RNS Number:6256Q
Capcon Holdings PLC
29 January 2002
CAPCON HOLDINGS plc
HIGHLIGHTS
- SUCCESSFUL FLOTATION ON AIM ENABLES GROUP TO PURSUE
ACQUISITION STRATEGY
- STRONG BALANCE SHEET AND INCREASED BANK FACILITIES
- INCREASED SALES AND GROSS PROFIT IN CORE BUSINESS
- BROADER CLIENT BASE
- RENEWED 4 YEAR CONTRACT WITH MAIN INVESTIGATORY CLIENT
- STRENGTHENING MANAGEMENT STRUCTURE
CHAIRMAN'S STATEMENT
________________________________________________________________________________
Strategic Review
The past year has seen some significant developments in Capcon with our
financial and corporate objectives having been achieved in spite of an
increasingly difficult business and economic climate.
The company, Capcon Limited, was acquired by a new vehicle, Capcon Holdings plc,
and floated on the Alternative Investment Market on 31 May 2001. The flotation
was most successful enabling the company to strengthen its balance sheet and
future cash flow by redeeming the expensive loan stock and providing additional
working capital.
We are now in a strong position to pursue our corporate objective to expand the
company through the acquisition of complementary businesses whilst continuing
organic growth in the core business.
The core business of audit, stocktaking and investigation services continues to
provide a strong platform upon which to develop a broader based group for the
future. Additionally, the directors believe that the growing market for these
services will lead to organic growth and facilitate the introduction of other
related services.
Acknowledging the primary objective of growing Capcon into a larger group, the
company has invested in the engagement of senior management who have the
experience, ambition and track record to achieve this objective.
Financial overview
The financial results for the year have been consolidated on the merger
accounting basis to allow a direct comparison with the trading performance in
the period before the group reconstruction and flotation.
Sales for the year to 30th September 2001 were £4.0 million compared with £3.9
million last year. Although representing an increase of just 2.8%, the overall
sales this year include the gain of a significant and growing new account with a
major pub chain. This new account has largely offset the impact of the loss of
a major contract which we had been expecting further to the take-over of that
client.
The profit for the year to 30th September 2001 before charging costs relating to
the amortisation of goodwill and group development amounted to £0.78 million
compared with an equivalent figure of £0.77 million last year. After charging
group development costs, goodwill amortisation and net interest which included
the loan stock redemption costs, the profit was reduced to £0.04 million. If
loan stock redemption costs and goodwill amortisation are added back, the pre
tax profit is £0.34 million compared with £0.37 million last year, reflecting an
increased level of group development costs this year.
The basic earnings per share of 0.2p is not directly comparable to the earnings
per share of 5.4p last year because the current year includes exceptional costs
in relation to the redemption of the loan stock and dilution due to the issue of
new shares when the company was floated. We believe that a more relevant
comparison is the earnings per share before amortisation and management and
development costs which increased from 15.4p to 15.5p if the new shares issued
on flotation of the company are excluded.
Cash inflow from operating activities was £0.43 million for the year compared
with £0.14 million last year. The bank facilities were renewed immediately
prior to the flotation and have been subsequently increased to provide
additional flexibility and support for future growth plans.
At the date of admission to AIM the directors indicated that it was anticipated
that the first dividend to be paid would be after announcement of the results
for the first half of the year 2001/02. I am pleased to confirm that the
performance of the past year and current trading leads the board to believe that
we are on target to achieve this objective.
Divisional performance
Audit & stocktaking
A small increase in overall sales turnover this year is hiding a very successful
year of sales activity that has resulted in the gaining of several new
customers. The previous year's sales turnover included the benefit of a
contract with a substantial pub chain which was taken over during that year by a
company whose stocktaking policy was known to be based on internal resource.
Consequently, we had anticipated that this business would ultimately be lost and
we allowed for this eventuality in our financial forecast for this year.
Nevertheless, considerable sales activity during the year has led to the gaining
of a substantial new account that has now largely replaced the lost client and
additionally we have gained several new clients in the leisure sector.
Operating margin levels remain at a similar level to the previous year despite a
higher level of staff turnover resulting from changes in the geographical spread
of our customer base. These changes entailed significant additional training
which the company should benefit from in future years.
