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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Rome Resources Plc | LSE:RMR | London | Ordinary Share | GB00BYY0JQ23 | ORD 0.1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-9.20 | -96.79% | 0.305 | 0.29 | 0.32 | 0.35 | 0.305 | 0.35 | 551,396,122 | 15:57:08 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:7912V RMR PLC 13 May 2002 RMR PLC PRELIMINARY RESULTS ANNOUNCEMENT For the year ended 28 February 2002 CHAIRMAN'S STATEMENT Overview The year to February 2002 was characterised by a dismal and deteriorating trading performance that necessitated a continual examination of RMR's business model and organisational structure. During the year the cost base was restructured several times and the business is now significantly reduced in size and scale. The results reflect the poor trading performance and restructuring costs with sales of £617,000 and a loss of £6.3 million for the year. In the interim statement for the six months to 31 August 2001, I reported that I thought we now had the base on which to build a successful business as a provider of technology and content solutions to organisations with complex information needs through our Elevate event and e-learning software. The e-learning marketplace was to be a particular focus with much of our future sales effort centred on the Elevate e-learning product. The acquisition of Learning Angles Limited ("LA"), an e-learning company, formed an important part of this strategy of focusing on the e-learning sector to take advantage of the market demand for technology supported training. During the last quarter of the financial year significant effort was put into improving the sales performance and several experienced sales executives were recruited to enable the LA team to concentrate on the rich content business. Despite this LA failed to produce any sales from the date of its acquisition and as a result the Board decided to discontinue it. On 5 March 2002 the Company announced that it was taking steps to remove Gwyn Jones and Chris Thomas, the two vendors of LA, from the Board and it was to commence legal proceedings against them to recover the shares in RMR plc paid as consideration for LA. On the 6 March 2002 the Company received the resignations of Chris Thomas and Gwyn Jones. The third vendor has agreed to return both the consideration and deferred shares and agreement was reached with him on his service contract. Some progress continued to be made with the Elevate events and e-learning software business in the second half year but unfortunately the necessary critical mass of deals was not achieved to justify continuing the business at the same level. In the light of this a further restructuring was undertaken in March 2002 to reduce the cost base further to match our current order book. The UK Business Review describes the actions that were taken. Over the last six months, the Board has continued to review a range of potential acquisition targets that could benefit in some way from our infrastructure, product range, cash and stock market listing. Discussions have been held with businesses both within and outside of the Company's core software business but unfortunately to date, none of these have met the Company's acquisition criteria of having proven growth potential and ability to enhance shareholder value. However, several are still under active consideration and I hope to be able to make a further announcement in the near future. Business review - UK In the first few months of the financial year, RMR continued to produce its own self-commissioned conferences as well as working more closely on producing events with third parties who had existing content and community. For the most part revenues on these activities were derived from online advertising either by RMR selling virtual advertising directly or having revenue-sharing arrangements with third parties who sold online advertising on their events. With the decline in online advertising, this model did not generate sufficient revenues to cover the level of resource employed. Therefore in the first half of the year we redefined the business model with revenues to be accrued from licensing our software to third parties rather than selling online advertising. As a result we reduced the number of employees from 80 at the beginning of the year to 47 in August 2001. At the same time we expanded into technology-supported learning with the launch of our product, Elevate e-learning which was under development in the first half of 2001. The e-learning marketplace was considered to be potentially the most promising source of revenue for the Company. In this regard acquisitions and strategic partnerships were felt to play a key role in developing the business and we acquired Learning Angles Limited, an e-learning company, in November 2001. The acquisition was meant to introduce a growing revenue line in rich content and was expected to help in the development of sales of Elevate learning. We expected the LA business to contribute revenues of £500,000 for the period to 28 February 2002. As mentioned in my overview, no sales were in fact achieved. During the year we