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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Addworth | LSE:ADW | London | Ordinary Share | GB00B05KLT09 | ORD 0.5P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.375 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:6836E Addworth PLC 27 September 2007 ADDWORTH PLC ("Addworth" or the "Company") INTERIM REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2007 Chairman's Statement Highlights for the six month period to 30 June 2007 (compared to 30 June 2006) *Turnover #2.89 million (#1.88 million) *Pre-tax profit #0.02 million (#0.05 million) *Current investments stated at fair value of #0.86 million (#0.35 million) *Non-current investments stated at fair value of #3.23 million (#1.74 million) *Total assets up 112% year on year at #4.89 million (#2.30 million), and up 63% in first half *Board confident of further asset advances being made in the second half year I am delighted to be reporting our Interim Results for the period ended 30 June 2007. This is our first period of reporting to comply with International Financial Reporting Standards (IFRS). In this period under review we have concentrated on PLUS Markets for our new issues. We have also used PLUS Markets to heighten our own profile, by admitting our shares to trading on this platform. In January 2007 we introduced Oil and Gas Support Services plc (PLUS: OGSP) to PLUS Markets following a #500,000 fundraising. We have a number of opportunities available to reverse into this vehicle and it is hoped that it will announce an acquisition by the end of this year. Having identified the oil and gas support services sector as one that had a range of 'buy and build' opportunities, we have not been disappointed by the potential. We hold 46.94% of the Oil and Gas Support Services plc equity. In March 2007 we were pleased to be able to introduce Gaming Ventures Plc (PLUS: GAMP) to PLUS Markets following an oversubscribed fundraising. Addworth has a 9.32% stake in this vehicle, which was established for the purpose of investing in and/or acquiring assets, businesses and companies in the online and mobile gaming markets. Our stake in Yellowcake plc (PLUS: YEL), the global investor in uranium equities, has increased to 29.73%. The uranium sector is experiencing excellent sentiment and we are delighted to have been involved in this exciting market at an early stage. To further our participation in this sector we introduced Uranium Prospects plc (PLUS: URPP), in which we hold a 16.43% equity stake, to PLUS Markets in July 2007. Once again, we are not short of opportunities to invest in global uranium prospects. In January 2007 we made a significant investment in Risk Transfer Limited, a wholly-owned subsidiary of the Company, and now own an insurance company in Guernsey, Channel Islands. Risk Transfer Limited has significantly progressed negotiations with a number of major companies with a 'lease care' policy. We envisage the company will have embedded its business model and will be fee-earning by the end of this year, and we will subsequently look to introduce it to the AIM market. The Core Business plc (AIM: CORE), in which we have a 7.99% interest, has completed its #2.6 million acquisition of Amirose International Limited following a #1 million fundraising in July 2007. In the period under review we raised a total of #540,000 (less costs of #18,000) through the issue of new ordinary shares at a price of 2.25p per share to enable us to participate at significant levels in our new issues. We are currently working on bringing three more companies to market by the year end. We also have a very interesting selection of prospective funding opportunities in our 'pipeline'. Addworth has continued to move from its entrepreneurial phase of business and we are now fully operational in our new offices in Carthusian Street. Our staff levels increased from seven to twelve, eight of whom are full-time. We are now able to provide facilities and management services through our offices to companies we bring to market. I would like to take this opportunity to thank our substantial shareholders for their strong support of our Company and I am confident that we will be able to continue our momentum to announce further positive news at the year end. Mark Watson-Mitchell Executive Chairman 27 September 2007 Further information: Mark Watson-Mitchell, Executive Chairman Tel: 020 7368 8750 www.addworth.co.uk Note to Editors: Addworth (ADW), which gained admission to AIM on 3rd February 2005, was formed primarily to act as an 'active capital investor'. The focus is upon the growth of capital value and the generation of fee income from: establishing and funding newly quoted sector focused companies; acquiring and developing companies with growth potential; and taking minority equity positions in undervalued smaller listed companies. In the middle of January 2007 the Company established its own insurance company in Guernsey, Channel Islands, called Risk Transfer Insurance Company Limited. In late January 2007 it also floated Oil and Gas Support Services plc on PLUS Markets, a special purpose acquisition company planning to acquire companies providing services to the global oil and as sector. In late March 2007 it floated Gaming Ventures plc, an