RNS Number:3322X
Cue Energy Plc
29 May 2007
29 May 2007
Cue Energy plc ("Cue" or "the Company")
Final Results
For the year ended 31 December 2006
Chairman's Statement
Cue's ordinary shares were admitted to trading on AIM on 3 August 2006,
following a successful placing which raised #3 million before expenses. The
Company was established for the purpose of making investments in the energy
sector, which may include exploration, development or production projects in oil
and gas, coal, uranium and renewable energy.
Since listing, the Directors have actively pursued the Company strategy by
reviewing a number of investment opportunities, which is ongoing. The Directors
believe that the current market conditions provide good opportunities for
investment in situations which are, in their opinion, undervalued or capable of
showing an above average return.
During this process the Directors have taken the advice of industry specific
consultants in reviewing and concluding the validity of the investment
opportunities, their current and future usefulness, market potential and
potential revenue streams.
On 3 January 2007, the Company entered into an agreement with Oreion Australia
Energy Pty Ltd ("Oreion") to provide funding for the evaluation and exploitation
of Polymer Electrolyte Membrane (PEM) Technology for fuel cells and
electrolysers, as contemplated under Oreion's commercialisation agreement with
the Commonwealth Scientific and Industrial Research Organisation of Australia
("CSIRO"). Up to #500,000 sterling has been made available to Oreion as part of
the working capital facility. To date Oreion had drawn down #200,000 sterling.
Under the terms of the facility agreement, funds provided will be used to
advance PEM Technology, file patent applications to protect the intellectual
property and commence the commercialisation planning of various applications.
Operational and Financial Review
During the course of the period the Company received investment income of
#27,678 and incurred administrative expenses of #253,360 resulting in a loss for
the period of #225,682.
Martin Thomas
Chairman
29 May 2007
INCOME STATEMENT
for the year ended 31 December 2006
Year Ended Year Ended
Note 31 Dec 2006 31 Dec 2005
# #
Administrative expenses (253,360) -
Operating loss 2 (253,360) -
Finance Revenue 3 27,678 -
Loss on ordinary activities before taxation (225,682) -
Income tax expense 4 - -
Loss for the financial year & retained loss (225,682) -
attributable to members of the Company
Loss per share expressed in pence per share
- Basic 7 (0.22)p -
There are no recognised gains or losses other than the loss for the year as
shown above
BALANCE SHEET
for the year ended 31 December 2006
Year Ended Year Ended
Note 31 Dec 2006 31 Dec 2005
# #
Assets
Non current assets
Tangible assets 8 3,341 -
Total non current assets 3,341 -
Current assets
Trade and other receivables 9 43,643 -
Cash and cash equivalents 14 2,831,452 -
Total current assets 2,875,095 -
Total assets 2,878,436 -
Liabilities
Current liabilities
Trade and other payables 10 12,095 -
Total liabilities 12,095 -
Net Assets 2,866,341
Shareholders Equity
Share Capital 11 161,146 -
Share premium 2,755,170 -
Share Based Payment Reserve 175,707 -
Retained Losses (225,682) -
Total equity 2,866,341 -
These financial statements were approved by the board of Directors on 29 May 2007.
STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2006
Called up Share Share based Retained Total equity
share premium payment earnings
capital reserve reserve
# # # # #
As at 1 January 2006 - - - - -
Share capital issued 161,146 3,044,624 - - 3,205,770
Share issue costs - (161,996) - - (161,996)
Share based payments - - 48,249 - 48,249
Share based expenses - (127,458) 127,458 - -
Loss for the year - - - (225,682) (225,682)
As at 31 December 2006 161,146 2,755,170 175,707 (225,682) 2,866,341
CASH FLOW STATEMENT
for the year ended 31 December 2006
Year Ended Year Ended
Note 31 Dec 2006 31 Dec 2005
# #
Cash flows from operating activities
Operating loss (225,682) -
Depreciation 276 -
Share options expensed 48,249 -
Increase in VAT due (22,609) -
Increase in prepayments (20,601) -
Increase in other receivables (433)
Increase in operating creditors 4,095 -
Increase in accruals 8,000 -
Net cash used in operating activities (208,705) -
Cash flows from investing activities
Payments to acquire tangible assets (3,617) -
Net cash used in investing activities (3,617) -
Cash inflows from financing activities
Proceeds from issue of shares 3,205,770 -
Shares issue costs (289,454) -
Share based payments 127,458
Net cash flow from financing activities 3,043,774 -
Net increase in cash and cash equivalents 2,831,452 -
Cash and cash equivalents at 1 January - -
Cash and cash equivalents at 31 December 14 2,831,452 -
STATEMENT OF ACCOUNTING POLICIES
for the year ended 31 December 2006
1. Principal accounting policies
a) Authorisation of financial statements and statement of compliance
with IFRS
The financial statements of Cue Energy plc for the year ended 31 December 2006
were authorised for issue by the board on 29 May 2007 and the balance sheets
signed on the board's behalf by Ms Jade Styants and Mr Toby Howell. Cue Energy
plc is a public limited Company incorporated and domiciled in England and Wales.
