TIDMSKC
Preliminary final results for the year ended 31 December 2008
Stockcube Plc ("Stockcube" or "the Company")
Preliminary Results for the year ended 31 December 2008
HIGHLIGHTS
2008 2007
GBP000 GBP000
Turnover 2,586 2,849
Profit before tax 192 533
Profit after tax 82 460
Earnings - pence per share - basic 0.9p 4.8p
Normalised Earnings - pence per share - basic 1.9p 4.4p
Earnings - pence per share - diluted 0.9p 4.8p
Group turnover 9% down on 2007.
Profit before tax down to GBP192,000 from GBP533,000.
Strong balance sheet with net assets of 26p per share, with 27p per share in cash and marketable
bonds.
Normalised earnings per share, before share options benefits (GBP41,000) and deferred tax charge
(GBP55,000), down to 1.9p from 4.4p.
Dividend (proposed) reduced to 0.75 pence per share from 1.25 pence per share in 2007.
Julian Burney, Chief Executive Officer, said:
"As a number of the world's biggest commercial enterprises will attest, merely to survive is victory
in these deeply troubled economic times. During 2008 we witnessed consolidation and shrinkage in the
fund management industry accompanied by a lack of investment activity, whose combined impact was most
immediately felt in our sales of institutional investment advisory services.
To some degree, falls in institutional sales and the contribution made by our technology services
activities were compensated for by the robustness of our wider market services. Nevertheless the net
drop in our group revenues of 9% has gone straight to operating profit for 2008
We remain confident in our future but are cautious about the current trading environment. Accordingly
we are proposing to reduce the dividend for 2008 to 0.75 pence per share."
For further information:
Stockcube plc Julian Burney 020-7352-4001
Blue Oar Securities plc William Vandyke 020-7448-4430
Chairman's Statement
Introduction
2008 was a year in which many asset values plummeted and much of the world's apparent wealth
evaporated. The outward spiral of global recession with the accompanying threat of depression and its
impact on equity and other financial markets had a significantly negative impact on the ability and
willingness of investors and fund managers to invest. Not surprisingly, the receptivity of investors
to quality research and analysis varied markedly, ranging from 'must have' to 'not listening.' In
these circumstances the group fared very well, remained cash generative and is highly liquid.
Overheads were and continue to be closely monitored.
Financial review
Turnover showed a net decrease of 9% from GBP2.849mn in 2007 to GBP2.586mn for the year ended 31 December
2008. Profit before tax was GBP192,000, a decrease of 64% from 2007 (GBP533,000). Normalised profit after
tax was GBP178,000, after adjusting for the deferred tax charge and the apportioned employee benefits
arising from the grant of share options during the year. Basic earnings per share decreased by 81%
from 4.8p per 10p ordinary share in 2007 to 0.9p in 2008. The like for like decrease in normalised EPS
between 2008 and 2007 would have been 57% from 4.8p to 1.9p per share after setting aside the impact
of the crystalisation of losses for tax purposes on the disposal of our shareholding in Sportcal in
2007 and the reversal of deferred tax charge and the share options benefits charge in 2008.
Our balance sheet had net assets of 26.4p per ordinary share at 31 December, 2008, backed by 27.3p per
share in cash, cash equivalents and marketable bonds.
Business review
Stockcube Research, our institutional consultancy service, suffered a 21% drop in revenues compared to
2007 as institutional and hedge fund customers reacted to the implications of the credit crisis and
the developing global recession, either by closing funds or reducing significantly their market
activity. Although we were faced with market behavioural patterns that few, if any, had experienced
before we continued to provide invaluable market advice and were able to identify what clear trend
changes and sector swings there were.and guided a number of clients away from potentially larger
problems
Our Fullermoney service recorded a 10% increase in income during the year although numbers of
subscribers dipped by 2%
Investors Intelligence showed a 5% reduction in revenues but we were encouraged by an increase in
enquiries for the provision of business to business data and analysis services toward the end of the
year.
As result of new marketing initiatives Chartcraft recorded a 14% increase in subscribers during 2008
which translated into a similar increase in revenue in US dollar terms over 2007. However, combined
with sterling's sharp decline against the US dollar through 2008 Chartcraft generated a 45% increase
to group revenues.
Ecube, our in-house software business, which develops and supports the group's technology needs,
recorded a 33% fall in revenues from third parties in 2008 as customers, mainly in the financial
services sector, deferred IT projects originally scheduled for early 2008 to the end of the year and
early 2009.
