Half-yearly report
27 April 2007 - 9:00AM
UK Regulatory
The Weather Lottery plc
("The Weather Lottery" or the "Company")
27 April 2007
Interim Financial Results for the period ended 31 January 2007
Highlights
* Successful launch of the new online system in February 2007.
* Further marketing poised to commence to National Trust members.
* Over 300 enquiries received from target societies in 2007 to date.
* Prize draw changes resulting in a higher top prize as well as
higher returns for The Weather Lottery
Key Financials for the 6 month period to 31 January 2007
* Sales of �761,000 (2006: �750,000)
* Gross Profit of �489,000 (2006: �472,000)
* Net Loss of �82,000 (2006: Net Profit of �1,000)
Chief Executive's Statement
New Marketing Focus
Since the Company was admitted to AIM in September 2006, our marketing efforts
have been focussed in two key areas. Firstly, we have been working towards
bringing the National Trust into the lottery and building up new client levels
from this source; and secondly, developing a bespoke software systems to enable
participants to join and play The Weather Lottery online. This project has been
undertaken in conjunction with our bankers HSBC.
Both of these projects have incurred delays with the result that sales are
correspondingly below current market expectations. This is being addressed as
follows:
National Trust marketing plan:
* The Weather Lottery will be promoted on the plastic carrier enclosing the
Summer National Trust magazine. Approximately 250,000 magazines will be posted
to National Trust members.
* A mailshot to approximately 100,000 National Trust members who have
participated in charity raffles is planned thus promoting the Weather Lottery as
a new means of donating.
* A "Weather Lottery" flyer will be inserted in the National Trust Volunteer's
newsletter promoting the game to the National Trust's 47,000 volunteers.
* A leaflet promoting The Weather Lottery will be included with all 8,000
employee payslips sent out by the National Trust by June.
* A further 5,000 leaflets promoting The Weather Lottery will be made
available to patrons at approximately five of the National Trusts key
properties.
* Further promotional activity with the National Trust is being discussed,
such as inclusion of a Weather Lottery leaflet being included in welcome packs
to new members
* In total, close to 500,000 people will be targeted by The Weather Lottery.
To encourage new clients to join, all literature will note that there have been
3,158 winners from supporters of The National Trust Lottery within a very short
period of time. It is hoped that this statement will stimulate new entry levels
Online Participation:
* The online system went live in February 2007
* The Company is marketing the new online system, which is secured by HSBC,
to all of its clients.
* Client supporters can join online by Credit Card, Debit Card and Standing
order.
* The successful implementation of the online system is a major Company
development. An example of how the system works can be seen at
www.sheffieldsteelers.co.uk by following the link on the �10,000 ball.
Prize Draw Changes
The game has been modified from a 5 day game to a 4 day game which will create a
20% higher return for The Weather Lottery.
In addition we have announced an annual �100,000 draw which we believe will
attract further new players.
Increased Enquiry Levels
The Weather Lottery has had over 300 separate new beneficiary enquires to date
in 2007. A beneficiary is the society, charity or sports club looking for new
fundraising options. The Company is also continuing to follow up the 925
enquiries received in 2006. The enquiry levels have increased to the extent that
new staff have been appointed specifically for this task.
New Clients
The Weather Lottery provides an innovative solution to providing the fundraising
that target societies require. Continuing contract discussions are being held
with high profile organisations both in the markets of Sport and Charity. Our
target to reach 10,000 clients within a five-year plan remains intact and our
enquiry list continues to increase on a daily basis
As the benefit of our relationships with key beneficiaries and additional routes
to market come through, I feel that the Company is well positioned to grow and I
look forward to reporting on these successes in the future.
