TIDMAMBR
RNS Number : 0638F
Ambrian Capital PLC
11 June 2012
AMBRIAN CAPITAL PLC
Results for the 12 months ended 31 December 2011
LONDON, 11 June 2012 - Ambrian Capital plc ("Ambrian Capital")
today announces its preliminary results for the 12 months ended 31
December 2011.
Financial Highlights
-- Total income for the year from continuing operations was
GBP5.48 million (2010: GBP9.60 million (restated))
-- Loss for the year from continuing operations, before tax, was
GBP4.10 million (2010: profit GBP1.13 million (restated))
-- Overall Group loss for the year from all operations was
GBP9.61 million (2010: profit GBP1.51 million (restated))
-- Group own cash at 31 December 2011 was GBP15.38 million (2010: GBP18.97 million)
-- Prior year adjustment in the Group's metals trading business
has reduced retained earnings for the year ended 31 December 2009
by GBP2.31 million and for the year ended 31 December 2010 by
GBP0.36 million
-- Tangible net asset value per voting share (net of deferred
tax) was 19.6p as at 31 December 2011 compared with 26.4p as at 31
December 2010 (restated)
Commenting on the results, Robert Ashley, Chief Executive of
Ambrian Capital, said:
"This has been a challenging year for the Group amidst the
resurgent turmoil in the global economy and the substantial
rationalisation of the Group's business has come at a considerable
price in terms of earnings and net assets.
Nevertheless, we have a strong and liquid balance sheet and our
metals trading business continues to trade positively. After
selling down its inventory backlog, our biofuels business is also
shipping new cargoes to meet the summer demand at positive margins.
When the rationalisation of our cost base has been completed, we
anticipate that the Group will return to profitability as a
whole."
The Company has convened its Annual General Meeting for Friday
29 June 2012 at 3.00pm at the offices of Maclay Murray & Spens,
12th Floor, One London Wall, London EC2Y 2AB and the accounts are
being sent to shareholders.
Enquiries
Ambrian Capital plc
Rob Ashley, Chief Executive + 44 (0)20 7634 4784
Macquarie Capital (Europe)
Limited
Steve Baldwin
Nicholas Harland + 44 (0)20 3037 2000
M:Communications
Charlotte Kirkham + 44 (0)20 7920 2331
Notes to Editors:
AMBRIAN CAPITAL PLC
Ambrian Capital plc (AIM: AMBR) is a specialist natural
resources business active in commodities merchandising and
principal investments.
Commodities
Ambrian Metals Limitedis a physical metals trader with a
particular strength in refined copper. Through Ambrian Metals'
offices in London and Shanghai and agents in New York, Santiago,
Sao Paulo, Seoul and Tokyo, it sources non-ferrous metals from
producers for distribution to an international client base of
metals consumers and merchants.
Ambrian Energy GmbH is a physical energy trading company focused
on the supply of biofuels.
Ambrian Energy Limited andStrategic Energy Bank Limited are
advisers and arrangers in fossil fuel transactions and strategic
storage.
Principal Investments
Ambrian Principal Investments Limited is an investment company
which holds Ambrian's principal investment portfolio. It is managed
by Ambrian Asset Management Limited, which is authorised and
regulated by the Financial Services Authority.
Further information on Ambrian Capital is available on the
Company's website: www.ambrian.com
CHAIRMAN'S REPORT
2011 was a year of change and rationalisation for the Ambrian
Group. In April 2011, we entered into an agreement to dispose of
our LME futures broking business, Ambrian Commodities Limited
("ACL"), which was completed in August. Subsequently, in November
2011, we entered into an agreement to dispose of our corporate
finance and equities business, Ambrian Partners Limited ("APL"),
which was completed in March this year. In both instances, the risk
and reward of the respective businesses passed at exchange of
contracts and completion took place later after receipt of the
requisite consents for the change of control of the respective
companies.
These disposals were made in light of the deteriorating
environment in the credit and equities markets and our lack of
confidence in the future direction of those markets in the short to
medium term. However, this rationalisation of our businesses has
come at a price in terms of earnings and net assets.
Following these disposals, the Group's business is now focused
principally on our commodity trading businesses in metals and
biofuels. The Board has already taken significant steps to reduce
the Group's cost base and continues to look for further
efficiencies and savings.
Regrettably, our balance sheet has been impacted by prior year
adjustments resulting from valuation inconsistencies which have
arisen in our metals trading business in previous years. These were
identified after an exhaustive investigation by management carried
out in conjunction with our auditors, BDO. Further details of the
adjustments are referred to in the Chief Executive's Report.
The Board is satisfied that these inconsistencies are problems
of the past and that adequate reconciliation processes and controls
are now in place to safeguard against inconsistencies of a similar
nature arising in the future.
In February 2011, following Tom Gaffney's resignation, Robert
Ashley took over as Chief Executive bringing extensive expertise in
both commodities and treasury.
In August 2011, I took over from Lawrence Banks following his
retirement from your Board after seven years service with the
Group, four of which were as Chairman.
In June 2011, Charles Crick took over as acting head of
corporate finance of APL. Following his assistance in selling that
company to RFC Group, he retired from the Board in March 2012.
I thank all the retiring Directors for their contributions over
the years.
I also take this opportunity to extend my thanks to all Ambrian
Group staff for their support and considerable efforts throughout
2011.
