RNS Number:2596U
PNC Telecom PLC
14 January 2004
PNC Telecom plc (in administration)
Interim Results for the six months ended 30 September 2003
Chairman's Statement and Operational Review
Major Events
As referred to in my last statement, the well publicised disagreements between
the Board and the Company's major shareholder and non executive deputy Chairman,
Mr. G Thomas, led to the Company being put up for sale. The Company's two
principal trading subsidiaries were sold to Harthall Limited, (now Vanguard
Group Holdings Limited), on 25th April 2003.
Included in the sale were the three three dormant subsidiaries, Piper Tel
Communications Limited, The Personal Number Company Limited and DIS Information
Services Limited. PNC Tele-Plus Limited, Teleshield Limited, PNC Telecom St
Albans Limited, Talking Ads Limited, Pensiv Technologies Limited and PNC
Tele.net Limited, were not included in the sale.
Harthall Limited paid #2,500,000 in cash plus the assumption of further
liabilities of approximately #1,200,000. This left the Company, after repayment
of bank debt, legal and selling expenses, with #1,822,000 in cash and certain
tax benefits and certain rights of legal action relating to, amongst others, Mr
D Ridge and Mr J Case. Certain of these rights of legal action have now been
settled.
After the sale of the trading businesses the Company was left with contingent
liabilities relating to 20 leasehold shops held in the name of the Company and a
further 6 shops where parent company guarantees had been given and certain
business contract and finance lease obligations. These contracts, leases and
guarantees, which should preferably have been entered into by one or other of
the trading companies, rather than the parent company, were the result of
decisions by management prior to May 2002. Harthall indemnified the Company
against these contingent liabilities.
Administration Order
On 23rd June a petition was presented to the High Court for the granting of an
Administration Order the main purposes of which were the survival of the Group
and the whole or any part of it as a going concern; the approval of a Voluntary
Arrangement under Part 1 of the Insolvency Act 1986; and a more advantageous
realisation of the Group's assets than would be effected on a winding-up. The
Joint Administrators, Christopher Laughton and Jonathan Birch of Numerica, are
dealing with the assignment or novation of the business contracts, finance
leases, property leases and the removal of the Group's guarantee obligations.
The Company's shares were suspended from trading on the AIM market on 23rd June
2003 at 1.375p.
At the date of the 2003 Report and Accounts, 10 out of the 26 shop leases had
been assigned or surrendered and no business contracts had been novated to
Harthall Limited or another member of the Vanguard Group. The remaining shops
and business contracts have a combined estimated contingent liability of
#4,386,000.
On 12th December 2003 an application to discharge the Administration was
presented to the High Court by Mr. G Thomas. After considering evidence over
hearings on 17th and 18th, the Judge adjourned the matter until 15th January
2004.
It is likely that in the Company will emerge from administration either at the
end of the current Administration Order, (31st May 2004), or before. In the
opinion of the Board, the criteria for emerging from Administration should be
either that the Joint Administrators have completed their original objective of
ensuring all the Company's contingent liabilities are negated, or that the Joint
Administrators have ensured that the estimated negotiable landlord claims and
unpaid rents, plus the contingent liabilities relating to the business contracts
and finance leases, are equal to or less than the net assets of the Company.
Currently the Company has net assets in the region of #1,000,000 and potential
claims against a former trading partner of the Company and one or more of the
Company's former officers. The Company continues to have a number of contingent
liabilities outstanding, which total #4,386,000. Numerica's estimate of the
landlord's mitigated claims is currently #805,000, which in their opinion
reduces the potential outstanding contingent liabilities to #1,100,000.
Review of results
Following the sale of its trading subsidiaries, the Company no longer has an
ongoing business. Accordingly the going concern basis of preparation of the
Company's accounts was no longer appropriate at 31st March 2003. The financial
statements were prepared on a break-up basis and all costs relating to the
periods prior to and throughout Administration were provided for in the accounts
for the year ending 31st March 2003. There are no additional incomes or charges
accruing to the profit and loss account for the six month period to 30th
September 2003. The cash position of the Company at 30th September was
#1,444,000, (compared to a cash balance of #169,000 and net debt of #1,668,000
for the same period of the previous year).
