Final Results
April 19 2006 - 3:02AM
UK Regulatory
RNS Number:6335B
Supercart PLC
19 April 2006
Supercart Plc ("Supercart" or the "Company")
Preliminary results for the 12 months to 31st December 2005
CHAIRMAN'S STATEMENT
I am pleased to present our second annual results since our flotation on AIM in
February 2004. During 2005, we have been faced with challenges concerning
production and delivery of certain of our trolleys and the restaffing of our
North American office. Accordingly, progress has been slower than we had hoped.
On a positive note, we believe we now have an excellent team in North America,
who have been in place since November, and we have reasons to feel encouraged
about our prospects there during the next 12 months. We continue to make good
progress in South Africa, where 2005 revenues exceeded the preceding year by
more than 25%.
Results
For the year ended 31st December 2005, Supercart generated turnover of
#2,415,000 (2004 - #2,083,000) an increase of 16% which resulted in a loss
before tax of #675,000 (2004 - loss of #838,000). The loss per share is 3.29p
(2004 - loss of 4.64p).
Supercart had net cash balances of #408,000 (2004 - #1,752,000) at the year end.
We also have unused banking facilities in place of in excess of #700,000.
The Directors are not recommending the payment of a dividend in respect of the
period ended 31st December 2005.
South Africa
In South Africa we continue to be the only supplier of plastic trolleys and the
dominant supplier in the region of any trolley type or size. 2005 saw an
increase in unit and retail sales of over 25% and an improvement of over 1.5% in
our gross profit margin.
As mentioned in our interim statement in September 2005, we were successful in
producing and delivering a significant number of trolleys made with recycled
plastic material in 2005. We expect this to be an increasingly important trend
in the future.
We also work with certain of our important customers to provide further
functionality to our trolley which will provide various retailer benefits. We
believe that this continuing development of intellectual property will serve to
provide our trolleys with the unique selling points required to repeat, in the
North American and European markets, the market penetration and financial
success that Supercart enjoys in South Africa.
We took delivery in March 2006 of the first off tool samples of our new plastic
hand basket. Initial retailer acceptance levels appear to be high and we expect
that this hand basket will add significantly to our product line and revenues
during 2006. Additionally, we will be using the CAD data for this design to
build our own hand basket moulds in the other regions in which we operate.
North America
As stated previously, we believe that it is in this market that Supercart will
see the real growth over the coming years. Already, in the less than six months
that our new General Manager has been on board, we have been made aware of the
enormous opportunities that exist in North America.
In December 2005, we successfully extracted our full sized 180 litre trolley
mould from our previous manufacturer following their lengthy and protracted
period restrained under the rules of the North American Chapter 11 bankruptcy
protection code.
Our 'Classic' 160 litre trolley mould is now in full production. Retailer
acceptance is high and we are receiving assurances concerning ongoing orders
from a number of potential customers.
With no production in 2005 of our full sized 180 litre trolley, sales were
accordingly down by nearly 50% on 2004 levels. We believe, however, that during
the next 12 months we will begin to see growing demand for our products.
Europe
A year ago we experienced problems with the 225 litre trolley for the European
market. In the interim, much work has gone into testing and rectifying these
problems and certain modifications are now planned.
Accordingly, we have made arrangements to ship the moulds to Europe from South
Africa for these modifications to take place. We will be in a position to
comment on the efficacy of this plan by the late summer of this year.
We have now signed off on the design of the new European trolley and have begun
cutting the steel for the moulds. This process has taken longer than we had
planned due to the extensive retailer acceptance processes that we have
subjected ourselves to, each of which required further CAD design work and the
building of full sized prototypes for real life testing.
Throughout this period we have kept our European distributors, Ateliers Reunis
Caddie SA ("Caddie"), fully informed of all progress with regard to our
products. Caddie confirms continued strong retailer demand and most importantly,
their continuing full commitment and support for Supercart and their endorsement
of these products.
Other
Since we had already started work in the summer of 2005 on the design of a
totally new trolley exclusively for North America, we considered that the 180
litre trolley would make an ideal product for the new Australian market where we
had begun marketing operations earlier in the year. The 180 litre mould arrived
in Melbourne, Australia at the end of January 2006 and work will soon commence
on building a new chassis for the Australian market. We expect production to
commence towards the end of this year in this new market.
