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REG-Energiser Invts PLC Final Results Released: 30/06/2009
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RNS Number : 8253U
Energiser Investments PLC
30 June 2009
Energiser Investments Plc
Final results for the year ended 31 December 2008
Chairman's statement
INTRODUCTION
I last wrote to shareholders with the circular which described the various
measures the Board were taking to convert part of the Company's loan from
Stephen Wicks, Energiser Investments' principal shareholder and a substantial
part of the remuneration due to the Directors and an employee of the Company
into ordinary shares. Since then the world has been gripped by a financial
meltdown which brought the banking system to the point of collapse.
I am reporting to you on the Group's results for the year ended 31 December,
2008, the year in which investors fled the equity markets in search of safer
havens. The last quarter of 2008 saw an unprecedented demand for cash and bonds,
which saw the yield on 3 month US Treasury bills, considered by investors to be
a safe haven, become negative. In other words, investors were so worried about
the prospects for the global economy that they put their money in places where
they believed that the money would be returned to them, rather than demanding a
return on the capital that they had invested.
As a consequence of this, the world's equity markets were severely impacted. The
US S&P 500 index suffered its biggest decline since the great depression of the
1930s and Japan's Nikkei index had its biggest annual fall ever. The UK and
other European markets were similarly affected. The response from the world's
Governments was to slash interest rates to all time lows and to throw billions
of dollars at the banking system in a desperate bid to avert the financial
meltdown and global recession.
As we stand today there are a multitude of conflicting economic indicators which
would indicate that we are either at the start of the next bull market or
alternatively on the verge of worldwide recession. To my mind, the green shoots
that are being referred to are just that. There is some considerable way to go
but I am swayed by the view that the worst is behind us but that the pace of
recovery will be slow and that almost inevitably there will be some painful
bumps along the way.
PERFORMANCE DURING THE YEAR
In light of my comments above, it will come as no surprise to shareholders that
the Board announce that the loss before taxation has increased to £1.25 million
(2007: loss £0.84 million) despite having further reduced the administrative
costs incurred in running the Group to £132,000 (2007: £361,000). We are
disappointed to note that Energiser Investments' net liabilities,
notwithstanding the actions taken by the Board to reduce the Group's
liabilities, have now fallen to a deficit of £0.40 million (2007: assets of
£0.70 million). The Directors do not intend to recommend the payment of a
dividend. The loss is due to the further reduction in the value of the Company's
investment portfolio, further details of which are set out below. Whilst this is
unsatisfactory we do not have any control over the share price performance of
our investee companies and shareholders should bear in mind that the performance
of smaller company shares in the last 12 months, particularly on London's
Alternative Investment Market ("AIM") has generally been very poor.
Having written off one investment during the year where we were not confident of
recovering any further monies, another of our investee companies, EiRx
Therapeutics PLC had its shares suspended on AIM and its listing subsequently
cancelled. We were therefore left with three quoted investments, Physiomics plc,
Cybit Holdings PLC and Inland PLC (which was acquired during the year) at the
year end. I would like to draw your attention to the achievements of these three
companies, as follows:-
AIM LISTED INVESTMENTS
Cybit Holdings PLC
Cybit Holdings PLC ("Cybit") is one of Europe's leading telematics products and
service providers, which principally provide organisations with a comprehensive
suite of solutions to monitor and position their mobile assets. Cybit operates
within three distinct sectors, namely: internet based vehicle telematics
solutions; maritime solutions and private mobile radio based asset tracking and
precise positioning management. Cybit now support 50,000 mobile assets and
approaching 2,000 customers.
In Cybit's latest interim results, for the 6 months ended 30 September 2008,
Cybit announced some good results with turnover up 37 per cent at £12.3 million
(2007: turnover £9 million), operating profits of £1.74 million (2007: operating
profit £1.23 million) and profits before taxation up to £855,000 compared to
£616,000 for the comparative period. With these results the company announced
contract wins from amongst others Greene King brewers, Powys County Council and
the Highways Agency.
Recently the company has announced a further contract win with Kwik Fit Mobile's
tyre fitting vehicles.
Since the year end we have disposed of our total shareholding in Cybit,
realising sales proceeds of £118,000.
Physiomics plc
Physiomics plc ("Physiomics") is a European computational systems biology
services company which applies simulations of cell behaviour to drug development
companies aimed at reducing the high attrition rates of clinical trials. The
commercial rationale for Physiomics services is that it is estimated that the
cost of bringing a new drug to market is $800 million and that 80 to 90 per cent
of all clinical drug candidates fail. There is increasing evidence that the
major pharmaceutical companies are using more sophisticated technology to
shorten the discovery process thereby reducing the overall cost associated with
it.
In February, 2009 Physiomics announced its interim results for the 6 months
ended 31 December, 2008 which showed a maiden albeit modest profit before
taxation of £3,000 (2007: loss before taxation of £194,000) on a near fourfold
increase in revenue of £210,000 (2007: revenue of £55,000). Physiomics reported
that the company had been successful in raising approximately £250,000 through a
combination of a debt for equity subscription and a placing of new ordinary
shares. The debt for equity included the conversion of £86,500 of a £100,000
loan from EiRx Pharma Limited, in which Energiser Investments has a near 40 per
cent shareholding.
