TIDMVSA
RNS Number : 8074D
VSA Capital Group PLC
26 June 2023
DATE: 26 June 2023
VSA Capital Group plc
("VSA", the "Company" or together with its subsidiaries the
"Group")
Audited results for the year ended 31 March 2023
VSA Capital Group plc (Aquis: VSA), the international investment
banking and broking firm is pleased to announce its audited results
for the year ended 31 March 2023.
Highlights
-- Turnover of GBP4.36m (previous year GBP3.61m), underlying
profit of GBP0.61m (previous year GBP0.40m)
-- Cash at year end GBP1.27m (previous year GBP2.01m)
-- NAV GBP4.372m (previous year GBP4.162m)
-- Retained Corporate Clients of VSA Capital Limited 24 (2022: 24)
Another busy year of progress despite difficult market
conditions.
We have continued to build on our core sectors of Natural
Resources and Transitional Energy and made solid progress into the
Leisure and Consumer Brands sectors and into Technology and
Software, eMobility and eCommerce.
Andrew Monk, CEO of VSA Capital Group plc said:
"This is a solid result in difficult markets. We continue to
advise and raise funds for companies listed on AIM and the Main
Market of the London Stock Exchange and have established a strong
position as an adviser and broker to companies on the Aquis Stock
Exchange. Our expanding activities into M&A and strategic
advisory work positions us well for the future. We are cautiously
optimistic about the prospects for VSA Capital in the current
year."
For more information, please contact:
VSA Capital Group plc +44(0)20 3005 5000
Andrew Monk, CEO
Andrew Raca, Head of Corporate Finance
Marcia Manarin, Finance Director
+44 (0)20 3772
Alfred Henry - AQSE Corporate Adviser 0021
N ick Michaels www.alfredhenry.com
M aya K. Wassink
Chairman's Statement
I am pleased to present the audited Annual Report and Accounts
for VSA Capital Group plc, which is the holding company of the
regulated investment banking and broking firm, VSA Capital
Limited.
As last year, the results include another tranche of
amortisation of GBP330,770 resulting from a simple restructuring
that we undertook on 31 March 2021 and this is expected to repeat
for another three years. Once the intangible assets are fully
amortised, which we currently anticipate will be in March 2026, our
profits will no longer be affected by the amortisation charge on
this asset.
In his report our CEO Andrew Monk describes certain very
challenging aspects of the market, of which we should all take
note. Nevertheless, and especially in such difficult circumstances,
the board is pleased with the outcome for the year which reflects
further growth and progress for the Group.
Whilst our optimism for the current year remains cautious,
reflecting challenging conditions, we are confident as a board that
the Group's strategy is robust to continue to build shareholder
value.
I pay tribute to my fellow Directors and staff within the Group
and also to our clients who trust us as their advisers, as they
themselves work to build value for their shareholders in such
difficult global conditions.
Mark Steeves
Chairman
CEO'S Report
Principal Activity
The principal activities of the Group are the provision of
corporate finance advisory, stockbroking, fundraising and research
services to both private and public companies.
Review of the Business
On 31 March 2021, in preparation for the IPO of the Company on
the Aquis Growth Market, VSA Capital Group plc acquired VSA Capital
Limited in a reverse takeover and its results are therefore
consolidated into these Group accounts for the second time in the
financial statements for the year ended 31 March 2023.
Review of the Year
I am pleased to report a good underlying performance for our
year ended 31 March 2023 as the last 12 months have been
exceptionally difficult for all players in the equity markets. We
achieved a turnover of GBP4.36m (2022: GBP3.61m) and an underlying
profit of GBP0.61m (2022: GBP0.40m).
As explained previously, we regard our underlying profit (profit
before tax adding back amortisation) as most pertinent as it is
considered by many as a better reflection of how much money is
being generated. As the amortisation of intangible assets is a
non-cash item, we exclude this when calculating our underlying
profit. Cash has decreased this year to GBP1.273m (March 2022:
GBP2.010m) as the substantial fee for the 'Silverwood Transaction'
has been received in equity. We will look to monetise that position
at the appropriate time. Because it is a listed company, we have to
reflect it by marking to market, regardless of how we think it may
perform. Like many of our peer group, we own equity positions in
many of our clients, and in this past turbulent year they gave a
substantial negative return, which we have to reflect in our Group
Statement of Comprehensive Income. However, we hope will regain
ground in the current year. Even so our NAV increased by 5% to
GBP4.372m (from GBP4.162m in March 2022), even after the material
amortisation charge.
Our retained clients remained static at 24, although the outlook
for the sectors we are involved in looks very promising. Whilst we
would have liked to have won a few more clients and will look to do
so going forward, I am happy that we have good quality clients
which is more important than just the overall number.
