TIDMPACC
RNS Number : 8130K
Prime Active Capital PLC
27 June 2014
Prime Active Capital plc
Annual Results
Year ended 31 December 2013
CHAIRMAN'S STATEMENT
After an encouraging start to 2013 the overall performance of
the Group was hampered significantly by a change in our main
customer Verizon's approach to its upgrade policy in the latter
part of the year. Verizon's decision to align itself with their
competitors and strictly adhere to a 24-month upgrade resulted in
over 4000 unit sales being taken out of our channel in the period
September to December 2013. All agents were affected and as a
result the customary strong close to the financial year did not
materialise.
The full year impact of this on the company saw annual revenue
decrease by 1.5% however on a constant currency basis revenues were
up 1.8%. Gross profit for the period was up by 12% to EUR12.942
million. This was through a combination of improved gross profit
per unit sold and the introduction of new business lines. At an
operating level the US companies delivered a loss of EUR0.172
million for the year compared to a loss of EUR2.071 million in
2012.
In May 2013 the company took out a loan from Mosaic Print
Management Limited ("Mosaic") and two Mosaic Directors, Mr. Tony
Gill and Mr. Steve Smith joined the board. The loan provided the
working capital necessary to increase inventory which subsequently
led to increased sales. Since then the company has generated enough
cash to meet all of the interest payments related to this loan and
also continue to pay down other interest and non-interest bearing
loan notes.
It has been previously noted that the repayment of the Mosaic
Loan Facility would be dependent on the trading performance of the
Group, the availability of other facilities or the support of
shareholders. Whilst trading conditions improved in the aftermath
of the availability of the facility, this improvement was not
sustained throughout the period due in the main to the change in
Verizon's upgrade policy detailed above. On the 12 June 2014 the
company announced it has reached agreement with Mosaic on an
extension of the facility until 31 August 2014 allowing the company
time to consider its options in relation to the repayment of the
loan.
The company has been engaged with a number of parties with
respect to a disposal of part or all of its stores, with the
intention of applying the proceeds of any such disposal to the
repayment in full of the Mosaic Loan Facility as well as a further
potential distribution to shareholders. A letter of intent has
recently been executed with one party providing for a period of
exclusivity. There can be no guarantee that this will lead to a
sale of the US stores. The company will continue to consider other
remedial actions with respect to the Mosaic Loan Facility,
including but not limited to a further extension on terms, a
restructuring of the facility and/or an issue of equity.
Closing comments
Whilst the US operating companies have stabilised somewhat after
a number of difficult years they remain subscale and so find
themselves overly susceptible to micro and macro-economic downturns
beyond their control. We have a number of excellent locations which
dominate the markets in which they operate however, as a small
regional agent in the retail channel we remain too vulnerable to
Verizon's strategic decisions. This is the position many smaller
premium retailers find themselves and consequently the industry
continues to go through significant consolidation. Based on this
the company has made the decision to write down the carrying value
of our investments in the US businesses and that can be seen in the
impairment review. Verizon, like its competitors, has recently
implemented the "Edge" programme, providing a finance option to
customers to upgrade to a new device each year, effectively selling
an operating lease on the device/devices. The customer can choose
to upgrade each year or own the device outright after 20 monthly
payments. This has seen uplift in device sales in 2014 and a
renewed optimism among the six national agents who between them
have an average of over 300 stores each. Verizon is openly
encouraging the consolidation of the premium retailer channel into
the hands of the six national agents as they themselves retreat
from their own strategy of operating corporate stores.
The board will continue to consider all options open to it to
achieve best value for shareholders.
For further information contact:
Prime Active Capital plc Davy Corporate Finance
Dermot Martin, Chairman Eugenee Mulhern /Anthony Farrell
+353 1 295 9895 + 353 1 679 6363
FINANCIAL REVIEW
Overview of results
Summary financial information
2013 2012
EUR'000 EUR'000
Continuing and discontinued operations
Revenue 40,570 41,199
Operating expenses (excluding exceptional
costs, depreciation, amortisation
and other gains) (40,745) (43,353)
------------ ------------
Earnings before interest, tax, depreciation
and amortisation expense (EBITDA),
exceptional costs, other income and
other gains (175) (2,154)
Depreciation and amortisation (579) (537)
------------ ------------
Adjusted earnings before interest,
tax (EBIT) and exceptional costs (754) (2,691)
Other income - 94
Other losses (6) (101)
Exceptional costs (2,407) -
Net finance costs (149) (60)
Loss before tax (3,316) (2,758)
Income tax charge (2) (10)
------------ ------------
Loss for the year (3,318) (2,768)
Loss attributable to non-controlling
interest 33 44
------------ ------------
Loss for the year attributable to
members (3,285) (2,724)
------------ ------------
EUR EUR
cent cent
Basic and diluted loss per share (14.48) (12.01)
Total Group Revenue
The Group's operations consist of its PAC Telemedia
division operating in the USA. Group revenue in
2013 amounted to EUR40.570 million, a 1.5% decrease
from the previous year. On a constant currency
basis revenue increased 1.8%.
