RNS Number:8212V
Griffin Group PLC
16 December 2005
GRIFFIN GROUP plc
("Griffin" or the "Company")
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2005
Financial highlights:
* Turnover up 220% to #10.58m (2004: #3.31m)
* Net Profit before exceptional items up 107% to #938,597 (2004: #453,642)
* Goodwill impairment write off amounting to #372,712 treated as exceptional
item
* Earnings per share before exceptional items up 48% to 1.38p (2004: 0.93p)
* Net current assets #2,557,016 (2004: #1,115,638) including cash at bank of
#904,451 and publicly tradable investments of #925,152
* Net assets #1,913,909 (2004: #1,700,375) equivalent to 4.71p per share
(2004: 4.3p)
* UK operations continued to be buoyant achieving six new AIM admissions and
completed a number of corporate transactions
* US operations have continued to struggle in difficult market conditions in
their sector resulting in a trading loss of #65,591 before goodwill
amortisation of #105,744 and the exceptional goodwill impairment write off
of #372,712
* Disposal of the US operations to the US management team completed shortly
after the year end date
CHAIRMAN'S STATEMENT
I am pleased to be able to report another year of record results for the Group
reflecting a further significant improvement in the performance of the Group
during this last financial year.
In the year ended 30 September 2005, turnover increased 220 per cent. to
#10,585,325 (2004: #3,310,569) as a result of an increase in completed
transactions in the period. Administrative costs rose as a result of the
additional business at #4,426,320 (2004: #1,495,352). Net profit before taxation
and the exceptional goodwill write off amounted to #938,597 (2004: #453,642) and
earnings per share (excluding the exceptional goodwill write off) amounted to
1.38p (2004: 0.93p). Shareholders' funds increased to #1,913,909 (2004:
#1,700,375) equivalent to 4.71p per share. The Directors do not propose to
declare a dividend (2004: nil). At the end of the year, the Company had cash on
hand of #904,451 and investments held as short term stock of #925,152.
Griffin Corporate Finance Limited ("Griffin UK")
Griffin UK has undertaken ten corporate transactions in the year and established
six new AIM flotations and one Ofex flotation. The corporate transactions and
publicly floated companies cover various industry sectors. The corporate finance
fee income amounted to #3.16 million and trading of investments totalled #5.8
million.
The new AIM and Ofex admissions promoted by Griffin UK are as follows:
Interbulk Investments plc Initial investment into an intermodal transport
business
Ionian Estates plc Initial investment into a Croatia property
development business
Process Handling plc Initial investment into an international pneumatic
conveying solutions business
Euro Investment Fund plc Initial investment into a specialist packaging
business providing a Child Resistant Senior
Friendly solution to the pharmaceutical industry
Croatia Ventures plc Under new management
Nanotech Energy plc Under new management
Firenze Ventures plc Just admitted to Ofex at the year end
Griffin UK's policy is not to maintain large long-term holdings in these
companies and, whilst a management agreement exists whereby Griffin provides
administrative support to these new AIM companies, Griffin UK looks to input
appropriate new executives into these companies at an early opportunity, once
the strategic direction of each company is determined.
Griffin Securities Inc ("Griffin US")
Your Company has today completed the disposal of the US subsidiaries and trading
operations to the US management team. The disposal is effective from 1 October
2005 and the disposal proceeds were $825,885 all payable in cash on completion.
The disposal proceeds represent the net assets disposed of plus $200,000
goodwill.
Trading performance in the US operations has been disappointing and lacks the
growth potential that your Board is seeking for the Group. The results of the US
operations in recent years are set out below:
2005 2004 2003
# # #
Turnover 1,563,826 1,681,627 396,452
(Loss)/Profit before taxation
and goodwill amortisation (65,591) 140,600 (222,212)
Goodwill amortisation (105,744) (105,748) (105,748)
Goodwill impairment write down (372,712) - -
(Loss)/Profit before taxation (544,047) 34,852 (327,960)
The board has decided that it was in the best interests of the Company to
dispose of the US operations due to the lack of potential growth and profits
from the US business, to ensure management time remained focused on the
profitable operations in the UK and to obtain an inflow of funds from the
disposal of the US operations by converting the US balance sheet assets into
cash.
At the same time as the disposal the US directors on the Group board, Adrian
Stecyk and Chrystyna Bedrij, resigned as directors of the Company to concentrate
on the management of the US operations. Your board wishes to thank them for
their hard work over recent years and wishes them every success with the future
trading of the US operations. No remaining members of the Group board have any
interest in the US operations disposed of.
Under the AIM Rules, as Adrian Stecyk and Chrystyna Bedrij are both directors of
the Company and interested in this disposal, the transaction is to a related
party. Accordingly the terms of the disposal have been reviewed by Stephen Dean
and Vince Nicholls, the independent directors, who after consultation with the
Company's Nominated Adviser, believe the terms of the disposal to be fair and
reasonable insofar as the shareholders of the Company are concerned.
