TIDMONE
RNS Number : 1996B
One Delta PLC
28 March 2013
28 March 2013
One Delta plc
("One Delta" or the "Company")
Audited financial statements for the fourteen months ended 30
November 2012
Chairman's Statement
Restructure & Change of Director
As shareholders will be aware, the Company was admitted to
trading (following the completion of a reverse takeover) in January
2012. At the time of that transaction, One Delta Limited was an
early stage company with the majority of its business relationships
based on products that had yet to come to market. It was felt that
One Delta Limited was capable of offering exciting growth
opportunities because of these relationships and the Board had
hoped that they would come to fruition during the period under
review.
Unfortunately, One Delta Limited has faced considerable
challenges in achieving the revenue that the Board and shareholders
had hoped for since admission. New product launches, focused
primarily in the Construction Sector and Public Sector, in the
current economic environment have been very difficult and the team
have been further frustrated by longer sales cycles than expected.
In addition, the lack of one of the larger contracts that the team
had spent considerable time pursuing has undermined the Company's
ability to deliver growth. Ultimately, although the business has
moved from R&D to revenue, the size and pace of the development
has been well behind where the Board expected it to be at this
stage.
The results for the 14 months to 30 November 2012 show revenue
of GBP33,318 and a loss for the period of GBP780,602 excluding the
exceptional item of GBP1,135,755 being the impairment of goodwill.
At the period end the group had cash resources of GBP149,750.
Given the delay in commercialisation and the impact on
resources, it has been necessary for the Board to review the
structure and the business of the group.
Following discussions within the Board, we have concluded that
the best course of action would be to restructure the group to
maintain an ongoing interest in One Delta Limited while reducing
shareholders' exposure to any losses. As such, this will also allow
the Board to assess any other opportunities for the Company.
Accordingly, the Company has entered into a conditional share
purchase agreement to dispose of 47.5% of One Delta Limited to Phil
Dale, Richard Ludford and I. In consideration for the interest in
One Delta Limited we will transfer back to the Company our holding
of 15,000,005 ordinary shares in itself. These shares include
shares subscribed for and those received as consideration. These
shares will be held in treasury and it is intended that they will
be cancelled in due course.
In addition, upon completion of the transaction, the Company
will enter into a management agreement with One Delta Limited, Phil
Dale, Richard Ludford and I, which will govern how One Delta
Limited will be run following the transaction.
Completion of the proposed transaction is subject to certain
conditions including shareholder approval at an Extraordinary
General Meeting of the Company.
Following completion of the transaction but prior to
cancellation of the shares, the Company will have 31,574,356
ordinary shares in issue but only 16,574,351 voting rights.
One Delta Plc. will also maintain a keen interest in the success
of the trading business.
These changes are a positive step forward and ensure that One
Delta Plc. has the maximum flexibility and the trading business can
remain as a significant part of the business.
As a result of these changes, I have decided to stand down as
Chairman and resign from the Board, so I can focus my efforts on
the trading business, which I believe will be a major source of
future value for One Delta plc.
Related party transaction
Under the AIM Rules, the sale of part of One Delta Limited to
Phil Dale, Richard Ludford and I, is classified as a related party
transaction for the purposes of Rule 13 of the AIM Rules.
The Independent Directors, being Roger King and Roger Maddock,
having consulted with the Company's Nominated Adviser, Sanlam
Securities UK, consider the terms of the transaction to be fair and
reasonable insofar as the Company's shareholders are concerned. In
advising the Independent Directors, Sanlam Securities UK has taken
into account the commercial judgment of the Independent
Directors.
