RNS Number:3301Q
Ocean Resources Capital HoldingsPLC
30 September 2003
OCEAN RESOURCES CAPITAL HOLDINGS PLC
INTERIM RESULTS
CHAIRMAN'S STATEMENT
By issuing its own shares, Ocean Resources Capital Holdings Plc acquired a
portfolio of securities in resource related companies that are either already
generating a positive cash flow, or are likely to do so within the next two
years. Subsequently, Ocean was admitted to trading on the London AIM market at
the end of February 2003.
Since the Admission Date, the investee companies have now sold the majority of
their shares in Ocean. Unfortunately the realisation value received for these
sales was below the investees' earlier expectations. In an effort to address the
difficulties that this reduction in value has caused to the companies, we agreed
to modify certain of the investment agreements. The portfolio as at 29 August
2003 is summarised in this statement and incorporates the effect of these
changes.
The Company's investment philosophy remains unchanged by these modifications.
The Company's net asset value at 30 June 2003 was 35.4p per share which reflects
all the agreed modifications mentioned above, as well as the impact of the
company's launch costs. The net asset value at 29 August 2003 of 36.5p shows a
modest improvement reflecting the beginning of an improvement in market
conditions in the resource sector.
Subsequent to the August month end, one of the Company's largest unquoted
investments, Archipelago Resources Plc was admitted to trading on AIM. We are
hopeful that some of our other unquoted investments will come to market during
the coming year.
As a result of the fall in the Company's investment portfolio, a #10.3 million
negative revaluation adjustment has been taken through the profit and loss
account. Until this has been recovered the Company will be unable to pay
dividends. We are therefore unable to indicate when the Company will be able to
pay its first dividend or the amount thereof.
As we have previously announced in order to manage the discount to net asset
value that the ordinary shares may trade at, the Board has decided that, subject
to shareholder approval and having sufficient distributable reserves, it intends
to utilise cash received from the realisation of investments, after payment of
dividends, in purchasing its own ordinary shares. Such purchases will be made so
long as the level of distributable reserves are maintained at a level equivalent
to the previous year's dividend, having paid such dividend and so long as
purchases can be made at a price that equates to a not less than 25% discount to
net asset value. If the ordinary shares are trading at more than a 40% discount
to net asset value, following receipt of shareholder approval to buy back the
Company's ordinary shares but the Company does not have sufficient distributable
reserves to enable such buy back to occur, the Board will consider what other
steps are available to enable buy backs to occur.
In addition, to prevent a further widening of the discount to net asset value
that the ordinary shares may trade at, the Board has decided to limit further
issues of ordinary shares, save in respect of existing obligations, to 10% of
the current issued share capital over the next two years.
While it has been a difficult start to the Company's life, we have achieved the
objective of funding a number of interesting and exciting resource companies,
with known reserves, and this has placed us in an excellent position to benefit
from their profit growth and potential market re-rating in the coming few years.
We also believe that Ocean is well positioned to additionally benefit from what
currently appears to be the early stages of a new bull market in the gold and
natural resource sectors.
30 September 2003
PORTFOLIO ANALYSIS
as at 29 August 2003
Nominal Security Sector Cost Value
GBP Sterling denominated
18,250,000 Archipelago Resources Gold 4,562,500.00 4,562,500.00
Plc ordinary shares
#845,000 Cambrian Forestry Other (timber) 845,000.00 845,000.00
Products Plc 10% CULN
2006
#3,600,000 Orevest Plc 12% CULN Industrial 3,600,000.00 3,600,000.00
2005 Minerals
#5,000,000 Alliance Mining Diamonds 5,000,000.00 2,000,000.00
Limited 10% CULN 2005
#5,000,000 Bralorne-Pioneer Gold Gold 5,000,000.00 3,500,000.00
Mines Ltd 11% Secured
Gold Loan
#960,000 Gold City Industries Gold 960,000.00 960,000.00
Ltd 12% Secured Gold
Loan
30,000,000 Rheochem Limited Oil Services 5,773,680.00 6,150,000.00
ordinary shares
#400,000 Scorpio Mining Corp Base Metals 400,000.00 400,000.00
12% CULN 2005
#120,000 Guy Wilkes re Ocean Other 120,000.00 120,000.00
Equities (financial)
26,261,180.00 22,137,500.00
USA $ denominated
$3,600,000 BPK Resources 10% Gold 2,195,000.00 1,298,376.73
Preferred Stock 2006
$2,500,000 BM Diamondcorp project Gold 1,050,000.00 1,050,000.00
loan PT Galuk Cempaka
$550,000 Ivernia West 10% Base Metals 367,922.75 348,476.21
Convertible Unsecured
Loan Notes
8,461,538 Ivernia West Inc Base Metals 0.00 0.00
Warrants (Cnv 6.5c
US$)
3,612,922.75 2,696,852.94
Canadian $ denominated
1,875,000 Strata Gold Gold 303,643.50 340,290.38
Corporation ordinary
shares
937,500 Strata Gold Warrants Gold 0.00 0.00
4,279,488 Gold City Industries Gold 1,440,000.00 349,504.46
common shares
10,825,966 Terra Nova Gold Corp Gold 2,600,000.00 1,227,990.70
common shares
