RNS Number:3428T
Resurge PLC
17 December 2003
For Immediate Release 17 December 2003
RESURGE PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 OCTOBER 2003
Resurge PLC ("Resurge" or "the Company"), the turnaround finance company,
announces its preliminary results for the year ended 31 October 2003.
Highlights:
* Turnover increased to #1.65m (2002: #0.54m);
* Pre-tax profit increased to #0.80m (2002: #0.67m);
* Earnings per share 0.79p (2002: 0.93p); 13.90m shares issued during the
year;
* Final dividend proposed of 0.11p per share (2002: 0.1p)
* Commenting on the results, Chairman, Anthony Brierley, said:
"The Company's strategy continues to be effective in the current economic
environment. We will continue to keep overheads well controlled and take
opportunities as they arise to maximise value for shareholders. We look forward
to reporting further progress during the current year."
For further information, please contact
Jonathan Rowland, Joint Managing Director
Jamie Constable, Joint Managing Director
Resurge PLC 020 7233 4270
Richard Darby / James Strong
Buchanan Communications 020 7466 5000
Notes to Editors
Resurge, which is based in London, offers finance, management and strategic
advice to companies affected by difficult economic and trading conditions.
Resurge's activities include the provision of turnaround finance and taking
stakes in and supporting the recovery of, businesses in turnaround situations
where the Directors believe that the potential exists to achieve a significant
uplift in financial performance and/or capital value.
Admitted to AIM in September 2001, Resurge receives its business proposals from
a number of sources including companies, banks, insolvency practitioners and
specialist lending vehicles.
CHAIRMAN'S STATEMENT
INTRODUCTION
The Board is pleased to present the results for the year ended 31 October 2003.
We continue to review a significant number of opportunities from companies,
banks, insolvency practitioners and specialist lending vehicles. The economic
environment has remained tough in a number of sectors causing adverse trading
conditions for many companies creating a continuing pipeline of opportunities.
However since the war in Iraq, stock markets have made a recovery helping to
create an increase in the value of our investments.
RESULTS AND DIVIDEND
Turnover for the year ended 31 October 2003 increased to #1,647,719 (2002:
536,268) and the Company realised a profit on disposal of its fixed asset
investments of #596,151 (2002: #486,916), giving a pre-tax profit of #804,825
(2002: #668,207).
Earnings per share amounted to 0.79p (2002: 0.93p). In view of this performance
the Board has decided to propose a final dividend of 0.11p per share (2002:
0.1p), payable to shareholders on 27 February 2004, to shareholders on the
register at the close of business on 30 January 2004.
BUSINESS ACTIVITY
We are pleased to report the following:
Apollo Gold Corporation
Following the sale of the common stock in September 2002 arising from the
conversion of the debenture, a further gain of US $172,907 (approx #104,000) was
made from 312,500 warrants in Apollo Gold on 16 January 2003.
UV Modular
The Company continues to hold 22% of the ordinary share capital of UV Modular at
a cost of #39 and 33,750 preference 'c' shares at a cost of #33,750.
In January 2003, UV Modular repaid to the Company a term loan of #2.1 million
and #200,000 outstanding on a revolving credit facility. Arrangement fees
charged were #211,000 and interest #418,000, equating to an annualised return of
56%.
Bikenet PLC
In March 2003, Resurge disposed of its entire 11.8% holding representing 1.325m
ordinary shares in Just Car Clinics PLC (formerly Bikenet PLC) for #130,000,
realising a surplus of #76,000
Strongbow Resources Inc
In August 2003, Resurge disposed of its 3.7m ordinary shares in Strongbow
Resources for #525,000, realising a 117% gain of #295,000. Resurge also disposed
of its 1,045,715 warrants realising a gain of #42,000 in October 2003.
Murray Financial Corporation Plc
In April 2003, Schweco Nominees ("Schweco") acting as nominee for Resurge,
acquired 29.9m ordinary shares in Murray Financial Corporation PLC ("MFC") for
#880,677, representing 29.9%. Jonathan Rowland and Jamie Constable of Resurge
were appointed to the board of MFC in July 2003. Kenneth Murray, the former
Chairman, has issued proceedings against MFC in connection with the termination
of his employment. His claim is being strongly resisted and MFC has issued a
counter-claim against Mr Murray in relation to costs incurred by MFC as a result
of the failure of its directors to convene an extraordinary general meeting, as
requisitioned to do so by Schweco, on behalf of Resurge. A court hearing is
scheduled for May 2004.
Phoenix Acquisitions Limited
In April 2003, Resurge provided a #12.86m term loan facility through its wholly
owned subsidiary Skillglass Limited to Phoenix Acquisitions Limited ("PAL")
enabling PAL to make a successful #10.2m cash offer for the entire issued share
capital of Chesterton International PLC ("Chesterton"). Resurge had at 31
October 2003, a 25% interest in the equity share capital of PAL, which is
carried at a cost of #9,000.