In April, 2009 Physiomics announced the signing of a further licence agreement
with the global pharmaceutical company Eli Lilly. The licence will allow Eli
Lilly to use the version of the company's simulation platform for in-house
modelling of anti cancer drugs. This is the first time that Physiomics has
licensed its technology to a third party.
Inland plc
Inland plc ("Inland") are developers of urban regeneration projects around
Southern England and predominantly specialise in brownfield developments.
Inland's strategy is to acquire large scale development opportunities,
substantially funded by third parties, where the company's expertise in securing
good planning consents can be fully utilised and to hold its landbank for a
future sale when conditions in the housing market improve. Stephen Wicks,
Energiser Investment's principal shareholder is the Chief Executive of Inland
and Nish Malde, a director of Energiser Investments, is the Finance Director. I
am on the board of directors at Inland as a non executive director. In addition,
Stephen Wicks and Nish Malde own respectively 21,050,009 and 8,524,000 Inland
ordinary shares equivalent to 12.98% and 5.26% of the issued share capital. I
own 50,000 Inland ordinary shares, equivalent to 0.03% of the issued share
capital. Energiser Investments currently owns 300,000 Inland ordinary shares,
equivalent to 0.19% of the issued share capital, which were acquired at a cost
of approximately £27,000.
In March 2009, Inland announced its interim results for the six months ended 31
December, 2008 which showed turnover of £0.35 million (2007: £0.17 million) and
a loss before taxation of £4.95 million, including a write down in the value of
the company's land portfolio of £3.04 million (2007: loss of £1.53 million). At
31 December, 2008 it was reported that the net assets of the company were £47.4
million (2007: £59.4 million) and had net borrowings of £6.79 million (2007: net
cash of £11.7 million).
In addition, it was announced that Inland had acquired by way of a joint venture
a site in West Drayton, Middlesex which has development potential for over 800
homes. In aggregate, the company's then land bank consisted of approximately
2,100 residential plots and 255,000 square feet of commercial space. It was
reported at that time that the focus was on securing planning permissions on the
company's land portfolio and that 533 of Inland's residential plots had planning
consent.
Whilst the board of Inland reported that they were cautious about the prospects
for the housebuilding market, in May 2009 the company announced that it had sold
10 detached building plots on two sites, a site for 5 apartments and had
received planning permission for 152 apartments on its site in Ashford,
Middlesex.
EIRX PHARMA LIMITED
Energiser Investments owns its shareholding in Physiomics through EiRx Pharma
Limited, in which the Company has a shareholding of 39.2 per cent. Following a
vote of the shareholders of EiRx Pharma Limited to effect a distribution of the
assets of that company in specie, by way of a members' voluntary winding up, on
12 August, 2008 Leonard Curtis were appointed liquidators to EiRx Pharma
Limited.
Whilst the process of winding the company up has taken longer than originally
anticipated I can report that there was a surplus available to shareholders
after paying all the company's debts in full. In addition, the assets of EiRx
Pharma Limited, which principally are the holding in Physiomics, will shortly be
distributed to shareholders.
DEVELOPMENT FUNDING LIMITED
Conditions in the UK housebuilding industry remain depressed and recovery is
still some way off. Following the demise of the building contractor to whom
Energiser Investments had provided mezzanine funding at its first development in
Wellingborough, Northamptonshire, Development Funding Limited ("DFL") took full
control of the site in December 2008 by acquiring the development company, Gramm
Partnership Housing Limited for a nominal consideration. The development
comprises 29 new freehold houses and I can report that 9 houses have now been
sold, with an additional 1 house under offer and 6 houses have been rented. The
market remains difficult, although there has been a marked increase in buyer
interest recently. The remaining 13 houses in the development are available for
sale. I am however, bound to add that we will shortly have to pay council tax on
uncompleted units to the Local Authority.
The Board remains cautious of the housebuilding market at present and it is
unlikely that, until market conditions improve substantially, DFL will consider
making further loans to housebuilders.
The funding for DFL's investment has been provided by Stephen Wicks, Energiser
Investments' largest shareholder who owns approximately 57 per cent of the
Company's issued share capital. At 31 December, 2008 he had lent Energiser
Investments £0.87million (2007: loan of £1.4 million) on commercial terms. Mr
Wicks converted £0.36million of his then loan into equity in November, 2008
details of which were contained in the circular to shareholders that was sent to
you in October, 2008. The Board has agreed with Mr Wicks that his outstanding
loan will not be repayable for a minimum of twelve months unless the Company is
able to do so. The Group continues to rely on financial support from Stephen
Wicks, which he has continued to provide on a secured basis at 1% above base
rates. This support is expected to continue for the foreseeable future and
constitutes a related party transaction under the AIM Rules for Companies and
accordingly the Directors consider, having consulted with the Company's
nominated advisor, that the terms of the facility are fair and reasonable
insofar as shareholders are concerned.
