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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| European Bus | LSE:EBJ | London | Ordinary Share | GB00B06T9D69 | ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.975 | 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:0801D
European Business Jets plc
31 August 2007
Company Registration No 05260863 (England and Wales)
EUROPEAN BUSINESS JETS PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2007
EUROPEAN BUSINESS JETS PLC
CONTENTS PAGE
Page
Directors' and Advisors 3
Statement from the Chairman and the Chief Executive 4-5
Board Members 6
Directors' Report 7-9
Corporate Governance Statement 10-11
Directors Remuneration Report 12-13
Independent Auditors' Report 14
Consolidated Profit & Loss Account 15
Consolidated Balance Sheet 16
Company Balance Sheet 16
Consolidated Cash Flow Statement 17
Notes to the Financial Statements 18-28
EUROPEAN BUSINESS JETS PLC
DIRECTORS AND ADVISORS
Directors B M Moritz
G S Deary
N R Messer
J E Burgess
Secretary and registered office A G C Clarke
Third Floor
55 Gower Street
London WC1E 6HQ
Auditors Baker Tilly UK Audit LLP
Marlborough House
Victoria Road South
Chelmsford
Essex CM1 1LN
Bankers Barclays Bank PLC
First Floor
99 Hatton Garden
London EC1N 8DN
Solicitors Ronaldson Solicitors
55 Gower Street
London WC1E 6HQ
Broker Hichens, Harrison & Co PLC
Bell Court House
11 Blomfield Street
London EC2M 1LB
Nominated advisor Grant Thornton Corporate Finance
Grant Thornton House
22 Melton Street
London NW1 2EP
EUROPEAN BUSINESS JETS PLC
STATEMENT FROM THE CHAIRMAN AND THE CHIEF EXECUTIVE
CHAIRMAN'S STATEMENT
Overview
* * Steady growth in line with increasing demand for private jets
* * Turnover up 604% to #4,282,327 (2006: #608,255)
* * Pre-tax losses of #1,166,286 (2006: #1,394,851)
* * Strong rise in new customers and exploratory enquiries
* * Customer flying hour activity increased by 129% year on year
* * New services and products launched including highly cash generative
card and management business
* * Expanded aircraft fleet - now operates a fleet of five aircraft
including a larger seven-seater which broadens access to previously
untapped markets across Southern Europe
* * Foundation in place for sustained growth and revenue generation
Chairman's Statement
The year under review has been one of slow but steady progress for the Group,
streamlining its growth strategy and developing the business through the launch
of new services and products. Importantly, the dynamics of the Group's cash flow
has altered through the launch of a new card, which entitles the purchaser to
fly a set number of hours in the Group's aircraft. This is a highly cash
generative new revenue stream for us in addition to our core product, which is
the sale of fractional ownership of private jets.
In line with the rapidly increasing demand for private jets, as people choose a
faster and less stressful travel option, the Group has experienced a strong rise
in new customers and exploratory enquiries. On the back of this, EBJ now
operates a fleet of five aircraft, including two managed for third party owners,
and, I am delighted to say, is fast becoming a recognised force in the industry.
The Board
In October 2006 Ian Harding resigned as a non executive director due to pressure
of work elsewhere. His work as chairman of the audit committee had been
particularly valuable and I would like to thank him for his efforts on behalf of
the Company.
Financials
The financial results for the year do not reflect the progress made in
stabilising the business and its finances. Turnover for the year has increased
by 604% to #4,282,327 (2006: #608,255) resulting in a reduction in pre-tax
losses to #1,166,286 (2006: #1,394,851). Therefore looking forward to 2008-9, we
believe we have a foundation for sustained growth and revenue generation. As
with last year no dividends are recommended.
Outlook
With card sales continuing to contribute positively to cash flow, fractional
sales beginning to accelerate, interest in our products at the highest level to
date and new aircraft purchased we look to the future with increasing
confidence.
Brian Moritz Chairman
EUROPEAN BUSINESS JETS PLC
STATEMENT FROM THE CHAIRMAN AND THE CHIEF EXECUTIVE
OPERATIONS REPORT
During the course of the year EBJ has evolved greatly as a Group as it continues
to expand its fleet of aircraft in line with the rising number of people opting
to travel on private jets. The Group now has three aircraft which it operates on
behalf of its fractional customers including a newly acquired seven-seater
aircraft, which significantly enhances EBJ's geographic reach, together with two
aircraft under management.
Importantly, our number of customer revenue flying hours, have increased by 129%
year on year and due to the increased flying demand we have moved to a fully
operational 24 hour service with a shift system in place to ensure a seamless
service.
During the early part of the year we gained our own Air Operators Certificate
from the Civil Aviation Authority ('CAA'), which allows us to operate the
aircraft under our own standard operating procedures. Thanks to the efforts of
our Operations Director, Peter Quigley, we gained acceptance by the CAA in a
very short period of time, allowing us to develop the business further and
attract aircraft under management. This allows us to generate charter revenue in
addition to providing supplemental flights to our own fleet.
Our core business is the operation of private jets under 'fractional ownership'.
Essentially, individuals can invest in and own a share of an aircraft which is
theirs to use for a specific number of hours at any time of the year. As we move
forward into our third financial year, we have extended the fractional programme
to include a Citation CJ2 aircraft. While the CJ1, of which the Group has two in
its fleet, provides the capability to fly up to five passengers to the main
cities in Europe, the CJ2 has a far longer range and the ability to seat up to
seven people. Both aircraft reflect the Group ethos of providing affordable
business travel throughout Europe and we expect the introduction of the new
programme to be a major contributor to the business.
Under the guidance of Nick Messer, our Sales and Marketing Director, we are now
in a far stronger position than this time last year achieving multiple sales
contracts each month. This provides the Group with a solid foundation for
sustained future growth with customers enjoying long term agreements in return
for a guaranteed price structure.
