RNS Number:4985E
Ambrian Capital PLC
26 September 2007
26th September 2007
AMBRIAN CAPITAL PLC
Interim Results for the Six Months Ended 30 June 2007
Ambrian Capital plc, the independent investment bank, today announces its
interim results for the six months ended 30 June 2007:
Highlights
Six months Six months Six months
ended ended Year ended 2006-2007
30 June 2007 30 June 2006(1) 31 Dec 2006(1) Change
#m #m #m %
Investment Banking Revenue 5.35 4.23 8.43 +26.5
Investment Portfolio Revenue 9.52 7.93 9.41 +20.0
Total Revenue 14.87 12.16 17.84 +22.3
Profit Before Tax 10.02 8.40 9.80 +19.3
Earnings per Share from Continuing
Operations (pence) 6.60 5.50 6.44 +20.0
Interim Dividend per Share (pence) 0.75 0.75 1.75 -
Shareholders' Equity 51.91 47.31 45.75 +13.5(2)
Shareholders' Equity per Share (pence) 47.81 43.78 42.33 +12.9(2)
(1) 2006 figures re-stated to IFRS
(2) Comparison with 31 December 2006
* Investment Banking performed well with revenues up 26.5% during the first
half of 2007
- completed nine capital raisings with a total value of #68 million
- commenced Market Making July 2007
- expansion of LME metals sales team
- commenced trading carbon credits and soft commodities
* The Investment Portfolio showed gains of #9.52 million during the first half
of 2007 compared with #7.93 million for the first half of 2006 and
#9.41 million for the year ended 31 December 2006
* Shareholders' equity increased by 13.5% to #51.91 million since
31 December 2006.
* Cash resources, net of client deposits, totalled #19.91 million compared with
#17.04 million at 31 December 2006, an increase of 16.8%
* Sun Hung Kai Financial, Hong Kong's largest non-bank financial institution,
acquired a 9.10% stake in Ambrian Capital in March 2007
Commenting on the results, Tom Gaffney, Chief Executive of Ambrian Capital plc,
said: "During the first half of 2007 Ambrian Capital has made excellent progress
in its Investment Banking business, growing revenue and building the platform
for the future growth of the Group. Our Investment Portfolio also experienced
significant gains over the period.
We have built a strong position as a specialist Investment Bank focused on the
wider resources and new technologies sectors. Our activities in these sectors
are diversified and include stockbroking, commodity dealing, asset management
and principal investment.
Our sector specialisation and range of activities provide us with a competitive
advantage and position us well to benefit from the continuing resource-intensive
growth of China and India.
Although the equity markets have been adversely affected in recent weeks by the
credit markets turmoil, we have seen the gold price surge to a 28 year high and
the oil price has recently hit an all time high. Whilst the Investment
Portfolio has not been immune to the weakness in the equity markets,
approximately 56% of the Investment Portfolio is exposed to precious metals
prices and approximately 28% to energy prices.
As a result of the adoption of IFRS, we are required to mark-to-market the value
of our investments. Changes in the value of the Investment Portfolio are now
reported as revenues - this will result in short-term fluctuations in our
reported profits.
Over the coming months the outlook for our business will depend on the impact
that the instability in the credit markets has on the global economy, and in
particular, emerging countries which have driven raw material demand.
Nevertheless, we remain confident that the fundamental factors remain in place
for China and India to sustain their strong growth over the medium and long
term, from which we are well positioned to benefit".
Enquiries:
Tom Gaffney Chris Howard Justine Howarth / Louise Goodeve
Chief Executive Officer Collins Stewart Parkgreen Communications
Ambrian Capital plc
Tel: +44 (0)20 7776 6400 Tel: +44 (0)20 7523 8314 Tel: +44 (0)20 7851 7480
Notes to Editors:
1. Ambrian Capital is an AIM listed independent investment banking group.
Ambrian Capital provides corporate finance, stockbroking, commodity broking and
investment management services to institutional and corporate clients active in
the natural resources, alternative energy and new technology sectors. Ambrian
Capital is also an active principal investor in the natural resources sector.
2. Ambrian Partners Limited, Ambrian Commodities Limited and Ambrian Asset
Management are all authorised and regulated by the Financial Services Authority.
Ambrian Partners Limited is a member of the London Stock Exchange and Ambrian
Commodities Limited is an Associate Broker member of the London Metal Exchange.
3. Further information on Ambrian Capital is available on the Company's
website: www.ambrian.com
Chief Executive's Statement
During the first half of 2007 Ambrian Capital has made excellent progress in its
Investment Banking business, growing revenue and building the platform for the
future growth of the Group. Our Investment Portfolio also experienced
significant gains over the period.
We have further advanced our vision of creating an investment bank focused on
the wider resources sector to include mining, oil & gas, agricultural products,
alternative energy and new technologies.
During the first half of the year there were a number of changes to the board of
Ambrian Capital. Lawrence Banks was appointed Chairman of Ambrian Capital in
succession to Malcolm Burne who stood down at the Annual General Meeting on 22
May 2007. Malcolm will remain an adviser to Ambrian Capital and to Golden
Prospect Precious Metals Limited. We would also like to extend our thanks to
Richard Lockwood, who stood down from the Board on 22 May, for his guidance and
support.
We are pleased to welcome Lee Seng Huang as a non-executive director of Ambrian
Capital. Lee Seng Huang is Chairman of Sun Hung Kai Financial which purchased a
9.10% interest in Ambrian Capital on 21 March 2007.
We are also pleased to welcome Charles Crick as a Non-Executive Director.