Shareholders will note that amongst the resolutions to be
proposed at the AGM convened for 29 June 2012, we are proposing a
resolution to change the name of the Company to East West Resources
PLC, which the Board feels better encapsulates the activities of
the Group following the sale of our LME futures broking and
stockbroking businesses.
Finally, I refer shareholders to the outlook statement set out
at the end of the Chief Executive's Report.
Nathan A Steinberg
Chairman
CHIEF EXECUTIVE'S REPORT
Total Income and Pre-Tax Profits
Total income from continuing operations was GBP5.48 million for
the year ended 31 December 2011 compared with GBP9.60 million
(restated) for the year ended 31 December 2010, a decline
principally resulting from the negative performance of both our
fossil fuels business and investment portfolio.
Operating and administrative costs from continuing operations of
GBP8.14 million were marginally lower than the operating costs for
the same period last year of GBP8.15 million.
The loss attributable to shareholders from continuing operations
after tax was GBP4.10 million, compared with a restated profit of
GBP1.13 million for the same period last year, principally
reflecting the reversal in performance of the investment portfolio
and a lack of income in our fossil fuels business relative to the
significant capital invested in the start up of this activity.
As a result of the disposals of Ambrian Commodities Limited
("ACL") and Ambrian Partners Limited ("APL") during the year, we
have treated the results of these two companies as discontinued
activities. Having written down the intangible assets relating to
our investment in APL to zero in the six months ended 30 June 2011,
we incurred trading losses in that company in the second half,
giving rise to a pre-tax loss of GBP5.11 million attributable to
our investments in both APL and ACL.
The Group loss attributable to shareholders from all operations
was GBP9.61 million after tax, compared to a restated after tax
profit of GBP1.51 million for the year ended 31 December 2010.
This loss includes a deferred tax asset in Ambrian Capital of
GBP0.79 million which has been expensed as there is no certainty
that it can be utilised within the foreseeable future (as required
by International Accounting Standard 12 if it is to be recognised
as an asset).
Dividend
In view of the loss reported by the Group, the Board has decided
not to recommend a dividend in respect of the year ended 31
December 2011 (2010:1.5p per share).
Continuing operations
Commodities
Revenue from continuing operations in the Commodities division
was GBP6.35 million for the year ended 31 December 2011 (2010:
GBP5.50 million restated).
Metals - Ambrian Metals Limited ("AML")
The principal feature of 2011 was the marked volatility in
copper prices, with these peaking at $10,109 per tonne in February
and then falling to $6,695 per tonne in September. The price ended
the year at $7,554 per tonne. Consequently premiums were similarly
volatile throughout the year.
In the first half of the year, Chinese demand was subdued,
largely as a result of the high copper price. However, AML
experienced a modest increase in activity in the second half as
prices reduced. Despite this volatility, AML increased its market
share in China with over 40 per cent of total sales in the year
being attributable to Chinese customers.
In the Middle East, the business was affected by the widespread
political unrest and the severe market volatility in commodity
prices. These factors resulted in delays in a number of utility
projects which, in combination with stock holdings carried over by
a number of AML's customers from 2010, led to less demand in the
region than forecast at the start of the year. Nevertheless, AML
increased its market share in the Middle East in 2011 and the
region remains a major source of customers for the business.
The balance of sales was split between South Korea, Europe and
the rest of SE Asia. The majority of the company's supplies were
sourced from Russia, Zambia and India.
Over the 12 months ended 31 December 2011, AML supplied a total
tonnage of refined copper of 240,528 tonnes (compared with 246,050
tonnes supplied for the equivalent period in 2010).
AML continued to benefit from the strong support of its bankers
and now has uncommitted trade finance facilities totalling over
US$385 million compared to US$330 million at 31 December 2011 and
US$310 million at 31 December 2010.
Total revenues in the physical metals division were GBP3.75
million in the period, down from GBP4.16 million for the 12 months
to 31 December 2010 (restated).
Profit before tax for the division for the 12 months to 31
December 2011 was GBP1.65 million compared with GBP1.80 million
(restated) for the same period in 2010.
Biofuels - Ambrian Energy GmbH ("AEG")
Total revenue in AEG for the 12 months ended 31 December 2011
was GBP2.20 million compared with GBP1.34 million in 2010. This was
a strong performance for a business which was only started in
September 2010 although the second half performance did not quite
match the first six months due to the difficulty of reducing
inventory into the winter months. The business was affected by a
period of lower biodiesel premiums relative to gasoil and delayed
shipments of biodiesel from Asia which led to increased storage and
financing expenses in the latter stages of the year. Overall,
biodiesel prices remained consistent throughout the year with
premiums over gasoil trading in a range between US$200-500 per
tonne depending upon seasonality and quality.
Most of AEG's customers are located in North West Europe with
occasional deliveries to Italy and Spain and as such the business
is seasonal with demand affected by winter temperatures. Most of
the product is sourced from South East Asia with some supplies from
South America and Europe. AEG merchandises an expanded range of
biodiesel grades including Rapeseed Oil Methyl Ester ("RME"),
Soyabean Oil Methyl Ester ("SME"), Palm Oil Methyl Ester ("PME")
and Used Cooking Oil Methyl Ester ("UCOME"). As a recycled waste
product, UCOME is considered a second generation biofuel with the
highest rated greenhouse gas saving potential.
During the year, the EU Renewable Energy Directive 2009/28/EC
("Red") was implemented in additional EU member states, leading to
increased demand for certified product.