Directors' Share Dealings and Shareholdings
In relation to the disposal of the US operations, as set out above, Adrian
Stecyk and Chrystyna Bedrij have today disposed of 1,305,113 ordinary shares of
5p each at 3.25p per share and no longer hold any shares in their personal names
in the Company. First Financial Securities Limited, a company in which Adrian
Stecyk holds a beneficial interest, has today disposed of 3,134,593 ordinary
shares of 5p each at 3.25p per share and now holds 5,422,643 ordinary shares of
5p each (13.33%). Global Investments Limited, a company in which Stephen Dean
holds a discretionary beneficial interest, has today acquired 1,539,706 ordinary
shares of 5p each at 3.25p per share and now holds 8,000,000 ordinary shares of
5p each (19.67%). Vince Nicholls has today acquired 2,900,000 ordinary shares of
5p each at 3.25p per share and now holds 4,000,000 ordinary shares of 5p each
(9.83%).
Group Financial Overview
During the year, the Group has achieved pre tax profits (excluding the
exceptional goodwill impairment write off) of #938,597. Due to the disposal of
the US operations after the year end, the goodwill in the group's balance sheet
has been written down to #100,000 representing the excess over net assets
achieved from the disposal. The Group's net assets as at 30 September 2005
amounted to #1,913,909 equivalent to 4.71p per share. Earnings per share
(excluding the exceptional goodwill write off) have increased by 48% to 1.38p
(2004: 0.93p) which, based on the current share price of 6.13p, puts the shares
at a p/e of around 4.44.
As at 30 September 2005, the Group's cash balances were #904,451 and the Group
also held investments (publicly tradeable on markets in London and New York) at
book values totalling #925,152, all held for short term disposal. The Group's
only debts are the convertible loan notes totalling #925,000. #175,000 of these
loans is due for repayment or conversion in March 2006. The new loans of
#750,000 were entered into just before the year end date and are repayable or
convertible by 28 September 2007. The cash balances at 30 September 2005 do not
reflect the receipt of the new loans of #750,000 as the funds were in transit at
the year end date. The Directors consider that the Group's financial position
and its trading position are very satisfactory.
We believe the Group's financial performance for 2005 supports the Directors'
belief that the economic climate is conducive to the smaller company markets in
which we operate in the UK. The Directors are actively seeking strategic
opportunities for the Company. In the last year, we have increased the Group's
profile, developed the UK operating business and increased shareholder value
substantially. The Directors believe the current year will present substantial
opportunities for the Group's future success.
The employees and advisers of the Group have worked hard to achieve these record
results and the Board would like to thank all of them for their continuing
support and loyalty.
Stephen Dean
Chairman
GROUP PROFIT & LOSS ACCOUNT
For The Year Ended 30 September 2005
2005 2004
# #
TURNOVER - Continuing operations 9,021,499 1,628,942
- Discontinuing operations 1,563,826 1,681,627
___________ ___________
10,585,325 3,310,569
COST OF SALES (5,275,093) (1,250,651)
___________ ___________
GROSS PROFIT 5,310,232 2,059,918
Administrative expenses (4,426,320) (1,495,352)
Goodwill amortisation (105,744) (105,748)
___________ ___________
OPERATING PROFIT BEFORE EXCEPTIONAL ITEMS 778,168 458,818
Goodwill impairment write off (372,712) -
___________ ___________
OPERATING PROFIT 405,456 458,818
- Continuing operations 949,503 423,966
- Discontinuing operations (544,047) 34,852
Interest receivable & similar income 178,879 3,261
Interest payable (18,450) (8,437)
___________ ___________
PROFIT ON ORDINARY ACTIVITIES BEFORE 565,885 453,642
TAXATION
Taxation (381,378) (121,627)
___________ ___________
RETAINED PROFIT FOR THE YEAR 184,507 332,015
___________ ___________
Basic earnings per share (note 1) 0.46p 0.93p
Diluted earnings per share (note 1) 0.45p 0.93p
Basic earnings per share before goodwill
impairment 1.38p 0.93p
The Company made no recognised gains or losses other than the result for the
year.
The continuing operations represent the UK operations which are continuing.
The discontinued operations represent the US operations which were disposed of
with effect from 1 October 2005.