Sean Reel
Chairman
28 March 2013
Enquiries:
One Delta plc
Sean Reel, Executive Chairman Tel: +44 (0) 845
Roger King, Executive Director 0945 623
Tel: +44 (0)1534
511 750
Sanlam Securities UK Limited (Nominated Adviser
and Broker)
Simon Clements/Virginia Bull Tel: +44 (0)20 7628
2200
Consolidated Statement of Comprehensive Income
Company
Group Fourteen Group and
Fourteen months Company
months ended ended Year ended
30 November 30 November 30 September
2012 2012 2011
Note GBP GBP GBP
Sales income 33,318 - 380
Cost of sales (39,773) - -
-------------- -------------- ---------------
Gross loss (6,455) - 380
Other income 478 - 15,795
Rental expenses 4 (11,054) - (70)
Investment management fee 4 - - (88,288)
Other administrative expenses (753,571) (530,868) (201,362)
Finance income - - 2,290
Impairment of goodwill / investment
in subsidiary 4 (1,135,755) (1,360,000) -
Amortisation of intangible asset 4 (10,000) - -
-------------- -------------- ---------------
Net loss before taxation (1,916,357) (1,890,868) (271,255)
Taxation - - -
Provision for winding down expenses - - 265,524
-------------- -------------- ---------------
Net loss for the year from continuing
operations (1,916,357) (1,890,868) (5,731)
-------------- -------------- ---------------
Basic earnings per share (pence) 2 (7.3) (7.2) (0.2)
-------------- ---------------
Diluted earnings per share (pence) 2 (7.3) (7.2) (0.2)
-------------- ---------------
Notes
(a) The Group and Company had no recognised gains or losses
other than those disclosed in the Consolidated Statement of
Comprehensive Income.
(b) The loss per share is calculated on the weighted average
number of Participating Shares in issue during the year.
Consolidated Statement of Financial Position
30 November 30 September
2012 2011
Notes GBP GBP
Non-current assets
Goodwill 9 300,000 -
Intangible asset 9 40,000 -
------------ -------------
340,000 -
Current assets
Inventory 16,818 -
Other receivables 6 15,708 3,375
Cash and cash equivalents 149,750 310,096
------------ -------------
182,276 313,471
Liabilities - amounts falling due
within one year
Other payables 7 (54,199) (47,079)
Net current assets 128,077 266,392
Total net assets 468,077 266,392
------------ -------------
Equity
Stated capital 5,326,952 3,208,910
Capital reserve (706,395) (706,395)
Issue costs reserve (679,868) (679,868)
Revenue reserve (3,472,612) (1,556,255)
Total shareholders' funds (all equity) 468,077 266,392
------------ -------------
Company Statement of Financial Position
30 November 30 September
2012 2011
Notes GBP GBP
Non-current assets
Investment in subsidiaries 8 340,000 -
------------ -------------
340,000 -
Current assets
Intercompany loan 60,000 -
Other receivables 6 3,200 3,375
Cash and cash equivalents 125,733 310,096
------------ -------------
188,933 313,471
Liabilities - amounts falling due
within one year
Other payables 7 (35,367) (47,079)
Net current assets 153,566 266,392
------------ -------------
Total net assets 493,566 266,392
------------ -------------
Equity
Stated capital 5,326,952 3,208,910
Capital reserve (706,395) (706,395)
Issue costs reserve (679,868) (679,868)
Revenue reserve (3,447,123) (1,556,255)
------------ -------------
Total shareholders' funds (all equity) 493,566 266,392
------------ -------------
Statement of Cash Flows
Group Company Group and
Fourteen Fourteen Company
months ended months ended Year ended
30 November 30 November 30 September
2012 2012 2011
Notes GBP GBP GBP
Net cash outflow from operating
activities 10 (579,667) (329,913) (292,466)
Cash flow from investing activities
Cash from acquisition of subsidiary 107,832 - -
Interest income received - - 2,529
Deposit recovered - - 1,099,997
-------------- -------------- --------------
Net cash inflow from investing
activities 107,832 - 1,102,526
-------------- -------------- --------------
(Decrease) / increase in cash
before financing (471,835) (329,913) 810,060
-------------- -------------- --------------
Cash flow from financing activities
Shares issued 223,750 208,750 150,000
Loan payments received / (issued) 87,739 (63,200) -
Redemption of shares - - (1,434,735)
-------------- -------------- --------------
Net cash inflow / (outflow)
from financing activities 311,489 145,550 (1,284,735)
-------------- -------------- --------------
Net decrease in cash and cash
equivalents (160,346) (184,363) (474,675)
--------------
Cash and cash equivalents at
the start of the period 310,096 310,096 784,771
--------------
Cash and cash equivalents at
the end of the period 149,750 125,733 310,096
-------------- -------------- --------------
Statement of changes in equity
Stated Capital Issue costs Revenue
Group Capital reserve reserve reserve Total
GBP GBP GBP GBP GBP
For the fourteen months ended
30 November 2012
