TIDMCSI
RNS Number : 2368I
Castle Street Investments PLC
24 March 2015
Date: 24 March 2015
On behalf of: Castle Street Investments plc (the 'Company' or the
'Group')
Embargoed until: 0700hrs
Castle Street Investments plc
Final Results for the year ended 31 December 2014
Castle Street Investments plc (AIM: CSI), the investing company,
is pleased to announce its final results for the year ended 31
December 2014 ('FY 2014').
Results highlights
-- Transition of the Company from an online dating business to
an investment vehicle completed in December 2014
-- Completion of Disposal of Traditional Dating Assets for a consideration of GBP3m
-- Payment of a reduced deferred consideration for casual assets
has been accelerated with GBP11.5m to be received by 15 December
2015
-- Cash at the end of December 2014 ahead of expectations at GBP12.1m
Post period highlights
-- The deferred consideration of GBP0.75m in respect of the
traditional asset sale was received in February 2015
-- A further GBP4m of deferred consideration received since 31 December 2014
-- Cash at the end of December 2015 expected to be GBP2m ahead
of forecast at GBP20m, GBP0.28 per share
-- Distributable reserves anticipated to be in excess of GBP19m
following approval of capital reduction
Commenting on the results, Bill Dobbie, Chairman of Castle
Street Investments plc, said:
"As stated in our December 2014 circular, the Company has now
transitioned from an online dating company into a well capitalised
investment vehicle. We are beginning to review selective
opportunities that meet our investment criteria, and are
considering a combination of cash returns and finding an attractive
investment opportunity to propose to shareholders."
For further information please contact:
Castle Street Investments plc Tel: +44 (0)131 526 3600
Phil Gripton, CEO
Niall Stirling, CFO
Peel Hunt LLP (Nominated Adviser and Tel: +44 (0)207 418 8900
Broker)
Richard Kauffer
Edward Fox
Notes to Editors:
-- Castle Street Investments plc is an Investing Company under Rule 15 of the AIM Rules.
-- Further information on the Company can be found at castlestreetinvestments.com
Chairman's statement
In the 2013 Annual Report, we identified a three-year strategy
focused around enhancing the core dating offering while identifying
new opportunities outside dating with our digital capability. This
was a challenging assignment and we made significant operational
progress in the first six months of 2014, delivering a series of
key products and initiatives. At the same time the rate of change
in the dating market accelerated as applications like Tinder gained
share and put pressure on traditional models. Accordingly in
September 2014 the Board announced that, in response to the
accelerating rate of change in the dating market, which was having
a damaging impact on our business and delaying the trading
recovery, it was carrying out a strategic review of its dating
business with the intention of maximising shareholder value and
arresting the Company's cash burn.
We reported back to our shareholders on 5 December 2014 that the
Group had conditionally agreed to sell its Traditional Dating
Assets to Tradax IP Licensing Limited, Together Networks Holdings
Limited, and Together Networks Limited, for a total consideration
of GBP3m. Given the proposed disposal of the traditional dating
assets and the change of status to an investing company, it was
considered advantageous for shareholders to effect the repayment of
the deferred consideration in a shorter timeframe, making funds
available to shareholders earlier and reducing the payment risk. We
therefore further reported that in order to more quickly realise
the outstanding deferred consideration owed by Grendall in relation
to the disposal of the Company's Casual Dating business in July
2013, the amount would be reduced from GBP20m to GBP12.5m and
payment would be accelerated such that all the Casual Dating
Payments will be received by 15 December 2015 (previously 15
November 2016).
The transaction was approved at a General Meeting of the
shareholders on 23 December 2014 and the transaction completed on
24 December 2014.
The Disposal also resulted in the Company becoming an Investing
Company, and its Investing Policy was duly approved by the
Shareholders at the same General Meeting.
Since that point we have been focused on ensuring a smooth exit
from the dating business and related liabilities and turning the
Company into a well-capitalised cash shell that can be utilised for
new opportunities in line with our proposed Investing Policy or to
support a return to shareholders. I am pleased to be able to say
that we now expect to close 2015 with a net GBP20m available for
investment and/or return, GBP2m better than anticipated. We are
proceeding with the planned reduction of capital, which is expected
to be heard by the Scottish Courts at the end of April 2015 and, if
successful, will create distributable reserves of approximately
GBP19m. No dividend is proposed in respect of 2014 at this point
but, subject to appropriate investment opportunities, we anticipate
bringing a proposal to shareholders for an initial distribution,
probably by way of a tender offer, before the end of December
2015.
