TIDMSJH
RNS Number : 2461T
St James House PLC
23 March 2021
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF REGULATION 11 OF THE MARKET ABUSE (AMMENT) (EU EXIT) REGULATIONS
2019/310.
St James House plc
Final Results and Audited Annual Report and Accounts for the
Year to 31 January 2020
("SJH" the "Group" or the "Company")
23 March 2021
Final Results
The Board of Directors of SJH is pleased to announce the
publication of the audited annual report and accounts for the year
to 31 January 2020 (the "Annual Report").
The Annual Report will be published on the Company's website in
compliance with its articles of association and the electronic
communications provisions of the Companies Act 2006. A copy of the
Annual Report can also be accessed through the link below.
Annual Report http://www.rns-pdf.londonstockexchange.com/rns/2461T_1-2021-3-23.pdf
Key extracts from the Annual Report can also be viewed
below.
The Company's ordinary shares of 1 pence each will remain
suspended from trading on AIM until the financial statements for
the six month period to 31 July 2020 are published, which is
expected to be tomorrow.
Graeme Paton, the Group CEO commented, "The last year has been a
difficult one for the Company, but we have also seen significant
progress with the launch of the St Frances House legal services
business and the consolidation of our payment activities within the
St Danial House business."
For further information, contact:
St. James House PLC
Roger Matthews
Website www.sjhplc.com 020 3655 5000
Allenby Capital Limited
(Nomad, Financial Adviser & Broker)
John Depasquale / Nick Harriss 020 3328 5656
Chairman's Statement and Strategic Report
The principal activities of St James House plc ('SJH' or the
'Company' or the 'Group') during the year were that of provision of
payment processing products and services and lottery administrators
and, since the year end, the provision of legal services.
During the year to 31 January 2020 and following the year end a
number of organisational and structural changes were made to the
business in order to deliver future revenue growth which are set
out below together with a detailed financial review.
On 31 October 2019 the company announced that progress was below
projections and that certain remedial measures were taken to
improve performance. The Company further announced that, although
there were operational improvements in performance, working capital
was constrained and the pattern of operational performance
improvements continued into 2020 as described in the trading
statements.
As can be seen in these financial statements, the financial
performance of the business has been significantly adversely
affected by the various restructurings required to deliver
increased operational performance as well as a number of law suits
which has diluted the capacity to achieve SJH's short term
goals.
Subsequent to the year end there have been a number of trading
statements published following the delisting as a result of the
late filing of these accounts which can be found on the Company's
website www.sjhplc.com.
Summary and key performance indicators
Financial key performance indicators ("KPIs")
KPIs provide an illustration of management's ability to
successfully deliver against SJH's strategic objectives. The Board
periodically reviews the KPIs of the Group taking into account its
strategic objectives and the challenges facing implementation of
such. The KPIs reflect the Group's development-focused strategy,
the importance of a positive cash position and its underlying
commitment to ensuring safe operations. These KPIs can be
categorised into operational and financial. These include, but are
not limited to:
-- Revenue
-- Gross profit
-- Normalised EBITDA
-- Profit before taxation
SJH's Board review these indicators once a month. Explanations
are sought and given for any material variances and management are
required to provide plans to resolve any performance failures as
they occur during the year.
As the business grows and increases its expenditure on
internally generated and externally purchased tangible and
intangible assets, resulting in increased depreciation and
amortisation, the business has moved to measuring performance using
Normalised EBITDA as it provides a better measurement of underlying
operational performance.
Normalised EBITDA is defined as profit before tax, net finance
costs, depreciation and amortisation as adjusted for any
exceptional or non-recurring items.
Financial summary
In summary, for the year to 31 January 2020 the Group
performance was as follows:
K ey performance Indicators 2020 2019
GBP'000 GBP'000
(restated)
Revenue 989 938
--------- ------------
Gross profit 327 686
--------- ------------
Loss before tax (4,266) (393)
--------- ------------
Operating loss (4,266) (2,806)
--------- ------------
Depreciation 3 4
--------- ------------
Amortisation 344 494
--------- ------------
Exceptional items 1,844 440
--------- ------------
Normalised EBITDA loss (2,075) (1,868)
--------- ------------
Payment services
The Payments Division has made significant progress in 2020 and
has launched new FX and Multi-Currency accounts. It has also
delivered further improvements to its payment card processing
service. To build on this the payments division has operated under
the single brand of St Daniel House since November 2019 to enhance
its presence in this sector.
