TIDMGLN
RNS Number : 6666L
Glen Group PLC
15 January 2009
?
Embargoed until 0700
15 January 2009
Glen Group plc
("Glen" or the "Company")
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2008
Glen Group plc, (AIM: GLN) the AIM listed provider of integrated
telecommunications solutions to the SME market, today announces its preliminary
results for the year ended 30 September 2008.
Highlights
* Successful sale, as at 31 December 2007, of the Eclectic and inGroup businesses
for a net cash consideration of GBP2.72m.
* Acquisition on 27 June 2008 of Colloquium Limited, one of Scotland's first ISPs,
for an all cash consideration of GBP100,000 excluding deal costs.
* Elimination of all group debt, amounting to over GBP800,000.
* Cash resources of over GBP0.5m available at the year end.
* Turnover of GBP1.5m, up 47% compared to last year.
* Gross margin percentage at 35.8% compared to 23.3% last year.
* Administrative expenses reduced.
* Operating loss of GBP1.07m represents a reduction of 58.5% over last year.
* Overall loss for the year nearly halved from GBP3.0m in 2007 to GBP1.63m.
* Strengthened sales team.
* Board successfully restructured.
* New Nominated Adviser and Broker appointed.
* Proposed name change to Pinnacle Telecom Group PLC
Graham J Duncan, Non-Executive Chairman commented:
"The Board recognises that the first priority for the year ending 30 September
2009 is organic growth and tight cash management. We believe that the new
financial year will, in many respects, be a critically important year for us."
For further information please contact:
Glen Group plc
Graham J Duncan, Non-Executive Chairman 0131 202 0102
Alan J Bonner, Chief Executive 0845 119 2100
Zeus Capital Limited
Ross Andrews
Bobby Fletcher 0161 831 1512
Pelham PR
Alex Walters 0203 170 7435
CHAIRMAN'S STATEMENT
Despite the sharp economic downturn, we have continued to make progress, with
the results compared to last year showing a 47% lift in turnover to GBP1.5m and
our bottom line losses dramatically reduced by nearly 50%. We are also fortunate
to be holding cash, which amounted to over GBP0.5m at the year end, having
repaid all our borrowings, of over GBP800,000, from the proceeds of the sale of
the businesses of Eclectic Group Limited and I G Software Limited. The timing of
this sale could not have been better, given the precipitous downturn in the
financial services sector which was the most important focus of the businesses
sold.
Telecommunications spend, both fixed and mobile, remains a significant cost to
many businesses. Although we have not seen a slowdown in activity at this time,
we cannot be certain that we will avoid deterioration through 2009 as the
economy continues to weaken. In this climate, we believe that businesses may be
more willing to change their telecommunications provider on the basis of price
alone, although services and solutions which can make their businesses more
efficient remain important factors when considering a change. It is our view
that, in a downturn, telecommunication services aimed at businesses do not
suffer as rapidly as a consumer focused business and we intend to further
promote our value for money solutions through our expanding sales channels.
We continue to expand the mix of services and on 27 June we were pleased to be
able to acquire Colloquium Limited ("Colloquium"), at a realistic all cash price
of GBP100,000, before acquisition costs. Colloquium is one of Scotland's oldest
internet service providers, which we have fully integrated into the existing
business. We now believe that we have an all-round service capability in the ICT
space and remain focused on providing telecommunications based solutions to the
SME market.
Major changes were made during the year to our Board structure. Eric M Hagman,
our first Chairman (Non-Executive), stepped down from the Board at the end of
May and Peter J Ford, who co-founded the group, did not put himself up for
re-election at the AGM on 9 May 2008, resigning from the Board at that time.
Effective 1 June 2008, I moved up into the role of Non-Executive Chairman and
handed over the day to day running of the business to Alan J Bonner, the MD of
our operating subsidiary Pinnacle Telecom, who took on the role of group CEO. We
had welcomed David Hewitt to the Board in late February 2008, but on 1 August he
stepped down in favour of John C Anderson, a well known Scottish based business
figure, following our renewed focus on the telecommunications market. Also with
effect from 1 June, Alan J Bonner, five significant shareholders and I entered
into a memorandum of understanding for the purposes of promoting the development
of the Company and its business.
Following the Board changes, we have completely restructured our sales
operations and are actively currently building a dealer channel as an additional
route to market, as well as continuing with other direct channels, based on an
active sales force. We have materially strengthened our middle management team
and our marketing efforts have been sharpened.
In order to recognise that our telecom operations now dominate the group
business, we are proposing at the AGM to change the name of the company to
Pinnacle Telecom Group PLC.
On 23 December 2008, we announced the appointment of Zeus Capital Limited as our
new Nominated Adviser and Broker and we look forward to working with them in the
future.
Small AIM listed businesses are out of fashion and may not return to popularity
for some time, perhaps several years. The ongoing costs of the listing remain
overwhelming compared to the size of our operating units and we must "grow into"
these costs and beyond in order to pull the group into profit. We do have an
extremely experienced team, but organic growth takes time. Through the efforts
of the management team, we have identified a number of possible acquisition
targets, but there needs to be more realism from private owners on the valuation
of their businesses. Any non equity financing would need to be externally
sourced by the Company.
The Board recognises that the first priority for the year ending 30 September
2009 is organic growth and tight cash management. We believe that the new
financial year will, in many respects, be a critically important year for us.
Graham J Duncan MA CA
CHAIRMAN
15 January 2009
BUSINESS REVIEW
Introduction
The economic background deteriorated sharply during the second half of the year,
and it continues to weaken. Given this dynamic, we are pleased to have lifted
our turnover, improved our gross profit, kept our administrative expenses to a
modest level and reduced our overall losses. Going forward, we cannot be certain
that we have escaped the effects of the worst decline in confidence in living
memory, but at this time we do not sense a fall off in turnover. We are,
however, keeping a watchful eye on the situation.
Given the fact that the group is running at a loss, we are putting much of our
energy into growing the business organically and, in particular, focussing on
increasing our gross profit in absolute terms. The Board believe that the
greatest risk to the business is being unable to achieve the levels of gross
profit that we need in the time scale which we have planned, without access to
further capital. Given the state of the financial markets, we are running the
business on the premise that we will not be able to access any additional funds
within the 2009 financial year, nor complete any acquisitions which require
cash.
Our cash resources are finite. Although we have no debt, and had cash in excess
of GBP0.5m at the year end, losses will continue to erode our cash resources
until our gross profit exceeds our cost base.
Much of our income is recurring particularly our telecom services revenues which
now make up the majority of our revenue base. Our sales channels have been
expanded both during the year and since the year end, and we now have a range of
channels to market, including direct sales using a sales team, call centre sales
activity and, more recently, the introduction of a dealer and reseller network.
Since the acquisition of Colloquium, an ISP, in late June 2008, we have been
able to sell a wider, more rounded, range of solutions to the business market
and we continue to package and deliver services which are good value for money.
In this climate, we believe that we may see more businesses change providers on
the basis of price alone.
As indicated in the Chairman's Statement, we believe that 2009 will be a pivotal
year.
