Welney Plc
("Welney" or the "Company")
Audited Final Results
Chairman's Statement
The Board is pleased to present the results of Welney plc for the year ended 30 June 2014.
The recent year has been particularly challenging for the Company and circumstances have forced the Directors to review the Company's previous investments and strategic focus as a matter of some urgency. As a result of that review, the Directors are planning to dispose of the Company's initial investments in the recycling sector and have raised additional funds to allow the Company to continue with its strategy of investing in the recycling industry, although focused now on the recycling of rubber and plastics.
The background to today's announcement is as follows:
On 7 February 2014, the Company announced that it had acquired (i) an interest of 30% in Aircraft Recycling Ltd ("ARL") and (ii) the issued share capital of Blaze and Barney Ltd ("B&B"), whose sole business is the operation of a horizontal baling machine for recycling. The total consideration for these transactions involved the payment of £280,000 in cash to the vendors (the "Vendors") and the issue of 234,500,000 ordinary shares in the Company at an agreed value of £586,250.
In May 2014, to reflect its focus on recycling, the Company disposed of the majority of its interest in Powabyke in settlement of amounts due to various creditors of the Company. Following this settlement, the Company was debt free and, the Directors believed, well placed to capitalise on the opportunities presented by ARL and B&B.
In this context, also in May 2014, the Company announced that it was finalising contracts for utilisation of B&B's baling machine which would generate cash flow for the Company. The baling machine was fully operational by October 2014 and the Directors were still optimistic at that time that contracts would be signed and that revenues would be generated for the Company.
However, it became clear to the Directors towards the end of 2014 that the operation of the baling machine was not going to be commercially viable for the Company. At around the same time, the Directors became aware that the funds required to develop ARL's recycling business could not be raised. In addition, the contract that ARL was expected to fulfil with a major airline was never started.
In light of this and the poor operational performance at B&B, on 1 December 2014, the Directors requested that trading in the Company's shares be suspended while the Company resolved its operational and financial issues.
The Directors have spent considerable time attempting to resolve the Company's problems with a view to stabilising the Company and providing a platform which could provide an opportunity for future growth in the recycling industry.
The Directors are now pleased to report that Semsa International FZC ("Semsa") has subscribed for £100,000 of 6% Convertible Unsecured Loan Notes 2016 (the "Loan Notes") of the Company. Subject to the approval of the Company's shareholders at a general meeting that will be convened as soon as possible, the Loan Notes will be convertible into a total of 100,000,000 ordinary shares in the Company, representing 6.08% per cent of the Company's issued share capital as enlarged by conversion. For every ordinary share converted, Semsa will be entitled to one warrant to subscribe for ordinary shares in the Company at a price of 0.5p per share.
The proceeds from the subscription for the Loan Notes will enable the Company to discharge its liabilities and provide the working capital required for it to continue to seek opportunities in the recycling and waste management sector.
As mentioned above, the Directors now plan to focus the Company's business on the recycling of rubber and plastics, with an initial focus on the recycling of tyres. To this end, the Company is in advance discussions regarding the disposal of ARL and B&B. The Directors expect to update shareholders on developments in this area shortly.
Mark Chapman
Chairman
PROFIT AND LOSS ACCOUNT for the year ended 30 June 2014
| 2014 £ | 2013 £ *(Restated) | ||||||
| Administrative expenses | (75,278) | (85,085) | |||||
| (Loss)/gain on disposal of investments | (218,669) | 150,000 | |||||
| Impairment of investments | (1,025,575) | (123,000) | |||||
| Provision for amounts due from subsidiary | - | (196,986) | |||||
| Operating loss | (1,319,522) | (255,071) | |||||
| Reversal of interest charge | 11,179 | - | |||||
| Interest payable and similar charges | - | (27,991) | |||||
| Loss on ordinary activities before taxation | (1,308,343) | (283,062) | |||||
| Tax on loss on ordinary activities | - | - | |||||
| Loss for the year | (1,308,343) | (283,062) | |||||
| Earnings per share | |||||||
| Basic and diluted loss per share | (0.108)p | (0.032)p | |||||
| *The financial statements for the year ended 30 June 2013 were prepared on a consolidated basis, so the comparative figures have been restated to reflect the results of the Company only. The profit and loss account has been prepared on the basis that all operations are continuing operations. There are no recognised gains and losses other than those passing through the profit and loss account. |
BALANCE SHEET as at 30 June 2014
| . | 2014 | 2013 | ||||||||
| £ | £ | |||||||||
| Fixed assets | ||||||||||
| Investment in subsidiaries | - | 315,000 | ||||||||
| Other investments | 2,675 | 162,000 | ||||||||
| 2,675 | 477,000 | |||||||||
| Current assets | ||||||||||
| Debtors | 5,850 | 5,850 | ||||||||
| Cash at bank and in hand | 173 | 33 | ||||||||
| 6,023 | 5,883 | |||||||||
| Creditors: Amounts falling due within one year | (57,042) | (147,955) | ||||||||
| Net current liabilities | (51,019) | (142,072) | ||||||||
| Creditors greater than one year: | ||||||||||
| Convertible loan notes | - | (200,040) | ||||||||
| Net assets/(liabilities) | (48,344) | 134,888 | ||||||||
| Capital and reserves | ||||||||||
| Called up share capital | 1,545,511 | 911,011 | ||||||||
| Share premium | 1,562,336 | 1,010,586 | ||||||||
| Loan note holders reserve | - | 61,139 | ||||||||
| Share option reserve | 132,240 | 132,240 | ||||||||
| Profit and loss account | (3,288,431) | (1,980,088) | ||||||||
| Shareholders' funds/(deficit) | (48,344) | 134,888 | ||||||||
The financial statements were approved by the Board of Directors on 29 May 2015
Emphasis of matter - Going concern
In forming their modified opinion on the financial statements, the auditors, Welbeck Associates, have considered the adequacy of the disclosure made in note 1 to the financial statements concerning the Company's ability to continue as a going concern. The Company incurred a net loss of £1,308,343 during the year ended 30 June 2014 and, at that date, the Company has net current liabilities of £51,019. These conditions, along with the other matters explained in note 1 to the financial statements, indicate the existence of a material uncertainty which may cast significant doubt about the Company's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Company was unable to continue as a going concern.Please review the Company's Annual Report for full details.
The financial information contained in this announcement been extracted from the Company's Annual Report for the year ended 30 June 2014. The Company does not declare a dividend for the period.
The directors of the Company accept responsibility for the contents of this announcement.
--ENDS--
Enquiries:
Welney Plc
Cameron Luck
Tel: +353 (0)861734543
Peterhouse Corporate Finance Limited
Fungai Ndoro and Mark Anwyl
Tel: 020 7469 0930