K Milhench
Chief Executive
26 April 2007
For further information:
The Weather Lottery plc 0113 2750002
Keith Milhench
Website www.theweatherlottery.com
SVS Securities plc 020 7638 5600
Ian Callaway/Peter Manfield
ARM Corporate Finance Ltd 020 7512 0191
Nick Harriss
City Road Communications 07947 186694
Paul Quade 020 7248 8010
UNAUDITED INTERIM FINANCIAL INFORMATION OF
THE WEATHER LOTTERY PLC
FOR THE PERIOD ENDED 31 JANUARY 2007
PROFIT AND LOSS ACCOUNT
Period Period Year ended
ended ended 31 July
31 January 31 January 2006
2007 2006 (audited)
Notes (unaudited) (unaudited)
�'000 �'000 �'000
Turnover 761 750 1,440
Cost of Sales 272 278 484
__________________________________
Gross (Loss)/Profit 489 472 956
Administrative expenses (571) (471) (1,039)
__________________________________
Operating (loss) (82) 1 (83)
Interest payable and similar - - -
charges
Interest receivable and - - 1
similar charges
__________________________________
(Loss) on ordinary activities
before taxation (82) 1 (82)
Taxation - - -
__________________________________
Retained (loss)/profit for (82) 1 (82)
the period
==================================
Earnings per share
Basic and fully diluted 2 (0.11)p 0.1p (0.51)p
All results derive from continuing operations of the Company.
There are no recognised gains or losses other than the loss for the period.
BALANCE SHEET
As At As At As At
31 January 31 January 31 July
2007 2006 2006
(unaudited) (unaudited) (audited)
Notes �'000 �'000 �'000
Fixed Assets
Intangible assets 3 202 227 212
Current assets
Debtors 4 17 23 10
Cash at bank and in hand 163 55 240
_____ _____ _____
180 78 250
Creditors: amounts
falling due within one year 5 (303) (321) (293)
_____ _____ _____
Net current (liabilities) (123) (243) (43)
_____ _____ _____
Total assets less current 79 (16) 169
liabilities
Creditors: amounts - - -
falling due over one year
_____ _____ _____
Net assets 79 (16) 169
===== ===== =====
Capital and reserves
Called up share capital 6 77 1 73
Share premium 233 48 245
Profit and loss account (231) (65) (149)
_____ _____ _____
Equity shareholders' funds 7 79 (16) 169
===== ===== =====
CASH FLOW STATEMENT
Period Period Year
ended ended ended
Notes 31 31 January 31 July
January 2006 2006
2007 (unaudited) (audited)
(unaudited)
�'000 �'000 �'000
Net cash (outflow)/inflow from 8 (69) 24 (60)
operating activities
Returns on investments and - - 1
servicing of finance
Capital expenditure - - -
_________________________________
Cash (outflow)/inflow before (69) 24 (59)
financing
Financing (8) - 268
_________________________________
(Decrease)/increase in cash in (77) 24 209
the period
_________________________________
Reconciliation of net cash flow
to movement in net debt
(Decrease)/increase in cash in (77) 24 209
the period
Opening net funds 240 31 31
_____ _____ _____
Closing net funds 163 55 240
NOTES TO THE INTERIM FINANCIAL INFORMATION
1. Accounting policies
International Financial Reporting Standards
The London Stock Exchange announced that AIM companies do not need to adopt
International Financial Reporting Standards for periods commencing before 1
January 2007. In this regard International Accounting Standard 34, Interim
Financial Reporting, has not been adopted for preparation of this unaudited
interim financial information.
Basis of Accounting
The interim financial information has been prepared on the historical cost
basis. The interim financial results are unaudited.
Turnover
Turnover represents takings received for entry into the daily prize draws. The
revenue is recognised upon receipt of the money for the period that the draws
take place.
Goodwill
Goodwill arising on consolidation represents the excess of the purchase
consideration over the Group's interest in the fair value of the identifiable
assets and liabilities of a subsidiary at the date of acquisition.
Goodwill is recognised as an asset and amortised over a period of 20 years,
which the directors consider to be the estimated useful life of the goodwill.
Intangible assets
Intangible assets relate to the software development of the lottery game. The
cost is being amortised over ten years, which is the period over which the
software is considered effective.
