Half-yearly Report
30 September 2010 - 8:00AM
UK Regulatory
TIDMTEX
30 September 2010
TEP Exchange Group PLC
("TEP" or "the Company")
Half-yearly results for the six month period ended 30 June 2010
Chairman's Statement
I am duly reporting the unaudited results of the Company for the six month
period ended 30 June 2010. Revenue for the period was GBP15,000 (six month period
ended 30 June 2009: GBP10,000), an increase of 50 per cent. over the
corresponding period last year. The Company incurred a loss from operations of
GBP79,000, compared to a loss from operations of GBP72,000 in the same period last
year. The loss before and after taxation was GBP92,000, compared to a loss before
and after taxation of GBP76,000 in the first six months of last year.
Although the revenue achieved in the first half of 2010 was ahead of the
revenue in the first half of 2009 the absolute figure is very low and this was
due to extremely challenging market conditions in the traded endowment policy
market. The turmoil in financial markets which commenced in the second half of
2008 resulted in a dramatic drop in demand for traded endowment policies from
market makers. In 2010 there has been a modest increase in demand for traded
endowment policies from market markers.
As set out in the Company's recently published Report and Accounts, the group
relies on support from SL Investment Management Limited (a 48.26 per cent.
shareholder in the Company). The Directors have recently agreed with SL
Investment Management Limited that the repayment of the loan in the amount of GBP
454,000 will not be repaid before 31 March 2011 unless otherwise agreed by both
parties.
The Directors remain of the view that the Company's electronic platform is a
cost effective method for market makers to source policies, particularly direct
from the public and, in addition, the technology can be utilised for trading in
other assets, particularly within the financial services sector. With this in
mind the Directors are currently in the final stages of negotiations for the
Company to licence the electronic platform and all technology to SL Investment
Management Limited for a quarterly fee. Under these arrangements, TEP Exchange
Limited, the Company's operating subsidiary, will continue to be able to
utilise the electronic platform so that market makers can continue to source
traded endowment policies.
Your Directors are not proposing an interim dividend.
George Kynoch
Chairman
30 September 2010
For further information please contact:
TEP Exchange Group plc
David Roxburgh 00 353 1 260 7746
Merchant Securities Limited
John East/Simon Clements 020 7628 2200
Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2010
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2010 2009 2009
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Revenue 15 10 10
Administrative expenses (94) (82) (216)
Loss from operations (79) (72) (206)
Finance costs (13) (4) (9)
Loss before tax (92) (76) (215)
Tax expense - - -
Loss attributable to the equity holders (92) (76) (215)
of the parent and total comprehensive
income for the period
Loss per share
Basic and diluted loss per share (note (0.02)p (0.02)p (0.05)p
3)
Consolidated Statement of Changes in Equity
for the six months ended 30 June 2010
Attributable to equity holders of the
Company
Share Share Accumulated Total
Capital Premium Losses Equity
(unaudited) (unaudited) (unaudited) (unaudited)
GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2009 2,263 3,952 (6,642) (427)
Total comprehensive income - - (76) (76)
for the period
At 30 June 2009 2,263 3,952 (6,718) (503)
Total comprehensive income - - (139) (139)
for the period
At 31 December 2009 2,263 3,952 (6,857) (642)
Total comprehensive income - - (92) (92)
for the period
At 30 June 2010 2,263 3,952 (6,949) (734)
Share capital is the amount subscribed for ordinary shares and deferred shares
at nominal value.
Share premium represents the excess of the amount subscribed for share capital
over the nominal value of these shares net of share issue expenses.
Accumulated losses represent cumulative losses of the Company and its
subsidiaries (together the "Group") attributable to equity holders.