Our outlook for this division continues to be optimistic with no indication that
there is likely to be any change in the well-established trend of outsourcing by
companies in the leisure sector. Additionally, we believe that the many
ownership changes and reconstruction taking place in the licensed trade sector
will continue to provide opportunities for this division to win new business.
Commercial investigation services
Acknowledging that this division warranted the commitment of a full-time general
manager to develop its potential, the Board appointed Bob Dulieu to this
position at the beginning of the year.
I am pleased to report that sales have increased year on year by some 14%,
confirming that the new management has been successful in the commencement of
building this division into a broader-based investigations and consultancy
business. The sale of services to one customer in the year 1999/00 amounted to
87% of sales and this single customer dependency has been reduced to 67% in the
past year with a continuing trend into the current year. Since the end of the
financial year we have successfully negotiated renewal of the contract with our
largest client for a further four years.
The higher sales level has increased divisional profit despite the additional
cost of employing a dedicated general manager. Furthermore, in the second half
of the year we have generated new interest in the financial sector in our senior
personnel screening services, security consultancy and risk management seminars.
We believe our pro-active approach will lead to further income in the current
year as more businesses react to the recent world events involving international
crime and terrorism.
Board changes
Following a successful year of sales and profit growth in the Investigations
division, I am delighted to confirm the appointment of Bob Dulieu to the board
of Capcon Limited on 1st November 2001. We look forward to a further period of
continuing growth and development of new services in this division under his
leadership.
On 1st January 2002 we announced the appointment of Karine Luckraft to the board
of Capcon Holdings plc. As a board, we are looking forward to the future
contribution from Karine who brings with her considerable experience from some
16 years of working in financial institutions in the City.
In January 2002 Richard Wevill resigned from the board of Capcon Holdings plc
having been a founder director of Capcon Limited. Richard formally represented
the interests of Sovereign Capital Limited who no longer have an investment in
Capcon. I would like to thank him for his contribution to the company from its
incorporation and through to our recent corporate re-structuring.
Current trading and prospects
The year has started well for both divisions and the internal growth targets for
the current year are expected to be achieved. New customers have already been
gained and the trend of opening new accounts and diversifying the services
offered by the investigatory division should continue.
An important aspect of the company's strategy is to seek compatible businesses
that are appropriate for acquisition. The board has spent considerable time
evaluating opportunities and we are optimistic that our continuing activity in
this aspect of group development will ultimately enhance both earnings and
shareholder value. To this end, considerable care will always be taken in the
review of all potential acquisitions to ensure that there is no dilution in the
quality of services being brought into the group and that the price paid is
directly related to expected future profit contribution.
I am pleased to report that, as a consequence of our search for suitable
acquisitions, we are now close to exchanging contracts to purchase an
investigations company that is expected to treble the sales turnover of our
investigations division. This exciting opportunity would create an entry for
Capcon into the insurance fraud market with a high volume of instructions being
undertaken by approximately 40 investigative staff for some of the UK's leading
insurers.
K P Dulieu 28 January 2002
Chairman
CAPCON HOLDINGS plc
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 SEPTEMBER 2001
Year ended 15 months ended
30 September 2001 30 September 2000
Before Amortisation Total Before Amortisation Total
amortisation of goodwill amortisation of goodwill
of goodwill of goodwill
Notes £ £ £ £ £ £
TURNOVER 1,2 4,045,819 - 4,045,819 3,936,691 - 3,936,691
Cost of sales (2,673,350) - (2,673,350) (2,613,696) - (2,613,696)
GROSS PROFIT 1,372,469 - 1,372,469 1,322,995 - 1,322,995
Administrative expenses 3 (850,409) (101,806) (952,215) (708,873) - (708,873)
PROFIT ON ORDINARY ACTIVITIES 4 522,060 (101,806) 420,254 614,122 - 614,122
BEFORE INTEREST AND TAXATION
Interest receivable 6 3,716 3,016
Interest payable 7 (387,212) (244,156)
PROFIT ON ORDINARY ACTIVITIES 36,758 372,982
BEFORE TAXATION
TAXATION ON PROFIT ON ORDINARY 8 (27,555) (104,111)
ACTIVITIES
RETAINED PROFIT FOR THE YEAR 9,203 268,871
RETAINED PROFIT BROUGHT 268,871 -
FORWARD
RETAINED PROFIT CARRIED £278,074 £268,871
FORWARD
EARNINGS PER SHARE - Basic 9 0.2p 5.4p
- Diluted 9 0.1p 4.9p
Total Recognised Gains and Losses
There were no recognised gains or losses other than the profits stated above.