In February 2015 we welcomed Max Royde onto our Board. Mr Royde
is a Partner at Kestrel Partners LLP, a significant shareholder. Mr
Royde brings a wealth of relevant experience to support the
identification and evaluation of potential opportunities in line
with our Investing Policy.
Finally, I'd like to express my thanks to our three outgoing
directors, George Elliott, Ian McCaig and Russ Shaw for their
efforts in support of the Company.
Bill Dobbie
Non-Executive Chairman
24 March 2015
Review of Performance
Review of 2014
2014 was a very challenging year for the Company. We started the
year full of optimism but with no illusions as to the scale of the
challenge ahead if we were to succeed in transforming an
underperforming traditional dating business and to prepare the way
for an evolution into a broad based digital services business.
Whilst we made some significant progress in many areas in the early
part of the year it became clear that the market was undergoing a
sea change that would seriously delay our recovery. Strenuous
efforts to reduce the underlying cost base resulted in us
successfully reducing the rate of loss, but with trading
deteriorating a return to profitability was receding. Following a
review of the strategic options open to us it became clear that the
best course for our investors was to sell the remaining business,
and conserve as much cash as possible for a return to shareholders
or a new investment opportunity. With the backing of our
shareholders we completed the disposal on Christmas Eve. In
summary, the impact of this decision on the results for the year
was as follows:
2014
GBPm
(Loss) arising on disposal of casual
dating assets after taxation (5.5)
(Loss) arising on disposal of traditional
dating assets after taxation (1.5)
(Loss) arising from operations in the
year after taxation (3.6)
------------------------------------------- -------
(Loss) for the financial year after
taxation (10.6)
Financial review
The 2014 financial performance of the business reflects the
impact of the disposal in 2013, the challenging year in general and
the consequences of restructuring the mainstream core dating
assets. The underlying trading demonstrates the efforts to throttle
back costs and invest tactically in marketing while revenue
softened. The net result was a significantly lower trading
loss.
Group (loss)/profit
At a headline level our revenues including discontinued
operations fell 78% to GBP12.6m (FY 2013: GBP56.1m) and adjusted
EBITDA(1) fell to a loss of GBP0.9m (FY 2013: profit of GBP0.5m).
Depreciation and amortisation fell to GBP2.2m (FY 2013: GBP6.9m)
reflecting the disposal of the casual assets and lower website
development expenditure. Exceptional costs include GBP1.2m for
costs associated with termination of employee contracts, GBP1.1m
for the actual or expected settlement of patent and trademark
infringement claims in the US, and GBP0.8m for committed costs
under onerous contracts, including property leases in the UK and
France.
To present a picture of the underlying performance of the
traditional dating business it is necessary to back out GBP2.25m of
one-off adjustments to accruals and other provisions. On a pro
forma basis revenue fell by GBP10m (45%). Despite the impact of new
launches in 2014, tactical deployment of marketing meant that
contribution improved to 31%. Stringent control of costs meant that
direct and administrative expenses were reduced by GBP7.2m (51%)
and consequently the adjusted EBITDA loss improved to GBP3.1m (FY
2013: loss GBP7.4m).
Discontinued business 2014 2013 2012
GBPm GBPm GBPm
Revenue 12.1 22.0 28.0
Direct marketing (8.4) (15.4) (15.8)
Other direct costs (4.1) (6.4) (6.6)
------------------------------ ------ ------- -------
Pro forma Gross (loss)
profit (0.4) 0.2 5.6
Contribution % 31% 30% 44%
GP% -3% 1% 20%
Administrative expenses (2.7) (7.6) (5.4)
------------------------------ ------ ------- -------
Pro forma Adjusted EBITDA(1) (3.1) (7.4) 0.2
------------------------------ ------ ------- -------
1Adjusted EBITDA is defined as earnings before interest, tax,
depreciation, amortisation, share based payments, acquisition costs
and restructuring costs and exceptional costs.
Loss on disposal
The pre-tax loss on disposal of GBP7.6m reflects both the
adjustment to the 2013 sale of the casual assets and the disposal
of the traditional dating business in 2014. The pre-tax loss on
disposal of the traditional dating assets is GBP1.3m. After
adjusting for the unwinding of the financial discount the
previously reported gain on the casual disposal is reduced by
GBP6.2m before tax. The remaining value of the consideration from
the sale of the casual assets of GBP11.5m has been discounted by
GBP0.5m in accordance with IFRS 13. This discount is expected to
unwind by the end of 2015 as the terms of the deferred
consideration payments are fulfilled.
