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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Soccercity | LSE:SOC | London | Ordinary Share | GB0032742339 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.10 | 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:4805G
Soccercity PLC
26 October 2007
SOCCERCITY PLC
("Soccercity" or the "Company")
Interim Results - 6 months ended 31 July 2007
Strategy
Soccercity has now re-focused and is a leading operator of football centres in
Yorkshire.
Trading in the first half of 2007 was very difficult. Although the reported
loss was around 60% lower than that experienced in the second half of 2006, the
Board are fully aware that much still needs to be done to turn the business
around. We are confident that the operational and organisational problems which
we faced in the second half of 2006 and early 2007 have now been resolved. As
reported at the time of the announcement of the final results for the year ended
31 January 2007 on 31 July 2007, the benefits of the many operational actions
taken are only expected to come through in the second half of this financial
year.
The first half results include a full 6 months contribution from the Fareham
centre which was disposed of on 10 September 2007 for a consideration of
#697,000, which enabled existing loans of approximately #194,000 to be repaid.
* The immediate strategic and operational focus of the Company will be
on its existing and future business in Yorkshire. Following the sale of the
Fareham centre, the organisation of the group has been further restructured,
reducing the ongoing monthly cost base by approximately 25%. This has reduced
the break-even point to an achievable level.
* The core football offering is being improved and this will include
the installation of new generation, high quality, playing surfaces aimed at
improving the playing experience for our football customers. Investment of
around #100,000 has been committed to the Leeds centre, with new pitch
installation taking place between the end of this month and the middle of
November.
* The Company continues to examine opportunities to introduce new,
complementary, business streams, utilising the existing facilities and core
competencies, and to build its sponsorship and events revenues.
* The Board believe that there is now a more appropriate capital
structure in place to progress the business opportunities available to the
Company.
Financial and Operating Review
Overall revenues at #0.97 million were 3% lower than last year (2006: #1.00
million) reflecting the operational difficulties at our Northern centres which
impacted on customer retention.
Gross margins in the first half of the year were 75%, in line with last year but
higher than the levels experienced in the second half of 2006.
The EBITDI loss was #183,000 compared to a small profit of #4,000 in the first
half of 2006; however, it is important to note that the loss was approximately
#100,000 lower than the loss in the second half of 2006.
During the first half of the year ended 31 July 2007, the Company continued with
the refinancing programme and secured additional equity and loan finance. Bank
debt at 31 July 2007 was #32,000, around 50% lower than at the beginning of the
financial year. Since the end of the period under review, approximately #194,000
of the proceeds of the Fareham sale has been used to reduce loan financing.
Outlook
To date, it has been a tough year for the business but much has been achieved
and we have now put in place a clear strategy, a more appropriate cost base and
a focused management team. Our concentration on the Yorkshire centres, enhanced
by the investment underway at the Leeds centre, provides us with a platform to
take advantage of the demand for quality indoor football and leisure facilities.
Norman Molyneux
Chairman
26 October 2007
For more information please contact:
Norman Molyneux, Soccercity plc 01942 322256
David Youngman, WH Ireland Limited 0161 832 2714
6 months 6 months Year
Consolidated Income Statement ended ended ended
31 July 2007 31 July 2006* 31 Jan 2007*
Note #'000 #'000 #'000
REVENUE 3.3 970 1,003 2,036
Cost of sales (245) (243) (585)
Gross Profit 725 760 1,451
ADMINISTRATION EXPENSES (1,030) (756) (1,737)
EBITDI (183) 4 (286)
Depreciation (61) (66) (117)
Impairment of goodwill (61) (61) (472)
LOSS FROM OPERATIONS (305) (123) (875)
Interest Received - - 1
Finance costs (17) (28) (79)
LOSS BEFORE TAXATION (322) (151) (953)
Taxation - - -
LOSS FOR THE PERIOD (322) (151) (953)
Loss per share - basic and diluted (pence) (0.40)p (0.22)p (1.20)p
The results for the period are derived from continuing activities.
* Restated to reflect the adoption of IFRS as per note 4.
Consolidated Balance Sheet 31 July 2007 31 July 2006* 31 Jan 2007*
Note #'000 #'000 #'000
NON CURRENT ASSETS
Goodwill 1,271 1,742 1,331
Property, plant and equipment 988 1,028 1,040
2,259 2,770 2,371
CURRENT ASSETS
Trade and other receivables 409 429 293
Cash 22 15 71
431 444 364
CURRENT LIABILITIES
Trade payables 819 540 697
Other payables 506 374 477
Taxation 27 25 27
Loans and borrowing 289 403 231
(1,641) 1,342 1,432
NET CURRENT LIABILITIES (1,210) (898) (1,068)
NON-CURRENT LIABILITIES
Borrowings (273) (215) (285)
NET ASSETS 776 1,657 1,018
EQUITY
Ordinary shares 1,321 863 1.211
Share premium account 2,075 2,169 2,105
Convertible loan stock - 121 -
Retained earnings (2,620) (1,496) (2,298)
EQUITY SHAREHOLDERS' FUNDS 776 1,657 1,018
* Restated to reflect the adoption of IFRS as per note 4.