Review
1) Turnover
Turnover from the continuing operations, which constitutes our reported
turnover, rose a healthy 47% over the year from GBP1,014,870 to GBP1,495,267.
Turnover from the discontinued operations sold on 31 December 2007, was
GBP1,686,652 for the three month period to the date of sale. Discontinued
operations are shown as a single line item in the consolidated income statement
and are more fully explained in the notes to the consolidated financial
statements.
2) Gross Profit
The overall gross profit from continuing operations for the full year was
GBP535,966, representing a gross profit to sales percentage of 35.8%. This
compares favourably to a gross profit percentage of 23.3% for last year.
The gross profit that can be obtained from our service portfolio varies
significantly depending on the sales channel, with top-end margins of 60%
available on certain services sold directly to customers by a sales team. By
contrast, margins as low as 5% apply for an indirect sale where we only provide
wholesale pricing of services to our dealer client who retains the prime
customer relationship. Much of this latter activity was embryonic at the year
end, but is expected to increase in the 2009 year.
3) Operating Loss
In the full year we have incurred an operating loss of GBP1,068,394 (2007:
GBP2,573,328). In 2007, we decided to expense all our goodwill, and the only
intangible asset in our balance sheet represents the written down value of
customer bases, a billing system and maintenance contracts acquired. We have
expensed GBP170,244 of our intangibles in the year (2007: GBP65,741). Last year
also saw significant write downs to goodwill and reorganisation costs expensed,
which are not repeated this year. Before these adjustments, our operating loss
amounted to GBP898,150 which compares favourably to an equivalent loss of
GBP1,208,061 last year.
As well as the need to expand our gross profit, we also work to keep our
administrative costs to modest levels given our continuing need to invest in
good people, particularly in sales. During the year we incurred administrative
expenses of GBP1,434,116 (2007: GBP1,445,020), with the costs of the parent
company making up approximately 40% of these costs.
4) Discontinued Operations
The sale of the business and assets, including people, of Eclectic Group Limited
("Eclectic") and I G Software Limited was concluded on 31 December 2007. The
shares in these companies were retained by the group, and we were left to
ingather all receivables and pay all balance sheet liabilities as they fell due,
together with all bank borrowings. The transaction included a mechanism to
apportion certain costs between the buyer and the seller, and included a bonus
payment to a director and key managers of Eclectic who transferred to the buyer.
The 'headline' price was GBP3.0m, and the net proceeds of sale were
approximately GBP1.5m after payment of the above named costs, the bonus and the
outstanding bank debt. In broad terms, we have been able to match sums received
for outstanding receivables with amounts paid for outstanding payables.
Including provisions made in 2007 and the trading results of these companies in
the current financial year to the date of sale, we have recorded losses from
this sale of GBP987,889 over the two years to 30 September 2008, with GBP566,108
of that loss taken in the current year. Given the circumstances and timing of
this sale, we are satisfied with the outcome.
5) Balance Sheet
At 30 September 2008, the group had net assets of GBP1,155,947. Included in this
figure are intangible assets, making up the written down value of customer
bases, a billing system and maintenance contracts acquired, of GBP717,568. We
are writing down the value of the customer bases and billing system over five
years, and the maintenance contracts over 10 years from the relevant acquisition
date.
We also had GBP879,237 of currents assets (with GBP545,521 being cash) and
GBP574,870 of current liabilities at 30 September 2008.
The cash balances remain a key performance indicator of the Board.
Risks
The key business risks are as undernoted. This list is not exhaustive, and
should not be taken as being the only risks attached to the business going
forward.
* Working capital
The group's cash resources are finite and there is no banking facility in place.
The directors recognise that the group must achieve monthly profitability for
the business to cover its cost base and remain within its finance resources. The
Board seeks to mitigate this risk by carefully managing the cash resources of
the group.
* People
As in many businesses, the ability to hire and retain good people is fundamental
to the success of the
business. Given the current economic
climate, such individuals may be less willing to move to a small
business than might otherwise be the case in times of prosperity. This includes
quality sales personnel.
The Board uses its contacts and
significant experience in the recruitment and selection of employees.
* Bad debts
The customer base is mainly made up of SME customers, who are one of the groups
likely to feel the
effects of a downturn. Although we have not
yet experienced any material lift in bad debt, that does not
mean to say that there will not be an increase in 2009. A majority of customers
are signed on direct debit
which allows us very quickly to know
when a customer defaults, and so take appropriate action.
* Competition
We pride ourselves in being competitive coupled with having the ability to
deliver a solutions based result that enhances the customer's business. The
deteriorating climate might cause buying decisions to move more in the direction
of a price based sale compared to value based sale. As a relatively small
business, the group may not be able to compete on price alone. However, our size
is also a strength, as we are able to react very quickly to changing market
conditions.
Of course all businesses carry technology risks, the risks of business
interruption, the ability to get credit from suppliers on suitable terms and so
on. The above is not an exhaustive list, and it should not be taken as such, but
it does cover certain key areas which the Board is focusing on at this time.
Financing
The group relies on credit from suppliers on reasonable commercial terms. The
main creditors tend to be significant companies, such as BT. The group does not,
at this time, rely on the banking market and is therefore somewhat shielded from
the difficulties associated with overdraft and other loan facilities.
From time to time, the group has taken out leasing for plant and vehicles and
will continue to do so when required. The group owns no property.
The group's main credit exposure lies with sums due from customers. Where at all
possible, the main telecom operating company, Pinnacle Telecom plc, seeks to
sign customers up on direct debit facilities which gives us a tighter control
over cash flow.
With positive cash balances, we are exposed to a reduction in interest rates,
albeit not materially so as far as the business as a whole is concerned.
Consultancy agreement
As announced on 9 May 2008, the Company entered a consultancy agreement with
Graham J Duncan, the former group CEO. In order to assist in lowering the costs
of the Company, Graham J Duncan agreed to bring his existing executive service
contract to an end on 31 May 2008, without compensation, notwithstanding that it
had a one year notice period. Under the provisions of the Companies Act 2006,
the existing consultancy agreement was required to be approved by the
shareholders, approval to be secured before signature. Such approval was not
obtained at the time and the Company therefore proposes that the existing
agreement be discharged and a new agreement entered into for the balance of the
original term and on the same terms following shareholders' approval at the
Annual General meeting to be held on 5 March 2009. This is a related party
transaction under the terms of the AIM Rules and further details are contained
in Note 8 to this Preliminary Announcement.
Loss of capital
As the net assets of the company represent less than half of its called up share
capital, the company is required by statute to convene an extraordinary general
meeting. Accordingly, the company will convene an extraordinary general meeting
to be held immediately following the annual general meeting at the same venue.
Apart from continuing to pursue their stated strategy of building an integrated
telecommunications business, however, the directors do not consider that any
particular steps need or should be taken to deal with the situation at this
time.