have also continued to develop sophisticated web and portal sites with a focus on projects in the e-government and charity sectors. This work has produced reasonable revenues and remains part of RMR's core activities. In the Overview, I referred to the most recent restructuring in March 2002. This has reduced the cost base through redundancy and relocation from extensive offices to more suitable, smaller premises that are also in Eynsham. The slimmed down business of less than ten employees has retained the core competencies created over the last three years and will continue to allow RMR to be a provider of software solutions as well as carrying out sophisticated web development work. Business review - US RMR completed its first dedicated US event in June 2001 with the launch of a US Banking event organised in conjunction with the American Bankers Association as primary partner. This event was based on our original business model of producing a self-commissioned conference and deriving revenues from the sale of virtual exhibitions stands and sponsorship space. Although the revenues on US Banking were encouraging, the development, production and selling of such events is extremely resource intensive and only cash generative on achievement of a large critical mass of events. There were not sufficient of these events and during the year we decided to follow a similar strategic direction to the UK. Ultimately, this led us to close the US operation in November 2001. Results The turnover for the 12 months to 28 February 2002 was £617,000 (2001: £2.052 million) of which 28 percent (£174,000) represented revenues generated from our events and e-learning software. The balance of revenue of £443,000 has come from the development of web and portal sites. Included in software revenues is £123,000 of income from the US operation. Principally as a result of below target revenues, a pre-tax loss of £6.345 million was incurred for the year ended (2000: loss of £6.316 million). This loss comprises a trading loss of £4.545 million, asset write-downs and restructuring costs of £1.2 million and a goodwill write-off of £600,000 on the LA acquisition. The second half trading loss of £1.738 million is below the loss of £2.807 million incurred in the first half and the estimated loss of £2 million referred to in the statement of 5 March 2002. The cash position at 28 February 2002 was £1.538 million compared to a balance of £6.270 million at 28 February 2001. For the twelve months, there was a loss per share of 11.12p (2001: 11.88p). Board changes The strategic and operational changes have coincided with changes in the Board composition. Dr Michael Peagram and Kazia Kantor resigned from their non-executive positions in August and September 2001 respectively. Robert Jackson and Mark Smith resigned as executive directors in September and October 2001. I was appointed executive chairman in September 2001. Ned Carroll also joined the Board as a non-executive director in October 2001 and following the acquisition of LA, Chris Thomas and Gwyn Jones joined the Board in executive and non-executive positions. As already mentioned in the Overview, Chris Thomas and Gwyn Jones resigned from the Board on 6 March 2002. Prospects The restructuring carried out in March 2002 has resulted in a much reduced operation with a cost base of below £500,000 per annum. With a far lower breakeven revenue target the business should be in a position to operate on a cash neutral basis during the second quarter of the current financial year. Whilst this is a more satisfactory state of affairs, the Board continues to investigate potential corporate deals that will utilise the Company's product portfolio, stock market listing and bring value to shareholders. Michael Mills Executive Chairman GROUP PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 28 FEBRUARY 2002 Continuing Discontinued operations operations Total Total 2002 2002 2002 2001 £'000 £'000 £'000 £'000 Turnover 494 123 617 2,052 Cost of sales (2,068) (326) (2,394) (3,606) Gross result (1,574) (203) (1,777) (1,554) Operating costs (2,348) (584) (2,932) (4,623) Goodwill write-off (600) - (600) - Restructuring costs (1,200) - (1,200) (330) Professional costs prior to Company flotation - (255) Administrative expenses (4,148) (584) (4,732) (5,208) Operating loss (5,722) (787) (6,509) (6,762) Net interest 164 446 Loss for the year (6,345) (6,316) Basic and diluted loss per share (pence) (11.12)p (11.88)p There were no recognised gains or losses other than the loss for the financial year. BALANCE SHEET AT 28 FEBRUARY 2002 Group Group Company Company 2002 2001 2002 2001 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Fixed assets Tangible assets 86 1,235 - - Investments - - 4,264 4,264 86 1,235 4,264 4,264 Current assets Debtors 188 603 - 11,847 Cash at bank and in hand 1,538 6,270 4 5 1,726 6,873 4 11,852 Creditors: amounts (470) (966) - - falling due within one year Net current assets 1,256 5,907 4 11,852 Total assets less current 1,342 7,142 4,268 16,116 liabilities Creditors: amounts - (55) - - falling due after more than one year Net assets 1,342 7,087 4,268 16,116 Capital and reserves Called up share capital 6,110 