Payments processing income during the year to 31 January 2020
was GBP298,000 (2019: GBP471,000), with the reduction resulting
from the time taken to develop the products, services and
infrastructure required to deliver a full suite of financial
products through Market Access Limited as described below. It
recorded a loss of GBP2,902,000 for the year (2019:
GBP979,000).
Having established Market Access Limited in 2018 the company was
able to take advantage of an opportunity to purchase a prepaid card
specialist ANother Ops Limited ('AOL') in May 2019 for a nominal
amount to further develop the Company's payment services
offering.
The acquisition was for 100 percent of the issued share capital
of AOL, comprising 350,000 ordinary shares of GBP1.00 each, of
which GBP210,000 is currently unpaid. The consideration was
GBP5.00. AOL had an existing trading relationship with the Group
and had net liabilities to the Group of around GBP140,000 as at the
date of the acquisition (see note 15 for more financial
details).
AOL had principally been engaged in product and service
development since incorporation in 2017. The Group has successfully
integrated card issuing technology to complement the other payment
services offered by the Company's existing payment services
infrastructure. AOL became part of the Group's Payments Division
and it was the intention to utilise the "ANother" brand for the
Group's retail payments offering, while the Group's existing Market
Access business focussed on the business and institutional markets.
Subsequently to this, and as part of the strategy to unify
operations within the single business and brand of St Daniel House,
the "ANother" brand is no longer used.
Throughout 2020 the payments division has continued to revise
and improve its technological capabilities and service offerings
but has also suffered from some delays in card activations as
clients deferred rollout of card programmes introduced as part of
the acquisition described above. It has successfully deployed a
complete suite of products including GBP and multi-currency
accounts, card issuing and card payment processing as well as
foreign exchange and cross border payments.
The group has also established new services offered through the
entity St Daniel House. This means that the Company now has a full
range of card and payment services designed to meet the needs of
individuals and businesses. Prepaid card programmes are being
rolled out on behalf of clients with and will significantly
increase the number of cards in issue in 2021. Each activated card
is expected to generate revenue between GBP3 and GBP5 per month.
Merchants Services has seen some challenges in meeting potential
clients due to travel restrictions in the UK however the
opportunity was taken to bring about technology improvements
including online applications, screening and reviews to reflect the
new circumstances of overcome the specific challenges dealing with
remote clients and is set for significant growth throughout 2021,
both prepaid and merchant services generate foreign exchange
business, further supporting the Company's strategy moving
forward.
On 28 Feb 2020 the Board disposed of Market Access Ops Limited
("MAO") to MDC Nominees Limited ("MDC") as part of the Group's
restructuring strategy at the time. MAO, which was established in
early 2018 failed to develop as the Board at the time had hoped,
and in particular it became apparent that much of the business was
of the "non-conforming" type of customer that was prevalent in the
Emex business that had been sold to MDC in July 2018.
The Group has established a new subsidiary, St. Daniel House
Ltd, which is approved as an EMD Agent by the Financial Conduct
Authority. The Board therefore decided to transfer any conforming
business to AOL and St. Daniel House Ltd and sell MAO to MDC for
GBP1.00. The consideration for the purchase of Emex by MDC (see
announcement dated 12 July 2018) was a GBP2m loan note secured on
the assets of MDC and to be repaid by a sinking fund from the
cashflow generated by those assets; MAO will become part of this
structure. The Board took the view that the majority of MAO's
business had become a distraction of management time and better
fits with MDC's business. While the consideration is nominal, the
sale of MAO will have a modest positive impact on both the trading
performance and balance sheet of the Group and should also help
accelerate progress on repayment under the sinking fund.
Lottery management services
Prize Provision Services Limited ("PPSL") is licensed by the
Gambling Commission as an External Lottery Manager ("ELM") to
provide administration services to charities, societies, and sports
clubs in Great Britain. It administers all aspects required to run
a lottery including draws, prizes, player accounts, financial and
data management and related regulatory and administrative tasks.
PPSL provides services to over 770 societies ranging from local
grass-roots sports teams to large national membership
organisations.
