TIDMCRO
RNS Number : 9423J
Creon Corporation PLC
07 July 2011
For immediate release: 7 July 2011
Creon Corporation plc
Audited results for the year ended 31 January 2011 and Issue of
Equity
Creon Corporation plc (AIM: CRO) today announces its audited
results for the year ended 31 January 2011.
CHAIRMAN'S STATEMENT
I am pleased to present this annual report of Creon Corporation
plc ("Creon" or the "Company") and its subsidiaries ("the Group")
to shareholders for the year ended 31 January 2011.
Creon's operations
During the financial year under review, the Company maintained a
low cost base whilst its directors and shareholders considered, and
continue to consider, suitable investment opportunities and
alternative sources of finance for the Company. The Company's
management has continually made assessments of suitable investment
opportunities during the year, although unfortunately none has yet
to come to fruition. Any investments made would require the support
of the Company's shareholders and the need to raise further equity
funds. The board would like to thank its various professional and
administrative advisers who have supported the Company over the
course of the last 12 months, which has enabled it to continue to
meet its liabilities as they have fallen due.
Financial review
Income of GBP10,000 during the year represented recovery of sums
loaned to third parties in previous years which had been fully
provided for. Administrative expenses of GBP121,024 (2010:
GBP152,337) were down on the previous year, a direct reflection of
the lower activity than in 2009/10.
At the beginning of the 2009/10 financial year, the Company made
one commercial loan of GBP200,000, of which GBP110,000 remained
outstanding at 31 January 2010. During the year under review, a
further GBP29,692 of the loan capital was repaid in accordance with
its terms and loan interest of GBP12,171 was accrued (2010:
GBP17,633). The Company's retained loss for the year was GBP79,638
(2010: GBP146,940 loss) resulting in a loss per share of 0.18 pence
(2010: 0.33 pence loss).
The Group ended the year with net assets of GBP416,137 (2010:
GBP495,775). The assets were principally made up of the GBP400,000
investment in unquoted preference shares that the Company made in
September 2008 ("Preference Share") and the loan receivable of
GBP80,308, together with accrued interest due of GBP25,294
("Loan"). Group cash at 31 January 2011 was GBP330 (2010:
GBP15,862).
The Group's outstanding liabilities at the year end of
GBP103,698 (2010: GBP58,036) primarily comprised amounts owing to
its administrators and its directors. The Company is pleased to
report that its directors and certain of its creditors have reached
agreement to defer payment of GBP72,640 of the Company's year end's
outstanding liabilities until at least 1 August 2012 and thereafter
until the earlier of: (i) a significant cash injection into the
Company over the next 2 years (being an aggregate of GBP100,000 or
more); or (ii) the repayment of the Preference Share. There were no
changes in the Company's share capital during the year under
review.
Issue of new equity
The Company is pleased to today announce that it has raised
GBP24,000 through the issue of 200,000 new ordinary shares of 1
pence each in the capital of the Company ("Subscription Shares")
via a subscription at 12 pence per Subscription Share with certain
of its existing shareholders ("Subscription"). Application has been
made for the Subscription Shares to be admitted to trading on AIM
and trading in the Subscription Shares is expected to begin on 13
July 2011.
Following admission of the Subscription Shares, the Company's
issued ordinary share capital will comprise 44,190,545 ordinary
shares. All of the Company's ordinary shares carry voting rights
and this will be the figure which may be used by shareholders in
the Company as the denominator for the calculations by which they
will determine if they are required to notify their interest, or a
change to their interest, in the issued share capital of the
Company.
Going concern
The repayment of the Loan (and interest due thereon), together
with the proceeds of the Subscription will be used by the Company
to pay the ongoing running costs associated with being a public
company until suitable investments have been indentified and
further equity funds raised. The Loan can be called by the Company
at any time up until its repayment date of 31 July 2012, when
interest on the loan is also payable. As at 31 January 2011,
interest accrued, but not paid was GBP25,508. The Directors
estimate that the total ongoing annual running costs of the Company
are approximately GBP70,000, having negotiated substantial
reductions in costs with certain of its administrators.
Accordingly, the Loan and its repayment (including interest due),
together with the subscription provides the directors with
sufficient comfort as to the Group's ability to meet its ongoing
obligations as they fall due for at least the next 12 months.
After due consideration, the directors believe that the Company
has adequate resources for a period of at least 12 months from the
date of approval of the financial statements, and consequently that
it is appropriate to apply the going concern principle in preparing
the financial statements.
Investment policy
The directors will be seeking approval of, inter alia, the
investment policy as set out below at the annual general meeting of
shareholders, which is to be held on 29 July 2011. The investment
policy has not changed from that approved by shareholders at last
year's annual general meeting.
The Group investment policy allows investments in private
companies, publicly quoted companies and partnerships. The Group
will not focus on any particular industry sector but will seek
investments in sectors where there is potential for suitable
returns. This is expected to include sectors such as financial
services and property, where values largely remain subdued. The
Company will primarily focus on European based businesses but will
also consider investments in other geographical areas if
appropriate. The Group will not seek to limit the size of the
investment or the size of the entities in which it invests.
The Group will not be limited to a fixed number of investments
or seek to diversify the investments over particular sectors or
particular indexes, however it is envisaged that the total number
of investments at any given time will not exceed 50 investments.
The Group does not envisage at this stage gearing its investments
but may consider doing so in the future. The board is currently
reviewing a number of investment opportunities and anticipates
making an investment during the course of next year.
The Company will generally be a passive investor in the entities
in which it invests but if the board or the Group's consultants are
able to add value to the investee entities then the Group may take
a more activist stance.
Once potential investments have been identified, the board will
evaluate them on the basis of research prepared and presented to
the board by its financial advisers and consultants. The board
believes that this investment policy will help maintain the Group's
low cost base until alternative sources of finance can be
secured.
Director changes
Robert Eijkelhof joined the board of the Company as a
non-executive director on 8 July 2010 and Jonathan Freeman resigned
from the board on 30 July 2010.
Change of registered office
The Company is in the process of changing its registered office
from 11 Grosvenor Crescent, London SW1X to 201-205 Temple Chambers,
Temple Avenue, London EC4. A further announcement will be made in
due course once this change has taken effect.
Annual general meeting
Today the Company has posted a notice convening an annual
general meeting of the Company ("AGM") to be held at 201-205 Temple
Chambers, Temple Avenue, London EC4 at 1.00 p.m. on 29 July 2011,
together with a form of proxy for use at the AGM, which includes,
inter alia, the following resolutions:
-- Directors' powers to allot securities;
-- Directors' powers to disapply pre-emption rights;
-- Approving the Group's ongoing investment strategy;
-- Receiving of the accounts;
-- Appointment of Robert Eijkelhof who retires by rotation, as a
director of the Company; and
-- Re-appointment of the Company's auditor
Current position and outlook
The board continues to discuss additional sources of finance
with its shareholders, however until agreement can be reached, the
Company will continue in its current state, with little new
investment activity and running costs being kept to a minimum. The
Directors and their advisers are continuing to assess investment
projects that appear to demonstrate significant return
opportunities and these are presented to the existing shareholders.
The directors remain hopeful of being able to complete on one of
these transactions during the course of the current financial year
although any transaction would require the need to raise further
equity for investment from existing and potentially new
shareholders.
CREON CORPORATION PLC
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