investor in the mobile and online gaming sector. In July 2007 it floated Uranium Prospects plc, which is involved on the funding of exploration and development of uranium prospects. INDEPENDENT REVIEW REPORT TO ADDWORTH PLC Introduction We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2007 which comprises the Consolidated Income Statement, the Consolidated Balance Sheet and the Summarised Consolidated Cash Flow Statement and the related explanatory notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. Directors' Responsibilities The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority. As disclosed in note 1, the next annual financial statements of the Group will be prepared in accordance with IFRSs adopted by the European Union. The condensed set of financial statements included in this half-yearly report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union. Our Responsibility Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. Scope of Review We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with international Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2007 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority. Saffery Champness Chartered Accountants Lion House Registered Auditors Red Lion Street 27 September 2007 London WC1R 4GB UNAUDITED CONSOLIDATED INCOME STATEMENT for the six months ended 30 June 2007 Notes Six months Six months Year ended ended ended 31 December 30 June 2007 30 June 2006 2006 # # # Income Sale of investments 2,587,127 1,716,977 3,852,200 Fee income 66,741 33,750 61,250 Gains on investments at fair value through profit or loss 224,548 130,552 710,975 Other income 12,992 1,636 2,262 Total income 2,891,408 1,882,915 4,626,687 Cost of sales (2,451,983) (1,659,042) (3,957,818) Gross profit 439,425 223,873 668,869 Expenses Administration expenses (425,780) (177,356) (537,564) Share based payment transactions - - 32,400 Total administration (425,780) (177,356) (505,164) expenses Operating profit 13,645 46,517 163,705 Interest income 5,463 1,679 5,735 Profit before taxation 19,108 48,196 169,440 Taxation 3 - - - Net profit after tax for the period 13 19,108 48,196 169,440 Return per ordinary share Basic 4 0.01p 0.07p 0.26p Diluted 0.01p 0.05p 0.18p UNAUDITED CONSOLIDATED BALANCE SHEET as at 30 June 2007 Notes 30 June 2007 30 June 2006 31 December # # 2006 # Non-current assets Plant & equipment 62,255 - 53,302 Intellectual property 45,225 - 49,998 Investments 5,6 3,230,091 1,744,647 1,603,545 Total non-current assets 3,337,571 1,744,647 1,706,845 Current assets Trade and other 261,763 103,046 64,554 receivables Cash and cash 433,779 107,867 743,714 equivalents Investments at fair 5 856,701 349,212 481,140 value through profit or loss Total current assets 1,552,243 560,125 1,289,408 Total assets 4,889,814 2,304,772 2,996,253 Equity and liabilities Ordinary share capital 9 703,333 325,000 583,333 Share premium 9 1,924,550 1,125,883 1,522,550 Share based payment 57,600 900,000 57,600 reserve Retained earnings 10 1,335,679 (510,731) 293,479 Total equity 13 4,021,162 1,840,152 2,456,962 Non current liabilities Deferred tax liability 3 656,974 272,950 218,506 Current liabilities Trade and other payables 211,678 191,670 320,785 Total liabilities 868,652 464,620 539,291 Total equity and 4,889,814 2,304,772 2,996,253 liabilities UNAUDITED SUMMARISED CONSOLIDATED CASH FLOW STATEMENT for the half year ended 30 June 2007 Notes Half year Half year Year ended ended ended 31 December 30 June 2007 30 June 2006 2006 # # # Net cash inflow/ (outflow) from operating activities 7 (216,170) 195,190 261,214 Investing activities Interest received 5,463 1,679 5,735 Increase in non-current investments (603,454) (329,141) (315,072) Purchases of tangible assets (17,774) - (53,302) Net cash inflow/ (outflow) from investing activities (615,765) (327,462) (362,639) Financing activities Proceeds from share 522,000 180,000 695,000 issues Directors' exercise of share warrants - - 90,000 Net cash inflow from financing activities 522,000 180,000 785,000 Net increase/(decrease) in cash and cash equivalents (309,935) 47,728 683,575 Cash and cash equivalents at start of period 743,714 60,139 60,139 Cash and cash equivalents at end of period 433,779 107,867 743,714 These interim financial statements have been prepared in compliance with the recognition and measurement criteria of IFRS. See note 13. Notes to the Interim Financial Statements As at 30 June 2007 1. Accounting policies Basis of preparation The next annual financial statements of Addworth Plc (the "Company" or the "Group") will be prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the EU applied in accordance with the provisions of the Companies Act 1985. Accordingly, the interim financial information in this report has been prepared using accounting policies consistent with IFRS. IFRS is subject to amendment and interpretation by the International Accounting Standards Board (IASB) and the International Financial Reporting Committee (IFRIC) and there is an ongoing process of review and endorsement by the European Commission. The interim financial information has been prepared on the basis of IFRS that the Directors expect to be applicable as at 31 December 2007. The interim financial information has been prepared under the historical cost convention