RNS Number:3031A
QuikTrak Networks PLC
30 June 2004
QUIKTRAK NETWORKS PLC
RESULTS FOR THE YEAR ENDED 31 DECEMBER 2003
CHAIRMAN'S STATEMENT
The two years since the incorporation of the company has been a period of
extreme contrasts and overall has been a time of difficulty.
The company was formed for the purpose of commercialising QuikTrak's unique
secure tracking technology in the UK and elsewhere. On formation, the company:
* secured the UK licence for the QuikTrak Technology from QuikTrak Networks
Ltd of Australia, which at the time was the company's parent.
* acquired the UK radiocommunications licence to operate QuikTrak in the UK
and then established a network within and around the M25 (the
"M25 Network").
In April 2003, the company demerged from QuikTrak Networks Ltd of Australia and
acquired the full intellectual property rights for the QuikTrak Technology for
Europe, the Middle East and the countries of the former USSR (the "Territory").
It also acquired the radiocommunications licence to operate QuikTrak in the
Netherlands.
Shortly after formation, the company's securities were admitted for trading on
OFEX and in August 2003, the company's securities were admitted for trading on
the London Stock Exchange's Alternative Investments Market (AIM).
Due to extensive delays by our contractor in completing the M25 Network roll-
out, the company experienced significant delays to its business plan and was
able to commence commercial operations only in late 2003. I am pleased to
report that the network which we have created functions very effectively at a
technical level. It provides users with a very secure, accurate and reliable
method of obtaining location-based and data services.
In the lead-up to the commencement of commercial operations, excellent progress
was made in developing relations with service and technology partners. The
delays to network roll-out negatively affected certain prospective customers but
in the main we retain excellent relationships with most of the key targets in
our selected markets.
Following successful commercialisation of the M25 Network, we found that the
market demand for a network limited to the M25 and within was incompatible with
the operating costs being incurred, in particular the level of spectrum fees
being paid, which were for a national UK telecommunications licence. From the
beginning it has been a fundamental component of our business plan that we
operate a UK national network, but the establishment of such a network requires
a significant amount of capital and we have to date not been successful in
securing these funds - our efforts in this direction continue and we believe
that in due course we shall find a partner to further commercialise the M25
Network and take the technology to the national market.
Accordingly, the directors resolved in May 2004 to suspend commercial operations
of the M25 Network, retaining it for demonstration purposes, and to focus the
company's efforts on securing partners to roll-out, operate and commercialise
QuikTrak networks in the Territory. In June 2004, we secured #845,000 in new
equity to finance this revised strategy.
QuikTrak's secure, accurate and reliable tracking technology has been well
received by the market for a wide range of applications and I remain confident
that with our new approach based on licensing and partnerships we have a solid
base for re-building shareholder value.
Chris Kyriakou
Chairman
Telephone: 0870 010 6044
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the period ended 31 December 2003
Note 5 July 2002 to
31 December
2003
#
Turnover 49,732
Cost of sales (24,308)
__________
Gross profit 25,424
__________
Administrative costs (4,371,774)
__________
Group Operating Loss Before
Exceptional Items (4,346,350)
__________
Exceptional Items:
Write down against assets following
Impairment review 1 (2,218,950)
Loss on sale of investment 1 (401,001)
__________
Loss on Ordinary Activities Before
Taxation (6,966,301)
Tax on loss on ordinary activities -
__________
Loss on Ordinary Activities After
Taxation (6,966,301)
__________
Loss per share (pence) 2 16.1p
Diluted loss per share (pence) 2 14.0p
CONSOLIDATED BALANCE SHEET
31 December 2003
Note 2003
#
Fixed Assets
Intangible Assets 1,417,486
Tangible Assets 628,840
__________
2,046,326
Current Assets
Debtors 62,328
Cash at bank and in hand 114,556
__________
176,884
Creditors: Amounts falling due
within one year (1,051,141)
__________
Net Current Liabilities (874,257)
__________
Total Assets less current liabilities 1,172,069
__________
Capital and Reserves
Called-up equity share capital 3 471,397
Share premium account 7,666,973