PPSL enjoyed a positive year with growth of existing activities,
the addition of well-known clients and product launches. A new
scratch card product was launched in Q1 2019 with Bolton based
charity Families and Babies the first client. Lincoln City F.C.'s
academy launched the Imps Lottery to raise money for the club's
academy in Q1 2019 and Unite the Union's Unite2Win lottery grew
quickly during the year.
The Imps Lottery and Unite2Win were the first examples of client
branded lotteries which PPSL hopes to grow alongside its Weather
Lottery and Sports Club Lottery umbrella brands.
Once again lottery fundraising has proven itself to be one of
the most reliable and robust forms of fundraising, a fact which
will be utilised as PPSL focusses on client and player acquisition
over the coming year.
In summary the Lottery Management business saw revenue rise from
GBP467,000 to GBP691,000 and a loss of GBP1,000 for the year ended
31 Jan 2020 (2019: Loss of GBP56,000).
On 8 March 2019, the Board of Directors of St James House plc
announced it had agreed terms, subject to contract, to establish a
new lottery joint venture in Malta. The Company's partner in this
joint venture is ZeU Crypto Networks Limited ("ZeU"), a wholly
owned subsidiary of St-Georges Eco-Mining Corp. of Montreal, Canada
("SGEM"), whose shares are quoted on the Canadian Securities
Exchange (The "Lottery JV"). There has been no further activity
with this business segment to date because of operational delays
outside of the Company's control. Further details are included in
note 29 (Related Party transactions).
Legal services
The development of the legal claims business in Liverpool which
commenced in July 2020 has developed apace with investment in
increasing numbers of cases on a monthly basis. It is expected that
the case load which is still largely personal injury claims based
will broaden to include the more complex and higher profit yielding
sectors, for example, mis-sold mortgages and breach of GDPR claims.
It is anticipated the performance will meet the projections in the
coming year .
Group and head office
Unallocated central costs comprised GBP1,381,000 (Year to Jan
2019: GBP1,774,000). The reduction is a result of cost reductions
made during the year, such as relocating the registered and head
office to Gainsborough House, Thames Street, Windsor, significantly
reducing office costs,
Board changes
With effect from 1 February 2019, Andrew Flitcroft stepped down
from the Board but continues in the role of Company Secretary for
the Group.
Clive Hyman (Non-Executive Director) and Tim Razzall (Executive
Chairman) did not seek re-election at the Annual General Meeting
for the year to 31 January 2019, which was held on 31 July
2019.
On the 31(st) July 2019 the Company welcomed Roger Matthews and
Kathy Cox to the Board.
On 4(th) September 2019 Jacques Leuba joined the Board but
subsequently resigned on 28(th) August 2020.
In November 2019 Cath McCormick, Finance Director, left the
company to take up a new senior position in the Third Sector.
On 30 September 2020 Daniel Pym joined the Board as Finance
Director.
Funding
Issue of equity, share restructure and changes in options during
the year
On 14 February 2019 (admitted to trade on AIM with effect from
21 February 2019) new shares totalling 200,000,230 Ordinary Shares
of 0.1p each were issued (the "Fee Shares") in settlement of
amounts owed. Full details are included on note 29 (Related
parties).
On 15th February 2019 the Board proposed to shareholders a
sub-division of each share and a subsequent consolidation at a
ratio of 1:1000 which was approved by the Board on 4 March 2019.
Each Ordinary Share of the Company was sub-divided into one new
ordinary share of 0.001 pence each ("Interim Ordinary Shares") and
one deferred share of 0.099 pence each ("Deferred Shares"),
followed by a consolidation of every 1,000 Interim Ordinary Shares
into one consolidated new ordinary share of 1 pence each ("New
Ordinary Shares"). Therefore, the existing 3,115,830,000 Ordinary
Shares became 3,115,830 New Ordinary Shares and 3,115,830,000
Deferred Shares (the "Restructuring"). Fractional entitlements
arising from the Restructuring were aggregated and sold in the
market for the benefit of the Company.
The outstanding options over 60,000,000 Ordinary Shares
exercisable at 0.1 pence per Ordinary Share (as announced 24 April
2018), all held by Board members, will be adjusted for the
Restructuring to become options over 60,000 New Ordinary Shares,
exercisable at 100 pence per share. The life of the options remains
unchanged at 5 years from 23 April 2018.
During the year 20,000,000 share options, which had been granted
to each of Clive Hyman and Cath McCormick at an exercise price of
0.1 pence per share, lapsed following the expiry of 12 months after
those option holders ceased to be employees of any constituent
company of the Group.