Charles trained as a Solicitor with Allen & Overy and from 1996 to 2004 was head
of corporate finance and a main board director of Numis Corporation PLC.
Financial Review
From 2007 Ambrian Capital is required to report its full year consolidated
financial statements under International Financial Reporting Standards ("IFRS")
as adopted by the European Union rather than under UK Generally Accepted
Accounting Principles ("UK GAAP") as we have done in the past. The consolidated
financial information reported for the six months to 30 June 2007 has been
prepared in accordance with accounting policies which will be adopted in
presenting the full year annual report and accounts. Accordingly (i) our
Investment Portfolio at 30 June 2007 was valued on the Group's balance sheet at
then market prices rather than at the lower of cost or net realisable value and
(ii) changes in the value of the Investment Portfolio are reported as revenue.
Revenue for the first half of 2007 was #14.87 million (2006: #12.16 million),
representing an increase of 22.3%.
Investment Banking revenue for the first half of 2007 was #5.35 million (2006:
#4.23 million). This represented a 26.5% increase over the first half of 2006
and accounted for 36% of Group revenue (2006: 35%).
Revenue from the Investment Portfolio was #9.52 million compared with #7.93
million for the first half of 2006 and #9.41 million for the full year of 2006.
Administrative expenses (including accrued incentive payments) were #4.82
million (2006: #3.72 million), an increase of 29% primarily attributable to
investment in additional staff and start-up costs associated with the
commencement of Market Making. Administrative expenses attributable to
Investment Banking (including accrued incentive payments) represented
approximately 67% of Investment Banking revenue.
Profit before tax was #10.02 million (2006: #8.40 million), generating basic
earnings per share from continuing operations of 6.60p, an increase of 20%.
Balance Sheet
The balance sheet remains strong with a substantial cash balance.
Shareholders' equity was #51.91 million at 30 June 2007 compared with #45.75
million at 31 December 2006, an increase of 13.5%. Our Investment Portfolio was
valued at #34.37 million at 30 June 2007 of which 94% is in quoted investments.
The Group's cash resources, net of client deposits, totalled #19.91 million at
30 June 2007 compared with #17.04 million at 31 December 2006 and #6.71 million
at 30 June 2006.
Our strong balance sheet ensures the resilience of our business and provides us
with the ability to take advantage of opportunities that may arise. We are
committed to making efficient use of our capital.
Dividend
The Board declares payment of an interim dividend of 0.75p per share (2006:
0.75p). The dividend will be payable on 2 November 2007 to all shareholders on
the register as at 12 October 2007.
Investment Banking
During the first half of 2007, each of our corporate finance and stockbroking,
commodity dealing and asset management subsidiaries made further progress in
strengthening their market positions. Our strategy of involvement in a range of
different business activities in the natural resources sector has proved to be
successful. During the first half of 2007, revenue from equity new issues
represented less than 25% of Investment Banking revenue. We have been
particularly successful in developing our M&A advisory activities. Mining
clients remain key to our business but these accounted for approximately 44% of
Investment Banking revenue in the first half of 2007, demonstrating our success
in building a client base that includes oil & gas, alternative energy and
technology clients.
Ambrian Partners Limited
During the period, Ambrian Partners Limited, our corporate finance and
stockbroking subsidiary, was involved in nine capital raisings with a total
value of approximately #68 million. At 31 August 2007, Ambrian Partners had 34
retained corporate clients.
During the first half of 2007 Ambrian Partners was involved in the following
equity placements:
- #18 million for Sylvania Resources Limited
- A$35 million (#15 million) for Monto Minerals Limited
- #15 million for TMO Renewables Limited
- #6 million for Zenergy Power plc
- #4.5 million for IPSO Ventures plc
Ambrian Partners was also active in providing M&A advisory services during the
first half of 2007; notable transactions included:
- Co-adviser to the Zijin Consortium on its recommended #95 million cash
offer for Monterrico Metals plc
- Adviser to Kalahari Minerals plc in connection with the #26.4 million
merger of its uranium assets with Extract Resources Ltd.
During the first half of 2007, Ambrian Partners appointed two experienced equity
traders and put in place the systems to become a registered Market Maker in the
shares of selected companies on AIM. Market Making operations commenced at the
beginning of July 2007. Market Making enables Ambrian Partners to provide a
superior level of service to its institutional clients and further strengthens
revenue from secondary market activities.
Ambrian Commodities Limited
Ambrian Commodities' LME metals business continues to make good progress and has
benefited from volatility in metals prices and high customer activity levels.
Ambrian Commodities added to its sales team with the appointment of three highly
experienced individuals who each brought with them his own client base to
complement the existing one. These appointments have further strengthened
Ambrian Commodities' presence in the global metals market and at the same time
have broadened the geographical client base.
Ambrian Commodities also recruited senior traders and salesmen to commence
trading in both the carbon credits and soft commodities markets. In January
2007, Ambrian Commodities began trading carbon products quoted on the European
Climate Exchange ("ECX") of which Ambrian Commodities is now a member. The move
into carbon credits and soft commodity trading is a natural progression for
Ambrian Commodities and is demonstrative of the Group's commitment to the wider
resources sector.
Ambrian Asset Management Limited
Ambrian Asset Management is the manager of Golden Prospect Precious Metals
Limited ("GPPM"), a Guernsey registered, closed-ended investment fund listed on
AIM dedicated to equity investments in the precious metals sector.
