RNS Number : 8265X
Griffin Group PLC
30 June 2008
Griffin Group plc
("Griffin" or the "Company")
Interim Statement
for the Six Months ended 31st March 2008
(the "Period")
Highlights:
* Revenue �916,233 before �850,106 unrealised loss on investments (2007: �1,119,094 before �1,164,250 unrealised loss on
investments)
* Loss after tax from continuing operations �846,137 (2007: �745,768)
* Loss per share from continuing operations of 0.77p (2007: 1.71p)
GRIFFIN GROUP PLC
Chairman's Statement
I am pleased to make this interim results announcement on behalf of our Company.
The results for this Period have been substantially affected by the lack of liquidity in Plus Markets stocks and the reporting changes
required to comply with International Financial Reporting Standards ("IFRS") which we are required to report under for the first time. The
comparative financial results have been similarly restated and reconciliations provided to explain the movements. The key changes are:
* Sales of trading investments are now reported on a net profit basis rather than disposal proceeds and cost of sales being
separately shown.
* Trading investments are now stated at fair value and the revaluation reported through the income statement. Previously these were
stated at the lower of cost and net realisable value.
* Where more than 50% of the share capital of an investment company is held, but that investment is held exclusively for resale, it
is now treated as a subsidiary held exclusively for resale in accordance with IFRS5 and shown as a disposal group at the lower of initial
carrying value and fair value less any anticipated costs to sell. Previously, where such shares were held for resale they were carried at
cost less impairment.
However, it is the lack of liquidity in Plus Markets stocks experienced over the last six to nine months that has had a major impact on
these results, and your Board have recognised a substantial fall in the value of these investments and the related loan notes, to reflect
the difficulties in converting these investments back into cash.
During the Period we are delighted to have introduced Interactive Publishing plc to PLUS Markets and this company quickly completed the
reverse acquisition of Trojan Publishing Limited in February 2008.
Trojan publishes a number of periodical magazines and after its first year of trading at a loss, it has achieved critical mass and is
now trading profitably. Since the Period we have provided further finance to Interactive Publishing to enable it to purchase Attitude
magazine and we are very pleased with the progress of this business. In common with our Plus Markets stocks in general, sales of our initial
investment in this company have been slower than we would have hoped for and the lack of liquidity has reduced the amount of cash available
to us to fund further deals which in turn create the profits.
Despite the difficult markets we are currently experiencing, we have a number of deals at various stages for the newly-listed companies
together with reverse deals for existing companies in our portfolio.
The Company's fee income and realised profit from the sale of investments for the six months ended 31st March 2008 reduced from
�1,119,094 to �916,233 compared to the same period to 31st March 2007. The unrealised loss on investments reduced from �1,164,250 to
�850,106. As a result of the unrealised losses on investments, the post-tax loss from continuing operations for the period ended 31st March
2008 was �846,137 compared to �745,768 in the comparative period. The loss per share on continuing operations was 0.77p to 31st March 2008
and 1.71p to 31st March 2007.
As at 31st March 2008, the Company had cash balances of �14,888 (2007: �521,536). We currently have no gearing or debt on our balance
sheet.
Our principal balance sheet assets are our investments and loans in at present listed companies totalling �2,179,738 (2007: �1,946,708).
Our primary objective is to be able to liquidate our investment positions and return cash back into the Griffin balance sheet. The year end
results will depend on our success in this regard and the fluctuations in the share prices of the investments held at that date. However,
following the fall in the fair value of these investments recognised in this Period we expect the second half to show more favorable
results.
Your Board is actively seeking acquisitions for Griffin with the objective of delivering a wider offering of financial services and we
anticipate making a further announcement in this regard before the year end date.
Finally, I would like to take this opportunity on behalf of the Board to thank our staff and the Company's advisors for their loyalty
and continued support.