As members of the International Sustainability & Carbon
Certification ("ISCC") and the Roundtable of Sustainable Palm Oil
("RSPO"), AEG continues to be at the forefront of sustainability
practices in the biofuels market with all feedstock supplied from
sustainable sources.
The business has been funded to date by EUR2.0 million capital
and a subordinated loan facility of up to US$4.8 million provided
by the Group and uncommitted trade finance facilities of US$40
million provided by commercial banks.
Profit before tax for AEG for the 12 months to 31 December 2011
was GBP0.96 million, compared with a loss of GBP0.07 million for
the same period in 2010.
Fossil fuels - Ambrian Energy Limited ("AEL") and Strategic
Energy Bank Limited ("SEB")
Total revenue in AEL and SEB for the 12 months ended 31 December
2011 was GBP0.40 million (2010: GBPnil) and the companies recorded
a loss before tax for the 12 months to 31 December 2011 of GBP1.31
million (2010: GBP0.17 million), Regrettably, the business has not
fulfilled expectations primarily as a result of difficult trading
conditions affecting the fossil fuel market throughout the year and
high storage fees. Since the year end, the Group has ceased
providing capital to AEL and is curtailing its activities in the
business.
Principal Investments
In the 12 months ended 31 December 2011, investment portfolio
recorded a pre-tax loss of GBP1.66 million compared with a pre-tax
profit of GBP2.75 million in the 12 months ended 31 December
2010.
This reflects a reduction of 27.5% in the value of the
underlying investments since 31 December 2010 but compares with a
decrease of 33.6% for the AIM Basic Resources Index (and increases
over the same period in sterling terms of 9.4% for gold and 11.5%
for crude oil).
In light of adverse market conditions and prevailing economic
uncertainty, the Board decided to reduce substantially its exposure
to junior resource stocks and as a result the total value of APIL's
investment portfolio at 31 December 2011 was GBP1.73 million
compared with a principal investment portfolio valued at GBP4.22
million at 31 December 2010.
At 31 December 2011, Ambrian Principal Investments Limited
("APIL") which holds a significant part of the investment portfolio
had 15 holdings. The unlisted investments were valued at GBP0.45
million at 31 December 2011, compared with GBP0.71 million at 31
December 2010.
Ambrian Capital continues to hold a 12.5% interest in
Consolidated General Minerals PLC ("CGM") which was de-listed from
AIM on 1 July 2011. CGM is managed and part-owned by employees of
Ambrian Resources AG ("ARAG") which was established in February
2010 in partnership with a team of three former executives of
Glencore International AG. ARAG employees are now charged to CGM.
CGM continues to focus on developing its clinker grinding mill and
cement packaging plant in Beira, Mozambique. As at 31 December
2011, CGM's reported own cash position was US$19.7 million.
Discontinued operations
Ambrian Commodities Limited ("ACL") and Ambrian Partners Limited
("APL")
In April 2011 we entered into an agreement for the sale to INTL
Global Currencies Limited (a wholly-owned subsidiary of INTL
FCStone Inc) of the whole of the issued share capital of ACL with
effect from 31 March 2011. This agreement was completed on 31
August 2011 and resulted in the return to the Company of its
invested capital of GBP4.37 million. In November 2011, we entered
into an agreement for the sale to RFC Group Limited of the whole of
the issued share capital of APL with effect from 31 October 2011.
This agreement was completed on 30 March 2012. In both agreements,
the risk and reward of the businesses passed at exchange of
contracts and completion took place later after the requisite
consents for the change of control of the respective companies had
been obtained. As a result of these disposals, the results of ACL
and APL for the periods until their disposal have been treated as
discontinued operations. The disposal of APL resulted in an after
tax loss of GBP5.51 million on our investment in APL (represented
by a loss on the Group's original investment (including goodwill)
of GBP3.71 million, a GBP0.40 million write-off of non-recoverable
deferred tax and trading losses in the period of GBP1.40 million).
The overall loss in Group attributable to our discontinued
operations was GBP5.51 million.
Expenses
Group administrative expenses attributable to the Group's
continuing operations for the year ended 31 December 2011 were
GBP8.14 million(2010: GBP8.15 million restated), of which GBP7.16
million (2010: GBP6.67 million) were represented by fixed costs
(excluding provisions for year-end profit related bonuses and
share-based payment charges). Like for like expenses were broadly
in line with those for last year.
Remuneration expenses attributable to continuing operations,
before share-based payment charges, were GBP3.72 million in the 12
months ended 31 December 2011 (2010: GBP3.30 million) of which (i)
GBP2.74 million was represented by salaries, employers' national
insurance and benefits (2010: GBP1.79 million) and (ii) GBP0.98
million represented a provision for year-end profit related bonuses
(2010: GBP1.51million). The ratio of total remuneration expenses to
total income relating to our continuing operations was 67% for the
year compared with 37% for 2010. The variance in these two
percentages is largely attributable to the reversal in performance
of the investment portfolio and the lack of income in our fossil
fuels business.
Total headcount in our continuing operations at 31 December 2011
was 30 (compared with a total Group headcount at 31 December 2010
of 78).
Share-based payment charges were GBP0.16 million in the 12
months ended 31 December 2011 (2010: GBP0.52 million).
Non-remuneration expenses attributable to continuing operations
were GBP4.42 million in the 12 months ended 31 December 2011 (2010:
GBP4.88 million).