During the course of the year we launched two new revenue streams. The first
being the very successful European Business Jets Business Card, which allows
customers to sample the service through the purchase of 25 hours or smaller
multiples. When the card expires, customers can either buy a fractional share or
take a further card as appropriate. The second revenue stream launched was that
of our aircraft management business. We currently have two aircraft under
management with a further mid-sized aircraft expected in the near future. We
consider that this part of the business will develop quickly and allow EBJ to
offer a full range of services to its clients.
I am, now, more than any other time in the Group's history, more confident of
its potential to deliver significant value to its shareholders. As a result of
the solid groundwork over the last two years, EBJ is, I believe, well positioned
to benefit from the developing market place.
Chief Executive Officer Graeme Deary
EUROPEAN BUSINESS JETS PLC
BOARD MEMBERS
Brian Michael Moritz FCA, aged 70, Non-Executive Chairman (A,R)
Brian is responsible for ensuring the Board operates efficiently and effectively
and provides overall financial and organisational control. Brian is a Chartered
Accountant and in addition to his role as Chairman of the Board he has initially
taken responsibility for the finances of the Company, pending the appointment of
a dedicated Finance Director. Brian is chairman and director of a number of
junior mining and exploration companies, the majority of which operate in
Africa.
Graeme Stephen Deary, aged 48, Chief Executive
Graeme is responsible for the delivery of the company's strategy and long-term
goals. He has over 12 years experience in the corporate aviation market and was
responsible for establishing the European arm of the global leader in fractional
ownership.
Nicholas Roger Messer, aged 42, Sales and Marketing Director
Nick is responsible for managing marketing initiatives and targeting new
customers. Nick is an experienced marketeer and has owned and managed marketing
agencies for over 16 years, working with many blue chip brands in both business
and consumer markets.
James Everett Burgess, aged 43, Non-executive Director (A,R)
James is the Chairman of the Remuneration Committee and is responsible for
ensuring the company recruits and retains the highest calibre executive
directors. He has spent 21 years working in the City and in 1992 he set up
Everett Financial Management, a firm authorised by the FSA and a member firm of
the London Stock Exchange. James was chairman until 2003 when the business was
sold.
A=Member of Audit Committee
R=Member of Remuneration Committee
Note: Directors' ages are at the 31 March 2007
EUROPEAN BUSINESS JETS PLC
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2007
The directors present their report and audited financial statements of the group
for the year ended 31 March 2007.
Principal activity
The principal activity of the group during the year was the selling of aircraft
and subsequent operation of these aircraft on behalf of the owners.
Review of the business and future developments
Details of the group's performance and financial position are given in the
financial statements on pages 15 to 28. The statement of the Chairman and Chief
Executive, which forms part of this report, describes the development of the
business during the year.
Principal risks and uncertainties
Like most businesses, there are a range of risks and uncertainties facing the
Group and the matters described below are not intended to be an exhaustive list
of all possible risks and uncertainties. The principal risks and uncertainties
affecting the business include the following:
* Human resources risk: This risk being defined as a shortage of requisite
skills, knowledge and experience within the Group. This risk, especially in
relation to technical skills, is kept at the forefront of the Group's
concerns and is addressed primarily through remuneration and recruitment
policies.
* The effect of legislation and other regulatory activities: The Group
regularly monitors forthcoming and current legislation particularly
concerning aviation matters.
* Environmental risks: The Group places emphasis on environmental compliance
in its business and seeks to ensure that environmental best practice is
observed as well as compliance with relevant legislation.
* Foreign currency exchange: Purchases of aircraft and aviation products are
made in United States Dollars, as a result of which the group is subject to
risks associated with currency movements. The Group does not hold
speculative positions against movements in foreign currencies.
* Competitive risk: Whilst the groups revenues are largely contract based the
growth of the business to achieve profitability is dependant on the
development of new customers. The Group invests in marketing and
development to sustain competitive advantage, and also works continually to
ensure that its cost base is competitive.
The Board have long experience in managing all these risks.
Performance monitoring
The Board monitors the Group's performance in a number of ways including key
performance indicators. The key financial performance indicators for 2007 and
2006 are as follows:
2007 2006
Turnover #4.28m #0.61m
Gross Loss -#0.09m -#0.23m
Pre-Tax Loss -#1.17m -#1.39m
Cash #0.06m #0.34m
The turnover indicator represents what has been invoiced to customers in the
year and measures sales growth or decline in value terms.
The gross margin is calculated as being the difference between turnover and cost
of sales. Pre-tax loss is the loss generated by the Group from operations
including finance income and finance costs but before taxation. This indicator
measures the overall profitability of the business. Cash is the year end balance
sheet position as reported in the consolidated balance sheet. These performance
indicators are measured against a budget approved by the Board. The Board also
considers the following key non-financial performance indicators:
* Marketing projects measured against project milestones.
* Suppliers performance.
* Health and Safety incidents.
* Customer support responsiveness.
* Employee performance, training requirements and sickness.
Results and dividends
The group loss for the financial period after taxation amounted to #1,166,286
(2006 #1,394,851). The Directors do not recommend the payment of a dividend at
this stage in the Company's development.
EUROPEAN BUSINESS JETS PLC
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2007
Directors
The directors who served during the year together with their interests in the
ordinary 0.1p shares of the company at 31 March 2007 were as follows:
Beneficial holding % of Share options
Ordinary Shares Equity Ordinary Shares
of 0.1p each of 0.1p each
2007 2006 2007 2006 2007 2006
(000's) (000's) (000's) (000's)
B Moritz (Chairman) * + 1,500 1,000 0.7 0.5 3,000 3,000
G Deary (Chief Executive) 43,880 43,880 19.8 19.8 10,000 10,000
N Messer (1) 21,670 18,170 9.8 8.2 10,000 10,000
I Harding* (2) - 1,500 - 0.7 3,000 3,000
J Burgess* 11,550 10,550 5.2 4.8 3,000 3,000
* Non-Executive director
+ Senior independent director
(1) The interest of N Messer includes 1,000,000 Ordinary Shares held
in the name of his wife.