Historical Cost Equivalents
There is no difference between the profit reported above and the equivalent
profit calculated on an unmodified historical cost basis.
Continuing Operations
Turnover and operating profit derive from continuing operations.
CAPCON HOLDINGS plc
BALANCE SHEET
AS AT 30 SEPTEMBER 2001
Consolidated Group Company
2001 2000 2001
Notes £ £ £
Fixed Assets
Investments 11 - - 50,000
Intangible fixed assets 12 1,934,302 2,036,108 -
Tangible fixed assets 13 97,890 69,988 -
______________ _____________ _________
2,032,192 2,106,096 50,000
Current Assets
Debtors 14 999,596 840,200 1,394,951
Cash at bank and in hand 247,097 238,794 1,144
______________ _____________ _____________
1,246,693 1,078,994 1,396,095
Creditors: amounts falling due within one
year 15 (597,557) (1,036,917) (71,400)
______________ _____________ _____________
Net Current Assets 649,136 42,077 1,324,695
______________ _____________ _____________
Total Assets less Current Liabilities 2,681,328 2,148,173 1,374,695
Creditors: amounts falling due after more
than one year 16 (50,000) (850,000) -
Provisions for Liabilities and Charges 17 (28,559) (29,302) -
______________ _____________ _____________
Net Assets 2,602,769 1,268,871 1,374,695
______________ _____________ _____________
Capital and Reserves
Called up share capital 18,19 71,875 50,000 71,875
Share premium account 19 1,302,820 - 1,302,820
Other reserves 19 950,000 950,000 -
Profit and loss account 19 278,074 268,871 -
______________ _____________ _____________
Shareholder's Funds 2,602,769 1,268,871 1,374,695
______________ _____________ _____________
28 January 2002
CAPCON HOLDINGS plc
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2001
2001 2000
Notes £ £ £ £
Net cash inflow from operating activities 21 425,955 143,391
Returns on investments and servicing of finance
Interest received 6,732 -
Interest paid (587,662) (43,706)
___________ _________
Net cash outflow from returns on investments and (580,930) (43,706)
servicing of finance
Taxation -
Tax paid (68,107)
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (48,258) (29,435)
__________ _________
Net cash outflow from investing activities (48,258) (29,435)
Acquisitions and disposals
Acquisition of business - (2,097,908)
__________ ____________
Net cash outflow for acquisitions - (2,097,908)
__________ ____________
Net cash outflow before financing (271,340) (2,027,658)
Financing
Issue of new ordinary shares 1,750,000 1,000,000
Costs of new issue (353,905) -
Issue of loan stock - 700,000
New loans - 300,000
Repayment of loan stock (700,000) -
Repayment of loans (100,000) (50,000)
____________ ____________
Net cash inflow from financing 596,095 1,950,000
__________ ____________
Increase/(decrease) in cash 324,755 (77,658)
__________ ____________
CAPCON HOLDINGS plc
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2001
________________________________________________________________________________
1. ACCOUNTING POLICIES
Basis of accounting
The financial statements have been prepared under the historical cost convention
and in accordance with all relevant United Kingdom Statements of Standard
Accounting Practice and Financial Reporting Standards.
Basis of consolidation
The group financial statements consolidate the financial statements of the
company and its subsidiary undertaking for the year ended 30 September 2001.
Capcon Holdings Limited was incorporated on 6 April 2001 and changed it's name
to Capcon Holdings plc on 17 May 2001. The company acquired the entire issued
share capital of Capcon Limited by the allotment of 3,649,900 ordinary shares of
1p each and 1,350,000 preferred ordinary shares of 1p each to the shareholders
of Capcon Limited at a ratio of 5 new shares for each share of 1p each held.
The investment is recorded in the company's balance sheet at the nominal value
of the shares issued.
The group reconstruction has been dealt with using the merger accounting
provisions of Financial Reporting Standard 6 'Acquisitions and mergers'.