Balance Sheet
Prior year adjustment and restatement of 2010 financial
results
The Group balance sheet has been adversely impacted by a prior
year adjustment resulting from valuation inconsistencies in our
metals trading business.
In conjunction with the Company's auditors, management carried
out an exhaustive investigation into the financial reporting of the
physical metals business and the manner in which transactions have
been recorded in the books of AML since the acquisition of the AML
business in 2008. As a result of this investigation, it was found
that there were inconsistencies in the manner in which certain
inventory and open sales contracts had been valued in the Group's
financial statements for the previous years ended 31 December 2009
and 31 December 2010. The financial statements for the year ended
31 December 2011 have been prepared on the basis that the inventory
has been valued at open market value less costs to sell and the
open sales contracts (which are included in prepayments and accrued
income) only include any contracted profit which is in excess of
open market value. This amount is reduced by a liability for any
open contracts which at the year-end are below open market
value.
In the year ended 31 December 2009, open sales contracts
included in prepayments and accrued income were overvalued by
GBP4.08 million as they had not been reduced to reflect the uplift
of related inventory items to fair value. After adjusting for
credits for bonuses and taxation, the Group profit after tax for
the year ended 31 December 2009 was overstated by GBP2.31 million.
Group retained earnings for the year ended 31 December 2009 were
overstated by the same amount.
In the year ended 31 December 2010, open sales contracts
included in prepayments and accrued income were overvalued by a net
amount of GBP1.10 million for the same reason as set out above in
relation to the previous year. After adjusting for credits for
bonuses and taxation, the Group profit after tax for the year ended
31 December 2010 was overstated by GBP0.36 million which has been
restated in the financial statements for this period. Group
retained earnings for the year ended 31 December 2010 were
overstated by the same amount. Further details are provided in Note
3 of the condensed consolidated financial statements.
Net assets
Total net assets at 31 December 2011 were GBP19.86 million, down
from GBP30.15 million at 31 December 2010 (restated). The principal
factors impacting the Group's net assets were the losses
attributable to our investments in APL and ACL (GBP5.51 million),
the losses on our investment portfolio (GBP1.66 million), the prior
year adjustments and restatements relating to our physical metals
business referred to above (GBP2.67 million) and the losses arising
in our fossil fuels business (GBP1.30 million).
The Group's own cash resources totalled GBP15.38 million at 31
December 2011 compared with GBP18.97 million at 31 December 2010.
As a result of the disposal of APL, the GBP0.9 million balance of
cash due on completion of that sale which had not been received at
31 December 2011 (but which has been received since the year-end)
has been treated as a debtor. The reduction in own cash amounting
to GBP3.59 million is principally attributable to APL and ACL
leaving the Group, the investment portfolio losses, the losses in
the fossil fuel business, payment of professional fees and employee
severance amounts and the payment of the final dividend for the
year ended 31 December 2010.
Net tangible asset value per share (net of deferred tax) was
19.6p (compared with 26.4p as at 31 December 2010 (restated)). Net
tangible asset value per share is based on 100,136,584 ordinary
shares outstanding at 31 December 2011 (excluding Treasury shares
and shares held by the Ambrian Capital Employee Benefit Trust)
(2010: 98,477,751).
Outlook
This has been a challenging year for the Group amidst the
resurgent turmoil in the global economy. However, the Group has a
strong and liquid balance sheet and the metals trading business
continues to trade positively. After selling down itsinventory
backlog, the biofuels business is also shipping new cargoes to meet
the summer demand at positive margins. When the rationalisation of
the Group's cost base has been completed, the Board anticipates
that the Group will return to profitability as a whole.
In view of the uncertainty in world markets, we remain focused
on the risk, control and reporting environment applicable to the
Group's operations and we continue to look for strategic
opportunities to enhance shareholder value.
