RNS Number:1845Z
Creative Education Corp Plc
27 May 2004
THE CREATIVE EDUCATION CORPORATION PLC ("The Company")
27 May 2004
Interim Results
CHAIRMAN'S STATEMENT
FOR THE 6 MONTHS ENDED 29 FEBRUARY 2004
The accounts for the six months ended 29th February 2004 show a loss before
taxation of #641,897 equivalent to a loss per share of 0.39p. At the end of the
half year, net assets were #5,469,563. For this trading period, the results are
in line with your directors' expectations.
Creative Education has continued to expand and refine its operations focusing at
all times on providing the best environment for children from 0 to 5 years. We
continue to pride ourselves on the service we offer to children and their
parents and guardians.
In order to maximise the quality of our schools, we have built an efficient
management system which will enable us to acquire new nurseries and, therefore,
increase the number of parents and children who can benefit from our education
service.
To this end, we have reviewed a number of acquisition opportunities and we are
optimistic that, before the end of the year, we will have further expanded the
number of nurseries operated by your company.
Our objective continues to be the operation of one of the leading nursery groups
which provides a high quality affordable service to parents and children while
achieving sustainable profit growth. To achieve this goal, the efforts of your
management and staff are crucial and over the past half year, David Alexander
and his team have worked tirelessly to meet this objective.
C Phillips
Chairman
Dated:27 May 2004
THE CREATIVE EDUCATION CORPORATION PLC
GROUP PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTHS ENDED 29 FEBRUARY 2004
--------------------------------------------------------------------------------
26 weeks to 29 Year ended 31
February August
2004 2003
(Unaudited)
Notes # #
Turnover 895,506 318,042
Administrative
expenses (1,530,306) (894,273)
Operating loss 3 (634,800) (576,231)
Interest payable and
similar charges 6 (7,097) (564)
Loss on ordinary
activities before
taxation (641,897) (576,795)
Tax on loss on
ordinary activities 7 - -
Loss on ordinary
activities after
taxation (641,897) (576,795)
Accumulated loss
brought forward (611,975) (35,180)
Accumulated loss
carried forward (1,253,872) (611,975)
Loss per share 9
- Basic (0.39) p (0.49) p
- Diluted (0.39) p (0.49) p
The profit and loss account has been prepared on the basis that all operations are
continuing operations.
There are no recognised gains and losses other than those passing through the
profit and loss account.
THE CREATIVE EDUCATION CORPORATION PLC
BALANCE SHEETS
AS AT 29 FEBRUARY 2004
--------------------------------------------------------------------------------
Group Company
As at 29 As at 31 August As at 29 As at 31 August
February February
2004 2003 2004 2003
(Unaudited) (Unaudited)
Notes # # # #
Fixed assets
Intangible
assets 10 4,141,043 4,249,097 4,141,043 4,249,097
Tangible
assets 11 614,360 454,807 614,360 454,807
Investments 290,656 - 290,656 -
5,046,059 4,703,904 5,046,059 4,703,904
Current assets
Debtors 13 122,918 74,268 122,918 74,268
Cash at bank
and in hand 631,721 42,029 631,721 42,029
754,639 116,297 754,639 116,297
Creditors:
amounts
falling due
within one
year 14 (331,135) (1,053,903) (331,135) (1,053,903)
Net current
assets 423,504 (937,606) 423,504 (937,606)
Total assets
less current
liabilities 5,469,563 3,766,298 5,469,563 3,766,298
Capital and reserves
Called up
share capital 15 1,658,000 1,171,766 1,658,000 1,171,766
Share premium
account 16 2,265,435 406,507 2,265,435 406,507
Other 16 2,800,000 2,800,000 2,800,000 2,800,000
reserves
Profit and
loss account (1,253,872) (611,975) (1,253,872) (611,975)
Shareholders'
funds -
equity 17 5,469,563 3,766,298 5,469,563 3,766,298