Alan J Bonner
CHIEF EXECUTIVE OFFICER
15 January 2009
+----------------------------+--+--+----+--+--+----------+-------------+-----------+----------+--+--+
| GLEN GROUP PLC |
+---------------------------------------------------------------------------------------------------+
| |
+---------------------------------------------------------------------------------------------------+
| CONSOLIDATED INCOME STATEMENT |
+---------------------------------------------------------------------------------------------------+
| |
+---------------------------------------------------------------------------------------------------+
| FOR THE YEAR ENDED 30 SEPTEMBER 2008 |
+---------------------------------------------------------------------------------------------------+
| |
+---------------------------------------------------------------------------------------------------+
| | | | Year | | Year |
+----------------------------------+-------+-------------+-------------+-----------+-------------+
| | | | ended | | ended |
+----------------------------------+-------+-------------+-------------+-----------+-------------+
| | | | 2008 | | 2007 |
+----------------------------------+-------+-------------+-------------+-----------+-------------+
| |Notes | | GBP | | GBP |
+----------------------------------+-------+-------------+-------------+-----------+-------------+
| | | | | | |
+----------------------------------+-------+-------------+-------------+-----------+-------------+
| Revenue | 4.1 | | 1,495,267 | | 1,014,870 |
+----------------------------------+-------+-------------+-------------+-----------+-------------+
| | | | | | |
+----------------------------------+-------+-------------+-------------+-----------+-------------+
| Cost of sales | (959,301) | | (777,911) |
+--------------------------------------------------------+-------------+-----------+-------------+
| | | | ------- | | ------- |
| | | | | | |
+----------------------------------+-------+-------------+-------------+-----------+-------------+
| Gross profit | 535,966 | | 236,959 |
+--------------------------------------------------------+-------------+-----------+-------------+
| | | | | | |
+----------------------------------+-------+-------------+-------------+-----------+-------------+
| Administration expenses | | | (1,434,116) | | (1,445,020) |
+----------------------------+----------------+----------+-------------+-----------+-------------+
| | | | ------- | | ------- |
| | | | | | |
+----------------------------------+-------+-------------+-------------+-----------+-------------+
| Operating loss before amortisation, impairment of | (898,150) | | (1,208,061) |
| goodwill and exceptional cost | | | |
+--------------------------------------------------------+-------------+-----------+-------------+
| | | | | | |
+----------------------------------+-------+-------------+-------------+-----------+-------------+
| Amortisation of intangibles | (170,244) | | (65,741) |
| | | | |
+--------------------------------------------------------+-------------+-----------+-------------+
| Impairment of goodwill | - | | (994,111) |
+--------------------------------------------------------+-------------+-----------+-------------+
| Exceptional cost of fundamental reorganisation | - | | (305,415) |
+--------------------------------------------------------+-------------+-----------+-------------+
| | | | ------- | | ------- |
| | | | | | |
+----------------------------------+-------+-------------+-------------+-----------+-------------+
| Operating loss | 5 | | (1,068,394) | | (2,573,328) |
+----------------------------------+-------+-------------+-------------+-----------+-------------+
| | | | ------- | | ------- |
| | | | | | |
+----------------------------------+-------+-------------+-------------+-----------+-------------+
| Interest receivable | | | 4,150 | | 2,771 |
+----------------------------------+-------+-------------+-------------+-----------+-------------+
| Interest payable | | | (2,761) | | (12,600) |
+----------------------------------+-------+-------------+-------------+-----------+-------------+
| | | | ------- | | ------- |
| | | | | | |
+----------------------------------+-------+-------------+-------------+-----------+-------------+
| Finance costs | | | 1,389 | | (9,829) |
+----------------------------------+-------+-------------+-------------+-----------+-------------+
| | | | ------- | | ------- |
| | | | | | |
+----------------------------------+-------+-------------+-------------+-----------+-------------+
| Loss before tax | | | (1,067,005) | | (2,583,157) |
+----------------------------------+-------+-------------+-------------+-----------+-------------+
| | | | | | |
+----------------------------------+-------+-------------+-------------+-----------+-------------+
| Taxation | | | 2,183 | | (439) |
+----------------------------------+-------+-------------+-------------+-----------+-------------+
| | | | ------- | | ------- |
| | | | | | |
+----------------------------------+-------+-------------+-------------+-----------+-------------+
| Loss for the year from continuing operations | (1,064,822) | | (2,583,596) |
+--------------------------------------------------------+-------------+-----------+-------------+
| Discontinued operations | 2 | | | | |
+-------------------------------+-------+----------------+-------------+-----------+-------------+
| Loss for the year from discontinued | | (566,108) | | (421,781) |
| operations | | | | |
+------------------------------------------+-------------+-------------+-----------+-------------+
| | | ------- | | ------- |
| | | | | |
+------------------------------------------+-------------+-------------+-----------+-------------+
| Loss for the year 4.2 | | (1,630,930) | | (3,005,377) |
+------------------------------------------+-------------+-------------+-----------+-------------+
| | | | ------- | | ------- |
| | | | | | |
+----------------------------------+-------+-------------+-------------+-----------+-------------+
| Loss per share | 6 | | | | |
+----------------------------------+-------+-------------+-------------+-----------+-------------+
| Loss per share basic and diluted - | | (0.09)p | | (0.46)p |
| continuing | | | | |
+------------------------------------------+-------------+-------------+-----------+-------------+
| Loss per share basic and diluted - | | (0.05)p | | (0.07)p |
| discontinued | | | | |
+------------------------------------------+-------------+-------------+-----------+-------------+
| Loss per share basic and diluted - | | (0.14)p | | (0.53)p |
| total | | | | |
+------------------------------------------+-------------+-------------+-----------+-------------+
| | | | | | |
+----------------------------------+-------+-------------+-------------+-----------+-------------+
| |
+---------------------------------------------------------------------------------------------+
| | | | | | |
+----------------------------------+-------+-------------+-------------+-----------+-------------+
| See accompanying notes to the financial statements. |
+---------------------------------------------------------------------------------------------+
| | | | | | |
+----------------------------+--+--+----+--+--+----------+-------------+-----------+----------+--+--+
+----+----+----------+----------+-------+-----------+-----------+--------------+--------------+
| GLEN GROUP PLC |
+---------------------------------------------------------------------------------------------+
| |
+---------------------------------------------------------------------------------------------+
| CONSOLIDATED BALANCE SHEET |
+---------------------------------------------------------------------------------------------+
| |
+---------------------------------------------------------------------------------------------+
| AS AT 30 SEPTEMBER 2008 |
+---------------------------------------------------------------------------------------------+
| |
+---------------------------------------------------------------------------------------------+
| | | | | | | 2008 | 2007 |
+----+----+---------------------+-------+-----------+-----------+--------------+--------------+
| | | | | | | GBP | GBP |
+----+----+---------------------+-------+-----------+-----------+--------------+--------------+
| Assets |
+---------------------------------------------------------------------------------------------+
| Non-current assets |
+---------------------------------------------------------------------------------------------+
| Intangible assets | | | | 717,568 | 751,368 |
+-------------------------------+-------+-----------+-----------+--------------+--------------+
| Property, plant and equipment | | | | 134,012 | 105,132 |
