FEEDBACK PLC — Earnings Release 2013

Nov 6, 2013

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RNS Number : 2842S

Feedback PLC

06 November 2013

6 November 2013

Feedback plc

("Feedback" or "the Company")

Final Results for the year ended 31 May 2013

Chairman's Statement

The 2013 financial year proved to be a defining year for Feedback which resulted in the disposal of the Group's remaining operating business, Feedback Data plc ("Feedback Data"), and the Company being reclassified as an Investing Company under the AIM Rules.

As predicted when the half year results were announced, the restructuring of Feedback within the context of the strict cash constraints imposed over several years proved a very challenging environment. Feedback Data continued to experience reduced activity from key customers whilst the introduction of new products to the channel suffered a number of delays and setbacks.

Whilst there was always the prospect of a recovery in Feedback Data's markets, it remained illusive. Significant steps were taken to reduce overhead and minimise costs but the lack of an immediate and wholesale turnaround in Feedback Data still left the Company without critical mass and generating significant losses. In the board's view this was an unsustainable position.

Following a detailed review of the investment necessary to return the company to profitability the Board examined its strategic options and concluded that the disposal of Feedback Data was the best route to secure value for shareholders. After considering a number of alternative approaches the Company agreed, and sought shareholder approval for, the disposal of Feedback Data to Belgravium Technologies plc. The transaction was concluded on 31 May 2013 for a cash consideration of £600,000 that was used to repay bank debt and for working capital purposes.

Following the year end the Group also completed the disposal of its former head office in Crowborough to Orbit South Housing Association Limited for a cash consideration of £940,000. This sale was approved by shareholders and was completed on 30 July 2013.

Following completion of the disposal of Feedback Data and the property the Company now has one employee (being the executive Director) and approximately £700,000 of cash.

The disposal of the trading businesses and its former head office means, under Rule 15 of the AIM Rules, the company was reclassified as an Investing Company and adopted the Investing Policy which was approved by Shareholders in May 2013. The Company has a technology focussed investing policy and is actively seeking opportunities in this sector.

The Board has reviewed several opportunities and continues to pursue others. It will update the market as appropriate.

Nick Shepheard

Chairman

Consolidated Statement of Comprehensive Income

for the year ended 31 May 2013

	Note	2013	2013	2013	2012	2012	2012
		£000	£000	£000	£000	£000	£000
		Continuing	Discontinued	Total	Continuing	Discontinued	Total
REVENUE	4	-	1,719	1,719	-	7,046	7,046
Cost of Sales		-	(1,010)	(1,010)	-	(4,598)	(4,598)
GROSS PROFIT		-	709	709	-	2,448	2,448
Other Operating Expenses	5	(492)	(890)	(1,382)	(509)	(2,353)	(2,862)
OPERATING LOSS	6	(492)	(181)	(673)	(509)	95	(414)
Net finance expense	7	(57)	-	(57)	(13)	-	(13)
(Loss)/profit on ordinary activities before taxation		(549)	(181)	(730)	(522)	95	(427)
Tax charge	9	-	-	-	-	(23)	(23)
LOSS/(PROFIT) ON ORDINARY ACTIVITIES AFTER TAX		(549)	(181)	(730)	(522)	72	(450)
Profit/(loss) on disposal of discontinued operations	12	-	382	382	-	(1,369)	(1,369)
(Loss)/profit for the year attributable to the equity Shareholders of the Company		(549)	201	(348)	(522)	(1,297)	(1,819)
Other comprehensive income/(expense)
Translation differences on overseas operations				(3)			10
Total comprehensive expense for the year				(351)			(1,809)
LOSS PER SHARE (pence)
Basic and diluted	11	(0.42)	0.15	(0.27)	(0.42)	(1.05)	(1.47)