interests
The accounts were approved by the board on 27 May 2004
D Alexander R Patel
Director Director
THE CREATIVE EDUCATION CORPORATION PLC
GROUP CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 29 FEBRUARY 2004
--------------------------------------------------------------------------------
26 weeks to 29 February Year ended 31 August
2004 2003
(Unaudited)
Notes # # # #
Net cash outflow
from 18 (1,018,101) (615,970)
operating
activities
Returns on
investments
and servicing
of finance
Interest paid (7,097) (564)
Net cash outflow from
returns on investments and
servicing of finance (7,097) (564)
Capital expenditure and financial investment
Payments to
acquire (180,224) (137,113)
tangible fixed
assets
Payments to
acquire - (52,090)
subsidiary
Payments to acquire trade
investments (290,656) -
Net overdrafts acquired
with subsidiary - (156,583)
Receipts from sales of
tangible fixed assets - 1,864
Net cash outflow from
capital expenditure and
financial investment (470,880) (343,922)
Net cash outflow before
financing (1,496,078) (960,456)
Financing
Issue of ordinary share
capital 2,431,170 770,000
Cost of share issue (86,008) (171,077)
Net cash inflow
from 2,345,162 598,923
financing
Increase/
(decrease) in 19 849,084 (361,533)
cash
THE CREATIVE EDUCATION CORPORATION PLC
NOTES TO THE GROUP ACCOUNTS
FOR THE SIX MONTHS ENDED 29 FEBRUARY 2004
--------------------------------------------------------------------------------
1 Accounting policies
1 .1 Basis of preparation
The accounts have been prepared under the historical cost convention and on a
going concern basis.
1 .2 Compliance with accounting standards
The accounts have been prepared in accordance with applicable accounting
standards.
1 .3 Basis of consolidation
The consolidated profit and loss account and balance sheet include the
accounts of the company and of its subsidiary undertaking, Primary Steps
Limited, made up to 29 February 2004. The results of subsidiaries sold or
acquired are included in the profit and loss account up to, or from, the date
control passes. Intra-group sales and profits are eliminated fully on
consolidation.
1 .4 Turnover
Turnover represents the invoiced value of services provided net of VAT.
1 .5 Goodwill
Goodwill is amortised over its useful economic life currently estimated to be
20 years.
1 .6 Tangible fixed assets and depreciation
Tangible fixed assets are stated at cost less depreciation. Depreciation is
provided on all tangible fixed assets at rates calculated to write off the
cost less estimated residual value of each asset over its expected useful
life, as follows:
Leasehold property Over the period of the lease
Fixtures, fittings & equipment 20% - 33.3% straight line
1 .7 Leasing
Rental payments under operating leases are charged to the profit and loss
account on a straight line basis over the period of the lease.
1 .8 Deferred taxation
Deferred tax is provided in full on timing differences which result in an
obligation at the balance sheet date to pay more tax, or a right to pay less
tax, at a future date, at rates expected to apply when they crystallise based
on current tax rates and law. Timing differences arise from the inclusion of
items of income and expenditure in taxation computations in periods different
from those in which they are included in the accounts. Deferred tax is not
provided on timing differences arising from the revaluation of fixed assets
where there is no commitment to sell the assets. Deferred tax assets are
recognised to the extent that it is regarded as more likely than not that
they will be recovered. Deferred tax assets and liabilities are not
discounted.
2 Turnover
The total turnover of the group for the year has been derived from its
principal activity wholly undertaken in the United Kingdom.