In view of the poor rates of return on our cash deposits with banks and, to an extent, the reduction
in compensating security following our experience with our Kaupthing Singer & Friedlander deposit,
repaid in full under HM Treasury's Financial Services Compensation Scheme, we resolved to take a more
active stance in relation to our Treasury activities. Using in-house expertise, we have taken low
risk investments in government and corporate bonds with an annual return target of 4%-6%.
Key performance indicators
The Board measures the Group's performance, principally using the following financial indicators:
2008 2007
GBP'000 GBP'000 % (decrease)
Normalised operating profit 115 371 (69%)
Normalised profit before tax 233 533 (56%)
Normalised earnings per share 1.9p 4.4p (57%)
Dividend (proposed and paid) 0.75p 1.25p (40%)
Normalised profit of GBP178,000 is profit before the share options benefits charge of GBP41,000 and
deferred tax charge of GBP55,000 (2007: GBP425,000, after loss on disposal of associate and deferred tax
asset).
Staff
I should like to thank all our staff for their contributions during the year.
Dividend
We are seeking shareholder approval at the AGM for a dividend of 0.75 pence per share in respect of
the results for 2008, a decrease of 40% on 2007.
Outlook
In common with many businesses we continue to face a great deal of uncertainty and it is anyone's
guess how long and what form the post credit shock convalescence will take. There is no doubt that
input from our area of expertise, technical analysis, has now become a basic requirement for any
investor.
We continue to be optimistic amid signs that larger investment institutions and remaining investment
banks will be reluctant to build up overheads at least for the foreseeable future and will outsource
their investment analysis to independent firms.
The current year has started solidly enough.
Edward Forbes,
Chairman,
London
27 April 2009
Directors' Report
The directors present their report and the financial statements for the year ended 31 December 2008.
Principal activities
The company is the holding company of a group whose principal activities during the period continued
to be provision of research and analysis of price trends in stocks and other financial instruments,
and website development.
Business Review
The review of the group's business and the key performance indicators are included in the Chairman's
statement.
Results for the year and dividends
The profit for the year, after taxation, amounted to GBP82,000 (2007: GBP460,000) after corporate taxation
of GBP110,000 (2007:GBP73,000). Normalised profit for the year after taxation amounted to GBP178,000 (2007:
GBP425,000), after adding back the share options charge of GBP41,000 and deferred tax charge of GBP55,000
The directors recommend the payment of a dividend of 0.75 pence per ordinary share (2007:1.25p).
Directors and their interests
The directors at 31 December 2008 and their interests in the share capital of the company were as
follows:
31 December 2008 31 December 2008 31 December 2007 31 December 2007
Ordinary shares Ordinary shares Ordinary shares Ordinary shares
Beneficial Non-beneficial Beneficial Non-beneficial
Edward Forbes - 50,100 - 50,100
Julian Burney 2,697,416 849,134 2,697,416 849,134
Shirley Yeoh 5,000 - 5,000 -
Andrew Ashman - 150,000 - 150,000
Dennison Veru 15,000 - 15,000 -
Timothy Horlick 7,500 - 7,500 -
Share option schemes
The directors believe it is in the interests of the company to grant incentives to employees through
participation in the company's growth. At the beginning of the year the company had three
discretionary executive share option schemes: the Stockcube Founder Employee Share Plan (closed to new
members on 18 April 2000), the Stockcube PLC (Revenue Approved) Executive Share Option Scheme and the
Stockcube PLC (No. 2) Executive Share Option Scheme (the 'Unapproved Scheme'). During the year, the
majority of the options granted under these schemes were renounced and replaced by options granted
under a new scheme, The Stockcube PLC Enterprise Management Incentive Scheme. Agreements granting
options have also been entered into with the non-executive directors and consultants.
(i) The Stockcube Founder Employee Share Plan ('The Plan')`
Under this plan, options to subscribe for 711,000 ordinary shares were granted to existing group
employees at the placing price of 25p (250p following consolidation of the ordinary shares in
May 2006). Following renunciations, there remain outstanding options over 70,500 ordinary
shares. The exercise price of the shares was rebased to 85p in May 2006 and was further adjusted
to 60p following the capital reorganisation in June 2007. This scheme is now closed to new
members.
