RNS Number:4339F
Corvus Capital Inc
30 June 2006
Corvus Capital Inc
Second Interim Results
For the six month period ended 31 March 2006
30 June 2006, Corvus Capital Inc (AIM: CVS) announces its second interim results
for the six month period ended 31 March 2006 which is also part of the process
of a change to the Company's accounting reference date from 31 March to 30
September. The final part of this change process will be the reporting of a
preliminary statement for the 18 month period ending 30 September 2006.
Summary
* Investment Activity:
* Nanonscience acquired Toumaz Technology for #17.1m and raised an
additional #7.1m. Toumaz is a spin-out from Imperial College London and
it has exploited developments in ultra-low power silicon chip technology
* Gable Holdings Inc. completed its acquisition of a European insurance
company writing insurance for the construction industry distributing its
products via FSA regulated brokers in the UK. Following the
acquisition and placing Corvus holds shares representing 17.06% of the
enlarged share capital of Gable.
* Following the period end Commoditrade announced it had agreed to
acquire from investment vehicle Tambelan Inc, its right to receive 75
per cent of the profits of the trading team on the London Metal Exchange
of Sucden UK, a leading commodities trading group. Commoditrade paid an
initial aggregate consideration of #24.4 million
Profits are presented as returns from revenue and capital activities and gross
revenue and capital gain for the six month period ended 31 March 2006 was #2.6m.
Total return was #0.6m and basic return per share for the six months 0.22p,
diluted return per share 0.21p.
Commenting, Andrew Regan, Chief Executive of Corvus Capital Inc, said:
"The period has seen a number of important investment successes for the Company,
the value of which we have yet to realise, particularly where we continue to
hold significant shareholdings such as Gable and Commoditrade. We anticipate
they will continue to provide a growing level of value for shareholders as the
investee companies execute their respective growth strategies.
"We have created over #21m of unrealised gains and I believe we are now nearing
the end of the first stage of our strategy which was to build the financial
resources to support the next phase: the due diligence and execution of a major
acquisition."
Enquiries:
John Bick tel: 020 7451 9800 or m: 07917 649362
www.corvus.com
SECOND INTERIM STATEMENT
I am delighted to present Corvus Capital's results for the six month period
ended 31 March 2006, together with an update of events since the period end.
Before I do so I would like to take the opportunity to remind shareholders that
as set out in our Annual Report, we announced the decision to change the
Company's accounting reference date from 31 March to 30 September. We published
our first of two interim reports in December and this statement therefore
represents the "second" Interim for the period from 1 October 2005 to 31 March
2006, and will be followed by audited results for the 18 month period ending 30
September 2006.
Results
Corvus produced gross revenue and capital gain for the six month period of #2.6m
and a total return of #0.6m. Since 31 March 2005 Corvus has successfully
realised investments for aggregate cash proceeds of #10.5m.
As at 31 March 2006 there were 260.7m ordinary shares in issue.
Investment Strategy
The Company's strategy is to invest in companies with either of the two
following characteristics:
* Companies with strong income generation or that have a proven or
anticipated stable and cash-generating business.
* Companies at a relatively early stage of their development which focus on
specific sectors and which either have or will seek a quotation on a
recognised investment exchange or which have the potential to be acquired.
Corvus's investment strategy is intended to be long-term although where
circumstances arise where investments or companies acquired by the Company may
be floated in their own right, or disposed of at a suitable premium, such exits
will be considered, converting the investment into cash for onward investment.
Corvus will continue to consider investments based predominately in Europe,
North America and Asia although it may also look at investment opportunities
outside of these regions and across a wide range of sectors.
In the medium term, leveraging the capital generated from its investment
strategy, it is Corvus's intention to acquire, either as principal or in
partnership, a sizeable company which has a proven stable and strong cash
generating business, and which it believes has significant inherent value which
is not being realised by its incumbent management or reflected in its market
capitalisation.
Investment Activity
I would like to update shareholders on our investment activity during the period
and since the balance sheet date, which together have been very successful for
the Company.
There were significant milestone events during the period for several of our
investee companies, each arguably transforming investments for the companies
concerned.
The first of these was Nanoscience, the specialist nanotechnology investment
holding company in which Corvus has a 4.5 per cent shareholding, which announced
in November that it had completed the acquisition of Toumaz Technology Limited
for #17.7 million satisfied through the issue of new Nanoscience shares. At the
same time Nanoscience placed additional new shares raising #7.1 million before
expenses.