OUTLOOK
The Board will continue to look to realise its remaining investments as and when
appropriate. Whilst we remain confident of the long term prospects for our
development financing business, DFL, we will continue to be cautious until there
is more evidence of a substantial and sustained improvement in the housing
market.
Simon Bennett
30 June 2009
Directors' Report
Results and dividends
The net loss of the Group for the year after taxation amounted to £1,250,000
(2007: £837,000). The directors do not recommend the payment of a dividend for
the year ended 31 December 2008.
The net liabilities of the Group at 31 December 2008 totalled £399,000 (2007:
net assets £703,000). The net liabilities per ordinary share as at 31 December
2008 were 1.4p (2007: net assets per share 6.6p).
As referred to above, the Group's principal activity is that of investing in
quoted and unquoted companies to achieve capital growth. Accordingly, the main
key performance indicators used by the business are:
* the underlying share price of the investments
- Cybit (2008: 29.5p, 2007: 47.2p)
- Physiomics (2008: 0.15p, 2007: 0.47p)
- Inland (2008: 6.6p, 2007: no investment)
* the returns on project finance (at the year end the only project is
under development); and
* the net assets position of the Group including net assets per share
(2008: net liabilities per share of 1.4p, 2007: net assets per share of
6.6p).
Going concern
The financial statements have been prepared on the going concern basis, the
directors having considered the cash forecasts for the next 12 months from the
date of the approval of these financial statements. In doing so they have given
due regard to the risks and uncertainties affecting the business, the liquidity
of investments and the liquidity risk, funding provided by Mr S D Wicks and the
repayment of other loans. On this basis the Directors have a reasonable
expectation that the funds available to the Group are sufficient to meet the
requirements indicated by those forecasts.
ON BEHALF OF THE BOARD
Nishith Malde
Company Secretary30 June 2009
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2008
2008 2007
Restated
£'000 £'000
Continuing operations
Net losses on investments (936) (543)
Other income 55 98
Cost of sales (382) -
Gross loss (1,263) (445)
Administrative costs (132) (361)
Operating loss (1,395) (806)
Finance costs (166) (115)
Finance income 311 84
Loss before taxation (1,250) (837)
Taxation - -
Loss for the year attributable to shareholders (1,250) (837)
Loss per share:
Basic and diluted loss per share from total and continuing (10.24)p (7.89)p
operations
CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2008
2008 2007
£'000 £'000
ASSETS
Non-current assets
Financial assets at fair value through profit and loss 266 1,651
Current assets
Inventories 2,126 -
Loans and receivables - 1,026
Trade and other receivables 245 208
Cash and cash equivalents 43 5
2,414 1,239
Total assets 2,680 2,890
LIABILITIES
Current liabilities
Trade and other payables 405 466
Short-term borrowings 2,338 1,422
2,743 1,888
Non-current liabilities
Other payables 20 -
Long-term borrowings 316 299
336 299
Total liabilities 3,079 2,187
Net (liabilities)/ assets (399) 703
EQUITY
Share capital 2,296 2,279
Share premium account 5,538 5,423
Convertible loan 88 88
Merger reserve 1,012 1,012
Retained earnings (9,333) (8,099)
Total equity (399) 703
consolidated CASH FLOW STATEMENT fOR THE YEAR ENDED 31 DECEMBER 2008
2008 2007
£'000 £'000
Cash flows from operating activities
Loss before and after taxation (1,250) (837)
Adjustments for:
Fair value adjustments 781 580
Loss/(profit) on sale of investments 155 (37)
Interest expense 166 115
Increase in loans, trade and other receivables (310) (920)
Decrease in trade payables (69) (104)
Interest received (311) (84)
Share option charge 16 9
Write down of inventories to net realisable value 381
-
Net cash from operating activities (441) (1,278)
Cash flows from investing activities
Purchase of investments (155) (13)
Proceeds from sale of investment 604 265
Acquisition of subsidiary, net of cash acquired - -
Net cash used in investing activities 449 252
Cash flows from financing activities
Proceeds from short-term borrowings 374 1,134
Re-payment of short-term borrowings (335) (82)
Net cash generated from financing activities 39 1,052
Net increase in cash and cash equivalents 47 26
Cash and cash equivalents at beginning of period (4) (30)
Cash and cash equivalents at end of period 43 (4)
Note:
Energiser has posted its Annual Report and Accounts for the year ended 31
December 2008, along with Notice of the AGM to shareholders. The AGM will be
held at 2 Anglo Office Park, 67 White Lion Road, Amersham, Buckinghamshire. HP7
9FB at 11:00 am on 4 September 2009.
The Company's Annual Report and Accounts are available to view and download on
the Company's website at www.billamplc.co.uk
For further information contact:
Energiser Investments plc
Nish Malde +44 (0) 1494 762 450
FinnCap
Marc Young +44 (0) 20 7600 1658
This information is provided by RNS
The company news service from the London Stock Exchange
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