Sector Focus
We remain focussed on our core sector expertise of Natural
Resources, Transitional Energy, Technology and Consumer/Leisure as
we believe these are good sectors for long term growth, although in
2022/23 they proved very challenging. We seek to add value to our
corporate clients and provide them with innovative solutions to
their corporate, strategic and financing needs.
Mining as a sector has seen a lack of investment now for about
15 to 20 years. Production across the industry is slowing as demand
picks up and so this will result in many commodities facing a
'squeeze' at some stage in the future. Pretty much all experts
agree on this, but stock markets are not responding - although
inevitably, they must. We are big supporters of Cornish mining but
the development of the Southwest region has been slowed by the
issues surrounding Tungsten West's Hemerdon mine getting back into
production. The Ukraine war and rising costs had a huge impact but
as the war continues, the demand for Tungsten (a key part of
military ammunition) will increase, and there is a very limited
supply outside of China. We have seen good progress made in our
Transitional Energy activities, with a particular emphasis on
energy storage, and electric mobility. In Technology and Software,
we have recruited new members of the team to strengthen our
offering and indications are that this will prove to be an
important area of growth for us. In Consumer Brands we completed
the acquisition of approximately 20% of Lush Cosmetics for
Silverwood Brands plc for approximately GBP216m. This was a complex
transaction, and also novel in that it was not technically an RTO
under the Aquis Growth Market Rules. As far as we and Silverwood
are concerned, the transaction is completed, although we note that
as there is an acrimonious relationship between Lush and Silverwood
which we hope will abate with the passage of time. There may be
speculation as to any further activity. We have recruited an
additional research analyst to help our coverage of the
Consumer/Brands sector in general.
Transitional Energy as an industry is becoming very strong. The
stock market, however, has become impatient with the pace of
change. This trend is very similar to the Technology sector back in
2000, when we had the Dot Com crash, but at that time the good
companies made good progress, and some became hugely successful. We
expect to see a similar pattern developing in Transitional
Energy.
Equity Capital Markets
Pension funds have been reducing their exposure to equities now
for 20 years but in the last 12 months the 'de-equitisation' of the
UK has become extreme and now exposure to equities by pension funds
has fallen from about 40% to probably less than 4%. This is
untenable for our industry and also untenable for the UK Economy as
it deprives UK companies of capital to grow. We are approaching the
stage where either the UK gives up on quoted equities or there is a
change of stance by the Government to make equities more attractive
and the accounting less penal for pension funds. If the latter does
occur, then one can be very optimistic, but it certainly cannot be
taken for granted and this is why at VSA we continue to tread
carefully and keep a tight cost base.
The Aquis Stock Exchange is an important part of our growth
strategy as we believe it will be an important and successful
challenger stock exchange in the UK. It was not an easy year for
Aquis, as many retail platforms are still very slow at offering an
electronic service to their customers, but we believe that as
demand continues to grow, that they will realise that if they do
put in electronic dealing their customers will leave them. We dual
listed two companies on the Aquis Growth Market; Guanajuato Silver
(from Canada) and Cooks Coffee (from New Zealand). The support for
Aquis stocks was further clearly seen by our incredibly successful
Aquis Showcase day and the running of the "Britain's Got Aquis"
competition. We will be hosting this again this year at the end of
November and expect it to be bigger, better and even more
exciting.
We continue to support our corporate clients on AIM and the Main
Market of the London Stock Exchange in terms of financial advice,
the provision of equity research and fundraisings. We look forward
with great interest as to what opportunities will arise as the
review of the Main Market takes shape.
International Reach
We have always had a very international approach at VSA,
although as we reported last year, we have been unable to really do
much with our Shanghai office. Our strategy has always been to
support western companies develop their China strategy, whilst also
advising on transactions involving Chinese investment or expertise.
Despite the difficult geopolitical situation, currently I am
hopeful that this year we will be back in China and able to
complete transactions as one cannot ignore that it is the second
largest economy in the World, and vital to the mining industry. At
the same time though, we have been developing more links into the
USA and continue to build our relationships in Africa and other
parts of the World. In Africa we are working well with our partners
in Kenya, Faida Investment Bank, and we have very recently entered
into a strategic alliance with Bravura Holdings in South Africa. We
have always been proud of the fact that we are not just reliant on
London as many of our competitors are. This has also proven useful
as we develop our M&A activities.