Toumaz Technology is a spin-out from Imperial College London and it has
exploited developments in ultra-low power silicon chip technology. Its
proprietary AMx(TM) technology (Advanced Mixed Signal) has resulted in the
development of ultra low power techniques in signal processing and wireless
systems for chips consuming up to 100 times less power than other state-of-the
art devices. Toumaz has focussed its AMx(TM) technology on the healthcare sector
where applications include body sensors for monitoring chronic conditions and
the lifestyle management sector where applications have been developed for the
digital audio broadcast market.
On 23 December 2005, Gable Holdings Inc. completed its acquisition of Brown Duke
AG, together with a placing which raised #4.75 million and admission of the
enlarged share capital of the company to trading on AIM. Brown Duke's name was
changed to Gable Insurance AG, which gained authorisation to write insurance
business in Europe following completion of the acquisition. The company
specialises in providing insurance services to the construction sector where
Gable's management team has a high level of expertise and experience in writing
business across several specific classes of business. Gable distributes its
products via FSA regulated brokers in the UK where it has strong relationships.
Following the acquisition and placing Corvus holds shares representing 17.06
per cent of the enlarged share capital of Gable.
Just after the period ended, Commoditrade announced on 6 April that it had
agreed to acquire from investment vehicle Tambelan Company Limited, its right to
receive 75 per cent of the profits of the trading team on the London Metal
Exchange of Sucden UK, a leading commodities trading group. Commoditrade paid
an initial aggregate consideration of #24.4 million, satisfied by the payment of
#14 million in cash and by the issue of 83.4 million new ordinary shares of
12.5p each. In addition, 6 million deferred consideration shares may be issued
on the achievement of certain performance criteria.
Gross profits attributable to the Tambelan Agreement have grown to #7.1 million
in the three years ended 31 December 2005 and on the basis of this historic data
the interest has been acquired on a historic multiple of just 3.5 times
operating profits. The LME Trading Team is well established and successful,
with an in-depth knowledge of the markets on which it is represented and has
developed strong client and market relationships. On the acquisition,
Christopher Adams, who is the head LME trader at the Brokerage and Geoffrey
Conway-Henderson, who has over 35 years experience in the finance industry,
dealing primarily in derivatives, interest rate swaps and options, both joined
the Board of Commoditrade as non-executive directors. In overall terms the
acquisition and board changes marked a very encouraging development for
Commoditrade which was incorporated in 2005 to build a group specialising in the
commodities sector. The company now has a much larger shareholder base and it
was very encouraging to see several major financial institutions participate in
the placing of new shares in Commoditrade. Corvus now holds 21.1 per cent of
the enlarged share capital.
Outlook
The period has seen a number of important investment successes for the Company,
the value of which have yet to be fully realised and we anticipate they will
continue to provide a growing level of value for shareholders as these investee
companies execute their respective growth strategies. The Board will continue
to monitor the performance of the Company's underlying assets and remains alert
to opportunities for making further investments consistent with its investment
strategy, acquiring interests in companies with considerable growth potential,
each at varying stages of development.
Graham Porter
Chairman
Andrew Regan
Chief Executive
30 June 2006
GROUP STATEMENT OF TOTAL RETURN
(INCORPORATING THE REVENUE ACCOUNT)
FOR THE 6 MONTHS ENDED 31 MARCH 2006
Unaudited Unaudited Unaudited
6 months ended 6 months ended 6 months ended
31.3.06 31.3.06 31.3.06
Note Revenue Capital Total
#'000 #'000 #'000
Gains / (losses) on investments
- realised - (460) (460)
- unrealised - 2,749 2,749
Other income 266 - 266
------- ------- -------
Gross revenue and capital gains 266 2,289 2,555
Administrative expenses (2,174) - (2,174)
------- ------- -------
Return on ordinary activities before interest and (1,908) 2,289 381
tax
Income from investments 99 - 99
Interest receivable and similar income 81 - 81
------- ------- -------
Return on ordinary activities before tax (1,728) 2,289 561
Tax on ordinary activities 2 - - -
------- ------- -------
Return on ordinary activities after tax 6 (1,728) 2,289 561
transferred (from)/to reserves
------- ------- -------
Basic (loss) / return per share (pence) 3 (0.67) 0.88 0.22
------- ------- -------
Diluted (loss) / return per share (pence) 3 (0.63) 0.84 0.21
------- ------- -------
There were no recognised gains or losses other than as shown above.
