Amd Commo Exagr Regulatory News (COMG)

28 Sep 2006 07:01

Europasia Education PLC28 September 2006 28 September 2006 Europasia Education plc ("EPE" or "the Group") Interim Results 2006 I am pleased to report on a very good six months for the Group. Highlights include: • £1.1 million invested in a Chinese education business, which subsequently listed on PLUS doubling the value of our stake; • Continued strong growth at investee China Education Group; • Fund raising successfully closed at over £1 million; • Considerable reduction in running costs Financial Results Turnover is primarily derived from our two wholly owned UK businesses,Management International ("MI") and Bournemouth Education Centre Ltd ("E2000").Turnover was marginally down on the same period last year, primarily as a resultof the scaling back of operations at MI, with E2000 showing a considerableimprovement in performance compared to the equivalent period last year followingthe restructuring in the second half of last year. Costs have been reduced considerably, so that the operating loss is £105,000against £337,000 for the same period last year. E2000 and MI are both tradingprofitably, but the loss arises as a result of group overheads primarily relatedto the costs of being listed, as well as a one-off charge to VAT of £43,000. Net assets of £1.5 million consist primarily of our holdings in PLUS listedChina Education Group ("CEG") and Dalian Business Institute ("DBI"), totalling£2.5 million at cost. These had a market value of £5.9 million at 30 June 2006,showing an unrealised profit of £3.4 million. In the early part of the year, the Group raised over £1 million via the issue ofunlisted secured convertible loan notes, with the proceeds used to increase ourstake in DBI and provide additional working capital. Investment Review In 2005 we invested £1.4 million in CEG for a 15% stake. CEG had a marketcapitalisation at 30 June 2006 of £24.4 million, valuing our stake at £3.7million. CEG continues to perform strongly, announcing interim profits to 31December 2006 of £1.7 million, up nearly 50%. In March CEG signed a jointventure agreement with the Beijing Chuangshi Huangiu Technology DevelopmentCompany to offer distance learning courses throughout China. EPE holds a 10.8% stake in DBI, acquired during the period at a cost of £1.1million. Based in Liaoning Province, DBI consists of six colleges and fiveindependent faculties teaching eight business and business related subjects tofive thousand students. DBI had a market capitalisation of £20.3 million at 30June 2006, valuing our stake at £2.2 million. DBI announced interim profits to31 January 2006 of £0.9m, up 13%. Outlook We remain committed to a strategy of growing the business to a more meaningfulsize to make better use of its AiM listing, either by further investments in ourcurrent investees or an acquisition of a larger business. James HolmesChairman28 September 2006 Europasia Education plcConsolidated Unaudited Unaudited AuditedProfit and Loss Account 6 months to 6 months to Year to 30 Jun 06 30 Jun 05 31 Dec 05 £ £ £ Turnover 213,320 289,026 434,667Cost of Sales (52,641) (98,773) (171,782) -------- -------- --------Gross Profit 160,679 190,253 262,885 Administrative expenses (266,004) (460,719) (719,838)Provision for investments - (66,040) (66,040) -------- -------- --------Operating loss (105,325) (336,506) (522,993) Interest received 5,905 6,530 9,407Interest payable (70,111) (3,735) (4,783) -------- -------- --------Loss before taxation (169,531) (333,711) (518,369)Taxation (121) 130 130 -------- -------- --------Loss after taxation (169,652) (333,581) (518,239) -------- -------- --------Basic and diluted loss per share (0.7p) (1.6p) (1.2p) Consolidated Unaudited Unaudited AuditedBalance Sheet as at as at as at 30 Jun 06 30 Jun 05 31 Dec 05 £ £ £Fixed AssetsGoodwill 359,760 431,743 382,013Tangible assets 18,246 26,793 27,633 ---------- ---------- ---------- 378,006 458,536 409,646Current assetsDebtors 129,219 70,054 37,735Investments 2,454,144 993,861 1,414,844Cash 367,170 288,894 70,589 ---------- ---------- ---------- 2,950,533 1,352,809 1,523,168Current liabilities (190,188) (288,033) (141,761) ---------- ---------- ----------Net current assets 2,760,345 1,064,776 1,381,407 Convertible loan notes (1,635,898) - (452,399)Provision for deferred taxation (3,694) (3,694) (3,694) ---------- ---------- ----------Total assets less currentliabilities 