2,000,000 Terra Nova Gold Gold 0.00 0.00
Warrants (Cnv 45c C$)
8,000,000 BM Diamond Corp common Diamonds 700,000.00 580,762.25
shares
15,000,000 BM Diamond Corp Diamonds 0.00 0.00
Warrants (Cnv 20c)
Canadian $ denominated
(continued)
800,000 Scorpio Mining Corp Base Metals 600,000.00 90,744.10
Warrants (Cnv 60c C$)
4,250,000 Bralorne-Pioneer Gold 0.00 0.00
Warrants (Cnv 50c US$
year 1)
5,643,643.50 2,589,291.89
Australian $ denominated
A$700,000 Burdekin Pacific Gold 260,190.00 283,676.45
Limited 10% CULN 2005
A$2,800,000 Burdekin Pacific Gold 1,040,760.00 1,134,705.79
Limited 10% CUPN 2005
A$7,200,000 St Barbara Mines Gold 3,052,215.50 2,917,814.88
Limited 12%
Convertible Notes
2,350,000 Intierra Limited Other 96,870.53 95,234.24
ordinary shares (services)
4,450,036.03 4,431,431.36
Euro denominated
Euro4,000,000 Central African Minerals 2,600,000.00 905,000.00
Ventures 10%
Industrial CULN 2005
N/A Picobello Andalucita Industrial 750,000.00 750,000.00
SL Minerals
3,350,000.00 1,655,000.00
43,317,782.28 33,510,076.19
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the period ended 30 June 2003
2003
#'000
(Unaudited)
Income from investments
Unlisted securities 629
Profit on disposal of investments:
Unlisted securities 126
Interest receivable and similar income 129
Administrative expenses (301)
Operating profit - continuing operations 583
Exceptional item - revaluation of investments (10,366)
Interest payable (97)
Loss on ordinary activities before taxation (9,880)
Tax on loss on ordinary activities (118)
Loss for the period (9,998)
Dividends -
Retained profit for the period (9,998)
Loss per share - note 4 (11.7p)
BALANCE SHEET OF THE GROUP AND COMPANY
as at 30 June 2003
Group Company
2003 2003
#'000 #'000
(Unaudited) (Unaudited)
Fixed asset investments - note 1
Group undertakings - -
Other investments 31,566 31,566
31,566 31,566
Current assets
Debtors 5,097 4,478
Cash at bank and in hand 39 39
5,136 4,517
Creditors: amounts falling due within one year (5,549) (5,431)
Net current liabilities (413) (914)
Total assets less current liabilities 31,153 30,652
Creditors: amounts falling due after more than one year
8% Convertible Unsecured Loan Stock 2006 (938) (938)
Net assets 30,215 29,714
Capital and reserves
Called up share capital 852 852
Share premium account 39,361 39,361
Profit and loss account - note 2 (9,998) (10,499)
Equity shareholders' funds 30,215 29,714
Net asset value per share - note 5 35.4p
CONSOLIDATED CASH FLOW STATEMENT
for the period ended 30 June 2003
2003
#'000
(Unaudited)
Operating profit 583
Profit on disposal of fixed asset investment (126)
Increase in debtors (760)
Increase in creditors 270
Net cash outflow from operating activities (33)
Interest paid on bank loan (4)
Net cash outflow from servicing of finance (4)
Taxation paid -
Investing activities
Purchase of fixed asset investments (812)
Proceeds of disposal of fixed asset investments -
Net cash outflow from capital expenditure and financial investment (812)
Equity dividends paid -
Net cash outflow before financing (849)
Share issue expenses paid (2,333)
Bank loan 5,000
Loans granted to investee companies (2,714)
Proceeds from issue of 8% Convertible Unsecured Loan Stock 2006 935
Net cash inflow from financing 888
Increase in cash 39
Reconciliation of net cash inflow to movement in net debt
Increase in cash 39
Net drawdown of loan facility (5,000)
Debt due on 8% Convertible Unsecured Loan Stock 2006 (938)
Movement in net debt in period (5,899)
Net debt at beginning of period -
Net debt at period end (5,899)
NOTES
1. Basis of preparation
The interim accounts have been prepared in accordance with applicable accounting
standards in the United Kingdom and the Company's established accounting
policies. The interim accounts do not constitute statutory accounts within the
meaning of S.240 Companies Act 1985.
2. Fixed asset investments
Investments are treated as fixed assets and are shown in the balance sheet at
valuation.
Investments listed in the United Kingdom are valued at middle market prices at
the close of business on the balance sheet date, and those listed overseas at
closing market prices on that date. Unquoted investments are valued at market
prices at the close of business on the balance sheet date where an organised
market exists; otherwise, unquoted investments have been valued by the directors
at the year end based upon dealing prices or stockbrokers' valuations where
available, net asset values or other relevant information. Where an event occurs
that requires the valuation of an unquoted investment to be revised, that
revision is reflected in the next announced net asset value. All valuations are
based upon the guidelines set out by the British Venture Capital Association.
3. Profit and loss account
The balance on the profit and loss account includes cumulative net unrealised
losses on the revaluation of fixed asst investment totalling #10,366,221.
4. Earnings per share
2003
# '000
Loss attributable to ordinary shareholders (9,998)
Number of ordinary shares in issue during the period 85,240,978
Loss per share (11.7p)
5. Net asset value per ordinary share
2003
# '000
Net asset value attributable to ordinary shareholders at 30 June 2003 30,215
Number of ordinary shares in issue at 30 June 2003 85,240,978
Net asset value per share 35.4p
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR IIFIAAAIIVIV