5,510 6,110 5,510 Share premium account 10,650 10,650 10,650 10,650 Profit and loss account (15,418) (9,073) (12,492) (44) Shareholders' funds 1,342 7,087 4,268 16,116 CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 28 FEBRUARY 2002 2002 2001 £'000 £'000 Net cash outflow from operating activities (4,645) (6,139) Returns on investments and servicing of finance Interest element of finance lease rentals (6) (10) Interest received 170 456 164 446 Capital expenditure and financial investment Purchase of tangible fixed assets (92) (922) Sale of tangible fixed assets 37 59 Purchase of investments (150) - (205) (863) Cash outflow before management of liquid resources and (4,686) (6,556) financing Financing Issue of share capital - 12,823 Expenses paid in connection with the issue of share capital - (449) Capital element of finance lease and hire purchase contracts (46) (73) Net cash (outflow)/inflow from financing (46) 12,301 (Decrease)/increase in cash (4,732) 5,745 NOTES TO THE PRELIMINARY ANNOUNCEMENT For the year ended 28 February 2002 1. Basis of preparation The financial statements have been prepared under the historical cost convention and in accordance with applicable United Kingdom accounting standards up to and including FRS 19. The financial statements have been prepared on the going concern basis because the directors have taken appropriate steps to reduce the cost base and hence the Group will have adequate resources to continue trading and meet liabilities as they fall due. The principal accounting policies of the Group have remained unchanged from the previous year and are set out below. 2. Basis of consolidation The consolidated financial statements have been prepared on the merger method of accounting using the principles set out in Financial Reporting Standard 6, ' Acquisitions and mergers'. Under merger accounting, the results and cash flows of RMR plc and its subsidiaries, with the exception of Learning Angles Limited, are combined from the beginning of the financial period in which the merger occurred and their assets and liabilities combined at the amounts at which they were previously recorded. The consolidated profit and loss account, balance sheet and cash flow comparatives are restated on the combined basis. Learning Angles Limited is dealt with by the acquisition method of accounting. 3. Loss per ordinary share The loss per share is based on a loss of £6,345,000 (2001: £6,316,000), being the loss attributable to ordinary shareholders, and a weighted average of 57,042,573 (2001: 53,186,129) ordinary shares. The comparative figures have been calculated using merger accounting principles, which require the use of the number of shares issued in the share for share exchange transaction as the weighted average number of shares. 4. Share capital 2002 2001 £'000 £'000 Authorised 100,000,000 Ordinary shares of 10p each 10,000 10,000 Allotted, called up and fully paid 61,102,847 (2000: 55,102,847) Ordinary shares of 10p each 6,110 5,510 6,000,000 Ordinary shares of 10p each were allotted, at par, during the year to fund the acquisition of Learning Angles Limited. The market price of the shares at that date was 6.25p. The following share options, which include directors' share options, were outstanding on 28 February 2002: Number of shares over which options granted Exercise price Exercise period Share option scheme 5,590,463 10p Exercisable up to 1 November 2011 Other share options 4,412,527 3.56p* Currently exercisable with no cessation date 755,087 11.56p Granted to employees on a monthly basis over a maximum period of three years service and are immediately exercisable on grant * The share options were issued prior to the Company's flotation when the nominal share value was 1p per share. On flotation the nominal value per share was 10p per share. The status of these share options is currently being reviewed by the Board. 5. Reconciliation of movements in shareholders' funds Group 2002 2001 £'000 £'000 Loss for the financial year (6,345) (6,316) Issue of shares 600 12,736 Expenses of share issues - (585) Adjustments for merger accounting - 87 Net addition to shareholders' funds (5,745) 5,922 Shareholders' funds at 1 March 2001 7,087 1,165 Shareholders' funds at 28 February 2002 1,342 7,087 6. Publication of non-statutory accounts The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The Balance Sheets as 28 February 2002 and the Group Profit and Loss Account, Consolidated Cash Flow Statement and associated notes for the year then ended have been extracted from the Group's 2002 statutory financial statements upon which the auditors' opinion is unqualified and does not include any statement under Section 237 of the Companies Act 1985. 7. Report and accounts Copies of the 2002 Report and Accounts will be sent to shareholders in due course. 8. Announcement Copies of the 2002 Report and Accounts will be available from the Nominated Adviser, Smith & Williamson Corporate Finance, No 1 Riding House Street, London W1A 3AS for one month from the date of this announcement. This information is provided by RNS The company news service from the London Stock Exchange
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