as modified by the revaluation of available-for-sale investments. The principal accounting policies set out below have been consistently applied to all financial periods presented. IFRS transition The disclosures required by IFRS 1 concerning the transition from UK Generally Accepted Accounting Practice (UK GAAP) to IFRS 1 are given in note 13. Non-statutory accounts The financial information set out in this interim report does not comprise the Group's statutory accounts as defined in section 240 of the Companies Act 1985. The statutory accounts for the year ended 31 December 2006, which were prepared under UK GAAP, have been delivered to the Registrar of Companies. The auditors of the Group at the time, Nexia Smith & Williamson, reported on those accounts: their report was unqualified and did not contain a statement under either Section 237 (2) or Section 237 (3) of the Companies Act 1985. The interim financial information for the six months ended 30 June 2007 and 30 June 2006 is unaudited, but a review has been carried out by Saffery Champness, an independent firm of chartered accountants, on the six month period ended 30 June 2007. Basis of consolidation The interim financial information incorporates the results of the Company and entities controlled by the Company (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating polices of an investee entity so as to obtain benefits from its activities. The results of subsidiaries acquired or disposed of during the period are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the results of subsidiaries to bring the accounting policies into line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation. Associated companies In accounting for investments in associates, the Group has taken advantage of the exemption granted in International Accounting Standard (IAS) 28 to venture capital organisations. Such investments are included on the Consolidated Balance Sheet at fair value under non-current asset investments. Revenue recognition Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales related taxes. Revenue arising from the sale of investments is recognised on the date that the contract for the transaction is entered into. Revenue arising from the sale of services is recognised when and to the extent that the Group obtains the right to consideration in exchange for the performance of its contractual obligations as follows: on a monthly basis, in accordance with the terms of the relevant contract or upon full delivery of the services provided. Foreign currency Transactions in foreign currency are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Exchange gains and losses on short term foreign currency borrowings and deposits are included with net interest payable. Exchange differences on all other transactions, except relevant foreign currency loans, are taken to operating profit. Taxation The tax expense represents the tax currently payable and any deferred tax. The tax currently payable is based on the estimated taxable profit for the period. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expenditure that are taxable or deductible in other years and further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements 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 generally 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 goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not be reversible in the foreseeable future. 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 realised. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current assets and liabilities on a net basis. Share based payments The cost of share based employee compensation arrangements, whereby employees receive remuneration in the form of shares or share options, is recognised as an employee benefit expense in the income statement. The total expense to be apportioned over the vesting period of the benefit is determined by reference to the fair value (excluding the effect of non-market based vesting conditions) at the date of grant. The assumptions underlying the number of awards expected to vest are subsequently adjusted for the effects of non-market-based vesting to reflect the conditions prevailing at the balance sheet date. Fair value is measured by the use of a binomial model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of the non-transferability, exercise restrictions and behavioural considerations. Plant and equipment Plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. Depreciation is charged so as to write off the cost of assets over their estimated useful lives using the straight-line method, on the following basis: Leasehold improvements - over the period of the lease Office furniture and equipment - 25% per annum on a straight line basis Financial instruments Financial assets and financial liabilities are recognised on the balance sheet when the Group becomes a party to the contractual provisions of the instrument. Investments are classified as either held-for-trading or available for sale at initial recognition and this designation is re-evaluated at each balance sheet date. At the balance sheet date all such investments are classified as available for sale. Investments are initially measured at cost, including transaction costs. At subsequent reporting dates available-for-sale investments are measured at fair value or at cost where fair value is not readily ascertainable. Gains and losses arising from changes in fair value are recognised directly in equity until the investment is disposed of or is determined to be impaired, at which time the cumulative gain or loss recognised previously in equity is included in the net profit or loss for the period. Trade and other receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest method. A provision is established when there is objective evidence that the Group will not be able to collect all amounts due. The amount of any provision is recognised in the income statement. Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less. Trade and other payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method. Financial liabilities and equity instruments issued by the Group are classified in accordance with the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued by the company are recorded at the proceeds received, net of direct costs. Interest bearing bank loans, overdrafts and other loans are recorded at the proceeds received, net of direct issue costs. Finance costs are accounted for on an accruals basis in the income statement using the effective interest method. 2. Critical accounting judgements and key sources of estimation uncertainty The preparation of financial information in conformity with IFRS requires management to make estimates and judgements that affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The significant judgements made by management in applying the Group's accounting policies were: Impairment of goodwill Determining whether goodwill is impaired requires an estimation of the value in use of the cash generating units to which goodwill has been allocated. The value in use calculation requires the Group to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate the present value. No goodwill was recognised in the period. Share based payments In determining the fair value of equity settled share based payments and the related charge to the income statement, the Group makes assumptions about future events and market conditions. In particular judgement must be made as to the likely number of shares that will vest, and the fair value of each award granted. The fair value is determined using a valuation model which is dependent on further estimates, including the Group's future dividend policy, employee turnover, the timing with which options will be exercised and the future volatility in the price of the Group's shares. Such assumptions are based on publicly available information and reflect market expectations and advice taken from qualified personnel. Different assumptions about these factors to those made by the Group could materially affect the reported value of share based payments. Valuation of financial instruments At each reporting date the Group values its financial instruments at fair value. In the case of listed securities this is deemed to be the bid price of the share at the close of business on the reporting date. In the case of unlisted securities the value is deemed to be the cost price less any impairment the directors may feel it prudent to provide. 3. Taxation Six months Six months Year ended 31 ended 30 June ended 30 December 2006 2007 June 2006 # # # Current tax - - - Deferred tax liability at 218,506 177,911 177,911 start of period Deferred tax liability at end 656,974 272,950 218,506 of period Total tax expense for the 438,468 95,039 40,595 period The deferred tax charge represents 30% of the fair value gain on non-current asset investments during the period. See also note 10. 4. Earnings per share Six months Six months Year ended 31 ended 30 June ended 30 June December 2006 2007 2006 # # # Earnings Earnings for the purpose of basic and diluted earnings per share being net profit 19,108 48,196 169,440 attributable to equity shareholders Number of shares Weighted average number of ordinary shares for the purpose of basic earnings per share 134,633,517 64,823,204 66,068,493 Weighted average number of dilutive shares under warrant 2,855,000 27,855,000 27,649,521 Weighted average number of ordinary shares for the purpose of dilutive earnings per share 137,488,517 92,678,204 93,718,014 Basic earnings per share in each period are based on the return on ordinary activities after taxation attributable to equity shareholders. The calculation of diluted earnings per share assumes conversion of all potentially dilutive ordinary shares, all of which arise from share warrants. 5. Investments All investments are accounted for at fair value through profit and loss or available for sale, as defined by IAS 39. The classification depends on the purpose for which the investment was acquired. Management determines the classification of its investments at initial recognition. (a) Investments at fair value through profit or loss Investments at fair value through profit or loss are investments held for trading. An investment is classified in this category if acquired principally for the purpose of selling in the short term. Investments in this category are classified as current assets. (b) Available for sale investments Available for sale investments are non-derivatives that are either designated in this category or not classified in any other category. This category also includes the Group's investments in associates. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the balance sheet date. All investments are designated upon initial recognition as held at fair value through profit or loss and are measured at subsequent reporting dates at fair value, which in the case of listed investments is the bid price. Unlisted investments are valued at cost price, subject to a review by the Directors taking into account relevant information as appropriate including market prices, accounting information and professional advice. 6. Investments in associates The Group accounts for its investments in associates under the rules set out in IAS 28 for venture capital organisations. Such investments are included on the balance sheet at fair value under non-current asset investments. The following valuations are included in non-current asset investments and are based on each associate's bid price at close of business on the reporting date, except that the valuation for Oil and Gas Support Services plc at 31 December 2006 is the cost price, as the shares were not yet listed at that date: Six months Six months Year ended 31 ended 30 June ended 30 December 2006 2007 June 2006 # # # Yellowcake plc 519,577 294,875 252,750 Oil and Gas Support Services 1,375,000 - 125,000 plc 1,894,577 294,875 377,750 Other investments at fair 1,335,514 1,449,772 1,225,795 value Total non-current asset 3,230,091 1,744,647 1,603,545 investments Summarised financial information of associates that are not accounted for using the equity method: Six months Six months Year ended 31 ended 30 ended 30 December 2006 June 2007 June 2006 # # # Yellowcake plc Total assets 527,404 318,335 320,642 Total liabilities 33,750 27,299 45,101 Revenues 431,371 170,221 99,825 Profit/(loss) 181,028 (123,381) (15,506) Oil and Gas Support Services plc Total assets 467,045 - - Total liabilities 980 - - Revenues - - - (Loss) (72,787) - - The financial information for the periods ended 31 December 2006 and 30 June 2007 for Yellowcake plc and Oil and Gas Support Services plc is based on internal management accounts and has not been audited and as a result may be subject to change. 7. Cash generated from/(used in) operations Six months Six months Year ended 31 ended 30 June ended 30 December 2006 2007 June 2006 # # # Operating profit 13,645 46,517 163,705 Depreciation charge 13,594 - - Share based (income) - - (32,400) (Increase)/decrease in debtors (197,209) (32,545) 5,947 (Increase)/decrease in current asset investments (375,561) 6,575 (125,353) Increase in creditors 329,361 174,643 249,315 Cash (used in)/arising from operations (216,170) 195,190 261,214 Tax paid - - - 8. Dividends The directors do not propose payment of an interim dividend. 9. Share capital Six months Six months Year ended 31 ended 30 June ended 30 December 2006 2007 June 2006 # # # Authorised At 1 January 2006 100,000,000 ordinary shares of 0.5p each 500,000 500,000 500,000 Increase June 2006 100,000,000 ordinary shares of 0.5p each 500,000 500,000 500,000 Increase March 2007 200,000,000 ordinary shares of 0.5p each 1,000,000 - - Balance at end of period: 400,000,000 ordinary shares of 2,000,000 1,000,000 1,000,000 0.5p Six months Six months Year ended 31 ended 30 June ended 30 December 2006 2007 June 2006 # # # Allotted and called up At 1 January 2006 57,000,000 ordinary shares of 0.5p each 285,000 285,000 285,000 Allotted to 30 June 2006 8,000,000 ordinary shares of 0.5p each 40,000 40,000 40,000 Allotted to 31 December 2006 51,666,666 ordinary shares of 0.5p each 258,333 - 258,333 Allotted to 30 June 2007 24,000,000 ordinary shares of 0.5p each 120,000 - - Balance at end of period: 140,666,666 ordinary shares of 0.5p each 703,333 325,000 583,333 Reconciliation of movements on Share Premium account Allotted and called up At 1 January 2006 57,000,000 ordinary shares of 0.5p each 985,883 985,883 985,883 Allotted to 30 June 2006 8,000,000 ordinary shares of 0.5p each 140,000 140,000 140,000 Allotted to 31 December 2006 51,666,666 ordinary shares of 0.5p each 396,667 - 396,667 Allotted to 30 June 2007 24,000,000 ordinary shares of 0.5p each 402,000 - Balance at end of period 1,924,550 1,125,883 1,522,550 10. Reconciliation of Retained Earnings Six months Six months Year ended 31 ended 30 June ended 30 December 2006 2007 June 2006 # # # Opening balance 293,479 (780,684) (780,684) Elimination of share based payment reserve 810,000 Profit from Consolidated Income Statement 19,108 48,196 169,440 Gains arising from fair value statement of non-current asset investments 1,461,560 316,796 135,318 Deferred tax charge (438,468) (95,039) (40,595) Balance as stated on Consolidated Balance Sheet 1,335,679 (510,731) 293,479 11. Contingent liabilities The Company acquired 500,000 ordinary shares of #1.00 each in Risk Transfer Limited at the end of the last financial year, representing 100% of the issued share capital of that company. The Company has made a payment of 50p on each share acquired, leaving a contingent liability for the remaining 50p, or #250,000 in total. 