GPPM was launched in November 2006 with an opening Net Asset Value ("NAV") per
share of 96.20p. GPPM had an NAV per share at 30 June 2007 of 114.84p, an
increase of 19.4% since launch. This compares with a 1.2% increase in the gold
price over the same period. GPPM's share price at 30 June 2007 was 113.5p and
its market capitalisation was #14.7 million.
In May 2007, Ambrian Capital placed 2.85 million shares of GPPM with
institutional investors and reduced its interest in GPPM to 49.96%. As a result
GPPM has ceased to be a consolidated subsidiary of Ambrian Capital and is now
held, instead, as an equity investment.
Ambrian Asset Management receives a monthly management fee for managing GPPM and
is eligible to receive a performance related fee at the end of the current year
equal to 20% of the increase in the NAV of GPPM after a hurdle of 8% has been
attained.
Ambrian Asset Management continues to explore the possibility of launching new
funds in sectors in which the Group has expertise.
Investment Portfolio
The total value of Ambrian Capital's Investment Portfolio at 30 June 2007 was
#34.37 million. Approximately 94% of the Investment Portfolio is in the shares
of quoted companies.
Precious metals investments represented approximately 56% of the Investment
Portfolio and energy investments represented a further 28% of the Investment
Portfolio. The balance comprised a range of other resources and technology
orientated investments.
Revenue from the Investment Portfolio for the six months ended 30 June 2007 was
#9.52 million. Approximately #4.0 million of revenue from the Investment
Portfolio was attributable to the 77.5% rise in the Jubilee Platinum share price
from 68.75p to 122p between 1 January 2007 and 30 June 2007. Ambrian Capital
holds 7.64 million Jubilee Platinum shares.
The Investment Portfolio was valued at #32.11 million at 24 September 2007 of
which Jubilee Platinum represented #7.02 million.
Listed Investments
At 30 June 2007 the market value of our portfolio of listed investments was
#32.41 million. Our top ten holdings had a total market value of #29.1 million
and were as follows:
1. Jubilee Platinum #9.3 million
2. Golden Prospect Precious Metals #7.4 million
3. Nido Petroleum #2.8 million
4. Kairiki Energy #1.9 million
5. Minerva Resources * #1.6 million
6. Anglesey Mining #1.5 million
7. Horizon Oil #1.4 million
8. Samson Oil & Gas #1.3 million
9. Nautical Petroleum #1.0 million
10. Commodity Watch #0.9 million
_____________
Total #29.1 million
=============
* Listed 10 July 2007
Ambrian Capital's 8.8% holding in Jubilee Platinum (AIM: JLP) remains a core
investment as the company has valuable resource positions in South Africa and
Madagascar.
Our 49.96% interest in Golden Prospect Precious Metals (AIM: GPM) provides
leveraged exposure to the precious metals sector.
In July 2007, we concluded the successful capitalisation of our exploration
assets by the sale of our exploration subsidiary, Golden Prospect Mining Company
Limited, in exchange for 39.82% interest in the share capital of Minerva
Resources plc, an AIM listed exploration company.
Minerva has an exciting management team and it is anticipated that with
Ambrian's continued support they will unlock value from our former exploration
assets.
Also of note, during the first half of 2007, Commodity Watch plc (previously
called Minesite) was listed on Plus Markets. Ambrian Capital has a 25% holding
in the company.
Unlisted Investments
At 30 June 2007 the book value of Ambrian Capital's unlisted investments was
#1.92 million. The reduction from #4.83 million at 31 December 2006 primarily
was attributable to the sale of the exploration assets in return for listed
shares of Minerva and the listing of Commodity Watch. The unlisted investment
portfolio includes five stocks and a holding of 'A' and 'B' shares in the London
Metal Exchange.
Future
Despite the fact that the majority of our Investment Portfolio is invested in
the shares of companies exposed to commodity prices, such as gold and oil, it
has not been immune to the downturn in the equity markets due to the instability
in the credit markets to which we have no direct exposure. We remain confident
that our Investment Portfolio comprises quality assets with good business models
and growth potential. Moreover, our cash balances underpin a solid balance
sheet.
The focus of the Investment Banking businesses on the resources sector positions
us well to benefit from strength in the commodities markets and the growth in
the alternative energy sectors. The strengthening of our secondary market
equity trading operation, the expansion of our commodities trading business and
the initial contribution from our asset management business, all provide avenues
for growth in a more volatile market environment.