Consolidated Cash Flow 6 months 6 months Year
ended ended ended
31 July 2007 31 July 2006* 31 Jan 2007*
#'000 #'000 #'000
Loss from operations (305) (123) (875)
Impairment of goodwill 61 61 472
Depreciation of tangible fixed assets 61 66 117
(Increase)/ decrease in receivables (116) (176) (42)
Increase/ (decrease) in payables 141 (139) 127
Cash used in operations (158) (311) (201)
Interest paid (17) (28) (78)
Net cash inflow/(outflow) from operating (175) (339) (279)
activities
Investing activities
Interest received - - 1
Purchase of plant and equipment (9) (69) (130)
Net cash used in investing activities (9) (69) (129)
Financing activities
Issue of ordinary shares 110 488 835
Issue costs (30) (29) (93)
Issue of convertible loan stock - 121
Receipt of loans 109 - 140
Repayment of loans (47) (25) (206)
Repayment of hire purchase obligations (7) (13) (22)
Conversion of loans into ordinary shares - - (158)
Conversion of loans to loan stock - (121) -
Net cash generated by financing activities 135 421 496
Increase/(Decrease) in cash and cash equivalents (49) 13 88
Opening cash and cash equivalents 71 2 (17)
Closing cash and cash equivalents 22 15 71
* Restated to reflect the adoption of IFRS as per note 4.
Consolidated Statement of Changes in Equity
As at 31 July 2007
Issued Share Loans Retained Total
capital premium stock earnings equity
#'000 #'000 #'000 #'000 #,000
Balance at 1 February 2006* 376 2,198 - (1,345) 1,229
Loss for the period - - (151) (151)
Issue of shares 488 (29) - - 459
Issue of loan stock - - 121 - 121
Balance as at 31 July 2006* 864 2,169 121 (1,496) 1,658
Loss for the period - - - (802) (802)
Issue of shares 347 (64) - 283
Conversion of loan stock - - (121) - (121)
As at 1 February 2007* 1211 2,105 - (2,298) 1,018
Loss for the period - - - (322) (322)
Issue of shares 110 (30) - - 80
Balance at 31 July 2007 1,321 2,075 - (2,620) 776
* Restated to reflect the adoption of IFRS as per note 4.
On 26th January 2007, the authorised share capital of the company was increased
from #1,000,000 to #2,000,000 by the creation of 100,000,000 ordinary shares of
#0.01 each ranking pari passu in all respects with the existing ordinary shares
of #0.01 each in the capital of the company.
Notes to the Interim Financial Statements
1. Basis of preparation
The Group's previous financial statements have been prepared under UK Generally
Accepted Accounting Principles (UK GAAP). For the financial year ending 31
January 2008, the Group will prepare its annual consolidated financial
statements in accordance with IFRS as adopted by the European Union (EU) and
implemented in the UK.
The presentation of financial information under IFRS is governed by IFRS 1 '
First-time Adoption of IFRS', because they are part of the period covered by the
Group's first IFRS financial statement for the year ended 31 January 2008. In
some cases this will require the presentation of an item in a different
position, or the use of a different description in the financial statements to
that adopted in the UK GAAP financial statements. These reclassifications have
been described in the explanatory notes.
An explanation of how the transition from UK GAAP to IFRS has affected the
Group's financial statements for the period ended 31 July 2007, 31 January 2007
and 31 July 2006 is set out in note 4.
The interim financial information has not been audited and does not constitute
statutory accounts within the meaning of Section 240 of the Companies Act 1985.
The Group's statutory accounts for the year ended 31 January 2007, prepared
under UK GAAP have been delivered to the Registrar of Companies. The report of
the auditors on these accounts was unqualified, but included an emphasis of
matter in relation to going concern. However, it did not contain a statement
under Section 237(2) or (3) of the Companies Act 1985.
2. Transitional arrangements
The Group's date of transition to IFRS was 1 February 2006 at which date the
Group prepared its opening IFRS balance sheet. The financial information for
the 6 months ended 31 July 2007 is unaudited and has been prepared in accordance
with the Group's accounting policies based on IFRS standards that are expected
to apply for the financial year to 31 January 2008. The financial information
for the 6 months ended 31 July 2006 is also unaudited and has been restated
under IFRS. The Group has not applied IAS 34, Interim Financial Reporting,
which is not mandatory for UK Groups, in the preparation of these interim
financial statements.