+-------------------------------+-------+-----------+-----------+--------------+--------------+
| | | | | | | ------- | ------- |
+----+----+---------------------+-------+-----------+-----------+--------------+--------------+
| | | | | | | 851,580 | 856,500 |
+----+----+---------------------+-------+-----------+-----------+--------------+--------------+
| | | | | | | ------- | ------- |
+----+----+---------------------+-------+-----------+-----------+--------------+--------------+
| Current assets |
+---------------------------------------------------------------------------------------------+
| Inventories | | | | 344 | 22,524 |
+-------------------------------+-------+-----------+-----------+--------------+--------------+
| Trade and other receivables | | | | 333,372 | 1,729,599 |
+-------------------------------+-------+-----------+-----------+--------------+--------------+
| Cash and cash | | | | 545,521 | 157,361 |
| equivalents | | | | | |
+--------------------+------------------+-----------+-----------+--------------+--------------+
| | | | | | | ------- | ------- |
+----+----+---------------------+-------+-----------+-----------+--------------+--------------+
| Total current assets | | | | 879,237 | 1,909,484 |
+-------------------------------+-------+-----------+-----------+--------------+--------------+
| Assets included in disposal | | | | - | 2,749,005 |
| groups | | | | | |
+-------------------------------+-------+-----------+-----------+--------------+--------------+
| | | | | ------- | ------- |
+-------------------------------+-------+-----------+-----------+--------------+--------------+
| Total assets | | | | 1,730,817 | 5,514,989 |
+-------------------------------+-------+-----------+-----------+--------------+--------------+
| | | | | ------- | ------- |
+-------------------------------+-------+-----------+-----------+--------------+--------------+
| Short term borrowings | | | | (6,936) | (587,308) |
+-------------------------------+-------+-----------+-----------+--------------+--------------+
| Trade payables | | | | (353,698) | (1,234,194) |
+-------------------------------+-------+-----------+-----------+--------------+--------------+
| Other taxes and social | | | | (22,759) | (442,776) |
| security costs | | | | | |
+-------------------------------+-------+-----------+-----------+--------------+--------------+
| Accruals and other payables | | | | (191,477) | (384,987) |
+-------------------------------+-------+-----------+-----------+--------------+--------------+
| | | | | ------- | ------- |
+-------------------------------+-------+-----------+-----------+--------------+--------------+
| Total current liabilities | | | | (574,870) | (2,649,265) |
+-------------------------------+-------+-----------+-----------+--------------+--------------+
| | | | | | | | |
+----+----+---------------------+-------+-----------+-----------+--------------+--------------+
| Non current liabilities | | | | |
+---------------------------------------+-----------+-----------+--------------+--------------+
| Long-term | | | | - | (65,155) |
| borrowings | | | | | |
+--------------------+------------------+-----------+-----------+--------------+--------------+
| | | | | ------- | ------- |
+--------------------+------------------+-----------+-----------+--------------+--------------+
| Total liabilities | | | | (574,870) | (2,714,420) |
+-------------------------------+-------+-----------+-----------+--------------+--------------+
| | | | | ------- | ------- |
+-------------------------------+-------+-----------+-----------+--------------+--------------+
| Net assets | | | | 1,155,947 | 2,800,569 |
+-------------------------------+-------+-----------+-----------+--------------+--------------+
| | | | | | | ------- | ------- |
+----+----+---------------------+-------+-----------+-----------+--------------+--------------+
| | | | | | | | |
+----+----+---------------------+-------+-----------+-----------+--------------+--------------+
| Equity |
+---------------------------------------------------------------------------------------------+
| Share capital | | | | 4,807,680 | 4,807,680 |
+-------------------------------+-------+-----------+-----------+--------------+--------------+
| Share premium account | | | | 3,207,593 | 3,207,593 |
+-------------------------------+-------+-----------+-----------+--------------+--------------+
| Other reserve | | | | 2,852 | 16,544 |
+-------------------------------+-------+-----------+-----------+--------------+--------------+
| Fair value adjustment | | | | (1,064,130) | (1,064,130) |
+-------------------------------+-------+-----------+-----------+--------------+--------------+
| Profit and loss reserve | | | | (5,798,048) | (4,167,118) |
+-------------------------------+-------+-----------+-----------+--------------+--------------+
| | | | | | | ------- | ------- |
+----+----+---------------------+-------+-----------+-----------+--------------+--------------+
| Total equity | | | | 1,155,947 | 2,800,569 |
+-------------------------------+-------+-----------+-----------+--------------+--------------+
| | | | | | | ------- | ------- |
+----+----+---------------------+-------+-----------+-----------+--------------+--------------+
| | | | | | | | |
+----+----+----------+----------+-------+-----------+-----------+--------------+--------------+
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| GLEN GROUP PLC |
+---------------------------------------------------------------------------------------------------------+
| |
+---------------------------------------------------------------------------------------------------------+
| CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
+---------------------------------------------------------------------------------------------------------+
| |
+---------------------------------------------------------------------------------------------------------+
| FOR THE YEAR ENDED 30 SEPTEMBER 2008 |
+---------------------------------------------------------------------------------------------------------+
| |
+---------------------------------------------------------------------------------------------------------+
| | Share | Share | Share | Other | Fair | Retained | Total |
| | Capital | Premium | to be | Reserve | Value | Earnings | GBP |
| | GBP | GBP | issued | GBP | GBP | GBP | |
| | | | GBP | | | | |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| At 1 October | 3,276,831 | 860,817 | 787,500 | 20,028 | (417,221) | (1,161,741) | 3,366,214 |
| 2006 | | | | | | | |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| Loss for the | - | - | - | - | - | (3,005,377) | (3,005,377) |
| year | | | | | | | |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| Recognised directly in | | | | | | |
| equity | | | | | | |
+----------------------------+-----------+-----------+----------+-------------+-------------+-------------+
| Share issue | 1,530,849 | - | - | - | (646,909) | - | 883,940 |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| Shares to be issued as | | | | | | |
| part | | | | | | |
+----------------------------+-----------+-----------+----------+-------------+-------------+-------------+
| of | - | - | (787,500) | - | - | - | (787,500) |
| acquisition | | | | | | | |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| Premium on | | | | | | | |
| share | | | | | | | |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| issue | - | 2,438,401 | - | - | - | - | 2,438,401 |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| Share-based | - | - | - | 8,272 | - | - | 8,272 |
| payments | | | | | | | |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| Lapse of share | - | - | - | (11,756) | - | - | (11,756) |
| options | | | | | | | |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| Expenses | | | | | | | |
| incurred on | | | | | | | |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| share issue | - | (91,625) | - | - | - | - | (91,625) |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| | ------- | ------- | ------- | ------- | ------- | ------- | ------- |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| Net change | | | | | | | |
| directly | | | | | | | |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| in equity | 1,530,849 | 2,346,776 | (787,500) | (3,484) | (646,909) | - | 2,439,732 |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| Total | 1,530,849 | 2,346,776 | (787,500) | (3,484) | (646,909) | (3,005,377) | (565,645) |
| movements | | | | | | | |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| | ------- | ------- | ------- | ------- | ------- | ------- | ------- |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| Equity at | | | | | | | |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| 30 September | 4,807,680 | 3,207,593 | - | 16,544 | (1,064,130) | (4,167,118) | 2,800,569 |