Tax charge
The effective tax rate is 8.6% (FY 2013: 9.1%). The lower
effective tax rate in 2014 is due largely to the book value of the
disposed assets being higher than the tax base.
Finance income
Finance income mainly relates to the unwinding of the discount
on the casual dating deferred consideration.
Balance sheet
All intangible assets were removed on disposal or written off.
With the acceleration of the payment of the deferred consideration
there are no longer any non-current assets. The deferred
consideration debtor after discounting in line with IFRS 13 is
GBP11.7m, comprising GBP11.5m relating to the casual asset
disposal, GBP0.7m relating to the traditional asset disposal,
offset by a GBP0.5m discount. All payments due to date under the
sale have been received in line with the agreed schedule. The fall
in trade and other receivables reflects the closure of the
business. Trade and other payables have similarly decreased by
GBP6.1m. Reserves are reduced by GBP2.1m as a consequence of the
dividend paid in respect of the prior year and by GBP10.6m in
respect of the loss for the year.
Cash flow
Our closing cash position remains strong at GBP12.1m (FY 2013:
GBP12.6m). The operating cash outflow is GBP5.8m (FY 2013: inflow
GBP3.6m) with the trading loss and the reduction in trade payables.
Disposal proceeds reflect the GBP2.25m received to date for the
2014 disposal, less costs, plus receipts from Grendall in respect
of the 2013 disposal. GBP1.2m was capitalised in respect of
software development (FY 2013: GBP2.5m). GBP2.1m has been returned
to shareholders in dividend payments.
Dividend
The directors do not propose a dividend in respect of the
current financial year.
Update and outlook for 2015
Since the end of the year we have successfully completed the
majority of the transition of the dating business with payment
processing migration, the main outstanding area, expected to be
substantially complete by the end of June 2015.
The deferred consideration of GBP0.75m in respect of the
traditional asset sale was received in February 2015. The Mimir
Data business has been reassessed and now closed with a saving of
GBP0.25m against forecast.
The majority of December 2014 accruals and trade creditors will
be settled by the end of March 2015 but significant provisions
remain in respect of closure costs, patent claims and employment
tribunals. Compared to the 5 December estimate we are making
positive progress. Closure costs and other provisions are GBP1m
lower than expected and this coupled with careful management of
costs in the last quarter means that the expected net cash balance
in December 2015 will be approximately GBP20m, GBP2m better than
the previous forecast.
The application to the Court to effect the cancellation of
reserves is under way and the Court hearing to approve the
reduction is expected to take place at the end of April 2015. If
successful this will create a distributable reserve of
approximately GBP19m, GBP2m better than expected. Conditional upon
the cancellation of reserves becoming effective, the Board expects
to offer all Shareholders the opportunity to realise some of their
investment in the Company by means of a tender offer. Any such
tender offer will be subject to separate Shareholder approval at
the appropriate time. The extent of any such tender offer will also
be dependent on investment plans at that point in time.
Phil Gripton Niall Stirling
Chief Executive Officer Chief Financial Officer
24 March 2015
Consolidated statement of comprehensive income
for year ended 31 December 2014
Unaudited
Discontinued Discontinued
Note Total Total
2014 2013
GBP000 GBP000
Revenue 12,569 56,060
Cost of sales (11,960) (47,216)
Gross profit 609 8,844
Administrative expenses (6,817) (16,813)
Operating loss (6,208) (7,969)
Analysed as:
(Loss)/Earnings before interest,
tax, depreciation, amortisation,
share based payments, acquisition
and restructuring costs and
exceptional costs (873) 475
Acquisition and restructuring
costs - (80)
Share based payments - (175)
Depreciation of plant and
equipment (233) (547)
Amortisation of intangible
assets (2,001) (6,318)
Exceptional costs 2 (3,101) (1,324)
Finance income 2,148 70
Loss before taxation (4,060) (7,899)
Taxation credit 3 470 1,481
Loss for the year after taxation (3,590) (6,418)
(Loss)/gain on disposal of
discontinued activities net
of tax 10 (7,038) 20,508
(Loss)/ profit for the financial
year - discontinued operations (10,628) 14,090
------------- -------------
Other comprehensive income:
Items that are or may be reclassified
subsequently to profit or
loss:
Foreign exchange translation
differences - equity accounted
investments 2 203
------------- -------------
(Loss)/ profit for the financial
year and total comprehensive
income all attributable to
equity holders of the parent (10,626) 14,293
------------- -------------
Basic and diluted (loss) earnings
per share 4
Basic (p per share) (14.93p) 18.10p
Diluted (p per share) (14.93p) 18.10p
There are no results relating to continuing operations.