Accordingly, the financial information for the group has been presented as if
Capcon Limited had been owned by the company throughout the current and prior
periods. The shares issued by Capcon Holdings plc to effect the merger have
been treated as if they were always in issue. The difference between the nominal
value of the shares issued and the total value of the share capital and share
premium account of Capcon Limited at acquisition has been treated as an "other
reserve".
Goodwill
Purchased goodwill is capitalised and amortised on a straight line basis over
its estimated useful economic life of 20 years as shown in note 12.
In the previous period, goodwill representing the excess fair value of
consideration given against the fair value of the identifiable net assets
acquired was capitalised in accordance with Financial Reporting Standard 10 '
Goodwill and Intangible Assets'. No amortisation was provided where the
purchased goodwill was considered to have an indefinite useful economic life. In
such circumstances, the individual amounts of purchased goodwill were subject to
impairment review annually.
The useful economic life of the acquired goodwill from the previous period has
been revised as the board considers that the company is unlikely to be able to
influence barriers to entry in the market in which the business operates over
the long term.
Depreciation
Depreciation is provided on all tangible fixed assets at rates calculated to
write off the cost or valuation, less estimated residual value, of each asset
over its expected useful life, as follows:
Fixtures and equipment - 25% reducing balance
Leased assets
Tangible fixed assets acquired under finance leases are capitalised at cost and
the amount outstanding at the balance sheet date is included under creditors.
Finance charges, calculated using a method materially consistent with Statement
of Standard Accounting Practice No 21, are included within interest payable in
the profit and loss account and charged over the periods of the agreements.
Rentals payable under operating leases are charged in the profit and loss
account evenly over the life of the lease.
Investments
Investments are stated at cost less any provision made for impairment in value.
Profit and parent company
The company has taken advantage of the provisions contained in section 230 of
the Companies Act 1985 and has not presented its own profit and loss account in
these financial statements. The parent company made neither a profit nor a loss
for the period since incorporation.
Deferred taxation
When appropriate the group provides for deferred taxation using the liability
method and expected future tax rates, to account for differences in timing
between the recognition of income and expenditure for accounting and taxation
purposes.
Pension costs
Pension costs relate to a defined contribution scheme and are accounted for as
they become payable.
2. TURNOVER
Turnover comprises the invoiced value of services supplied
exclusive of value added tax and after deduction of trade discounts.
Turnover is entirely attributable to the Group's principal activities.
Group turnover split between business segments is:
Year Ended 15 months ended
30 September 2001 30 September 2000
£ £
Audit and stocktaking 3,388,582 3,357,934
Commercial investigation services 657,237 578,757
____________ ____________
4,045,819 3,936,691
____________ ____________
_______________________________________________________________________________
Year Ended 15 months ended
3. ADMINISTRATIVE COSTS 30 September 2001 30 September 2000
£ £
Central overhead costs 141,200 100,300
Central marketing costs 29,500 -
Group development costs 84,700 60,200
Amortisation of goodwill 101,806 -
Other administrative expenses 595,009 548,373
____________ ____________
952,215 708,873
____________ ____________
The information presented includes costs attributable to future development and
management of the business and as such are not directly related to the core
business operations. These costs are highlighted on the basis that this allows
greater comparability of the underlying performance for the accounting periods.
Central overhead costs include the remuneration for C. J. Cavender and
professional fees relating to potential future development of the group.
Central marketing costs relate mainly to the salary and benefits of an employee
appointed to establish a database comprising potential new clients for existing
and future services of the group and potential targets for acquisition.
Group development costs comprise the proportion of time and expenses of K.P.
Dulieu attributed to the implementation of the group strategy of seeking a
flotation and then making acquisitions, together with R Wevill's fees as a
director of Capcon Limited.