| 2007 | | | | | | | |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| | ------- | ------- | ------- | ------- | ------- | ------- | ------- |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| At 1 October | 4,807,680 | 3,207,593 | - | 16,544 | (1,064,130) | (4,167,118) | 2,800,569 |
| 2007 | | | | | | | |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| Loss for the | - | - | - | - | - | (1,630,930) | (1,630,930) |
| year | | | | | | | |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| Recognised directly in | | | | | | |
| equity | | | | | | |
+----------------------------+-----------+-----------+----------+-------------+-------------+-------------+
| Share-based | - | - | - | 2,852 | - | - | 2,852 |
| payments | | | | | | | |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| Lapse of share | - | - | - | (16,544) | - | - | (16,544) |
| options | | | | | | | |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| | ------- | ------- | ------- | ------- | ------- | ------- | ------- |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| Net change | | | | | | | |
| directly | | | | | | | |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| in equity | - | - | - | (13,692) | - | - | (13,692) |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| Total | - | - | - | (13,692) | - | (1,630,930) | (1,644,622) |
| movements | | | | | | | |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| | ------- | ------- | ------- | ------- | ------- | ------- | ------- |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| Equity at | | | | | | | |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| 30 September | 4,807,680 | 3,207,593 | - | 2,852 | (1,064,130) | (5,798,048) | 1,155,947 |
| 2008 | | | | | | | |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
| | ------- | ------- | ------- | ------- | ------- | ------- | ------- |
+----------------+-----------+-----------+-----------+----------+-------------+-------------+-------------+
+------------------------------------+-----------+-----------+-------------+-------------+----+
| GLEN GROUP PLC |
+---------------------------------------------------------------------------------------------+
| |
+---------------------------------------------------------------------------------------------+
| CONSOLIDATED CASH FLOW STATEMENT |
+---------------------------------------------------------------------------------------------+
| |
+---------------------------------------------------------------------------------------------+
| FOR THE YEAR ENDED 30 SEPTEMBER 2008 |
+---------------------------------------------------------------------------------------------+
| |
+---------------------------------------------------------------------------------------------+
| | | | 2008 | 2007 |
+------------------------------------+-----------+-----------+-------------+-------------+
| | | | GBP | GBP |
+------------------------------------+-----------+-----------+-------------+-------------+
| Cash flows from operating activities | | |
+------------------------------------------------------------+-------------+-------------+
| Operating loss | (1,643,269) | (2,491,961) |
+------------------------------------------------------------+-------------+-------------+
| Adjustments for: | | |
+------------------------------------------------------------+-------------+-------------+
| Depreciation | 59,360 | 93,778 |
+------------------------------------------------------------+-------------+-------------+
| Amortisation | 170,244 | 65,741 |
+------------------------------------------------------------+-------------+-------------+
| Impairment of goodwill | - | 994,110 |
+------------------------------------------------------------+-------------+-------------+
| Release of negative goodwill | - | (9,557) |
+------------------------------------------------------------+-------------+-------------+
| Other non-cash items | 19,396 | (3,484) |
+------------------------------------------------------------+-------------+-------------+
| Payment of corporation tax | (3,253) | (8,712) |
+------------------------------------------------------------+-------------+-------------+
| Decrease in inventories | 22,180 | 11,228 |
+------------------------------------------------------------+-------------+-------------+
| Decrease in trade and other receivables | 1,396,227 | 331,844 |
+------------------------------------------------------------+-------------+-------------+
| (Decrease) / increase in trade payables, accruals and | (1,494,631) | 70,872 |
| other creditors | | |
+------------------------------------------------------------+-------------+-------------+
| | ------- | ------- |
+------------------------------------------------------------+-------------+-------------+
| Net cash outflow from operating | | | (1,473,746) | (946,141) |
| activities | | | | |
+------------------------------------+-----------+-----------+-------------+-------------+
| | | | ------- | ------- |
+------------------------------------+-----------+-----------+-------------+-------------+
| Cash flows from investing | | | | |
| activities | | | | |
+------------------------------------+-----------+-----------+-------------+-------------+
| Purchase of property, plant and | | | (9,850) | (135,220) |
| equipment | | | | |
+------------------------------------+-----------+-----------+-------------+-------------+
| Sale of property, plant and | | | 2,360 | - |
| equipment | | | | |
+------------------------------------+-----------+-----------+-------------+-------------+
| Disposal of subsidiary company | | | 2,635,857 | - |
+------------------------------------+-----------+-----------+-------------+-------------+
| Acquisition of subsidiaries | | | (130,400) | 25,292 |
+------------------------------------+-----------+-----------+-------------+-------------+
| | | | ------- | ------- |
+------------------------------------+-----------+-----------+-------------+-------------+
| Net cash used in investing | | | 2,497,967 | (109,928) |
| activities | | | | |
+------------------------------------+-----------+-----------+-------------+-------------+
| | | | ------- | ------- |
+------------------------------------+-----------+-----------+-------------+-------------+
| Cash flows from financing | | | | |
| activities | | | | |
+------------------------------------+-----------+-----------+-------------+-------------+
| Interest paid | | | (10,821) | (62,195) |
+------------------------------------+-----------+-----------+-------------+-------------+
| Interest received | | | 20,287 | - |
+------------------------------------+-----------+-----------+-------------+-------------+
| Issue of shares | | | - | 1,380,000 |
+------------------------------------+-----------+-----------+-------------+-------------+
| Repayment of bank borrowing | | | (101,403) | (28,716) |
+------------------------------------+-----------+-----------+-------------+-------------+
| Former subsidiary director's loan notes less | | - | (50,000) |
| repayments | | | |
+------------------------------------------------+-----------+-------------+-------------+
| Receipt of finance leases less repayments | | (44,242) | 34,695 |
+------------------------------------------------+-----------+-------------+-------------+
| Expenses paid in connection with share issues | | - | (91,625) |
+------------------------------------------------+-----------+-------------+-------------+
| | | ------- | ------- |
+------------------------------------------------+-----------+-------------+-------------+
| Net cash used in financing | | | (136,179) | 1,182,159 |
| activities | | | | |
+------------------------------------+-----------+-----------+-------------+-------------+
| | | | ------- | ------- |
+------------------------------------+-----------+-----------+-------------+-------------+
| Net increase in cash | | | 888,042 | 126,090 |
+------------------------------------+-----------+-----------+-------------+-------------+
| Cash and bank overdrafts at | | | (349,457) | (475,547) |
| beginning of period | | | | |
+------------------------------------+-----------+-----------+-------------+-------------+
| | | | ------- | ------- |
+------------------------------------+-----------+-----------+-------------+-------------+
| Cash and bank overdrafts at end of | | | 538,585 | (349,457) |
| period | | | | |
+------------------------------------+-----------+-----------+-------------+-------------+
| | | | ------- | ------- |
+------------------------------------+-----------+-----------+-------------+-------------+
| Cash and bank overdrafts comprise: | | | | |
+------------------------------------+-----------+-----------+-------------+-------------+