At 1 October 2011 3,208,910 (706,395) (679,868) (1,556,255) 266,392
Loss for the period - - - (1,916,357) (1,916,357)
Issue of fee shares 209,292 - - - 209,292
Issue of consolidation shares 1,700,000 - - - 1,700,000
Issue of participation shares 208,750 - - - 208,750
------------ ---------- ------------ ------------ ------------
At 30 November 2012 5,326,952 (706,395) (679,868) (3,472,612) 468,077
------------ ---------- ------------ ------------ ------------
For the year ended 30 September
2011
At 1 October 2010 4,493,645 (706,395) (679,868) (1,550,524) 1,556,858
Redemption of shares (1,434,735) - - - (1,434,735)
Issue of participation shares 150,000 - - - 150,000
Loss for the year - - - (5,731) (5,731)
------------ ---------- ------------ ------------ ------------
At 30 September 2011 3,208,910 (706,395) (679,868) (1,556,255) 266,392
------------ ---------- ------------ ------------ ------------
Stated Capital Issue costs Revenue
Company Capital reserve reserve reserve Total
GBP GBP GBP GBP GBP
For the fourteen months ended
30 November 2012
At 1 October 2011 3,208,910 (706,395) (679,868) (1,556,255) 266,392
Loss for the period - - - (1,890,868) (1,890,868)
Issue of fee shares 209,292 - - - 209,292
Issue of consolidation shares 1,700,000 - - - 1,700,000
Issue of participation shares 208,750 - - - 208,750
------------ ---------- ------------ ------------ ------------
At 30 November 2012 5,326,952 (706,395) (679,868) (3,447,123) 493,566
------------ ---------- ------------ ------------ ------------
For the year ended 30 September
2011
At 1 October 2010 4,493,645 (706,395) (679,868) (1,550,524) 1,556,858
Redemption of shares (1,434,735) - - - (1,434,735)
Issue of participation shares 150,000 - - - 150,000
Loss for the year - - - (5,731) (5,731)
------------ ---------- ------------ ------------ ------------
At 30 September 2011 3,208,910 (706,395) (679,868) (1,556,255) 266,392
------------ ---------- ------------ ------------ ------------
Notes
(a) The capital reserve arose from recognised losses on property development and holding.
(b) The issue costs reserve arose from expenses incurred on a share issue in 2006.
Notes to the financial statements
1. Basis of preparation
The financial information set out above does not constitute the
Company's statutory accounts for the 14 months ended 30 November
2012 and the year ended 30 September 2011, but is derived from
those accounts. Statutory accounts for 2011 have been delivered to
the Registrar of Companies and those for 2012 will be delivered
following completion of those accounts and the Company's Annual
General Meeting. The Auditors have reported on the accounts for the
14 months ended 30 November 201; their report was unqualified.
The financial statements have been prepared for a 14 month
period to align with new group accounting arrangements after the
acquisition of One Delta Limited. Users of these financial
statements should be aware that, because of this, amounts shown in
the Consolidated Statement of Comprehensive Income will not be
entirely comparable.
The consolidated financial statements have been prepared under
the historical cost convention, as modified to include the
revaluation of quoted investments and investment properties and in
accordance with applicable Accounting Standards as adopted by the
European Union. Applicable Accounting Standards for these purposes
are International Financial Reporting Standards ("IFRS"), as
adopted by the European Union.
Following the group restructuring carried out after the year end
and a review of the business plan and related commitments, the
Directors have concluded that the Group has adequate financial
resources to continue in operational existence for the foreseeable
future and therefore continue to adopt the going concern basis in
preparing the accounts.
2. Loss per share
Basic earnings per share amounts are calculated by dividing the
net loss for the period attributable to ordinary equity holders of
the Company by the weighted average number of participating
ordinary shares outstanding during the year.
Diluted earnings per share are not applicable to the Company,
since there is only one participating class of share issued by the
Company.
The following reflects the income and share data used in the
basic earnings per share computation:
Group fourteen Company fourteen Group and
months months ended Company year
ended 30 30 November ended 30 September
November 2012 2012 2011
Loss attributable to ordinary
shareholders GBP(1,916,357) GBP(1,890,868) GBP(5,731)
Weighted average of shares
in issue 26,366,056 26,366,056 2,869,107
Basic and diluted loss per
share (7.3)p (7.2)p (0.2)p
3. Operating segment
The subsidiary company, One Delta Limited, is currently in the
early stages of developing its technology and hence only has one
operating and geographical segment.