Year Ended 15 months ended
4. OPERATING PROFIT 30 September 2001 30 September 2000
£ £
Operating profit is stated after charging:
Auditors' remuneration:
Audit 12,000 8,000
Depreciation of tangible fixed assets:
Owned by the company 20,356 21,247
Amortisation of intangible fixed assets: 101,806 -
Operating lease rentals:
Other 375,884 337,737
__________ __________
Year Ended 15 months ended
5. DIRECTORS AND OTHER EMPLOYEES 30 September 2001 30 September 2000
£ £
Staff costs (including directors) include the following
amounts:
Wages and salaries 1,953,682 1,873,178
Social security costs 183,742 172,224
Pension costs 90,916 81,707
_____________ _____________
2,228,340 2,127,109
_____________ _____________
________________________________________________________________________________
5. DIRECTORS AND OTHER EMPLOYEES (Continued) Year Ended 15 months ended
30 September 2001 30 September 2000
The average monthly number of persons employed by the No. No.
group during the year was as follows:
Administration and management 18 13
Auditors and stocktakers 73 81
______ _____
91 94
______ _____
The remuneration of the directors who served during the
year was as follows:
Year Ended 15 months ended
30 September 2001 30 September 2000
£ £
Aggregate emoluments 86,335 130,225
Pension contributions 6,233 2,342
__________ __________
92,568 132,567
__________ __________
There is one (2000 - one) director to whom benefits are accruing in
respect of a money purchase pension scheme.
6. INTEREST RECEIVABLE Year Ended 15 months ended
30 September 2001 30 September 2000
£ £
Bank interest receivable 3,716 3,016
_________ _________
7. INTEREST PAYABLE AND SIMILAR CHARGES Year Ended 15 months ended
30 September 2001 30 September 2000
£ £
Bank loans and overdrafts 22,480 45,656
Interest on loan stock 364,732 198,500
__________ __________
387,212 244,156
__________ __________
8. TAX ON PROFIT ON ORDINARY ACTIVITIES Year Ended 15 months ended
30 September 2001 30 September 2000
£ £
UK corporation tax:
Current tax on income for the period at 30% (2000: 30%) 35,000 74,809
Transfer (from)/to deferred taxation in respect of the
current period (743) 29,302
Adjustments in respect of prior periods corporation tax (6,702) -
__________ __________
27,555 104,111
__________ __________
________________________________________________________________________________
9. EARNINGS PER SHARE
Year Ended 15 months ended
30 September 2001 30 September 2000
£ £
Earnings attributable to ordinary shareholders 9,203 268,871
_________ _________
Weighted average number of shares issued during the year 5,815,068 5,000,000
Dilutive effect of share options 513,750 513,750
Adjusted weighted average number of shares ____________ ____________
in issue during the year 6,328,818 5,513,750
____________ ____________
Basic earnings per share
0.2p 5.4p
______ _____
Diluted earnings per share
0.1p 4.9p
______ _____
Additional earnings per share information has been provided to reflect the
impact of goodwill amortisation and management and development expenditure on
this indicator. The earnings for this purpose are £777,460 for 2001 and £774,622
for 2000.
10. DIVIDENDS
No dividend is proposed for the year (2000 - none).
11. INVESTMENTS
Group Company
2001 2000 2001
£ £ £
Balance at 1 October 2000 - - -
Additions - - 50,000
______ ______ ________
Balance at 30 September 2001 - - 50,000
______ ______ _____ _
The company owns the entire issued share capital of Capcon Limited, a company
registered in England and Wales. The principal activity of Capcon Limited is
the provision of audit, stocktaking and commercial investigation services.
12. INTANGIBLE FIXED ASSETS
Group Company
£ £
Cost
At 1 October 2000 and 30 September 2001 2,036,108 -
____________ _____________
Depreciation
At 1 October 2000 - -
Charge for the year 101,806 -
__________ ____________
At 30 September 2001 101,806 -
____________ __________
Net Book Value
At 30 September 2001 1,934,302 -
____________ _____________
At 30 September 2000 2,036,108 -
____________ _____________
________________________________________________________________________________
13. TANGIBLE FIXED ASSETS
Fixtures and
Group Equipment
£
Cost
At 1 October 2000 91,235
Additions 48,258
_________
At 30 September 2001 139,493
_________
Depreciation
At 1 October 2000 21,247
Charge for the year 20,356
_________
At 30 September 2001 41,603
_________
Net Book Value
At 30 September 2001 97,890
_________
At 30 September 2000 69,988
_________
Company
The company has no separate tangible fixed assets.