Since the acquisition Chesterton has disposed of its Facilities Management
business for a gross consideration of #20.5m and PFI contracts for #2.9m. On 11
December 2003, following a technical breach of the terms of the facility,
Resurge issued PAL with a demand for repayment and entered into negotiations to
restructure the term loan and refinance Chesterton. As a consequence of the
exercise of its security, Resurge has an interest in 86.9% of the equity share
capital of Chesterton International PLC.
Fees were payable by PAL to Skillglass in connection with the term loan. Fees
were paid to Rowland Capital (C.I.) Ltd (Jonathan Rowland is a beneficiary of
the Rowland Capital Trusts, which control Rowland Capital (C.I.) Ltd) for
providing a facility to Skillglass and are included in direct costs. The profit
on this transaction to Resurge was approx. #486,000 including interest.
Other Investments
The Company retains interests in the following:
1) Odyssey Clubs Group, where a loan of #462,500 is outstanding with a 9%
per annum coupon to founding director and major shareholder, John West.
Resurge retains ongoing rights to any realised premium in excess of #5 per
Odyssey share over 15,000 underlying shares, being 20% of John West's
rights to underlying Odyssey shares;
2) Venda, where a three-year loan of #500,000 with a 10% per annum coupon
is outstanding and an option to acquire 10% of Venda's equity for #250,000
is held. Resurge also has a seat on the board of directors of Venda and
earns fees from this service;
3) Moorgate Paper, where a 6.5% equity stake is retained in the Group and
is carried at 31 October 2003 at a cost of #696.
On 15 August 2003, Resurge announced the terms of an all share offer for the
whole of the issued and to be issued share capital of London Forfaiting Company
Plc ("LFC"). On 13 August 2003, LFC had received 64% acceptances for a competing
offer from FIMBank and on 28 August 2003, FIMBank's offer for LFC was declared
unconditional in all respects. Accordingly, no offer document by Resurge was
posted.
NEW SHARE ISSUES
In February 2003, Resurge completed a private placing with Wood Hall Securities
Ltd of 8m Ordinary Shares at 9p per share raising #720,000 and in March a
further private placing with Tomahawk Fund ("Tomahawk") of 5.6m Ordinary Shares
at 9p per share raised #500,000. Tomahawk is a fund managed by Marble Bar Asset
Management LLP. The proceeds of both placings have been used to provide further
working capital for the development of the Company. Also in March 2003, Resurge
allotted 0.3m Ordinary Shares at 8.75p per share in consideration for
professional services.
BOARD APPOINTMENTS
During the second half, we were pleased to welcome Julian Lewis onto the Board
as a Non-Executive director. Julian is a partner at Halliwell Landau solicitors
and has acted for the Company since its flotation in 2001. Graham Hellier, a
Non-Executive Director will be stepping down from the Board with immediate
effect to pursue his other business interests and we thank him for his
contribution.
CONCLUSION
The Company's strategy continues to be effective in the current economic
environment. We will continue to keep overheads well controlled and take
opportunities as they arise to maximise value for shareholders. We look forward
to reporting further progress during the current year.
Anthony Brierley
Chairman 17 December 2003
Resurge PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 31 October 2003
2003 2002
Notes # #
TURNOVER 1,647,719 536,268
Direct costs (665,709) (64,836)
Other operating expenses (735,804) (326,951)
OPERATING PROFIT 246,206 144,481
Profit on disposal of fixed asset investments 596,151 486,916
Interest receivable 50,430 48,665
Amounts written off fixed asset investments (87,962) (11,855)
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 804,825 668,207
Taxation (274,433) (217,388)
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 530,392 450,819
Dividends 2 (79,229) (58,128)
RETAINED PROFIT FOR THE YEAR 451,163 392,691
EARNINGS PER SHARE 3
Basic 0.79p 0.93p
Diluted 0.79p 0.93p
The operating profit for the year arises from the Group's continuing operations.