We are always looking for opportunities at VSA to create
shareholder value, which is not easy in an industry which has been
in decline. The fact that we have become stronger over the past 5
years, whilst our peer group has weakened, suggests that if the
industry does see a recovery, we will be well placed to take
advantage of it. We have historically tried many times to become a
Nominated Adviser on AIM, as without this ability it has been
harder to grow. Unfortunately, we were unsuccessful. The London
Stock Exchange has historically made it very difficult to acquire a
Nomad firm unless you are already a Nomad. In this last financial
year, we saw that potentially being a Nomad is a poison pill due to
the fact that you cannot be acquired. We saw with Arden Partners
that this caused the value of the business to be effectively zero
when Ince acquired it as it was then passed to Zeus Capital for a
net zero consideration. The number of Nomad firms has shrunk to a
current level of 26 compared to over 70 firms 10 years ago. We
believe there may be change as it does appear there will be a
shake-up of the rules and approach to the 3 different markets of
AIM, the Standard Listing and the Premium listing. We view this as
good news and an opportunity for firms with high quality people and
capabilities to be more active on the LSE. We have seen the merger
of Finncap and Cenkos, and we would expect more mergers to take
place. Numis is not merging with Deutsche Bank, but is being
acquired as part of consolidation in the sector, and we believe
further acquisitions will take place, as bigger banks that felt
London was no longer on their radar after Brexit, reconsider as
there has not been the anticipated outflow of business across the
Channel.
Most of the UK domestic brokers were formed or grew rapidly
around the 2000's as many entrepreneurial brokers in their 40's
wanted to get away from the rigid structures of big banks. These
entrepreneurs are now in their 60's, but one issue they face is
that the younger generation now in their 40's no longer want to run
or own their own broking business, as they are just not nearly as
attractive due to weaker economics and vastly increased regulation.
This again is likely to lead to more consolidation or
acquisitions.
Outlook
Last year I said we were cautiously optimistic despite the
worsening conditions for global markets that are unlikely to
improve for some time. I was right on both points. We expect to
report a loss at the interim stage. This is due to our year end
being March and as the three quietest months in our industry -
April, July and August - all fall in our first half. Nevertheless
this year, I am slightly more cautious but remain optimistic as we
head towards 2024 as we have a good client base and are engaged on
a broad range of strategic advisory, M&A and fundraising
mandates. Our Position in Transitional Energy is also attracting a
lot of attention particularly in the USA and Asia and we expect
some major developments in the future.
We can but hope that a clearer global picture emerges which has
been clouded in the last three years by Covid, the Ukraine war,
global political tension, inflation at record levels, an energy
crisis, and interest rates going up substantially. Let's hope that
not much more will be thrown at us! Whatever happens, we are in
good shape with a great team.
Andrew Monk
CEO
Key performance indicators
Reported (accounting) profit
Year ended 31 March 2023 Underlying Profits
GBP611,531 comprising GBP280,761 profit on ordinary activities
before taxation plus amortisation of GBP330,770 (2022:
GBP399,144)
Cash at 31 March 2023
GBP1.27m (2022: GBP2.01m)
Retained Corporate Clients at 31 March 2023
24 clients of VSA Capital Limited (2022: 24)
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 MARCH 2023
Notes 2023 2022
------------ ------------
GBP GBP
Turnover 2 4,358,875 3,605,562
Cost of sales (166,179) (175,761)
------------ ------------
Gross profit 4,192,696 3,429,801
Other operating income 39,000 34,750
Administrative expenses (3,090,564) (2,954,406)
------------ ------------
Operating Profit 1,141,132 510,145
Finance (expenses)/income 4 (721) 736
Gains/(losses) on investments 4 (859,650) (442,507)
Profit on ordinary activities before taxation 280,761 68,374
Tax on Profit on ordinary activities 5 (33,218) (26,482)
------------ ------------
Profit for the year 247,543 41,892
Other Comprehensive Income - -
------------ ------------
Total Comprehensive Income 247,543 41,892
============ ============
EARNINGS PER SHARE - PROFIT AFTER TAX Notes pence pence
------ ------
Basic 7 1.3 0.2
Diluted 7 0.8 0.1
The statement of comprehensive income has been prepared on the
basis that all operations in the year ended 31 March 2023 are
continuing operations.
There were no discontinued operations during the current
financial year.
