RNS Number:7717S
Meriden Group PLC
12 March 2007
12 March 2007
Enquiries:
Russell Stevens 07860 562621
Chief Executive
Jonathan Wright 020 7107 8000
Seymour Pierce Limited
Meriden Group Plc (the "Company" or "the Group")
Preliminary results for the period ended 31 December 2006
Chairman's Statement
I present my 2006 extended period Chairman's report for Meriden Group plc.
During the period the Company made pre tax losses of #1,577,358 (Compared to the
consolidated 2005 results of a loss of #873,005 on a turnover of #8,891,713).
It was announced in the Chancellors March 2006 budget that the decision was made
to implement a change in the Governments policy and remove the benefits under
tax efficient payroll based deferred computer purchase agreements commonly known
as the Home Computer Initiative ("HCI") schemes from 6 April 2006. This change
in policy meant that the Company was forced to write off the set up costs and
work that had been incurred in setting up the HCI division. Subsequently the
Company lost its significant order book, which would have seen a high level of
revenue stream and profit flowing from its HCI division.
As shareholders are aware the Group had been incurring significant losses in the
Logistics subsidiaries being operated in Scotland and France. It was evident
that these activities whilst growing could not, even after the close of the
Scottish branch and the rationalisation of the business, provide a sufficiently
reasonable timescale to reach breakeven and, as the expected profit from HCI,
which would have subsidised these losses had been lost, the board made the
decision that these two trading subsidiaries should be placed into voluntary
administration, and the administration orders were granted by the court on 16
June 2006.
Following the placing of the Logistics subsidiaries into administration the
board entered into discussions with the Logistics divisions' residual creditors,
with whom Meriden Group had provided a guarantee for their indebtedness. Whilst
these discussions were mainly successful with 90% of the creditors agreeing,
notably, Barclays Asset Finance and Hill Hire, there was unfortunately one
creditor being SeaFrance SA who would not agree to the proposed informal
compromise agreement for the residual creditors. These discussions continued,
but were unfortunately unsuccessful and consequently the residual logistics
creditor of SeaFrance lodged a winding up petition against the Group.
The Group had been continuing to trade its core divisions of IT Solutions,
Marketing & Communications, Management Consultancy and Outsourcing, with the
board being hopeful that these core divisions would deliver positive results
having seen a number of notable contracts being won. However following the
submission of the winding up petition by SeaFrance SA the board resolved that
the precautionary step of making an application to the court for the Company and
its wholly owned subsidiary, Meriden Holdings Limited, to be placed into
administration.
The court granted the administration order for Meriden Holdings Limited on 13
September 2006 with a further hearing for the administration of Meriden Group
Plc being held at a later date. Meriden Holdings Limited traded under
administration, but unfortunately the administrator decided that the remaining
activities were not sufficiently profitable and consequently ceased to trade on
30 November 2006.
Unfortunately the court did not agree that Meriden Group Plc should be subject
to an administration order and the court therefore rejected our voluntary
administration application. Following this the Company was disappointed to
announce the resignation of Mr Derek Hall, who had been Chairman since flotation
on AIM in 2001. I therefore assumed the role as acting Chairman following his
resignation, but would like to thank Derek for his services to the Group and the
contribution he made during this time.
With the winding up petition being held in court I proposed that the Group
should attempt to enter into a Creditors Voluntary Arrangement ("CVA") between
all of the creditors. I entered into discussions with the major creditors in
order that this could be agreed in order to avoid the Company from being wound
up. To facilitate this I agreed to loan #30,000 to Meriden Group Plc so that
this would enhance the funds available for the CVA. I am pleased to say that my
discussions with the creditors were successful and the CVA proposal was passed
on 13 December 2006. Following this the petition for winding up of the Company
was subsequently dismissed by the court.
Following the successful approval of the CVA the decision was made that that the
year end should be extended to 31 December 2006 in order to prepare a 17 month
period set of accounts. The extended set of accounts will therefore incorporate
the CVA and I believe that these will provide a more informative current
situation of the Company to shareholders, following the CVA proposal.