The Company's ordinary shares are traded on the Alternative Investment Market
operated by the London Stock Exchange.
The Company's financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS). The principal accounting
policies adopted by the group are set out below.
b) Basis of preparation
The financial statements have been prepared on the historical cost basis, except
for the measurement to fair value of assets and financial instruments as
described in the accounting policies below, and on a going concern basis.
The financial report is presented in Sterling and all values are in pounds (#)
unless otherwise stated.
c) Revenue
The Company had no revenue during the year ended 31 December 2006.
d) Finance revenue
Finance revenue is recognised as interest accrues.
e) Cash and cash equivalents
Cash and short-term deposits in the balance sheet comprise cash at bank and in
hand and short-term deposits with an original maturity of three months or less.
For the purposes of the Cash Flow Statement, cash and cash equivalents consist
of cash and cash equivalents as defined above, net of outstanding bank
overdrafts.
f) Income tax and deferred taxation
Current tax assets and liabilities for the current and prior periods are
measured at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those
that are enacted or substantially enacted by the balance sheet date.
No deferred tax asset has been recognised because there is insufficient evidence
of the timing of suitable future profits against which they can be recovered.
g) Foreign currencies
Both the functional and presentational currency of Cue Energy plc is sterling
(#). Transactions in foreign currencies are recorded at the rate ruling at the
date of the transaction. Monetary assets and liabilities denominated in foreign
currencies are translated at the rate of exchange ruling at the balance sheet
date. All differences are taken to the income statement.
h) Significant accounting judgements, estimates and assumptions
Share based payment transaction
The Company measures the cost of equity-settled transactions with employees by
reference to the fair value of the equity instruments at the date at which they
were granted. The fair value is determined using a Black-Scholes model.
i) Tangible assets - Plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any
accumulated impairment losses.
Depreciation is provided on all tangible assets to write off the cost less
estimated residual value of each asset over its expected useful economic life on
a straight line basis at the following annual rates:
Computer equipment - 40%
All assets are subject to annual impairment reviews.
j) Trade and other receivables
Trade receivables, which generally have 30 day terms, are recognised and carried
at original invoice amount less any allowance for any uncollectible amounts.
k) Trade and other payables
Trade payables and other payables are carried at amortised cost and represent
liabilities for goods and services provided to the Company prior to the end of
the financial year that are unpaid and arise when the Company becomes obliged to
make future payments in respect of the purchase of these goods and services.
l) Financial Instruments
The Company's financial instruments comprise cash and items arising directly
from its operation such as trade debtors and trade creditors.
There is no material difference between the book value and fair value of the
Company's cash.
m) Share-based payment transactions
(i) Equity settled transactions
The Company provides benefits to employees (including senior executives) of the
Company in the form of share-based payments, whereby employees render services
in exchange for shares or rights over shares (equity-settled transactions).
The cost of these equity-settled transactions with employees is measured by
reference to the fair value of the equity instruments at the date at which they
are granted. The fair value is determined using a Black-Scholes model.
In valuing equity-settled transactions, no account is taken of any performance
conditions, other than conditions linked to the price of the shares of Cue
Energy Plc (market conditions) if applicable.
The cost of equity-settled transactions is recognised, together with a
corresponding increase in equity, over the period in which the performance and/
or service conditions are fulfilled, ending on the date on which the relevant
employees become fully entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each
reporting date until vesting date reflects (i) the extent to which the vesting
period has expired and (ii) the Company's best estimate of the number of equity
instruments that will ultimately vest. No adjustment is made for the likelihood
of market performance conditions being met as the effect of these conditions is
included in the determination of fair value at grant date. The Income Statement
charge or credit for a period represents the movement in cumulative expense
recognised as at the beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for
awards where vesting is only conditional upon a market condition.
If the terms of an equity-settled award are modified, as a minimum an expense is
recognised as if the terms had not been modified. In addition, an expense is
recognised for any modification that increases the total fair value of the
share-based payment arrangement, or is otherwise beneficial to the employee, as
measured at the date of modification.