Consolidated balance sheet
As at 31 December 2014
Unaudited
Note 2014 2013
GBP000 GBP000
Non-current assets
Property, plant and equipment - 447
Intangible assets - 4,718
Trade and other receivables 5 - 15,564
- 20,729
------- -------
Current assets
Trade and other receivables 5 11,974 8,690
Cash and cash equivalents 12,139 12,607
Tax receivable 1,033 -
25,146 21,297
------- -------
Total assets 25,146 42,026
------- -------
Current liabilities
Trade and other payables 6 1,840 7,938
Provisions 7 2,753 -
Tax payable - 383
4,593 8,321
------- -------
Non-current liabilities
Deferred tax liabilities - 644
Provisions 7 254 -
------- -------
254 644
------- -------
Total liabilities 4,847 8,965
Net assets 20,299 33,061
------- -------
Equity attributable to equity
holders of the parent
Share capital 8 1,780 2,084
Share premium 8 18,025 18,025
Share options reserve 8 - 635
Capital redemption reserve 8 347 43
Retained earnings 8 1,576 13,705
Foreign currency translation reserve 8 (168) (170)
Merger reserve 8 (1,261) (1,261)
Total equity 20,299 33,061
------- -------
Statement of changes in equity
Unaudited
Share Share Share options Capital Retained Foreign Merger Total
capital premium reserve redemption earnings currency reserve
reserve translation
reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1 January
2013 2,127 18,021 1,447 - 13,318 (373) (1,261) 33,279
Total comprehensive
income for the year
Profit for the year - - - - 14,090 - - 14,090
Exchange rate differences - - - - - 203 - 203
Transactions with
owners recorded
directly in equity
Charge for the year - - 175 - - - - 175
Dividends paid - - - - (2,502) - - (2,502)
Deferred tax on share
based payments - - (175) - - - - (175)
Cancellation of options - - (812) - 812 - - -
Issue of ordinary
shares - 4 - - - - - 4
Share buyback (43) - - 43 (2,985) - - (2,985)
Shares held in treasury - - - - (9,028) - - (9,028)
Balance at 31 December
2013 2,084 18,025 635 43 13,705 (170) (1,261) 33,061
Total comprehensive
income for the year
Loss for the year - - - - (10,628) - - (10,628)
Exchange rate differences - - - - - 2 - 2
Transactions with
owners recorded
directly in equity
Dividends paid - - - - (2,136) - - (2,136)
Cancellation of options - - (635) - 635 - - -
Cancellation of shares
held in treasury (304) - - 304 - - - -
Balance at 31 December
2014 1,780 18,025 - 347 1,576 (168) (1,261) 20,299
-------- -------- ------------- ----------- --------- ------------ -------- --------
Cash flow statement
for year ended 31 December 2014
Unaudited
Note 2014 2013
GBP000 GBP000
Cash flows from operating activities
(Loss)/profit for the year (10,628) 14,090
Adjustments for:
Depreciation and amortisation 2,234 6,865
Financial income (2,148) (70)
Equity settled share-based payment
expenses - 175
Taxation (997) 1,406
Loss/(gain) on disposal of discontinued
activities 10 7,565 (23,395)
Other reserve movements 2 203
(3,972) (726)
Decrease in trade and other receivables 1,863 8,351
Decrease in trade and other payables (6,096) (1,276)
Increase in provisions 3,007 -
(5,198) 6,349
Tax paid (638) (2,704)
Net cash from operating activities (5,836) 3,645
-------- --------
Cash flows from investing activities
Interest received 73 70
Acquisition of subsidiary, net of
cash acquired - (3,416)
Acquisition of property, plant and
equipment (57) (635)
Capitalised development expenditure (1,171) (2,535)
Acquisition of other intangible assets (80) (72)
Proceeds from sale of discontinued
operations - 2014 10 1,680 -
Proceeds from sale of discontinued
operations - 2013 7,000 6,652
Proceeds from sale of property, plant
and equipment 59 267
-------- --------
Net cash from investing activities 7,504 331
-------- --------
Cash flows from financing activities
Payment of finance lease liabilities - (13)
Share buy-back - (2,981)
Dividends paid 8 (2,136) (2,502)
Net cash from financing activities (2,136) (5,496)
-------- --------
Net decrease in cash and cash equivalents (468) (1,520)
Cash and cash equivalents at 1 January
2014 12,607 14,127
-------- --------
Cash and cash equivalents at 31 December
2014 12,139 12,607
-------- --------
All cash flows are attributable to the operating, investing and
financing activities of discontinued operations.