All amounts relate to continuing activities.
GROUP STATEMENT OF TOTAL RETURN
(Incorporating the Revenue Account)
for the 12 months ended 31 March 2006
Unaudited Unaudited Unaudited
12 months ended 12 months ended 12 months ended
31.3.06 31.3.06 31.3.06
Note Revenue Capital Total
#'000 #'000 #'000
Gains on investments
- realised - 1,359 1,359
- unrealised - 4,115 4,115
Other income 505 - 505
------- ------- -------
Gross revenue and capital gains 505 5,474 5,979
Administrative expenses (3,647) - (3,647)
------- ------- -------
Return on ordinary activities before interest and (3,142) 5,474 2,332
tax
Income from investments 99 - 99
Interest receivable and similar income 87 - 87
------- ------- -------
Return on ordinary activities before tax (2,956) 5,474 2,518
Tax on ordinary activities 2 - - -
------- ------- -------
Return on ordinary activities after tax (2,956) 5,474 2,518
transferred (from)/to reserves
------- ------- -------
Basic (loss) / return per share (pence) 3 (1.14) 2.12 0.98
------- ------- -------
Diluted (loss) / return per share (pence) 3 (1.10) 2.03 0.94
------- ------- -------
There were no recognised gains or losses other than as shown above.
All amounts relate to continuing activities.
GROUP STATEMENT OF TOTAL RETURN
(Incorporating the Revenue Account)
for the year ended 31 March 2005
Audited Audited Audited
Year ended Year ended Year ended
31.03.05 31.03.05 31.03.05
Note Revenue Capital Total
#'000 #'000 #'000
Gains on investments
- realised - 68 68
- unrealised - 22,044 22,044
Other income 144 - 144
------- ------- -------
Gross revenue and capital gains 144 22,112 22,256
Administrative expenses (1,083) - (1,083)
Write-off of goodwill (2) (9,110) (9,112)
------- ------- -------
Return on ordinary activities before interest and (941) 13,002 12,061
tax
Interest receivable and similar income 4 - 4
------- ------- -------
Return on ordinary activities before tax (937) 13,002 12,065
Tax on ordinary activities 2 - - -
------- ------- -------
Return on ordinary activities after tax (937) 13,002 12,065
transferred (from)/to reserves
------- ------- -------
Basic (loss) / return per share (pence) 3 (0.39p) 5.43p 5.04p
------- ------- -------
Diluted (loss) / return per share (pence) 3 (0.38p) 5.27p 4.89p
------- ------- -------
There were no recognised gains or losses other than as shown above.
All amounts relate to continuing activities.
GROUP BALANCE SHEET
at 31 March 2006
Unaudited Audited
Note 31.3.06 31.3.05
#'000 #'000
Fixed assets
Tangible assets 270 65
Investments 4 21,741 24,729
----------- -----------
22,011 24,794
----------- -----------
Current assets
Debtors 2,571 436
Cash at bank and in hand 3,489 5
----------- -----------
6,060 441
Creditors: amounts falling due within one year (278) (310)
----------- -----------
Net current assets 5,782 131
----------- -----------
Total assets less current liabilities 27,793 24,925
----------- -----------
Capital and reserves
Called up share capital 5 13,035 12,816
Share premium account 6 3,111 2,980
Capital reserve - realised 6 (1,819) (10,652)
Capital reserve - unrealised 6 18,685 22,044
Revenue reserve 6 (5,219) (2,263)
----------- -----------
Total equity shareholders' funds 7 27,793 24,925
----------- -----------
----------- -----------
Net asset value per share (pence) - basic 10.66 9.73
------- -------
------- -------
- diluted 10.33 9.45
------- -------
------- -------
CASH FLOW STATEMENT
For the period ended 31 March 2006
Unaudited Unaudited Audited
Note 6 months ended 12 months ended Year ended
31.3.06 31.3.06 31.3.05
#'000 #'000 #'000
Net cash outflow from operating activities 8 (3,483) (5,283) (1,102)
Returns on investments
Income from investments 99 99 -
Interest received 81 87 4
------- ------- -------
Net cash inflow from returns on investments 180 186 4
------- ------- -------
Capital expenditure and financial investment
Purchase of subsidiary undertakings - - (157)
Purchase of tangible fixed assets (230) (230) (84)
Sale of tangible fixed assets - - 6
Proceeds from sale of investments 2,019 10,480 668
Purchase of investments (1,969) (2,019) (978)
------- ------- -------
Net cash (outflow) / inflow from investing (180) 8,231 (545)
activities
------- ------- -------
Net cash (outflow) / inflow before financing (3,483) 3,134 (1,643)
Financing
Issue of shares 175 350 1,348
------- ------- -------
Movement in cash 9 (3,308) 3,484 (295)
------- ------- -------
------- ------- -------
Significant non-cash movements
Increase in value of investments 2,749 4,115 22,044
------- ------- -------
------- ------- -------
NOTES TO THE INTERIM ANNOUNCEMENT
1. BASIS OF PREPARATION
The Company was incorporated as a corporation in the British Virgin Islands,
which does not prescribe the adoption of any particular accounting framework.