3. Accounting policies
The principal accounting policies adopted in the preparation of these interim
financial statements are set out below. These policies have been consistently
applied to all periods presented.
The interim statements are prepared on a going concern basis, which assumes the
Group will continue in operational existence for the foreseeable future. The
Group's ability to meet its future working capital requirements and therefore
continue as a going concern is dependent upon it being able to generate
significant free cash flow from both trading and financing activities. On 10
September 2007, The Company disposed of its indoor centre at Fareham for #697k,
which together with the forecast significant improvement in trading performance
will generate sufficient funds to enable the Group to continue to meet its debts
as they fall due for at least the next 12 months.
The principle effects identified on adoption of IFRS are detailed below:
IFRS 3 'Business Combinations', IAS 36 and IAS 38 resulted in a change to the
accounting policy for Goodwill. Until 31 January 2006, goodwill was amortised
on a straight line basis over a period of up to 10 years from the year of
acquisition and assessed for an indication of impairment at each balance sheet
date.
In accordance with the provisions of IFRS 3 and IAS 36, the Group ceased
amortisation of goodwill from 1 February 2007 and thenceforth, goodwill is
tested annually for impairment, as well as when there are indications of
impairment.
3.1 Basis of consolidation
The consolidated interim financial statements comprise the accounts of
Soccercity Plc and its subsidiary undertakings up to 31 July 2007.
3.2 Business combinations
The Group has elected not to apply IFRS 3 Business Combinations retrospectively
to business combinations that took place prior to the transition date.
Consequently goodwill arising on business combinations before transition date
remains at its previous UK GAAP carrying value as at the date of transition.
3.3 Revenue
Revenue comprises of the hire of five-a-side football pitches, income from
children's play centres and sales of other goods, net of value added tax.
3.4 Goodwill
Goodwill arising on the acquisition of subsidiary undertakings or businesses,
representing any excess of the fair value of the consideration given over the
fair value of the identifiable assets and liabilities acquired, is recognised as
an asset. Goodwill is reviewed for impairment at least annually and any
impairment is to be recognised in the income statement and is not subsequently
reversed. Goodwill is carried at cost less accumulated impairment losses.
On disposal of a subsidiary or business, the attributable amount of goodwill
will be included in the determination of the profit or loss on disposal.
3.5 Impairment
At each balance sheet date, the Group reviews the carrying amounts of goodwill
to determine whether there is any indication that this asset has suffered an
impairment loss. If any such indication exists, the recoverable amount of the
asset is estimated in order to determine the extent of the impairment loss (if
any). Where the asset does not generate cash flows that are independent from
other assets, the Group estimates the recoverable amount of the cash-generating
unit to which the asset belongs. An intangible asset with an indefinite useful
life is tested for impairment annually and whenever there is an indication that
the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the
asset for which the estimates of future cash flows have been adjusted.
If the recoverable amount of an asset is estimated to be less than its carrying
amount, the carrying amount of the asset is reduced to its recoverable amount
and an impairment loss is recognised as an expense immediately.
3.6 Plant and equipment
All plant and equipment is initially recorded at cost. Depreciation is provided
at rates calculated to write off the cost less residual value of each asset over
its expected useful life, as follows:
Pitch & Fun City construction 6.7% straight line
Other plant & machinery 20% straight line
Fixtures fittings & equipment 10% straight line
Motor vehicle 33% straight line
Leasehold land and buildings Over the period of the lease
Residual value and estimated remaining lives are reviewed annually.
3.7 Operating leasing commitments
Rentals payable under operating leases where substantially all of the benefits
and risks of ownership remain with the lessor are charged against revenue on a
straight-line basis over the period of the lease.
3.8 Employee benefits
The pension costs charged in the financial statements represent the contribution
payable by the Group during the year.
3.9 Deferred taxation
The Company has not recognised a deferred tax asset in the accounts in respect
of tax losses. These tax losses will be recoverable against suitable taxable
future profits.
3.10 Financial instruments
The Group's principal financial instruments comprise bank loans, hire purchase
agreements and loans from private investors and directors.
3.11 Financial liability
Financial liabilities are classified according to the substance of the
contractual arrangements entered into.
An instrument will be classified as a financial liability when there is a
contractual obligation to deliver cash or another financial asset to another
enterprise.
An equity instrument is any contract that evidences a residual interest in the
assets of the group after deducting all of its liabilities.
3.12 Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand.
For the purposes of the Cash Flow Statement, cash and cash equivalents consist
of cash and cash equivalents as defined above.
4. Explanation of the transition to IFRS
For all periods up to and including the year ended 31 January 2007 the Group
prepared its financial statements in accordance with United Kingdom Generally
Accepted Accounting Practices (UK GAAP). In preparing these interim financial
statements, the Group has started from an opening balance sheet as at 1 February
2006, the Group's date of transition to IFRS, and made those changes in
accounting policies and other restatements required by IFRS.