4. Other operating expenses
The profit for the period is stated after charging the
following:
Group
Fourteen Company Fourteen Group and
months months ended company
ended 30 30 November Year ended
November 2012 30 September
2012 2011
GBP GBP GBP
Impairment of goodwill / investment
in subsidiary 1,135,755 1,360,000 -
Amortisation of intangible assets 10,000 - -
Director loans written off 80,509 - -
Wages and salaries 69,945 - -
Research and development 16,386 - -
Auditors' fees - for audit services 20,300 17,900 12,700
Other amounts due to auditors 3,600 3,600 -
Directors' remuneration 62,616 62,616 40,333
Cost of inventories sold 39,773 - -
Rental expenses 11,054 - 70
Provision for winding down expenses - - (265,524)
Acquisition costs 227,129 227,129 -
5. Taxation
Profits arising in the company for the 2012 Year of Assessment
will be subject to Jersey Income Tax at the rate of NIL per cent
(2011: NIL per cent).
30 November 30 September
2012 2011
Reconciliation of taxable profit
Net loss on ordinary activities before finance
costs and taxation
(1,916,357) (271,255)
Adjustment for disallowable income and expenses 1,916,357 271,255
------------ -------------
Taxable profit - -
------------ -------------
6. Other receivables
Group Company
30 November 30 September 30 November 30 September
2012 2011 2012 2011
GBP GBP GBP GBP
Accounts receivable 15,708 - 3,200 -
Prepayments - 3,375 - 3,375
------------ -------------
15,708 3,375 3,200 3,375
------------ ------------- ------------ -------------
7. Other payables
Group Company
30 November 30 September 30 November 30 September
2012 2011 2012 2011
GBP GBP GBP GBP
Accruals 37,320 30,200 18,488 30,200
Tax 16,879 16,879 16,879 16,879
------------ -------------
54,199 47,079 35,367 47,079
------------ ------------- ------------ -------------
8. Investment in subsidiaries
The Company has the following investments in subsidiaries:
Country of Class of
Incorporation shares held %
England and
One Delta Limited Wales Ordinary 100%
England and
Fusion Delta Limited Wales Ordinary 100%
On 23 December 2011 the Company acquired the entire shareholding
of One Delta Limited. The consideration of GBP1,700,000 was met by
the issue of 21,250,002 shares in One Delta plc. to the previous
shareholders of One Delta Limited. The value of 8 pence per share
was a combination of the value attributed to Cholet Investments
plc. and the price at which investors were prepared to subscribe
the additional GBP275,750 on the reverse take-over.
Of the issue of these shares, 89% were defined as Locked-in and
therefore specified shareholders were unable to dispose of any
shares until 12 months after the date of admission to trading on
the AIM.
One Delta Limited is incorporated in the United Kingdom and is
100% owned by One Delta plc. The results of One Delta Limited are
included within these financial statements.
One Delta Limited GBP GBP
Cost 1,700,000
Cash 107,832
Accounts receivable 116,567
Intangible asset 50,000
Accounts payable (15,218)
Other payable (11,736)
Inventory 16,800
---------
264,245
----------
Goodwill 1,435,755
----------
In the interim financial statements, goodwill was shown at a
value of GBP1,468,981. Since then, the directors have re-assessed
the cost of One Delta Limited to include Intellectual Property at
GBP50,000, to be amortised over 5 years, and have impaired the
value of goodwill to GBP300,000 (see note 9). Goodwill will be
reviewed for impairment on an annual basis. The accounts receivable
amount included director loans totaling GBP80,509 which were
written off during the period.
The reason for the business combination is in order for the
trading company to enhance its marketing ability and thereby
attract more sales through its relationship with the plc. The
goodwill was attributed to the chance of acquiring a number of
significant contracts.
The statement of comprehensive income includes turnover of
GBP33,318 and loss of GBP239,734 of the subsidiary since
acquisition. Had the subsidiary been acquired at the start of the
reporting period, turnover and profit would not have been
significantly different to that reported.
9. Intangible assets
Included in the financial statements is Intellectual Property
which the directors have valued at GBP50,000.
One Delta Limited has developed a portfolio of products that can
be produced from waste plastic. No similar products have been sold
therefore the valuation is based on known costs of GBP30,248 plus
some unaccounted costs.