Tom Gaffney
Chief Executive
26 September 2007
Unaudited condensed consolidated interim income statement
6 months to 30 6 months to 30 Year to 31
June 2007 June 2006 December 2006
# # #
Continuing operations
Revenue 14,867,585 12,158,144 17,841,224
Administrative expenditure (4,819,484) (3,723,984) (8,003,165)
Finance costs (28,652) (36,373) (36,615)
----------------------------------------------
Profit before tax 10,019,449 8,397,787 9,801,444
Taxation (3,011,130) (2,574,900) (2,995,305)
----------------------------------------------
Profit for the period from continuing 7,008,319 5,822,887 6,806,139
operations
Discontinued operations
Loss for the period from discontinued operations - - (1,732,261)
----------------------------------------------
Profit for the period 7,008,319 5,822,887 5,073,878
==============================================
Attributable to:
Equity holders of the parent 7,008,319 5,822,887 5,073,878
----------------------------------------------
7,008,319 5,822,887 5,073,878
==============================================
Earnings per share: Pence Pence Pence
Basic earnings per share from continuing operations 6.60 5.50 6.44
========== ========== ==========
Diluted earnings per share from continuing operations 6.25 5.22 6.12
========== ========== ==========
Basic earnings per share from discontinued operations - - (1.63)
========== ========== ==========
Diluted earnings per share from discontinued operations - - (1.55)
========== ========== ==========
Basic earnings per share 6.60 5.50 4.81
========== ========== ==========
Diluted earnings per share 6.25 5.22 4.57
========== ========== ==========
Unaudited condensed consolidated interim balance sheet
30 June 2007 30 June 2006 31 December 2006
# # #
ASSETS
Non-current assets
Property, plant and equipment 173,054 203,728 199,766
Goodwill 1,836,828 1,836,828 1,836,828
Other intangible assets - 2,626,765 -
------------------------------------------------
2,009,882 4,667,321 2,036,594
------------------------------------------------
Current assets
Financial assets 32,810,513 40,357,085 34,739,291
Trade and other receivables 3,976,535 6,986,820 3,856,631
Cash and cash equivalents 26,796,044 14,166,055 30,408,289
------------------------------------------------
63,583,092 61,509,960 69,004,211
Non-current assets classified as held for sale 1,557,500 - 1,557,500
------------------------------------------------
65,140,592 61,509,960 70,561,711
-----------------------------------------------
Total assets 67,150,474 66,177,281 72,598,305
================================================
LIABILITIES
Current liabilities
Trade and other payables (2,034,403) (2,253,643) (4,198,794)
Amounts due to clients (6,883,254) (7,457,050) (13,371,613)
Current tax payable (1,573,639) (3,762,538) (3,091,685)
-----------------------------------------------
(10,491,296) (13,473,231) (20,662,092)
-----------------------------------------------
Non-current liabilities
Deferred tax liabilities (4,752,717) (5,393,901) (2,706,549)
-----------------------------------------------
Total non-current liabilities (4,752,717) (5,393,901) (2,706,549)
-----------------------------------------------
Total liabilities (15,244,013) (18,867,132) (23,368,641)
-----------------------------------------------
Net assets / liabilities 51,906,461 47,310,149 49,229,664
===============================================
Unaudited Condensed consolidated interim balance sheet (continued)
30 June 2007 30 June 2006 31 December 2006
# # #
EQUITY
Equity
Share capital 10,856,121 10,806,121 10,806,121
Share premium 12,194,639 12,094,639 12,094,639
Treasury shares (163,217) - (163,217)
Related earnings 30,242,673 25,811,019 24,278,739
Employee benefit trust (1,813,557) (1,813,557) (1,813,557)
Reserve for share based payments 589,802 411,927 543,262
--------------------------------------------
Total equity attributable to equity 51,906,461 47,310,149 45,745,987
holders of the parent
Minority interest - - 3,483,677
--------------------------------------------
Total equity 51,906,461 47,310,149 49,229,664
============================================
Unaudited condensed consolidated interim statement of changes in equity
Share Share Other Profit and Total Minority Total
capital premium equity loss interest equity
account reserves account
# # # # # # #
Balance at
31 December 2005 10,726,121 12,048,639 168,957 20,791,092 43,734,809 - 43,734,809
-------------------------------------------------------------------------------------------------
Changes in equity
for first half
of 2006
Purchase of shares - - (1,701,921) - (1,701,921) - (1,701,921)
Share option charge - - 131,334 - 131,334 - 131,334
Profit for the
the period - - - 5,822,887 5,822,887 - 5,822,887
-------------------------------------------------------------------------------------------------
Total recognised
income and
expense for the
period - - (1,570,587) 5,822,887 4,252,300 - 4,252,300
Dividends - - - (802,960) (802,960) - (802,960)
Issue of share
share capital 80,000 46,000 - - 126,000 - 126,000
-------------------------------------------------------------------------------------------------
Balance at
30 June 2006 10,806,121 12,094,639 (1,401,630) 25,811,019 47,310,149 - 47,310,149
=================================================================================================
Unaudited condensed consolidated interim statement of changes in equity
(continued)
Share Share Other Profit and Total Minority Total
capital premium equity loss interest equity
account reserves account
# # # # # # #
Balance at
31 December 2005 10,726,121 12,048,639 168,957 8,529,698 31,473,415 - 31,473,415
Changes in
accounting policy - - - 12,261,394 12,261,394 - 12,261,394
-------------------------------------------------------------------------------------------------
Restated
balance at
31 December 2005 10,726,121 12,048,639 168,957 20,791,092 43,734,809 - 43,734,809
-------------------------------------------------------------------------------------------------
Changes in equity
for 2006
Minority interest
arising on
acquisition - - - - - 3,483,677 3,483,677
Purchase of shares - - (1,865,138) - (1,865,138) - (1,865,138)
Share option charge - - 262,669 - 262,669 - 262,669
Profit for the
period - - - 5,073,878 5,073,878 - 5,073,878
-------------------------------------------------------------------------------------------------
Total recognised
income and expense
for the period - - (1,602,469) 5,073,878 3,471,409 3,483,677 6,955,086
Dividends - - - (1,586,231) (1,586,231) - (1,586,231)
Issue of share
capital 80,000 46,000 - - 126,000 - 126,000
-------------------------------------------------------------------------------------------------