If an equity-settled award is cancelled, it is treated as if it had vested on
the date of cancellation, and any expense not yet recognised for the award is
recognised immediately. However, if a new award is substituted for the cancelled
award and designated as a replacement award on the date that it is granted, the
cancelled and new award are treated as if they were a modification of the
original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional
share dilution in the computation of earnings per share (see Note 7).
n) Earnings per share
Basic earnings per share is calculated as net profit attributable to members of
the Company, adjusted to exclude any costs of servicing equity (other than
dividends) and preference share dividends, divided by the weighted average
number of ordinary shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to members
of the Company, adjusted for:
* costs of servicing equity (other than dividends) and preference share dividends;
* the after tax effect of dividends and interest associated with
dilutive potential ordinary shares that have been recognised as expenses; and
* other non-discretionary changes in revenues or expenses during the
period that would result from the dilution of potential ordinary shares; divided
by the weighted average number of ordinary shares and dilutive potential
ordinary shares, adjusted for any bonus element.
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2006
1. Turnover & Segmental analysis
The Company had no turnover during the year.
All of the Company's losses, and net assets arose in the United Kingdom.
2. Operating loss
The operating loss is stated after charging: Year Ended Year Ended
31 Dec 2006 31 Dec 2005
# #
Auditors' remuneration - audit services 8,000 -
Directors' emoluments 33,992 -
Depreciation 276 -
Share options expenses 48,249 -
Auditors' remuneration for non-audit services provided during the period
amounting to #5,875 relates to the provision of an accountant's report for the
purpose of the Company's AIM admission document and was charged to the share
premium reserve, as part of share issue expenses
3. Finance Revenue
Year Ended Year Ended
31 Dec 2006 31 Dec 2005
# #
Bank interest receivable 27,678 -
4. Taxation
Year Ended Year Ended
31 Dec 2006 31 Dec 2005
# #
Current year taxation
UK corporation tax at 30% on profits for the period - -
Factors affecting the tax charge for the period
Loss on ordinary activities before tax (225,682) -
Loss on ordinary activities at the UK standard rate of 30% (67,705) -
Effect of tax benefit of loss carried forward 67,705 -
Current period taxation - -
5. Staff Costs
The Company had no full time employees during the year. The directors provided
professional services as required on a part-time basis.
6. Directors' remuneration
Year Ended Year Ended
31 Dec 2006 31 Dec 2005
# #
Non Executive Directors:
Chris Lambert 7,405 -
Malcolm James 7,405 -
Jade Styants 5,905 -
Toby Howell 13,277 -
Total 33,992 -
No pension benefits are provided for any Director.
Directors' share options
On Admission to AIM, the Company granted Directors options to subscribe for the
following numbers of new ordinary shares, exercisable at 2p per share in the
period 3 August 2006 to 2 August 2011. The fair value of these options has been
fully expensed during the year, based on a Black-Scholes model, assuming a risk
free rate of 4.6 % and expected volatility of 70% for the period of trading.
There are no performance measures attached to the options.
Number of options
Christopher Lambert 1,151,040
Malcolm James 1,151,040
Jade Styants 1,151,040
Toby Howell 2,302,079
7. Loss per share
Loss for the period #225,682
Weighted average number of ordinary shares of 0.07p in issue 104,645,967
Loss per share - basic (0.22) p
Weighted average number of ordinary shares of 0.07p in issue inclusive of 113,316,557
outstanding options
8. Tangible assets
Computer
Equipment
#
Cost
At 1 January 2006 -
Additions 3,617
At 31 December 2006 3,617
Depreciation
At 1 January 2006 -
Charge for the year 276
At 31 December 2006 276
Net Book Value
At 31 December 2006 3,341
9. Trade and other receivables
Year Ended Year Ended
Current trade and other receivables 31 Dec 2006 31 Dec 2005
# #
Prepayments 20,601 -
Other receiveables 433
Vat due 22,609 -
43,643 -
10. Trade and other payables
Year Ended Year Ended
Current trade and other payables 31 Dec 2006 31 Dec 2005
# #
Trade Creditors 4,095 -
Accruals 8,000 -
12,095 -
11. Share Capital
Year Ended
31 Dec 2006
#
Authorised
20,000,000,000 ordinary shares of 0.07 p each 14,000,000
Issued and fully paid
230,207,901 ordinary shares of 0.07 p each 161,146
The Company was incorporated on 17 December 2004 with an authorised share
capital of #2,000,000 divided into 200,000,000 ordinary shares of 0.1p each, of
which 2 shares were issued fully paid to the subscribers to the Memorandum of
Association of the Company.
