SUMMARISED GROUP PROFIT
AND LOSS ACCOUNT
_____________________________________________________________________________________
Unaudited Unaudited
9 month 10 month 13 month
period period period
ended ended ended
31 July 31 July 31 October
Note 2000 1999 1999
£ £ £
Turnover
4,162,224
914,241
1,885,553
Cost of sales
1,256,408
311,079
695,819
Gross profit 2,905,816 603,162 1,189,734
Selling and distribution costs 986,024 270,125 640,862
Administrative expenses:
Before goodwill amortisation and exceptional items 5,057,769 952,468 1,792,123
Goodwill amortisation 2,465,795 1,678,766 2,511,523
Employee Benefit Trust charge 2 876,012 340,795 635,500
8,399,576 2,972,029 4,939,146
(6,479,784) (2,638,992) (4,390,274)
Other operating income 10 9,056 12,728
Group operating loss
(6,479,774)
(2,629,936)
(4,377,546)
Share of (loss)/ profit of associated undertaking - (81) 2,483
Total operating loss: Group and share of associate (6,479,774) (2,630,017) (4,375,063)
Interest receivable and similar income 353,130 14,283 13,105
Interest payable and similar charges (110,741) (29,069) (44,385)
Loss on ordinary
activities before taxation
(6,237,385)
(2,644,803)
(4,406,343)
Tax on loss on ordinary activities - - -
Retained loss for the period (6,237,385) (2,644,803) (4,406,343)
Loss per share -
basic and diluted
3
27.72p
17.87p
25.61p
Loss per share adjusted 3 12.84p 4.46p 7.76p
4
GROUP
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
________________________________________________________________________
Unaudited Unaudited
9 month 10 month 13 month
period ended period ended period ended
31 July 31 July 31 October
2000 1999 1999
£ £ £
Loss for the financial period attributable to members
of the parent company
(6,237,385)
(2,644,803)
(4,406,343)
Exchange difference on retranslation of
net assets of
subsidiary undertakings
8,470
5,221
(5,593)
Total recognised loss relating
to
the period
(6,228,915)
(2,639,582)
(4,411,936)
5
GROUP BALANCE
SHEET
____________________________________________________________________________________
Unaudited Unaudited
31 July 31 July 31 October
2000 1999 1999
£ £ £
FIXED
ASSETS
Intangible assets
11,451,134
14,744,861
13,912,103
Tangible assets
1,330,351
643,012
770,598
12,781,485 15,387,873 14,682,701
CURRENT
ASSETS
Stocks 70,000 25,000 20,000
Debtors 1,761,368 499,487 751,860
Cash at bank and in hand 21,691,881 842,849 828,815
23,523,249 1,367,336 1,600,675
CREDITORS: amounts falling due within one year 2,042,668 1,737,285 1,595,411
NET CURRENT ASSETS/(LIABILITES) 21,480,581 (369,949) 5,264
TOTAL ASSETS LESS CURRENT
LIABILITIES
34,262,066
15,017,924
14,687,965
CREDITORS: amounts falling due after more than one year
174,275
171,273
165,565
PROVISIONS FOR LIABILITIES
AND CHARGES
68,505
34,383
75,500
34,019,286 14,812,268 14,446,900
CAPITAL AND RESERVES
Called up share capital 6,094,729 5,203,466 5,330,966
Share premium account 26,017,369 836,938 1,862,838
Other reserves 12,548,039 11,411,446 11,665,032
Profit and loss account (10,640,851) (2,639,582) (4,411,936)
Shareholders funds: Equity 34,019,286 14,812,268 14,446,900
6
GROUP STATEMENT OF
CASHFLOWS
______________________________________________________________________________________
Unaudited Unaudited
9 month 10 month 13 month
period period period
ended ended ended
31 July 31 July 31 October
2000 1999 1999
Note £ £ £
Net cash outflow from
operating activities 4 (3,234,042) (712,769) (1,323,427)
Returns on investments and servicing of finance
Interest received 353,130 14,283 13,105
Interest paid (110,741) (29,069) (44,385)
242,389 (14,786) (31,280)
Taxation
Corporation tax paid - - -
Capital expenditure
Payments to acquire tangible fixed assets (762,702) (310,688) (419,486)
Acquisitions and disposals
Purchase of subsidiary undertaking - (574,222) (574,222)
Net overdrafts acquired with subsidiary undertaking - (24,892) (24,892)
- (599,114) (599,114)
Net Cash outflow before
mANAGEMENT OF LIQUID RESOURCES AND financing (3,754,355) (1,637,357) (2,373,307)
MANAGEMENT OF LIQUID
RESOURCES
Increase in short term deposits
(21,420,776)
(650,000)
(279,224)
Financing
Issue of ordinary share capital 24,918,294 2,445,436 3,598,836
Movement in short-term loans (7,519) (3,218) (8,808)
Movement in long-term loans 8,710 (34,262) (17,130)
Repayment of loan notes (279,224) - (370,776)
24,640,261 2,407,956 3,202,122
(decrease)/Increase in cash (534,870) 120,599 549,591
7
GROUP STATEMENT OF
CASHFLOWS
_______________________________________________________________________________________
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET
FUNDS
Unaudited Unaudited
9 month 10 month 13 month
period period period
ended ended ended
31 July 31 July 31 October
2000
1999
1999
£ £ £
(Decrease)/increase in cash (534,870) 120,599 549,591
Cash outflow from movement in loans 278,033 37,480 396,714
Cash outflow from increase in liquid resources 21,420,776 650,000 279,224
Change in net funds resulting from cash flows 21,163,939 808,079 1,225,529
Loans acquired with subsidiaries - (256,347) (256,347)
Other - (650,000) (650,000)
Movement in net funds/(debt) 21,163,939 (98,268) 319,182
Net funds at beginning of period 319,182 - -
Net funds at end of
period/(debt)
21,483,121
(98,268)
319,182
8
NOTES FOR THE UNAUDITED NINE MONTH PERIOD ENDED 31 JULY 2000
_______________________________________________________________________________________
1. basis of preparation of interim financial information
The financial information
for all periods has been prepared on the basis of the accounting policies set
out in the groups statutory accounts for the period ended 31 October 1999. The financial information for the period
ended 31 July 1999 has been restated accordingly. Expenses are accrued in accordance with
the same principles used in the preparation of the annual
accounts.