Balance at
31 December 2006 10,806,121 12,094,639 (1,433,512) 24,278,739 45,745,987 3,483,677 49,229,664
=================================================================================================
Unaudited condensed consolidated interim statement of changes in equity
(continued)
Share Share Other Profit and Total Minority Total
capital premium equity loss interest equity
account reserves account
# # # # # # #
Balance at
31 December 2006 10,806,121 12,094,639 (1,433,512) 22,228,739 45,745,987 3,483,677 49,229,664
Changes in equity
for 2007
Elimination of
minority interest - - - - - (3,483,677) (3,483,677)
Share option charge - - 46,540 - 46,540 - 46,540
Profit for the
period - - - 7,008,319 7,008,319 - 7,008,319
-------------------------------------------------------------------------------------------------
Total recognised
income and expense
for the period - - 46,540 7,008,319 7,054,859 (3,483,677) 3,571,182
Dividends - - - (1,044,385) (1,044,385) - (1,044,385)
Issue of share
capital 50,000 100,000 - - 150,000 - 150,000
-------------------------------------------------------------------------------------------------
Balance at
30 June 2007 10,856,121 12,194,639 (1,386,972) 30,242,673 51,906,461 - 51,906,461
=================================================================================================
Unaudited condensed consolidated interim cash flow statement
6 months to 30 6 months to 30 Year to 31
June 2007 June 2006 December 2006
Restated Restated
# # #
Cash flows from operating activities
Profit after taxation 7,008,319 5,822,887 5,073,878
Adjustments for: - - -
Depreciation 43,132 23,014 79,118
Foreign exchange (gain)/loss (331,825) 409,220 548,737
Investment income (270,077) (148,532) (593,096)
Taxation expense recognised in profit and loss 3,011,130 2,574,900 2,995,305
(Increase) in trade and other receivables (119,904) (5,356,984) (2,226,795)
Decrease/(increase) in financial assets 1,928,778 1,291,009 6,908,803
(Decrease)/Increase in trade payables (2,164,391) 968,190 2,797,618
(Decrease)/Increase in amounts owed to clients (6,488,357) 7,457,050 13,371,613
Employee benefit trust - (1,701,921) (1,701,921)
Share base payment reserve 46,540 131,334 262,669
Loss on discontinued operations - - 1,732,261
-----------------------------------------------
Cash generated from operations 2,663,345 11,470,167 29,248,190
Income taxes paid (2,483,010) (505,794) (4,302,766)
-----------------------------------------------
Net cash from operating activities 180,335 10,964,373 24,945,424
-----------------------------------------------
Cash flows from investing activities
Purchase of property, plant and equipment (16,420) (87,943) (140,085)
Purchase of intangible fixed assets - (29,895) (558,805)
Investment income 270,077 148,532 593,096
-----------------------------------------------
Net cash used in investing activities 253,657 30,694 (105,794)
-----------------------------------------------
Cash flows from financing activities
Proceeds from issue of share capital 150,000 126,000 126,000
Treasury shares acquired - - (163,217)
Bank loan repayment - (1,500,000) (1,500,000)
Minority interests (3,483,677) - 3,483,677
Dividends paid (1,044,385) (802,959) (1,586,231)
-----------------------------------------------
Net cash used in financing activities (4,378,062) (2,176,959) 360,229
-----------------------------------------------
Net increase in cash and cash equivalents (3,944,070) 8,818,108 25,199,859
Cash and cash equivalents at beginning of period 30,408,289 5,757,167 5,757,167
Foreign exchange gains/(losses) 331,825 (409,220) (548,737)
-----------------------------------------------
Cash and cash equivalents at end of period 26,796,044 14,166,055 30,408,289
===============================================
Notes to the unaudited condensed consolidated interim financial statements
1 Basis of preparation
These interim condensed consolidated financial statements are for the six months
ended 30 June 2007. They have been prepared in accordance with the requirements
of IFRS 1 "First-time Adoption of International Financial Reporting Standards"
relevant to interim reports, because they are part of the period covered by the
Group's first IFRS financial statements for the year ended 31 December 2007.
They do not include all of the information required for full annual financial
statements, and should be read in conjunction with the consolidated financial
statements of the Group for the year ended 31 December 2006.
These condensed consolidated interim financial statements have been prepared
under the historical cost convention, except for revaluation of certain
properties and financial instruments.
These condensed consolidated interim financial statements (the interim financial
statements) have been prepared in accordance with the accounting policies set
out below which are based on the recognition and measurement principles of IFRS
in issue as adopted by the European Union (EU) and are effective at 31 December
2007 or are expected to be adopted and effective at 31 December 2007, our first
annual reporting date at which we are required to use IFRS accounting standards
adopted by the EU.
Ambrian Capital plc's consolidated financial statements were prepared in
accordance with United Kingdom Accounting Standards (United Kingdom Generally
Accepted Accounting Practice) until 31 December 2006. The date of transition to
IFRS was 1 January 2006. The comparative figures in respect of 2006 have been
restated to reflect changes in accounting policies as a result of adoption of
IFRS. The disclosures required by IFRS 1 concerning the transition from UK GAAP
to IFRS are given in the reconciliation schedules, presented and explained in
note 5.
The accounting policies have been applied consistently throughout the Group for
the purposes of preparation of these condensed consolidated interim financial
statements.
The financial information set out in this interim report does not constitute
statutory accounts as defined in Section 240 of the Companies Act 1985. The
Group's statutory financial statements for the year ended 31 December 2006,
prepared under UK GAAP, have been filed with the Registrar of Companies. The
auditor's report on those financial statements was unqualified/qualified and did
not/did contain a statements under Section 237(2) of the Companies Act 1985.
The Interim Statement was approved by the Directors on 25 September 2007 and
copies are available to the public free of charge from the company at 8 Angel
Court, London EC2R 7HP during normal office hours, Saturdays, Sundays and Bank
Holidays exempted, for 14 days from today.