Notes
(forming part of the financial statements)
1 Background and basis of preparation
Castle Street Investments plc is a company incorporated and
domiciled in the UK. Its registered office is at 7 Castle Street,
Edinburgh EH2 3AH.
The financial information set out in the announcement does not
constitute the company's statutory accounts for the years ended 31
December 2014 or 2013. The financial information for 2013 is
derived from the statutory accounts for 2013, which have been
delivered to the registrar of companies. The auditor has reported
on the 2013 accounts; their report was (i) unqualified, (ii) did
not include a reference to any matters to which the auditor drew
attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under section 498 (2) or (3) of
the Companies Act 2006. The statutory accounts for 2014 will be
finalised on the basis of the financial information presented by
the directors in this preliminary announcement and will be
delivered to the Registrar of Companies in due course.
2 Exceptional costs
Exceptional costs include GBP1.2m for costs associated with
termination of employee contracts, GBP1.1m for the actual or
expected settlement of patent and trademark infringement claims in
the US, and GBP0.8m for committed costs under onerous contracts,
including property leases in the UK and France. See also note 11
(contingent liabilities).
3 Taxation
Recognised in the income statement 2014 2013
GBP000 GBP000
Current year (1,237) 1,503
Adjustments for prior years 466 173
------- -------
Current tax (credit) /expense (771) 1,676
Deferred tax credit (226) (270)
Total tax (credit) /expense (997) 1,406
Tax (credit) /expense on sale of discontinued
operations (527) 2,887
Total tax (credit) before tax on sale of discontinued
operations (470) (1,481)
------- -------
Tax recognised directly in equity (i.e. not 2014 2013
in comprehensive income)
GBP000 GBP000
Current tax recognised directly in equity - -
Deferred tax recognised directly in equity - (175)
Total tax recognised directly in equity - (175)
------ ------
Reconciliation of effective tax rate 2014 2013
GBP000 GBP000
(Loss)/profit for the year (10,628) 14,090
Total tax (credit)/expense (997) 1,406
(Loss)/profit before taxation (11,625) 15,496
-------- -------
Tax using the UK corporation tax rate of 21.5%
(2013: 23.25%) (2,499) 3,603
Non-deductible expenses 32 52
Under provided in prior years 466 173
Difference between book value and tax base
of disposed assets 1,089 -
Share option relief - (22)
Difference due to profit taxed overseas (58) (311)
Income not taxable (gain on disposal) - (2,556)
Deferred tax credits written off - 460
Other differences (27) 7
Total tax (credit)/expense (997) 1,406
-------- -------
Reductions in the UK corporation tax rate to 21% (effective from
1 April 2014) and 20% (effective from 1 April 2015) were
substantively enacted on 2 July 2013. This will reduce the
company's future current tax charge accordingly.