(ii) The Stockcube PLC (Revenue Approved) Executive Share Option Scheme ('The Approved Scheme')
Approval was granted by the Inland Revenue for this scheme under Schedule 9 of the Income and
Corporation Taxes Act 1988 ('Taxes Act'). Options granted under this scheme (which following
Revenue approval, are 'approved options') are at the discretion of the Remuneration Committee.
Following renunciations, there remain outstanding options over 80,647 ordinary shares. This
scheme is now closed to new members.
(iii) The Stockcube PLC (No. 2) Executive Share Option Scheme ('The Unapproved Scheme')
Application will not be made to the Inland Revenue for the approval of this scheme. Options
granted under this scheme (which is, therefore, be 'unapproved') are at the discretion of the
Remuneration Committee. Following renunciations, there are outstanding options over 70,000
ordinary shares. The exercise price of the options in this scheme was rebased to 60p following
the capital reorganisation in June 2007. This scheme is now closed to new members.
iv) The Stockcube PLC Enterprise Management Incentive Scheme ('The EMI Scheme')
This scheme was adopted on 2 June 2008. Options under this scheme are granted at the discretion
of the Remuneration Committee. At the year end, there were outstanding options over 1,372,500
ordinary shares. The exercise price of the options in this scheme was 36.5p, which was the mid-
market price at the date of grant.
All options are due to expire ten years from the date of the grant.
Corporate governance
So far as is practicable and to the extent appropriate having regard to the size of Stockcube, the
board will consider and where appropriate comply with the principles set out in the Combined Code.
Stockcube has established Audit and Remuneration Committees. These Committees comprise non- executive
directors, Timothy Horlick and Dennison Veru. The Audit Committee is responsible for ensuring that the
financial performance of the group is properly monitored and reported on. It receives and reviews
reports from management and the company's auditors relating to annual and interim financial statements
and the internal control systems in use throughout the group.
The main areas of compliance are as follows:
The Board
The company is directed by the Board comprising four executive and two non-executive directors. The
directors hold board meetings at which operating and financial reports are considered. The board is
responsible for formulating, reviewing and approving the group's strategy, budgets, major items of
capital expenditure and senior personnel appointments.
The key elements of financial control are as follows:
Control environment - presence of a clear organisational structure and well-defined lines of
responsibility and delegation of appropriate level of authority.
Financial risk management - the company's operations expose it to a variety of financial risks that
include the effects of changes in credit risk, liquidity risk and interest rate risk. The company has
in place a risk management programme that seeks to limit adverse effects on the financial performance
of the company. The company does not use derivative financial instruments to manage interest rate
costs and, as such, no hedge accounting is applied.
Risk management - business strategy and plans are reviewed by the board.
Financial reporting - a comprehensive system of budgets and forecasts with monthly reporting of actual
results against targets is in operation.
Control procedures and monitoring systems - authorisation levels, procedures and other systems of
internal financial controls are documented, applied and regularly reviewed.
Business Risk
The Board is responsible for identifying and evaluating the major business risks faced by the Group
and for determining and monitoring the appropriate course of action to manage these risks.
The Board conducts a review of the effectiveness of the Group's systems of internal control and risk
management on an annual basis. Following this review it has concluded that the Group's financial,
operational and compliance controls and risk management procedures are appropriate and suitable to
enable the Board to safeguard shareholders' interests and the Group assets.
Due to the nature and size of the Group, the Board considers that it is not appropriate at present to
have a dedicated internal control function. The Board will continue to review this recommendation on
at least an annual basis.
The process and systems of internal control are designed to manage, rather than eliminate, the risk of
failure to achieve the Group's objectives, and can therefore only provide reasonable and not absolute
assurance against material misstatement or loss
Creditor payment policy
It is the group's policy that payments to suppliers are made in accordance with the terms and
conditions agreed between the company and its suppliers, provided that all trading terms and
conditions have been complied with. At 31 December 2008 the group had an average of 5 (2007: 26) days'
purchases owed to trade creditors.
Pillar 3 Disclosure
The Pillar 3 Disclosure Statement is available at the registered office, 1.23, Plaza 535, King's Road,
London SW10 0SZ.
Disclosure of Information to the auditors
So far as each of the directors is aware at the time the report is approved:
- there is no available relevant audit information of which the auditors are unaware and
- that directors have taken all steps that each director ought to have taken as a director to make
himself or herself aware of any relevant audit information and to establish that the company's
auditors were aware of that information.
Auditors
A resolution to re-appoint the auditors, Nexia Smith & Williamson, will be proposed at the next Annual
General Meeting.