2. cost of share option scheme and employee benefit trust
In accordance with Urgent
Issues Task Force Statement 17 (UITF 17), the company recognises a charge to the
profit and loss account for the amount by which the fair market value of any
share options or benefits likely to be issued exceeds their respective exercise
price on the date of the grant.
These costs are recognised on a straight line basis over the period to
which they relate.
Certain employees of the
company are potential beneficiaries of shares or share options which may become
available to the Employee Benefit Trust of the company. Although no employee has an absolute
right to receive any shares or interest in shares under the terms of the
Employee Benefit Trust, the company recognises a charge for the full amount of
all potential entitlements communicated to employees as at the balance sheet
date. In addition, provision is
made for the estimated liability for Employers National Insurance on the
expected number of shares which will be issued, using the market value of the
companys shares at the balance sheet date.
Unaudited Unaudited
9 month 10 month 13 month
period period period
ended ended ended
31 July 31 July 31 October
2000 1999 1999
£ £ £
Recognised in arriving at operating profit:
Charge in connection with Employee Benefit Trust (EBT) 883,007 306,414 560,000
Provision for Employers National Insurance liability in
connection with EBT (6,995) 34,381 75,500
876,012 340,795 635,500
9
NOTES FOR THE UNAUDITED NINE MONTH PERIOD ENDED 31 JULY 2000
_______________________________________________________________________________________
3. LosS PER ORDINARY SHARE
|
|
Unaudited 9 month period ended
31 July
2000 |
Unaudited
10
month period ended
31 July
1999 |
13 month
period ended 31 October
1999 |
|
The
calculation of basic loss per ordinary share is based on the effective
weighted average number of shares in issue during the
period |
No. 22,499,443 |
No. 14,802,486 |
No. 17,206,480 |
|
The adjusted loss per
share is based on the loss after tax before goodwill amortisation and the
charge in connection with the Employment Benefit Trust
(EBT): |
|
|
|
|
|
£ |
£ |
£ |
|
Loss after tax as
reported |
6,237,385 |
2,644,803 |
4,406,343 |
|
Less: Goodwill
amortisation |
(2,465,795) |
(1,678,766) |
(2,511,523) |
|
Charge in connection with EBT |
(883,007) |
(306,414) |
(560,000) |
|
|
2,888,583 |
659,623 |
1,334,820 |
The effective weighted average
number of ordinary shares used in the adjusted loss per share calculation are
the same as used in calculating the basic loss per share.
4. reconciliation of operating loss to net cash outflow from operating activities
Unaudited Unaudited
9 month 10 month 13 month
period period period
ended ended ended
31 July 31 July 31 October
2000
1999
1999
£ £ £
Operating loss (6,479,774) (2,630,017) (4,375,063)
Depreciation 198,123 81,672 62,884
Amortisation of goodwill 2,465,795 1,678,766 2,511,523
Share of loss/(profit) in associated undertakings - 81 (2,483)
Increase in stocks (50,000) (11,000) (6,000)
Increase in debtors (1,009,508) (273,561) (525,934)
Increase in creditors 765,310 100,495 376,146
Increase in other provisions (see note 2) (6,995) 34,381 75,500
Charge in connection with Employee Benefit Trust
under UITF 17 (see note 2) 883,007 306,414 560,000
Net cash outflow from operating activities (3,234,042) (712,769) (1,323,427)
10
NOTES FOR THE UNAUDITED NINE MONTH PERIOD ENDED 31 JULY 2000
_______________________________________________________________________________________
5. publication of non-statutory accounts
The financial information
contained in this statement does not constitute statutory accounts as defined in
section 240 of the Companies Act 1985.
The financial information for the full preceding period is based on the
statutory accounts for the financial period ended 31 October 1999. Those accounts, upon which the auditors
issued an unqualified opinion, have been delivered to the Registrar of
Companies.
11
INDEPENDENT REVIEW
REPORT
to Virtual Internet
plc
Introduction
We have been instructed by the
company to review the financial information set out on pages 2 to 9 and we have
read the other information contained in the report for the nine month period
ended 31 July 2000 and considered whether it contains any apparent misstatements
or material inconsistencies with the financial
information.
Directors
responsibilities
The report for the nine months
ended 31 July 2000, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The Listing Rules of the Financial
Services Authority require that the accounting policies and presentation applied
to the figures for the nine month period ended 31 July 2000 should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.
Review work
performed
We conducted our review in
accordance with guidance contained in Bulletin 1999/4 issued by the Auditing
Practices Board. A review consists
principally of making enquiries of group management and applying analytical
procedures to the financial information and underlying financial data and, based
thereon, assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review excludes audit procedures such
as tests of controls and verification of assets, liabilities and
transactions. It is substantially
less in scope than an audit performed in accordance with Auditing Standards and
therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit
opinion on the financial information.
Review
conclusion
On the basis of our review we are
not aware of any material modifications that should be made to the financial
information as presented for the nine months ended 31 July
2000.
Ernst &
Young
London
14 September
2000
12