1
Stockcube plc
Interim Report 2008 for the six months ended 30 June 2008
The Stockcube group produces research and technical analysis of the relative strengths and weaknesses
of price trends of stocks, stock and sector indices, currencies, bonds and financial data to assist
institutional and private investors with the timing of investment transactions.
Highlights for the six months ended 30 June, 2008
* Turnover of �1,372,000 (2007: �1,439,000)
* Operating profit of �111,000 (2007: �208,000)
* Profit before tax of �165,000 (2007: �339,000)
* Basic earnings per share of 1.0p (2007: 2.6p)
* Normalised basic earnings per share 1.4p (2007:2.6p)
"In the light of extremely difficult market conditions we are satisfied with our performance in the
first half of this year. While pre-tax profits may be down by half, much of this shortfall is, of
course, due to the reduction in our investment income following repayment of over half the group's
cash holdings in June 2007 with the remainder due to a modest slippage in income and increased
investment in analytical and technology staff.
"Revenues from our wider market subscription businesses have increased but a number of our
institutional customers have been reducing their market exposure, impacting on our income. However,
the quality of our research means that we are fortunate to count many of the biggest and most
successful institutional investors amongst our clients.
"We believe we are consolidating our position as a leading investment adviser in markets which often
favour a technical analysis approach rather than a fundamentally driven one."
Julian Burney
Chief Executive of Stockcube,
11 September, 2008
Enquiries:
Julian Burney Chief Executive Officer +44 (0)207-352-4001
Shirley Yeoh Finance Director +44 (0)207-352-4001
William Vandyk Blue Oar Securities +44 (0)207-448-4400
Our website is: www.stockcube.com
Stockcube Plc
Chairman's Statement
Introduction
We are pleased to report that our reputation for providing clarity and valuable timing advice to our
customers during the recent turmoil in global markets has increased considerably in the last six
months.
Financial review
Revenue for the six months ended 30 June, 2008 was down 5% to �1,372,000 (2007: �1,439,000) and group
operating profit decreased by 47% from �208,000 to �111,000 in 2008.
Profit before tax amounted to �165,000 a decrease of 51% from �339,000 in 2007.
Due to the reversal of the deferred tax asset, basic earnings per share of 1.0p compared to 2.6p in
2007. Normalised earnings per share would be 1.4p (2007: 2.6p), a fall of 46%
Interest income fell 54% reflecting the return to shareholders of over half the group's cash
resources in June, 2007 as well as a general softening of rates.
We remain cash generative. We had cash balances of �2,590,000 at 30 June, 2008 compared with
�2,308,000 at the beginning of the year. Net assets per share amounted to 26.4p per share (2007:
25.0p) of which 'free' cash (net of the sum required to repay outstanding redeemable capital)
represented 25.1p per share (2007: 25.2p).
Review of operations
Our institutional investor consultancy showed a net 11% drop in income during the first six months of
the year, due in the main to the loss of one significant client in mid-2007. Although we experienced
a net loss of two customers between the two periods, the movement generated a modest increase in
income, countered by a general reduction in an increase from the remaining customer base
Demand for Fullermoney, our global investment strategy service has continued to increase. Numbers of
subscribers at 30 June, 2008 were 15% more than a year earlier with subscription income up by 22%.
Income from our US business, Chartcraft Inc, showed a 19% increase in both � and US$ terms whereas
our non-US activities conducted through Investors Intelligence showed flat revenues between 2007 and
2008.
Ecube, our website developer, is continuing to generate more stable hosting and maintenance income
but the level of development income we enjoyed in the first half of 2007 has not been repeated with a
number of expected third party projects being deferred from the first half of 2008.
Trading outlook
We are unable to foresee when global market conditions will return to 'normal' - whatever that may
mean for the medium term. We are dependent on our institutional customers' appetite and opportunity
to trade and on our subscribers' continuing interest in stock and other markets.
Certainly we expect consolidation, or rather increasing polarisation, in the fund management sector
where smaller funds that lack of critical mass will close and the larger funds will grow. We are
sufficiently flexible to service equally well managers of stand-alone funds or within groups of
larger funds.
Our 'steady as she goes' approach and our concentration on providing our customers with the help they
need and the clearest analysis possible should keep us out of trouble.