THE CREATIVE EDUCATION CORPORATION PLC
NOTES TO THE GROUP ACCOUNTS
FOR THE SIX MONTHS ENDED 29 FEBRUARY 2004
--------------------------------------------------------------------------------
3 Operating loss 26 weeks ended Year ended 31
29 February August 2003
2004
(Unaudited)
# #
Operating loss is stated after charging:
Amortisation of intangible assets 108,054 90,406
Depreciation of owned tangible assets 20,671 21,263
Operating lease rentals 252,255 200,357
Auditors' remuneration 6,500 10,000
Remuneration of auditors for non-audit work - 28,593
4 Directors' emoluments 26 weeks ended Year ended 31
29 February August 2003
2004
(Unaudited)
# #
Aggregate emoluments 125,306 62,458
5 Employees 26 weeks ended Year ended 31
29 February August 2003
2004
(Unaudited)
Number of employees Number Number
The average weekly number of employees
was:
Administration 111 60
Employment costs
# #
Wages and salaries 622,052 346,379
Social security costs 50,422 30,671
672,474 377,050
6 Interest payable and similar charges 26 weeks ended Year ended 31
29 February August 2003
2004
(Unaudited)
# #
Interest payable on:
Bank loans and overdrafts 7,097 564
7 Tax on loss on ordinary activities 26 weeks ended Year ended 31
29 February August 2003
2004
(Unaudited)
# #
Factors affecting the tax charge for the year
Loss on ordinary activities before taxation (641,897) (576,795)
Loss on ordinary activities before taxation (121,960) (109,591)
multiplied by standard rate of UK corporation tax
of 19.00% (2003 : 19.00%)
Expenses not deductible for tax purposes - 4,242
Capital allowances in period in excess of (765) 737
depreciation
Movement in tax losses 122,725 104,612
Current tax charge - -
8 Loss for the financial year
As permitted by section 230 of the Companies Act 1985, the holding company's
profit and loss account has not been included in these accounts. The loss for
the financial year is made up as follows:
26 weeks ended Year ended 31
29 February August 2003
2004
(Unaudited)
# #
Holding company's loss for the financial year (641,897) (576,795)
9 Earnings per share
The calculation of the basic earnings per share and diluted earnings per
share is based on the loss attributable to ordinary shareholders of #641,897
(2003: Loss #576,795), divided by the weighted average number of shares in
issue during the year.
The weighted average number of shares used on the calculations are set out
below:
26 weeks ended Year ended 31
29 February August 2003
2004
(Unaudited)
Number of Number of
Shares shares
165,799,910 117,176,560
THE CREATIVE EDUCATION CORPORATION PLC
NOTES TO THE GROUP ACCOUNTS
FOR THE SIX MONTHS ENDED 29 FEBRUARY 2004
--------------------------------------------------------------------------------
10 Intangible fixed assets
Group and company
Goodwill
#
Cost
At 1 September 2003 4,339,503
Additions -
At 29 February 2004 (Unaudited) 4,339,503
Amortisation
At 1 September 2003 90,406
Charge for year 108,054
At 29 February 2004 (Unaudited) 198,460
Net book value
At 29 February 2004 (Unaudited) 4,141,043
At 31 August 2003 4,249,097
The Goodwill arises on the acquisition of Primary Steps Limited which
had net liabilities of #787,413. The company was purchased for
#3,552,090, being the 70,000,000 Ordinary Shares of 1 pence each issued
by The Creative Education Corporation Plc at 5 pence per share, stamp
duty of #17,500 and related legal and professional costs of #34,590.
11 Tangible fixed assets
Group and company
Short leasehold Fixtures, Total
improvements fittings &
equipment
# # #
Cost
At 1 September 2003 417,274 86,386 503,660
Additions 145,204 35,020 180,224
At 29 February 2004 (Unaudited) 562,478 121,406 683,884
Depreciation
At 1 September 2003 23,726 25,127 48,853
Charge for the year 11,502 9,169 20,671
At 29 February 2004 (Unaudited) 35,228 34,296 69,524
Net book value
At 29 February 2004 (Unaudited) 527,250 87,110 614,360
At 31 August 2003 393,548 61,259 454,807
THE CREATIVE EDUCATION CORPORATION PLC
NOTES TO THE GROUP ACCOUNTS
FOR THE SIX MONTHS ENDED 29 FEBRUARY 2004
--------------------------------------------------------------------------------
12 Fixed asset investments
Company
Shares in Trade investments Total
Subsidiary undertakings # #
#
Cost - - -
As at 1 September 2003 - 290,656 290,656
Additions
At 29 February 2004 - 290,656 290,656
(Unaudited)
During the period, the Company acquired for cash an 18.5% interest in Academy
Childcare Group Plc.
