TIDMCTNO
RNS Number : 0250O
Cantono PLC
27 February 2009
CANTONO PLC
INTERIMS RESULTS
27 February 2009
CANTONO PLC
Interim Results
for the Six Months ended 30 November 2008
Highlights
* Group operating loss for continuing activities of GBP1.03m (2007: loss of
GBP1.01m);
* Group operating loss for the period of GBP2.6M (2007: loss of GBP2.26M);
* Successful fundraising in Dec 2008 of GBP2M before expenses.
CHAIRMAN'S STATEMENT
Overview
The transformation of Cantono plc continues, the disposal of the Managed
Services businesses and assets
was approved by shareholders on 15 December 2008, and the business is now
totally focused on co-location
services in the Data Centre market.
Financial Review
The sale of the Managed Services Business is classified under IFRS5 as a
disposal group held for sale and
disclosed under Note 2 as a discontinued activity, and therefore the results of
the Managed Services Business are shown separately from the Data Centre's (now
described as the main activity of the Group) performance in the Income Statement
for the current half year period.
In the first six months the Group produced a very similar operating loss to last
year GBP1.29M, (2007: GBP1.06M). The loss before tax was GBP1.03M, marginally
higher by GBP17k compared to last year.
The Group's consolidated cash position as at 30 November 2008 was GBP216k,
compared to GBP5.2M last year, although the Group completed a successful
fundraising in December 2008 of GBP2M convertible loan notes and GBP0.03k in
equity.
The Managed Services Business was sold to Xploite plc and approved by
shareholders on 15 December 2008, the total consideration was GBP3M of which
GBP1.9M was paid immediately, used to complete work on the Data Centre. The
remaining GBP1.1M (less a provision for redundancy costs post transaction) was
deferred until 15 March 2009.
Operational Review
The Data Centre facility, near Fareham, became operational in September 2008.
In November we ran three "open days" for local businesses, potential business
partners and IBM. Feedback
from these events was very positive and consequently we have developed a strong
pipeline of sales opportunities.
Whilst the current economic climate is challenging, demand for co-location
facilities, especially those that
can deliver higher levels of power per sq metre is holding up whilst supply is
still constrained.
The facility in Fareham is one of the few Data Centres in the South of England
that can provide a cost
effective supply of energy for high powered computing and is therefore ideally
positioned to take advantage
of this market demand.
The financial dynamics of a Data Centre business are very different from a
Managed Services business. One
of the key differences is that growing a Data Centre business is capital
intensive whereas growing a
Managed Services business is much more reliant on recruiting and retaining
qualified technical personnel.
In our case this means that with the investment made to date in the
infrastructure of our Data Centre we have
the opportunity to close an element of incremental business from our growing
sales pipeline with very little additional capital investment and no additional
investment in personnel. Adding our existing revenues to this potential revenue
means that we have a good view on future cash flow. On the other hand as we
close more business we will eventually need access to further capital to build
out the facility to deliver these new services.
Outlook
The Board are aware that the performance of the share price has been extremely
disappointing, and the current stock market turmoil has seen the Company's
current market capitalisation fall to a value that is dissociated from the
inherent value of the business. The Board recently sent out a circular
seeking approval to delist the company from the AIM market. An General Meeting
arranged on 25 February to vote on this subject has been adjourned until 9 March
in order for the Board to discuss in further detail with a number of
shareholders the merits of this action.
In the meantime the Board continue to look at the best alternative options to
maximise shareholder value.