The results of the PAC Telemedia division for
the past three years are summarised as follows:
2013 2012 2011
EUR'000 EUR'000 EUR'000
PAC Telemedia
Revenue 40,570 41,199 37,004
Operating expense(1) (40,170) (42,743) (36,258)
--------- ---------- ---------
EBITDA 400 (1,544) 746
Depreciation, amortisation and
other grants(1) (572) (527) (423)
--------- ---------- ---------
EBIT (172) (2,071) 323
--------- ---------- ---------
(1) excludes unallocated corporate costs of the Group and
exceptional costs
Operating profit before interest, taxation and exceptional
costs
One of the Group's key performance measures for its overall
business is adjusted EBIT defined as operating profit before
interest, taxation and exceptional costs. Adjusted EBIT amounted to
a loss of EUR0.754 million in 2013, compared to a loss of EUR2.691
million in the previous year.
Exceptional costs
The Group recognised an impairment charge of EUR2.407 million
(2012:EURnil), against the carrying amount of goodwill allocated to
the Cellular Center Holdings CGU following an impairment review
undertaken in accordance with IAS36.
Other income
The Group recognised a gain of EUR0.094 million in 2012 as a
result of an effective interest adjustment to its other loans and
receivables balance. Other loans and receivables consisted of the
Group's remaining investment in redeemable shares in Bell &
Bain Limited, following the receipt of the first and interim
redemption repayments in 2011. The shares were issued in settlement
of a loan due to another subsidiary in the Group and were
redeemable in instalments up to the third anniversary of the sale,
which took place on 25 November 2009. These shares were redeemed in
full in 2012.
Other losses
Other losses of EUR0.006 million (2012: EUR0.101 million loss)
consist of foreign exchange losses that have arisen on the
retranslation of inter-company loan balances held with foreign
subsidiaries and a loan note and loan finance held in sterling by
the parent company.
Net financial expense
The net financial expense for the year was EUR0.149 million
compared to EUR0.060 million in 2012. The charge arose mainly in
respect of interest costs on a loan note issued by the Group in
February 2010 and loan finance received by the Group in May 2013.
The charge also includes exchange differences on finance costs.
Non-controlling interest
The non-controlling interest share of loss after tax for 2012
amounted to a loss of EUR0.033 million (2012: (EUR0.044 million)).
The non-controlling interest relates to shareholdings held in
Cellular Center Holdings.
Earnings per share
The adjusted fully diluted loss per share for 2013 is 3.87 cent
as compared with adjusted loss per share of 12.01 cent in 2012.
Adjusted loss per share excludes exceptional costs and the results
from discontinued operations in 2012. Fully diluted loss per share,
before such adjustments, amounted to 14.48 cent in 2013 compared to
a loss of 12.42 cent in 2012.
Cash flow
At 31 December 2013 the Group had cash and cash equivalents of
EUR0.640 million compared to cash and cash equivalents of EUR0.524
million at 31 December 2012.
Outflows in the year included payments totalling EUR0.333
million (2012: EUR0.752 million) in respect of capital expenditure
of which EUR0.332 million (2012: EUR0.752 million) was for PAC
Telemedia and the remainder was for the Ireland centre. Funding for
capital expenditure in PAC Telemedia was partly provided by asset
finance agreements, EUR0.052 million (2012: EURnil). All other
capital expenditure was funded from existing resources. In 2012
EUR0.413 million of capital expenditure in PAC Telemedia was funded
by term loan.
The expected final retention monies of EUR1.172 million relating
to the 2009 disposal of the remaining operating company within the
PAC Digimedia division were received in 2012.
