Early Equity Plc – Audited Results for the Year Ended 31 August 2020
PR Newswire
London, March 25
Early Equity Plc
(“Early Equity” or “the Company”)
AUDITED RESULTS FOR THE YEAR ENDING 31 AUGUST 2020
CHAIRMAN’S STATEMENT
Business Review
The Directors are pleased to present the financial results for Early Equity Plc (“the Group”) for the year ended 31 August 2020. The total comprehensive loss for the year was £498,932 (2019 – £721,671). The loss per share was 0.05p (2019 – 0.09p). The loss before tax of £495,344 (2019 – £702,554) largely reflects the costs of maintaining a public listing, administration costs and the impairment of investments that have not performed in line with expectations. Although the Group generated a loss in the year it had a net asset position of £984,319 ( 2019 – £975,509), which includes available for sale investment of £327,859 (2019: 266,807). The cash balance was £23,723 (2019: 174,042) which was decreased versus the prior year because of the acquisition of an investment in subsidiary during the year and the timing of fundraises in the prior year.
As reported at the time of the Interim Results, the Group’s operations in Malaysia have continued to be adversely affected by Covid-19, which has resulted in lower than expected merchants and sales on the Meihome e-commerce platform and reduced sales of products sourced by Yicom Global Sdn Bhd for sale through Early Infinity Sdn Bhd’s direct sales agents. Malaysia, where Early Equity’s business is primarily operational, has continued with ongoing lockdown measures due to Covid-19 and this has had a material adverse impact on business operations. This culminated in the resignations of our executive directors, Chua Siew Lian and Tee Lian Hing based in the region on the 3 February 2021.
Outlook
The Board are working with a life science company that has created a range of seaweed and plant based formulations that benefit human health, being high in vitamins and antioxidants which help boost immune support. The Board believes that these products will be well received in Asia, particularly at this time and expect initial stock to arrive within the coming months. The Board are optimistic that these products will help reinvigorate sales in Malaysia when available and once restrictions are lifted.
Concurrently, the Board have been actively seeking to diversify the Group’s activities and have been exploring opportunities in the UK within sectors that can flourish during and beyond these unprecedented times. As a first stage in this strategy, the Company has acquired a strategic stake of 26,409 ordinary shares in Lotto Studios Limited (“Lotto Studios”), representing 2.94% of Lotto Studios issued share capital, for the total sum of £150,000.
Lotto Studios is a London-based development company formed in December 2018, which licenses major entertainment and sports brands to create lottery, social casino and mobile augmented reality games using regulated third-party lottery and casino platforms. The first social casino game to be launched is in partnership with ITV Studios and is the world’s No.1 entertainment show, The Voice. The exclusive 3 year deal will enable Lotto Studios to launch branded Social Casino games on the Apple and Android App stores in over 120 countries. Gamers will be able to download and play their favourite casino games for free, including blackjack, roulette and slots. Revenue is generated via in-game advertising and in-game purchases for upgrades. The casual game does not fall under gambling laws and so can operate in territories where real-money gaming is restricted. The Banijay agreement for Deal or No Deal, The Drop and Tenable sweepstake and prize draw games has now been fully executed and work on the development the games is in progress. In addition, terms have been reached with Bullseye for a prize draw game and Sony for ’the world’s biggest game show’. Marketing and User Acquisition partners have been lined up with global rights to publishing market the games. Lotto Studios expect to see early-stage revenues by April.
Lotto Studio’s mission is to be the number one choice for rights holders to deliver dynamic and innovative high-yield online games.
Whilst only taking a small initial stake, the Board intends to work actively with the directors of Lotto Studios to maximise the potential of these valuable licenses and explore opportunities to further exploit the intellectual property via Early Equity’s extensive network in South East Asia. Following this initial investment, the Board is exploring the potential to develop a more formal working relationship and closer collaboration with Lotto Studios and further announcements in this respect will be made in due course.
During the reporting period and following the year end, the Group has been successful in raising further funds to sustain the business through this difficult period and now has sufficient cash resources to enable the board to explore further opportunities.