Mike Northall
Chairman
27 February 2008
Consolidated Income Statement (unaudited)
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | Half Year | | Half Year | | Year |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | 30-Nov | | 30-Nov | | 31-May |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | 2008 | | 2007 | | 2008 |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | Notes | Unaudited | | Restated | | Restated |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | GBP | | GBP | | GBP |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Revenue | | - | | - | | - |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Cost of sales | | - | | - | | - |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Gross profit | | - | | - | | - |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Administrative expenses | | 1,022,044 | | 1,066,453 | | 2,402,982 |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Operating loss | | (1,022,044) | | (1,066,453) | | (2,402,982) |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Finance income | | 26,179 | | 68,214 | | 74,931 |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Finance costs | | (33,883) | | (14,105) | | (74,932) |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Loss before tax | | (1,029,748) | | (1,012,344) | | (2,402,983) |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Tax expense | | - | | - | | 241,046 |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Loss for the period from | | (1,029,748) | | (1,012,344) | | (2,161,937) |
| continuing operations | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Loss for the period from | 2 | (1,570,284) | | (1,244,905) | | (5,623,507) |
| discontinued operations | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Loss for the financial | | (2,600,032) | | (2,257,249) | | (7,785,444) |
| period | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| attributable to : | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| equity holders of the | | (2,600,032) | | (2,257,249) | | (7,785,444) |
| parent | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Earnings per share | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| - basic and diluted - | | (3.80)p | | (3.49)p | | (8.00)p |
| continuing | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Earnings per share | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| - basic and diluted - | | (5.80)p | | (4.29)p | | (20.80)p |
| discontinuing | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
Consolidated Balance Sheet (unaudited)
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| | | Half Year | | Half Year | | Year |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| | | 30-Nov | | 30-Nov | | 31-May |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| | | 2008 | | 2007 | | 2008 |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| | Notes | Unaudited | | Unaudited | | Audited |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| | | GBP | | GBP | | GBP |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| ASSETS | | | | | | |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| Non-current assets | | | | | | |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| Property, plant and | | 3,968,387 | | 1,279,848 | | 4,289,671 |
| equipment | | | | | | |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| Goodwill | | - | | 3,046,748 | | 1,103,273 |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| Other intangible assets | | - | | 4,001,978 | | 2,296,338 |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| | | | | | | |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| | | 3,968,387 | | 8,328,574 | | 7,689,282 |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| Current assets | | | | | | |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| Stocks | | - | | - | | 39,870 |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| Tax receivable | | 27,168 | | - | | 241,046 |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| Trade and other receivables | | 71,114 | | 1,790,328 | | 2,475,360 |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| Cash and cash equivalents | | 216,277 | | 5,743,797 | | 2,559,546 |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| | | 314,559 | | 7,534,125 | | 5,315,822 |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| | | | | | | |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| Non-current assets | 2 | 4,657,270 | | - | | - |
| classified as held for sale | | | | | | |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| | | | | | | |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| Total Assets | | 8,940,216 | | 15,862,699 | | 13,005,104 |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| | | | | | | |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| LIABILITIES | | | | | | |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| | | | | | | |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| Non-current liabilities | | | | | | |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| Deferred tax | | - | | 710,371 | | 426,016 |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| | | - | | 710,371 | | 426,016 |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| Current liabilities | | | | | | |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| Bank overdrafts | | - | | 540,650 | | - |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| Interest bearing loans and | | 204,043 | | 161,961 | | 506,719 |
| borrowings | | | | | | |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| Trade and other payables | | 2,244,757 | | 1,483,209 | | 4,966,620 |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| Accruals and deferred | | 360,852 | | 1,827,695 | | 1,500,439 |