IFRS 1 allows first time adopters certain exemptions from the general
requirements to retrospectively apply IFRS as effective for the 31 January 2006
year-end. The Group has elected not to apply IFRS 3 Business Combinations
retrospectively to business combinations that took place prior to the transition
date. Consequently goodwill arising on business combinations before transition
date remains at its previous UK GAAP carrying value as at the date of
transition.
4.1 Reconciliation of consolidated balance sheet and equity at 31 July 2006.
Goodwill Impairment
UK GAAP amortisation of goodwill IFRS
#'000 #'000 #'000 #'000
NON CURRENT ASSETS
Goodwill 1,742 61 (61) 1,742
Plant and equipment 1,028 - - 1,028
2,770 61 (61) 2,770
CURRENT ASSETS
Trade and other receivables 429 - - 429
Cash 15 - - 15
444 - - 444
CURRENT LIABILITIES
Trade payables 540 - - 540
Other payables 374 - - 374
Taxation 25 - - 25
Loans and borrowing 403 - - 403
1,342 - - 1,342
NET CURRENT LIABILITIES (898) - - (898)
NON-CURRENT LIABILITIES
Borrowings (215) - - (215)
(215) - - (215)
NET ASSETS 1,657 61 (61) 1,657
EQUITY
Ordinary shares 863 - - 863
Share premium account 2,169 - - 2,169
Convertible loan stock 121 - - 121
Retained earnings (1,496) 61 (61) (1,496)
EQUITY SHAREHOLDERS' FUNDS 1,657 61 (61) 1,657
4.2 Reconciliation of consolidated balance sheet and equity at 31 January 2007.
Goodwill Impairment
UK GAAP amortisation of goodwill IFRS
#'000 #'000 #'000 #'000
NON CURRENT ASSETS
Goodwill 1,331 121 (121) 1,331
Plant and equipment 1,040 - - 1,040
2,371 121 (121) 2,371
CURRENT ASSETS
Trade and other receivables 293 - - 293
Cash 71 - - 71
364 - - 364
CURRENT LIABILITIES
Trade payables 697 - - 697
Other payables 477 - - 477
Taxation 27 - - 27
Loans and borrowing 231 - - 231
1,432 - - 1,432
NET CURRENT LIABILITIES (1,068) - - (1,068)
NON-CURRENT LIABILITIES
Borrowings (285) - - (285)
(285) - - (285)
NET ASSETS 1,018 121 (121) 1,018
EQUITY
Ordinary shares 1.211 - - 1.211
Share premium account 2,105 - - 2,105
Convertible loan stock - -
Retained earnings (2,298) 121 (121) (2,298)
EQUITY SHAREHOLDERS' FUNDS 1,018 121 (121) 1,018
4.3 Reconciliation of income statement for the 6 months ended 31 July 2006
UK GAAP IFRS IFRS
Effect
#'000 #'000 #'000
REVENUE 1,003 - 1,003
Cost of sales (243) - (243)
Gross profit 760 - 760
ADMINISTRATION EXPENSES (756) - (756)
EBITDI 4 - 4
Depreciation (61) - (61)
Amortisation of goodwill (61) 61 -
Impairment of goodwill - (61) (61)
LOSS FROM OPERATIONS (123) - (123)
Finance costs (28) - (28)
LOSS FROM ORDINARY ACTIVITIES (151) - (151)
BEFORE TAXATION
Taxation - - -
LOSS FOR THE PERIOD (151) - (151)
4.4 Reconciliation of income statement for the year ended 31 January 2007
UK GAAP IFRS IFRS
Effect
#'000 #'000 #'000
REVENUE 2,036 - 2,036
Cost of sales (585) - (585)
Gross profit 1,451 - 1,451
ADMINISTRATION EXPENSES (1,737) - (1,737)
EBITDI (286) - (286)
Depreciation (117) - (117)
Amortisation of goodwill (121) 121 -
Impairment of goodwill (351) (121) (472)
LOSS FROM OPERATIONS (875) - (875)
Finance costs (78) - (78)
LOSS FROM ORDINARY ACTIVITIES (953) - (953)
BEFORE TAXATION
Taxation - - -
LOSS FOR THE PERIOD (953) - (953)
5. Loss per ordinary share
The calculation of basic loss per ordinary share is based on losses attributable
to equity holders issue during the period. The weighted average number of shares
in issue for the period to 31 July 2007 is 125,545,025 (31 January 2007-
79,429,259, 31 July 2006- 76,865,703).
The loss for the periods and the weighted average number of ordinary shares for
calculating the diluted loss per share are identical to those for the basic loss
per share.
6. The Board of Directors approved the interim report on 25 October 2007.
End
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EAKEKAALXFFE
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