RNS Number : 6634E
Bright Things plc
30 September 2008
Bright Things plc
("Bright Things" or the "Company")
PRELIMINARY RESULTS for the year ended 31st March 2008
Bright Things today announces today announces its full year results for the year ended 31 March 2008.
Financial Highlights:
* Revenues rose to �257,000 (2007: �205,000)
* Gross profits for the year were �163,000 (2007: �101,000)
* Loss per share fell to 2.5p (2007: 13.5p)
Operational Highlights:
* Acquired CommonWorld Ltd a company which develops social networking platforms for the creation of online communities.
* Development of "SocialGO" the Company's first social networking product (now in Beta testing).
* Raised �955,000 by a placing of new shares at 4p per share.
* Developed and launched the Tiger Woods PGA Tour 07 DVD game.
* Reduced running costs by, amongst other things, relocating the Head Office.
Dominic Wheatley, CEO of Bright Things commented:
"This has been a year of transition for Bright Things: with the acquisition of CommonWorld and the subsequent development of the
SocialGO social networking product. We are all very excited about the potential benefits this product can bring to the Company, and I look
forward to updating shareholders as to new developments as and when they arise."
The Annual Report and Accounts has today been sent to Shareholders is available on the Company's website: www.brightthings.com
For further information please contact:
Bright Things PLC 0870 351 7770
Dominic Wheatley, CEO
Edward Levey, Finance Director
HB Corporate
Luke Cairns/ Rory Creedon Tel: +44 (0) 207 510 8600
Brunswick Group
Giles Croot / Mark Antelme, Tel: +44 (0) 207 404 5959
Chairman's Statement
Introduction
As I announced in the results for the period ending 31 March 2007 and subsequently in the interims, the Board has been reviewing a
number of new initiatives and opportunities with a view to growing the business and, in doing so, create value for Shareholders.
Work has continued on the Company's current business, the Tiger Woods PGA Tour 07 game was launched on schedule and the Company
continues to explore new opportunities for the ASIC chip.
Notwithstanding the Board's belief in the potential of the historic business, it recognised that in order to grow the Company needed a
new product initiative.
Such a product was identified during the year and in December 2007 the company acquired CommonWorld Ltd. Under the terms of the
Acquisition Agreement, the Company agreed to acquire the entire issued share capital of CommonWorld for the issue of 7,500,000 Ordinary
Shares in the Company and �189,000 of pre-acquisition development loans, which were capitalised as part of the agreement. Following
completion of the first version of the product on 31 July 2008, a further 3,091,250 new Ordinary Shares were issued to the vendors of
CommonWorld Ltd. In addition, if the net proceeds of sales of the Social Network Maker product in the period of two years following the
commercial launch exceed �2,000,000, the Company will issue to the vendors of CommonWorld a further 3,091,250 new Ordinary Shares. The
maximum aggregate number of new Ordinary Shares that may be issued pursuant to the Acquisition Agreement is 13,682,500 new Ordinary Shares.
The first product, now named "SocialGO", has been designed to provide a secure, dedicated social network for Groups and Organisations.
Whilst "SocialGO" has similar features and functions to social network sites on the Internet such as Facebook, MySpace or Bebo it is
distinct by virtue of it enabling Groups and Organisations to create and maintain their own social networks.
"SocialGO" is designed to be highly customisable in both design and layout to suit the specific requirements of the user. The Directors
consider there are numerous types of Groups and Organisations for whom "SocialGO" could become an indispensable tool, be it for schools,
companies, local sports leagues or simply extended family networks.
At the date of the acquisition, the product was still under development and CommonWorld's only asset on completion was the Intellectual
Property ("IP") behind the social network platform.
Immediately following the acquisition, Get On With It Limited ('GOWIT'), a company controlled by the vendors of CommonWorld, was
contracted to complete the development of the product. GOWIT has been granted a licence of the IP by CommonWorld under which GOWIT is
granted rights that will permit it to support and host seven websites developed for third parties using the IP. The licence also permits
GOWIT to use and licence the IP to develop, support and host further bespoke websites for clients, with the prior written consent of
CommonWorld, in respect of which CommonWorld will be entitled to a 15% royalty.
Under the services agreement pursuant to which GOWIT agreed to develop "Social Network Maker", CommonWorld agreed to pay GOWIT a royalty
of 7.5% on all sales of "Social Network Maker" in excess of �2,000,000, in addition to the fees and expenses payable to GOWIT for the
provision of services.