(2) (2) I Harding resigned on 5 October 2006.
There have been no changes in the directors' interests between the year end and
the approval of the financial statements. The directors have no other interests
required to be disclosed under Schedule 7 of the Companies Act 1985.
G Deary retired by rotation at the Annual General Meeting on 18 May 2007 and was
duly re-elected.
The group has renewed third party indemnity insurance on behalf of the directors
as permitted under the Companies Act 1985.
Directors' Responsibilities
The directors are responsible for preparing the Annual Report and the financial
statements in accordance with applicable law and United Kingdom Generally
Accepted Accounting Practice. Company law requires the directors to prepare
financial statements for each financial year which give a true and fair view of
the state of affairs of the company and the group and of the profit or loss of
the group for that period. In preparing those financial statements, the
directors are required to:
* select suitable accounting policies and apply them consistently
* make judgements and estimates that are reasonable and prudent
* state whether applicable accounting standards have been followed, subject
to any material departures disclosed and explained in the financial
statements; and - prepare the financial statements on a going concern basis
unless it is inappropriate to presume that the company and group will
continue in business.
The directors are responsible for keeping proper accounting records, which
disclose with reasonable accuracy, at any time the financial position of the
company and the group to enable them to ensure that the financial statements
comply with the Companies Act 1985. They are also responsible for safeguarding
the assets of the group and hence for taking steps for the prevention and
detection of fraud and other irregularities.
Supplier payment policy
It is company and group policy to agree and clearly communicate the terms of
payment as part of the commercial arrangements negotiated with suppliers and
then pay according to those terms based on the timely receipt of an accurate
invoice. The proportion of trade creditors at 31 March 2007 to amounts supplied
during the year gives an average payment term for the Group of 35 days (2006:75
days).
Donations
The company remains an active sponsor of "Help a Jersey Child", a charity that
supports under privileged children in Jersey. The company has donated #16,500
(2006 #10,500) to the charity and has made available management time to promote
the charity.
EUROPEAN BUSINESS JETS PLC
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2007
Substantial shareholding
On the date the financial statements were approved, apart from the directors
holdings mentioned above, the directors have also been notified that P Rooney
was materially interested in 14.77% and Medical Debenture Investments was
materially interested in 3.26% of the issued ordinary share capital of the
company. The company has not been notified in accordance with section 198 to 208
of the Companies Act 1985 of any other interests in the ordinary share capital
of the company.
International Financial Reporting Standards
The group intends to comply with the AIM regulations and implement International
Financial Reporting Standards ('IFRS') for the financial statements from 2008.
The financial statements for the year ending 31 March 2008, including
comparative information for the year ending 31 March 2007, will be prepared in
accordance with IFRS. The group is currently undertaking a review of the impact
of IFRS on its published financial statements.
Disclosure of information to the auditors
The directors confirm that in fulfilling their duties as directors, they have:
* taken all relevant steps in order to make themselves aware of any
information relevant to the audit and to establish that the auditors are
aware of that information.
* so far as the directors are aware, there is no relevant audit information
of which the auditors have not been made aware.
Auditors
A resolution appointing Baker Tilly UK Audit LLP as the company's auditors was
passed at the Annual General Meeting held on 18 May 2007. In accordance with
section 385 of the Companies Act 1985, a resolution proposing that Baker Tilly
UK Audit LLP be reappointed as auditors of the company will be put to the
members at the Annual General Meeting.
By order of the Board
Nicholas Messer, Director
28th August 2007
EUROPEAN BUSINESS JETS PLC
CORPORATE GOVERNANCE STATEMENT
The Company is not required to comply with the Combined Code but regards it as
best practice. The Directors have applied such guidelines to the management of
the Company, as they believe appropriate to a Company of its size and nature,
with a view to moving towards full compliance as the Company develops.
An Audit Committee and a Remuneration Committee have been established, each with
written terms of reference which clearly define the authority and the duties of
the Committees.
The Board of Directors
The Board currently consists of four members, two of whom are Non-Executive. The
Senior Independent Director is Brian Moritz. The Board, which meets twelve times
a year, is responsible for setting and delivering the Group's long term goals
and strategy and provides overall financial and organisational control. The
Board has a schedule of matters specifically reserved for its approval. The
Group's day-to-day operations are managed by the Executive Directors.
All Directors have access to advice from the Company Secretary and independent
professional advisors at the Company's expense.
Audit Committee
The Audit Committee is chaired by James Burgess and also comprises Brian Moritz.
The Audit Committee meets twice a year and is responsible for ensuring that the
financial performance, position and prospects of the Group are properly
monitored and reported on. This Committee is also responsible for meeting the
auditors and reviewing their reports relating to the published accounts and
internal controls. It keeps under review the relationship with the external
auditors, including their independence and objectivity.
Remuneration Committee
The Remuneration Committee is chaired by Brian Moritz and also comprises James
Burgess. The Remuneration Committee meets at least once a year to review the
performance of the Executive Directors, set their remuneration, determine the
payment of commission to Executive Directors and consider the allocation of
share options, together with any attached performance targets, to Executive and
non-executive directors and employees.
Internal Control
The Board has overall responsibility for ensuring that the Group maintains
systems of internal financial control. The systems are designed to ensure the
maintenance of proper accounting records and the safeguarding of assets.
However, even the most effective system of internal financial control has its
limitations and no system can provide absolute assurance against material
misstatement or loss. The key procedures that have been established to provide
effective internal control are described below:
The Board is ultimately responsible for setting Group strategy and securing
corporate performance at levels that are in accordance with its long term
objectives and plan. It meets regularly to review the progress of the business,
identify business issues and actions that are required and approve major
decisions.
