Interim Results
March 12 2003 - 9:04AM
UK Regulatory
RNS Number:6423I
Room Service Group PLC
12 March 2003
ROOM SERVICE GROUP PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2002
THE DIRECTORS REPORT
The expected return to profitability in the first half of 2002, following the
reverse take-over and re-construction in January, failed to materialise, because
of the deteriorating market conditions in which the newly acquired trading
operation was forced to operate.
The Company's major subsidiary suffered a substantial setback to its food
delivery business as a result of the September 2001 terrorist attacks. Its
impact upon the US corporate market in London was significant, as the levels of
personnel coming to London reduced considerably. Subsequently the downturn in
the level of corporate business generally, in the first half of the year,
compounded Room Service Deliveries' problems.
The Company recognised the need to market and promote its food delivery services
more widely and intensely whilst diversifying its activities. However this was
severely hampered by the lack of sufficient funding.
Since the early part of last summer the company has been strenuously seeking new
sources of capital funding. During the second half of 2002 several potential
investors emerged but, unfortunately, none of these proposals could be
successfully concluded.
The Company's shares were suspended in October 2002, initially on a
technicality, revolving around the timing of the publication of the half yearly
figures. However, subsequently, following advice from its brokers, the
suspension was maintained as the Directors were involved in advanced
negotiations regarding a possible take-over and until the Company's financial
position could be clarified.
During this time the Company continued to record trading losses, on a monthly
basis and the Directors realised that, in the best interests of the
shareholders, the food delivery business should be disposed of. It became
evident, however, that liquidation was the only possible route. The Board
further took action to reduce its operating costs and ensure that its actual and
contingent liabilities were kept to a minimum whilst maintaining existing
operations.
As additional funding had not been forthcoming the Directors believe that they
best protect the shareholders' position by seeking a suitable party to complete
the re-structuring of the business and inject the required funding.
The Company at present has creditors of approx 190k and is looking to realise
assets to reduce this amount and is offering creditors an alternative for full
and final settlement of their outstanding amounts.
The Company, as assisted by its advisors, are in negotiations with a third party
who may be interested in obtaining a stake in Room Service PLC and who also may
provide the company with a working capital facility. Whilst preliminary
indications of interest have been expressed, informal discussions are currently
taking place but should the outcome of the present discussions be positive it
will be the Boards intention to apply for the suspension of dealings to be
lifted. The Board will continue to keep shareholders informed on progress.
DIRECTORS
ROOM SERVICE GROUP PLC
11 March 2003
CONSOLIDATED profit and loss account
For the six months ended 30 June 2002
6 months ended 6 months ended Year ended
30 June 2002 30 June 2001 31 December 2001
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Turnover 1,928 867 991
Cost of sales 1,312 480 380
_______ ______ ______
Gross profit 616 387 611
Administrative expenses (1,105) (2,129) (4,185)
Accounts written off investments - - (2,704)
_______ ______ ______
Operating loss (489) (1,742) (6,278)
Profit on disposal of discontinued operation - 17 684
Share of operating loss of associated undertakings - (160) -
Interest payable and similar charges (24) - -
Interest receivable and similar income 3 68 90
_______ ______ ______
Loss on ordinary activities before taxation (510) (1,817) (5,504)
Tax on loss on ordinary activities - - -
_______ ______ ______
Loss on ordinary activities after taxation (510) (1,817) (5,504)
Minority interest - (186) 25
_______ ______ ______
Retained loss for the period (510) (2,003) (5,479)
_______ ______ ______
Loss per ordinary share (0.41p) (6.00p) (13.90p)
Fully diluted loss per ordinary share (0.40p) (5.00p) (13.80p)
Consolidated balance sheet
30 June 2002 31 December 2001 30 June 2001
(unaudited) (audited) (unaudited)
#'000 #'000 #'000
Intangible fixed assets
Goodwill 2,510 - 605
______ ______ _____
Tangible fixed assets
Investments - 75 2,054
Investments in associates - - (78)