Post balance sheet events
On 31 January 2020 the Company announced that it had entered
into a binding agreement for the subscription for 1,666,667
ordinary shares of 1p each in the capital of the Company ("Ordinary
Shares") at a price of 30 pence per Ordinary Share (the
"Transaction Price") to raise a total of GBP500,000 (the
"Subscription"). The Subscription was to be made by Auxilum
Investere SJ Ltd, a UK company controlled by Michael and Linda
Peters ("AIS") that had been established for this purpose. At the
same time the Company confirmed its intention to settle GBP237,500
of outstanding liabilities through an issue of a further 791,667
Ordinary Shares at the Transaction Price (the "Capitalisation
Shares").
On 12 March 2020 the Company issued a statement informing
shareholders that payment of cleared funds for the Subscription had
been requested but they had not been received. The Company entered
into a discussion with Mr Peters, the sole director of AIS, to
rectify the situation. Mr Peters had provided personal surety for
the monies due and the Company's management was confident that the
funds would be received.
In May it became clear that AIS was unlikely to deliver and the
company prepared to make alternative arrangements.
On 30 June 2020 the company announced that, in order to replace
the proposed investment from AIS, it had entered into an agreement
with a number of individuals including existing shareholders to
enter into an unsecured convertible loan note for a total amount of
GBP415,000 to improve the working capital position of the Company
(see note 29 for further details).
Principal risks and uncertainties facing the Group
There are several potential risks and uncertainties that could
have a material impact on the Group's long-term performance, and
the Group takes a proactive approach to risk management.
Management and employees
The nature of the Group and its business model creates reliance
upon retaining and incentivising its senior management and certain
key employees, whose expertise will be important to the performance
of the Group going forward. The Directors have endeavoured to
ensure that the principal members of its management team are
suitably incentivised, but the retention of such staff cannot be
guaranteed.
The Group may need to recruit additional senior management and
other staff to further develop its business. There can be no
guarantee that such individuals will be recruited in the Group's
preferred timetable or at the cost levels anticipated by the Group.
Competition for staff is strong and therefore the Group may find it
difficult to retain key management and staff. The loss of key
personnel and the inability to recruit further key personnel could
have a material adverse effect on the future of the Group through
the impairment of the day-to-day running of the businesses and the
inability to maintain existing client relationships.
Economic risk
Demand for the Group's services may be significantly affected by
the general level of economic activity and economic conditions in
the regions and sectors in which the Group operates. Therefore, a
continuation of the challenging economic environment, especially in
regions or sectors where the Group's operations are focused, could
have a material adverse effect on the Group's business and
financial results.
Financial risk
The Group's financial risk management strategy is based on sound
economic objectives and corporate practices. The main financial
risks concern the availability of funds to meet obligations as they
arise (liquidity risk) and fluctuations in exchange rates (exchange
rate risk).
Competition
The Group is engaged in business activities where there are a
number of competitors. Many of these competitors are larger than
the relevant businesses carried on by the Group and have access to
greater funds than the Group, which will potentially enable them to
gain market share at the expense of the Group.
Acquisitions
The Directors cannot discount circumstances where an acquisition
would support the Group's business strategy. However, there is no
guarantee that the Group will successfully be able to identify,
attract and complete suitable acquisitions or that the acquired
business will perform in line with expectations.
Funding and working capital
Maintaining a sufficient level of working capital is essential
to enable the Group to meet its foreseeable obligations and achieve
its strategy. Failure to manage working capital or to collect
receivables such as amounts due from Phillite D UK Limited of
GBP840,000 in a timely manner could impact upon the ability of the
Group to grow.
Management of growth
The ability of the Group to implement its strategy in an
expanding market requires effective planning and management control
systems. The Group's growth plans may place a significant strain on
its management, operational, financial and personnel resources. The
Group's future growth and prospects will, therefore, depend on its
ability to manage the growth and to continue to expand and improve
operational, financial and management information and quality
control systems on a timely basis, whilst at the same time
maintaining effective cost controls. Any failure to expand and
improve operational, financial and management information and
quality control systems in line with the Group's growth could have
a material adverse effect on its business, financial condition and
results of operations.
Market developments
Any failure to expand the Group's service offering in response
to customer demand and/or industry developments may have an adverse
effect on the Group's financial performance and prospects.