Financial information, comprising profit and loss accounts, balance sheets and
cash flow statements, are produced monthly and variances between actual results
and budget for the Group are analysed and reported to the Board. Where action is
required to correct issues identified by this process, it is implemented as soon
as practicable.
The Group has an organisation structure which is evolving to meet the developing
needs of the business and which encompasses clear lines of responsibility.
EUROPEAN BUSINESS JETS PLC
CORPORATE GOVERNANCE STATEMENT
The Board has identified major business risks facing the Group, and these are
reported on at each Board meeting to allow appropriate policies to be developed
to manage these risks. The risk management approach used is to identify the
Group's most significant areas of risk and to determine key control objectives.
Relations with Investors and AGM
The Annual General Meeting gives all shareholders the opportunity to communicate
directly with the Board. During the year, the Directors are available to respond
to enquiries from investors on the Group's operations. Announcements are made to
the London Stock Exchange and the business media concerning trading and business
developments to provide wider dissemination of information.
James Burgess
Chairman of Audit Committee
EUROPEAN BUSINESS JETS PLC
DIRECTORS REMUNERATION REPORT
Remuneration policy
The Remuneration committee considers and approves on behalf of the Board and the
shareholders the conditions of service of the Executive Directors. The objective
is to provide remuneration packages with which to attract, retain and motivate
the highest calibre Executive Directors and which are in the best interests of
the shareholders.
For the year ended 31 March 2007 the emoluments are as set out in the following
table.
The Executive Directors achieved a commission payment in respect of aircraft
sale of #24,000 during the year ended 31 March 2007.
Directors' Emoluments
Fees Share based
Salary & # Payments or 2007
Commission Share options Total
# # #
Executive
G Deary 72,000 0 15,500 87,500
N Messer 60,000 0 15,500 75,500
Non-Executive
B Moritz 15,000 0 0 15,000
I Harding (resigned 5 October 2006) 7,500 0 0 7,500
J Burgess 15,000 0 0 15,000
169,500 0 31,000 200,500
The Remuneration Committee considers share options to be a valuable incentive to
Directors and employees. Details of the options granted to Directors are set out
in the following table.
Interests in share options
The following directors held options over 0.1p ordinary shares during the year:
31 March Earliest
2007 Exercise date of Date
Millions Price Exercise Expires
G Deary 10 1p 15/3/2007 15/3/2015
N Messer 10 1p 15/3/2007 15/3/2015
B Moritz 3 1.5p 29/9/2005 29/3/2015
J Burgess 3 1.5p 29/9/2005 29/3/2015
I Harding (resigned 5 October 2006) 3 1.5p 29/9/2005 29/3/2015
Millions 29
EUROPEAN BUSINESS JETS PLC
DIRECTORS REMUNERATION REPORT
On 15 March 2005 G Deary and N Messer were granted 10,000,000 options at a price
of 1p all issued under The Approved Employee Scheme. The exercise of these
options is conditional after two years subject to attaining performance criteria
set out in the company's business plan. The Remuneration Committee will
determine whether the objectives have been achieved.
The remaining options listed in the table are not subject to any performance
criteria and have been issued under The Unapproved Employee Scheme at a price of
1.5p.
Options were granted at no cost to the Directors.
The closing mid-market price of European Business Jets PLC 0.1p ordinary shares
at 31 March 2007 was 1.86p. During the year the closing mid-market price of
European Business Jets PLC 0.1p ordinary shares ranged between 0.53p to 2.11p.
Details of other share options granted are set out in note 18 to the accounts.
Brian Moritz
Chairman of Remuneration Committee
EUROPEAN BUSINESS JETS PLC
INDEPENDENT AUDITORS REPORT TO THE SHAREHOLDERS OF EUROPEAN BUSINESS JETS PLC
We have audited the financial statements on pages 15 to 28.
This report is made solely to the company's members, as a body, in accordance
with section 235 of the Companies Act 1985. Our audit work has been undertaken
so that we might state to the company's members those matters we are required to
state to them in an auditor's report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone
other than the company and the company's members as a body, for our audit work,
for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
The directors' responsibilities for preparing the Annual Report and the
financial statements in accordance with applicable law and United Kingdom
Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are
set out in the Statement of Directors' Responsibilities.
Our responsibility is to audit the financial statements in accordance with
relevant legal and regulatory requirements and International Standards on
Auditing (UK and Ireland).
We report to you our opinion as to whether the financial statements give a true
and fair view and are properly prepared in accordance with the Companies Act
1985, and whether the information given in the Directors' Report is consistent
with the financial statements. The information given in the Directors' Report
includes that specific information in the Statement from the Chairman and the
Chief Executive that is cross referenced from the Review of the business and
future developments section of the Directors' Report.
In addition, we report to you if, in our opinion, the company has not kept
proper accounting records, if we have not received all the information and
explanations we require for our audit, or if information specified by law
regarding directors' emoluments and other transactions is not disclosed.
We read the other information contained in the Annual Report and consider
whether it is consistent with the audited financial statements. This other
information comprises only the Statement from the Chairman and the Chief
Executive, the Corporate Governance Statement and the Directors Remuneration
Report. We consider the implications for our report if we become aware of any
apparent misstatements or material inconsistencies with the financial
statements. Our responsibilities do not extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing
(UK and Ireland) issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the amounts and
disclosures in the financial statements. It also includes an assessment of the
significant estimates and judgements made by the directors in the preparation of
the financial statements, and of whether the accounting policies are appropriate
to the company's and group's circumstances, consistently applied and adequately
disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements
are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements.
Opinion
In our opinion
- The financial statements give a true and fair view, in accordance with
United Kingdom Generally Accepted Accounting Practice, of the state of the
company's and group's affairs at 31 March 2007 and of the group's loss for
the year then ended and have been properly prepared in accordance with the
Companies Act 1985; and
- The information given in the Directors' Report is consistent with the
financial statements.