Accordingly, the Board have resolved that the Company will follow UK Accounting
Standards and apply the Companies Act 1985 when preparing its annual financial
statements.
The principal accounting policies of the Group are set out in the Group's 2005
annual report and financial statements. The policies have remained unchanged
since the previous annual report. In the 2005 annual report the method of
valuation of quoted investments was changed to that of middle market prices at
the balance sheet date and consolidated information was presented for the first
time. The impact of this was to replace the intangible asset at 30 September
2004 with a valuation of investments at 31 March 2005 and subsequent period
ends.
Interim financial information in this report has been neither audited nor
reviewed by the Group's auditors.
2. TAXATION
The Company is not subject to UK corporation tax. The UK
subsidiary did not make a profit during the period and hence no tax arises in
the UK.
3. (LOSS) / RETURN PER SHARE
The calculation of the basic return per share is based on the return on ordinary
activities after taxation and on the weighted average number of ordinary shares
in issue during the period. The diluted return per share is based on the
assumption that the outstanding share options and warrants are fully exercised.
Returns and weighted average number of shares used in the calculations are set
out below:
Return Weighted average Return per
#'000 number of shares share (pence)
Basic (loss) / return per share
6 months ended 31.3.06
Revenue (1,728) 259,364,851 (0.67)
Capital 2,289 259,364,851 0.88
Total 561 259,364,851 0.22
12 months ended 31.3.06
Revenue (2,956) 258,274,774 (1.14)
Capital 5,474 258,274,774 2.12
Total 2,518 258,274,774 0.98
Year ended 31.3.05
Revenue (937) 239,337,552 (0.39)
Capital 13,002 239,337,552 5.43
Total 12,065 239,337,552 5.04
Diluted (loss) / return per share
6 months ended 31.3.06
Revenue (1,728) 272,401,092 (0.63)
Capital 2,289 272,401,092 0.84
Total 561 272,401,092 0.21
12 months ended 31.3.06
Revenue (2,956) 269,028,158 (1.10)
Capital 5,474 269,028,158 2.03
Total 2,518 269,028,158 0.94
Year ended 31.3.05
Revenue (937) 246,861,458 (0.38)
Capital 13,002 246,861,458 5.27
Total 12,065 246,861,458 4.89
4. INVESTMENTS
Movements in investments during the period are as follows:
Overseas
AIM listed Unlisted Total
#'000 #'000 #'000 #'000
Valuation at 1 April 2005 (Audited) 24,006 685 38 24,729
Additions at cost - - 50 50
Disposals:
- proceeds (4,981) (3,480) - (8,461)
- (loss) / gains on disposal (975) 2,795 - 1,820
Net unrealised gains in period 1,365 - - 1,365
------- ------- ------- -------
Valuation at 30 September 2005 (Unaudited) 19,415 - 88 19,503
Additions at cost 1,890 - 78 1,968
Disposals:
- proceeds (2,019) - - (2,019)
- loss on disposal (460) - - (460)
Net unrealised gains in period 2,749 - - 2,749
------- ------- ------- -------
Valuation at 31 March 2006 (Unaudited) 21,575 - 166 21,741
------- ------- ------- -------
------- ------- ------- -------
Book cost at 31 March 2006 (Unaudited) 2,886 - 166 3,052
Total unrealised gains 18,689 - - 18,689
------- ------- ------- -------
Valuation at 31 March 2006 (Unaudited) 21,575 - 166 21,741
------- ------- ------- -------
------- ------- ------- -------
Book cost at 31 March 2005 (Audited) 2,058 589 38 2,685
Total unrealised gains 21,948 96 - 22,044
------- ------- ------- -------
Valuation at 31 March 2005 (Audited) 24,006 685 38 24,729
------- ------- ------- -------
------- ------- ------- -------
5. SHARE CAPITAL
Authorised
31.3.06 31.3.05
No. No.