In order to facilitate the transaction the Company completed at the same time a Capital Reorganisation and Placing. Under the Capital
Reorganisation, each issued Ordinary Share of 10p was subdivided into one new Ordinary Share of 1p and one Deferred Share of 9p. It was
resolved that the rights attaching to the Deferred Shares would be minimal so that the equity value of the Company would effectively be
attributed entirely to the new Ordinary Shares. It was also resolved to sub-divide each of the unissued Ordinary Shares into 10 new Ordinary
Shares of 1p. In due course it is intended that the Deferred Shares will be cancelled as part of a capital reconstruction. At the same time
the Company raised �955,000 (before expenses) by the issue of 23,875,000 new Ordinary Shares at 4p. The Placing Shares rank pari-passu in
all respects with the new Ordinary Shares in issue following the Capital Reorganisation.
Progress
The group has made progress in a number of areas
* Reduced the overhead and cost base and relocated our Head Office to a more cost effective location
* Completed development and launched Tiger Woods PGA Tour 07 game
* Completed a capital reorganisation where each issued Ordinary Share of 10p was subdivided into one new Ordinary Share of 1p and
one Deferred Share of 9p.
* Completed an additional fundraising of �955,000 (before expenses) in December 2007, in which 23,875,000 new ordinary shares were
allotted at a placing price of 4p.
* Identified a new business opportunity and completed the acquisition of CommonWorld Ltd, a company which develops social networking
platform to allow the creation of web based communities
* Completed development of the first Social networking product, "SocialGO", which is currently being Beta tested.
Results
Revenue at �257,000 (2007 - �205,000) primarily consists of ASIC income along with sales and royalties from 41,000 iDVD games (2007 -
37,000 units). Segmental analysis of revenue can be found in note 3 to the accounts.
The operating loss was reduced to �1,011,000 (2007 loss �3,344,000), with cost of sales at �94,000 (2007 - �104,000) research &
development costs at �350,000 (2007 - �847,000), other administrative expenses, at �824,000 (2007 - �2,598,000). Other administrative
expenses include a one off charge for impairment of IP of �19,000 (2007 - nil), no impairment of goodwill (2007 - �832,000) and a charge for
share based payments of �92,000 (2007 - �107,000).
Continuing the trend from last year, cost reductions have reflected on the above overheads and cost of sales. All expenditure continues
to be closely monitored.
The Group had cash deposits of �601,000 (2007 - �864,000) at the Balance Sheet date.
Prospects
Opportunities for new applications for the Application Specific Integrated Circuit "ASIC" chip continue to be explored. However, at this
time, no further orders have been received from Radica. We continue to have discussions with other parties interested in utilising the ASIC
in their products.
New iDVD products will be considered with the Company intending to remain selective in identifying premium licenses, but at present
there are no projects in place.
The Board are excited about the prospects offered by SocialGO. The sales growth of similar types of products is impressive and the Board
considers the product to be well positioned to take a stake in this market.
Summary
We continue to explore all opportunities to utilise the Company's expertise and intellectual property.
Overheads have been significantly reduced and your Board will continue to carefully monitor the working capital requirements of the
company.
Finally, I would like to thank all employees for their hard work and dedication during the year.
Ian Livingstone
Chairman
25 September 2008
Bright Things Plc
Consolidated income statement for the year ended 31 March 2008
_________________________________________________________________________ _________________
Note 31 March 2008�*000 31 March 2007�'000
Revenue 257 205
2
Cost of sales (94) (104)
_______
_______
Gross profit 163 101
Research and development costs (350) (847)
4
Administrative expenses - (805) (1,766)
other
Administrative expenses - (19) (832)
impairment of intangible
assets
Total administrative expenses (1,174) (3,445)
_______
_______
Loss from operations (1,011) (3,344)
3
Finance income 27 52
_______
_______
Loss before and after tax for (984) (3,292)
the year
_______ _______
Attributable to:
Equity shareholders (984) (3,292)
_______ _______
Loss per share
Basic and diluted (13.5)p
(2.5)p
5
_______ _______
Consolidated balance sheet at 31 March 2008
_________________________________________________________________________ _________________
Note 31 March 31 March 31 March 31 March
2008 2008 2007 2007
�'000 �'000 �'000 �'000
Assets
Non-current assets
Property, plant and equipment 9 38
Intangible assets 414 89
________ ________
Total non-current assets 423 127
Current assets
Inventories - 7
Trade and other receivables 27 161
Tax asset 37 20
Cash and cash equivalents 601 864
________ ________
Total current assets 665 1,052
________ ________
Total assets 1,088 1,179
Liabilities
Current Liabilities
Trade and other payables (118) (194)
Tax liabilities (8) (11)
Accruals and deferred income (182) (347)
________ ________
Total liabilities (308) (552)
________ ________
Total net assets 780 627
________ ________
Capital and reserves attributable to equity
shareholders
Called up share capital - 1p ordinary 618 -
Called up share capital - 9p deferred 2,741 -
Called up share capital - 10p ordinary - 3,045
Share premium account 10,170 9,589
Warrant reserve 267 267
Merger reserve (136) (286)
Share based payment reserve 312 220
Retained deficit (13,192) (12,208)
________ ________
Total equity 780 627
________ ________
The financial statements were approved by the Board and authorised for issue on 25 September 2008.