Improvements to property, plant and equipment 254 7 200
______ ______ _____
254 82 2,176
Current assets ______ ______ _____
Stock 21 - -
Investments 241 425 -
Debtors 459 376 642
Cash at bank and in hand - 728 1,824
______ _____ ______
721 1,529 2,466
______ _____ ______
Creditors: amounts falling due within one year (1,252) (409) (769)
______ _____ ______
Net current (liabilities)/assets (531) 1,120 1,697
______ _____ ______
Total assets less current liabilities 2,233 1,202 4,478
Provisions for liabilities and charges 12 (200) -
______ _____ ______
Net assets 2,245 1,002 4,478
====== ===== ======
Capital and reserves (note 5)
Called up Share Capital 5,004 4,180 4,180
Share Premium 10,226 9,371 9,371
Profit and loss account (12,985) (12,527) (9,051)
_______ _______ ______
Equity shareholders funds 2,245 1,024 4,500
Minority Interest - (22) (22)
______ _______ ______
Total capital and reserves 2,245 1,002 4,478
====== ====== =====
Consolidated cash flow statement
For the six months ended 30 June 2002
6 months ended 6 months ended Year ended
30 June 2002 30 June 31 December 2001
(unaudited) (unaudited) (unaudited)
#'000 #'000 #'000 #'000 #'000 #'000
Net cash outflow from operating activities (note (818) (1,750) (2,673)
2)
Returns on investments and servicing of finance
Interest paid (24) - -
Interest received 3 (21) 68 68 90 90
_____ _____ _____
Acquisitions
Acquisition of subsidiary (note 4) (207) (18) (18)
Net overdraft acquired with subsidiary (117) - -
Acquisition of fixed assets (26) (25) (36)
Acquisition of fixed asset investments - (40) (649)
Loans and advances to associates - (79) (509)
Loans and advances to fixed asset investments - (350) (301) (463) (98) (1,310)
_____ _____ _____
Disposals
Cash balances of discontinued activities - (28) (77)
Sale of business - - 684
Sale of tangible fixed assets - - 1 (27) 18 625
_____ _____ _____
Financing
Issue of equity shares 265 - -
Decrease in cash in the period (note3) (924) (2,172) (3,268)
==== ====== =====
Notes to the financial statements
1. Accounting policies
Basis of accounting
The financial statements have been prepared in accordance with the
applicable accounting standards under the historical cost accounting rules.
Basis of consolidation
The consolidated financial statements incorporate the financial statements
of the company and all its subsidiaries. The results and cash flows of
companies entering the group are included from the date of acquisition. The
results and cash flows of companies leaving the group are included up to the
date of disposal. The net assets of subsidiaries are included on the basis
of their fair value.
Goodwill
Goodwill arising on the acquisition of Room Service (UK) Limited has been
capitalised and is being amortised over its estimated useful life of ten
years.
2. Reconciliation of operating loss to net cash outflow from operating
activities
30 June 2002 30 June 2001 31 December 2001
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Operating loss (489) (1,742) (6,278)
Depreciation 28 101 263
Amortisation 132 13 618
Loss on discontinued business - - 87
Writedown of fixed asset investments - - 2,704
Decrease/(increase) in stocks 3 - -
Decrease/(increase) in current asset investments 184 - -
Decrease/(increase) in debtors 83 5 177
(Decrease)/increase in creditors (559) (112) (429)
(Decrease)/increase in provisions (200)' (15) 185
_____ ______ ______
Net cash outflow from operating activities (818) (1,750) (2,673)
_____ ______ ______
3. Reconciliation of net cash flow to movement in net debt
30 June 2002 30 June 2001 31 December 2001
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Net (debt)/cash brought forward 728 3,996 3,996
Movement in funds (924) (2,172) (3,268)
_____ ______ _____
Net (debt)/cash carried forward (196) 1,824 728
_____ ______ _____
4. Summary of the effects of acquisition of Room Service UK Limited
Net assets acquired #'000
Tangible fixed assets 249
Stocks 24
Debtors 166
Bank loans and overdraft (117)
Other creditors (1,204)
Provisions (12)
______
(894)
Goodwill 2,642
______
1,748
______
Consideration
Shares allotted 1,466
Acquisition expenses 207
Cost of existing investment transferred from fixed assets 75
______
1,748
______
5. Share capital and reserves
Share Capital Share premium Profit and loss
#'000 #'000 #'000
At 1 January 2002 4,180 9,371 (12,527)
Shares issued on acquisition 698 768
of Room Service (UK) Limited
Shares issued for cash 126 139
Loss for the period (510)
Costs of share issue (52) 52
_____ ______ _______
At 30 June 2002 5,004 10,226 (12,985)
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