With the trading of the shares having been suspended on 7 September 2006 these
extended set of accounts were required to be announced by 8 March 2007 in order
to retain the status of the AIM listing. Therefore I have personally financed
the costs of the Group since the CVA such as the audit, court fees and other
costs to ensure that this deadline could be met.
Having reviewed the potential opportunities for the remaining listed shell of
Meriden Group Plc I have been actively searching for businesses which will
relaunch the Company as a broad based business services group. I am hopeful that
my discussions will be successful having had a significant amount of positive
feedback from these. Should suitable opportunities be found then this will
enable the Company to continue into the foreseeable future and hopefully provide
an increase in value for shareholders, having seen the investment values
dramatically drop over the last 18 months.
Appropriate announcements will hopefully be made in due course following the
outcome of my discussions, but in the meantime I would like to thank all of our
former staff for their hard work during the difficult times that the Group has
incurred.
R W Stevens
9 March 2007
Profit and Loss Account for the period ended 31 December 2006
Note Period ended Year ended
31 December 31 July
2006 2005
# #
Turnover - 153,000
Administrative expenses - continuing (185,166) (145,442)
- exceptional (1,231,973) -
----------- -----------
Operating (loss)/profit (1,417,139) 7,558
Amounts written off investments (167,953) -
----------- -----------
Loss before interest and taxation (1,585,092) 7,558
Interest receivable 7,741 33
Interest payable (7) -
----------- -----------
(Loss)/profit on ordinary activities
before taxation (1,577,358) 7,591
Taxation - -
----------- -----------
(Loss)/profit on ordinary activities
after (1,577,358) 7,591
taxation
Dividends paid and proposed - (49,700)
----------- -----------
Retained (loss)/profit for the year (1,577,358) (42,109)
----------- -----------
Basic and diluted (loss)/earnings per
share (pence) 2 (0.46) (0.29)
----------- -----------
Balance Sheet as at 31 December 2006
Note As at As at
31 December 31 July
2006 2005
# #
Fixed Assets
Fixed asset investments - 167,953
Current assets
Debtors 1,164 1,385,857
Cash at bank and in hand 2,725 182
----------- -----------
3,889 1,386,039
Creditors: amounts falling due (51,094) (84,947)
within one year
----------- -----------
Net current (liabilities)/assets (47,205) 1,301,092
----------- -----------
Total assets less current liabilities (47,205) 1,469,045
----------- -----------
Capital and reserves
Called up share capital 345,000 345,000
Share premium 1,110,263 1,049,155
Profit and loss account (1,502,468) 74,890
----------- -----------
Equity shareholders' funds 3 (47,205) 1,469,045
----------- -----------
Cash Flow Statement for the period ended 31 December 2006
Notes Period ended Year ended
31 December 31 July
2006 2005
# #
Net cash outflow from operating activities 4 (31,639) (525,810)
Return on investments and servicing of finance
Interest received 7,741 33
Interest payable (7) -
------------ ------------
Net cash inflow from returns on
investments and servicing of finance 7,734 33
Taxation
Payments of taxation (4,800) -
Amounts eliminated under CVA arrangement (9,450) -
Capital expenditure and financial investment
Receipt from disposal of intangible fixed assets - 5,468
------------ ------------
Net cash inflow from capital expenditure
and financial investment - 5,468
Dividends paid (20,410) (66,421)
------------ ------------
Net cash outflow before financing (58,565) (586,730)
------------ ------------
Financing
Issue of ordinary shares for cash - 580,800
Refund of VAT on flotation costs 61,108 -
------------ ------------
Net cash inflow from financing 61,108 580,800
------------ ------------
------------ ------------
Increase/(decrease) in cash 5 2,543 (5,930)
------------ ------------
Notes to the Preliminary Results for the period ended 31 December 2006
1 Accounting policies
Basis of accounting
The financial statements have been prepared in accordance with applicable
accounting standards and under the historical cost convention. The principal
accounting policies of the Company have remained unchanged from those set out
in the Company's 2005 annual report and financial statements.