Edward Levey, Director
The notes on pages 31 to 65 form part of the group financial statements.
Bright Things Plc
Consolidated cash flow statement for the year ended 31 March 2008
_________________________________________________________________________ _________________
31 March 31 March 31 March 31 March
2008 2008 2007 2007
�'000 �'000 �'000 �'000
Cash flows from operating activities
Loss before tax (984) (3,292)
Share based payments 92 107
Depreciation on property plant and 33 38
equipment
Amortisation of intangible assets 70 113
(Loss)/Profit on sale of property, - 5
plant and equipment
Goodwill and IP impairment 19 832
Finance income (27) (52)
_______ _______
Cash used in operating activities (797) (2,249)
before
changes in working capital and
provisions
Decrease in trade and other 120 250
receivables
Decrease in inventory 7 7
(Decrease)/increase in trade and (248) 5
other payables and accruals and
deferred income
_______ _______
Cash used in operations (918) (1,987)
Investing activities
Purchase of property, plant and (3) (6)
equipment
Purchase of intangible fixed assets (189) -
Finance income 27 52
_______ _______
Net cash (used in)/from investing (165) 46
activities
Financing activities
Proceeds from issue of new share 955 1,100
capital
Costs of issue of new share capital (135) (70)
_______ _______
Net cash from financing activities 820 1,030
Net decrease in cash and cash (263) (911)
equivalents
Cash and cash equivalents at 864 1,775
beginning of the year
_______ _______
Cash and cash equivalents at end of 601 864
the year
_______ _______
.
Bright Things Plc
Notes forming part of the financial statements for the year ended 31 March 2008
_________________________________________________________________________ _________________
1 Accounting policies
Principal accounting policies
The Company is a limited liability company incorporated and domiciled in the United Kingdom. The principal accounting policies applied
in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the
years presented, unless otherwise stated.
Adoption of IFRS in the financial year ending 31 March 2008
In the current year the Group has adopted standards and interpretations issued by the International Accounting Standards Board and the
International Financial Reporting Interpretations Committee that are relevant to its operations and effective for the Group's financial year
end on 31 March 2008, see note 23. The adoption of these standards and interpretations has resulted in changes to the Group's accounting
policies.
The basis of preparation and accounting policies used in preparing the accounts for the year ended 31 March 2008 are set out below. The
basis of preparation describes how IFRS has been applied under IFRS 1.
Basis of preparation
The financial statements have been prepared in accordance with EU Endorsed International Financial Reporting Standards ('IFRS') and the
Companies Act 1985 applicable to companies reporting under IFRS. The Group has adopted all of the standards and interpretations issued by
the International Accounting Standards Board and the International Financial Reporting Interpretations Committee that are relevant to its
operations.
Going concern
The Directors continually monitor the financial position of the Group, taking into account the latest cash flow forecasts and the
ability of the Group to generate cash. The Company intends to raise additional cash by way of a placing, which will be underwritten. The
Directors have prepared the financial statements on a going concern basis having given consideration to forecast sales and the marketability
of SocialGO together with the proposed fundraising for the period to 31 August 2009.
While there will always remain some inherent uncertainty within the aforementioned cash flow forecasts, the Directors remain confident
that they will be able to manage the Group's finances and operations so as to achieve the forecasted cash flows and, as a result, that it is
appropriate to draw up the financial statements on a going concern basis.
The financial statements do not include any adjustments that would result if the going concern basis of preparation were to become no
longer appropriate.