Stephen Dean
Chairman
GRIFFIN GROUP PLC
Group Income Statement
12 months to 30 September 2007
6 months to 31 March 6 months to 31 March (Audited)
2008 2007
(Unaudited) (Unaudited)
Restated Restated
� � �
REVENUE - continuing
operations
Fee income 414,190 644,500 1,480,816
Realised profit on 502,043 474,594 1,013,734
investments
Unrealised loss on (850,106) (1,164,250) (671,915)
investments
_________ _________ _________
66,127 (45,156) 1,822,635
Cost of sales (60,000) (47,500) (442,500)
_________ _________ _________
GROSS PROFIT/(LOSS) 6,127 (92,656) 1,380,135
Administrative expenses (946,172) (967,295) (1,797,952)
Fair value adjustments to loan (193,919) - (54,000)
notes
_________ _________ _________
(LOSS)/PROFIT FROM OPERATIONS (1,133,964) (1,059,951) (471,817)
Finance revenue 46,500 10,674 110,753
Finance costs (1,360) (264) (701)
_________ _________ _________
(LOSS)/PROFIT BEFORE TAXATION (1,088,824) (1,049,541) (361,765)
Taxation 242,687 303,773 72,993
_________ _________ _________
(LOSS)/PROFIT FOR THE PERIOD
FROM CONTINUING OPERATIONS
(846,137) (745,768) (288,772)
(Loss)/profit for the period (1,116,678) 2,756 28,356
from disposal groups
_________ _________ _________
LOSS FOR THE PERIOD FROM ALL
OPERATIONS (1,962,815) (743,012) (260,416)
_________ _________ _________
Basic and diluted earnings per
share
- continuing operations (0.77)p (1.71)p (0.65)p
-all operations (1.80)p (1.70)p (0.58)p
GRIFFIN GROUP PLC
Group Balance Sheet
At 30 September 2007
At 31 March 2008 At 31 March 2007
(Unaudited) (Unaudited) (Audited)
Restated Restated
� � �
NON-FINANCIAL ASSETS
Property, plant & machinery - 2,930 -
_________ _________ _________
- 2,930 -
CURRENT ASSETS
Held for trading investments 461,105 608,301 1,217,850
Assets of disposal groups 720,747 1,486,821 1,709,079
Trade and other receivables 374,588 1,243,054 1,392,436
Convertible loan notes 834,670 - 486,000
Loans & receivables 569,084 - -
Cash and cash equivalents 14,888 521,536 1,378,545
_________ _________ _________
2,975,082 3,859,712 6,183,910
CURRENT LIABILITIES
Trade and other payables (1,044,908) (1,587,582) (2,419,267)
Liabilities of disposal groups (405,868) (148,414) (277,522)
_________ _________ _________
NET CURRENT ASSETS 1,524,306 2,123,716 3,487,121
_________ _________ _________
TOTAL ASSETS LESS CURRENT 1,524,306 2,126,646 3,487,121
LIABILITIES
_________ _________ _________
NET ASSETS 1,524,306 2,126,646 3,487,121
_________ _________ _________
EQUITY
Issued share capital 2,249,346 2,183,831 2,249,346
Share premium account 1,339,713 527,349 1,339,713
Profit & loss account (2,064,753) (584,534) (101,938)
_________ _________ _________
SHAREHOLDERS' FUNDS 1,524,306 2,126,646 3,487,121
_________ _________ _________
GRIFFIN GROUP PLC
GROUP CASH FLOW STATEMENT
12 months to 30 September 2007
6 months to 31 March 6 months to 31 March
2008 2007
(Unaudited) (Unaudited) (Audited)
Restated Restated
� � �
Cash flow from operating
activities
(Loss)/profit before taxation (1,088,824) (1,049,541) (361,765)
Adjusted for:
Investment income (46,500) (10,674) (110,753)
Investment expenses 1,360 264 701
Depreciation - 1,170 4,348
(Increase)/decrease in - 499,099 1,344,500
investments
Decrease/(increase) in trade 1,774,593 15,081 (134,301)
and other receivables
(Increase)/decrease in (345,776) 913,500 (1,095,000)
convertible loan notes
(Decrease)/increase in trade (1,181,672) (688,257) 37,910
and other payables
Increase in loans and (510,305) -
receivables
Tax paid - - (125,262)
_________ _________ _________
Net cash from operating (1,397,124) (319,358) (439,622)
activities
Cash flows from investing
activities
Purchase of tangible fixed - (4,100) (4,348)
assets
Interest received 34,827 10,674 110,753
Interest payable (1,360) (264) (701)
_________ _________ _________
Net cash from investing 33,467 6,310 105,704
activities
Cash flows from financing
activities
Issue of shares - - 982,724
Expenses of issue - - (104,845)
Repayment of loan notes - (450,000) (450,000)
_________ _________ _________
Net cash used in financing - (450,000) 427,879
activities