Robert Ashley
Chief Executive
AMBRIAN CAPITAL PLC
FINANCIAL STATEMENTS FOR THE YEAR ENDED
31 DECEMBER 2011
Consolidated statement of comprehensive income
Year to 31 December 2011 Year to 31 December
2010
GBP (restated)
GBP
Revenue 6,894,593 5,503,078
Investment portfolio (losses) and gains (1,409,649) 4,094,224
----------------------------- ------------------------
Total income 5,484,944 9,597,302
Administrative expenses (8,143,053) (8,153,603)
(Loss)/profit before tax (2,658,109) 1,443,699
Taxation (1,436,937) (313,005)
----------------------------- ------------------------
(Loss)/profit after tax from continuing operations (4,095,046) 1,130,694
(Loss)/profit on discontinued operations before tax (5,112,764) 681,822
Taxation on discontinued operations (399,870) (303,429)
----------------------------- ------------------------
(Loss)/profit after tax from continuing and discontinued
operations (9,607,680) 1,509,087
----------------------------- ------------------------
Other comprehensive income
Exchange profit/(loss) arising from translation of
foreign operations 245,460 (459,080)
----------------------------- ------------------------
Total other comprehensive income 245,460 (459,080)
----------------------------- ------------------------
Total comprehensive (loss)/income (9,362,220) 1,050,007
(Loss)/profit for the period attributable to:
Owners of the parent (9,604,730) 1,599,532
Non-controlling interest (2,950) (90,445)
----------------------------- ------------------------
(9,607,680) 1,509,087
----------------------------- ------------------------
Total comprehensive income attributable to:
Owners of the parent (9,359,270) 1,140,452
Non-controlling interest (2,950) (90,445)
----------------------------- ------------------------
(9,362,220) 1,050,007
----------------------------- ------------------------
Earnings per share continuing and
discontinued operations:
Basic (9.88) pence 1.62 pence
Continuing operations:
Basic (4.21) pence 1.23 pence
============================= ========================
Consolidated statement of financial position at 31 December
2011
2011 2010 2009
(restated) (restated)
GBP GBP GBP
ASSETS
Non-current assets
Property, plant and equipment 177,747 288,754 317,511
Intangible assets - 2,150,109 2,290,109
Deferred tax asset 232,071 2,038,275 1,904,968
----------------------- ------------------- -------------------
409,818 4,477,138 4,512,588
Current Assets
Financial assets at fair value through profit
or loss 4,841,449 7,250,816 4,698,734
Inventory 179,154,816 237,921,517 58,551,733
Trade and other receivables 59,127,665 103,413,968 51,451,699
Current tax recoverable - 215,219 1,107,775
Cash and cash equivalents 15,378,657 31,121,434 37,432,135
258,502,587 379,922,954 153,242,076
----------------------- ------------------- -------------------
Total Assets 258,912,405 384,400,092 157,754,664
----------------------- ------------------- -------------------
LIABILITIES
Current liabilities
Financial liabilities at fair value through
profit or loss (5,008,970) (18,745,460) (7,709,922)
Short term borrowings (159,207,524) (177,851,710) (85,590,071)
Short term liabilities under sale & repurchase
agreements (45,057,643) (82,363,606) -
Trade and other payables (29,459,659) (74,146,542) (34,270,265)
Current tax payable (321,799) (1,145,936) (59,672)
Total liabilities (239,055,595) (354,253,254) (127,629,930)
----------------------- ------------------- -------------------
Total net assets 19,856,810 30,146,838 30,124,734
----------------------- ------------------- -------------------
CAPITAL AND RESERVES
Share capital 11,136,121 11,136,121 11,136,121
Share premium account 11,105,383 11,105,383 11,105,383
Merger reserve - 1,245,256 1,245,256
Treasury shares (1,128,716) (1,128,716) (1,093,889)
Retained earnings 762,273 10,187,976 10,051,747
Share-based payment reserve 4,325,508 4,161,508 3,639,675
Employee benefit trust (5,471,023) (5,445,444) (5,342,707)
Exchange reserve (830,472) (1,075,932) (616,852)
----------------------- ------------------- -------------------
Total equity attributable to the owner of the
parent 19,899,074 30,186,152 30,124,734
Non-controlling interest 42,264) (39,314) 0
Total equity 19,856,810 30,146,838 30,124,734
----------------------- ------------------- -------------------
Consolidated statement of changes in equity for the year ended
31 December 2011
Share-
Share based Employee Non-controlling
Share premium Merger payments benefit Treasury Retained Exchange interest Total
capital account reserve reserve trust shares earnings reserve Equity
GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP
Balance at 31
December 2009 11,136,121 11,105,383 1,245,256 3,639,675 (5,342,707) (1,093,889) 12,357,624 (616,852) - 32,430,611
--------------- --------------- ---------------- -------------- ---------------- ---------------- ----------------- ---------------- -------------------- ----------------
Prior year
adjustment
(Note 3) - - - - - - (2,305,877) - - (2,305,877)
--------------- --------------- ---------------- -------------- ---------------- ---------------- ----------------- ---------------- -------------------- ----------------
Restated
balances at 31
December 2009 11,136,121 11,105,383 1,245,256 3,639,675 (5,342,707) (1,093,889) 10,051,747 (616,852) - 30,124,734
--------------- --------------- ---------------- -------------- ---------------- ---------------- ----------------- ---------------- -------------------- ----------------
Profit for the
period - - - - - - 1,963,931 - (90,445) 1,873,486
Prior year
adjustment
(Note 3) - - - - - - (364,399) - - ((364,399)
Other
comprehensive
income - - - - - - - (459,080) - (459,080)
Non-controlling
interest on
incorporation
of subsidiary - - - - - - - - 51,131 51,131
Share-based
payment charge - - - 521,833 - - - - 521,833
Purchase of
shares - - - - (268,295) (34,827) - - - (303,122)
Sale of shares - - - - 165,558 - - - - 165,558
Dividends - - - - - - (1,463,303) - - (1,463,303)
--------------- --------------- ---------------- -------------- ---------------- ---------------- ----------------- ---------------- -------------------- ----------------
Restated
balances at 31
December 2010 11,136,121 11,105,383 1,245,256 4,161,508 (5,445,444) (1,128,716) 10,187,976 (1,075,932) (39,314) 30,146,838
--------------- --------------- ---------------- -------------- ---------------- ---------------- ----------------- ---------------- -------------------- ----------------