Approved by the board of directors and signed on behalf of the board
S Yeoh
Secretary
27 April 2009
Consolidated Income Statement
For the year ended 31 December 2008
2008 2007
GBP000 GBP000
Continuing Operations
Revenue 2,586 2,849
Cost of sales (328) (355)
------- -------
Gross Profit 2,258 2,494
Administrative expenses (2,184) (2,143)
------- -------
Operating profit 74 351
Finance income 118 174
Share of profits of associate - 8
------- -------
Profit before taxation 192 533
Taxation (110) (73)
------- -------
Profit for the year 82 460
------- -------
------- -------
Basic earnings per share 0.9p 4.8p
Diluted earnings per share 0.9p 4.8p
Consolidated Balance Sheet
At 31 December 2008
2008 2007
GBP000 GBP000
Non current assets
Intangible assets 17 17
Available for sale investments 700 -
Property, plant and equipment 329 339
Deferred tax assets - 55
------- -------
1,046 411
------- -------
Current assets
Trade and other receivables 229 791
Available for sale investments 515 -
Cash and cash equivalents 1,413 2,308
------- -------
Total current assets 2,157 3,099
------- -------
Current liabilities
Trade and other payables (603) (868)
Current tax payable (60) (54)
------- -------
Total current liabilities (663) (922)
------- -------
Net current assets 1,494 2,177
------- -------
Net assets 2,540 2,588
------- -------
------- -------
Equity
Share capital 961 961
Share premium account 1,294 1,327
Merger reserve 568 568
Share options reserve 41 -
Available for sale investments reserve 9 -
Translation reserve (20) 7
Retained earnings (313) (275)
------- -------
Total equity 2,540 2,588
------- -------
------- -------
The financial statements were approved by the Board and authorised for issue on 27 April 2009 and
signed on its behalf
Julian Burney
Director
Consolidated Statement of Changes in Equity
For the year ended 31 December 2008
Share Share Merger Other Retained
capital Premium reserve Reserves Earnings Total
account (see note Shareholders'
below) Funds
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 January 2007 961 3,774 568 5 (639) 4,669
Exchange differences on
retranslation of net
assets of subsidiary - - - 2 - 2
undertaking
------- ------- ------- ------- -------
Net income / (expense)
recognised directly in - - - 2 -
equity
Profit for the year - - - - 460 460
------- ------- ------- ------- -------
Total recognised income
and expense for 2007 - - - 2 460
Capital reorganisation -
cash repaid to - (2,403) - - - (2,403)
shareholders
Capital reorganisation
-legal expenses - (44) - - - (44)
Dividends paid - - - - (96) (96)
------- ------- ------- ------- ------- -------
At 31 December 2007 961 1,327 568 7 (275) 2,588
Exchange differences on
retranslation of net
assets of subsidiary - - - (27) - (27)
undertaking
Gain arising on
revaluation - - - 9 - 9
------- ------- ------- ------- -------
Net income / (expense)
recognised directly in - - - (18) -
equity
Profit for the year - - - - 82 82
------- ------- ------- ------- -------
Total recognised income
and expense for 2008 - - - (18) 82
Share options charge - - - 41 - 41
Capital reorganisation
- legal expenses - (33) - - - (33)
Dividends paid - - - - (120) (120)
------- ------- ------- ------- ------- -------
At 31 December 2008 961 1,294 568 30 (313) 2,540
------- ------- ------- ------- ------- -------
Other Reserves
Translation Share Option Available Total
reserve for sale
Reserve investment
reserve
GBP000 GBP000 GBP000 GBP000
At 1 January 2007 5 - - 5
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 - - - -
------- ------- ------- -------
Total recognised income and expense for 2007
2 - - 2
Capital reorganisation - cash repaid to
shareholders - - - -
Capital reorganisation -legal expenses
- - - -
Dividends paid - - - -
------- ------- ------- -------
At 31 December 2007 7 - - 7
Exchange differences on retranslation of net assets
of subsidiary undertaking
(27) - - (27)
Gain arising on revaluation
- - 9 9
------- ------- -------
Net income / (expense) recognised directly in
equity (27) - 9
Profit for the year - - -
------- ------- -------
Total recognised income and expense for 2008
(27) - 9
Share options charge - 41 - 41
Capital reorganisation
- legal expenses - - -
Dividends paid - - -
------- ------- ------- -------
At 31 December 2008 (20) 41 9 30
------- ------- ------- -------
------- ------- ------- -------
Statement of Cash Flows
For the year ended 31 December 2008
2008 2007
GBP000 GBP000
Net cash inflow from operating activities 526 342
-------- --------
Cash flows from investing activities
Interest and other income received 118 174
Purchases of property, plant and equipment (10) (20)
Purchase of available for sale investments (1,206) -
