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Share Name | Share Symbol | Market | Type |
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Big Red Mining Corp | CSE:RED | CSE | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 0.03 | 0.025 | 0.03 | 0 | 01:00:00 |
RNS Number:0123S Redstone PLC 13 November 2003 Redstone plc ("Redstone" or "the Company") INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2003 Redstone, the national communications services provider, announces its financial results for the six months ended 30 September 2003. FINANCIAL HIGHLIGHTS *Positive EBITDA of #0.25m for the six months ended 30 September 2003 versus a loss of #1.27m during the same period last year, and #0.06m positive for the six month period to 31 March 2003. *Significant improvement in gross margin to 30.9% compared with 25.5% for same period last year. *Operating loss for the period down by 72% to #0.57m from #2.00m last year and down 52% in comparison with the six month period to 31 March 2003. Loss on ordinary activities before taxation for the period was #2.43m versus #4.21m for the same period last year. *Revenue fell to #31.18m from #36.81m in the same period last year but was virtually unchanged from the #31.39m achieved in the six months to March 2003. The Group has pursued a strategy of focussing on establishing long term profitable relationships with mid sized business customers, which has resulted in overall customer numbers at 30 September 2003 reducing to circa 9,000 from circa 15,000 two years ago. *Strong balance sheet further enhanced by a #0.32m increase in cash balances to #12.36m from #12.04m at 31 March 2003 and up #2.20m from #10.16m at 30 September 2002. Net funds up #0.40m to #12.22m from #11.82m at 31 March 2003 and compared with a net funds position of #9.72m at 30 September 2002. OPERATIONAL HIGHLIGHTS *Completed implementation of a SMART B (Smart Buildings) Infrastructure at the new Bullring shopping centre in Birmingham. SMART B solutions are now being actively marketed to other industry sectors including finance, education, health and local authorities. *New regional office opened in Manchester during July, the Group's eighth regional office, supporting plans for developing business in Northern England. *Further investment in recruitment and training of the new sales team. Organic revenue growth is now substantially dependent on its performance. *Launch of a new range of telecoms services specifically for channel organisations. Ian Brown, CEO of Redstone, commented, "I'm pleased with the way things are shaping up. We have made steady progress on our key operational objectives, reflected in improved margins and customer profile. Market conditions remain challenging and competition across all product lines remains intense. However, following the structural changes we have made to the business and investment in our sales team we look to the future with confidence." FOR FURTHER INFORMATION: ICIS Roger Leboff/Archie Berens Tel. 020 7628 1114 Chief Executive's Statement Financial highlights During the six month period to 30 September 2003, Redstone continued to build the teams and infrastructure that are expected to deliver growth over the medium term. As announced previously Redstone has invested significantly in rebuilding its national sales teams and this has continued during the period. Overall order performance has been sporadic with the first quarter being more pleasing than the summer months of July and August. The overall financial results for the period were solid with the following highlights: * EBITDA performance of #0.25m versus #1.27m loss for the same period last year and compared with #0.06m for the six month period to 31 March 2003. * Gross margins as a percentage of sales have improved significantly to 30.9% during the period compared with 25.5% in the same period last year. Reported gross margin for the period was #9.62m versus #9.39m (continuing operations only) last year, and #9.31m for the six month period to 31 March 2003. Overall gross margin improvements have been driven substantially by a combination of improved mix of revenue towards higher margin products and stronger telecoms margins of 24.7% during the period compared with 19.1% in the same period last year. The latter is due primarily to improvements achieved under the BT Wholesale outsourcing agreement. * Overheads of #12.43m fell by #1.31m from last year and by #0.26m in comparison with the six month period to 31 March 2003. * Operating losses on continuing operations before goodwill amortisation were reduced by 72% to #0.57m from #2.00m last year and were down by 52% in comparison with the six month period to 31 March 2003. Loss on ordinary activities before taxation for the period was #2.43m versus #4.21m for the same period last year. * Revenue fell to #31.18m from #36.81m in the same period last year but was virtually unchanged from the #31.39m achieved in the six months to March 2003. The Group has pursued a strategy of focussing on establishing long term profitable relationships with mid sized business customers, which has resulted in overall customer numbers at 30 September 2003 reducing to circa 9,000 from circa 15,000 two years ago. * Cash balances improved in the period by #0.32m to #12.36m and compared with #10.16m at 30 September 2002. The net funds position of the Company improved over the period by #0.40m to #12.22m from #11.82m and compared with a net funds position at 30 September 2002 of #9.72m. The improvement in cash over the period featured an inflow from operating activities