GROUP BALANCE SHEET
As at 30 September 2005
2005 2004
# #
FIXED ASSETS
Intangible fixed assets 100,000 578,456
Tangible fixed assets 6,893 6,281
___________ ___________
106,893 584,737
___________ ___________
CURRENT ASSETS
Investments (note 5) 925,152 946,428
Debtors 3,475,173 641,681
Cash at bank & in hand 904,451 711,500
___________ ___________
5,304,776 2,299,609
CREDITORS: Amounts falling due within one
year
Convertible debt (175,000) (225,000)
Other creditors (2,572,760) (958,971)
___________ ___________
NET CURRENT ASSETS 2,557,016 1,115,638
___________ ___________
TOTAL ASSETS LESS CURRENT LIABILITIES 2,663,909 1,700,375
CREDITORS: Amounts falling due after more
than one year (750,000) -
___________ ___________
NET ASSETS 1,913,909 1,700,375
___________ ___________
CAPITAL & RESERVES
Called up share capital - equity 2,033,831 1,974,181
Share premium account 527,349 557,972
Profit & loss account (647,271) (831,778)
___________ ___________
EQUITY SHAREHOLDERS' FUNDS 1,913,909 1,700,375
___________ ___________
GROUP CASH FLOW STATEMENT
For The Year Ended 30 September 2005
2005 2004
# #
NET CASH (OUTFLOW)/INFLOW FROM
OPERATING ACTIVITIES (note 2) (690,058) 35,374
RETURNS ON INVESTMENTS &
SERVICING OF FINANCE
Interest received 178,879 3,261
Interest paid (18,450) (8,437)
___________ ___________
NET CASH INFLOW/(OUTFLOW) FROM RETURNS ON
INVESTMENTS & SERVICING OF FINANCE 160,429 (5,176)
TAXATION
UK corporation tax paid - -
CAPITAL EXPENDITURE & FINANCIAL
INVESTMENT
Purchase of tangible fixed assets (6,447) (6,882)
___________ ___________
NET CASH OUTFLOW FROM CAPITAL EXPENDITURE
& FINANCIAL INVESTMENT (6,447) (6,882)
ACQUISITIONS & DISPOSALS
Purchase of investments - -
Disposal of investments - -
___________ ___________
NET CASH OUTFLOW FROM ACQUISITIONS & - -
DISPOSALS
EQUITY DIVIDENDS PAID - -
___________ ___________
NET CASH (OUTFLOW)/INFLOW BEFORE (536,076) 23,316
FINANCING
___________ ___________
FINANCING
Issue of ordinary share capital 59,650 675,000
Costs of share issues (30,623) (257,038)
Debt finance introduced 750,000 225,000
Debt finance repaid (50,000) -
___________ ___________
NET CASH INFLOW FROM FINANCING 729,027 642,962
___________ ___________
INCREASE IN CASH (notes 3 & 4) 192,951 666,278
___________ ___________
NOTES
1 Earnings per share
The basic earnings per share are calculated by dividing the profit for the
financial year attributable to shareholders by the weighted average number
of shares in issue. In calculating the diluted earnings per share, share
options and warrants outstanding have been taken into account.
The weighted average number of shares were: 2005 2004
Number Number
Weighted average number of shares 40,405,344 35,577,892
Effect of outstanding warrants and options 400,000 -
__________ __________
Adjusted weighted average number of ordinary 40,805,344 35,577,892
shares
__________ __________
2 Net cash (outflow)/inflow from operating activities
2005 2004
# #
Operating profit 405,456 458,818
Depreciation 5,835 11,784
Amortisation 105,744 105,748
Goodwill impairment write off 372,712 -
Provision against investments - 18,300
(Increase)/decrease in investments 21,276 (599,483)
(Increase)/decrease in debtors (2,833,492) (555,250)
Increase/(decrease) in creditors 1,232,411 595,457
___________ __________
Net cash (outflow)/inflow from operating (690,058) 35,374
activities
___________ __________
3 Reconciliation of change in cash to movement in net funds
2005 2004
# #
Increase in cash in the year 192,951 666,278
Debt finance introduced (750,000) (225,000)
Debt finance repaid 50,000
___________ __________
Movement in net funds (507,049) 441,278
___________ __________
4 Analysis of net cash and debt
2004 Cashflow 2005
# # #
Cash at bank 711,500 192,951 904,451
__________ __________ __________
Net funds 711,500 192,951 904,451
Convertible loan notes (225,000) (700,000) (925,000)
__________ __________ __________
486,500 (507,049) (20,549)
__________ __________ __________
5 Investments
The investments represent shares which are publicly tradeable on a
recognised market in either USA or UK.
6 The Board of Directors does not propose to pay a dividend.
7 The financial information set out in this document has not been audited and
does not constitute statutory group accounts.
8 The report and accounts for the year to 30 September 2005 will be posted to
shareholders and, after being laid before the Annual General Meeting, will
be delivered to the Registrar of Companies.
Copies of the Report and Accounts will be available to the public, free of
charge, from the office of Griffin Group plc, Hilden Park House, 79 Tonbridge
Road, Hildenborough, Kent, TN11 9BH during normal office hours, with the
exception of Saturdays, Sundays and bank holidays, for one month from today.
Enquiries:
Griffin Group plc
Stephen Dean, Chairman 0034 605 282 211
Nabarro Wells & Co Limited
Keith Smith 020 7710 7400
This information is provided by RNS
The company news service from the London Stock Exchange
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