Reliance on partners
Much of the Group's business is dependent on partners (acquiring
banks, charities, clubs, etc.). Changes in key relationships with
those partners, change of strategic direction by partner
organisations, changes in the viability of partner-owned
technology, economic and other business circumstances could all
have an adverse effect on the financial performance of the
Group.
Legal and regulatory matters
The Group is subject to a considerable degree of regulation and
legislation. Changes in or extensions of laws and regulations
affecting the industry in which the Group operates (or those in
which its customers operate) and the rules of industry
organisations could restrict or complicate the Group's business
activities, with the potential to increase compliance/legal costs
significantly.
Covid 19
On 11 March 2020, the World Health Organisation declared the
Coronavirus outbreak (COVID-19) a pandemic. Following on from this,
the Company has taken steps to comply with the lockdown measures
introduced by the UK Government to help stop the spread of
COVID-19, and to protects its employees. Whilst it is not possible
to quantify precisely the impact of the pandemic, as disruption to
the global economy on this scale has not been seen in recent
history, the Directors have taken a number of mitigating actions to
ensure that the Company can continue in operation for the
foreseeable future, including working remotely and implementing
social distancing measures in offices.
Going concern
As a result of the challenges faced by the business in recent
periods, and because of the restructuring undertaken in the last
year, the Group continues to progress against its plan and has
generated operating losses in the year ended 31 January 2020 and
subsequently. As a result, there is a risk that it is not able to
achieve the forecast growth in revenue, profits and cash flows and
as a result it may not be able to continue as a going concern
without raising additional capital. Further details are provided in
the Directors' Report and in Note 1 to the financial
statements.
Section 172(1) Statement
The Board of Directors always consider, both individually and
together, that they have acted in the way that, in good faith,
would be most likely to promote the success of the Company for the
benefit of its members as a whole, having regard to the
stakeholders and matters set out in s172(1) (a) - (f) of the
Companies Act 2006, in the decisions taken during the year ended 31
January 2020.
Our plan is designed to have a long-term beneficial impact on
the group and to contribute to its success in delivering a high
quality of service across all of our business divisions.
Our employees are fundamental to the delivery of our plan. We
aim to be a responsible employer in our approach to the pay and
benefits our employees receive. The health, safety and well-being
of our team members is one of our primary considerations in the way
we conduct our business. Engagement with suppliers and customers is
also key to our success. We meet with our major suppliers and
partners at appropriate regular intervals and take the appropriate
action, when necessary, to prevent involvement in modern slavery,
corruption, bribery and breaches of competition law.
Our plan considers the impact of the Company's operations on the
community and environment and our wider social responsibilities,
and how we comply with environmental legislation and pursue
waste-saving opportunities and react promptly to local
concerns.
As the Board of Directors, our intention is to behave in a
responsible manner, operating within the high standards of business
conduct and good governance expected for a business such as ours
and in doing so, will contribute to the delivery of our plan. The
intention is to nurture our reputation, through both construction
and delivery of our plan, that reflects our values, beliefs and
culture.
As the Board of Directors, our intention is to behave
responsibly towards all our shareholders and treat them fairly and
equally, so they too may benefit from the successful delivery of
our plan.
The Strategic report was approved by the Board.
Independent Auditor's Report to the Members of St James House
plc
1. Our opinion is unmodified
We have audited the financial statements of St James House plc
(formerly Boxhill Technologies plc) ("the Company") for the year
ended 31 January 2020 which comprise the Consolidated Statement of
Profit and Loss and Other Comprehensive Income, Consolidated
Balance Sheet, Consolidated Statement of Changes in Equity,
Consolidated Cash Flow Statement, Company Balance Sheet, Company
Statement of Changes in Equity, and the related notes, including
the accounting policies in note 1.
In our opinion:
-- the financial statements give a true and fair view of the
state of the Group's and of the parent
Company's affairs as at 31 January 2020 and of the Group's loss for the year then ended;
-- the Group financial statements have been properly prepared in
accordance with International Financial Reporting Standards as
adopted by the European Union;
-- the parent Company financial statements have been properly
prepared in accordance with UK accounting standards, including FRS
102 The Financial Reporting Standard applicable in the UK and
Republic of Ireland; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our
responsibilities are described below. We have fulfilled our ethical
responsibilities under, and are independent of the Group in
accordance with, UK ethical requirements including the FRC Ethical
Standard as applied to listed entities. We believe that the audit
evidence we have obtained is a sufficient and appropriate basis for
our opinion.