-------- --------
Net cash generated from investing activities (1,098) 154
-------- --------
Cash flows from financing activities
Capital reorganisation -cash repaid to shareholders and
associated expenses (203) (2,277)
Equity dividends paid (120) (96)
-------- --------
Net cash used in financing activities (323) (2,373)
-------- --------
Net (decrease) in cash and cash equivalents (895) (1,877)
Cash and cash equivalents at beginning of year 2,308 4,185
-------- --------
Cash and cash equivalents at end of year 1,413 2,308
-------- --------
-------- --------
Cash generated from operations
2008 2007
GBP000 GBP000
Operating profit 74 351
Depreciation 20 18
Loss on disposal of associate - 20
Exchange differences (27) -
Share options charge 41 -
Decrease/(increase)/in trade receivables 562 (17)
(Decrease)/increase in trade payables (95) 176
-------- --------
Cash generated from(used in)operations 575 548
Tax paid (49) (206)
-------- --------
Net cash inflow from operating activities 526 342
-------- --------
-------- --------
Notes
1. Nature of financial information
This financial statements does not constitute financial statements under Section 240 of the Companies
Act 1985. The results of the year ended 31 December 2007 are extracts from the Group financial
statements which have been delivered to the Registrar of Companies. They carry an unqualified
auditor's report and did not contain a statement under Section 237(2) or (3) of the Companies Act
1985. The statutory accounts for the year ended 31 December 2008 have not yet been delivered to the
Registrar of Companies nor have the auditors reported on them. They will be finalised on the basis of
the information presented by the Directors in this preliminary announcement.
2. Basis of preparation
The financial information has been prepared using accounting policies consistent with International
Financial Reporting Standards ("IFRS"), as adopted by the EU.
The financial statements have been prepared on an historical cost basis as modified by the revaluation
of available for sale investments.
3. Basis of consolidation
The group financial statements incorporate the financial statements of Stockcube PLC and all of its
subsidiary undertakings for the year to 31 December 2008.
Entities other than subsidiary undertakings, in which the group has a participating interest and over
whose operating and financial policies the group exercises a significant influence, are treated as
associates. In the group financial statements, associates are accounted for using the equity method.
The equity accounting method involves recording the investment initially at cost to the Group and
then, in subsequent periods, adjusting the carrying amount of the investment to reflect the Group's
share of the associate's results less any impairment of goodwill and any other changes such as
dividends to the associate's net assets.
Intra-group balances and any unrealised gains and losses or income and expenses arising from intra-
group transactions are eliminated in preparing the consolidated financial statements.
4. Earnings per share
2008 2007
Earnings GBP000 GBP000
Earnings for the purposes of basic and diluted earnings per share being
net profit attributable to equity shareholders 82 460
-------- --------
-------- --------
Number of shares '000 '000
Weighted average number of ordinary shares for the purposes of basic
earnings per share 9,611 9,611
-------- --------
-------- --------
Profit per ordinary share (pence):
Basic 0.9p 4.8p
Normalised basic 1.9p 4.4p
Diluted 0.9p 4.8p
Normalised diluted 1.9p 4.4p
Normalised basic earnings per share are calculated by adding back the share options benefit charge of
GBP41,000 and deferred tax charge of GBP55,000, to give an adjusted earnings after tax of GBP178,000 (2007:
GBP425,000).
Diluted earnings per share are 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) as
the market price is less than the grant price of the options.
5. Dividend record and payment date
The Directors have proposed the payment of a dividend. The dividend of 0.75p per ordinary share will
be paid on 5 June 2009. Dividends will be paid to those shareholders on the Register at the close of
business on 8 May 2009.
6. Annual report and accounts
The annual report and accounts will be posted to shareholders on 5 May 2009 and copies will be
available free of charge during normal business hours on any day (except Saturdays, Sundays and public
holidays) at the offices of the Company at Unit 1.23 Plaza 535, King's Road, London SW10 0SZ.
Stockcube PLC
Stockcube (LSE:SKC)
Historical Stock Chart
From Oct 2024 to Nov 2024
Stockcube (LSE:SKC)
Historical Stock Chart
From Nov 2023 to Nov 2024