Profit and loss account (6,966,301)
__________
Equity Shareholders' Funds 1,172,069
__________
CONSOLIDATED CASH FLOW STATEMENT
for the period ended 31 December 2003
5 July 2002 to
31 December 2003
#
Reconciliation of operating loss to net cash
(Outflow) from operating activities
Operating loss (6,966,301)
Increase in debtors (40,478)
Increase in creditors 623,380
Depreciation 447,366
Amortisation of goodwill 1,995,248
Loss on sale of investments 401,001
___________
Net cash outflow from operating activities (3,539,784)
___________
CASH FLOW STATEMENT
Net cash outflow from operating activities (3,539,784)
Capital expenditure and financial investment
Purchase of fixed assets (1,071,113)
Purchase of investment (500,000)
Sale of investment 98,999
___________
Net cash outflow for capital expenditure and
financial investment (1,472,114)
___________
Acquisitions: Net cash acquired with subsidiaries 29,604
___________
Cash outflow before financing (4,982,294)
___________
Financing :
Issue of Share Capital 2,943,313
Loans from QuikTrak Networks Ltd which were
subsequently
converted into preference share capital in 2,153,537
subsidiary company
___________
Net cash inflow from financing 5,096,850
___________
Increase in Cash 114,556
___________
Reconciliation of net cash flow to movement in net funds
Increase in cash in the period 114,556
Net funds at 5 July 2002 -
___________
Net funds at 31 December 2003 114,556
___________
Analysis of changes in net funds
At 5 July 2002 Acquisitions Cashflows At 31
(excluding December 2003
bank)
Cash at bank and
in hand - - #114,556 #114,556
____________ ____________ ____________ ____________
NOTES TO THE FINANCIAL STATEMENTS
for the period ended 31 December 2003
1. Exceptional Item
Following the decision on 20 May 2004 to suspend commercial operation of
the M25 QuikTrak network, the group carried out an impairment review with
the result that assets were written down as follows:
#
Goodwill 1,498,950
Network assets 250,000
Stock purchased in year and written off 470,000
____________
2,218,950
____________
During the period the company acquired an investment of #500,000 shares in
Jubilee Investment Trust Plc, a company listed on the London Stock
Exchange, in return for #500,000 worth of shares in the company. The shares
were subsequently disposed of for #98,999 giving rise to a loss of
#401,001.
2. Loss per share
2003
Loss per ordinary share (pence) 16.1p
____________
Diluted loss per ordinary share (pence) 14.0p
____________
The loss per share has been calculated on the net basis on the deficit for
the financial period, after taxation, of #6,966,301 using the weighted
average number of ordinary shares in issue of 43,185,274.
Diluted earnings per share have been calculated using the weighted average
number of ordinary shares in issue, diluted for the effect of share
options, in existence at the period end of 49,800,004.
3. Share capital
2003
Authorised share capital: #
250,000,000 Ordinary shares of #0.01 each 2,500,000
____________________________________________________________________
Allotted, called up and fully paid: 2003
#
No. Nominal
Value
Issued in period (total consideration
received #2,943,313)
Ordinary shares of #0.01 each 47,139,727 471,397
____________________________________________________________________
Share options and warrants in existence at 31 December 2003 were as
follows:
No. Description Exercise Price Expiry Date
3,900,000 Ordinary Shares 50p per share 19 July 2007
1,043,607 Ordinary Shares 35p per share 31 December 2004
1,671,123 Ordinary Shares 50p per share 31 December 2004
____________________________________________________________________
Note the above options of 3,900,000 were cancelled on 8 March 2004
and replaced by the following:
No. Description Exercise Price Expiry Date
4,800,000 Ordinary Shares 25p 7 March 2009
____________________________________________________________________
4. Post Balance Sheet Events
In April 2004 the company issued a further 12,580,000 for Ordinary shares
for a total consideration of #1,512,000.
Subject to shareholder approval, the company has in June 2004, received
irrevocable commitments for the placing of 56,430,004 Ordinary Shares to
raise #846,450 in new equity funds.
On 20 May 2004 the group announced that they were suspending commercial
operation of its M25 QuikTrak Network.
5. Availability of accounts
The accounts have been posted to shareholders. Copies are available from
the Company's office at Lawton Gate House, 7 Hill Street, Richmond TW9 1SX.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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