12. Events after balance sheet date On 16 April 2007 the Group subscribed for 10,000,200 ordinary shares of 0.5p each in Uranium Prospects plc at a total cost of #50,001. This amount is included in non-current asset investments on the Consolidated Balance Sheet at 30 June 2007. On 27 July 2007 Uranium Prospects plc was admitted to PLUS Markets. The bid price for Uranium Prospects plc as at the date of this report is 4.75p per share, resulting in an unrealised gain on this investment of #425,000. 13. Transition to IFRS Addworth Plc reported under UK GAAP in its previously published financial statements for the year ended 31 December 2006. The analysis below shows a reconciliation of net assets and profit as reported under UK GAAP as at 31 December 2006 to the revised net assets and profit under IFRS as reported in these interim financial statements. In addition, there is a reconciliation of net assets under UK GAAP to IFRS at the transition date for the Group, being 1 January 2006. There is also a reconciliation of net assets under UK GAAP to IFRS at the comparative interim financial reporting date, being 30 June 2006. Reconciliation of equity Reconciliation of equity at Previous GAAP Effect of IFRS 1 January 2006 transition to IFRS # # # Net assets 951,612 438,588 1,390,200 Share capital 285,000 - 285,000 Share premium 985,884 - 985,884 Share based payment reserve 900,000 - 900,000 Profit and loss account (1,219,272) 438,588 (780,684) Total equity 951,612 438,588(1) 1,390,200 Reconciliation of equity at Previous GAAP Effect of IFRS 31 December 2006 transition to IFRS # # # Net assets 1,868,125 588,837 2,456,962 Share capital 583,333 - 583,333 Share premium 1,522,550 - 1,522,550 Share based payment reserve 57,600 - 57,600 Profit and loss account (295,358) 588,837 293,479 Total equity 1,868,125 588,837(2) 2,456,962 Reconciliation of equity at Previous Effect of IFRS 30 June 2006 GAAP transition to IFRS # # # Net assets 1,167,234 672,918 1,840,152 Share capital 325,000 - 325,000 Share premium 1,125,883 - 1,125,883 Share based payment reserve 900,000 - 900,000 Profit and loss account (1,183,649) 672,918 (510,731) Total equity 1,167,234 672,918(3) 1,840,152 Explanation of effects of transition to IFRS: # 1) Fair value gain on current asset investments 23,463 Fair value gain on non-current asset investments 593,036 Less deferred taxation (177,911) 438,588 2) Fair value gain on current asset investments 78,989 Fair value gain on non-current asset investments 728,354 Less deferred taxation (218,506) 588,837 3) Fair value gain on current asset investments 36,036 Fair value gain on non-current asset investments 909,832 Less deferred taxation (272,950) 672,918 Reconciliation of net profit Reconciliation of profit for Previous Effect of IFRS the year ended 31 December GAAP transition 2006 to IFRS # # # Total income 3,915,712 710,975 4,626,687 Cost of sales (3,302,369) (655,449) (3,957,818) Administrative expenses (537,564) - (537,564) Share based payment 32,400 - 32,400 transactions Taxation - - - Interest receivable 5,735 - 5,735 Net profit 113,914 55,526(1) 169,440 Reconciliation of profit for Previous Effect of IFRS the six months ended 30 June GAAP transition 2006 to IFRS # # # Total income 1,752,363 130,552 1,882,915 Cost of sales (1,541,063) (117,979) (1,659,042) Administrative expenses (177,356) - (177,356) Share based payment - - - transactions Taxation - - - Interest receivable 1,679 - 1,679 Net profit 35,623 12,573(2) 48,196 Explanation of effect of transition to IFRS: # 1) Fair value gain on current asset investments 710,975 Increase in cost of sales resulting from the application of fair value (655,449) 55,526 2) Fair value gain on current asset investments 130,552 Increase in cost of sales resulting from the application of fair value (117,979) 12,573 Consolidated Cash Flow Statement The Group's Consolidated Cash Flow Statements are presented in accordance with IAS 7. The Consolidated Cash Flow Statements present substantially the same information as that required under UK GAAP, with the following principal exceptions: 1. Under UK GAAP, cash flows are presented under nine standard headings, whereas IFRS requires the classification of cash flows resulting from operating, investing and financing activities. 2. The cash flows reporting under IAS 7 relates to movements in cash and cash equivalents, which include cash and short term liquid investments. Under UK GAAP, cash comprises cash in hand and deposits repayable on demand. 14. Financial information The financial information contained in this interim report does not constitute full statutory accounts as defined in Section 240 of the Companies Act 1985. The financial information for the six months ended 30 June 2007 and 30 June 2006 has not been audited. The information for the year ended 31 December 2006 has been extracted from the latest published accounts. Those accounts have been filed with the Registrar of Companies and included the report of the auditors which was unqualified and did not contain a statement under either Section 237(2) or 237(3) of the Companies Act 1985. Those statutory accounts were prepared in accordance with UK GAAP. -Ends- For further information: Mark Watson-Mitchell, Executive Chairman Tel: 020 7638 8750 Addworth plc Hugh Oram, Nominated Adviser Tel: 020 7710 7400 Nabarro Wells & Co. Limited END This information is provided by RNS The company news service from the London Stock Exchange END IR MGGZLRNDGNZM
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