2 Revenue
Year ended Year ended
31 March 31 March
2008 2007
�'000 �'000
Revenue arises from:
Sale of goods 173 144
Royalties 67 26
Provision of services 17 35
________ ________
257 205
________ ________
3 Loss from operations
Year ended Year ended
31 March 31 March
2008 2007
�'000 �'000
This is arrived at after
charging/(crediting):
Staff costs (see note 7) 281 662
License fees for intellectual properties - 50 198
advances
Depreciation 33 50
Amortisation of intellectual property 70 112
Impairment of intellectual property 19 -
Goodwill impairment charge - 832
Exchange differences 4 (2)
Development expenses and advances 300 649
Loss on disposal of property, plant and - 5
equipment
Auditors' remuneration in respect of Company 25 25
Audit of subsidiary undertakings pursuant to 26 26
legislation 9 5
Auditors' remuneration - non-audit
services - other services
Auditors' remuneration - non-audit 11 6
services - taxation
Share based payments 92 107
4 Research and development costs
Year ended Year ended
31 March 31 March
2008 2007
�'000 �'000
Consist of:
Development expenses and advances 300 649
Licence fees for intellectual properties - 50 198
advances
________ ________
350 847
5 Loss per share
Loss per share has been calculated using the following:
Year ended Year ended Year ended
31 March 31 March
2008 2007
Loss (�'000) (984) (3,292)
Weighted average number of shares ('000s) 38,680 24,311
________ ________
Basic and diluted loss per ordinary share (2.5)p (13.5)p
________ ________
Loss per ordinary share has been calculated using the weighted average number of shares in issue during the relevant financial periods.
The weighted average number of equity shares in issue, is 38,679,586 (2007 - 24,310,780) and the earnings, being loss after tax is �984,000
(2007 - �3,292,000 loss). There are no potentially dilutive shares in issue. Share options totalling 2,393,105 (2007 - 2,198,105) have not
been included in the calculation of diluted loss per share because they are anti-dilutive for the periods presented.
Following completion of the first version of the SocialGO product on 31 July 2008, 3,091,250 new Ordinary Shares were issued to the
vendors of CommonWorld Ltd. In addition, if the net proceeds of sales of the Social Network Maker product in the period of two years
following the commercial launch exceed �2,000,000, the Company will issue to the vendors of CommonWorld a further 3,091,250 new Ordinary
Shares.
Other than the shares issued relating to the acquisition of CommonWorld, there have been no share issues since the balance sheet date that
would significantly alter the basic and diluted EPS calculations if those transactions had occurred before the year end.
The company has outstanding issued warrants to subscribe for 540,541 10p ordinary shares at �1.50 per share and 250,000 10p ordinary shares
at �2.50 per share. These outstanding warrants are considered to be anti-dilutive.
6 Related party transactions
Transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation
and are not disclosed in this note. Details of transactions between the Group and other related parties are described below.
Matthew Tims is a director. A contract for his consultancy services with Creative Partners has been in place during the period. �18,250
(2007 - �63,250) was due under this agreement in the period. All transactions were conducted on an arm's length basis on normal trading
terms. At 31 March 2008, �1,175 (2007 - �4,750) was outstanding.
During the year, Greg Ingham served as a director. A contract for his consultancy services with MediaClash was in place during the
period, ending in September 2007. �3,333 (2007 - nil) was due under this agreement in the period. All transactions were conducted on an
arm's length basis on normal trading terms. There was no balance outstanding at 31 March 2008 (2007 - nil).
Alex Halliday and Steve Hardman were directors of CommonWorld Ltd prior to its acquisition by Bright Things plc. Steve Hardman and Alex
Halliday are currently directors of Get On With It Ltd and as two of the four vendors of CommonWorld Ltd are shareholders in Bright Things
plc having received shares as consideration. Get On With It Ltd have the contract to complete the development of SocialGO and provide
ongoing development support. �356,463 (2007 - nil) was due under this agreement in the period. All transactions were conducted on an arm's
length basis on normal trading terms. At 31 March 2008, �61,254 (2007 - nil) was outstanding.
7 Major non-cash transactions
During the year the group entered into the following non-cash transactions:
Shares issued as consideration
7,500,000 shares were issued in consideration for the purchase of CommonWorld Limited on 27 December 2007.
On 30 July 2008, following the completion of the development and developer testing of SocialGO by 31 July 2008, the Company issued Get
On With It Ltd, the vendors of CommonWorld Limited, a further 3,091,250 new 1p Ordinary Shares.
Share options
Further to disclosure on share options in note 16, the Directors believe that the key stakeholders in the business of an early stage
company should be rewarded and aligned to the same objectives as the shareholders. Therefore, share options have been used to incentivise
contractors.
8 Events after the balance sheet date
On 30 July 2008, following the completion of the development and developer testing of SocialGO by 31 July 2008, the Company issued the
vendors of CommonWorld Limited, a further 3,091,250 new 1p Ordinary Shares (see note 17).
On 25 September 2008 the Company intends to announce the plan to raise additional cash by means of a share placing on AIM.
The financial statements were authorised for issue by the board as a whole following their approval on 25 September 2008.
9 Non statutory information
The full annual report has today been posted to shareholders. Copies of this report on the Company website www.brightthings.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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