14. DEBTORS
Group Company
2001 2000 2001
£ £ £
Trade debtors 847,615 687,442 -
Amounts due from group undertaking - - 1,392,262
Other debtors 85,459 30,051 2,689
Prepayments and accrued income 66,522 122,707 -
_____________ _________ ____________
999,596 840,200 1,394,951
__________ __________ ____________
15. CREDITORS: amounts falling due within one year
Group Company
2001 2000 2001
£ £ £
Bank loan and overdraft 100,000 416,452 -
Trade creditors 80,071 59,140 -
Corporation tax 35,000 74,809 -
Other tax and social security 213,771 109,928 -
Other creditors 81,108 6,994 71,400
Accruals and deferred income 87,607 369,594 -
___________ _________ ____________
597,557 1,036,917 71,400
___________ _________ ____________
________________________________________________________________________________
16. CREDITORS: amounts falling due after more than one year
Group Company
2001 2000 2001
£ £ £
Loan stock - 700,000 -
Bank loan 50,000 150,000 -
___________ _________ __________
50,000 850,000 -
___________ _________ __________
Included in the above are amounts falling due as
follows:
Group Company
2001 2000 2001
£ £ £
In 1-2 years:
Bank loan 50,000 100,000 -
___________ _________ ____________
In 2-5 years:
Loan stock - 700,000 -
Bank loan - 50,000 -
___________ _________ ____________
The bank loan, totalling £150,000, is secured by way of a fixed and floating
charge over the group's assets.
17. PROVISIONS FOR LIABILITIES AND CHARGES
Group Company
Deferred Tax 2001 2000 2001
£ £ £
At 1 October 2000 29,302 - -
Movements (743) 29,302 -
___________ _________ ____________
At 30 September 2001 28,559 29,302 -
___________ _________ ____________
Deferred tax arises as a result of accelerated capital allowances. There is no
unprovided deferred tax.
18. SHARE CAPITAL
Company and Group
2001
£
Authorised
20,000,000 1p ordinary shares 200,000
_________
Allotted, called up and fully paid
7,187,500 1p ordinary shares 71,875
_________
Ordinary shares
On 6 April 2001 one £1 ordinary share was issued at £1 on incorporation of the
company.
On 17 May 2001 the share capital was sub-divided into ordinary 1p shares.
On 17 May 2001 3,649,900 ordinary 1p shares and 1,350,000 preferred ordinary 1p
shares were issued at par to facilitate the merger with Capcon Limited.
On 17 May 2001 preferred ordinary 1p shares were re-designated as ordinary 1p
shares.
On 17 May 2001 2,187,500 ordinary 1p shares were issued at 80p each on the
admission of the company to the Alternative Investment Market.
Share options
At 30 September 2001, options exist which provide the holders the opportunity to
acquire up to 375,000 ordinary shares of 1p each at a price of £0.80 per share.
The options were granted on 17 May 2001 and may be exercised at any time between
17 May 2004 and 16 May 2011.
Options also exist to provide the holders with the opportunity to acquire up to
62,500 ordinary shares of 1p each at an exercise price of £0.80 per share. The
options were granted on 17 May 2001 and may be exercised at any time up to 16
May 2004.
Options also exist to provide the holders with the opportunity to acquire up to
one per cent of the issued ordinary share capital of the company at the date of
exercise of the option at an exercise price of £0.80 per share. The options were
granted on 17 May 2001 and may be exercised at any time up to 16 May 2004.
________________________________________________________________________________
19. RESERVES AND RECONCILIATION OF MOVEMENTS IN SHAREHOLDER'S FUNDS
Share Profit and
Share Premium Merger Loss Total Total
Capital Account Reserve Account 2001 2000
£ £ £ £ £ £
Opening shareholder's funds 50,000 - 950,000 268,871 1,268,871 50,000
Shares issued 21,875 1,302,820 - - 1,324,695 -
Merger adjustment - - - - 950,000
Profit for the period after
taxation - - - 9,203 9,203 268,871
________ ___________ __________ __________ ___________ ___________
Closing shareholder's funds 71,875 1,302,820 950,000 278,074 2,602,769 1,268,871
________ ___________ __________ __________ ___________ ___________
The comparative figures reflect the consolidated position on the basis that
Capcon Limited had been a subsidiary company throughout the current and
preceding accounting period. The merger adjustment reflects the difference
between the nominal value of the shares issued to acquire Capcon Limited and the
cumulative value of that company's share capital and share premium account at
the date of acquisition.