FINANCIAL REVIEW (CONTINUED)
Cash flow (continued)
Inflows in the year included a further EUR0.025 million
unsecured loan to the Group by Mr. Peter E. Lynch on an interest
free basis taking his total loan amount to the Group to EUR0.125
million. This loan was repaid in equal monthly instalments, with
the final repayment being made in May 2014.
Loan finance
On 8 May 2013 the company entered into a GBP1.000 million
sterling (EUR1.181 million) loan facility from Mosaic Print
Management Limited ("Mosaic"), a UK company owned by Mr. Anthony
Gill and Mr. Stephen Smith. The purpose of this loan facility was
to provide a short term working capital loan to facilitate the
business trading. The loan from Mosaic carries a 15% coupon with
monthly interest payments. The loan is secured on certain USA based
subsidiaries of the Group. As part of the terms of this loan
facility, Mr. Anthony Gill and Mr. Stephen Smith joined the board
as non-executive directors in May 2013.
Subsequent to the year end, Mosaic Print Management Limited has
agreed a three month extension of the GBP1.000 million (EUR1.243
million), one year secured loan facility which matured in May 2014.
The facility is now extended until 31 August 2014. This loan
facility has incurred a late payment fee of GBP0.065 million
(EUR0.081 million), which has been added to the outstanding
principal. The Group will continue to pay interest at the agreed
previous rate of 15% on the sum of GBP1.065 million (EUR1.324
million).
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2013
Pre-exceptionals Exceptionals Pre-exceptionals Exceptionals
Total Total
2013 2013 2013 2012 2012 2012
Continuing operations EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Revenue 40,570 - 40,570 41,199 - 41,199
Cost of sales (27,628) - (27,628) (29,622) - (29,622)
------------------------ ----------------- ------------- ----------- ----------------- ------------- -----------
Gross profit 12,942 - 12,942 11,577 - 11,577
Selling and
distribution costs (10,338) - (10,338) (11,091) - (11,091)
Administration expenses (3,358) (2,407) (5,765) (3,177) - (3,177)
Other losses (6) - (6) (101) - (101)
------------------------ ----------------- ------------- ----------- ----------------- ------------- -----------
Operating loss (760) (2,407) (3,167) (2,792) - (2,792)
Finance costs (149) - (149) (62) - (62)
Finance income - - - 2 - 2
------------------------ ----------------- ------------- ----------- ----------------- ------------- -----------
Loss before tax (909) (2,407) (3,316) (2,852) - (2,852)
Income tax charge (2) - (2) (10) - (10)
------------------------ ----------------- ------------- ----------- ----------------- ------------- -----------
Loss for the year from
continuing operations (911) (2,407) (3,318) (2,862) - (2,862)
------------------------ ----------------- ------------- ----------- ----------------- ------------- -----------
Discontinued operations
Profit for the year
from
discontinued operations
after tax - 94
------------------------ ----------------- ------------- ----------- ----------------- ------------- -----------
Loss for the year (3,318) (2,768)
------------------------ ----------------- ------------- ----------- ----------------- ------------- -----------
Attributable to:
Equity shareholders (3,285) (2,724)
Non-controlling
interest (33) (44)
------------------------ ----------------- ------------- ----------- ----------------- ------------- -----------
(3,318) (2,768)
------------------------ ----------------- ------------- ----------- ----------------- ------------- -----------
2013 2012
EUR cent EUR cent
Loss per share
From continuing
operations
- Basic and diluted (14.48) (12.42)
------------------------ ----------------- ------------- ----------- ----------------- ------------- -----------
Earnings per share
- Basic and diluted - 0.41
------------------------ ----------------- ------------- ----------- ----------------- ------------- -----------
Loss per share
From continuing and
discontinued operations
- Basic and diluted (14.48) (12.01)
------------------------ ----------------- ------------- ----------- ----------------- ------------- -----------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2013
2013 2012
EUR'000 EUR'000
Loss for the year (3,318) (2,768)
Other comprehensive income/(expense):
Items that may subsequently be
reclassified to profit or loss
Fair value adjustment on other 302 -
reserves
Exchange movement (275) (8)
--------------------------------------- -------- --------
Total comprehensive expense for
the year (3,291) (2,776)
--------------------------------------- -------- --------
Attributable to:
Equity holders of the Company (3,260) (2,732)
Non-controlling interest (31) (44)
--------------------------------------- -------- --------
(3,291) (2,776)
--------------------------------------- -------- --------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2013
2013 2012
EUR'000 EUR'000
Assets
Current assets
Inventories 2,022 1,096
Trade and other receivables 2,168 3,797
Cash and cash equivalents 640 524
4,830 5,417
---------------------------------- ------------ -------------