Consolidated Statement of Changes in Equity

for the year ended 31 May 2013

GROUP	Share	Share	Capital	Retained		Translation
	Capital	Premium	Reserve	Earnings		Reserve	Total
	£000	£000	£000	£000		£000	£000
At 1 June 2011	273	633	300	1,657		(214)	2,649
New shares issued	54	218	-	-		-	272
Total comprehensive expense for the year	-	-	-	(1,819)		10	(1,809)
At 31 May 2012	327	851	300	(162)		(204)	1,112
Total comprehensive expense for the year	-	-	-	(348)		(3)	(351)
At 31 May 2013	327	851	300	(510)		(207)	761
COMPANY			Share		Share	Retained
			Capital		Premium	Earnings	Total
			£000		£000	£000	£000
At 1 June 2011			273		633	824	1,730
New shares issued			54		218	-	272
Total comprehensive expense for the year			-		-	(1,148)	(1,148)
At 31 May 2012			327		851	(324)	854
Total comprehensive expense for the year			-		-	(73)	(73)
At 31 May 2013			327		851	(397)	781

Consolidated Balance Sheet

at 31 May 2013

		2013		2012
	Notes	£000	£000	£000	£000
ASSETS
Non-current assets
Property, plant and equipment	14		-		73
Intangible assets	15		-		330
			-		403
Current assets
Inventories	16	-		316
Trade receivables		-		343
Other receivables	17	15		160
Cash and cash equivalents		342		-
			357		819
Non current assets held for sale	13		940		1,050
Total assets			1,297		2,272
LIABILITIES
Non-current liabilities
Deferred tax liabilities	9		-		86
Current liabilities
Trade payables		102		228
Other payables	18	434		688
Bank borrowings		-		158
			536		1,074
Total liabilities			536		1,160
TOTAL NET ASSETS			761		1,112
EQUITY
Capital and reserves attributable to the Company's equity shareholders
Called up share capital	20		327		327
Share premium account			851		851
Capital reserve			300		300
Translation reserve			(207)		(204)
Retained earnings			(510)		(162)
TOTAL EQUITY			761		1,112

Consolidated Cash Flow Statement

for the year ended 31 May 2013

	2013		2012
	£000	£000	£000	£000
Cash flows from operating activities
Loss before tax		(730)		(427)
Adjustments for:
Impairment provision against property	110		-
Net finance expenditure	57		13
Depreciation and amortisation	241		508
Loss on disposal of property, plant and equipment	17		-
Foreign exchange difference	3		(10)
Decrease /(increase) in inventories	193		(310)
Decrease in trade receivables	31		(81)
Decrease in other receivables	136		42
Decrease/(increase) in trade payables	36		(286)
Decrease in other payables	39		434
		863		310
Net cash generated by/(used in) operating activities		133		(117)
Cash flows from investing activities
Purchase of tangible fixed assets	(9)		(51)
Purchase of intangible assets	(126)		(258)
Net cash disposed of with subsidiary	(11)		-
Net proceeds from sale of subsidiary	570		-
Net cash used in investing activities		424		(309)
Cash flows from financing activities
Interest paid	(57)		(13)
Proceeds of share issue	-		272
Net cash used from financing activities		(57)		259
Net decrease in cash and cash equivalents		500		(167)
Cash and cash equivalents at beginning of year		(158)		9
Cash and cash equivalents at end of year		342		(158)

1.       ACCOUNTING POLICIES

Basis of preparation

These financial statements have been prepared in accordance with those IFRS standards and IFRIC interpretations issued and effective or issued and early adopted as at the time of preparing these statements (November 2013). The accounting policies have been consistently applied to all the years presented.

These consolidated financial statements have been prepared under the historical cost convention.

During the period the group disposed of its subsidiary Feedback Data plc, in the previous period the group disposed of its subsidiaries Feedback Instruments Limited and Feedback Inc. Subsequent to the year end disposed of its property (held by Brickshield Limited).  For these reasons the results of these subsidiaries have been disclosed as discontinued and the property classified 'as held for sale'.