Baker Tilly UK Audit LLP Registered Auditor Chartered Accountants Marlborough
House Victoria Road South Chelmsford Essex CM1 1LN
Date: 28th August 2007
EUROPEAN BUSINESS JETS PLC
CONSOLIDATED PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2007
Restated
2007 2006
Notes # #
Turnover 2 4,282,327 608,255
Cost of Sales -4,378,725 -841,666
Gross Loss -96,398 -233,411
Administrative expenses -978,465 -1,104,655
Operating Loss 5 -1,074,863 -1,338,066
Other interest receivable and similar income 0 11,830
Interest payable and similar charges 6 -91,423 -68,615
Loss on ordinary activities before taxation -1,166,286 -1,394,851
Tax on loss on ordinary activities 7 0 0
Loss on ordinary activities for the year -1,166,286 -1,394,851
p p
Basic and diluted loss per ordinary share 8 -0.53 -0.82
All activity has arisen from continuing operations.
The accompanying notes are an integral part of this consolidated profit and loss
account.
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Restated
Notes 2007 2006
Loss for the financial year -1,166,286 -1,394,851
Prior year adjustment 1 j) -182,300 0
Total Gains and Losses recognised since last annual report -1,348,586 -1,394,851
EUROPEAN BUSINESS JETS PLC
BALANCE SHEETS AT 31 MARCH 2007
Group Group Company Company
2007 2006 2007 2006
Notes # # # #
Fixed Assets
Tangible assets 9 1,335,405 1,489,197 20,349 22,000
Investments 10 0 0 2 2
1,335,405 1,489,197 20,351 22,002
Current Assets
Debtors
- due within one year 11 463,632 123,572 381,333 114,412
- due after more than one year 11 0 0 0 579,139
Cash at bank and in hand 60,491 342,819 33,545 226,924
524,123 466,391 414,878 920,475
Creditors: amounts falling due
within one year 12 -1,390,116 -627,512 -1,251,655 -453,797
Net Current - Liabilities / Assets -865,993 -161,121 -836,777 466,678
Total Assets Less Current Liabilities 469,412 1,328,076 -816,426 488,680
Creditors: amounts falling due
after more than one year 13 -988,911 -790,956 -226,915 0
Net - Liabilities / Assets -519,499 537,120 -1,043,341 488,680
Capital and Reserves
Called-up share capital 15 221,687 221,687 221,687 221,687
Share premium account 16 1,527,984 1,527,984 1,527,984 1,527,984
Profit and loss account 16 -2,269,170 -1,212,551 -2,793,012 -1,260,991
Shareholders' Funds -519,499 537,120 -1,043,341 488,680
The financial statements on pages 15 to 28 were approved and authorised for
issue by the board of directors on 28 August 2007 and were signed on its behalf
by:
Nicholas Messer Director 28th August 2007
EUROPEAN BUSINESS JETS PLC
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2007
Restated
2007 2006
Notes # #
Operating cash flows
Operating loss -1,074,863 -1,338,066
Depreciation on tangible fixed assets 176,890 138,555
Shares in lieu of commission 0 17,250
Share-based payments 109,667 182,300
Increase in debtors -340,060 -123,572
Increase in creditors 817,777 478,316
Net cash outflow from operating activities -310,589 -645,217
Return on investments and servicing finance
Interest received 0 11,830
Interest paid -91,423 -68,615
Net cash outflow from returns on investments and
servicing of finance -91,423 -56,785
Capital expenditure and financial investment
Purchase of tangible fixed assets -23,098 -1,627,752
Net cash outflow from capital expenditure -23,098 -1,627,752
Cash outflow before financing -425,110 -2,329,754
Financing
Issue of ordinary share capital 0 1,924,427
Share issue costs 0 -192,006
Loans drawn down 1,082,934 1,000,000
Capital elements of loan repayments -940,152 -59,848
Net inflow from financing 142,782 2,672,573
-Decrease/increase in cash for the year 21a -282,328 342,819
EUROPEAN BUSINESS JETS PLC
NOTES TO THE FINANCIAL STATEMENTS
1. Principal accounting policies
The financial statements have been prepared on the going concern basis, under
the historical cost convention and in accordance with the Companies Act 1985 and
applicable accounting standards in the United Kingdom. A summary of the more
important Group accounting policies, which have been applied consistently, is
set out below.
a) Basis of consolidation
The group financial statements consolidate the financial statements of European
Business Jets PLC and its subsidiary undertakings made up to 31 March 2007. Any
inter group transactions have been eliminated on consolidation.
No profit or loss account is presented for European Business Jets PLC as
provided by Section 230 of the Companies Act 1985. The company's loss for the
year, determined in accordance with the Act, was #1,641,688
b) Going Concern
The financial statements have been prepared on the going concern basis. The
directors believe this to be appropriate after having reviewed internal
projections covering the 12 months from the date of approval of these financial
statements and the funding arrangements available. The projections have been
prudently prepared taking into account the current level of business activity
and expectations for conversions of only a small proportion of EBJ's database of
likely potential new customers. The projections allow for cost inflation and
continued development of the business.
c) Turnover
Group turnover, which excludes value added tax, comprises sales of aircraft,
income from aircraft management fees, occupied hourly fees, charter fees, other
disbursements and sales of jet cards. Turnover is recognised in respect of
aircraft sales at the point of delivery and in the provision of all other
services and jets cards on completion of the service.
d) Cost of sales
The group cost of sales comprises fixed direct aircraft running costs, purchase
of aircraft, depreciation of the company owned fleet aircraft, operational
salaries and other direct costs.
e) Tangible fixed assets
Tangible fixed assets are included in the balance sheet at cost, less
accumulated depreciation and any provision for impairment. Depreciation is
provided to reflect a reduction from cost to estimated residual value over the
estimated useful life of the asset to the Group. Depreciation is calculated
using a straight line method and the annual rates applicable to the principal
categories are:
Core fleet aircraft 20%
Office equipment 25%
Computer equipment 331/3%
Engine overhaul 331/3%
Whilst the core fleet aircraft are expected to have a theoretical operational
life of over 15 years it is a Group policy to operate recently manufactured
aircraft. Depreciation is charged to reduce the net book value to its estimated
residual value over the period of ownership. Due to the materiality of the core
fleet aircraft its residual value is reviewed on a regular basis.
f) Aircraft maintenance and overhaul costs
Routine repairs and maintenance costs are charged to the profit and loss account
when incurred. The costs of major periodic overhauls are capitalised within
fixed assets.