Non-current assets
Property, plant and equipment 1,724 2,054
Intangible assets 4,798 7,438
6,522 9,492
---------------------------------- ------------ -------------
Total assets 11,352 14,909
Liabilities
Current liabilities
Trade and other payables 6,288 7,017
Current income tax liabilities 1 1
Borrowings 1,370 638
Provisions for other liabilities
and charges 378 624
8,037 8,280
---------------------------------- ------------ -------------
Non-current liabilities
Borrowings 44 67
44 67
---------------------------------- ------------ -------------
Total liabilities 8,081 8,347
Net assets 3,271 6,562
---------------------------------- ------------ -------------
Equity
Ordinary shares 11,341 11,341
Share premium 16,444 16,444
Other reserves 2,548 2,523
Retained earnings (27,062) (23,777)
---------------------------------- ------------ -------------
Non-controlling interest - 31
Total equity 3,271 6,562
---------------------------------- ------------ -------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2013
Share premium Total Non-
Share reserve Other Retained attributable controlling Total Equity
Capital Reserves Earnings to Interest
shareholders
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Balance at 1
January 2013 11,341 16,444 2,523 (23,777) 6,531 31 6,562
--------------- ---------- -------------- ----------- ----------- -------------- -------------- ---------------
Comprehensive
income:
Loss for year - - - (3,285) (3,285) (33) (3,318)
Other
comprehensive
income:
Fair value
adjustment on
other
reserves - - 302 - 302 - 302
Exchange
movement - - (277) - (277) 2 (275)
--------------- ---------- -------------- ----------- ----------- -------------- -------------- ---------------
Total
comprehensive
income - - 25 (3,285) (3,260) (31) (3,291)
--------------- ---------- -------------- ----------- ----------- -------------- -------------- ---------------
Transactions - - - - - - -
with owners
--------------- ---------- -------------- ----------- ----------- -------------- -------------- ---------------
Balance at 31
December 2013 11,341 16,444 2,548 (27,062) 3,271 - 3,271
--------------- ---------- -------------- ----------- ----------- -------------- -------------- ---------------
Share premium Total Non-
Share reserve Other Retained attributable controlling Total Equity
Capital Reserves Earnings to Interest
shareholders
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Balance at 1
January 2012 11,341 16,444 2,532 (21,054) 9,263 75 9,338
--------------- ---------- -------------- ----------- ----------- -------------- -------------- ---------------
Comprehensive
income:
Loss for year - - - (2,724) (2,724) (44) (2,768)
Other
comprehensive
income:
Exchange
movement - - (9) 1 (8) - (8)
Total
comprehensive
income - - (9) (2,723) (2,732) (44) (2,776)
--------------- ---------- -------------- ----------- ----------- -------------- -------------- ---------------
Transactions - - - - - - -
with owners
--------------- ---------- -------------- ----------- ----------- -------------- -------------- ---------------
Balance at 31
December 2012 11,341 16,444 2,523 (23,777) 6,531 31 6,562
--------------- ---------- -------------- ----------- ----------- -------------- -------------- ---------------
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2013
2013 2012
EUR'000 EUR'000
Operating activities
Cash absorbed by operations (24) (560)
Tax paid (6) (8)
Net cash outflow from operating
activities (30) (568)
---------------------------------- -------------- --------------
Investing activities
Purchase of property, plant and
equipment (333) (752)
Disposal of subsidiary, net of
cash disposed of - 1,172
Net cash (outflow)/inflow from
investing activities (333) 420
---------------------------------- -------------- --------------
Financing activities
Proceeds from borrowings 1,270 570
Repayment of borrowings (538) (527)
Capital element of asset finance
payments (28) (25)
Net interest paid (148) (57)
Finance lease interest (1) (3)
Net cash inflow/(outflow) from
financing activities 555 (42)
---------------------------------- -------------- --------------
Net increase/(decrease) in cash
and cash equivalents 192 (190)
Cash and cash equivalents at 1
January 524 723
Effect of exchange rate changes (76) (9)
Cash and cash equivalents at 31
December 640 524
---------------------------------- -------------- --------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of preparation
The financial information included in this result statement has
been extracted from the Group's financial statements for the year
ended 31 December 2013 and is prepared on the accounting policies
set out therein. As permitted by EU Law and in accordance with AIM
/ ESM rules, the Group financial statements have been prepared in
accordance with International Financial Reporting Standards and
their interpretations issued by the International Accounting
Standards Board as adopted by the EU. The Group Financial
Statements were approved by the Directors on 27 June 2014 and will
be filed with the Irish Registrar of Companies and circulated to
shareholders in due course.