_________ _________ _________
Net change in cash and cash (1,363,657) (763,048) 93,961
equivalents
Opening cash & cash 1,378,545 1,284,584 1,284,584
equivalents
_________ _________ _________
14,888 521,536 1,378,545
Closing cash & cash _________ _________ _________
equivalents
GRIFFIN GROUP PLC
STATEMENT OF MOVEMENTS IN EQUITY
Issued Share Capital Share Premium Profit and Loss
Account Account Total Reserves
Restated Restated Restated Restated
� � � �
At 1st October 2006 2,183,831 527,349 158,478 2,869,658
Loss for the period - - (743,012) (743,012)
_________ _________ _________ _________
At 31st March 2007 2,183,831 527,349 (584,534) 2,126,646
Open Offer & Placing 65,515 917,209 - 982,724
Expenses of issue - (104,845) - (104,845)
Loss for the period - - 482,596 482,596
_________ _________ _________ _________
At 30th September 2007 2,249,346 1,339,713 (101,938) 3,487,121
Loss for the period - - (1,962,815) (1,962,815)
_________ _________ _________ _________
At 31st March 2008 2,249,346 1,339,713 (2,064,753) 1,524,306
_________ _________ _________ _________
Note - On 23rd April 2008, by Court Order, the share premium account was reduced to �530,938 and the reduction applied to reduce the
deficit on the Company's profit and loss account.
GRIFFIN GROUP PLC
Accounting policies
The following is a summary of the principal changes to accounting policies arising from the application of International Financial
Reporting Standards ("IFRS") in these financial statements. The comparative figures have been restated in accordance with IFRS and the
effect of these changes is shown in note 8:
1. Basis of Consolidation
Subsidiaries are entities controlled by the Group. Control exists when the Company has the power, directly or indirectly, to govern the
financial and operating policies of an entity so as to obtain benefit from its activities. The financial statements of subsidiaries are
included in the consolidated financial statements from the date that control commences until the date that control ceases.
In certain instances the group has acquired in excess of 50% of the issued share capital of an entity but holds those shares exclusively
with a view to subsequent resale. Such investments are accounted for as disposal groups in accordance with IFRS 5 'Non-current assets held
for sale and discontinued operations' and are initially recognised at the lower of cost and fair value less costs to sell. At each
subsequent reporting date the carrying value of the investment is remeasured to the lower of its initial carrying amount, and fair value
less costs to sell at the reporting date. The post-tax profit or loss of the subsidiary and the post-tax gain or loss on remeasurement is
charged to the income statement.
2. Investment Portfolio
(i) Recognition and measurement
Investments are recognised and de-recognised on a date where the purchase or sale of an investment is under a contract whose terms
require the delivery or settlement of the investment. The Group manages its investments with a view to profiting from the sale of the
equity investments.
Quoted investments are designated at fair value through profit and loss and subsequently carried in the balance sheet at fair value.
Fair value is generally based on the closing bid price at the reporting date, where the investment is quoted on an active stock market. Many
of the investments are in illiquid stocks where the directors do not consider that an active market exists. Fair value of these investments
is based on either the closing bid price at the reporting date with a downward adjustment for marketability or using an alternative
valuation model where the directors consider that this is more appropriate.
Unquoted equity investments are designated at fair value through profit and loss and are subsequently carried in the balance sheet at
fair value. Other investments including non convertible loan investments are included as loans and receivables. Where the fair value of
loans and receivables is anticipated to be substantially different to the holding value the carrying value of the loans and receivables is
reduced accordingly.
