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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Arteon | LSE:ARTO | London | Ordinary Share | GB00B54PND91 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 3.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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Arteon PLC / Epic: ARTO / Index: AIM / Sector: Property
30 December 2009
Arteon PLC (`Arteon' or `the Company')
Interim Results for the six months ended 30 September 2009
Arteon PLC, the AIM traded real estate investment and services company,
announces its results for the six months ended 30 September 2009, following the
disposal of TurfTrax Holdings Limited (`THL') and the adoption of its new
business strategy in July 2009.
Chairman's Statement
The period under review has been a transitional one for the Company and as a
result this statement will be largely forward looking in nature by virtue of
the fact the majority of the period was taken up with the disposal of the
legacy business and the development and resulting adoption in July of our new
business strategy to create a diverse property investment and services
business. Following the preparatory steps taken in 2009 we hope, during 2010,
to begin generating revenues as platform provider and asset manager to a new
breed of transparent property funds and vehicles.
Implementing the New Strategy
The first major step in this strategy was achieved post period end in October
2009, when we licensed Orchos, a proprietary technology platform, from Real
Estate Innovations Holdings Ltd (`REIH'), a strategic Arteon shareholder.
Orchos is designed to enable qualified investors and funds to hold and report
investment property within a uniform and transparent framework, and in
particular to gain exposure `on demand' to individual assets. The Directors
believe that as it evolves, this platform should give Arteon a unique
competitive proposition in the investment property marketplace.
Arteon has worldwide exclusivity for the use of Orchos, providing that we
achieve Euro 300 million of assets under management or in the pipelines of
relevant funds by March 2011, with payment to REIH based on a licence fee
ranging between 9.5 per cent. and 12.5 per cent of resulting revenues. The
first GBP2 million of such revenues accruing to Arteon in any year are exempt
from the fee.
Our immediate operational priority is a series of new, targeted property
investment vehicles which will deploy Orchos on behalf of family offices and
similarly sophisticated investors. As previously announced, talks are underway
with a number of parties interested in establishing the first of these
entities. In addition to providing an early revenue stream for Arteon as asset
manager and/or investment advisor, these vehicles will serve as `showcase
funds' demonstrating the capabilities and advantages of the new platform.
Since October, a significant amount of work has taken place to bring Orchos
into a deployment phase and we are well advanced in identifying the additional
human resources required to support our investment and asset management
division. We will be previewing the platform at launch events in the UK and
mainland Europe beginning in January 2010 and I expect to be in a position to
update you further on concrete progress towards the showcase funds at that
time.
Financial Review
As a result of the disposal of THL and adoption of the new investing strategy
in July 2009 the figures, and in particular the comparatives, shed little light
on the business that we are in the process of building. From a cash
perspective, the obligations incurred by your Company during the period were
largely those relating to the maintenance of the AIM listing and the production
of the associated circular following the disposal of THL. Excluding management
fees (see note 5 and below) these costs amounted to GBP66,000 during the period
under review.
The negative equity position of GBP108,000 includes the effect of GBP137,000 of
management charges which, together with an additional GBP12,000 cash loan, are
fully financed by an interest-free subordinated facility provided by the major
shareholders. The interested shareholders have confirmed that they have no
intention of calling the facility (which in any case requires a minimum of 12
months notice) in the near future and that, in principal, they are willing to
extend further such facilities throughout 2010.
Global Property Investment
During 2009, which includes the period under review, investment property
markets worldwide have displayed conflicting signals beneath a veneer of
headlines which focussed on the slightest evidence of recovery. Widespread
money printing and the virtual absence of base rates have seen funds flow into
prime assets - in some cases chasing down yields to levels which are suggestive
of a series of `mini-bubbles'.
At the same time, a number of new and existing funds have sought to take
advantage of the expected supply of distressed property and so far appear
largely frustrated by the measured approach taken by most lenders who have been
robust in turning away `vulture' offers for impaired securities.
We believe that recent market development is largely the result of macro (or
Beta driven) trades by financial investors seeking to hedge against inflation,
gain yield (relative to low bank rates) or take advantage of what they perceive
to be undervalued currencies. The resulting bubble-like recovery in certain
assets is further evidence of the volatility which results when capital markets
come face to face with an asset class which is as `lumpy' and indivisible as
property.
With a significant volume of property lending due to roll over within the next
24 months and great uncertainty in the domestic economies which underpin the
asset class, we believe that opportunities will be more plentiful in the coming
times. We expect that demand for income and a hedge against inflation will
remain a central theme and against this backdrop we are encouraged by the
prospects of our unique approach to property investment; centred on a platform
designed to facilitate diversification - whilst simultaneously enabling
targeted investments at the individual asset level. We believe that these
features, together with highly transparent reporting, will strike a chord with
many investors and principals in the marketplace.