Edward Forbes,
Chairman
London
11 September 2008
Stockcube Plc
Consolidated Income Statement
for the six months ended 30 June 2008
Unaudited Unaudited Audited
Six Months to Six Months to Year to
30 June 30 June 31 Dec
2008 2007 2007
�'000 �'000 �'000
Revenue 1,372 1,439 2,849
Cost of sales (119) (172) (355)
-------- -------- --------
Gross Profit 1,253 1,267 2,494
Administrative expenses (1,142) (1,059) (2,143)
-------- -------- --------
Group operating profit 111 208 351
Share of operating profit of associate - 13 8
Investment revenues 54 118 174
-------- -------- --------
Profit before taxation 165 339 533
Taxation (91) (85) (73)
-------- -------- -------
Profit for the period 74 254 460
-------- -------- -------
Earnings per share
Basic 1.0p 2.6p 4.8p
Diluted 1.0p 2.6p 4.8p
Stockcube Plc
Consolidated Balance Sheet
as at 30 June 2008
Unaudited Unaudited Audited
As at As at As at
30 June 30 June 31 Dec
2008 2007 2007
�'000 �'000 �'000
Non Current Assets
Intangible assets 17 17 17
Property, plant and equipment 333 346 339
Investments in associate - 250 -
Deferred tax asset - - 55
-------- -------- --------
350 613 411
-------- -------- --------
Current assets
Trade and other receivables 856 628 791
Cash and cash equivalents 2,590 2,263 2,308
-------- -------- --------
3,446 2,891 3,099
-------- -------- --------
Current Liabilities
Trade and other payables (1,050) (711) (698)
Corporation Tax (41) (223) (54)
Financial Liabilities (170) (170) (170)
-------- -------- --------
(1,261) (1,104) (922)
-------- -------- --------
Net current assets 2,185 1,787 2,177
-------- -------- --------
Total assets less current liabilities 2,535 2,400 2,588
-------- -------- --------
Equity
Share Capital 961 961 961
Share premium account 1,322 1,350 1,327
Merger reserve 568 568 568
Translation reserve 5 2 7
Retained earnings (321) (481) (275)
-------- -------- --------
Equity shareholders' funds 2,535 2,400 2,588
-------- -------- --------
Approved by Order of the Board on 11 September 2008
Julian Burney
Director
Stockcube Plc
Consolidated Statement of Changes in Equity
for the six months ended 30 June 2008
Group
Share Share Merger Translation Retained
Capital Premium Reserve Reserve earnings Total
�'000 �'000 �'000 �'000 �'000 �'000
At 1 January 2007 961 3,774 568 5 (639) 4,669
Exchange differences on retranslation of
net assets of subsidiary undertaking - - - 2 - 2
------- ------- ------- ------- ------- -------
Net income / (expense) recognised
directly in equity - - - 2 - 2
Profit for the year - - - - 460 460
------- ------- ------- ------- ------- -------
Total recognised income and expense for 2007 - - - 2 460 462
Capital reorganisation - cash repaid to
shareholders - (2,403) - - - (2,403)
Capital reorganisation -legal expenses
- (44) - - - (44)
Dividends paid - - - - (96) (96)
------- ------- ------- ------- ------- -------
At 31 December 2007 (audited) 961 1,327 568 7 (275) 2,588
Exchange differences on retranslation of
net assets of subsidiary undertaking - - - (2) - (2)
-------- ------- ------- ------- ------- -------
Net income / (expense) recognised
directly in equity - - - (2) - (2)
Profit for the period - - - - 74 74
------- ------- ------- ------- ------- -------
Total recognised income and expense for
2008 - - - (2) 74 72
Capital reorganisation -legal expenses - (5) - - - (5)
Dividends paid - - - - (120) (120)
------- ------- ------- ------- ------- --------
At 30 June 2008 (unaudited) 961 1,322 568 5 (321) 2,535
------- ------- ------- ------- ------- --------
Stockcube Plc
Consolidated Cash Flow Statement
for the six months ended 30 June 2008
Group
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 30 June 31 December
2008 2007 2007
�'000 �'000 �'000
Net cash from operating activities 357 329 342
-------- -------- --------
Net cash flows from investing activities
Interest and other income received 54 118 174
Purchases of property, plant and equipment (4) (19) (20)
-------- -------- --------
Net cash generated from investing activities 50 99 154
-------- -------- --------
Cash flows from financing activities
Capital reorganisation -Cash repaid to shareholders and
associated expenses (5) (2,254) (2,277)
Equity dividends paid (120) (96) (96)
-------- -------- --------
Net cash used in financing activities (125) (2,350) (2,373)
-------- -------- --------
Net increase/ (decrease) in cash and cash equivalents 282 (1,922) (1,877)
Cash and cash equivalents at beginning of period 2,308 4,185 4,185
-------- -------- --------
Cash and cash equivalents at end of period 2,590 2,263 2,308
-------- -------- --------
Stockcube Plc
Notes to the Interim Report
for the six months ended 30 June 2008
1. Statement of Compliance
The consolidated financial information has been prepared using accounting policies consistent with
International Financial Reporting Standards ("IFRS") as adopted by the European Union applied in
accordance with the provisions of the Companies Act 1985 and in accordance with IAS 34, Interim
Financial Reporting.