Depreciation, in addition to that charged against the original capital value, is
then charged against these overhaul assets at such a rate that by the time the
next periodic overhaul is due the previous one has been fully depreciated.
EUROPEAN BUSINESS JETS PLC
NOTES TO THE FINANCIAL STATEMENTS
g) Investments
Fixed asset investments are stated at cost less provision for impairment.
h) Taxation
UK corporation tax is provided at amounts expected to be paid (or recovered)
using the tax rates and laws that have been enacted or substantively enacted by
the balance sheet date.
Deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date where transactions or
events that result in an obligation to pay more tax in the future or a right to
pay less tax in the future have occurred at the balance sheet date. Timing
differences are differences between the Group's taxable profits and its results
as stated in the financial statements that arise from the inclusion of gains and
losses in tax assessments in periods different from those in which they are
recognised in the financial statements.
Deferred tax is measured at the average tax rates that are expected to apply in
the periods in which the timing differences are expected to reverse, based on
tax rates and laws that have been enacted or substantively enacted by the
balance sheet date. Deferred tax is measured on a non-discounted basis.
i) Foreign Currency
Transactions in foreign currencies are recorded at the rate of exchange at the
date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the balance
sheet date are reported at the rates of exchange prevailing at that date.
j) Share-based payments
The Group has adopted FRS20 (Share-based payment) for the period commencing 1
April 2006. In accordance with the transitional provisions, FRS20 has been
applied to all grants of equity instruments after 15 March 2005, being the date
the first option was granted, that were unvested as at the date of adoption.
The Group issues equity-settled share-based payments to directors and certain
employees. Equity-settled share based payments are measured at fair value at the
date of grant. In the consolidated Financial Statements, the fair value
determined at the grant date of equity-settled share-based payments is expensed
on a straight-line basis, together with a corresponding increase in equity, over
the vesting period based on the Group's estimate of shares which will eventually
vest.
Fair value is measured by using the Black Scholes model and has been adjusted
for the estimated effect of non-transferability, exercise restrictions and
behavioural considerations. Further details of equity-settled share-based
payments are set out in the report of the Remuneration Committee, Note 3, Note 4
and Note 18.
The consolidated results for the year ended 31 March 2006 have been restated
following the adoption of FRS20 resulting in an increase in the reported loss of
#182,300.
2. Segmental analysis
The directors are of the opinion that the group operates in a single segment,
that of the provision of ownership of jets. Hence all turnover, profits and net
assets relate to this class of business. All turnover arises in the United
Kingdom.
3. Directors' emoluments
Detailed disclosure of the Directors' individual remuneration and share options
are given in the report of the Remuneration Committee on pages 12 and 13.
2007 2006
# #
Directors' Fees 0 67,000
Salaries and Commissions 169,500 201,000
Share-based payments 31,000 174,900
Shares received 0 17,250
200,500 460,150
The aggregate emoluments of the highest paid director were 87,500 127,800
EUROPEAN BUSINESS JETS PLC
NOTES TO THE FINANCIAL STATEMENTS
4. Particulars of employees
The average monthly number of employees (including executive directors) was:
2007 2006
Number Number
Operations 6 3
Sales and distribution 2 2
Administration 8 6
16 11
Their aggregate remuneration comprised Restated
2007 2006
# #
Wages and salaries 600,741 394,239
Social security costs 66,066 43,714
Share-based payments 109,667 182,300
776,474 620,253
5. Operating Loss
The operating loss is stated after charging:
2007 2006
# #
Depreciation of tangible fixed assets
-owned 176,890 138,555
Auditors' remuneration
- statutory audit 20,750 21,637
- taxation services 6,221 2,636
Property rents - operating leases 11,357 8,234
Foreign exchange - gain/-loss -7,549 -950
A more detailed analysis of auditors' remuneration is provided
below:
2007 2006
# #
Service as auditors:
Nexia Smith & Williamson 0 21,637
Baker Tilly UK Audit LLP 20,750 0
Taxation Services:
Nexia Smith & Williamson 6,221 2,636
26,971 24,273
Significant non-audit services require pre-approval by the audit committee.
EUROPEAN BUSINESS JETS PLC
NOTES TO THE FINANCIAL STATEMENTS
6. Interest payable and similar charges
2007 2006
# #
Interest payable on long term borrowings 82,423 64,479
Other interest payable 9,000 4,136
91,423 68,615
7. Tax on loss on ordinary activities Restated
2007 2006
# #
a) Factors affecting taxation charge for the year
Loss on ordinary activities before taxation -1,166,286 -1,394,851
UK corporation tax at 30% -349,886 -418,455
Effects of:
Capital allowances in excess of depreciation -10,437 41,566
Expenses not deductible for taxation purposes 51,564 2,633
Current year losses not utilised 308,759 374,256
0 0
b) Factors affecting the future tax charge
Subject to HM Revenue & Customs agreement, the Group has approximately
#2,227,866 of losses available to be utilised against future years profits.
Deferred tax assets have not been recognised in respect of tax losses of
#2,227.866 (2006:#1,198,672) at tax rate of 30%. These losses represent a
potential tax asset of #668,360 (2006:#359,602).The potential deferred tax asset
has not been recognised on the basis that the directors do not consider it to
recoverable within a time horizon that they consider to be appropriate.