2. Material uncertainty related to going concern
We draw attention to note 1 to the financial statements which
indicates that the Group's and the parent Company's ability to
continue as a going concern is dependent upon the substantial
achievement of forecast cash flows and may depend on securing
future funding. These events and conditions represent a material
uncertainty that may cast significant doubt on the Group's and
Parent Company's ability to continue as a going concern. Our
opinion is not modified in respect of this matter.
The risk - disclosure quality
The Directors have undertaken a significant restructuring of the
Payment Processing business during the year to 31 January 2020 as a
critical part of the Group's strategy. As a result of the
challenges faced by the business in recent periods, and as a result
of this restructuring started in the prior year, the Group remained
in the relatively early phases of its revised longer-term strategy
and has generated further losses in the year ended 31 January 2020
and subsequently.
The two key elements of the restructuring that impact going
concern are the disposal of Emex (UK) Group Limited on 30 July 2018
and the launch of the re-shaped payment processing business during
2018 and the legal services business in 2020.
The Directors have prepared cash flow projections for the period
to 31 July 2022, which indicate that the Group will generate
revenues, profit and cash inflows in that period. In particular,
the projections demonstrate that the Group will be able to address
current cash flow shortfalls, and that it will be able to meet its
liabilities as they fall due for the foreseeable future. The
directors are also in the process of seeking further investment to
support working capital requirements and expand the business
further.
The financial statements explain how the Directors have formed a
judgement that it is appropriate to prepare the accounts of the
Group and Parent Company on a going concern basis. However, the
Directors have concluded that the factors discussed in note 1
represent a material uncertainty that may cast significant doubt
regarding the Group's and parent Company's ability to continue as a
going concern.
As this assessment involves a consideration of future events
there is a risk that the judgement is inappropriate.
Furthermore, clear and full disclosure of the facts and the
directors' rationale for the use of the going concern basis of
preparation, including that there is a related material
uncertainty, is a key financial statement disclosure. Auditing
standards require such matters to be reported as a key audit
matter.
Our response
Our procedures included:
- Personnel interviews: inquiring of senior management and
challenging the assumptions used in the Directors' forecast models,
in particular those relating to forecast revenue, and corroborating
these against available evidence by inspecting agreements signed
with new and existing customers;
- Sensitivity analysis: we assessed reasonably possible downside
scenarios that would result in the cash flow falling below
operating expense requirements and considered whether they could be
considered to be reasonably possible; and
- Assessing transparency: Assessing the going concern disclosure
for clarity, including that there is disclosure of a material
uncertainty.
3. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional
judgment, were of most significance in the audit of the financial
statements and include the most significant assessed risks of
material misstatement (whether or not due to fraud) identified by
us, including those which had the greatest effect on: the overall
audit strategy; the allocation of resources in the audit; and
directing the efforts of the engagement team. These matters were
addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. In arriving at our
audit opinion above, the key audit matters, in decreasing order of
audit significance, were as follows:
Key audit matter The risk Our response
Assessment of the Assessment of valuation Our procedures included:
litigation position
relating to amounts
due from Phillite
D Limited The recoverability Review of the supporting
of the amounts due documentation relating
See note 19 relating from Phillite D limited to the litigation
to the recoverability are related to ongoing for the transactions
of the amounts due litigation. There is involved, discussions
from Phillite D Limited always a judgement with management and
required as to the in-house counsel.
GBP840,000 at 31 January success of the litigation
2020 (2019: GBP1,241,000) or otherwise which
would have an impact
Risk vs 2019 - remains on the likelihood of
the same the recoverability
of the debtors or the
likelihood of settlement
of the creditor.