The results for the year ended 31 December 2007 have been audited whilst the results for the six months
ended 30 June 2007 and 30 June 2008 are un-audited. The financial information contained in this
interim report does not constitute statutory accounts as defined in section 240 of the Companies Act
1985. The statutory accounts for the previous year, which were prepared under IFRS have been
delivered to the Registrar of Companies. The auditors' opinion on those accounts was unqualified and
did not contain a statement made under s237 (2) or s237 (3) of the Companies Act 1985
2. Accounting Policies
Basis of preparation of interim financial statements
The interim financial information has been prepared using accounting policies consistent with IFRS, as set
out in the last annual report to 31 December 2007.
They have all been applied consistently throughout the period covered by these financial statements.
Principle risks and uncertainties for the remaining six months of the financial year
The group does not have any gearing which would impact the results over the remaining six months of the
year.
Further, the group has surplus cash available and should be in a strong position to take advantage of
situations arising out of the current economic environment.
3. Revenue
Revenue, which is stated net of value added tax, represents the sales value of work done in the year.
Revenue is attributable mainly to the continuing activity of the provision of research and analysis of price
trends in stocks, commodities, currencies and interest rates.
An analysis of the Group's revenue is as follows:
Unaudited Unaudited Audited
Six months to Six months to Year to
30 June 30 June 31 December
2008 2007 2007
�'000 �'000 �'000
Rendering of services 1,372 1,439 2,849
Investment income 54 118 174
-------- -------- --------
1,426 1,557 3,023
-------- -------- --------
4. Business and geographical segments
Segmental information is presented in the consolidated financial statements in respect of the Group's
geographical segments, which are the primary basis of segment reporting. The Group's operations are
in two geographical segments, the United Kingdom and United States. The Group's operations are predominantly
in one business segment.
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
30 June 30 June 30 June 30 June 30 June 30 June
2008 2008 2008 2007 2007 2007
UK USA Total UK USA Total
�'000 �'000 �'000 �'000 �'000 �'000
External Revenue 1,227 145 1,372 1,321 118 1,439
Intersegment sales 113 - 113 98 - 98
Eliminations (113) - (113) (98) - (98)
------- ------- ------- ------- ------- -------
Total Revenue 1,227 145 1,372 1,321 118 1,439
Segment Results 143 57 200 248 43 291
Unallocated Expenses (89) (83)
------- ------- ------- ------- ------- -------
Group Operating Profit 111 208
Net Financing Income 54 - 54 118 - 118
Share of associate's profit - - - 13 - 13
------- ------- ------- ------- ------- -------
165 339
Income tax expense (91) (85)
------- -------
Profit for the period 74 254
------- -------
Audited Audited Audited
31Dec 31Dec 31Dec
2007 2007 2007
UK USA Total
�'000 �'000 �'000
External Revenue 2,609 240 2,849
Intersegment sales 166 - 166
Eliminations (166) - (166)
------- ------- -------
Total Revenue 2,609 240 2,849
------- ------- -------
Segment Results 490 86 576
Unallocated Expenses (225)
------- ------- -------
Group Operating Profit 351
Net Financing Income 174 - 174
Share of associate's profits 8 - 8
------- ------- -------
533
Income tax expense (73)
-------
Profit for the period 460
-------
There is no material seasonality associated with the group's activities.
Segment assets and liabilities
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
30 June 30 June 30 June 30 June 30 June 30 June
2008 2008 2008 2007 2007 2007
UK USA Total UK USA Total
�'000 �'000 �'000 �'000 �'000 �'000
Segment Assets 3,763 33 3,796 3,488 16 3,504
Unallocated assets - - - - - -
------- ------- ------- ------- ------- -------
Total assets 3,763 33 3,796 3,488 16 3,504
-------- ------- ------- ------- ------- -------
Segment Liabilities (952) (114) (1,066) (691) (91) (782)
Unallocated liabilities (190) (5) (195) (322) - (322)
------- ------- -------- -------- ------- -------
Total liabilities (1,142) (119) (1,261) (1,013) (91) (1,104)
------- ------- ------ ------- ------- -------
Net assets/(liabilities) 2,621 (86) 2,535 2,475 (75) 2,400
------- ------- ------ ------- ------- -------
Audited Audited Audited
31 Dec 31 Dec 31 Dec
2007 2007 2007
UK USA Total
�'000 �'000 �'000
Segment Assets 3,433 22 3,455
Unallocated assets 55 - 55
------ ------- ------
Total assets 3,488 22 3,510
------ ------- ------
Segment liabilities (603) (95) (698)
Unallocated liabilities (224) - (224)
------- ------- -------
Total liabilities (827) (95) (922)
------- ------- -------
Net assets/(liabilities) 2,661 (73) 2,588
------- ------- -------
5. Earnings per share
Unaudited Unaudited Audited
30 Jun 30 Jun 31Dec
2008 2007 2007
Earnings �'000 �'000 �'000
Earnings for the purposes of basic and diluted earnings per
share being net profit attributable to equity shareholders 74 254 460
-------- -------- --------
Number of shares '000 '000 '000
Weighted average number of ordinary shares for the purposes of
basic earnings per share 9,611 9,611 9,611
Number of dilutive shares under option - - -
--------- ------- --------
Weighted average number of ordinary shares for the purposes of
basic earnings per share 9,611 9,611 9,611
-------- -------- --------
Profit per ordinary share (pence):
Basic 1.0p 2.6p 4.8p
Normalised basic 1.4p 2.6p 4.8p
Diluted 1.0p 2.6p 4.8p
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all dilutive potential ordinary shares. A calculation is done to
determine the number of shares that could have been acquired at fair value (determined as the average
annual market share price of the company's shares) based on the monetary value of the subscription
rights attached to outstanding share options. The number of shares calculated as above is compared
with the number of shares that would have been issued assuming the exercise of the share options.