Prospects
As I have stated above, it is likely that in the short term the Company will
emerge from administration since the Administrators will have completed their
duty to protect the assets of the Company. The Company can then decide whether a
further insolvency process is required, or, if assets exceed liabilities,
whether there is a use for the corporate shell, or whether money should be
returned to shareholders.
E.J.Peett CBE
Chairman
13th January 2004
Consolidated Profit and Loss Account
Six months to Six months to Year to
Sept 2003 Sept 2002 March 2003
Unaudited Unaudited Audited
#'000 #'000 #'000
Group Turnover - 28,523 52,104
_____ _____ _____
- 28,523 52,104
Operating
expenses
before
depreciation,
amortisation and
impairment - (29,370) (52,364)
EBITDA - (2,616) (260)
Depreciation - (658) (1,105)
Impairment of
tangible fixed
assets - (567) (567)
Loss before
interest, tax
and
amortisation - (2,072) (1,932)
Amortisation
of goodwill
and
intangibles - (686) (1,375)
Impairment of
goodwill and
intangibles - (26) (5,881)
Group
Operating Loss (2,784) (9,188)
Loss on
disposal of
fixed assets (327) (298)
Profit/(loss)
on termination
of operation (75) (175)
Group
fundamental
reorganisation
costs (624) (726)
Loss on
ordinary
activities
before
interest and tax (3,810) (10,387)
Interest
receivable and
similar income - - 20
Interest
payable and
similar
charges (97) (164)
Loss on
ordinary
activities
before tax (3,907) (10,531)
Tax on loss on
ordinary
activities - (290)
Retained loss
for the year (3,907) (10,740)
Basic and diluted loss per share Pence Pence Pence
- (8.13) (22.34)
On Friday 25th April 2003 the Group sold its two principal trading businesses.
Following the disposal, the Company has no ongoing business and all activities
up until 31st March 2003 are classed as discontinued.
Consolidated Balance Sheet
Six months to Six months to Year to March
Sept 2003 Sept 2002 March 2003
Unaudited Unaudited Audited
#'000 #'000 #'000
Fixed Assets
Intangible
assets - 8,995 2,605
Tangible
assets - 2,511 2,264
______ _____ _____
- 11,506 4,869
Current Assets
Stock - 727 614
Debtors 27 9,213 4,842
Cash at bank
and in hand 1,444 169 408
______ _______ ______
1,461 10,109 5,864
Creditors:
Amounts
falling due
within one
year (425) (12,661) (9,021)
Net Current
(Liabilities)/
Assets 1,036 (2,552) (3,157)
_______ _______ _______
Total Assets
less Current
Liabilities 1,036 8,954 1,712
Creditors:
Amounts
falling due
after more
than one year - (353) (131)
Provision for
Liabilities
and Charges - (649) (545)
Net Assets 1,036 7,952 1,036
Capital and Reserves
Called up
share capital 2,404 2,404 2,404
Share premium
account 48,033 48,033 48,033
Profit and
loss account (49,401) (42,485) (49,401)
Equity
Shareholders'
Funds 1,036 7,952 1,036
Consolidated Cash Flow Statement
Six months to Six months to Year to
Sept 2003 Sept 2002 March 2003
Unaudited Unaudited Audited
#'000 #'000 #'000
Net cash
inflow/(outflow)
from
operating
activities (354) 112 611
Returns on
investment and
servicing of
finance - (104) (144)
Taxation - (194) 409
_____ _____ _____
(354) (186) 876
Capital
expenditure
and financial
investment - 107 (136)
Acquisitions
and Disposals 1,822 (45) -
Cash
inflow/(outflow)
before
financing 1,444 (124) 740
Financing - (270) (396)
Increase/(decrease)
in cash 1,468 (394) 344
Notes
This interim report has been prepared using accounting policies that are
consistent with those adopted in the statutory accounts for the year ended 31st
March 2003. The statutory accounts were compiled on a break up basis as the
Company was not considered to be a going concern due to the sale of its trading
subsidiaries.
The figures for the year to 31st March 2003 were derived from the statutory
accounts.
The statutory accounts for the year ended 31st March have received an audit
report which was unqualified and did not contain statements under s237(2) or (3)
of the Companies Act 1985.
Considering that there has been no trading and the net asset position has not
significantly altered since the statutory accounts, the Directors have chosen
not to have the Company's Auditor's undertake an independent review of the
financial statements set out in this Announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
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