Successful implementation of the Orchos platform could open significant
opportunities for the Company, providing a distinct competitive advantage as an
asset manager and service provider for a new range of specialist funds and
vehicles - whether private or exchange traded. I would like to thank the Board
and staff for the time and energy they have committed to the Company during
this transformational period, as well as to Shareholders for their continued
support.
Peter Hagerty
Chairman
INCOME STATEMENT
for the six months ended 30 September 2009
Unaudited Unaudited Audited
6 months 6 months Year ended
ended ended
30 30 31 March
September September
2009 2008 2009
GBP000 GBP000 GBP000
Continuing operations:
Revenues - 58 -
Administrative expenses (202) (68) (97)
Finance income - 84 -
Finance costs - (1) -
(Loss)/profit before taxation from (202) 73 (97)
continuing operations
Income tax expense - - -
(Loss)/profit for the period from (202) 73 (97)
continuing operations
Loss for the period from - (551) (508)
discontinued operations
Total loss for the period from
continuing
and discontinued operations (202) (478) (605)
Loss per ordinary share from (GBP0.46) (GBP5.37) (GBP6.80)
continuing and discontinued
operations (basic and diluted)
(Loss)/profit per ordinary share (GBP0.46) GBP0.82 (GBP1.09)
from continuing operations (basic
and diluted)
STATEMENT OF CHANGE IN EQUITY (unaudited)
Share Share Share Merger Accumulated Total
capital premium option reserve deficit
reserve
GBP `000 GBP `000 GBP `000 GBP `000 GBP `000 GBP `000
At 1 April 2008 4,429 1,972 133 10,730 (16,649) 615
Loss for the period - - - - (478) (478)
Share based payments - - (41) - 41 -
At 30 September 2008 4,429 1,972 92 10,730 (17,086) 137
Release of merger - - - (10,730) 10,730 -
reserve
Loss for the period - - - - (127) (127)
Share based payments - - (92) - 56 (36)
At 31 March 2009 4,429 1,972 - - (6,427) (26)
Loss for period (202) (202)
Issue of equity 40 80 - - - 120
At 30 September 2009 4,469 2,052 - - (6,629) (108)
BALANCE SHEET
as at 30 September 2009
Unaudited Unaudited Audited
30 30 31 March
September September
2009 2008 2009
GBP000 GBP000 GBP000
Assets
Non-current assets
Property, plant and equipment 4 40 -
4 40 -
Current Assets
Inventories - 4 -
Trade and other receivables 19 83 -
Cash and cash equivalents 84 195 2
103 282 2
Total assets 107 322 2
Capital and reserves attributable
to equity holders of the Company
Share capital 4,469 4,429 4,429
Share premium 2,052 1,972 1,972
Share option reserve - 92 -
Merger reserve - 10,730 -
Accumulated deficit (6,629) (17,086) (6,427)
Total equity (108) 137 (26)
Current liabilities
Trade and other payables 65 185 28
65 185 28
Non current liabilities
Subordinated loan 150 - -
150 - -
Total liabilities 215 185 28
Total equity and liabilities 107 322 2
CASH FLOW STATEMENT
for the six months ended 30 September 2009
Unaudited Unaudited Audited
6 months 6 months Year ended
ended ended
30 30 31 March
September September
2009 2008 2009
GBP000 GBP000 GBP000
Cash flows from operating
activities
Cash used in operations (46) (889) (912)
Interest paid - (1) (2)
(46) (890) (914)
Net cash used in operating
activities
Cash flows from investing
activities
Purchase of property, plant and (4) 241 (13)
equipment
Proceeds on disposal of property, - - 40
plant and equipment
Proceeds from disposal of business - - 108
Other - (11) -
Interest received - 84 10
Net cash used in investing (4) 314 145
activities
Cash flows from financing
activities
Proceeds from issuance of ordinary 120 - -
shares
Issue of subordinated loan 12 - -
Net cash generated from financing 132 - -
activities
Net increase (decrease) in cash,
cash equivalents and
bank overdrafts 82 (576) (769)
Cash, cash equivalents and bank 2 771 771
overdrafts at beginning of the year
Cash, cash equivalents and bank
overdrafts at end of
the year 84 195 2
NOTES TO THE FINANCIAL INFORMATION
for the six months ended 30 September 2009
1. Legal status and activities
The Company is a public limited liability company incorporated and domiciled in
England and Wales. The address of its registered office is 27/28 Eastcastle
Street, London W1W 8DH.
The Company is listed on the AIM Market of the London Stock Exchange.