Following the resignations of Chua Siew Lian and Tee Lian Hing on 3 February 2021, it is the intention of the Directors to strengthen the Board through the appointment of at least one additional director and the process of considering potential candidates has already commenced.
Gregory Collier
Executive Chairman
25 March 2021
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 AUGUST 2020
2020 | 2019 | |
GBP | GBP | |
CONTINUING OPERATIONS | ||
Turnover | 47,415 | 83,677 |
Cost of Sales | (43,112) | (31,812) |
——————- | ——————- | |
Gross Profit/(Loss) | 4,303 | 51,865 |
Other Income | 54,630 | 42,153 |
Administrative expenses | (464,441) | (799,267) |
Finance costs | (3,494) | (1,754) |
Share of loss of associate | (31,057) | (16,596) |
Fair value movement on financial assets | – | 21,045 |
(Gain)/Loss on exchange | (11,040) | – |
Loss on investment | (32,274) | – |
Stock Impairment | (11,971) | – |
——————- | ——————- | |
LOSS BEFORE TAX | (495,344) | (702,554) |
Income tax | (3,588) | (19,117) |
—————— | —————— | |
LOSS FOR THE YEAR | £(498,932) | £(721,671) |
========= | ========= | |
OTHER COMPREHENSIVE INCOME | ||
Fair value movement on financial assets | – | – |
TOTAL COMPREHENSIVE LOSS FOR THE YEAR | £(498,932) | £(721,671) |
========= | ========= | |
Attributable to: | ||
Owners of the parent | (475,066) | (714,776) |
Non-controlling interests | (23,866) | (6,895) |
—————— | —————— | |
£(498,932) | £(721,671) | |
========= | ========= | |
BASIC AND DILUTED LOSS PER SHARE (PENCE) | (0.06) | (0.09) |
========= | ========= |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 AUGUST 2020
2020 | 2019 | |
GBP | GBP | |
ASSETS | ||
Non-current assets | ||
Fixtures, fittings and equipment | 33,727 | 49,104 |
Goodwill | 27,066 | 97,540 |
Investments in associates | 362,328 | 416,237 |
——————— | ——————— | |
423,121 | 562,881 | |
——————— | ——————— | |
Current assets | ||
Available for sale financial assets | 327,859 | 266,807 |
Inventories | 26,535 | 26,386 |
Trade and other receivables | 428,217 | 156,444 |
Cash and cash equivalents | 23,723 | 174,042 |
——————— | ——————— | |
TOTAL ASSETS | 806,334 | 623,679 |
========== | ========== | |
LIABILITIES | ||
Current liabilities | ||
Trade and other payables | (245,136) | (211,051) |
——————— | ——————— | |
NET CURRENT ASSETS | 561,198 | 412,628 |
——————— | ——————— | |
NET ASSETS | £984,319 | £975,509 |
========== | ========== | |
EQUITY | ||
Share capital | 897,860 | 819,387 |
Share premium | 2,090,191 | 1,658,590 |
Non-controlling interest | 83,950 | 60,084 |
Fair value reserve | – | – |
Foreign exchange reserve | 2,936 | 5,268 |
Accumulated losses | (2,090,618) | (1,567,820) |
——————— | ——————— | |
SHAREHOLDERS’ FUNDS | £984,319 | £975,509 |
========== | ========= |
This financial information has been extracted from the audited financial statements of the Group for the year ended 31 August 2020. The financial statements are prepared in accordance with the International Financial Reporting Standards (IFRS). A copy of the Company’s financial statements for the year ended 31 August 2020 will be posted to shareholders and will be delivered to the Registrar of Companies.
The Directors do not propose to pay a dividend for the year.
The Directors of the Company accept responsibility for this announcement.
–ENDS–
Enquiries:
Early Equity Plc
Tel: +44 (0)7830 182501
Greg Collier
Novum Securities Limited
AQSE Corporate Adviser
David Coffman / Lucy Bowden
Tel: +44 (0)207 399 9400
About Early Equity plc:
Early Equity is an e-commerce focused group based in Malaysia whose Ordinary Shares are admitted to trading on the AQSE Growth Market in London with the trading symbol EEQP.