Holdings of more than 20%
The company holds more than 20% of the share capital of the following companies:
Company Country of registration Shares held
or
incorporation
Class %
Subsidiary undertakings
Primary Steps Limited England & Wales Ordinary 100
13 Debtors
Group Company
As at 29 As at 31 August As at 29 As at 31 August
February February
2004 2003 2004 2003
(Unaudited) (Unaudited)
# # # #
Trade debtors 6,613 22,335 6,613 22,335
Other debtors 11,750 11,750 11,750 11,750
Prepayments and accrued 104,555 40,183 104,555 40,183
income
122,918 74,268 122,918 74,268
Amounts falling due after more than one year and included in the debtors above
are:
Group Company
As at 29 As at 31 August As at 29 As at 31 August
February February
2004 2003 2004 2003
(Unaudited) (Unaudited)
# # # #
Other debtors 11,750 11,750 11,750 11,750
These amounts relate to rent deposits.
THE CREATIVE EDUCATION CORPORATION PLC
(PREVIOUSLY THE CREATIVE EDUCATIONAL CORPORATION PLC)
NOTES TO THE GROUP ACCOUNTS
FOR THE SIX MONTHS ENDED 29 FEBRUARY 2004
--------------------------------------------------------------------------------
14 Creditors : amounts falling due within one year
Group Company
As at 29 As at 31 August As at 29 As at 31 August
February February
2004 2003 2004 2003
(Unaudited) (Unaudited)
# # # #
Bank overdrafts - 259,392 - 259,392
Trade creditors 131,223 131,816 131,223 131,816
Taxes and social 34,825 20,500 34,825 20,500
security costs
Directors' current 50,000 349,000 50,000 349,000
accounts
Other creditors 64,525 49,594 64,525 49,594
Accruals and deferred 50,562 243,601 50,562 243,601
income
331,135 1,053,903 331,135 1,053,903
The bank overdraft is secured by a mortgage debenture over all the assets of the
company.
15 Share capital As at 29 As at 31 August
February 2004 2003
(Unaudited)
-------------
# #
Authorised
500,000,000 Ordinary Shares of 1 pence each 5,000,000 5,000,000
Allotted, called up and fully paid
165,799,910 (2003: 117,176,560) Ordinary Shares 1,658,000 1,171,766
of 1 pence each
On 25 September 2003, loans amounting to #335,000 due to Laurence Davis and
John Baker, both directors of the company, were capitalised through the issue
of 6,700,000 ordinary shares of 1p each issued at 5p per share.