| income | | | | | | |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| | | 2,809,652 | | 4,013,515 | | 6,973,778 |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| | | | | | | |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| Liabilities directly | 2 | 3,110,467 | | - | | - |
| associated with non-current | | | | | | |
| assets classified as held | | | | | | |
| for sale | | | | | | |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| | | | | | | |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| Total liabilities | | 5,920,119 | | 4,723,886 | | 7,399,794 |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| | | | | | | |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| Net assets | | 3,020,097 | | 11,138,813 | | 5,605,310 |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| | | | | | | |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| EQUITY | | | | | | |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| | | | | | | |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| Share capital | | 9,890,554 | | 9,881,837 | | 9,881,837 |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| Share premium | | 18,941,554 | | 18,935,452 | | 18,935,452 |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| Retained earnings | | (25,812,011) | | (17,678,476) | | (23,211,979) |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| | | | | | | |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| Total equity attributable | | 3,020,097 | | 11,138,813 | | 5,605,310 |
| to equity holders of the | | | | | | |
| parent | | | | | | |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| | | | | | | |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
| | | 3,020,097 | | 11,138,813 | | 5,605,310 |
+-----------------------------+-------+--------------+---+--------------+---+--------------+
Consolidated Cash Flow Statement (unaudited)
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| | | Half Year | | Half Year | | Year |
| | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| | | 30-Nov | | 30-Nov | | 31-May |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| | | 2008 | | 2007 | | 2008 |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| | | Unaudited | | Unaudited | | Audited |
| | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Consolidated Cash Flow | | | | | | |
| Statement (unaudited) | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| | | GBP | | GBP | | GBP |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Cash flows from operating | | | | | | |
| activities | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Loss for the period | | (2,600,032) | | (2,257,249) | | (7,785,444) |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Adjustments for: | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Impairment of intangible | | - | | - | | 3,505,318 |
| assets | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Amortisation of intangible | | 634,740 | | 446,508 | | 1,183,029 |
| assets | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Depreciation of tangible | | 369,594 | | 325,606 | | 693,817 |
| assets | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Disposal of fixed assets | | - | | - | | (4,622) |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Equity settled share-based | | - | | 565,279 | | 565,279 |
| payment expenses | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Net finance charge | | 7,704 | | 169,634 | | 344,122 |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Tax charge for the year | | (124,649) | | (198,452) | | (764,430) |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| | | (1,712,643) | | (948,674) | | (2,262,931) |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| (Increase)/decrease in | | 1,290,498 | | (840,272) | | (1,525,304) |
| trade and other receivables | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| (Increase)/decrease in | | 19,708 | | 7,214 | | (32,656) |
| stock | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| (Decrease)/increase in | | (1,465,587) | | (2,211,968) | | 712,429 |
| trade and other payables | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| | | (1,868,024) | | (3,993,700) | | (3,108,462) |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Interest paid | | (33,883) | | (237,848) | | (419,053) |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Tax received | | 213,878 | | - | | - |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Net cash from operating | | (1,688,029) | | (4,231,548) | | (3,527,515) |
| activities | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Cash flows from investing | | | | | | |
| activities | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Proceeds from sale of | | - | | - | | 16,750 |
| property, plant and | | | | | | |
| equipment | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Interest received | | 26,179 | | 68,214 | | 74,933 |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Acquisition of intellectual | | - | | - | | (359,000) |
| property | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Acquisition of property, | | (548,049) | | (302,935) | | (3,400,423) |
| plant and equipment | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Net cash from investing | | (521,870) | | (234,721) | | (3,667,740) |
| activities | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Cash flows from financing | | | | | | |
| activities | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Proceeds from the issue of | | 14,819 | | 10,618,500 | | 10,618,494 |
| share capital | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Payment of transaction | | - | | (516,803) | | (516,803) |
| costs | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Proceeds from new loan | | - | | - | | 200,000 |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Repayment of borrowings | | (25,142) | | (156,292) | | (206,333) |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Payment of finance lease | | (123,047) | | (17,555) | | (82,124) |