(ii) Revenue
Fee income represents amounts invoiced for services provided, net of VAT.
The realised and unrealised profits/losses on investments are equivalent to "revenue" for the purposes of IAS 1. They represent the
overall increase in net assets from the investment portfolio net of deal-related costs.
Investment income is analysed into the following components:
(a) Realised profits over value on the disposal of investments are the difference between the fair value of the consideration received
less any directly attributable costs, on the sale of equity and its carrying value at the start of the accounting period.
(b) Unrealised profits on the revaluation of investments are the movement in the carrying value of investments between the start and end
of the accounting period.
GRIFFIN GROUP PLC
Notes to the Interim Statement
1. The interim financial information has been prepared using a basis consistent with International Financial
Reporting Standards (*IFRS*) as adopted by the EU except that IAS 34 *Interim Financial Statements* which is not mandatory for AIM companies
has not been adopted in the preparation of this statement. Previous results have been reported under UK GAAP using accounting policies as
set out in the Group*s statutory accounts to 30th September 2007. The comparative results for 31st March 2007 and 30th September 2007 have
been restated using IFRS and a reconciliation of the income statement and balance sheets under the two methods has been presented (note 8).
The statutory accounts to 30th September 2008 will be presented under IFRS.
2. The interim figures have not been audited. The interim financial statements do not constitute statutory accounts within
the meaning of Section 240 of the Companies Act 1985 (the *Act*). Comparative financial information for the 12 months ended 30th September
2007 has been extracted from the statutory accounts for the period which have been delivered to the Registrar of Companies and upon which
the auditors gave an unqualified report, with no statement under Section 237(2) or (3) of the Act, and, for the purposes of this
announcement, restated into IFRS presentation for comparison purposes.
3. Taxation charges have been estimated for the six months, based on a 30% Corporation tax rate in the UK.
4. The calculation of earnings per share is based on the profit on ordinary activities after taxation and 109,191,573 (31st
March 2007: 43,676,629; 30th September 2007: 44,576,560) ordinary shares being the weighted average number of shares in issue during the
half year.
The calculation of fully diluted earnings per share is based on the profit on ordinary activities after taxation and
109,191,573 (31st March 2007: 43,676,629; 30th September 2007: 44,576,560) ordinary shares being the weighted average number of shares in
issue during the half year, after allowing for dilution by share options, warrants and convertible loan notes.
5. The Directors have not declared an interim dividend.
6. Since the period end, the Company has sought and obtained Court approval for a reduction of its Share Premium Account from
�1,339,713 to �530,938, the reduction being applied to the Profit and Loss Account and allowing the Company, for example, to pay a dividend
out of future distributable profits earned.
7. The interim statement was approved by the Board of Directors on 30 June 2008. Copies of this statement will be available
free of charge from the Company*s Registered Office at Hilden Park House, 79 Tonbridge Road, Hildenborough, Kent TN11 9BH.