--------------------------- --------------------------
Key audit matter The risk Our response
Measurement of the Valuation and recoverability Our procedures included:
intangibles and goodwill
recognised on the Reviewing the intangible
acquisition of ANother Judgement is required calculations
Ops Limited. to identify the intangibles
acquired and value Discussions with
See notes 14 and 15 as appropriate in management and technical
relating to the acquisition accordance with the team on the assessment
of ANother Ops Limited. requirements under of the value of the
IFRS 3. underlying Intellectual
On acquisition GBP115,000, Property both on
at 31 January 2020 Further judgement acquisition and at
GBPNil (2019: n/a) is required to assess the balance sheet
if there is any likely date.
impairment of the
Risk vs 2019 - n/a intangible at the Reviewing the transaction
appropriate measurement to the underlying
date. documentation
Comparing the assessment
Additionally, goodwill of goodwill and intangibles
was recognised as to the Sale and Purchase
part of the acquisition documentation and
of ANother Ops Limited underlying records
during the year requiring of the entity acquired.
judgments over its
recoverability in Reviewing the intangible
accordance IFRS 3 calculations
and IAS 36. This has
been impaired in the Discussions with
year together with management and technical
the intangible above. team on the assessment
of the value of the
underlying Intellectual
Property and the
resultant goodwill
----------------------------- -----------------------------
Recoverability and Valuation Our procedures included:
valuation of specific
receivables There is judgement Discussions with
required to assess management and review
Loan note from MDC both the timings of of the underlying
GBP1,124,000 (2019: the repayment of the cash flow forecast
GBP1,003,000) loan note and the for the business
appropriate discount sold to MDC to assess
Risk vs 2019 - remains rate used to model the expected timing
the same the fair value. of the repayments.
Review of the appropriate
discount rates used
by the Directors
to translate the
above cashflows into
a fair market value
of the loan instrument
including use of
comparators.
----------------------------- -----------------------------
4. Our application of materiality and an overview of the scope of our audit
Materiality for the Group financial statements as a whole was
set at GBP36,000, determined with reference to a benchmark of group
normalised earnings before interest, depreciation and amortisation
('EBITDA') (of which it represents 1.75%). We consider EBITDA to be
the most appropriate measure of group performance.
Materiality for the parent company financial statements as a
whole was set at GBP31,000, determined with reference to a
benchmark of company gross assets, of which it represents
1.25%.
We agreed to report to the Audit Committee any corrected or
uncorrected identified misstatements exceeding GBP1,800, in
addition to other identified misstatements that warranted reporting
on qualitative grounds.
Of the Group's eight (2019: 8) reporting components, we
subjected 5 (2019: 5) to full scope audits for Group purposes. For
the residual 3 components, we performed analysis at an aggregated
group level to re-examine our assessment that there were no
significant risks of material misstatement within these.
The components within the scope of our work accounted for 100%
(2019: 100%) of total group revenue, 100% (2019: 100%) of group
loss before tax and 100% (2019: 100%) of total group assets.
All component audits, including the audit of the parent company,
were performed by the Group team using component materialities,
which ranged from GBP2,000 to GBP31,000, having regard to the mix
of size and risk profile of the Group across the components.
5. We have nothing to report on the other information in the Annual Report
The directors are responsible for the other information
presented in the Annual Report together with the financial
statements. Our opinion on the financial statements does not cover
the other information and, accordingly, we do not express an audit
opinion or, except as explicitly stated below, any form of
assurance conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether, based on our financial statements audit
work, the information therein is materially misstated or
inconsistent with the financial statements or our audit knowledge.
Based solely on that work we have not identified material
misstatements in the other information.
Strategic report and directors' report
Based solely on our work on the other information:
-- we have not identified material misstatements in the
strategic report and the directors' report;
-- in our opinion the information given in those reports for the
financial year is consistent with the financial statements; and
-- in our opinion those reports have been prepared in accordance with the Companies Act 2006.
6. We have nothing to report on the other matters on which we
are required to report by exception
Under the Companies Act 2006, we are required to report to you
if, in our opinion:
-- adequate accounting records have not been kept by the parent
Company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent Company financial statements are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
7. Respective responsibilities
Directors' responsibilities
As explained more fully in their statement set out on page 24
the directors are responsible for: the preparation of the financial
statements including being satisfied that they give a true and fair
view; such internal control as they determine is necessary to
enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error; assessing the
Group and parent Company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern; and
using the going concern basis of accounting unless they either
intend to liquidate the Group or the parent Company or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue our
opinion in an auditor's report. Reasonable assurance is a high
level of assurance, but does not guarantee that an audit conducted
in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial
statements.
A fuller description of our responsibilities is provided on the
FRC's website at: www.frc.org.uk/auditorsresponsibilities .