| Cash and cash equivalents | | | 545,521 | 157,361 |
+------------------------------------+-----------+-----------+-------------+-------------+
| Bank overdrafts | | | (6,936) | (506,818) |
+------------------------------------+-----------+-----------+-------------+-------------+
| | | | ------- | ------- |
+------------------------------------+-----------+-----------+-------------+-------------+
| | | | 538,585 | (349,457) |
+------------------------------------+-----------+-----------+-------------+-------------+
| | | | ------- | ------- |
+------------------------------------+-----------+-----------+-------------+-------------+----+
+-----+---+--------------------------------------------------------------+-------+---+---+
| GLEN GROUP PLC |
+--------------------------------------------------------------------------------+
| |
+--------------------------------------------------------------------------------+
| NOTES |
+--------------------------------------------------------------------------------+
| 1. | General information |
+---------+------------------------------------------------------------------------------+
| 2. | |
| | The consolidated financial statements of the group have been prepared in |
| | accordance with International Financial Reporting Standards as adopted |
| | by the EU. The financial statements for the year ended 30 September 2008 |
| | were approved by the board of directors on 15 January 2009. |
| | The financial information set out above does not constitute the |
| | company's statutory consolidated financial statements for the year ended |
| | 30 September 2008 but is derived from those financial statements. The |
| | comparative figures are those of the consolidated financial statements |
| | for the year ended 30 September 2007. The report of the auditors was |
| | unqualified and did not contain a statement under s237 (2) or (3) |
| | Companies Act 1985. The statutory financial statements for the year |
| | ended 30 September 2008 will be delivered to the Registrar of Companies |
| | following the Company's Annual General Meeting. The information |
| | contained in this Preliminary Statement does not constitute statutory |
| | accounts as defined by Section 240 of the Companies Act. |
| | Glen Group plc, a public limited company, is the group's ultimate parent |
| | company. It is incorporated in England and Wales. The address of Glen |
| | Group plc's registered office is 8-10 New Fetter Lane, London, EC4A 1RS. |
| | Its principal place of business is Glen House, 6 Straiton View, Straiton |
| | Business Parc, Edinburgh, EH20 9QZ. |
| | Disposal group |
+---------+------------------------------------------------------------------------------+
| | |
| | The disposal group consists of Eclectic Group Limited ("Eclectic") and |
| | its wholly owned subsidiary I G Software Limited ("inGroup"). The assets |
| | and undertaking of these businesses were sold to Maxima Information |
| | Group Limited, a wholly owned subsidiary of Maxima Holdings plc, |
| | effective 31 December 2007. |
+-----+------------------------------------------------------------------------------+
| 3. | Acquisition of Colloquium Limited |
+---------+--------------------------------------------------------------------------+
| | |
| | On 27 June 2008, Pinnacle Telecom plc acquired 100% of the share |
| | capital of Colloquium Limited, a company registered in Scotland. The |
| | total cost of acquisition includes the components stated below. The |
| | purchase price of GBP130,400, including acquisition expenses, was |
| | settled in cash. With the exception of intangible assets no |
| | adjustments have been made to the book values of the assets and |
| | liabilities at acquisition. The book value of intangible assets at |
| | acquisition was nil. This can be analysed as follows: |
+---------+--------------------------------------------------------------------------+
| | Assets | |
+---------+--------------------------------------------------------------+-----------+
| | Non-current assets | 78,430 |
| | Property, plant and equipment | |
+---------+--------------------------------------------------------------+-----------+
| | Intangible assets | 136,444 |
+---------+--------------------------------------------------------------+-----------+
| | | ------- |
+---------+--------------------------------------------------------------+-----------+
| | | 214,874 |
+---------+--------------------------------------------------------------+-----------+
| | | ------- |
+---------+--------------------------------------------------------------+-----------+
| | Current assets | |
+---------+--------------------------------------------------------------+-----------+
| | Trade and other receivables | 37,460 |
+---------+--------------------------------------------------------------+-----------+
| | Cash and cash equivalents | 14,452 |
+---------+--------------------------------------------------------------+-----------+
| | | ------- |
+---------+--------------------------------------------------------------+-----------+
| | Total current assets | 51,912 |
+---------+--------------------------------------------------------------+-----------+
| | | ------- |
+---------+--------------------------------------------------------------+-----------+
| | Total assets | 266,786 |
+---------+--------------------------------------------------------------+-----------+
| | | ------- |
+---------+--------------------------------------------------------------+-----------+
| | Liabilities | |
+---------+--------------------------------------------------------------+-----------+
| | Current liabilities | |
+---------+--------------------------------------------------------------+-----------+
| | Trade and other payables | 88,156 |
+---------+--------------------------------------------------------------+-----------+
| | Other taxes and social security costs | 24,714 |
+---------+--------------------------------------------------------------+-----------+
| | Other creditors and accruals | 23,516 |
+---------+--------------------------------------------------------------+-----------+
| | | ------- |
+---------+--------------------------------------------------------------+-----------+
| | Total current liabilities | 136,386 |
+---------+--------------------------------------------------------------+-----------+
| | Total liabilities | 136,386 |
+---------+--------------------------------------------------------------+-----------+
| | | ------- |
+---------+--------------------------------------------------------------+-----------+
| | Net assets | 130,400 |
+---------+--------------------------------------------------------------+-----------+
| | | --------- |
+---------+--------------------------------------------------------------+-----------+
| | Turnover and operating loss of the company acquired for the | |
| | post acquisition period were GBP88,304 and GBP34,598 | |
| | respectively. For the period 1 March 2008 to 30 September | |
| | 2008 the turnover was GBP237,355 and the operating loss was | |
| | GBP102,554. | |
+-----+---+--------------------------------------------------------------+-------+---+---+
+----+-----------+-----------+-----------+-----------+-----------+-----------+-------+-----+
| 4. | Segment Reporting |
+----+-------------------------------------------------------------------------------+
| | 4.1 Analysis of revenue | | |
+----+-----------------------------------------------------------+-----------+-------------+
| | | 2008 | 2007 |
+----+-----------------------------------------------------------+-----------+-------------+
| | | GBP | GBP |
+----+-----------------------------------------------------------+-----------+-------------+
| | By business sector | | |
+----+-----------------------------------------------------------+-----------+-------------+
| | Mobile services | 168,227 | 221,939 |
+----+-----------------------------------------------------------+-----------+-------------+
| | IT | 126,546 | 423,503 |
+----+-----------------------------------------------------------+-----------+-------------+
| | Other telecommunication services | 1,200,494 | 369,428 |
+----+-----------------------------------------------------------+-----------+-------------+
| | | ------- | ------- |
+----+-----------------------------------------------------------+-----------+-------------+
| | Continuing operations | 1,495,267 | 1,014,870 |
+----+-----------------------------------------------------------+-----------+-------------+
| | IT - discontinued operations | 1,686,652 | 5,670,935 |
+----+-----------------------------------------------------------+-----------+-------------+
| | | ------- | ------- |