1,498,759 1,519,618 1,334,960 ---------- ---------- ---------- Called up share capital 2,461,528 2,239,228 2,239,228Share premium account 3,395,328 3,284,177 3,284,177Profit and loss account (4,358,097) (4,003,787) (4,188,445) ---------- ---------- ----------Equity shareholders funds 1,498,759 1,519,618 1,334,960 ---------- ---------- ---------- Europasia Education plcConsolidated Unaudited Unaudited AuditedCash Flow statement 6 months to 6 months to Year to 30 Jun 06 30 Jun 05 31 Dec 05 £ £ £ Net cash inflow/(outflow) fromoperating activities 41,086 (136,630) (376,480) Returns on investments and servicingof financeInterest received 5,905 6,530 9,407Interest paid (70,111) (3,735) (4,783) Capital expenditure and financial investmentPayments to acquire tangible assets - (311) (11,173)Receipts from disposal of tangibleassets 2,050 - -Payments to acquire investments (705,849) (155,766) (156,148)Proceeds on disposal of investments - - 30,960 ---------- ---------- ----------Net cash outflow before management ofliquid resources and financing (726,919) (289,912) (508,217) FinancingIssue of convertible loan notes 1,023,500 - - ---------- ---------- ----------Increase/(decrease) in cash inperiod 296,581 (289,912) (508,217) ---------- ---------- ---------- Reconciliation of net cash flow movementOpening net funds 70,589 578,806 578,806Increase/(decrease) in cash inperiod 296,581 (289,912) (508,217) ---------- ---------- ----------Closing net funds 367,170 288,894 70,589 ---------- ---------- ---------- Europasia Education plcNotes to the interim results 1 Basis of preparation The information relating to the six month period ended 30 June 2006 is unauditedand has not been reviewed by the Auditors. These statements have been preparedon accounting bases and policies that are consistent with those used in thepreparation of the financial statements of the company for the year ended 31December 2005 with the exception of the adoption of FRS 20: Share based paymentswhich is discussed in note 2 below. The information relating to the year ended 31 December 2005 is extracted fromthe audited accounts of the Company, which have been filed at Companies Houseand on which the auditors issued an unqualified opinion. The financial information relating to the six month period ended 30 June 2006does not constitute statutory accounts within the meaning of Section 240Companies Act 1985. The financial information contained in this report wasapproved by the Board of Directors on 27 September 2006. 2 Share based payments The Group is required to adopt FRS 20: Share based payment which is applicablefor all periods commencing on or after 1 January 2006. FRS 20 requires anexpense to be recognised in respect of share options granted to directors andemployees. The expense is calculated by reference to the fair value at the dateof grant of the share options which is charged to the profit and loss accountover the vesting period of the options. There is no impact on the Group's cashflow. The fair value of options on the date of grant has been estimated using theBlack Scholes valuation model. The significant inputs to the model were: a) Share price on the date of the grantb) Exercise pricec) Expected volatility (50% based on historic volatility)d) Risk free rate on date of grante) Expected dividend yield No share options were issued in 2005 or 2006. The historic share options issuedby the Group vested immediately. Consequently there is an equal and oppositeentry to the Group's reserves and therefore no impact on the Group's net assets. 3 Loss per share Loss per share is based on the loss after tax of £169,652 (30 June 2005:£333,581) on 23,511,585 ordinary shares (30 June 2005: 20,585,624) being theweighted average number of ordinary shares in issue in the period ended 30 June2006. There is no dilutive effect of options. 4 Dividend The directors do not recommend the payment of an interim dividend. 5 Taxation The tax charge relates to a subsidiary of the Group which is not permitted toclaim relief from group tax losses brought forward. 6 Interim Results Copies of the Interim Results are available on the Company's web site,www.europasiaeducation.com, or from the Company's registered office, 4th Floor,35 Park Lane, London W1K 1RB. Send an email to cynthia.zhu@londonasia.com if youwould like a copy of the accounts posted to you. This information is provided by RNS The company news service from the London Stock Exchange