The financial information set out above does not comprise the Company's statutory accounts for the periods ended 31 May 2013 or 31 May 2012. Statutory accounts for 31 May 2012 have been delivered to the Registrar of Companies and those for 31 May 2013 will be delivered following the Company's Annual General Meeting. The auditors have reported on those accounts; their report was unqualified and did not contain statements under section 498(2) or (3) of the Companies Act 2006 in respect of the accounts for 2012 or for 2011.

2.       GOING CONCERN

The Group disposed of Feedback Data plc during the year and subsequent to the year end disposed of its investment property for £940,000. The company become an investment company following the disposal of Feedback Data plc.

The Directors have produced forecasts which show that the company has adequate cash resources for at least the next twelve months from the date of this report. However, to achieve significant investments in the future it may be necessary to raise further capital. The Directors believe that the company is a going concern and has therefore prepared the financial statements on a going concern basis

3.       SEGMENTAL REPORTING

The Directors have determined the operating segments based on the management reports that are used to make strategic decisions. The Group's business was analysed below between the Instruments segment and the Data segment.  The Instruments segment primarily related to the former subsidiary companies Feedback Instruments plc and Feedback Incorporated which were disposed of last year.

The Data segment relates to the subsidiary company Feedback Data plc which was disposed of on 31 May 2013. Details of these companies are included in the Directors' Report.

On the 30 May 2013 the group disposed of its Data business (see Note 12). The results therefore include the results of the Data business for the full year to 31 May 2013.

On the 23 May 2012 the group disposed of its Instruments business. For this reason the results shown below disclose the results of the Instruments business for the period to 23 May 2012. 

Year ended 31 May 2013
	Instruments	Data	Other	Total
	£000	£000	£000	£000
Revenue
External	-	1,551	168	1,719
Finance expense	-	-	(57)	(57)
Loss before tax	-	(38)	(692)	(730)
Balance sheet
Assets	-	-	1,297	1,297
Liabilities	-	-	(536)	(536)
	-	-	761	761
Capital expenditure	-	135	-	135
Year ended 31 May 2012
	Instruments	Data	Other	Total
	£000	£000	£000	£000
Revenue
External	4,935	1,925	186	7,046
Finance expense	-	-	(13)	(13)
Loss before tax	311	(286)	(452)	(427)
Balance sheet
Assets	-	781	2,524	3,305
Liabilities	-	(602)	(2,138)	(2,740)
		179	386	565
Capital expenditure	91	185	33	309

Reported segments' assets are reconciled to total assets as follows:

			2013	2012
			£000	£000
Segment assets for reportable segments			1,297	3,305
Unallocated:
Inter-company receivables adjustment			-	(1,223)
Intangible assets			-	330
Investments			-	(140)
Total assets per the balance sheet			1,297	2,272

Reported segments' assets are reconciled to total assets as follows:

						2013	2012
						£000	£000
Segment liabilities for reportable segments						536	2,740
Inter-company payables adjustment						-	(1,666)
Deferred tax						-	86
Total liabilities per the balance sheet						536	1,160
	External revenue by			Total assets by		Capital expenditure by
	location of customer			location of assets		location of assets
	2013	2012		2013	2012	2013	2012
	£000	£000		£000	£000	£000	£000
United Kingdom	1,431	3,070		1,297	2,258	135	309
Rest of Europe	288	644		-	14	-	-
United States of America	-	445		-	-	-	-
Other Americas	-	498		-	-	-	-
Asia	-	1,040		-	-	-	-
Africa	-	384		-	-	-	-
Middle East	-	965		-	-	-	-
Total	1,719	7,046		1,297	2,272	135	309

4.       OTHER OPERATING EXPENSES

		2013	2012
		£000	£000
Distribution costs		-	1,821
Administrative costs:
Research and development		243	619
Other		1,139	422
		1,382	2,862

5.       LOSS PER SHARE

Basic earnings per share is calculated by reference to the loss on ordinary activities after taxation of £348,000 (2012: £1,819,000) and on the weighted average of 130,949,746 (2012: 123,679,889) shares in issue.