Ordinary shares of 5p each 400,000,000 400,000,000
------- -------
------- -------
#'000 #'000
Ordinary shares of 5p each 20,000 20,000
------- -------
------- -------
Allotted, called up, and fully paid
No. No.
Ordinary shares of 5p each 260,704,994 256,329,998
------- -------
------- -------
#'000 #'000
Ordinary shares of 5p each 13,035 12,816
------- -------
------- -------
Allotments during the period
On each of 4 June 2005, 4 September 2005, 5 December 2005 and 6 March 2006
1,093,749 ordinary shares were issued at 8p per share on exercise of share
options, raising #350,000 in total.
6. RESERVES
Capital Capital
reserve reserve Revenue
Share premium (realised) (unrealised) reserve
#'000 #'000 #'000 #'000
At 1 April 2005 (Audited) 2,980 (10,652) 22,044 (2,263)
Share premium on issue of shares 65 - - -
Net revenue loss for the period - - - (1,228)
Unrealised gains - - 1,365 -
Net gain on realisation of investments - 1,820 - -
Unrealised gains brought forward realised - 5,985 (5,985) -
during the period
----------- ----------- ----------- -----------
At 30 September 2005 (Unaudited) 3,045 (2,847) 17,424 (3,491)
Share premium on issue of shares 66 - - -
Net revenue loss for the period - - - (1,728)
Unrealised gains - - 2,749 -
Net loss on realisation of investments - (460) - -
Unrealised gains brought forward realised - 1,488 (1,488) -
during the period
----------- ----------- ----------- -----------
At 31 March 2006 (Unaudited) 3,111 (1,819) 18,685 (5,219)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
7. RECONCILIATION OF SHAREHOLDERS' FUNDS
Unaudited Unaudited Audited
6 months ended 12 months ended Year ended
31.3.06 31.3.06 31.3.05
#'000 #'000 #'000
At beginning of period 27,057 24,925 262
Net proceeds of share issues 175 350 12,598
Net revenue loss for the financial period (1,728) (2,956) (937)
Increase in capital reserves 2,289 5,474 13,002
------- ------- -------
At end of period 27,793 27,793 24,925
------- ------- -------
------- ------- -------
8. RECONCILIATION OF RETURN ON ORDINARY ACTIVITIES BEFORE INTEREST AND TAX WITH NET CASH OUTFLOW FROM OPERATING
ACTIVITIES
Unaudited Unaudited Audited
6 months ended 12 months ended Year ended
31.3.06 31.3.06 31.03.05
#'000 #'000 #'000
Operating profit 381 2,332 12,061
Write off of goodwill - - 9,112
Depreciation 13 26 13
Movement in debtors (1,641) (2,135) (321)
Movement in creditors 53 (32) 145
Loss / (profit) on disposal of investments 460 (1,359) (68)
Revaluation of investments (2,749) (4,115) (22,044)
------- ------- -------
(3,483) (5,283) (1,102)
------- ------- -------
------- ------- -------
9. ANALYSIS OF CHANGES IN CASH DURING THE PERIOD
Unaudited Unaudited Audited
6 months ended 12 months ended Year ended
31.3.06 31.3.06 31.03.05
#'000 #'000 #'000
(Decrease) / increase in cash (3,308) 3,484 (295)
Net funds at beginning of period 6,797 5 300
------- ------- -------
Net funds at end of period 3,489 3,489 5
------- ------- -------
------- ------- -------
PUBLICATION OF NON-STATUTORY ACCOUNTS
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
figures for the year ended 31 March 2005 have been extracted from the statutory
financial statements. The auditors' report on those financial statements was
unqualified and did not contain a statement under section 237(2) of the
Companies Act 1985.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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