+----+-----------------------------------------------------------+-----------+-------------+
| | Total revenue | 3,181,919 | 6,685,805 |
+----+-----------------------------------------------------------+-----------+-------------+
| | | ------- | ------- |
+----+-----------------------------------------------------------+-----------+-------------+
| | By destination | | |
+----+-----------------------------------------------------------+-----------+-------------+
| | United Kingdom | 3,181,919 | 6,685,805 |
+----+-----------------------------------------------------------+-----------+-------------+
| | | ------- | ------- |
+----+-----------------------------------------------------------+-----------+-------------+
| | By origin | | |
+----+-----------------------------------------------------------+-----------+-------------+
| | Glen Communications - continuing operations | 197,008 | 638,077 |
+----+-----------------------------------------------------------+-----------+-------------+
| | Pinnacle Group | 1,298,259 | 376,793 |
+----+-----------------------------------------------------------+-----------+-------------+
| | Eclectic and inGroup - discontinued operations | 1,686,652 | 5,670,935 |
+----+-----------------------------------------------------------+-----------+-------------+
| | | ------- | ------- |
+----+-----------------------------------------------------------+-----------+-------------+
| | Total revenue | 3,181,919 | 6,685,805 |
+----+-----------------------------------------------------------+-----------+-------------+
| | | ------- | ------- |
+----+-----------------------------------------------------------+-----------+-------------+
| | 4.2 Analysis of net loss after tax | | |
+----+-----------------------------------------------------------+-----------+-------------+
| | | 2008 | 2007 |
+----+-----------------------------------------------------------+-----------+-------------+
| | | | | | | GBP | GBP |
+----+-----------+-----------+-----------+-----------+-----------+-----------+-------------+
| | By business sector |
+----+-------------------------------------------------------------------------------------+
| | Mobile services | | |
+----+-----------------------------------------------------------+-----------+-------------+
| | Loss from operations before exceptional items | (81,502) | (578,964) |
+----+-----------------------------------------------------------+-----------+-------------+
| | Reorganisation costs | - | (278,843) |
+----+-----------------------------------------------------------+-----------+-------------+
| | Impairment of goodwill | - | (935,314) |
+----+-----------------------------------------------------------+-----------+-------------+
| | | ------- | ------- |
+----+-----------------------------------------------------------+-----------+-------------+
| | Loss from operations after exceptional items | (81,502) | (1,793,121) |
+----+-----------------------------------------------------------+-----------+-------------+
| | | ------- | ------- |
+----+-----------------------------------------------------------+-----------+-------------+
| | IT | | |
+----+-----------------------------------------------------------+-----------+-------------+
| | Loss from operations before exceptional items | (33,890) | (124,927) |
+----+-----------------------------------------------------------+-----------+-------------+
| | Reorganisation costs | - | (12,184) |
+----+-----------------------------------------------------------+-----------+-------------+
| | Amortisation | (20,000) | (20,000) |
+----+-----------------------------------------------------------+-----------+-------------+
| | Impairment of goodwill | - | (58,796) |
+----+-----------------------------------------------------------+-----------+-------------+
| | | ------- | ------- |
+----+-----------------------------------------------------------+-----------+-------------+
| | Loss from operations after exceptional items | (53,890) | (215,907) |
+----+-----------------------------------------------------------+-----------+-------------+
| | | ------- | ------- |
+----+-----------+-----------+-----------+-----------+-----------+-----------+-------+-----+
+----+------------------------------------------------------+---------------+-------------+
| | Other telecommunication services | GBP | GBP |
+----+------------------------------------------------------+---------------+-------------+
| | (Loss) / profit from operations before exceptional | (213,202) | 49,636 |
| | items | | |
+----+------------------------------------------------------+---------------+-------------+
| | Reorganisation costs | - | (14,388) |
+----+------------------------------------------------------+---------------+-------------+
| | Amortisation | (150,244) | (45,741) |
+----+------------------------------------------------------+---------------+-------------+
| | | ------- | ------- |
+----+------------------------------------------------------+---------------+-------------+
| | Loss from operations after exceptional items | (363,446) | (10,493) |
+----+------------------------------------------------------+---------------+-------------+
| | | ------- | ------- |
+----+------------------------------------------------------+---------------+-------------+
| | Head office | | |
+----+------------------------------------------------------+---------------+-------------+
| | Loss from operations | (565,984) | (564,075) |
+----+------------------------------------------------------+---------------+-------------+
| | | ------- | ------- |
+----+------------------------------------------------------+---------------+-------------+
| | Loss from continuing operations | (1,064,822) | (2,583,596) |
+----+------------------------------------------------------+---------------+-------------+
| | IT - discontinued operations | (566,108) | (421,781) |
+----+------------------------------------------------------+---------------+-------------+
| | | ------- | ------- |
+----+------------------------------------------------------+---------------+-------------+
| | Loss for the year | (1,630,930) | (3,005,377) |
+----+------------------------------------------------------+---------------+-------------+
| | | ------- | ------- |
+----+------------------------------------------------------+---------------+-------------+
| | By destination - continuing and discontinued | | |
| | operations | | |
+----+------------------------------------------------------+---------------+-------------+
| | United Kingdom | (1,630,930) | (3,005,377) |
+----+------------------------------------------------------+---------------+-------------+
| | | ------- | ------- |
+----+------------------------------------------------------+---------------+-------------+
| | By origin | | |
+----+------------------------------------------------------+---------------+-------------+
| | Glen Group | (565,984) | (564,075) |
+----+------------------------------------------------------+---------------+-------------+
| | Glen Communications | (135,392) | (2,009,028) |
+----+------------------------------------------------------+---------------+-------------+
| | Pinnacle Group | (363,446) | (10,493) |
+----+------------------------------------------------------+---------------+-------------+
| | | ------- | ------- |
+----+------------------------------------------------------+---------------+-------------+
| | | (1,064,822) | (2,583,596) |
+----+------------------------------------------------------+---------------+-------------+
| | Eclectic and inGroup - discontinued operations | (566,108) | (421,781) |
+----+------------------------------------------------------+---------------+-------------+
| | | ------- | ------- |
+----+------------------------------------------------------+---------------+-------------+
| | Loss for the year | (1,630,930) | (3,005,377) |
+----+------------------------------------------------------+---------------+-------------+
| | | ------- | ------- |
+----+------------------------------------------------------+---------------+-------------+
| 5. | Operating loss | 2008 | 2007 |
+----+------------------------------------------------------+---------------+-------------+
| | | GBP | GBP |
+----+------------------------------------------------------+---------------+-------------+
| | Loss from operations is stated after charging: | | |
+----+------------------------------------------------------+---------------+-------------+
| | Exceptional cost of fundamental reorganisation | - | 305,415 |
+----+------------------------------------------------------+---------------+-------------+
| | Depreciation of owned fixed assets | 59,360 | 93,778 |
+----+------------------------------------------------------+---------------+-------------+
