 1p each.
On 12 June 2008, the company issued and allotted 9,523,806 new ordinary shares of 1p each at 5.25p per share raising £500,000 (before
expenses). This extra funding was raised to provide further working capital to the Group.
Also on 12 June 2008, the company issued and allotted 1,983,457 new ordinary shares of 1p each at 5.25p per share.
5 EXPLANATION OF TRANSITION TO IFRS
For all periods up to and including the year ended 31 December 2006, the Group prepared its financial statements in accordance with
United Kingdom Generally Accepted Accounting Practices (UK GAAP). In preparing these financial statements, the Group has started from an
opening balance sheet as at 1 January 2006, the Group's date of transition to IFRS, and made those changes in accounting policies and other
restatements required by IFRS.
IFRS 1 allows first time adopters certain exemptions from the general requirements to retrospectively apply IFRS as effective for the 31
December 2005 year end. The optional exemptions taken by the Group relate only to Business Combinations. The Group has elected not to apply
IFRS 3 Business Combinations retrospectively to business combinations that took place prior to the transition date. Consequently, goodwill
arising on business combinations before transition date remains at its previous UK GAAP carrying value as at the date of transition.
Reconciliations between IFRS and UK GAAP
The following reconciliations provide details of the impact of the transition on:
* Balance sheets as at 31 December 2006 & 1 January 2006
* Net income for the year ended 31 December 2006
* Reconciliation of equity as at 1 January 2006
The principal effects identified on adoption of IFRS are discussed below:
Restatement
The UK GAAP results reflect the impact of the impairment of goodwill arising from the acquisition of Point of Purchase TV Limited which
led to comparative results being restated to reflect the change (see note 2 for further detail).
Reconciliation of Cash Flow at 31 December 2006 (date of last UK GAAP Statements)
There are no adjustments to cash flow resulting from the transition to IFRS.
Goodwill
IFRS 3 'Business Combinations', IAS 36 and IAS 38 resulted in a change to the carrying values of Goodwill. Until 1 January 2006,
goodwill was amortised on a straight line basis over a period of up to 10 years from the year of acquisition and assessed for an indication
of impairment at each balance sheet date.
Under IFRS 3, goodwill is no longer amortised and, instead, is assessed annually for impairment.
Intangible assets
Under IAS 38 'Intangible assets', if development expenditure meets the definition of an intangible asset it must be capitalised. Costs
directly related to the development of the screen networks were capitalised and amortised over their useful life. Under UK GAAP these were
expensed as incurred.
Under UK GAAP, computer software was disclosed under "Tangible Assets" which fell under "Fixed Assets". Under IFRS, this must be
disclosed under Other Intangible Assets. This has no effect on equity. It is merely a balance sheet reclassification.
Reconciliation of balance sheet at 31 December 2006 (date of last UK GAAP Statements)
As Prior year Effect of
previously adjustment transitio
stated under - n to
UK GAAP impairment IFRS As restated
£ of under IFRS
Goodwill Note £
£ £
Non-current assets
Property, plant & equipment 2,794,606 - 1 (342,507) 2,452,099
Intangible assets 1,283,525 (460,850) 2 706,945 1,529,620
4,078,131 (460,850) 364,438 3,981,719
Current assets
Trade and other receivables 1,499,729 - - 1,499,729
Cash and cash equivalents 3,393,369 - - 3,393,369
4,893,098 - - 4,893,098
Total assets 8,971,229 (460,850) 364,438 8,874,817
Current liabilities
Trade and other payables 3,363,984 - 142,660 3,506,644
Financial liabilities 1,098,666 - - 1,098,666
4,462,650 - 142,660 4,605,310
Non-current liabilities
Trade and other payables 142,660 - (142,660) -
Financial liabilities 558,932 - - 558,932
Total liabilities 5,164,242 - (142,660) 558,932
Equity
Share capital 6,610,748 - - 6,610,748
Share premium account 10,112,144 - - 10,112,144
Retained earnings (12,915,905) (460,850) 364,438 (13,012,317)
Total equity 3,806,987 (460,850) 364,438 3,710,575
Total Liabilities and equity 8,971,229 (460,850) 364,438 8,874,817
Reconciliation of balance sheet at 1 January 2006 (date of transition to IFRS)