2 Revenue
The group's revenue is derived from investment banking and management.
6 months to 30 June 2007 - unaudited
Investment banking Investment Total
portfolio
Operating revenue 5,352,784 9,514,801 14,867,585
===========================================================
6 months to 30 June 2006 - unaudited
Investment banking Investment Total
portfolio
Operating revenue 4,229,172 7,928,972 12,158,144
===========================================================
Year to 31 December 2006 - unaudited
Investment banking Investment Total
portfolio
Operating revenue 8,429,339 9,411,885 17,841,224
===========================================================
Operating revenue includes investment and other income. The investment
portfolio includes realised and unrealised gains on financial assets.
3 Share issue
During the period to 30 June 2007 500,000 shares were issued as a result of the
exercise of share options. Shares issued and authorised for the period to 30
June 2007 may be summarised as follows:
6 months to 30 June 2007 - unaudited
Number #
At 1 January 2007 108,061,208 10,806,121
Issue of shares 500,000 50,000
At 30 June 2007 108,561,208 10,856,121
=================================
6 months to 30 June 2006 - unaudited
Number #
At 1 January 2006 107,261,208 10,726,121
Issue of shares 800,000 80,000
At 30 June 2006 108,061,208 10,806,121
=================================
Year to 31 December 2006 - unaudited
Number #
At 1 January 2006 107,261,208 10,726,121
Issue of shares 800,000 80,000
At 31 December 2006 108,061,208 10,806,121
=================================
4 Earnings per share
The calculation of the basic earnings per share is based on the earnings
attributable to ordinary shareholders divided by the weighted average number of
shares in issue during the year. Shares held in employee share trusts are
treated as cancelled for the purposes of this calculation.
The calculation of diluted earnings per share is based on the basic earnings per
share, adjusted to allow for the issue of shares and the post tax effect of
dividends and/or interest, on the assumed conversion of all dilutive options and
other dilutive potential ordinary shares.
Reconciliations of the earnings and weighted average number of shares used in
the calculations are set out below.
6 months to 30 June 2007 - unaudited
Earnings Weighted average Per share
number of shares amount
# Pence
Total operations - all continuing operations
Earnings attributable to ordinary shareholders 7,008,319
Weighted average number of shares (used for basic
earnings per share) 108,207,617
Shares held in Treasury and Employee Benefit Trust 2,056,712
------------
106,150,905
Dilutive effect of options 6,024,242
------------
Diluted weighted average number of shares (used for
diluted earnings per share) 112,175,147
Basic earnings per share 6.60
=========
Diluted earnings per share 6.25
=========
6 months to 30 June 2006 - unaudited
Earnings Weighted average Per share
number of shares amount
# Pence
Total operations - all continuing operations
Earnings attributable to ordinary shareholders 5,822,887
Weighted average number of shares (used for basic 107,544,081
earnings per share)
Shares held in Employee Benefit Trust 1,731,712
------------
105,812,369
Dilutive effect of options 5,638,796
------------
Diluted weighted average number of shares (used for
diluted earnings per share) 111,451,165
Basic earnings per share 5.50
=========
Diluted earnings per share 5.22
=========
Year to 31 December 2006 - unaudited
Earnings Weighted average Per share
number of shares amount
# Pence
Continuing operations
Earnings attributable to ordinary shareholders 6,806,139
Weighted average number of shares (used for basic
earnings per share) 107,804,770
Shares held in Treasury and Employee Benefit Trust 2,056,712
------------
105,448,058
Dilutive effect of options 5,390,248
------------
Diluted weighted average number of shares (used for
diluted earnings per share) 111,138,306
Basic earnings per share 6.44
=========
Diluted earnings per share 6.12
=========
Discontinued operations
Earnings attributable to ordinary shareholders (1,732,261)
Weighted average number of shares (used for basic
earnings per share) 107,804,770
Shares held in Treasury and Employee Benefit Trust 2,056,712
------------
105,448,058
Dilutive effect of options 5,390,248
------------
Diluted weighted average number of shares (used for
diluted earnings per share) 111,138,306
Basic earnings per share (1.63)
=========
Diluted earnings per share (1.55)
=========
Total operations
Earnings attributable to ordinary shareholders 5,073,878
Weighted average number of shares (used for basic
earnings per share) 107,804,770
Shares held in Treasury and Employee Benefit Trust 2,056,712
------------
105,448,058
Dilutive effect of options 5,390,248
------------
Diluted weighted average number of shares (used for
diluted earnings per share) 111,138,306
Basic earnings per share 4.81
=========
Diluted earnings per share 4.57
=========
5. Explanation of transition to IFRS
As stated in the Basis of Preparation, these are the Group's first condensed
consolidated interim financial statements for part of the period covered by the
first IFRS annual consolidated financial statements prepared in accordance with
IFRS.
An explanation of how the transition from UK GAAP to IFRS has affected the
Group's financial position, financial performance and cash flows is set out
below.
IFRS 1 permits companies adopting IFRS for the first time to take certain
exemptions from the full requirements of IFRS in the transition period. These
interim financial statements have been prepared on the basis of taking the
following exemptions:
* business combinations prior to 1 January 2006, the Group's date of
transition to IFRS, have not been restated to comply with IFRS 3 "Business
Combinations". Goodwill arising from these business combinations of #1,836,828
has not been restated other than as set out in note a below.