| liabilities | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Net cash from financing | | (133,370) | | 9,927,850 | | 10,013,234 |
| activities | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Net increase in cash and | | (2,343,269) | | 5,461,581 | | 2,817,979 |
| cash equivalents | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Cash and cash equivalents | | 2,559,546 | | (258,433) | | (258,433) |
| at 1 June | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| Cash and cash equivalents | | 216,277 | | 5,203,148 | | 2,559,546 |
| at period end | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+--------------+---+-------------+---+-------------+
Consolidated Statement of Recognised Income and Expense
For the half year ended 30 November 2008
+-----------------------------+-----------+------------+--------------+--------------+--------------+
| | Share | Share | Retained | Total | Total |
| | Capital | premium | earnings | | Equity |
+-----------------------------+-----------+------------+--------------+--------------+--------------+
| | | | | | |
+-----------------------------+-----------+------------+--------------+--------------+--------------+
| Equity at 1 June 2007 | 7,758,136 | 10,957,455 | (15,986,502) | 2,729,089 | 2,729,089 |
+-----------------------------+-----------+------------+--------------+--------------+--------------+
| | | | | | |
+-----------------------------+-----------+------------+--------------+--------------+--------------+
| Loss for the period | - | - | (2,257,250) | (2,257,250) | (2,257,250) |
+-----------------------------+-----------+------------+--------------+--------------+--------------+
| Issue of shares | 2,123,701 | 7,977,997 | - | 10,101,698 | 10,101,698 |
+-----------------------------+-----------+------------+--------------+--------------+--------------+
| Share based payments | - | - | 565,276 | 565,276 | 565,276 |
+-----------------------------+-----------+------------+--------------+--------------+--------------+
| Equity at 30 November 2007 | 9,881,837 | 18,935,452 | (17,678,476) | 11,138,813 | 11,138,813 |
+-----------------------------+-----------+------------+--------------+--------------+--------------+
| | | | | | |
+-----------------------------+-----------+------------+--------------+--------------+--------------+
| Loss for the period | - | - | (5,533,503) | (5,533,503) | (5,533,503) |
+-----------------------------+-----------+------------+--------------+--------------+--------------+
| | | | | | |
+-----------------------------+-----------+------------+--------------+--------------+--------------+
| Equity at 31 May 2007 | 9,881,837 | 18,935,452 | (23,211,979) | 5,605,310 | 5,605,310 |
+-----------------------------+-----------+------------+--------------+--------------+--------------+
| | | | | | |
+-----------------------------+-----------+------------+--------------+--------------+--------------+
| Loss for the period | - | - | (2,600,032) | (2,600,032) | (2,600,032) |
+-----------------------------+-----------+------------+--------------+--------------+--------------+
| Issue of shares | 8,717 | 6,102 | - | 14,819 | 14,819 |
+-----------------------------+-----------+------------+--------------+--------------+--------------+
| | | | | | |
+-----------------------------+-----------+------------+--------------+--------------+--------------+
| Equity at 30 November 2008 | 9,890,554 | 18,941,554 | (25,812,011) | 3,020,097 | 3,020,097 |
+-----------------------------+-----------+------------+--------------+--------------+--------------+
Notes
1. Basis of preparation
The financial information in these interim results has been prepared using the
recognition and measurement principles of International Accounting Standards,
International Financial Reporting Standards and Interpretations adopted for use
in the European Union (collectively Adopted IFRSs). The principal accounting
policies used in preparing the interim results are those the group expects to
apply in its financial statements for the year ending 31 May 2009 and are
unchanged from those disclosed in the group's Annual Report for the year ended
31 May 2008. The financial information for the six months ended 30 November 2007
and the six months ended 30 November 2008 is unaudited and does not constitute
the group's statutory financial statements for those periods. The comparative
financial information for the full year ended 31 May 2008 has, however, been
derived from the audited statutory financial statements for that period. A copy
of those statutory financial statements has been delivered to the Registrar of
Companies.
The auditors' report on those accounts was unqualified, did not contain a
statement under section 237(2)-(3) of the Companies Act 1985, but did make
reference to an emphasis of matter - Going concern, at the time of issuing the
audited financial statements.
Following the sale of the managed services business, and the issue of the loan
stock in December 2008, the Directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence for the
foreseeable future and for this reason they continue to adopt the going concern
basis in preparing the financial statements.
The interim financial statements do not include all of the information required
for full annual financial statements and do not comply with all the disclosures
in IAS 34 'Interim Financial Reporting'. Accordingly, whilst the interim
statements have been prepared in accordance with IFRS as endorsed by the EU,
they cannot be construed as being in full compliance with IFRS.
2. Discontinued operation
On 27 November 2008 the company announced its intention to dispose of Managed
Services Business and this disposal completed on 15 December 2008.