Deferred Tax
The charge for taxation is based on the profit or loss for the period and takes
into account taxation deferred because of timing differences between the
treatment of certain items for taxation and accounting purposes.
Deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date where transactions or
events that result in an obligation to pay more, or a right to pay less, tax in
the future have occurred at the balance sheet date, with the exception that
deferred tax assets are recognised only to the extent that the directors
consider that it is more likely than not that there will be suitable taxable
profits from which the future reversal of the underlying timing differences can
be deducted.
Deferred tax is measured on a non-discounted basis at the tax rates that are
expected to apply in the periods in which timing differences reverse, based on
tax rates and laws enacted or substantially enacted at the balance sheet date.
2. Earnings per ordinary share
The calculation of basic earnings per share is based on the results and
weighted average number of ordinary shares as follows:
Period Period Year
ended ended ended
31 January 31 January 31 July
2007 2006 2006
(unaudited) (unaudited) (audited)
�'000 �'000 �'000
(Losses)/profits in period (82) 1 (82)
====================================
Weighted average number of
ordinary shares:
Basic and fully diluted 76,412,614 1,000 16,042,083
====================================
The basic and fully diluted weighted average number of ordinary shares are the
same due to there being no share options in place during the period.
3. Intangible Fixed Assets
Goodwill Software Total
Development
�'000 �'000 �'000
Cost:
As at 1 August 2006 176 154 330
Additions - - -
___________________________
As at 31 January 2007 176 154 330
___________________________
Depreciation:
As at 1 August 2006 18 100 118
Charge for Period 3 7 10
___________________________
As at 31 January 2007 22 107 128
___________________________
Net Book Value:
As at 31 January 2007 155 47 202
===========================
As at 31 July 2006 158 54 212
===========================
4. Debtors
As At As At As At
31 January 31 January 31 July
2007 2006 2006
�'000 �'000 �'000
Prepayments 10 7 7
Other debtors 7 16 3
________________________________
17 23 10
================================
5. Creditors: amounts falling due within one year
As At As At As At
31 January 31 January 31 July
2007 2006 2006
�'000 �'000 �'000
Trade creditors 227 294 229
Accruals and deferred income 38 14 23
Social security and other taxes 38 13 41
________________________________
303 321 293
================================
6. Share capital
As At As At As At
31 January 31 January 31 July
2007 2006 2006
�'000 �'000 �'000
Authorised:
100,000,000 ordinary shares of 0.1p each
(31 January 2006: 1,000 ordinary 100 1 100
shares of �1 each) ===============================
Issued and fully paid:
77,054,737 ordinary shares of 0.1p each
(31 July 2006 73,202,000
ordinary shares; 31 January 2006 77 1 73
1,000 ordinary shares) ===============================
7. Reconciliation of movement in shareholders' funds
As At As At As At
31 January 31 January 31 July
2007 2006 2006
�'000 �'000 �'000
(Loss)/profit for the period (82) 1 (82)
New share capital (including
premium & expenses) (8) - 268
________________________________
Net (deduction)/addition to
shareholders funds (90) 1 186
Opening shareholders funds 169 (17) (17)
________________________________
Closing shareholders funds 79 (16) 169
================================
8. Reconciliation of operating loss to operating cash flows
As At As At As At
31 January 31 January 31 July
2007 2006 2006
�'000 �'000 �'000
Operating (loss)/profit (82) 1 (83)
Amortisation and depreciation 10 12 27
(Increase)/decrease in debtors (7) (6) 8
Increase/(decrease) in creditors 10 17 (12)
________________________________
Net cash (outflow)/inflow from (69) 24 (60)
operating activities ================================
9. Interim Financial Information
The unaudited interim financial information, which is the responsibility of the
directors and was approved by them on 26th April 2007 does not constitute
statutory accounts within the meaning of Section 240 of the Companies Act 1985.
Copies of this Interim statement are available from the Company at its
registered office: 24 St. Michael's Road, Headingley, Leeds, LS6 3AW for a period
of one month, free of charge.
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