* cumulative translation differences on foreign operations are deemed
to be nil at 1 January 2006. Any gains and losses recognised in the
consolidated income statement on subsequent disposal of foreign operations will
exclude translation differences arising prior to the transition date
* the entity has elected not to apply IAS 21 "The Effects of Changes
in Foreign Exchange Rates" retrospectively to goodwill and fair value
adjustments arising on business combinations before the Group's date of
transition to IFRS. Such goodwill and fair value adjustments are not treated as
foreign currency assets and so are not retranslated at each reporting date.
Reconciliation of equity at 1 January 2006 - unaudited
Note UK GAAP a b c d e f IFRS
# # # # # # # #
Non-current assets
Property, plant and
equipment 138,799 - - - - - - 138,799
Goodwill 1,836,828 - - - - - - 1,836,828
Other intangible assets 2,596,870 - - - - - - 2,596,870
Deferred tax assets 84,178 - - - - (84,178) - -
Current assets
Financial assets 24,131,817 - 17,516,277 - - - - 41,648,094
Trade and other
receivables 1,629,836 - - - - - - 1,629,836
Cash and cash
equivalents 5,757,167 - - - - - - 5,757,167
Current liabilities
Trade and other payables (1,149,443) - - - - - - (1,149,443)
Short-term borrowings (1,500,000) - - - - - - (1,500,000)
Current tax payable (1,916,627) - - - - - - (1,916,627)
Other taxes and social
security (136,010) - - - - - - (136,010)
Non-current liabilities
Deferred tax - - - - (5,254,883) 84,178 - (5,170,705)
----------------------------------------------------------------------------------------------
Net assets 31,473,415 - 17,516,277 - (5,254,883) - - 43,734,809
==============================================================================================
Equity
Share capital 10,726,121 - - - - - - 10,726,121
Share premium account 12,048,639 - - - - - - 12,048,639
Profit and loss account 8,529,698 - 17,516,277 - (5,254,883) - - 20,791,092
Reserve for share based
payments 280,593 - - - - - - 280,593
Employee benefit trust (111,636) - - - - - - (111,636)
----------------------------------------------------------------------------------------------
Total equity 31,473,415 - 17,516,277 - (5,254,883) - - 43,734,809
==============================================================================================
Reconciliation of equity at 30 June 2006 - unaudited
Note UK GAAP a b c d e f IFRS
# # # # # # # #
Non-current assets
Property, plant and
equipment 203,728 - - - - - - 203,728
Goodwill 1,787,846 48,982 - - - - - 1,836,828
Other intangible assets 2,626,765 - - - - - - 2,626,765
Deferred tax assets 84,178 - - - - (84,178) - -
Current assets
Financial assets 22,096,820 - 18,260,265 - - - - 40,357,085
Trade and other
receivables 6,986,820 - - - - - - 6,986,820
Cash and cash
equivalents 14,166,055 - - - - - - 14,166,055
Current liabilities
Trade and other payables (9,710,693) - - - - - - (9,710,693)
Current tax payable (3,762,538) - - - - - - (3,762,538)
Non-current liabilities
Deferred tax - - - - (5,478,079) 84,178 - (5,393,901)
----------------------------------------------------------------------------------------------
Net assets 34,478,981 48,982 18,260,265 - (5,478,079) - - 47,310,149
==============================================================================================
Equity
Share capital 10,806,121 - - - - - - 10,806,121
Share premium account 12,094,639 - - - - - - 12,094,639
Profit and loss account 13,111,185 48,982 18,260,265 (131,334) (5,478,079) - - 25,811,019
Reserve for share based
payments 280,593 - - 131,334 - - - 411,927
Employee benefit trust (1,813,557) - - - - - - (1,813,557)
----------------------------------------------------------------------------------------------
Total equity 34,478,981 48,982 18,260,265 - (5,478,079) - - 47,310,149
==============================================================================================
Reconciliation of equity at 1 January 2007 - unaudited
Note UK GAAP a b c d e f IFRS
# # # # # # # #
Non-current assets
Property, plant and
equipment 199,766 - - - - - - 199,766
Goodwill 1,738,864 97,964 - - - - - 1,836,828
Other intangible
assets 3,155,675 - - - - - (3,155,675) -
Deferred tax assets 1,727,034 - - - - (1,727,034) - -
Current assets
Financial assets 19,960,680 - 14,778,611 - - - - 34,739,291
Trade and other
receivables 3,856,631 - - - - - - 3,856,631
Cash and cash
equivalents 30,408,289 - - - - - - 30,408,289
Non-current assets
classified as held for
sale - - - - - - 1,557,500 1,557,500
Current liabilities
Trade and other payables (17,436,322) - - - - - (134,085) (17,570,407)
Current portion of
long-term borrowings - - - - - - - -
Current tax payable (3,091,685) - - - - - - (3,091,685)
Non-current liabilities
Deferred tax - - - - (4,433,583) 1,727,034 - (2,706,549)
----------------------------------------------------------------------------------------------
Net assets 40,518,932 97,964 14,778,611 - (4,433,583) - (1,732,260) 49,229,664
==============================================================================================
Equity
Share capital 10,806,121 - - - - - - 10,806,121
Share premium account 12,094,639 - - - - - - 12,094,639
Treasury shares (163,217) - - - - - - (163,217)
Profit and loss account 15,568,007 97,964 14,778,611 - (4,433,583) - (1,732,260) 24,278,739
Reserve for share based
payments 543,262 - - - - - - 543,262
Employee benefit trust (1,813,557) - - - - - - (1,813,557)
----------------------------------------------------------------------------------------------
Total equity 40,518,932 97,964 14,778,611 - (4,433,583) - (1,732,260) 49,229,664
==============================================================================================
Reconciliation of profit for the 6 months ended 30 June 2006 - unaudited
UK GAAP a b c d e f IFRS
# # # # # # # #
Continuing operations
Revenue 11,414,156 - 743,988 - - - - 12,158,144
Administrative costs (3,641,632) 48,982 - (131,334) - - - (3,723,984)