6.       ASSETS HELD FOR SALE

		Land & Buildings	Total
		£000	£000
At 31 May 2011		-	-
Reclassification from property, Plant and Equipment (note 14)		1,323	1,323
Impairment		(273)	(273)
At 31 May 2012		1,050	1,050
Impairment in the year		(110)	(110)
At 31 May 2013		940	940

Reclassification: As at 31 May 2012 the group was actively seeking to dispose of its property. The asset has therefore been reclassified as held for sale. Subsequent to the 31 May 2013 the property was sold for £940,000 and therefore a further impairment charge of £110,000 has been made in the year.

7.         PROPERTY, PLANT AND EQUIPMENT

	Land and	Plant and	Motor
	Buildings	Equipment	Vehicles	Total
GROUP	£000	£000	£000	£000
Cost of valuation
At 31 May 2011	1,441	855	19	2,315
Additions	-	51	-	51
Disposal	-	(504)	(5)	(509)
Reclassification	(1,441)	-	-	(1,441)
At 31 May 2012	-	402	14	416
Additions	-	9	-	9
Disposal	-	(71)	(14)	(85)
Disposed with subsidiary	-	(65)	-	(65)
Retired in the year	-	(275)	-	(275)
At 31 May 2013	-	-	-	-
Depreciation
At 31 May 2011	94	700	16	810
Charge for the year	24	121	1	146
Disposal	-	(492)	(3)	(495)
Reclassification	(118)	-	-	(118)
At 31 May 2012	-	329	14	343
Charge for the year	-	49	-	49
Disposal	-	(51)	(14)	(65)
Disposed with subsidiary	-	(52)	-	(52)
Retired in the period	-	(275)	-	(275)
At 31 May 2013	-	-	-	-
Net Book Value
At 31 May 2013	-	-	-	-
At 31 May 2012	-	73	-	73

8.       INTANGIBLE ASSETS

			Development Expenditure
GROUP			£000
Cost
At 31 May 2011			4,095
Additions			258
Disposed on sale of subsidiary			(2,236)
At 31 May 2012			2,117
Additions			126
Disposed on sale of subsidiary			(2,243)
At 31 May 2013			-
Amortisation
At 31 May 2011			3,363
Charge for the year			362
Disposed on sale of subsidiary			(1,938)
At 31 May 2012			1,787
Charge for the year			192
Disposed on sale of subsidiary			(1,979)
At 31 May 2013			-
Net Book Value
At 31 May 2013			-
At 31 May 2012			330

9.       OTHER PAYABLES

	Group		Company
	2013	2012	2013	2012
	£000	£000	£000	£000
Amounts falling due within one year
Other payables	349	124	346	122
Other taxes and social security	22	44	22	22
Accruals and deferred income	63	520	62	53
	434	688	430	197

Included within other payables is a loan and interest thereon from a company connected to a shareholder of £345,000 (2012 £101,000). The loan attracted interest at 12% per annum and was secured on the group's property. The loan was repayable within 6 months and was fully repaid on 31 July 2013 following the sale on the property.

10.     POST BALANCE SHEET EVENTS

On 31 July 3013 the company's subsidiary Brickshield Limited sold its property for £940,000.

11.     PUBLICATION OF ANNOUNCEMENT AND REPORT AND ACCOUNTS

A copy of this announcement will be available at the Company's registered office (Maple Barn, Beeches Farm Road, Uckfield, East Sussex TN22 5QD) and on its website - www.fbk.com.

This announcement is not being sent to shareholders. The Annual Report will be posted to shareholders shortly and will be made available on the website.

For further information contact:

Feedback plc
Nick Shepheard	Tel: 020 3289 7747
Sanlam Securities UK Limited
Simon Clements/Lindsay Mair	Tel: 020 7628 2200

This information is provided by RNS

The company news service from the London Stock Exchange

END

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