Total
other
Patents Development intangible
Goodwill and and other assets
trade-marks costs
Cost GBP GBP GBP GBP
Balance at 1 October 2010
and 30 September 2011 - - - -
Balance at 1 October 2011 - - - -
Acquisitions through business
combinations 1,435,755 7,020 42,980 50,000
Balance at 30 November 2012 1,435,755 50,000
----------- ------------
Amortisation and impairment
Balance at 1 October 2010
and 30 September 2011 - -
Balance at 1 October 2011 - -
Amortisation and impairment
for the year 1,135,755 (10,000)
Balance at 30 November 2012 1,135,755 (10,000)
----------- ------------
Net book value
Balance at 1 October 2010
and 30 September 2011 - -
Balance at 1 October 2011 - -
Balance at 30 November 2012 300,000 40,000
----------- ------------
It has been estimated that the intangible asset has a useful
life of 5 years and is therefore being amortised on a straight line
basis at GBP10,000 per year with the carrying value at 30 November
2012 being GBP40,000.
It is clear that One Delta Limited has faced considerable
challenges in achieving the revenue that the Board and Shareholders
had hoped for in 2012. Launching new products, focused primarily in
the Construction Sector and Public Sector with current economic
activity being severely constrained has been very difficult.
This was further frustrated by unusually long sales cycles and
the lack of the Olympic contracts that the team had spent
considerable time pursuing.
The amortisation and impairment charges are shown separately in
the Consolidated Statement of Comprehensive Income.
There is only one cash generating unit thus the figures above
represent the total amortisation and impairment deductions for the
Company. The recoverable amount is forecast to be GBP329,573 and
has been calculated with reference to its value in use. The
directors consider 12% to be appropriate for One Delta Limited on
the basis of the anticipated risk and return.
Management forecasts are based on a 5 year period with sales
expected to increase at 30% per annum until the trading year
2015/16 and at 50% per annum thereafter. Costs of sales are
expected to remain at a constant percentage of sales whilst other
costs are expected to increase at between 10% and 20% over the same
5 year period. Management have assumed that any future price rises
in cost of sales will be negated by the ability to purchase with
volume discounts.
The growth rates used in the value in use calculation reflect
the rates currently experienced in the construction sector.
10. Cash outflow from operating activities
Fourteen
months ended Year ended
30 November 30 September
2012 2011
GBP GBP
Rental income received - 2,268
Deposit interest received - 2,529
Sales income 33,548 -
Other income 478 15,787
Investment management fees paid - (88,288)
Purchase of stock (15) -
Rental expenses (10,445) (70)
Other expenses (603,233) (224,692)
Net cash outflow from operating activities (579,667) (292,466)
-------------- ---------------
11. Related party transactions
The compensation of key management personnel, including the
directors, is as follows:
2012 2011
GBP GBP
Director fees 1,616 40,333
Share based payments 61,000 -
Roger King and Roger Maddock hold 25,640 shares and 998,556
shares respectively and are directors of the Company. Roger King
and Roger Maddock agreed that from 31 March 2011 all fees due under
their service contracts would become payable following, and
conditional upon, a reverse takeover being undertaken by the
Company and in consideration for such waiver of fees, that if fees
should become payable, they would be paid at double their usual
rate. At 30 September 2011 Roger King was due GBP10,000 and Roger
Maddock was due GBP5,000. These fees were satisfied in the
introduction of share capital on 23 December 2011.
Roger King and Donald Reid are directors of Anglo Saxon Trust
Limited, who act as administrator to the Company. Fees paid to this
company during the period amounted to GBP46,200 (2011:GBP41,614).
Balances due to Anglo Saxon Trust Limited at the period end
amounted to GBP2,093 (2011:GBPnil).
During the period, the following balances due from the directors
of the parent company and the subsidiary were written off:
GBP
Sean Reel 17,073
Phil Dale 63,436
12. Post balance sheet event
Given the delay in commercialisation and the impact on
resources, it has been necessary for the Board to review the
structure and the business of the group.
Following discussions within the Board, it was concluded that
the best course of action would be to restructure the group to
maintain an ongoing interest in One Delta Limited while reducing
shareholders' exposure to any losses. As such, this will also allow
the Board to assess any other opportunities for the Company. A full
explanation of this restructuring is noted in the Chairman's
Statement.
13. Copies of the report and accounts
Copies of the Report and Accounts will be posted to shareholders
shortly and will be available from the Company's registered office
at PO Box 264, JP Morgan House, Grenville Street, St. Helier,
Jersey JE4 8TQ and on its website www.onedeltaplc.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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