These losses would be recoverable in the event of taxable profits arising in the
future.
In addition deferred tax assets have not been recognised in respect of
share-based payments of #291,967 (2006:#182,300) which create tax losses of
#192,333 (2006:#143,000).
These represent a potential tax asset of #57,700 (2006:#42,900).
The potential tax assets would be recoverable in the event of exercise of the
share options and of taxable profits arising in future periods.
8. Basic and diluted loss per ordinary share
Restated
2007 2006
# #
Loss for basic and diluted earnings calculations -1,166,286 -1,394,851
Weighted average number of shares in issue 221,686,779 169,463,400
FRS 14 requires presentation of diluted EPS when a company could be called upon to issue shares that
would decrease net profit or increase net loss per share. For a loss making company with outstanding
share options, net loss per share would only be increased by the exercise of out-of-money options.
Since it seems inappropriate to assume that option holders would act irrationally, no adjustment has
been made to diluted EPS for out-of-the money share options.
EUROPEAN BUSINESS JETS PLC
NOTES TO THE FINANCIAL STATEMENTS
9. Tangible fixed assets
Computer
Jet Engine & office
Group aircraft overhaul equipment Total
# # # #
Cost
At 1 April 2006 1,572,879 26,886 27,987 1,627,752
Additions 14,284 0 8,814 23,098
At 31 March 2007 1,587,163 26,886 36,801 1,650,850
Depreciation
At 1 April 2006 131,074 1,494 5,987 138,555
Charge for the year 157,461 8,964 10,465 176,890
At 31 March 2007 288,535 10,458 16,452 315,445
Net Book Value
At 31 March 2007 1,298,628 16,428 20,349 1,335,405
At 31 March 2006 1,441,805 25,392 22,000 1,489,197
Computer
& office
Company equipment Total
# #
Cost
At 1 April 2006 27,987 27,987
Additions 8,814 8,814
At 31 March 2007 36,801 36,801
Depreciation
At 1 April 2006 5,987 5,987
Charge for the year 10,465 10,465
At 31 March 2007 16,452 16,452
Net Book Value
At 31 March 2007 20,349 20,349
At 31 March 2006 22,000 22,000
EUROPEAN BUSINESS JETS PLC
NOTES TO THE FINANCIAL STATEMENTS
10. Fixed assets investments
Company Company
2007 2006
# #
At 1 April 2006 2 0
Additions 0 2
At 31 March 2007 2 2
The parent company has an investment in the following subsidiary undertaking
which effects the profits or net assets of the Group.
Country of Percentage Principal
Subsidiary undertaking Incorporation Shares holding activity
EBJ Sales Limited England & Wales Ordinary 100% Selling
Aircraft
The above subsidiary undertaking is unlisted and is held directly by European
Business Jets PLC.
11. Debtors
Amounts falling due within one year:
Group Group Company Company
2007 2006 2007 2006
# # # #
Trade Debtors 354,737 68,167 253,022 68,167
VAT 25,650 23,352 45,062 23,352
Other debtors 24,828 2 24,832 2
Prepayments 58,417 32,051 58,417 22,891
463,632 123,572 381,333 114,412
Amounts falling due after more than one year:
Group Group Company Company
2007 2006 2007 2006
# # # #
Amounts owed by group undertakings 0 0 0 579,139
EUROPEAN BUSINESS JETS PLC
NOTES TO THE FINANCIAL STATEMENTS
12. Creditors: amounts falling due within one year
Group Group Company Company
2007 2006 2007 2006
# # # #
Bank loan 94,023 149,196 0 0
Trade Creditors 486,646 286,669 486,646 286,669
VAT 0 18,519 0 0
Other creditors including taxation and social security 620,971 18,730 471,580 18,730
Accruals 188,476 154,398 293,429 148,398
1,390,116 627,512 1,251,655 453,797
13. Creditors: amounts falling due after more than one year
Group Group Company Company
2007 2006 2007 2006
# # # #
Bank loan 988,911 790,956 0 0
Amounts owed by group undertakings 0 0 226,915 0
988,911 790,956 226,915 0
The interest rate on the bank loan is fixed at an effective rate of 7.47% and is
repayable over 7 years, with 83 instalments of #14,314 and a final payment of
#364,314. The loan is secured on the Jet Aircraft.
The repayment profile of the long term borrowings is made up as follows:
2007 2006
Net obligations repayable on debt: # #
Within one year 94,023 77,238
In more than one year, but not more than two 101,295 83,606
In more than two years, but not more than five 353,362 294,497
In more than five years, but not more than seven 534,254 484,811
1,082,934 940,152
14. Financial instruments
The Group uses fixed rate interest instruments to finance capital expenditure
projects.
Short-Term Debtors and Creditors
Short-Term debtors and creditors have been excluded from all the following
disclosures.