The Company's accounts for the year ended 31 March 2009 have been delivered to
the Registrar of Companies. Those accounts have received an unqualified audit
report which did not contain statements under Section 237 (2) and (3) of the
Companies Act 1985.
These condensed interim financial statements are not statutory accounts within
the meaning of Section 435 of the Companies Act 2006.
These interim financial statements were authorised for issue by the Board of
Directors on 29 December 2009.
2. Basis of preparation of the interim report
The Company has presented its results in accordance with International
Financial Reporting Standards as adopted in the EU (`IFRS') using the same
accounting policies and methods of computation as were used in the annual
financial statements for the year ended 31 March 2009. As permitted, the
interim report has been prepared in accordance with the AIM Rules for companies
and is not compliant in all respects with IAS 34 Interim Financial Statements.
The condensed interim financial statements do not include all of the
information required for full annual financial statements and cannot be
construed to be in full compliance with IFRS.
3. Loss per share
Basic loss per share is calculated by dividing the profit attributable to
equity holders of the Company by the weighted average number of ordinary shares
in issue.
Given the Group's reported loss for the period share options are not taken into
account when determining the weighted average number of ordinary shares in
issue during the period and therefore the basic and diluted loss per share are
the same.
On 11 July 2009 the Company carried out a capital reorganisation whereby for
each 500 ordinary 10p shares held by shareholders they were issued with one new
5p ordinary share and 88,581 deferred ordinary shares of GBP49.95 each in
exchange for their 10p ordinary shares in the Company. The deferred ordinary
shares have no voting rights and essentially have no value to the shareholder.
On the same date the company issued 788,459 new ordinary shares of 5p each at a
premium of 10.22p per share.
The number of shares in issue for the purposes of earning per share
calculations is re calculated for earlier years based on the number of new 5p
ordinary shares received by shareholders in exchange for their 10p ordinary
shares in the Company.
Unaudited Unaudited Audited
year-ended
Six months Six months 31 March
ended 30 ended 30 2009
September September
2009 2008
(Loss)/profit per share from continuing (GBP0.46) GBP0.82 (GBP1.09)
operations
Loss per share from discontinued operations - (GBP6.19) (GBP5.71)
Total basic loss per share (GBP0.46) (GBP5.37) (GBP6.80)
The losses and weighted average number of ordinary shares used in the
calculation of basic loss per share are as follows:
Unaudited Unaudited Audited
year-ended
Six months Six months 31 March
ended 30 ended 30 2009
September September
2009 2008
GBP'000 GBP'000 GBP'000
(Loss)/profit used in calculation of total (202) 478 (605)
basic and diluted earnings per share
Loss for the period from discontinued - (551) (508)
operations used in the calculations of
basic and diluted earnings per share from
discontinued operations
(Loss)/profit used in the calculation of (202) 73 (97)
basic earnings per share from continuing
operations
Number of shares
Unaudited Unaudited Audited
year-ended
Six months Six months 31 March
ended 30 ended 30 2009
September September
2009 2008
`000 `000 `000
Weighted average number of ordinary shares 440 89 89
for the purposes of basic earnings per
share
4. Cash used in operations
Reconciliation of operating loss to cash flows from operating activities
Unaudited Unaudited Audited
year-ended
Six months Six months 31 March
ended 30 ended 30 2009
September September
2009 2008
GBP000 GBP000 GBP000
Operating loss from continuing operations (202) (10) (97)
Operating loss from discontinued operations - (551) (515)
(202) (561) (612)
Adjustments for:
- Depreciation - 14 53
- Profit on disposal of property, plant and - (202) -
equipment
- Profit on disposal of business - - (321)
- Transfer to share option reserve - - (37)
- Trade payables converted to subordinated 138 - -
debt
Changes in working capital
- Inventories - 12 (138)
- Trade and other receivables (19) 198 169
- Trade and other payables 37 (350) (26)
Cash flows from operating activities (46) (889) (912)
5. Management Services
During the period under review Peter Hagerty and Patrick Aisher, both directors
of the Company, provided services to the Company amounting to GBP137,000 through
Choron Management Limited, a Company controlled by family trusts of which they
are potential beneficiaries.
Choron has agreed with the Company that the payment of any liabilities owed to
it will be deferred for a minimum period of 12 months and that Choron will
consider converting any liability into shares of the Company.
6. Website
These interim accounts will be available from today's date on the Company's
website, www.arteonplc.com.
**ENDS**
For further information visit www.arteonplc.com or contact:
Peter Hagerty Arteon Plc Tel: +44 (0)20 7148 7700
Luke Cairns / Avi Robinson Astaire Securities Plc Tel: +44 (0)20 7448 4400
Isabel Crossley / Hugo de St Brides Media & Finance Tel: +44 (0)20 7236 1177
Salis Ltd
END
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