Resurge PLC
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
For the year ended 31 October 2003
2003 2002
# #
Profit for the year 530,392 450,819
Unrealised surplus on revaluation of fixed asset investments 284,734 15,430
Total recognised gains and losses relating to the year 815,126 466,249
Resurge PLC
CONSOLIDATED BALANCE SHEET
As at 31 October 2003
Notes 2003 2002
# #
FIXED ASSETS
Investments 1,426,510 114,948
CURRENT ASSETS
Debtors 344,171 250,036
Loans: due within one year 10,192,618 2,594,493
Loans: due after more than one year 3,321,452 500,000
Investments 1,000 -
Cash at bank and in hand 4,267 436,768
13,863,508 3,781,297
CREDITORS: Amounts falling due within one year (9,815,468) (347,592)
NET CURRENT ASSETS 4,048,040 3,433,705
TOTAL ASSETS LESS CURRENT LIABILITIES 5,474,550 3,548,653
CAPITAL AND RESERVES
Called up share capital 4 1,440,519 1,162,551
Share premium account 2,890,013 1,977,981
Revaluation reserve 284,734 15,430
Profit and loss account 859,284 392,691
EQUITY SHAREHOLDERS' FUNDS 5 5,474,550 3,548,653
Resurge PLC
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 October 2003
Notes 2003 2002
# #
Cash flow from operating activities 6 (7,857,515) (3,127,972)
Returns on investments and servicing of finance 6 50,430 48,665
Taxation (204,301) -
Capital expenditure and financial investment 6 (518,639) 375,543
Equity dividends paid (58,128) -
CASH OUTFLOW BEFORE FINANCING (8,588,153) (2,703,764)
Financing 6 8,112,391 3,140,532
(DECREASE)/INCREASE IN CASH IN THE YEAR (475,762) 436,768
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET (DEBT)/FUNDS
2003 2002
# #
(Decrease)/increase in cash in the year (475,762) 436,768
Cash inflow from increase in debt (6,952,391) -
CHANGES IN NET (DEBT)/FUNDS RESULTING FROM CASH FLOWS (7,428,153) 436,768
Accrued loan interest and amortised loan finance costs (620,527) -
MOVEMENT IN NET (DEBT)/FUNDS IN THE YEAR (8,048,680) -
NET (DEBT)/FUNDS AT 1 NOVEMBER 2002 436,768 -
NET (DEBT)/FUNDS AT 31 OCTOBER 2003 (7,611,912) 436,768
Resurge PLC
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 October 2003
1 The financial information contained in this document does not
constitute statutory accounts within the meaning of section 240 of the Companies
Act 1985. The figures for the periods ended 31 October 2002 and 2003 have been
extracted from the audited annual accounts. Statutory accounts for 2003 will be
delivered to the Registrar of Companies in due course. The auditors have
reported on those accounts; their reports were unqualified and did not contain
statements under section 237(2) or (3) of the Companies Act 1985.
The accounting policies adopted are consistent with those used in
the previous period.
The comparative period is from 24 September 2001 to 31 October 2002.
2 DIVIDENDS
The directors recommend that a dividend of 0.11p per ordinary share
is payable. If approved the dividend will be paid on 27 February 2004 to
eligible shareholders on the register at close of business on 30 January 2004.
3 EARNINGS PER SHARE
The calculation of earnings per share is based upon the profit after taxation of
#530,392 (2002: #450,819) and on 67,444,619 (2002: 48,485,580) being the
weighted average number of ordinary shares in issue during the year.
The warrants have an exercise price above the fair value of the company's shares
and hence are non-dilutive.
4 SHARE CAPITAL 2003 2002
# #
Authorised:
500,000,000 ordinary shares of 2p each 10,000,000 10,000,000
Allotted, issued and fully paid:
72,025,963 (2002: 58,127,551) ordinary shares of 2p each 1,440,519 1,162,551
Share issues:
On 21 February 2003, the company allotted 8,000,000 2p ordinary shares at 9p per
share for total cash consideration of #720,000.
On 6 March 2003, the company allotted 342,857 2p ordinary shares at 8.75p per
share in consideration for professional services.
On 13 March 2003, the company allotted 5,555,555 2p ordinary shares at 9p per
share for total cash consideration of #500,000.
Share warrants:
On 11 September 2001, the Company granted 10,000,000 warrants. Each warrant
gives the right to subscribe for one ordinary share at a price of 20p per share.
These warrants are exercisable from 24 September 2002 to 24 September 2004.
No warrants have been exercised.
5 RECONCILIATION OF MOVEMENT IN EQUITY SHAREHOLDERS' FUNDS 2003 2002
# #
Profit for the year 530,392 450,819
Dividends (79,229) (58,128)
451,163 392,691
New share capital issued net of costs 1,190,000 3,140,532
Other recognised gains and losses 284,734 15,430
Net addition to equity shareholders' funds 1,925,897 3,548,653
Opening equity shareholders' funds 3,548,653 -
Closing equity shareholders' funds 5,474,550 3,548,653
6 CASH FLOWS 2003 2002
# #
Reconciliation of operating profit to net cash flow from
operating activities
Operating profit 246,206 144,481
Increase in debtors (71,303) (246,479)
Increase in loans (10,419,577) (3,094,493)
Increase in creditors 2,387,159 68,519
Net cash flow from operating activities (7,857,515) (3,127,972)
Analysis of cash flows for headings netted in the cash flow
Returns on investments and servicing of finance
Interest received 50,430 48,665
Net cash inflow from returns on investments and servicing of 50,430 48,665
finance
Capital expenditure and financial investment
Purchase of equity shares (1,871,064) (1,310,972)
Sale of equity shares 1,352,425 1,686,515
Net cash (outflow) / inflow from capital expenditure and (518,639) 375,543
financial investment
Financing
Issue of ordinary share capital 1,220,000 3,334,949
Expenses paid in connection with share issue (60,000) (194,417)
Increase in loans 6,952,391 -
Net cash inflow from financing 8,112,391 3,140,532
7 The financial statements for the year ended 31 October 2003 will be
posted to shareholders shortly and will also be available at the registered
office, 7 The Sanctuary, London SW1P 3JS.
8 The AGM will take place on 27 February 2004.
This information is provided by RNS
The company news service from the London Stock Exchange
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