Based on these calculations there were no dilutive potential ordinary shares in 2008 (2007: nil).
6. Dividends and other appropriations
Unaudited Unaudited Audited
Six Months to Six Months to Year to
30 June 30 June 31 Dec
2008 2007 2007
�'000 �'000 �000
Equity dividends on ordinary shares -Paid 120 96 96
-------- -------- --------
7. Capital reorganisation
On 20 June 2007, the Company was granted court approval to repay part of its capital by way of capitalisation of
part of the share premium account. For each one Ordinary share, five 'B' shares of 5p each were
credited as fully paid at par. Each 'B' share was then cancelled and repaid to shareholders on 27
June 2007, unless subject to an election to defer cancellation until 2008. The nominal value of 'B'
shares subject to this election is �170,071. This is shown as a financial liability in the Balance
sheet as at 30 June 2008 and was repaid on 3 July 2008.
8. Cash generated from operations
Group Unaudited Unaudited Audited
Six Months to Six Months to Year to
30 June 30 June 31 Dec
2008 2007 2007
�'000 �'000 �'000
Operating profit 111 208 351
Depreciation 9 8 18
Loss on disposal of associate - - 20
(Increase)/decrease in trade receivables (65) 90 (17)
Increase in trade payables 352 11 176
-------- -------- --------
Cash generated from operations 407 317 548
Tax (paid)/refunded (50) 12 (206)
-------- -------- --------
Net cash from operating activities 357 329 342
-------- -------- --------
9.Reconciliation of net cash flow
Group Unaudited Unaudited Audited
Six Months to Six Months to Year to
30 June 30 June 31 Dec
2008 2007 2007
�'000 �'000 �'000
Cash at bank and in hand
At start of period 2,308 4,185 4,185
Net increase/(decrease) in cash flow 282 (1,922) (1,877)
-------- -------- --------
At end of period 2,590 2,263 2,308
-------- -------- --------
10. Share-based payments
During the period, the Enterprise Management Incentive ("EMI") scheme was launched, which will eventually
replace the current Approved Scheme. Options under the EMI scheme were issued at the mid-market price
of 36.5p on 16 June 2008. These options have a life of 10 years from the date of grant.
At 30 June 2008, the following options were outstanding:
Founders Executive Approved EMI Total
No.2 Scheme
1 January 2008 Brought forward 559,500 544,705 239,341 - 1,343,546
2 June 2008 Renunciations (516,500) (474,705) (143,694) - (1,134,899)
16 June 2008 New options - - - 1,464,500 1,464,500
-------- -------- -------- -------- ----------
30 June 2008 Outstanding 43,000 70,000 95,647 1,464,500 1,673,147
-------- -------- -------- -------- ----------
The model used in the calculation of share-based payments was the Binomial model and the charge for
the period was not material.
11. Publication of non-statutory accounts
The financial information for the six months ended 30 June 2008 has not been reviewed in accordance
with the guidance contained ISRE 2140 "Review of interim financial information."
Statement of directors' responsibilities
The directors' confirm that this condensed consolidated interim financial information has been prepared in
accordance with IAS 34 as adopted by the European Union and that the interim management report
includes a fair review of the information required, namely:
* An indication of important events that have occurred during the first six months and their
impact on the condensed set of financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial year; and
* Material related party transactions in the first six months and any material changes in the
related party transactions described in the last annual report.
The directors of Stockcube plc are listed in the Stockcube plc Annual Report for 31 December 2007 and a list of
current directors is maintained on the Stockcube plc website: www.stockcube.com.
By order of the board
-------------------------------------- -------------------------------------------
Edward Forbes Julian Burney
Chairman Chief Executive
Stockcube PLC
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