8. Restatement of Prior Periods to IFRS
The effect of the changes in accounting policies and other restatements described in note 1 on the previously reported results, assets
and liabilities for the periods are, in summary, as follows:
Reclassification of
Reporting of sales invest-ments to a
of invest-ments on a disposal group
net basis
As previously stated Revaluation of
assets to fair value
Year to 31st March 2007 As restated
� � � � �
Revenue 2,472,603 (1,353,509) (1,164,250) - (45,156)
Cost of sales (1,401,009) 1,353,509 - - (47,500)
Fair value adjustments to loan
notes - - - - 609,000
Taxation (34,411) - 338,184 - 303,773
Loss from disposal groups - - 609,000 (606,244) 2,756
Profit/(Loss) from all
operations 80,298 - (217,066) (606,244) (743,012)
_________ _________ _________ _________ _________
Property, plant & machinery
2,930 - - - 2,930
Investments held for resale
2,348,311 - 204,642 (1,944,652) 608,301
Assets of disposal groups - - - 1,486,821 1,486,821
Trade and other receivables
1,243,054 - - - 1,243,054
Convertible loan notes - - - - -
Cash & cash equivalents 521,536 - - - 521,536
_________ _________ _________ _________ _________
Total assets 4,115,831 - 204,642 (457,831) 3,862,642
Trade & other payables (1,515,099) - (72,483) - (1,587,582)
Liabilities of disposal groups
- - - (148,414) (148,414)
_________ _________ _________ _________ _________
Total liabilities (1,515,099) - (72,483) (148,414) (1,735,996)
_________ _________ _________ _________ _________
Net assets 2,600,732 - 132,159 (606,245) 2,126,646
_________ _________ _________ _________ _________
Equity - profit and loss
account 2,600,732 - 132,159 (606,245) 2,126,646
_________ _________ _________ _________ _________
Reclassification of
invest-ments to a
Reporting of sales disposal group
of invest-
ments on a net basis
As previously stated Revaluation of
assets to fair value
Year to 30th September 2007
As restated
� � � � �
Revenue 6,744,934 (4,250,384) (671,915) - 1,822,635
Cost of sales (4,692,884) 4,250,384 - - (442,500)
Fair value adjustments to loan
notes - - (54,000) - (54,000)
Taxation (117,490) - 190,483 - 72,993
Loss from disposal groups - - 609,000 (580,644) 28,356
Profit/(Loss) from all
operations 246,660 - 73,568 (580,644) (260,416)
_________ _________ _________ _________ _________
Investments held for resale
2,533,075 - 696,977 (2,012,202) 1,217,850
Assets of disposal groups - - - 1,709,079 1,709,079
Trade and other receivables
1,932,436 - (540,000) - 1,392,436
Convertible loan notes - 486,000 - 486,000
Cash & cash equivalents 1,378,545 - - - 1,378,545
_________ _________ _________ _________ _________
Total assets 5,844,056 - 642,977 (303,123) 6,183,910
Trade & other payables (2,199,083) - (220,184) - (2,419,267)
Liabilities of disposal groups
- - - (277,522) (277,522)
_________ _________ _________ _________ _________
Total liabilities (2,199,083) - (220,184) (277,522) (2,696,789)
_________ _________ _________ _________ _________
Net assets 3,644,973 - 422,793 (580,645) 3,487,121
_________ _________ _________ _________ _________
Equity - profit and loss
account 3,644,973 - 422,793 (580,645) 3,487,121
_________ _________ _________ _________ _________
The effect of the changes in accounting policies and other restatements described in note 1 on the balance sheet of the group at the
date of transition to IFRS, 1st October 2006, is as follows:
Reporting of sales
of invest-ments on a
net basis
As previously stated Revaluation of
assets to fair value
At 1st October 2006 As restated
� � � �
Investments held for resale 1,074,159 - 1,368,892 2,443,051
Trade and other receivables 2,780,635 (1,522,500) - 1,258,135
Convertible loan notes - 1,522,500 (609,000) 913,500
Cash & cash equivalents 1,284,584 - - 1,284,584
_________ _________ _________ _________
Total assets 5,139,378 - 759,892 5,899,270
Trade & other payables (2,168,944) - (410,668) (2,579,612)
Borrowings (450,000) - - (450,000)
Liabilities of disposal groups - - - -
_________ _________ _________ _________
Total liabilities (2,618,944) - (410,668) (3,029,612)
_________ _________ _________ _________
Net assets 2,520,434 - 349,224 2,869,658
_________ _________ _________ _________
Equity - profit and loss 2,520,434 - 349,224 2,869,658
account
_________ _________ _________ _________
GRIFFIN GROUP PLC
Registered office: Hilden Park House, 79 Tonbridge Road, Hildenborough, Kent TN11 9BH.
Registered No. 03861966
Contacts:
Company
Vince Nicholls 01732 836180
Nominated Adviser
James Caithie
Dowgate Capital Advisers Limited 020 7492 4777
Investor Relations
Melissa Gilmour 07970 767869
This information is provided by RNS
The company news service from the London Stock Exchange
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