(Loss) for the
period - - - - - - (9,604,730) - (2,950) (9,607,680)
Elimination on
disposal - - (1,245,256) - - - 924,392 - - (320,864)
Other
comprehensive
income - - - - - - - 245,460 - 245,460
Share-based
payment charge - - - 164,000 - - - - - 164,000
Purchase of
shares - - - - (57,809) - - - - (57,809)
Sale of shares - - - - 32,230 - - - - 32,230
Dividends - - - - - - (745,365) - - (745,365)
Balance at 31
December 2011 11,136,121 11,105,383 - 4,325,508 (5,471,023) (1,128,716) 762,273 (830,472) (42,264) 19,856,810
--------------- --------------- ---------------- -------------- ---------------- ---------------- ----------------- ---------------- -------------------- ----------------
Consolidated statement of cash flows for the year ended 31
December 2011
Year to 31 December 2011 Year to 31 December 2010
(restated)
GBP GBP
(Loss)/profit for the year (9,607,680) 1,509,087
Adjustments for:
Depreciation of property, plant and equipment 52,600 217,392
Amortisation of intangible assets 2,150,109 140,000
Foreign exchange losses/(gains) 96,538 (38,311)
Taxation expense 1,836,807 616,434
Unrealised gains on financial assets designated at
fair value 155,366 48,845
Realised losses on financial assets designated at
fair value 2,213,170 263,567
Net cost/(income) on acquisition of financial
assets designated at fair value 40,831 (2,864,494)
Decrease/(increase) in inventories 58,766,701 (179,369,785)
Decrease/(increase) in trade and other receivables 41,936,350 (51,962,269)
Unrealised (losses)/gains on financial liabilities
at fair value (13,736,490) 11,035,538
(Decrease)/increase in trade and other payables (43,447,274) 39,876,277
(Decrease)/increase in short term liabilities under
sale and repurchase agreements (37,305,963) 82,363,606
(Decrease)/increase in short term borrowings (18,644,186) 92,261,639
Share-based payment charge 164,000 521,833
Loss on disposal of subsidiaries 1,500,000 -
Cash used in operations (13,829,121) (5,380,641)
Taxation (paid)/recovered (481,175) 1,229,080
----------------------------- -----------------------------
Net cash flow used in operating activities (14,310,296) (4,151,561)
----------------------------- -----------------------------
Investing activities
Cash introduced by non-controlling interest on
incorporation of subsidiary - 51,131
Disposal of subsidiary undertakings (868,139) -
Purchase of property, plant and equipment (83,405) (188,767)
Disposal of property, plant and equipment 141,115 133
----------------------------- -----------------------------
Net cash (used) in investing activities (810,429) (137,503)
----------------------------- -----------------------------
Financing activities
Purchase of shares by employee benefit trust (25,579) (268,295)
Sale of shares by employee benefit trust - 165,558
Purchase of treasury shares - (34,828)
Dividends paid to owners of the parent (745,365) (1,463,303)
----------------------------- -----------------------------
Net cash used in financing activities (770,944) (1,600,868)
============================= =============================
Net decrease in cash and cash equivalents (15,891,669) (5,889,932)
Cash and cash equivalents at the beginning of the year 31,121,434 37,432,135
Foreign exchange gains on translation of foreign
subsidiaries 148,892 (420,769)
----------------------------- -----------------------------
Cash and cash equivalents at the end of the year 15,378,657 31,121,434
============================= =============================
Notes to the condensed consolidated financial statements
1 Basis of preparation
The financial information set out in this announcement does not
constitute the Group's statutory accounts for the years ended 31
December 2011 or 2010 but is derived from those accounts. Statutory
accounts for 2010 have been delivered to the Registrar of
Companies, and those for 2011 will be delivered in due course.
The auditors have reported on those accounts; their reports were
(i) unqualified, (ii) did not include a reference to any matters to
which the auditors drew attention by way of emphasis without
qualifying their report and (iii) did not contain statements under
section 498 (2) or (3) of the Companies Act 2006. The results for
the year ended 31 December 2011 were approved by the Board of
Directors on 8 June 2012 and are audited.
While the financial information included in this preliminary
announcement has been prepared in accordance with the recognition
and measurement criteria of International Financial Reporting
Standards (IFRSs) as endorsed for use in the European Union, this
announcement does not itself contain sufficient information to
comply with IFRSs. The accounting policies adopted in this
announcement have been consistently applied and are consistent with
the policies used in the preparation of the statutory accounts for
the period ending 31 December 2011.
2 Segmental analysis
The Group has four reportable segments attributable to its
continuing operations and unallocated central revenues and
costs:
-- Physical metals - comprises Ambrian Metals Limited, a physical metals merchant.
-- Biofuels - comprises Ambrian Energy GmbH, a biofuels trader
-- Fossil fuels - comprises Ambrian Energy Limited, a physical
fuels merchant and Strategic Energy Bank Limited, an adviser and
arranger of transactions.
-- Investment portfolio - comprises the Group's principal
investment portfolio held in Ambrian Principal Investments
Limited.
-- Unallocated central revenues represent recharges of costs
from Ambrian Resources AG ("ARAG"). Unallocated central costs
relate to overheads incurred in connection with operating the
public limited company and include the share-based payment charges
in relation to the staff share option schemes, the remuneration of
the Directors of Ambrian Capital plc and the costs of ARAG.
During the year, the Group disposed of its LME futures broking
business and entered into an agreement to dispose of its Corporate
finance & equities division (which was completed after the year
end.). As a result of these disposals, the two divisions have been
treated as discontinued activities of the Group.
The measurement of the segmental revenue, profit before tax,
capital expenditure, depreciation, total assets, total liabilities
and net assets have been prepared using consistent accounting
policies across the segments.