of #0.63m, net capital expenditure of #0.41m, net interest receivable of #0.18m and debt repayments of #0.08m. The inflow from operating activities was boosted by an increase in creditors of #0.93m as the Company continued to benefit from some favourable payment terms. Debtor days remained strong at around 35. Operational highlights During the period Redstone completed the implementation of a SMART B (Smart Buildings) infrastructure at the new Bullring shopping centre in Birmingham, on behalf of the Birmingham Alliance - a property development partnership between Hammerson plc, Henderson Global Investors Ltd and Land Securities plc. SMART B is Redstone's architecture for delivering advanced data, voice, internet and building services into a common IP platform. Notably it incorporates building services such as CCTV and access control in addition to standard information technology and communications requirements. The project involved installing the UK's most advanced retail communications network in the single largest shopping centre development built in Europe within the last decade. The network provides for approximately 130 stores a 350km cable infrastructure connecting every part of the development to converged voice, data and internet communications. The infrastructure benefits shoppers through a network of plasma screens and information kiosks providing details of local information including travel, job vacancies, events and special promotions within the centre's stores. Redstone's work at the Bullring was acknowledged recently with the award of "Most Innovative Vertical Market Solution" at the 2003 Channel Awards hosted by Avaya. Redstone is now actively marketing SMART B solutions to other industry sectors including finance, education, health and local authorities. In July 2003 Redstone opened its eighth UK regional office in Manchester as part of its approach to building local sales and support organisations for each part of the country, and to further support its plans for developing business in Northern England. Also during the period Redstone launched a new range of telecoms services specifically for channel organisations. Ultimately the Company expects to expand its channel portfolio to include aspects from the systems portfolio as well. Dividend The company does not intend to pay a dividend for the six months ended 30 September 2003. Future outlook Market conditions remain challenging albeit there appears to be an improvement in the appetite of businesses for capital expenditure. It is unclear whether this will continue. Competition across all product lines remains intense. Elements of the Company's strategy for calendar year 2004 include the following: *Redstone will continue its focus on being an expert provider of IP telephony systems using both Cisco and Avaya technology for business customers. The European IP telephony market is expected to grow at a compound annual rate of some 27% between 2003 and 2006 to around US$6 billion. Enterprise IP telephony alone is predicted to grow to US$4.4 billion by 2006 from US$849 million in 2002 and as such represents a significant opportunity for the Company. *Further resource will be dedicated to the management of existing customers to improve service levels and penetration of Redstone's range of communication services. *During 2004 Redstone will also launch enhancements to its non geographic number services (which allow customers to generate revenue through use of an 08 or 09 inbound number) to allow increased functionality for call centre customers, which the Company believes are an ideal match for its product and service range. *Redstone expects to launch during 2004 a new version of its CallSure personal number service incorporating both a personal attendant facility and unified messaging. CallSure was Redstone's original product when the company was launched during 1995. *As previously announced, Redstone is considering acquisitions as part of the expected consolidation in the IT and telecommunications markets. Any such arrangements are likely to enhance earnings and provide opportunities for cross selling Redstone's range of services. Ian Brown Chief Executive Officer 12 November 2003 Consolidated Profit and Loss Account Six months Six months Six months Year ended 30 ended 30 ended 31 ended 31 September September March March 2003 2002 2003 2003 Note #000 #000 #000 #000 -------- -------- -------- ------- Turnover - Continuing 31,181 36,805 31,392 68,197 - Discontinued - 668 - 668 -------- -------- -------- ------- 31,181 37,473 31,392 68,865 Cost of sales (21,561) (28,241) (22,080) (50,321) -------------------------------------------------------------------------------------- -------- -------- -------- ------- Gross profit/(loss) - Continuing 9,620 9,389 9,312 18,701 - Discontinued - (157) - (157) -------- -------- -------- ------- 9,620 9,232 9,312 18,544 Selling and distribution costs (3,428) (3,400) (3,465) (6,865) Administrative expenses (8,999) (10,340) (9,226) (19,566) Other operating income 188 180 129 309 -------------------------------------------------------------------------------------- -------- -------- -------- ------- Operating loss - Continuing (2,619) (4,050) (3,250) (7,300) - Discontinued - (278) - (278) -------- -------- -------- ------- (2,619) (4,328) (3,250) (7,578) -------------------------------------------------------------------------------------- - amortisation of - Continuing 2,050 2,052 2,053 4,105 goodwill ------------------- ---------- ---- -------- -------- -------- ------- Operating loss before goodwill amortisation -------- -------- -------- ------- - Continuing (569) (1,998) (1,197) (3,195) - Discontinued - (278) - (278) -------- -------- -------- ------- (569) (2,276) (1,197) (3,473) -------------------------------------------------------------------------------------- Exceptional 3 - - 305 305 restructuring income Net interest 189 122 186 308 receivable ------------------------------------------------------------------------------------- Loss on ordinary activities before (2,430) (4,206) (2,759) (6,965) taxation Tax on loss on - - 765 765 ordinary activities ------------------------------------------------------------------------------------- Loss for the (2,430) (4,206) (1,994) (6,200) period ------------------------------------------------------------------------------------- Basic and diluted 4 (0.87)p (1.51)p (0.71)p (2.22)p loss per share -------- -------- -------- ------- Gross profit % - Continuing 30.9 25.5 29.7 27.4 - Discontinued - (23.5) - (23.5) -------- -------- -------- ------- 30.9 24.6 29.7 26.9 -------- -------- -------- ------- EBITDA - Continuing 246 (990) 62 (928) - Discontinued - (278) - (278) -------- -------- -------- ------- 246 (1,268) 62 (1,206) EBITDA per share 0.09 p (0.45)p 0.02 p (0.43)p -------------------------------------------------------------------------------------- Statement of Total Recognised Gains and Losses Six Six Six months months months Year ended 30 ended 30 ended 31 ended 31 September September March March 2003 2002 2003 2003 #000 #000 #000 #000 Loss on ordinary activities after (2,430) (4,206) (1,994) (6,200) taxation Lapse of warrants not subscribed 21 - - - --------------------------------------------------------------------------------------------- Total recognised losses (2,409) (4,206) (1,994) (6,200) --------------------------------------------------------------------------------------------- Consolidated Balance Sheet 30 30 31 September September March 2003 2002 2003 Note #000 #000 #000 Fixed assets Intangible assets 27,420 31,522 29,470 Tangible assets 2,941 3,941 3,359 -------------------------------------------------------------------------- 30,361 35,463 32,829 Current assets Stocks 494 924 791 Debtors 12,346 16,035 12,007 Cash at bank and in hand 7 12,355 10,155 12,035 Cash held on trust for guaranteed loan - 87 87 notes -------------------------------------------------------------------------- 25,195 27,201 24,920 Creditors Amounts falling due within one year 21,719 23,666 20,930 -------------------------------------------------------------------------- Net current assets 3,476 3,535 3,990 -------------------------------------------------------------------------- Total assets less current liabilities 33,837 38,998 36,819 Creditors Amounts falling due after one year 5 98 33 Provisions for liabilities and charges 2,165 2,809 2,689 -------------------------------------------------------------------------- Net assets 31,667 36,091 34,097 -------------------------------------------------------------------------- Capital and reserves Called up share capital 8,472 8,472 8,472 Share premium account 185,336 185,336 185,336 Warrants - 21 21 Merger reserve 216 216 216 Profit and loss account (162,357) (157,954) (159,948) --------------------------------------------------------------------------- Shareholders' funds 31,667 36,091 34,097 --------------------------------------------------------------------------- Consolidated Cash Flow Statement Six months Six months Year ended 30 ended 30 ended September September 31 March 2003 2002 2003 Note #000 #000 #000 Net cash inflow/(outflow) from operating 5 630 (2,203) 693 activities ------------------------------------------------------------------------------------ Returns on investments and servicing of finance Interest received 192 288 513 Interest paid - (170) (175) Interest element paid on finance leases and hire purchase agreements (13) (43) (63) Net cash inflow from returns on investments and servicing of finance 179 75 275 ------------------------------------------------------------------------------------ Corporation tax refunded - - 399 ------------------------------------------------------------------------------------ Capital expenditure Purchase of tangible fixed assets (415) (270) (2,077) Proceeds on disposal of tangible fixed assets 6 21 436 ------------------------------------------------------------------------------------ Net cash outflow from capital expenditure (409) (249) (1,641) Net cash inflow/(outflow) before management of liquid resources and financing 400 (2,377) (274) ------------------------------------------------------------------------------------ Financing Capital element paid on finance leases and hire purchase agreements (80) (348) (571) ------------------------------------------------------------------------------------ Net cash outflow from financing (80) (348) (571) ------------------------------------------------------------------------------------ Increase/(decrease) in cash at bank and in hand 6/7 320 (2,725) (845) ------------------------------------------------------------------------------------ Notes to the results for the six months ended 30 September 2003 1 Basis of Preparation The interim report is unaudited but has been reviewed by the auditors, Ernst & Young LLP, and their report to Redstone plc is set out below. The financial information contained in this interim report does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The financial information has been prepared using the same accounting policies as the audited accounts for the year ended 31 March 2003. The comparative financial information is based on the statutory accounts for the financial year ended 31 March 2003 and those accounts, upon which an unqualified auditors opinion has been issued, have been delivered to the Registrar of Companies. The profit and loss account for the six months ended 31 March 2003 has been prepared to show a more meaningful comparison of the Group's results for the period. The interim report for the six months ended 30 September 2003 was approved by the directors on 12 November 2003. 