Going concern
The Company has net current liabilities of #47,205 and total liabilities of
#47,205 therefore there may be some concern of its ability to continue in the
foreseeable future.
However, after making enquiries, the director has a reasonable expectation
that the Company can continue in operational existence for the foreseeable
future under the assumption that a reverse takeover opportunity can be sought
for the AIM listing and support from the director, Mr Russell Stevens. For
this reason the board continues to adopt the going concern basis in preparing
the financial statements
Investments
Fixed asset investments are stated at cost less provision for permanent
diminution in value to the current market value.
Accounting period
The comparative trading period runs from 1 August 2004 to 31 July 2005 and
following an extension of the year end accounting reference date the current
period runs from 1 August 2005 to 31 December 2006.
2 Earnings per share
The calculation of the basic earnings per share is based on the profit on
ordinary activities after taxation and on the weighted average number of
shares in issue during the period. The profit and weighted average number of
shares used in the calculations are set out below:
(Loss)/ Weighted Basic
profit average (loss)/
# number Earnings
of shares per share
(pence)
Basic and diluted
earnings per
share:
Period ended 31 (1,577,358) 345,000,000 (0.46)
December 2006
Year ended 31 (885,810) 301,000,000 (0.29)
July 2005
(Consolidated
accounts)
--------------- --------------- -----------
3 Reconciliation of movements in shareholders'
funds
Period ended Year ended
31 December 31 July
2006
# 2005
#
(Loss)/profit on ordinary activities after (1,577,358) 7,591
taxation
Dividend - (49,700)
Share subscription - 605,000
Share subscription costs - (24,200)
Refund of VAT on flotation costs 61,108 -
------------ ------------
(Decrease)/increase in shareholders funds (1,516,250) 538,691
Opening shareholders' funds 1,469,045 930,354
------------ ------------
Closing shareholders' funds (47,205) 1,469,045
------------ ------------
4 Reconciliation of operating profit with net cash inflow from operating
activities
Period ended Year ended
31 December 31 July
2006
# 2005
#
Operating (loss)/profit (1,417,139) 7,558
Decrease/(increase) in debtors 1,384,693 (561,653)
Increase in creditors 807 28,285
------------ ------------
Net cash (outflow)/inflow from operating (31,639) (525,810)
activities
------------ ------------
5 Analysis of changes in net funds
1 August Cash Flow Other 31 December
2005 Changes
# in Year # 2006
# #
Cash at bank and 182 2,543 - 2,725
in hand
------------ ------------ ------------ ------------
182 2,543 - 2,725
------------ ------------ ------------ ------------
6 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 summarised balance sheet at 31 December 2006 and
the summarised profit and loss account, summarised cashflow statement and
associated notes for the period then ended have been extracted from the
Company's 2006 statutory financial statements upon which the auditors
opinion is unqualified and does not contain any statement under section
237 of the Companies Act 1985. Statutory accounts for the period ended 31
December 2006 will be delivered to the Registrar in due course. The
comparative financial information is based on the statutory accounts for
the financial year ended 31 July 2005. Those accounts on which the
auditors issued an unqualified opinion have been delivered to the
Registrar of Companies.
7 Availability of Annual Report and AIM Trading
The Annual Report will be posted to shareholders shortly and copies will be
available from the registered office of the Company. Copies are also
available now as a download from the Company's website at
www.meriden-group.co.uk. As a result, trading in the Company's shares on AIM
will now be restored.
8 Further information
The Company intends to send a circular to shareholders shortly to seek
ratification by shareholders for a new investing strategy at an
extraordinary general meeting in accordance with AIM Rule 15. Thereafter,
the Company will need to undertake a reverse takeover or otherwise implement
its investing strategy within a year of shareholder approval, or otherwise
trading on AIM will be suspended then cancelled after six months of
suspension.
This information is provided by RNS
The company news service from the London Stock Exchange
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