On 6 April 2006, 12 ordinary shares of 1p each were issued at par.
At the Company's first annual general meeting on 7 April 2006 the authorised
share capital of the Company was increased from #2,000,000 to #14,000,000 by
creation of 1,200,000,000 new ordinary shares of 1p each ranking equally with
existing shareholders of 1p each. The authorised share capital was sub-divided
from 1,400,000,000 ordinary shares of 1p each into 140,000,000,000 ordinary
shares of 0.01p each and further consolidated from 140,000,000,000 ordinary
shares of 0.01p each into 20,000,000,000 ordinary shares of 0.07p each.
Following the re-organisation, 200 ordinary shares were transferred by the
initial subscribers to Black Ivory Limited on 18 May 2006.
On 21 June 2006, the Company issued and allotted 65,681,065 ordinary shares to
certain founder subscribers, fully paid, at par value.
On 22 June 2006, 14,526,636 ordinary shares were issued and fully paid at 1.1p
each
On 3 August 2006, 150,000,000 ordinary shares were placed at a price of 2p per
share.
Share options and warrants
Under IFRS 2 'Share Based Payments', the Company determines the fair value of
options issued to Directors and Employees as remuneration and recognises the
amount as an expense in the income statement with a corresponding increase in
equity.
Name Date Granted/ Vested Number Exercise Price Expiry Date Fair Value at Grant Date
(pence) (pence)
Chris Lambert 3 August 2006 1,151,040 2 2 August 2011 0.0084
Malcolm James 3 August 2006 1,151,040 2 2 August 2011 0.0084
Jade Styants 3 August 2006 1,151,040 2 2 August 2011 0.0084
Toby Howell 3 August 2006 2,302,079 2 2 August 2011 0.0084
Totals
5,755,199
The fair value of the employee options vested during the year was #48,249. The
assessed fair value at grant date is determined using the Black-Scholes Model
that takes into account the exercise price, the term of the option, the share
price at grant date, the expected price volatility of the underlying share, the
expected dividend yield and the risk-free interest rate for the term of the
option.
The following table lists the inputs to the model used for the year ended 31 December 2006:
Dividend Yield (%) -
Expected Volatility (%) 70
Risk-free interest rate (%) 4.60
Share price at grant date (#) 0.02
The expected volatility reflects the assumption that the historical volatility is indicative
of future trends, which may, not necessarily be the actual outcome.
12. Commitments
As at 31 December 2006, the Company had no material capital commitments.
13. Related party transactions
Claridge House Services Limited (CHS) was a company set up for the purpose of
administering the serviced office for a number of companies, including Cue
Energy Plc. The directors of CHS are Jade Styants, Toby Howell and Malcolm
James, with Greg Kuenzel being the beneficial owner. The Company has entered
into an agreement with CHS for the provision of services and accommodation in
relation to Suite 4, 32 Davies Street, London W1K 4ND, for a monthly fee of
#5,000 plus VAT payable 3 months in advance. During the year CHS invoiced the
Company #35,200 in respect of serviced office costs.
14. Analysis of changes in net funds
#
Balance at 1 January 2006 -
Increase in the year 2,831,452
Balance at 31 December 2006 2,831,452
15. Financial instruments
The Company uses financial instruments comprising cash, liquid resources and
debtors/ creditors that arise from its operations.
The Company's exposure to currency and liquidity risk is not considered
significant.
The Company's cash balances are held in pound sterling. To date the Company has
relied upon equity funding to finance operations. The Directors are confident
that adequate cash resources exist to finance operations to commercial
exploitation but controls over expenditure are carefully managed.
16. Post balance sheet events
Cue Energy plc has entered into an agreement with Oreion Australia Energy Pty
Ltd (formerly GTL Corporation Pty Ltd) ("Oreion") whereby up to a maximum of
#500,000 sterling has been made available to Oreion as part of a working capital
facility. Interest is payable @ 9.1% on the outstanding balances. To date Oreion
had drawn down #200,000 sterling. The loan is repayable to Cue Energy Plc by 31
July 2007 or will be converted into shares in Oreion on the repayment date.
**ENDS**
For further information please visit www.cueenergy.com or contact the following:
Jade Styants/Toby Howell Cue Energy plc Tel: +44 (0)20 7932 2427
Edward Hutton HB Corporate Tel: +44 (0) 20 7510 8600
Rachel Kane HB Corporate Tel: +44 (0) 20 7510 8600
Hugo de Salis St Brides Media & Finance Tel: +44 (0) 20 7242 4477
This information is provided by RNS
The company news service from the London Stock Exchange
END
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