Accordingly at 30 November 2008 the Managed Services Business is classified
under IFRS5 as a disposal group held for sale and the assets and liabilities of
this disposal group are shown separately on the balance sheet. The results of
the Managed Services Business are shown separately in the Income Statement for
the current half year period (comparatives are restated), and consist of :
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | Half Year | | Half Year | | Year |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | 30-Nov | | 30-Nov | | 31-May |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | 2008 | | 2007 | | 2008 |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | Unaudited | | Restated | | Restated |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Revenue | | 2,841,332 | | 4,259,249 | | 8,534,079 |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Cost of sales | | (623,164) | | (1,316,691) | | (4,071,724) |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Gross profit | | 2,218,168 | | 2,942,558 | | 4,462,355 |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Share based payments | | - | | 565,276 | | 565,279 |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Impairment of goodwill and | | - | | - | | 3,505,318 |
| other intangible assets | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Amortization of intangible | | 1,004,334 | | 970,567 | | 1,876,847 |
| and tangible assets | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Other administrative | | 2,908,767 | | 2,626,329 | | 4,308,747 |
| expenses | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Administrative expenses | | 3,913,101 | | 4,162,172 | | 10,256,191 |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Operating loss | | (1,694,933) | | (1,219,614) | | (5,793,836) |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Finance income | | - | | - | | - |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Finance costs | | - | | (223,743) | | (353,055) |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Loss before tax | | (1,694,933) | | (1,443,357) | | (6,146,891) |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Tax expense | | 124,649 | | 198,452 | | 523,384 |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Loss for the period from | | (1,570,284) | | (1,244,905) | | (5,623,507) |
| discontinued operations | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
The net assets relating to the Managed Service Business amounted to GBP1.5M at
30 November 2008, including goodwill of GBP1.1 m. Movements in working capital
balances arising from ongoing trading in the period from 1 December up to
completion will be taken into account together with costs associated with the
disposal in determining the expected net gain on disposal.
No separate segmental information is provided as the continuing operations of
the group essentially comprise one business activity of Data Centre operations,
as shown in the Income Statement.
Cashflow information relating to the discontinued operations is summarised as
follows:
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | Half Year | | Half Year | | Year |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | 30-Nov | | 30-Nov | | 31-May |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | 2008 | | 2007 | | 2008 |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | Unaudited | | Restated | | Restated |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | | | | | |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Operating activities | | (1,051,099) | | (2,211,449) | | (408,908) |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Investing activities | | (28,896) | | (302,935) | | (568,999) |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| Financing activities | | (93,481) | | (173,847) | | (88,458) |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
| | | (1,173,476) | | (2,688,231) | | (1,066,365) |
+-----------------------------+-------+-------------+---+-------------+---+-------------+
3. Dividend
No interim dividend has been proposed.
4. Taxation
+-----------------------------+-------+------------+---+------------+---+------------+
| | | Half Year | | Half Year | | Year |
+-----------------------------+-------+------------+---+------------+---+------------+
| | | 30-Nov | | 30-Nov | | 31-May |
+-----------------------------+-------+------------+---+------------+---+------------+
| | | 2008 | | 2007 | | 2008 |
+-----------------------------+-------+------------+---+------------+---+------------+
| | | Unaudited | | Restated | | Restated |
+-----------------------------+-------+------------+---+------------+---+------------+
| | | | | | | |
+-----------------------------+-------+------------+---+------------+---+------------+
| Current tax credit/(charge) | | | | | | |
+-----------------------------+-------+------------+---+------------+---+------------+
| Current year (R and D tax | | - | | - | | 241,046 |
| credit) | | | | | | |
+-----------------------------+-------+------------+---+------------+---+------------+
| Deferred tax credit | | 124,649 | | 198,452 | | 523,384 |
| (discontinued activities) | | | | | | |
| on Intangible assets | | | | | | |
+-----------------------------+-------+------------+---+------------+---+------------+
| Total tax in income | | 124,649 | | 198,452 | | 764,430 |
| statement | | | | | | |
+-----------------------------+-------+------------+---+------------+---+------------+
| | | | | | | |
+-----------------------------+-------+------------+---+------------+---+------------+
5. Share capital
On 31 July 2008 the company allotted 43,589 ordinary shares, at a price of 34
pence per share, with a nominal value of 20 pence each in settlement of an
outstanding loan relating to the purchase of NSA Solutions Limited in 2006.
6. Post balance sheet events
In addition to the completion of the Managed Services Business Disposal as
referred to above, the company initiated the following fundraising in December
2008. The fundraising comprise of the following two elements:
* Convertible Loan Notes
GBP1.279M "A" 2011 Convertible Loan notes; and
GBP0.721M "B" 2013 Loan notes
* Equity
966,667 new ordinary shares of 1p at an issue price of 3p per share
7. Distribution of interim report
This interim report is being posted to all shareholders and will be available on
application to the Company's registered office and from the Company's
website www.cantono.com.
Cantono PLC
Eamus Halpin, Chief Executive 01895 444 420
Brewin Dolphin Investment Banking
Neil Baldwin, Director 0845 270 8612
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EAAAXAADNEFE
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