RNS Number:3531L
Contemporary Enterprises PLC
21 May 2003
CONTEMPORARY ENTERPRISES plc
Interim Results for the six months ended 31 March 2003
Contemporary Enterprises plc acquired Ausped Limited, an established software
development company, in December 2002.
Ausped provides innovative solutions to meet the increasing requirements for
real-time, accurate, qualitative management information. Ausped specialises in
developing Hand Held Computer applications to capture data for the purpose of
compliance monitoring & auditing and is at the forefront of the use of Radio
Frequency Identification (RFID) technology.
* Good progress since acquisition of Ausped
* Energetic steps being taken to broaden the customer base
* In spite of increasing staff establishment and promotional expenditure,
the operating loss of the acquisition was held to only #(5,000), before
goodwill amortisation.
Commenting on prospects, Henry Edwards, Chairman, said:
"The proven success of our existing systems and their excellent reputation with
our customers, the enthusiasm and high professionalism of our staff coupled with
the knowledge that we have adequate funds for our planned developments and
expansion generates optimism for the company's successful future."
21 May 2003
ENQUIRIES:
Contemporary Enterprises plc Tel: 0870 011 2440
Tony Edwards, Finance Director
College Hill Tel: 020 7457 2020
Richard Pearson
Chairman's statement
The acquisition of Ausped Limited was approved in December 2002 at an
Extraordinary General Meeting when three of its directors were warmly welcomed
to the board.
Immediate steps were taken in the beginning of the year to plan and implement
the company's aim to become the market leader in its sector in the UK within
three years through the various actions to be taken outlined at the EGM.
Good progress has been made in all areas toward this aim whilst recognising that
the desired results can only be achieved in the medium term. In the short term
increasing the staff establishment and promotional expenditure will have some
adverse impact on profitability. Nevertheless, turnover in the first three
months of 2003 has increased significantly compared to the same period last year
enabling the loss attributable to the acquisition to be held down to only #
(5,000) before goodwill amortisation.
The energetic steps being taken to both broaden the customer base and offer
solutions for any commercial activity in part based on our well proven existing
systems is making progress. However it is realistic to anticipate that with
longer lead times for larger contracts and a slow pace of current economic
activity, a significant improvement in results is unlikely to occur until 2004
and beyond.
The proven success of our existing systems and their excellent reputation with
our customers, the enthusiasm and high professionalism of our staff coupled with
the knowledge that we have adequate funds for our planned developments and
expansion generates optimism for the company's successful future.
Henry Edwards
Chairman
Independent review report to Contemporary Enterprises plc
Introduction
We have been instructed by the company to review the financial information for
the six months ended 31 March 2003 set out on pages 3 to 7. We have read the
other information contained in the interim report and considered whether it
contains any apparent misstatements or material inconsistencies with the
financial information.
This report is made solely to the company in accordance with the terms of our
engagement to assist the company in meeting the requirements of the rules of the
London Stock Exchange for companies trading securities on the Alternative
Investment Market. Our review has been undertaken so that we might state to the
company those matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company for our review work, for
this report, or for the conclusions we have reached.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The directors
are responsible for preparing the interim report in accordance with Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed. The directors of Contemporary
Enterprises plc have voluntarily complied with this requirement in preparing the
interim report.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practice Board for use in the United Kingdom. A review
consists principally of making enquiries of management and applying analytical
procedures to the financial information and underlying financial data and based
thereon, assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets, liabilities and
transactions. It is substantially less in scope than an audit performed in
accordance with United Kingdom Auditing Standards and therefore provides a lower
level of assurance than an audit. Accordingly we do not express an audit
opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 March 2003.
BDO STOY HAYWARD
Chartered Accountants
London
Continuing operations
Acquisitions** Total
Note 6 months to 6 months to 6 months to 5 months to 18 months to
31 March 31 March 2003 31 March 30 September 30 April
2003* (unaudited) 2003* 2002 2002
(unaudited) (unaudited) (unaudited) (audited)
# # # # #
Turnover - 111,921 111,921 - -
Cost of sales - (22,852) (22,852) - -
________ ________ ________ _________ _________
Gross Profit - 89,069 89,069 - -
Administrative expenses
-Goodwill Amortisation - (18,797) (18,797) - -
-Other (30,995) (94,324) (125,319) (42,068) (144,170)
(30,995) (113,121) (144,116) (42,068) (144,170)
________ ________ ________ _________ _________
Operating loss (30,995) (24,052) (55,047) (42,068) (144,170)
Interest receivable 11,379 11,830 44,129
________ _________ _________
Loss on ordinary activities
before and after taxation and
retained loss for the
period (43,668) (30,238) (100,041)
======== ======== ========
Basic and diluted loss per
share 3 (1.43)p (1.37)p (6.2)p
There are no other recognised gains and losses other than those stated above.
* The next audited financial statements will be for the period ended 30
September 2003.