2 Segmental Analysis The Group operates as an end to end communications services provider and as such the Group operates in one principal area of activity. All turnover during the current and previous periods was derived from the United Kingdom. 3 Items Charged after Operating Loss For the six months ended 31 March 2003 and the year ended 31 March 2003 a restructuring credit of #305,000 arose in relation to surplus duct and trench capacity impaired in prior periods. 4 Loss per share On 6 June 2003 at an Extraordinary General Meeting of Redstone plc a share consolidation on the basis of 10 existing ordinary shares of 0.1p each for 1 new ordinary share of 1p was approved. Basic and diluted earnings per share have been adjusted to reflect the share consolidation. For the six months ended 30 September 2003 the calculations have been based on a weighted average number of ordinary shares of 278,907,064 (30 September 2002, year ended 31 March 2003 and six months ended 31 March 2003: 278,907,064). At 30 September 2003 the number of ordinary shares in issue was 278,907,064 (30 September 2002 and 31 March 2003: 2,789,070,648). 5 Net cash flow from operating activities Six months Six months Year ended 30 ended 30 ended September September 31 March 2003 2002 2003 #000 #000 #000 ------------------------------------------------------------------------------------ Operating loss (2,619) (4,328) (7,578) Exceptional restructuring income - - 305 Goodwill amortisation 2,050 2,052 4,105 Depreciation 831 955 1,931 (Profit)/loss on disposal of fixed assets (4) 53 31 Decrease in stock 297 27 160 (Increase)/decrease in debtors (328) 2,973 6,987 Increase/(decrease) in creditors 927 (3,028) (4,221) Decrease in provisions (524) (907) (1,027) ------------------------------------------------------------------------------------ Net cash inflow/(outflow) from operating activities 630 (2,203) 693 ------------------------------------------------------------------------------------ 6 Reconciliation of net cash flow Six months Six months Year to movement in net funds ended 30 ended 30 ended September September 31 March 2003 2002 2003 #000 #000 #000 ------------------------------------------------------------------------------------ Increase/(decrease) in cash in the period 320 (2,725) (845) Cash outflow from finance leases and hire purchase agreements 80 348 571 Cash inflow from liquid resources (87) (10,600) (10,600) ------------------------------------------------------------------------------------ Change in net funds resulting from cash flows 313 (12,977) (10,874) Repayment of loan notes for acquisitions 87 10,600 10,600 Non cash movements - assignment of debt - 4,469 4,469 ------------------------------------------------------------------------------------ Movement in net funds in the period 400 2,092 4,195 Net funds at 1 April 2003 11,822 7,627 7,627 ------------------------------------------------------------------------------------ Net funds at 30 September 2003 12,222 9,719 11,822 ------------------------------------------------------------------------------------ 7 Analysis of Net Funds At Cash flow At 1 April 30 September 2003 2003 #000 #000 #000 ------------------------------------------------------------------------------------ Cash at bank and in hand 12,035 320 12,355 Liquid resources - cash held on trust for guaranteed loan notes 87 (87) - ------------------------------------------------------------------------------------ 12,122 233 12,355 Debt due within one year Guaranteed loan notes (87) 87 - Finance lease obligations (180) 52 (128) Debt due after one year Finance lease obligations (33) 28 (5) ------------------------------------------------------------------------------------ Total 11,822 400 12,222 ------------------------------------------------------------------------------------ Independent Review Report to Redstone plc Introduction We have been instructed by the Company to review the financial information for the six months ended 30 September 2003 which comprises Consolidated Profit and Loss Account, Consolidated Balance Sheet, Consolidated Cash Flow Statement, and the related notes 1 to 7. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. This report is made solely to the Company in accordance with guidance contained in Bulletin 1999/4 'Review of interim financial information' issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the Listing Rules of the Financial Services Authority which require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4 'Review of interim financial information' issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data, and based thereon, assessing whether the accounting policies and presentation have been consistently applied, unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with United Kingdom Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 September 2003. Ernst & Young LLP London 12 November 2003 This information is provided by RNS The company news service from the London Stock Exchange END IR ZGMMMRZMGFZM
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