Consolidated Statement of Financial Position
as at 30 June 2010
As at As at As at
30 June 30 June 31 December
2010 2009 2009
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
ASSETS
Current assets
Inventories 3 3 3
Trade and other receivables 52 60 23
Cash and cash equivalents 5 4 2
Total current assets 60 67 28
TOTAL ASSETS 60 67 28
LIABILITIES
Current liabilities
Short term borrowings (454) - (363)
Trade and other payables (340) (298) (307)
Total current liabilities (794) (298) (670)
Non-current liabilities
Trade payables - (272) -
Total non-current liabilities - (272) -
TOTAL LIABILITIES (794) (570) (670)
TOTAL NET LIABILITIES (734) (503) (642)
Equity attributable to equity holders of
the parent
Share capital 2,263 2,263 2,263
Share premium reserve 3,952 3,952 3,952
Accumulated losses (6,949) (6,718) (6,857)
TOTAL EQUITY DEFICIT (734) (503) (642)
Consolidated Cash Flow Statement
for the six months ended 30 June 2010
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2010 2009 2009
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
Operating activities
Loss before taxation (92) (76) (215)
Finance costs 13 4 9
Loss from operations before changes in (79) (72) (206)
working capital
(Increase) / decrease in trade and other (29) 8 45
receivables
Increase / (decrease) in trade and other 20 42 (220)
payable
Cash used by operating activities (88) (22) (381)
Financing activities
Increase in borrowings 91 - 363
Interest paid - (3) (9)
Net cash inflow / (outflow) from financing 91 (3) 354
activities
Increase / (decrease) in cash and cash 3 (25) (27)
equivalent
Cash and cash equivalents at beginning of 2 29 29
period
Cash and cash equivalents at end of period 5 4 2
Cash and cash equivalents comprise:
Cash available on demand 5 4 2
Notes to the half-yearly results
1. Basis of preparation
As permitted IAS 34, `Interim Financial Reporting' has not been applied to
these Half-yearly Results. The financial information of the Group for the six
months ended 30 June 2010 have been prepared in accordance with the recognition
and measurement principles of International Financial Reporting Standards,
International Accounting Standards and Interpretations (collectively "IFRS")
issued by the International Accounting Standards Board ("IASB") as adopted by
the European Union ("adopted IFRS") and are in accordance with IFRS as issued
by the IASB. The condensed interim financial information has been prepared
using the accounting policies which will be applied in the Group's statutory
financial statements for the year ending 31 December 2010.
The financial information shown in this publication is unaudited and does not
constitute statutory accounts as defined in Section 434 of the Companies Act
2006. The comparative figures for the financial year ended 31 December 2009
have been derived from the statutory accounts for 2009. The statutory accounts
have been delivered to the Registrar of Companies. The auditors have reported
on those accounts; their report was unqualified and did not contain statements
under the section 498(2) or 498(3) of the Companies Act 2006. The auditors'
report on the statutory accounts for 2009 referred to a matter concerning the
company's ability to continue as a going concern to which the auditors drew
attention by way of emphasis without qualifying their report. The details
concerning this matter are given in note 4 below.
2. Dividends
No dividend is proposed for the six months ended 30 June 2010.
3. Loss per share
The loss per share has been calculated by dividing the loss after taxation for
the period of GBP92,000 (six month period ended 30 June 2009: loss of GBP76,000 and
year ended 31 December 2009: loss of GBP215,000) by the weighted average number
of Ordinary Shares of 399,999,999 (six month period ended 30 June 2009:
399,999,999 and year ended 31 December 2009: 399,999,999) in issue during the
period.
The options and warrants in issue at 30 June 2009, 31 December 2009 and 30 June
2010 are anti-dilutive and have therefore been excluded from the calculation of
diluted earnings per share. However, such options may be dilutive in future
periods.
4. Going Concern
During the six month period ended 30 June 2010 the Group incurred a loss of GBP
92,000 (year ended 31 December 2009 loss of GBP215,000) and at 30 June 2010 had
net liabilities of GBP734,000 (31 December 2009 net liabilities of GBP642,000).
The Group relies on support from SL Investment Management Limited (a 48.26 per
cent. shareholder in the Company). The Directors have recently agreed with SL
Investment Management Limited that the repayment of the loan in the amount of GBP
454,000 will not be repaid before 31 March 2011 unless otherwise agreed by both
parties.
In 2010 the Directors are anticipating increased demand for traded endowment
policies from market makers particularly from SL Investment Management Limited.
In addition, the Directors are currently in the final stages of negotiations
for the Company to receive quarterly fees from licensing the electronic
platform and all the technology to SL Investment Management Limited.
Accordingly, the Directors are anticipating improved trading results for the
period up to 30 June 2011 and have projected cash flows information which show
creditors can be paid out of cash flow. The projected cash flow information
assumes that the total amount due at 31 December 2009 to HM Revenue & Customs
of GBP165,026 will be paid over a period of nine months from February 2010, in
accordance with the written agreement with HM Revenue & Customs. Should the new
licensing agreement not be completed as anticipated, the Company will need to
raise funds from other sources.
On the basis of the above, and all other available information, the Directors
consider that the Group will be able to operate within the cash flow forecasts
and therefore that it is appropriate to prepare the interim financial
statements on the going concern basis.
These conditions indicate the existence of a material uncertainty which may
cast significant doubt about the Company's ability to continue as a going
concern. The interim financial statements do not include any adjustments that
would result from the going concern basis of preparation being inappropriate.
END
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