Final Results
April 06 2006 - 3:02AM
UK Regulatory
RNS Number:0890B
Commoditrade Inc.
06 April 2006
6 April 2006
Commoditrade Inc.
Preliminary results for the period from 6 January 2005 to 31 December 2005
Proposed acquisition and placing of 144,000,000 ordinary shares
Application for admission and re-admission to trading on the AIM market
Chairman's Statement
I am pleased to present the first full set of results for Commoditrade covering
the period from incorporation on 6 January 2005 to 31 December 2005. The Company
was admitted to AIM on 8 March 2005 through an initial placing of 10.3 million
ordinary shares that generated net funds for the Company of #370,000. The
Company was created to build, through investment and acquisition, a group
specialising in the commodities sector.
The Company did not trade in the period covered by these results and the only
activity during this period has been the investigation of various potential
acquisition opportunities and the related due diligence undertaken thus far. On
12 July 2005, Commoditrade announced that it had entered into heads of agreement
and a period of exclusivity to acquire a UK-based company engaged in the
brokerage of commodities and derivatives ("Brokerage"). On 31 October 2005, a
further announcement was made by the Company that negotiations in relation to
the acquisition of the Brokerage were at an advanced stage. On 16 January 2006,
the Company confirmed that negotiations to acquire the Brokerage were
progressing and that, in addition, it had been granted an option by Tambelan to
acquire Tambelan's interest in its contract with the Brokerage in respect of
metals trading by the Brokerage's LME trading team ("LME Trading Team") on the
London Metal Exchange ("Tambelan Interest").
The Board has made significant progress in respect of the proposed acquisition
of the Brokerage and, whilst it still believes that the Brokerage represents a
viable acquisition opportunity, it has decided to terminate discussions in this
regard in order to pursue the proposed acquisition of the Tambelan Interest
which the Directors believe will create greater value for Shareholders. The
Brokerage is regulated by the FSA and as such, an application for change of
controller had been submitted to the FSA, which as a result of termination of
discussions has now been withdrawn.
Accordingly, the Board announced today that the Company has exercised its option
to acquire the Tambelan Interest for an initial aggregate consideration of #24.4
million, to be satisfied as to the payment of #14 million in cash and by the
issue of 83.4 million new ordinary shares at 12.5p each ("Acquisition"). In
addition, 6 million deferred consideration shares may be issued on the
achievement of certain performance criteria. In order to satisfy the cash
consideration in respect of the Acquisition, and to provide working capital for
the enlarged group, the Company's brokers have conditionally placed 144 million
new ordinary shares with institutional investors at 12.5p per share, to raise
#18 million before expenses.
The Directors believe that the Acquisition represents a substantial investment
opportunity which will allow Commoditrade to receive the benefit of the revenue
stream generated by the LME Trading Team and which will deliver enhancement of
shareholder value. The LME Trading Team is well established and successful, with
an in-depth knowledge of the markets on which it is represented and has
developed strong client and market relationships. This has resulted in the
achievement of strong growth in the level of profits achieved by the LME Trading
Team over recent years.
Dealings in the Company's existing ordinary shares were suspended, at the
Board's request, on 12 July 2005 at a mid-market price of 12.25 pence per share.
This suspension has now been lifted following publication of an admission
document in respect of the Acquisition and related proposals.
The Board is pleased with the progress made by the Company to date and looks
forward to the future with confidence.
Graham Butt
Chairman
6 April 2006
PROFIT AND LOSS ACCOUNT
For the period ended December 2005
Note Period from
6 January 2005
to
31 December 2005
#'000
Administrative expenses (180)
Operating loss and loss on ordinary activities before taxation (180)
Taxation 2 -
Loss on ordinary activities after taxation and retained loss 4 (180)
Loss per ordinary share (pence)
- basic 3 (0.20)p
BALANCE SHEET
At 31 December 2005
31 December
Note 2005
#'000
Current assets
Debtors 1,087
Cash at bank 179
1,266
Creditors:
Amounts falling due within one year (984)
Net current assets, total assets less current liabilities and net assets 282
Capital and reserves
Called up share capital 103
Share premium account 359
Profit and loss account (180)
Shareholders' funds 4 282
CASH FLOW STATEMENT
For the period ended 31 December 2005
Note Period from
6 January 2005 to
31 December 2005
#'000
Net cash outflow from operating activities 5 (283)
Net cash outflow before financing (283)
Financing
Issue of shares 607
Share issue costs (145)
Net cash inflow from financing 462
Increase in cash 6 179
NOTES TO THE PRELIMINARY ANNOUNCEMENT
For the period ended 31 December 2005
1 BASIS OF PREPARATION
The preliminary announcement has been prepared in accordance with applicable
accounting standards and under the historical cost convention.
The Company was incorporated as a Corporation in the Cayman Islands which does
not prescribe the adoption of any particular accounting framework. Accordingly,
the Board have resolved the Company will follow UK Accounting Standards and
apply the Companies Act 1985 when preparing its annual financial statements.
The principal accounting policies are set out in the Company's 2005 annual
report and financial statements.
2 TAXATION ON LOSS ON ORDINARY ACTIVITIES
There is no tax charge for the period. The Company does not operate within the
UK and there is no tax arising on its operations.
3 LOSS PER SHARE
The calculation of the basic loss per share is based on the loss on ordinary
activities after tax of #180,000 divided by the weighted average number of
ordinary shares in issue during the period of 89,529,528. The impact of the
warrants on the loss per share is anti-dilutive.
4 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
Period from
6 January 2005 to
31 December 2005
#'000
Loss for financial period (180)
Issue of ordinary share capital (net of issue costs) 462
Net increase in shareholders' funds 282
Equity shareholders' funds brought forward -
Equity shareholders' funds carried forward 282
5 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
Period from
6 January 2005 to
31 December 2005
#'000
Operating loss (180)
Increase in debtors (1,087)
Increase in creditors 984
Net cash outflow from operating activities (283)
6 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
Period from
6 January 2005 to
31 December 2005
#'000
Increase in cash for the period 179
Change in net funds resulting from cashflows 179
Net funds brought forward -
Net funds carried forward 179
7 ANALYSIS OF CHANGES IN NET DEBT
On Cash flow 31 December 2005
incorporation
#'000 #'000 #'000
Cash at bank - 179 179
8 PUBLICATION OF NON STATUTORY ACCOUNTS
The financial information set out in this preliminary announcement does not
constitute statutory accounts as defined in Section 240 of the Companies Act
1985.
The balance sheet at 31 December 2005 and the profit and loss account, cash flow
statement and associated notes for the period then ended have been extracted
from the Company's 2005 statutory financial statements upon which the auditors'
opinion is unqualified and does not include any statement under Section 237 of
the Companies Act 1985.
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