| | Other operating lease rentals: | | |
+----+------------------------------------------------------+---------------+-------------+
| | - buildings | 70,953 | 101,670 |
+----+------------------------------------------------------+---------------+-------------+
| | - office equipment | 1,413 | 14,576 |
+----+------------------------------------------------------+---------------+-------------+
| | Auditors' remuneration: | | |
+----+------------------------------------------------------+---------------+-------------+
| | - company | 12,400 | 13,337 |
+----+------------------------------------------------------+---------------+-------------+
| | - group | 60,575 | 46,985 |
+----+------------------------------------------------------+---------------+-------------+
| | Non-audit fees: | | |
+----+------------------------------------------------------+---------------+-------------+
| | - company, tax work and advice | - | 600 |
+----+------------------------------------------------------+---------------+-------------+
| | - group, review of interim accounts | 4,887 | 3,709 |
+----+------------------------------------------------------+---------------+-------------+
| | - group, tax work and advice | 4,230 | 6,114 |
+----+------------------------------------------------------+---------------+-------------+
| | and after crediting: | | |
+----+------------------------------------------------------+---------------+-------------+
| | Government grants | - | 30,000 |
+----+------------------------------------------------------+---------------+-------------+
| | | ------- | ------- |
+----+------------------------------------------------------+---------------+-------------+
| | In addition, remuneration paid to the auditors in | | |
| | respect of fundraising totaling GBPNil (2007: | | |
| | GBP17,625) has been included within the share | | |
| | premium account. | | |
+----+------------------------------------------------------+---------------+-------------+
| | | | |
+----+------------------------------------------------------+---------------+-------------+
| 6. | Total and continuing loss per share | 2008 | 2007 |
+----+------------------------------------------------------+---------------+-------------+
| | | GBP | GBP |
+----+------------------------------------------------------+---------------+-------------+
| | Loss attributable to ordinary shareholders - | 1,064,822 | 2,583,596 |
| | continuing operations | | |
+----+------------------------------------------------------+---------------+-------------+
| | Loss attributable to ordinary shareholders - | 566,108 | 421,781 |
| | discontinued operations | | |
+----+------------------------------------------------------+---------------+-------------+
| | Loss attributable to ordinary shareholders | 1,630,930 | 3,005,377 |
+----+------------------------------------------------------+---------------+-------------+
| | | ------- | ------- |
+----+------------------------------------------------------+---------------+-------------+
| | | Number | Number |
+----+------------------------------------------------------+---------------+-------------+
| | Weighted average number of ordinary shares in issue | 1,194,099,804 | 567,346,340 |
+----+------------------------------------------------------+---------------+-------------+
| | Loss per share (pence) - continuing operations | 0.09 | 0.46 |
+----+------------------------------------------------------+---------------+-------------+
| | Loss per share (pence) - discontinued operations | 0.05 | 0.07 |
+----+------------------------------------------------------+---------------+-------------+
| | Loss per share (pence) - total | 0.14 | 0.53 |
+----+------------------------------------------------------+---------------+-------------+
| | | ------- | ------- |
+----+------------------------------------------------------+---------------+-------------+
| | Both the basic and diluted earnings per share have been calculated using the |
| | net loss after taxation attributable to the shareholders of Glen Group plc |
| | as the numerator. |
| | The weighted average number of outstanding shares used for basic earnings |
| | per share amounted to |
| | 1,194,099,804 shares (2007: 567,346,340). |
+----+------------------------------------------------------------------------------------+
| | |
+----+------------------------------------------------------------------------------------+
| | Due to the losses incurred by the group the share options are anti-dilutive. |
+----+------------------------------------------------------+---------------+-------------+
+-----+---------------------------------------------------------------------------+
| 7. | Dividends |
+-----+---------------------------------------------------------------------------+
| | |
| | The Directors do not propose a dividend for the year ended 30 September |
| | 2008 (2007: GBPNil) |
+-----+---------------------------------------------------------------------------+
| | |
+-----+---------------------------------------------------------------------------+
| 8. | Related party transactions |
+-----+---------------------------------------------------------------------------+
| | |
| | The following related party |
| | transactions occurred during the |
| | year: |
| | * |
| | In connection with the sale of the |
| | assets and business of Eclectic |
| | Group Limited on 31 December 2007, |
| | that company paid a bonus of |
| | GBP191,000 to John Nicoll, its |
| | Managing Director. |
| | * |
| | Graham J Duncan, the former group |
| | CEO, became Non-Executive Chairman |
| | with effect from 1 June 2008 and |
| | entered into a letter of |
| | appointment for an initial period |
| | of one year with a three-month |
| | rolling notice period thereafter. |
| | Separately, he entered into a |
| | consulting contract to provide a |
| | package of services to Glen over a |
| | period of three years, covering |
| | certain financial and M&A work. |
| | Under the terms of the consultancy |
| | contract Graham J Duncan is |
| | entitled to a consultancy fee of |
| | GBP60,000 during the first year of |
| | the contract and GBP50,000 per |
| | annum in subsequent years, paid |
| | monthly in arrears. He is also |
| | entitled to a transaction fee of 4% |
| | of the gross value of any corporate |
| | transactions entered into by the |
| | Company less the relevant legal |
| | fees and after a deduction of the |
| | sum of GBP15,000 in any single |
| | year. All payments made are |
| | processed through payroll and |
| | suffer PAYE and NIC deductions. In |
| | order to assist in lowering the |
| | costs of the Company Graham J |
| | Duncan agreed to bring his existing |
| | executive service contract to an |
| | end on 31 May 2008, without |
| | compensation, notwithstanding that |
| | it had a one year notice period. |
| | The entering into the consultancy |
| | agreement is a related party |
| | transaction under the AIM Rules. As |
| | such the Directors, other than |
| | Graham J Duncan consider, having |
| | consulted with the Company's |
| | nominated adviser (Zeus Capital |
| | Limited), that the terms of the |
| | transaction are fair and reasonable |
| | insofar as shareholders are |
| | concerned. |
| | There are no other related party |
| | transactions recorded during the |
| | year to 30 September 2008 or to 30 |
| | September 2007. |
| | |
+-----+---------------------------------------------------------------------------+
| 9. | Annual report and accounts |
+-----+---------------------------------------------------------------------------+
| | A copy of the Annual Report and Accounts for the year ended 30 September |
| | 2008 will be sent to shareholders at the end of January 2009 and copies |
| | will be available from the Company's registered office at 8-10 New Fetter |
| | Lane, London, EC4A 1RS or by visiting our website at www.glengroup.co.uk |
| | |
+-----+---------------------------------------------------------------------------+
| | The annual general meeting of the Company will be held at the Company's |
| | offices, Glen House, 6 Straiton View, Straiton Business Parc, Edinburgh, |
| | EH20 9QZ on 5 March 2009 at 1.00 p.m. |
| | |
+-----+---------------------------------------------------------------------------+
| | The extraordinary general meeting referred to in the Business Review will |
| | be held at the Company's offices, Glen House, 6 Straiton View, Straiton |
| | Business Parc, Edinburgh, EH20 9QZ on 5 March 2009 at 1.30 p.m. |
| | |
+-----+---------------------------------------------------------------------------+
| | |
+-----+---------------------------------------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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