2. Going concern
The Directors have taken time to consider the general volatility
of the market place within which the businesses operate and the
companies scale and general susceptibility to micro and
macro-economic downturns beyond the companies control. As a small
regional agent the company is vulnerable to Verizon's strategic
decisions however it continues to maintain strong positions in many
of the markets it operates in. As further detailed in the
consolidated financial statements, subsequent to the year end, the
Group agreed a three month extension to the GBP1.000 million one
year secured Mosaic Loan Facility which matured in May, 2014. This
facility now becomes repayable on 31 August 2014. The extension of
the facility allows the Group further time to consider its options
in relation to the repayment of the Mosaic Loan Facility including
a sale of all or part of the Group's USA based stores or other
forms of refinancing. The Group is in ongoing discussions with
respect to a disposal of part or all of the USA based stores and
has recently executed a letter of intent with one party providing
for a period of exclusivity.
After taking account of the factors described above, and
considering possible changes in trading performance, forecasts show
that the Group, should it not have to repay the Mosaic Loan
Facility, would be able to continue to operate its existing
businesses for a period of 12 months from the date of this annual
report without the need for additional finance. For that reason,
the consolidated financial statements have been prepared on the
going concern basis.
3. Exceptional Items
2013 2012
Continuing operations EUR'000 EUR'000
Goodwill impairment(1) 2,407 -
--------------------------------- ----------- ----------
(1) the Group recognised an impairment charge
of EUR2.407 million as a result of an impairment
review undertaken in accordance with IAS 36 against
the goodwill allocated to the Cellular Center
Holdings CGU
4. Expenses
2013 2012
Continuing operations EUR'000 EUR'000
Employee benefit expense (note 13) 8,281 8,475
Material cost of inventories consumed
(included within cost of sales) 27,628 29,622
Depreciation of property, plant and equipment
- Included in administration expenses 579 537
Services provided by the Group's Auditors
(note 12) 77 78
Operating lease rentals - property 1,916 2,418
Inventory provision 12 161
Goodwill impairment (note7) 2,407 -
Other selling and distribution and administrative
expenses 2,831 2,599
Other losses 6 101
--------------------------------------------------- -------- --------
43,737 43,991
--------------------------------------------------- -------- --------
5. Events after the Reporting Period
On 23 May 2014, the Group announced that it had entered
into discussions with Mosaic Print Management Limited
in respect of the Mosaic loan facility. Both parties
were considering a number of options including but
not limited to an extension of the facility, a restructuring
of the facility and or/ an issue of equity. In parallel
the Group stated that it had been engaged in discussions
with a number of parties with respect to a disposal
of part or all of its USA based stores, with the
intention of applying any such disposal proceeds
to the repayment in full of the loan facility, as
well as a further potential distribution to shareholders.
On this date the Group also announced that, Mr. Peter
E. Lynch had resigned as Director and Chief Executive
of the Group. Following his resignation, Mr. Dermot
Martin assumed the role of Executive Chairman.
The Group announced on 12 June 2014 that it had agreed
a three month extension of the GBP1.000 million (EUR1.243
million) loan facility from Mosaic Print Management
Limited, which matured in May, 2014. This loan facility
has been subject to a late payment fee of GBP0.065
million (EUR0.081 million), which has been added
to the principal outstanding, making the total amount
due on 31 August 2014 of GBP1.065 million (EUR1.324
million). The Group will continue to pay interest
on the increased amount at the agreed previous rate
of 15%.
Other information
The annual report and accounts of PAC plc will be available for
review on the Company's www.pacplc.com from this
evening. A copy of the annual report will be sent by mail to shareholders shortly.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SEDFIWFLSEEM
Prime Active (LSE:PACC)
Graphique Historique de l'Action
De Août 2024 à Sept 2024
Prime Active (LSE:PACC)
Graphique Historique de l'Action
De Sept 2023 à Sept 2024