The following ordinary shares of 1p each were issued pursuant to a placing of
40 million shares at 5p per share:
2 October 2003 - 5,300,000
20 October 2003 - 15,100,000
17 November 2003 - 12,300,000
1 December 2003 - 3,640,000
2 December 2003 - 600,000
28 January 2004 - 3,060,000
The company also capitalised various invoices amounting to #76,167.50 through
the issue of 1,523,350 ordinary shares of 1p each at 5p per share as follows:
1 December 2003 - 1,403,850
2 December 2003 - 19,500
28 January 2004 - 500,000
THE CREATIVE EDUCATION CORPORATION PLC
(PREVIOUSLY THE CREATIVE EDUCATIONAL CORPORATION PLC)
NOTES TO THE GROUP ACCOUNTS
FOR THE SIX MONTHS ENDED 29 FEBRUARY 2004
16 Statement of movements on reserves
Merger reserve Share premium
account
# #
Balance at 1 September 2003 2,800,000 406,507
Premium on shares issued during the year - 1,944,936
Cost of issue of shares - (86,008)
Balance at 29 February 2004 (Unaudited) 2,800,000 2,265,435
17 Reconciliation of movements in shareholders' As at 29 As at 31 August
funds February 2004 2003
(Unaudited)
Group # #
Loss for the financial year (641,897) (576,795)
New share capital subscribed 2,345,162 4,098,923
Net addition to shareholders' funds 1,703,265 3,522,128
Opening shareholders' funds 3,766,298 244,170
Closing shareholders' funds 5,469,563 3,766,298
18 Net cash outflow from operating activities As at 29 As at 31 August
February 2004 2003
(Unaudited)
# #
Reconciliation to operating loss:
Operating loss (634,800) (576,231)
Depreciation of tangible fixed assets 20,671 21,263
Amortisation of intangible fixed assets 108,054 90,406
Loss on disposal of tangible fixed assets - 6,868
(Increase)/decrease in debtors (48,650) 109,878
(Decrease) in creditors (463,376) (268,154)
Net cash outflow from operating (1,018,101) (615,970)
activities
THE CREATIVE EDUCATION CORPORATION PLC
(PREVIOUSLY THE CREATIVE EDUCATIONAL CORPORATION PLC)
NOTES TO THE GROUP ACCOUNTS
FOR THE SIX MONTHS ENDED 29 FEBRUARY 2004
19 Reconciliation of net cash flow to movement in As at 29 As at 31 August
net cash/(debt) February 2004 2003
(Unaudited)
# #
Increase/(decrease) in cash 849,084 (361,533)
Net cash/(debt) at 1 September 2003 (217,363) 144,170
Net cash/(debt) at 29 February 2004 631,721 (217,363)
20 Analysis of net cash/(debt)
At 1 September Cash flow At 29 February
2003 2004
(Unaudited)
# # #
Cash at bank and in hand 42,029 589,692 631,721
Bank overdrafts (259,392) 259,392 -
Net cash/(debt) (217,363) 849,084 631,721
21 Financial commitments
At 29 February 2004, the group had annual commitments under non-cancelable
operating leases as follows:
Land and buildings
As at 29 As at 31 August
February 2004 2003
(Unaudited)
# #
Expiry date:
Within one year 4,250 50,500
Between two and five years 6,086 25,000
In over five years 241,919 207,000
252,255 282,500
22 Capital commitments
There were no capital commitments at the year end.
23 Related party transactions
Leases;
During the year the Group was charged #26,250 (2003: #21,875) for the lease of Primary
Steps Milton Keynes, #11,000 (2003: #16,779) for the lease of Primary Steps Hemel
Hempstead, #94,086 (2003: #nil) for the lease of Primary Steps Ilford and #27,097
(2003: #nil) for the lease of Primary Steps Bedford by Conduit Square Limited, a
company in which L. Davis and J. Baker are directors and shareholders.
Also during the year the Group was charged #27,500 (2003: #4,583) for the lease of
Primary Steps East Sheen by Iron Founders & Allied Trade Nominees Limited, a company
in which J. Baker is a director and sole shareholder.
THE CREATIVE EDUCATION CORPORATION PLC
NOTES TO THE GROUP ACCOUNTS
FOR THE SIX MONTHS ENDED 29 FEBRUARY 2004
--------------------------------------------------------------------------------
24 Post Balance Sheet Events
Group and company
There were no material events outside the course of ordinary business since the 29
February 2004.
.
25 Publication of non-statutory accounts
The financial information contained in this statement does not constitute statutory
accounts as defined in Section 240 of the Companies Act 1985. The financial
information for the preceding period is based on the statutory accounts for the year
ended 31 August 2003. Those accounts, upon which the auditors issued an unqualified
opinion, have been delivered to the Registrar of Companies.
Copies of this report can be obtained from the Registered Office at Aston House,
Cornwall Avenue, London N3 1LF.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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