4 (Loss)/Earnings per share
Total Group (Loss)/ Weighted (Loss)/ (Loss)/ Weighted (Loss)/
earnings average earnings earnings average earnings
no. of per share no. of per share
2014 shares 2013 shares
GBP000 2014 2014 GBP000 2013 2013
'000 '000
Basic (loss)/earnings
per share (10,628) 71,202 (14.93)p 14,090 77,862 18.10p
Dilution for options - - 2 -
------------------------------- ---------- --------- ----------- ---------- --------- -----------
Diluted (loss)/earnings
per share 71,202 (14.93)p 77,864 18.10p
------------------------------- ---------- --------- ----------- ---------- --------- -----------
Amortisation of intangible
assets (ex R&D) 1,154 4,735
Acquisition and restructuring
costs - 80
Share based payments - 175
Loss/(gain) on disposal 7,565 (23,395)
Tax impact of adjusted
items (775) 1,727
------------------------------- ---------- --------- ----------- ---------- --------- -----------
Adjusted (loss) for
the period (2,684) (2,588)
------------------------------- ---------- --------- ----------- ---------- --------- -----------
Basic adjusted (loss)
per share 71,202 (3.77)p 77,862 (3.32)p
------------------------------- ---------- --------- ----------- ---------- --------- -----------
Diluted adjusted (loss)
per share 71,202 (3.77)p 77,864 (3.32)p
------------------------------- ---------- --------- ----------- ---------- --------- -----------
Basic (loss)/earnings per share
The calculation of basic (loss)/earnings per share at 31
December 2014 was based on the loss attributable to ordinary
shareholders of GBP10,628,000 (2013: GBP14,090,000 profit) and a
weighted average number of ordinary shares outstanding of
71,201,642 (2013: 77,862,287) calculated as follows:
Weighted average number of ordinary shares 2014 2013
Number Number
Issued ordinary shares at start of year 83,371,971 85,091,971
Effect of share options exercised 1,649 72,719
Effect of share buyback - (1,570,538)
Effect of shares held in treasury (12,171,978) (5,731,865)
Weighted average number of ordinary shares
at 31 December 71,201,642 77,862,287
------------ -----------
Diluted (loss)/earnings per share
The calculation of diluted (loss)/earnings per share at 31
December 2014 was based on the loss attributable to ordinary
shareholders of GBP10,628,000 (2013: GBP14,090,000 profit) and a
weighted average number of ordinary shares outstanding after
adjustment for the effects of all dilutive potential ordinary
shares of nil (2013: 1,630), calculated as follows:
Weighted average number of ordinary shares 2014 2013
(diluted) Number Number
Weighted average number of ordinary shares
(basic) 71,201,642 77,862,287
Effect of share options on issue - 1,630
---------- ----------
Weighted average number of ordinary shares
(diluted) at 31 December 71,201,642 77,863,917
---------- ----------
The average market value of the Company's shares for purposes of
calculating the dilutive effect of share options was based on
quoted market prices for the period during which the options were
outstanding. The measure of adjusted (loss)/earnings per share, as
calculated above, is a non-statutory measure that we believe is
useful to investors and is commonly used to evaluate the
performance of businesses where M&A activity is
significant.
5 Trade and other receivables
2014 2013
GBP000 GBP000
Non-current
Deferred consideration on disposal of discontinued
operations - 15,564
- 15,564
------ ------
Current
Deferred consideration on disposal of discontinued
operations 11,707 6,562
Prepayments and other debtors 90 1,198
Other trade receivables 177 930
11,974 8,690
------ ------
6 Trade and other payables
2014 2013
GBP000 GBP000
Current
Trade payables due to related
parties - 35
Other trade payables 615 1,122
Non-trade payables and
accrued expenses 1,225 6,781
1,840 7,938
------ ------
7 Provisions
Property Legal claims Redundancy Other Total
GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1
January 2014 - - - - -
Provisions
made during
the year 588 1,140 985 429 3,142
Provisions
used during
the year - (135) - - (135)
Balance at
31 December
2014 588 1,005 985 429 3,007
--------------------- -------------------- --------------------- --------------------- ---------------------
Non-current 254 - - - 254
Current 334 1,005 985 429 2,753
8 Capital and reserves
Share capital Number
At 1 January 2013 85,091,971
Share buyback (1,725,000)
Issued on exercise of share
options 5,000
In issue at 31 December 2013
- fully paid 83,371,971
------------
At 1 January 2014 83,371,971
Cancellation of shares held
on treasury (12,169,978)
------------
In issue at 31 December 2014
- fully paid 71,201,993
------------
2014 2013
GBP GBP
Allotted, called up and fully paid
A Ordinary shares of 2.5p 1,780,050 2,084,299
--------- ---------
Shares classified in shareholders'
funds 1,780,050 2,084,299
--------- ---------
The holders of ordinary shares are entitled to receive dividends
as declared from time to time and are entitled to one vote per
share at meetings of the Company. The Board's policy is to maintain
a strong capital base so as to maintain investor, creditor and
market confidence and to sustain future development of the
business. The Board monitors the return on capital and the level of
dividends to ordinary shareholders.
12,169,978 shares held on treasury were cancelled in December
2014. The result is that the Company has 71,201,993 ordinary shares
issued and fully paid up as at the closing balance sheet date of 31
December 2014.
No further new ordinary shares have been issued since the end of
the financial year to the date of this report.