We continue to scrutinize every aspect of our costing structure being keenly
aware of how important pricing is to our retail customers. In conjunction with
some of our current customers, we are developing pricing models that clearly
demonstrate savings of plastic over metal trolleys in regards to 'total lifetime
ownership and maintenance costs'.
Outlook
We continue to be confident in the acceptance of our products in all the markets
where we operate, and we believe that this presents us with significant
opportunities. With the management structure that we now have in place and the
products that are under development and will come into production over the next
twelve months, we have every chance of turning the corner. We believe it
reasonable to anticipate that during the current year we will continue to reduce
the level of recent losses and that we will become profitable in 2007.
Victor Segal
Chairman
Consolidated profit and loss account
Year ended 31st December 2005
Period 10th
Year ended November 2003
31st December to 31st
2005 December 2004
Notes #'000 #'000
Turnover 2 2,415 2,083
Cost of Sales (2,021) (1,859)
__________ __________
Gross Profit 394 224
Administrative expenses (1,106) (1,127)
__________ __________
Operating loss 3 (712) (903)
Interest receivable 46 73
Interest payable (9) (8)
__________ __________
Loss on ordinary activities before taxation (675) (838)
Tax on loss on ordinary activities - -
__________ __________
Loss on ordinary activities after taxation (675) (838)
__________ __________
Loss per ordinary share
- Basic and diluted 4 (3.29)p (4.64)p
__________ __________
All profits and losses arose from continuing activities.
Consolidated statement of total recognised gains and losses
Year ended 31st December 2005
Notes Period 10th
Year ended November 2003
31st December to 31st
2005 December 2004
#'000 #'000
Loss on ordinary activities after taxation (675) (838)
Currency translation differences on foreign currency net
investments (22) 25
__________ __________
Total recognised gains and losses for the year/ period (697) (813)
__________ __________
Consolidated balance sheet at 31st December 2005
2005 2004
Notes #'000 #'000
Fixed Assets
Intangible fixed assets 8 16
Tangible fixed assets 927 573
__________ __________
935 589
__________ __________
Current Assets
Stocks 17 146
Debtors 1,127 550
Cash at bank and in hand 460 1,877
__________ __________
1,604 2,573
Creditors: amounts falling due within one year (1,015) (930)
__________ __________
Net current assets 589 1,643
__________ __________
Total assets less current liabilities 1,524 2,232
Creditors: amounts falling due after one year - (11)
__________ __________
Net assets 1,524 2,221
__________ __________
Capital and reserves
Called up share capital 5 82 82
Share premium account 2,952 2,952
Profit and loss account (1,510) (813)
__________ __________
Equity shareholders' funds 1,524 2,221
__________ __________
Consolidated cash flow statement
Year ended 31st December 2005
Period 10th
Year ended November 2003 to
31st December 31st December
2005 2004
Notes #'000 #'000
Net cash outflow from operating activities (902) (1,171)
_______ _______
Returns on investments and servicing of finance
Interest received 46 73
Interest paid (9) (8)
_______ _______
37 65
_______ _______
Taxation paid (25) (34)
_______ _______
Capital expenditure
Purchase of tangible fixed assets (394) (319)
Sale of fixed assets 12 13
_______ _______
(382) (306)
_______ _______
Acquisitions
Purchase of subsidiary undertakings - (14)
Net cash acquired with subsidiaries - 44
_______ _______
- 30
_______ _______
Net cash outflow before financing (1,272) (1,416)
Financing
Issue of ordinary share capital - 3,158
Finance leases (15) 14
_______ _______
(15) 3,172
_______ _______
Net cash (outflow)/inflow (1,287) 1,756
Translation differences (56) (5)
_______ _______
(Decrease)/increase in cash in the year/period (1,343) 1,751
__________ __________
Notes on the financial statements
1. Accounting policies
Basis of accounting
The financial information has been prepared under the historical cost convention
and in accordance with applicable United Kingdom accounting standards.
Going concern
The financial statements are prepared on the going concern basis, which assumes
that the company and the group will continue in operational existence for the
foreseeable future. Up to 31st December 2005 the group has made operating losses
totalling #1.6 million. Ultimately it will not be possible, without further
funds being made available either by way of equity or borrowing, for the group
to sustain further significant losses and continue as a going concern.