Interest Rate Risk Profile of Financial Assets
Interest is received at 2% per annum. The amount in Cash at Bank and in Hand at
31 March 2007 is #60,491
Interest Rate Risk Profile of Financial Liabilities
The interest rate risk profile of the Group's financial liabilities was:
2007 2006
# #
Long term borrowings 1,082,934 940,152
EUROPEAN BUSINESS JETS PLC
NOTES TO THE FINANCIAL STATEMENTS
15. Called up share capital
2007 2006
# #
Authorised
500,000,000 ordinary shares of #0.001 each 500,000 500,000
Allotted, called up and fully paid
221,686,779 ordinary shares of #0.001 each 221,687 221,687
2007 2006
Shares issued during the year
Number of Shares 0 221,686,779
Nominal value 0 221,687
Cash consideration 0 1,924,427
Provision of Service 0 17,250
16. Reserves Share Profit &
premium loss
Account Account
Group # #
Balance at 1 April 2006 1,527,984 -1,212,551
Retained loss for the year 0 -1,166,286
Share-based payments 0 109,667
Balance as at 31 March 2007 1,527,984 -2,269,170
Company
Balance at 1 April 2006 1,527,984 -1,260,991
Retained loss for the year 0 -1,641,688
Share-based payments 0 109,667
Balance as at 31 March 2007 1,527,984 -2,793,012
EUROPEAN BUSINESS JETS PLC
NOTES TO THE FINANCIAL STATEMENTS
17. Reconciliation of movement in shareholders' funds
Restated
Group 2007 2006
# #
Loss for the financial year -1,166,286 -1,212,551
Prior year adjustment 0 -182,300
Restated loss for the financial year -1,166,286 -1,394,851
Share-based payment 109,667 182,300
Proceeds from issue of shares 0 1,941,677
Cost of share issue written off to share premium account 0 -192,006
Net -reduction/addition to shareholders funds -1,056,619 537,120
Opening shareholders' funds 537,120 0
Closing shareholders' funds -519,499 537,120
Company
Loss for the financial year -1,641,688 -1,260,991
Prior year adjustment 0 -182,300
Restated loss for the year -1,641,688 -1,443,291
Share-based payments 109,667 182,300
Proceeds from issue of shares 0 1,941,677
Cost of share issue written off to share premium account -192,006
Net -reduction/addition to shareholders funds -1,532,021 488,680
Opening shareholders' funds 488,680 0
Closing shareholders' funds -1,043,341 488,680
EUROPEAN BUSINESS JETS PLC
NOTES TO THE FINANCIAL STATEMENTS
18. Share options
The company had the following ordinary share options in issue at 31 March 2007:
Date of issue Ordinary 0.1p shares Exercise Earliest Latest
Number price Exercise Exercise
15 Mar 2005 20,000,000 1p 15 Mar 2007 15 Mar 2015 *
29 Mar 2005 9,000,000 1.5p 29 Sep 2005 29 Mar 2015**
29 Mar 2005 7,000,000 1.5p 29 Sep 2005 29 Mar 2010**
23 Aug 2006 6,666,666 1.5p 23 Aug 2008 23 Aug 2016**
All options were granted at an exercise price equal to or above the market value
at the date of the grant.
* Denotes share options issued under the Company's EMI Approved Share Option
Scheme ** Denotes share options issued under the Company's Unapproved Share
Option Scheme
Options were granted in March 2005 and August 2006 as detailed above. No options
have been exercised of forfeited during either accounting period.
Vesting conditions attached to the 20 million share options issued on 15 March
2005 are detailed in the directors remuneration report.
Vesting conditions attached to the other share options were all satisfied at 31
March 2007.
Options were valued using the Black-Scholes model. The fair value per option
granted and the assumptions used in the calculation are as follows:
2006 2006 2006 2007
Grant date 15 Mar 2005 29 Mar 2005 29 Mar 2005 23 Aug 2006
Share price at grant date #0.01 #0.01 #0.01 #0.01
Exercise price #0.01 #0.015 #0.015 #0.015
Number of employees 2 3 1 1
Shares under option 20,000,000 9,000,000 1,000,000 6,666,666
Vesting period (years) 2 1 1 1
Expected Volatility 106.9% 106.9% 106.9% 106.9%
Option Life (years) 10 10 5 10
Expected life (years) 2 2 2 2
Risk free rate 5.38% 5.38% 5.38% 5.38%
Expected dividend yield 0% 0% 0% 0%
Possibly of ceasing employment
before vesting 0% 0% 0% 0%
Fair value per option #0.0093 #0.0091 #0.0074 #0.0118
In addition to the 1 million options granted on 29 March 2005 with an option
value of 5 years, 6 million options were granted to advisors in connection with
the placing of the company on AIM.
EUROPEAN BUSINESS JETS PLC
NOTES TO THE FINANCIAL STATEMENTS
19. Financial commitments
At 31 March 2007, the group had annual commitments under non-cancellable
operating leases as set out below:
2007 2006
Land & Land &
Building Building
# #
Operating lease which expire - within one year 20,154 11,064
20. Capital commitments
There was no capital expenditure contracted for but not provided for in the
financial statements as at 31 March 2007 (2006 il)
21. Cash flow information
a) Reconciliation of net cash flow to movement in net debt
2007 2006
# #
-Decrease/ increase in cash during year -282,328 342,819
Cash -inflow / outflow from changes in debt financing -142,782 -940,152
Changes in net funds resulting from cashflows -425,110 -597,333
Net debt at 31 March 2006 -597,333 0
Net debt at 31 March 2007 -1,022,443 -597,333
b) Analysis of net debt
2006 Cash flow 2007
# # #
Cash at bank and in hand 342,819 -282,328 60,491
Loan -940,152 -142,782 -1,082,934
-597,333 -425,110 -1,022,443
22. Related Party Transactions
Under the terms of FRS 8 the Company is exempt from disclosing details of
transactions with its subsidiary undertakings.
The Group obtained services amounting to #8,176 (2006 #34,094) during the year
from Strategic Marketing Concepts Limited of which N Messer is a director. The
Group obtained services amounting to #1,344 (2006 #nil) from G Deary's daughter.
The Group provided services to European Business Jets Syndicate GNS LLP of which
European Business Jets PLC and EBJ Sales Limited are founder members. The Group
provided aircraft management services during the year which amounted to #279,872
(2006:#0) and sale of aircraft which amounted to #2,167,872 (2006:#0). The Group
obtained services in respect of the use of the Syndicate's aircraft amounting to
#87,754 (2006:#0). The balance of indebtedness due from European Business Jets
Syndicate GNS LLP at 31 March 2007 amounted to #84,348 (2006:#0) There were no
other related party transactions.
23. Ultimate controlling party
There is considered to be no ultimate controlling party.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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