20. OTHER FINANCIAL COMMITMENTS
At the year end the group had annual commitments under non-cancellable operating
leases as set out below:
Land &
Buildings Other
2001 2000
2001 2000
£ £ £ £
Leases which expire:
Within 1 year 4,750 875 41,358 89,496
Between 2 and 5 years 13,336 13,900 199,533 225,874
_________ _________ _________ _________
21. RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM
OPERATING ACTIVITIES
2001 2000
£ £
Operating profit before interest 420,254 614,122
Depreciation 20,356 21,247
Amortisation 101,806 -
(Increase) in debtors (159,396) (840,200)
Increase in creditors 42,935 348,222
___________ ___________
Net cash inflow from operating activities 425,955 143,391
___________ ___________
________________________________________________________________________________
22. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS/(DEBT)
2001 2000
£ £
Increase/(decrease) in cash in period 324,755 (77,658)
Outflow/(inflow) from change in debt financing 800,000 (950,000)
___________ ___________
Movements in net debt resulting from cash flows 1,124,755 (1,027,658)
Net debt at 1 October 2000 (1,027,658) -
___________ ___________
Net funds/(debt) at 30 September 2001 97,097 (1,027,658)
___________ ___________
23. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
Analysis of net debt At Cash Non Cash At
1/10/2001 Flow Movements 30/09/2001
£ £ £ £
Cash at bank and in hand 238,794 8,303 247,097
Overdraft (316,452) 316,452 -
__________ __________ __________ __________
(77,658) 324,755 247,097
Debt due within one year (100,000) 100,000 (100,000) (100,000)
Debt due after one year (850,000) 700,000 100,000 (50,000)
___________ ___________ __________ _________
Total (1,027,658) 1,124,755 - 97,097
___________ ___________ __________ _________
24. ULTIMATE CONTROLLING PARTY
There is no single ultimate controlling party.
25. RELATED PARTY TRANSACTIONS
During the period fees were paid to The Morgan Group totalling £79,235 (2000 -
£10,260). In addition, fees for services totalling £46,953 (2000 - £nil) were
charged by Capcon Limited to The Morgan Group. At the year end, a balance of
£30,405 (2000 - £(6,804)) was owed by The Morgan Group in respect of services
provided by Capcon Limited. P F Jackson is a partner of The Morgan Group.
During the period, fees totalling £36,605 (2000 - £16,240) and £nil (2000 -
£1,213) were paid to R N Gatenby (a director of Capcon Limited) and C J Cavender
respectively for consultancy services. At the period end £nil (2000 - £6,915)
was owed to R N Gatenby in respect of these transactions.
During the year fees were paid to K P Dulieu totalling £51,993 (2000 - £47,224)
for professional services. At the year end, a balance of £10,527 (2000 - £nil)
was owed to K P Dulieu. In addition fees for services totalling £12,410 (2000 -
£nil) were invoiced to K D A (Portugal), a business in which K P Dulieu is
interested, by Capcon Limited
26. FINANCIAL INSTRUMENTS
The group's financial instruments are all in sterling and comprised borrowings,
cash and various non-financial derivatives such as trade debtors and trade
creditors. As permitted by of Financial Reporting Standard 13 'Derivatives and
other financial instruments', short term debtors and creditors have been
excluded from disclosures under that standard. The fair value at the balance
sheet date of all the group's financial instruments is the same as the book
value.
The principal purpose of the group's financial instruments is to provide finance
for the group's operations. The main risk arising from the financial instruments
of the group are interest rate risk and liquidity risk, which the board manages
through it's overdraft facility and by fixing interest rates. The interest rate
applying to the group's borrowings is currently 2 per cent above bank base rate.
The board does not consider that there is a significant exposure to exchange
rate risks.
Borrowing facilities
At 30 September 2001, the group had undrawn overdraft facilities totalling
£200,000 (2000: 15,070) which are due for review on 31 May 2002. The directors
expect that the facility will be renewed at that time. Other than the group's
borrowings as detailed in note 16, the group had no other financial interests.
27. POST BALANCE SHEET EVENTS
Since 30 September 2001, the company has allotted a further 66,664 ordinary
shares of 1p each at a price of £0.75 per share ranking pari passu in all
respects with the existing ordinary shares. These shares have not been taken
into account in calculating the earnings per share as the effect is not
considered to be significant.
This information is provided by RNS
The company news service from the London Stock Exchange
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