Subsequent to the balance sheet date the directors have negotiated a financing
facility, to be secured on one of its moulds, of up to R6 million (approximately
#570,000), which is as yet undrawn. This facility is in addition to an existing
overdraft facility of R1.5 million (#140,000), which is also undrawn at the date
of approval of these financial statements. It has also agreed, with certain
manufacturers with whom it has relationships, arrangements by which the cost of
constructing and/or modifying moulds for production is to be borne principally
by the manufacturer, rather than the group.
The directors' assessment of the group's ability to continue as a going concern
beyond the date of approval of the financial statements has concluded that it is
appropriate to apply the going concern basis, and that the group will continue
to be able to realise its assets and discharge its liabilities in the normal
course of business on the basis of the arrangements in place described above and
based on assumptions concerning:
* The availability of new products
* The time at which those new products become available
* The demand for those products
Should there be any significant delay in the new products becoming available or
demand fall short of expectations, the group would require access to further
funds to continue as a going concern. Preliminary discussions have already been
held with the group's bankers concerning additional borrowing facilities secured
on other of the group's moulds and the directors would also consider further
equity issues should the need arise.
2. Turnover
The turnover of the group was wholly attributable to its principal activity,
which is the design, marketing, sale and distribution of plastic supermarket
trolleys and hand baskets.
3. Operating Loss
Operating loss on ordinary activities was stated after charging/(crediting):
Period 10th
Year ended November 2003
31st December to 31st
2005 December 2004
#'000 #'000
Exceptional gain-forgiveness of amounts owed to suppliers (note 24) (77) -
Exceptional gain-recovery of salary costs from former employee (36) -
Exceptional gain - reimbursement of overseas sales duty (28) -
Operating leases - Land and buildings 39 44
Depreciation of tangible fixed assets (owned) 31 9
Depreciation of tangible fixed assets (leased) 5 2
Loss on disposal of fixed assets 10 -
Amortisation of intangible fixed assets 8 7
Auditors' remuneration-audit work 29 25
Auditors' remuneration-non-audit work 31 18
Foreign exchange profit (52) (4)
__________ __________
In addition to the amounts shown above, in 2004 the auditors were paid #29,250,
in relation to services provided in admission to AIM. These amounts are included
in share issue costs.
4. Loss per share
The calculation of loss per share is based on the loss for the financial year/
period of #674,549 (2004 - #837,989) and the weighted average number of shares
in issue of 20,500,000 (2004 - 18,063,432).
The losses attributable to ordinary shareholders and weighted average number of
shares for the purposes of calculating the diluted loss per share are identical
to those used for basic loss per share. This is because the exercise of share
options would have the effect of reducing the loss per ordinary share and is
therefore not dilutive under the terms of FRS 22.
5. Called up share capital
2005 2004
#'000 #'000
Authorised:
25 million Ordinary shares of 0.4p each 100 100
_________ _________
Issued, allotted and fully paid:
20.5 million Ordinary shares of 0.4p each 82 82
_________ _________
The company operates both an Inland Revenue approved share option scheme and an
unapproved share option scheme under which options have been granted to
employees and directors.
During the year ended 31 December 2005, 1,200,000 share options were granted and
40,000 options lapsed. The options outstanding at 31 December 2005 were as
follows:
Number of shares Exercise price Period of exercise
800,000 15.9p 4th February 2007 - 3rd February 2014
25,000 16p 4th February 2007 - 3rd February 2014
125,000 35p The period commencing three years from the date on which
average market value per share reaches 35p and ending on
3rd February 2014
117,500 50p The period commencing three years from the date on which
average market value per share reaches 50p and ending on
3rd February 2014
100,000 19.5p 4th February 2007 - 3rd February 2014
700,000 14.1p 4th February 2007 - 3rd February 2014
200,000 14.1p 19th April 2008 - 19th April 2015
6. Copies of the Report and Accounts will be sent to shareholders by 24
April 2006. Copies are also available free of charge to members of the public
from the Company's registered office at 3 The Mews, 16 Hollybush Lane,
Sevenoaks, Kent, TN13 3JT and shall remain available for at least one month.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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