** The company acquired the entire shareholding of Ausped Limited on 24 December
2002. (see note 2)
Consolidated Balance sheet at 31 March 2003
31 March 30 September 30 April
2003 2002 2002
(unaudited) (unaudited) (audited)
# # #
Fixed assets
Intangible 1,489,959 - -
Tangible 27,057 - -
_________ _________ _________
1,517,016 - -
__________ _________ _________
Current assets
Stocks 3,687 - -
Debtors 161,544 12,136 13,367
Cash at bank and in hand 200,502 871,970 913,033
_________ _________ _________
365,733 884,106 926,400
Creditors: amounts falling due within one (103,061) (2,435) (14,491)
year _________ _________ _________
Total assets less current liabilities 1,779,688 881,671 911,909
======== ======== ========
Capital and reserves
Called up share capital 1,900,000 1,100,000 1,100,000
Share premium account 141,685 - -
Profit and loss account (261,997) (218,329) (188,091)
_________ _________ _________
Shareholders funds - equity 1,779,688 881,671 911,909
======== ======== ========
Consolidated Cash flow statement for the 6 months to 31 March 2003
6 months to 5 months to 18 months to
31 March 30 September 30 April
2003* 2002* 2002
(unaudited) (unaudited) (audited)
# # #
Net cash outflow from operating activities (232,750) (52,893) (138,938)
Returns on investments and servicing of
finance 11,379 11,830 40,021
Interest received
___________ ___________ ___________
(221,371) (41,063) (98,917)
Capital Expenditure
Purchase of tangible fixed assets (25,453) - -
Acquisition and disposal
Purchase of subsidiary (424,175) - -
Cash acquired with subsidiary 17,846
___________ ___________ ___________
(653,153) - -
Financing
Issue of ordinary share capital - - 1,100,000
Share issue costs (18,315) - (88,050)
___________ ___________ ___________
(Decrease)/increase in cash in period (671,468) (41,063) 913,033
========== ========== ==========
Reconciliation of operating loss to net cash
outflow from operating activities
Operating loss (55,047) (42,068) (144,170)
Depreciation 1,858 - -
(Increase) in stock (247) - -
Amortisation of goodwill 18,797 - -
(Increase)/decrease in debtors (57,317) 1,231 (9,259)
(Decrease)/increase in creditors (140,794) (12,056) 14,491
___________ ___________ __________
Net cash outflow from operating activities (232,750) (52,893) (138,938)
========== ========== =========
* The next audited financial statements will be for the period ended 30
September 2003.
Notes to the interim statement for the 6 months to 31 March 2003
1 Basis of preparation
The unaudited results for the six months ended 31 March 2003 have been prepared
on a consistent basis and using the same accounting polices as those adopted in
the financial statements for the period ended 30 April 2002 except that
following the acquisition of Ausped Limited, Contemporary Enterprises plc has
adopted these additional accounting policies below.
Turnover
Turnover represents amounts receivable for goods and services net of VAT and
trade discounts.
Research and development
Development costs are capitalised where the directors expect the commercial
success and financial benefits thereof will exceed development costs already
incurred in accordance with SSAP 13. These development costs are written off to
the profit and loss account over the expected number of installation of each
product to match revenues generated. Development costs capitalised are reviewed
annually and written off where the circumstances giving rise to capitalisation
no longer apply. All other development expenditure is written off as incurred.
Tangible fixed assets and depreciation
Tangible fixed assets are stated at cost less depreciation. Depreciation is
provided at rates calculated to write off the cost less estimated residual value
of each asset over its expected useful life, as follows:
Computer and office equipment 20% Straight line
Fixtures, fittings & furniture 10% Straight line
Leasing
Rentals payable under operating leases are charged against income on a straight
line basis over the lease term.
Stock
Stock is valued at the lower of cost and net realisable value.
Deferred taxation
Deferred taxation is provided at appropriate rates on all timing differences
using the liability method.
Goodwill
Goodwill arising on an acquisition of a subsidiary undertaking is the difference
between the fair value of the consideration paid and the fair value of the
assets and liabilities acquired. It is capitalised and amortised through the
profit and loss account over 20 years. Where consideration is contingent on
uncertain future events, it is recognised to the extent that it is reasonably
expected to be payable.
Impairment tests on the carrying value of goodwill are undertaken:
* at the end of the first full financial year following acquisition.
* in other periods if events or changes in circumstances indicate that
the carrying value may not be recoverable.
2 Basis of Consolidation
On 24 December 2002 the Company became the legal parent company of Ausped
Limited in a share and cash transaction with a deferred consideration payable of
up to a further #3,600,000 in deferred shares dependent on exceeding profit
targets in the next three accounting years.
Goodwill amounting to #1,508,756 arose on the difference between the fair value
of Ausped Limited's share capital and the fair value of its net liabilities at
the acquisition date. The goodwill is being amortised over a 20 year period.
3 Loss per ordinary share
The calculation of loss per share for the period ended 31 March 2003 is based
upon a loss of #43,668 (2002 interim - #30,238, 2002 final - #100,041) and the
number of weighted average ordinary 50p shares in issue of 3,061,539 (2002
interim - 2,200,000, 2002 final - 1,607,463).
There are no potentially dilutive shares in issue.
4 Financial information
The financial information set out on pages 3 to 7 does not constitute statutory
accounts within the meaning of section 240 of the Companies Act 1985. The
financial information for the period ended 30 April 2002 has been extracted from
the audited financial statements for the period, which have been filed with the
Registrar of Companies. The audit report in those accounts was unqualified and
did not contain a statement under section 237(2) or (3) of the Act. The
financial information for the five months ended 30 September 2002 and six months
ended 31 March 2003 have been reviewed as described on page 2.
5 Interim report
Copies of the interim statements for the period ended 31 March 2003 will be sent
to shareholders on 21 March 2003. Further copies will be available from the
company's registrars Capita Registrars, Shareholder Services Department, Bourne
House, 34 Beckenham Road, Beckenham, Kent, BR3 4TU.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SEUFWSSDSELI