8. The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
Company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the Company and the Company's members, as a body,
for our audit work, for this report, or for the opinions we have
formed.
Jason Mitchell MBA BSc FCA (Senior Statutory Auditor)
For and on behalf of
MHA MacIntyre Hudson
Chartered Accountants
Statutory Auditors
Pennant House
1-2 Napier Court
Reading
RG1 8BW
23 March 2021
Consolidated Statement of Profit and Loss and Other
Comprehensive Income
for year ended 31 January 2020
Note 2020 2019
as restated
GBP000 GBP000
Continuing operations
Revenue 3,5 989 938
Cost of sales 4,6 (662) (252)
Gross profit 327 686
Administrative expenses
Other 4,6 (2,746) (3,052)
Impairment of intangible assets 14 (784) (440)
Impairment of financial assets (1,059) -
Total administrative expenses (4,589) (3,492)
Operating loss (4,262) (2,806)
Finance expenses 9 (4) (3)
Loss before tax (4,266) (2,809)
Loss for the year from continuing
operations (4,266) (2,809)
Discontinuing operations
Profit from discontinued operations,
net of tax 10 - 2,416
______ ______
Loss for the year (4,266) (393)
Other comprehensive income/(loss)
Items that will not be reclassified
to profit or loss:
Revaluation of equity investment
- Soccerdome 16 (213) (9)
Other comprehensive loss for the
year, net of income tax (213) (9)
Total comprehensive loss for the
year (4,479) (402)
Loss per share
Basic loss per ordinary share (pence
per share) 12,24 (138) (14.4)
Diluted loss per ordinary share (pence
per share) 12,24 (138) (14.4)
Loss per share from continuing operations
Basic loss per ordinary share (pence
per share) 12,24 (138) (103)
Diluted loss per ordinary share (pence
per share) 12,24 (138) (103)
Consolidated Balance Sheet
At 31 January 2020
Note 2020 2019
as restated
GBP000 GBP000
Non-current assets
Property, plant and equipment 13 8 3
Goodwill 15 158 158
Other intangible assets 14 23 1,009
Investments in equity instruments 16 - 213
Investments in debt instruments 17 1,124 1,003
Total non-current assets 1,313 2,386
Current assets
Trade and other receivables 19 1,160 1,449
Cash and cash equivalents 20 336 371
Total current assets 1,496 1,820
Total assets 2,809 4,206
Current liabilities
Trade and other payables 22 4,411 1,939
Bank and other borrowings 21 6 6
Total current liabilities 4,417 1,945
Non-current liabilities
Trade and other payables 22 310 -
Total liabilities 4,727 1,945
Net (liabilities)/assets (1,918) 2,261
Equity attributable to equity
holders of the parent
Share capital 24 3,116 2,816
Share premium 25 3,020 3,020
Merger reserve 25 - 999
Revaluation reserves 25 - 213
Retained earnings (8,054) (4,787)
Total equity attributable to equity
holders of the Parent (1,918) 2,261
Consolidated Cash Flow Statement
for year ended 31 January 2020
Note 2020 2019
as restated
GBP000 GBP000
Cash flows from operating activities
Loss for the year (4,266) (393)
Adjustments for:
Depreciation and amortisation 13,14 347 498
Impairments of intangibles 14 784 440
Impairment of goodwill 15 751 -
Impairment of trade and other receivables 19 308 -
Financial expenses 9 4 3
Share options charge 24 - 14
Fair value adjustments 17 (121) (68)
Loss on disposal of fixed assets 10 -
Gain on disposals of subsidiaries 10 - (2,759)
Movement in working capital:
Decrease/(Increase) in trade and
other receivables (210) (1,514)
Increase in trade and other payables 2,355 2,226
Cash generated by operations (38) (1,553)
Interest paid 9 (4) (3)
Tax paid - -
Net cash from operating activities (42) (1,556)
Cash flows from investing activities:
Acquisition of property, plant and
equipment 13 (1) (1)
Acquisition of intangible assets 14 (37) (90)
Repayment of loan notes - 19
Net cash on acquisitions 45
Net cash on disposal of subsidiaries 10 - (152)
Net cash used in investing activities 7 (224)
Net cash used in financing activities - -
Net (decrease)/increase in cash and
cash equivalents (35) (1,780)
Cash and cash equivalents at start
of period 371 2,151
Cash and cash equivalents at end
of period 20 336 371
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