Finance costs (36,373) - - - - - - (36,373)
----------------------------------------------------------------------------------------------
Profit before tax 7,736,151 48,982 743,988 (131,334) - - - 8,397,787
Taxation (2,351,704) - - - (223,196) - - (2,574,900)
----------------------------------------------------------------------------------------------
Profit for the period
from continuing
operations 5,384,447 48,982 743,988 (131,334) (223,196) - - 5,822,887
Loss for the period
from discontinued
operations - - - - - - - -
----------------------------------------------------------------------------------------------
Profit before tax 5,384,447 48,982 743,988 (131,334) (223,196) - - 5,822,887
==============================================================================================
Reconciliation of profit for the year to 31 December 2006 - unaudited
UK GAAP a b c d e f IFRS
# # # # # # # #
Continuing operations
Revenue 20,578,890 - (2,737,666) - - - - 17,841,224
Administrative costs (8,101,128) 97,964 - - - - - (8,003,164)
Finance costs (36,616) - - - - - - (36,616)
----------------------------------------------------------------------------------------------
Profit before tax 12,441,146 97,964 (2,737,666) - - - - 9,801,444
Taxation (3,816,605) - - - 821,300 - (2,995,305)
----------------------------------------------------------------------------------------------
Profit for the period
from continuing
operations 8,624,541 97,964 (2,737,666) - 821,300 - - 6,806,139
Profit for the period
from discontinued
operations - - - - - - (1,732,261) (1,732,261)
----------------------------------------------------------------------------------------------
Profit before tax 8,621,541 97,964 (2,737,666) - 821,300 - (1,732,261) 5,073,878
==============================================================================================
Notes on reconciliations of equity
a) Goodwill recognised by the Group on acquisition of its subsidiaries under UK
GAAP was amortised over a period of 20 years. Under IFRS goodwill is not
amortised, but tested annually for impairment. The goodwill amortisation charge
recognised in accordance with UK GAAP in 2006 was written back. However,
intangible assets identified on this business combination in accordance with
IFRS as described above are included at their net book value as at 31 December
2005.
b) Under UK GAAP the group included listed and unlisted investments at cost.
However, under IFRS these are included at market value. Accordingly, an
unrealised gain of #17,516,277 at 1 January 2006 has been credited to the income
statement. Operating income has been increased by #743,988 for the 6 months
ended 30 June 2006 and decreased by #2,737,666 for the year ended 31 December
2006.
c) Under FRS 20 liabilities in respect of share based payments have only been
recognised in the financial statements for the year ended 31 December 2006, with
the balance sheet as at 31 December 2005 duly restated. Under IFRS these
liabilities are recognised in all accounting periods under review.
Accordingly, a charge of #131,334 is made to the income statement for the 6
months ended 30 June 2006.
d) Under FRS 19 deferred tax was only recognised on timing differences; in
contrast, IAS 12 "Income Taxes" requires the recognition of all temporary
differences. Under UK GAAP, investments are carried on the balance sheet at
cost, and no deferred tax arises whereas under IRFS investments are carried on
the balance sheet at market value and deferred tax liabilities are recognised.
The effect of this adjustment is to create deferred tax liabilities of
#5,254,883 at 1 January 2006, #5,470,080 at 30 June 2006, and #4,433,583 at 31
December 2006 and to increase the tax charge for the period ended 30 June 2006
by #506,810 and decrease the tax charge for the year ended 31 December 2006 by
#821,300.
e) The UK GAAP financial statements include a deferred tax asset of #84,178 at 1
January 2006 and 30 June 2006 and #162,979 at 31 December 2006 in respect of the
taxation relief on the charge to profits for share based payment. This deferred
tax asset has been offset against the deferred tax liabilities set out at (d)
above.
The UK GAAP accounts at 31 December 2006 include a further deferred tax asset of
#1,564,055 in respect of taxation charged on the profits on the sale of
investments between group companies. As the profit has been recognised under
IFRS with the appropriate taxation charge, the deferred asset has been debited
to deferred tax for the year ended 31 December 2006.
f) In November 2006, the group commenced negotiations for the sale of its
exploration assets to Palladex plc in exchange for Palladex shares. In the UK
GAAP accounts these explorations assets were included in intangible fixed assets
at cost of #3,155,675. Under IFRS, these assets should be disclosed as
non-current assets classified as held for sale at their fair value of
#1,557,500. Accordingly, the IFRS accounts for the year ended 31 December 2006
include a loss on discontinued activities of #1,732,261.
Explanation of material adjustments to the cash flow statement
Application of IFRS has resulted in reclassification of certain items in the
cash flow statement as follows:
(i) under UK GAAP, payments to acquire property, plant and equipment were
classified as part of 'Capital expenditure and financial investment'. Under
IFRS, payments to acquire property, plant and equipment have been classified as
part of 'Investing activities'.
(ii) income taxes of #4,302,766 paid during 2006 are classified as operating
cash flows under IFRS, but were included in a separate category of tax cash
flows under previous GAAP.
There are no other material differences between the cash flow statement
presented under IFRS and the cash flow statement presented under UK GAAP.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR IFFSFAFIEFID
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