2011 2010
GBP GBP
Revenue/Income Restated
Continuing operations
Physical metals 3,751,879 4,160,539
Biofuels 2,194,656 1,342,539
Fossil Fuels 401,285 -
--------------------------- --------------------------
Commodities division 6,347,820 5,503,078
Investment portfolio (1,409,649) 4,094,224
Unallocated central 546,773 -
--------------------------- --------------------------
5,484,944 9,597,302
--------------------------- --------------------------
Discontinued operations
Corporate finance & equities 4,119,339 9,776,968
LME futures broking 513,891 2,172,107
--------------------------- --------------------------
4,633,230 11,949,075
--------------------------- --------------------------
10,118,174 21,546,377
--------------------------- --------------------------
Investment portfolio income represents:
Unrealised (losses)/gains on financial
assets designated at fair value (1,260,821) 670,507
Realised gains on financial assets
designated at fair value (155,366) 1,701,177
Dividends, distributions and other 6,538 1,722,540
--------------------------- --------------------------
(1,409,649) 4,094,224
--------------------------- --------------------------
Profit/loss before tax
Continuing operations
Physical metals 1,653,681 1,801,302
Biofuels 955,990 (72,433)
Fossil Fuels (1,307,346) (172,305)
--------------------------- --------------------------
Commodities division 1,302,325 1,556,564
Investment portfolio (1,660,189) 2,745,674
Unallocated central (2,300,245) (2,858,539)
--------------------------- --------------------------
(2,658,109) 1,443,699
--------------------------- --------------------------
Discontinued operations
Corporate finance & equities (5,059,127) 318,024
LME futures broking (53,637) 363,798
--------------------------- --------------------------
(5,112,764) 681,822
--------------------------- --------------------------
(7,770,873) 2,125,521
--------------------------- --------------------------
Capital expenditure
Corporate finance & equities - 35,545
Physical metals - 1,429
Biofuels 11,252 124,039
--------------------------- --------------------------
11,252 161,013
Unallocated central 72,153 27,755
--------------------------- --------------------------
83,405 188,768
--------------------------- --------------------------
Depreciation
Corporate finance & equities - 207,012
LME futures broking - 3,145
Physical metals 73 97
Biofuels 22,714 7,138
Unallocated central 29,813 -
52,600 217,392
--------------------------- --------------------------
Total assets
Corporate finance & equities - 7,222,554
LME futures broking - 19,370,676
Physical metals 239,251,286 337,521,347
Fossil fuels 455,183 58,506
Biofuels 10,556,315 8,622,636
Investment portfolio 2,084,079 4,862,611
Unallocated central 6,565,542 6,741,762
--------------------------- --------------------------
258,912,405 384,400,092
--------------------------- --------------------------
Total liabilities
Corporate finance & equities - 2,127,080
LME futures broking - 14,987,479
Physical metals 230,203,388 328,783,182
Biofuels 6,514,782 168,310
Fossil fuels 754,116 6,377,784
Investment portfolio 35,613 68,750
Unallocated central 1,547,696 1,796,462
--------------------------- --------------------------
239,055,595 354,253,254
--------------------------- --------------------------
The majority of the Group's non-current assets are located in
the UK. The information required to disclose the geographical
analysis of revenues from customers is not available and the cost
to develop it would be excessive.
3 Prior year adjustment
During the preparation of the 2011 financial statements a number
of inconsistencies have been discovered in respect of accounting
for open sales contracts and inventory. The 2011 statements have
been prepared on the basis that inventory has been valued at open
market value less costs to sell and that open sales contracts which
are included in prepayments and accrued income only include any
contracted profit which is in excess of open market value. This
amount is reduced to reflect a liability for any open contracts
which at the year-end are below open market value.
In the year ended 31 December 2009 open sales contracts included
in prepayments and accrued income were overvalued by GBP4,084,392
as they had not been reduced to reflect the uplift of related
inventory items to fair value. This resulted, after adjusting for
administrative expenses comprising bonuses (GBP733,812) and related
taxation charge adjustments (GBP1,044,703) in the Group profit
after tax for the year ended 2009 being overstated by GBP2,305,877.
Group retained earnings for the year ended 31 December 2009 were
overstated by the same amount.
In the year ended 31 December 2010 open sales contracts included
in prepayments and accrued income were overvalued by GBP1,104,459
as they had not been reduced to reflect contracted losses for open
contracts which at the year-end were below market value. This
resulted, after adjusting for administrative expenses comprising
bonuses (GBP331,337) and related taxation charge adjustments
(GBP408,723) in the Group profit after tax for the year ended 2010
being overstated by GBP364,399. Group retained earnings for the
year ended 31 December 2010 were overstated by the same amount.
This has been adjusted by a prior year adjustment in these
financial statements. This adjustment reduced the Earnings per
Share by 0.02 pence in the year.
In the year ended 31 December 2010 open sales contracts included
in prepayments and accrued income were overvalued by GBP12,654,841
and inventory relating to metals was undervalued by the same amount
as the allocation of open market values for inventory and
prepayments and accrued income was not correctly stated. This has
no impact on the results for the year ended 31 December 2010. The
comparative statements for 2010 in these financial statements have
been restated.
In previous years prepayments and accrued income and accruals
and deferred income have been presented by showing their gross open
sales and purchases commitments at the period end. In 2011 the
company changed its accounting policy in relation to the
presentation of prepayments and accrued income and accruals and
deferred income in the statements of financial position. The effect
of measurement of these is now presented net in either prepayments
and accrued income or accruals and deferred income depending on
whether the outcome of measuring these results in gains or losses
at the end of each reporting period. The change is accounting
policy was made to better reflect the fact that these instruments
are derivative financial instruments which can be settled net at
each reporting date on a contract by contract basis. This change
has no effect on the group's net equity position and effects on the
statement of financial position are shown below.