Share premium account
GBP000
At 1 January 2014 and 31
December 2014 18,025
------
Reserves
Castle Street Investments plc has five reserves other than share
capital, namely the foreign currency translation reserve, share
options reserve, capital redemption reserve, retained earnings, and
merger reserve (where the difference between the consideration paid
and the capital of the acquiree on any common control transaction
is reflected).
Foreign Share Capital Retained Merger Total
currency options redemption earnings reserve
translation reserve reserve
reserve
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 January 2013 (373) 1,447 - 13,318 (1,261) 13,131
Profit for the year - - - 14,090 - 14,090
Dividends paid - - - (2,502) - (2,502)
Charge for the year - 175 - - - 175
Deferred tax on share
based payments - (175) - - - (175)
Share buyback - - 43 (2,985) - (2,942)
Shares held in treasury - - - (9,028) - (9,028)
Transfer to profit
and loss reserve - (812) - 812 - -
Exchange rate differences 203 - - - - 203
At 31 December 2013 (170) 635 43 13,705 (1,261) 12,952
Loss for the year - - - (10,628) - (10,628)
Dividends paid - - - (2,136) - (2,136)
Cancellation of shares
held in treasury - - 304 - - 304
Transfer to profit
and loss reserve - (635) - 635 - -
Exchange rate differences 2 - - - - 2
At 31 December 2014 (168) - 347 1,576 (1,261) 494
------------ -------- ----------- --------- -------- --------
Dividends
The following dividends were recognised during the period:
2014 2013
GBP000 GBP000
2012 final dividend - 2,502
2013 final dividend 2,136 -
Total 2,136 2,502
------ ------
9 Principal risks and uncertainties
The directors believe that the principal risks and uncertainties
of the business are:
Deferred consideration
At the balance sheet date, there is a deferred consideration
receivable of GBP12.2m in relation to the disposal of the casual
assets in July 2013 and the disposal of the traditional assets in
December 2014. There is a risk that the full amount due is not
received, but the Group has applied a discount of GBP0.5m to the
gross amount to reflect the perceived default risk. The full amount
due is also secured on the assets of the purchaser and a further
GBP1m is held in escrow.
Provisions and other amounts payable relating to discontinued
business
At the balance sheet date the Directors have made provisions and
recorded payables which due to their nature are judgemental. While
the provisions reflect the Directors' best estimates of the likely
outflow of funds there is a risk that additional amounts may be
payable in a worst case scenario.
10 Discontinued operations
The assets disposed of were as follows:
Casual Traditional Total
Assets Assets Assets
GBP000 GBP000 GBP000
Intangible assets - 3,968 3,968
Property, plant and equipment - 208 208
Other - (7) (7)
Deferred taxation - (418) (418)
-------
Net identifiable assets and liabilities - 3,751 3,751
------- ----------- -------
Consideration received, satisfied in
cash - 2,250 2,250
Expenses of sale - (570) (570)
-------
Net proceeds - 1,680 1,680
------- ----------- -------
Net cash inflow in respect of disposals - 1,680 1,680
------- ----------- -------
Net proceeds cash - 1,680 1,680
Deferred consideration - 750 750
------- ----------- -------
Total net proceeds - 2,430 2,430
Reduction in deferred consideration for
2013 disposal (7,500) - (7,500)
Related discount on reduction in casual
dating consideration 1,799 - 1,799
Discounting of future cash flows (543) - (543)
------- ----------- -------
(6,244) 2,430 (3,814)
------- ----------- -------
Loss on disposal (before tax) (6,244) (1,321) (7,565)
------- ----------- -------
The total tax credit attributable to the disposal of all
discontinued operations amounts to GBP527,000.
11 Contingent liabilities
Following the disposal of the dating assets of the business in
2013 and 2014 and the resulting cessation of trade, the Directors
have made estimations of liabilities associated with the settlement
of patent and trademark infringement claims, labour disputes,
onerous lease contracts, legal and warranty claims, and taxation.
In each of these matters some degree of judgement has necessarily
been applied and where appropriate the Directors have sought
external advice. The Directors estimate that the maximum amount of
any additional liabilities is GBP4.0m but are confident they will
be settled within the amounts provided in the financial
statements.
12 Posting of report and accounts
The Report and Accounts will be published around 26 March 2015
on the Company's website:
castlestreetinvestments.com/investors/results-reports/
This information is provided by RNS
The company news service from the London Stock Exchange
END
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