As previously Effect of
stated under transitio
UK GAAP n to As restated
£ IFRS under IFRS
Note £ £
Non-current assets
Property, plant & equipment 2,810,759 - 2,810,759
Intangible assets 1,049,042 1 112,683 1,161,725
3,859,801 112,683 3,972,484
Current assets
Trade and other receivables 656,272 - 656,272
Cash and cash equivalents 136,479 - 136,479
792,751 - 792,751
Total assets 4,652,552 112,683 4,765,235
Current liabilities
Trade and other payables 954,271 - 954,271
Financial liabilities 574,433 - 574,433
1,528,704 - 1,528,704
Non-current liabilities
Trade and other payables - - -
Financial liabilities 776,203 - 776,203
Total liabilities 2,304,907 - 2,304,907
Equity
Share capital 1,693,333 - 1,693,333
Share premium account 6,264,852 - 6,264,852
Retained earnings (5,610,540) 112,683 (5,497,857)
Total equity 2,347,645 112,683 2,460,328
Total Liabilities and equity 4,652,552 112,683 4,765,235
Notes
1 Transfer of concession rights and softwareto 342,507
intangible assets
2 Reversal of goodwill amortisation 226,367
Capitalisation of development costs 138,071
364,438
706,945
Reconciliation of income statement for the year ended 31 December 2006 (date of last UK GAAP Statements)
As previously Impairment of Effect of As restated
stated under Goodwill transitio under IFRS
UK GAAP n to
£ IFRS
£ £ £
Revenue 1,845,525 - - 1,845,525
Cost of sales (2,685,062) - - (2,685,062)
Gross loss (839,537) - - (839,537)
Administration expenses
(development costs (5,561,402) - 25,388 (5,536,014)
capitalised)
Amortisation of goodwill (226,367) (460,850) 226,367 (460,850)
Total administration expenses (5,787,769) (460,850) 251,755 (5,996,864)
Loss from operations (6,627,306) (460,850) 251,755 (6,836,401)
Interest payable and similar (671,067) - - (671,067)
charges
Loss before taxation (7,298,373) (460,850) 251,755 (7,507,468)
Taxation (6,992) - - (6,992)
Loss for year (7,305,365) (460,850) 251,755 (7,514,460)
Reconciliation of equity as at 1 January 2006
1 January 2006
£
Total equity under UK GAAP 2,347,645
Capitalisation of development costs
(net of accumulated amortisation) 112,683
Total equity under IFRS 2,460,328
6 EARNINGS PER SHARE
The calculation of basic loss per ordinary share is based on losses of £5,544,344 (2006: £7,514,460) and on 22,612,378 ordinary shares
of 10p each (2006: 4,152,175 adjusted for the effects of the consolidation) being the weighted average number of shares in issue during the
year.
The calculation of basic loss per ordinary share - continuing operations is based on losses of £4,982,733 (2006: £6,750,514) and on
22,612,378 ordinary shares of 10p each (2006: 4,152,175 adjusted for the effects of the consolidation) being the weighted average number of
shares in issue during the year.
The calculation of basic loss per ordinary share - discontinued operations is based on losses of £561,611 (2006: £763,946) and on
22,612,378 ordinary shares of 10p each (2006: 4,152,175 adjusted for the effects of the consolidation) being the weighted average number of
shares in issue during the year.
The loss for the year and the weighted average number of ordinary shares for calculating the diluted loss per share for the year ended
31 December 2006 are identical to those used for the basic loss per share. This is because the outstanding share options and warrants would
have the effect of reducing the loss per ordinary share and would therefore not be dilutive under the terms of IAS 33.
7 GOING CONCERN
These accounts are prepared on a going concern basis, which assumes the Group will continue in operational existence for the foreseeable
future. The Group's ability to meet its future working capital requirements and therefore continue as a going concern is dependent upon
being able to generate significant free cash flow from both trading and financing activities. The Group has also announced in June 2008
additional financing by way of loans, a further placing of new equity, and is in negotiations to dispose of part of its business, which
actions together would generate significant amounts of cash and which would, based on projections prepared by the Group, enable it to
continue to meet its debts as they fall due for at least the next 12 months.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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