The effect of the above adjustments has been to
increase/(decrease) the reported numbers as follows:
Prior year adjusted Consolidated statement of
comprehensive income
2010 2009
GBP GBP
Revenue (1,104,459) (4,084,392)
Administrative expenses 331,337 733,812
----------------- ----------------
Profit before tax (773,122) (3,350,580)
Taxation 408,723 1,044,703
----------------- ----------------
(Loss)/profit after
tax (364,399) (2,305,877)
----------------- ----------------
Prior year adjusted Statement
of Financial Position
2010 2009
GBP GBP
Deferred tax asset 102,701 650,840
Prepayments (174,701,913) (199,824,620)
Inventory 12,654,481 -
Trade and other receivables 331,697 733,812
------------------ ------------------
Total assets (161,613,034) (198,439,968)
Accruals 160,942,613 195,740,228
Current tax payable 306,022 393,863
------------------ ------------------
Net assets (364,399) (2,305,877)
------------------ ------------------
4 Earnings per Ordinary 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,
excluding shares held in the Employee Benefit Trust and treasury
shares.
The calculation of diluted earnings per share is based on the
basic earnings per share adjusted to allow for the issue of shares
through the share option schemes on the assumed conversion of all
dilutive options.
Reconciliations of the earnings and weighted average number of
shares in the calculations are set out below.
2011 2010
(Loss) Profit
Attributable Attributable
to Owners Weighted to Owners Weighted
of the average Per of the average Per
Company number share Company number share
GBP of shares amount GBP of shares amount
Restated Restated (pence) Restated Restated (pence)
Continuing
and
discontinued
operations
Basic
earnings
per share (9,604,730) 97,260,778 (9.88) 1,599,532 98,542,909 1.62
_________ _________ _________ _________
Dilutive
effect
of share
options - 994,960
_________ _________
Diluted
earnings
per share (9,604,730) 97,260,778 (9.88) 1,599,532 99,537,869 1.62
_________ _________ _________ _________ _________ _________
Continuing
operations
Basic
earnings
per share (4,092,096) 97,260,778 (4.21) 1,221,139 98,542,909 1.23
_________ _________ _________ _________
Dilutive
effect
of share
options - 994,960
_________ _________
Diluted
earnings
per share (4,092,096) 97,260,778 (4.21) 1,221,139 99,537,869 1.23
_________ _________ _________ _________ _________ _________
The loss attributable to the owners of the company for
continuing and discontinued operations used in the above
calculation is that presented in the consolidated statement of
comprehensive income. The loss attributable to owners of the
company for discontinuing operations is derived from the loss from
continuing operations of GBP4,095,046 (2010: profit GBP1,130,694)
which is adjusted for the loss for the period attributable to the
non-controlling interest of GBP2,950 (2010:loss GBP90,445).
5 Discontinued operations
In March 2011, the Group entered into an agreement to dispose of
its entire interest in Ambrian Commodities Limited ("ACL") which
was completed in September 2011 and in November 2011, the Group
entered into an agreement to sell its entire interest in Ambrian
Partners Limited ("APL") which was completed on 30 March 2012 but
with the risk and reward passing with effect from 31 October 2011.
As a result of these disposals, the operations of ACL and APL
during the year ended 31 December 2011 have been treated as
discontinued operations.
Trade & other receivables contain a sum of GBP900,000
representing the post tax consideration for the disposal of
APL.
The assets attributable to the discontinued operations as at
their respective effective disposal dates are set out below.
At disposal
2011 2010
GBP GBP
Property, plant and equipment 697 142,731
Trade and other receivables 3,247,998 7,893,593
Cash 5,338,335 18,877,617
Trade and other payables (1,716,834) (17,415,246)
---------------- -----------------
Net asset position 6,870,196 9,498,695
---------------- -----------------
The post-tax gain on disposal of discontinued operations was
determined as follows:
Result of discontinued operations
2011 2010
GBP GBP
Revenue 4,633,230 11,949,075
Administrative expenses (8,245,994) (11,267,253)
Loss from selling discontinued operations (1,500,000) -
----------------- ---------------------
(5,112,764) 681,822
Taxation (expense) (399,870) (303,429)
----------------- ---------------------
(Loss)/profit for the year (5,512,634) 378,393
----------------- ---------------------
(Loss)/earnings per share discontinued operations:
Basic (5.67) pence 0.38 pence
The total proceeds of the disposal of Ambrian Commodities
Limited was GBP4,370,196 and the total proceeds of the disposal of
Ambrian Partners Limited was GBP1,000,000.
Statement of cash flows from discontinued operations
Operating activities (13,539,282) (7,656,357)
Investing activities (868,139) -
Net cash from discontinued operations (14,407,421) (7,656,357)
----------------- ----------------
In the above tables, the comparative information for 2010 has
been restated to present income generated and expenses incurred by
both discontinued operations.
6 Non-controlling interest
The non-controlling interest disclosed in the statement of
comprehensive income and statement of financial position represents
a 20% minority interest in Ambrian Resources AG held by
shareholders other than Ambrian Capital plc.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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