GROUP AND COMPANY BALANCE SHEET
FOR THE YEARED 31 MARCH 2023
2023 2022 2023 2022
Notes Group Group Company Company
ASSETS GBP GBP GBP GBP
---------- ---------- ---------- ----------
Non-current assets
Property, plant & equipment
- owned 77,515 107,764 - -
Property, plant & equipment
- right of use 468,900 645,253 - -
Intangible assets 992,311 1,323,081 - -
Investment in subsidiaries - - 3,873,996 3,873,996
---------- ---------- ---------- ----------
Total non-current assets 1,538,726 2,076,098 3,873,996 3,873,996
Current assets
Investments 2,141,416 691,769 6,322 12,716
Trade and other receivables 381,464 536,932 49,041 1,532
Cash and cash equivalents 6 1,273,122 2,010,003 267,292 339,625
---------- ---------- ---------- ----------
Total current assets 3,796,002 3,238,704 322,655 353,873
TOTAL ASSETS 5,334,728 5,314,802 4,196,651 4,227,869
---------- ---------- ---------- ----------
EQUITY AND LIABILITIES
Share capital 3,523,547 3,523,547 3,523,547 3,523,547
Share premium 418,057 418,057 418,057 418,057
Share-based payments
reserve 13,892 51,585 13,892 51,585
Accumulated profits/(losses) 416,637 169,094 214,159 218,990
---------- ---------- ---------- ----------
Total equity 4,372,133 4,162,283 4,169,655 4,212,179
LIABILITIES
Current liabilities
Trade and other payables 529,199 557,408 26,996 15,690
Finance liabilities
- borrowings 216,566 107,623 - -
---------- ---------- ---------- ----------
Total current liabilities 745,765 665,031 26,996 15,690
Non-current liabilities
Finance liabilities
- borrowings 216,830 487,488 - -
TOTAL EQUITY AND LIABILITIES 5,334,728 5,314,802 4,196,651 4,227,869
---------- ---------- ---------- ----------
The financial statements were approved by the Board of Directors
on 26 June 2023 and were signed on its behalf by:
Andrew Monk Andrew Raca
Director Director
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 31 MARCH 2023
Share Share Share Retained Total
Capital Premium based Earnings
payments
reserve
GBP GBP GBP GBP GBP
------------ --------- ----------- ---------- ------------
At 1 April 2022 3,645,260 177,524 25,786 127,202 3,975,772
Total comprehensive income - - - 41,892 41,892
Share issue 12,027 240,533 - - 252,560
Company purchase of own
shares into Treasury (133,740) - - - (133,740)
Movement in share based
premium reserve - - 25,799 - 25,799
At 1 April 2023 3,523,547 418,057 51,585 169,094 4,162,283
Total Comprehensive Income - - - 247,543 247,543
Movement in share based
premium reserve - - (37,692) - (37,693)
At 31 March 2023 3,523,547 418,057 13,892 416,637 4,372,133
------------ --------- ----------- ---------- ------------
GROUP AND COMPANY CASHFLOW STATEMENT
FOR THE YEARED 31 MARCH 2023
2023 2022 2023 2022
Group Group Company Company
Notes GBP GBP GBP GBP
------------ ---------- --------- ----------
Net cash generated/(used)
in operating activities
Profit / (loss) before income
tax 280,761 68,374 (4,831) (158,212)
Tax paid - (19,740) - -
Depreciation and amortisation 540,043 521,947 - -
Loss / (gain) on current asset
investments 859,650 438,628 6,394 9,403
Sales settled by shares (2,277,074) - - -
(Increase)/decrease in trade
/ other receivables 107,468 (301,565) (47,509) 112
Increase / (decrease) in trade
/ other payables (13,427) (504,770) 11,306 15,252
Change in share based payments
reserve (37,693) 25,799 (37,693) 25,799
------------ ---------- --------- ----------
NET CASH (GENERATED)/USED IN
OPERATING ACTIVITIES (540,272) 228,673 (72,333) (107,646)
------------ ---------- --------- ----------
Net cash generated from/(used
in) investing activities
Proceeds from disposal of plant, - 212,808 - -
property and equipment
Purchases of plant, property
and equipment (2,671) (252,540) - -
Proceeds from other investing
activities 280,215 210,262 - 57,015
Other investments - additions (312,437) (177,167) - (3,377)
Dividends received - - - 250,000
------------ ---------- --------- ----------
NET CASH (GENERATED)/USED IN
INVESTING ACTIVITIES (34,893) (6,637) - 303,638
------------ ---------- --------- ----------
Cash flows from financing
activities
Share capital issue - 252,560 - 252,560
Purchase of shares into treasury - (133,740) - (133,740)
Finance lease repayments (161,716) (194,638) - -
------------ ---------- --------- ----------
NET CASH GENERATED/(USED) FROM
FINANCING ACTIVITIES (161,716) (75,818) - 118,820
------------ ---------- --------- ----------
NET INCREASE/(DECREASE) IN
CASH AND CASH EQUIVALENTS (736,881) 146,218 (72,333) 314,812
Cash and cash equivalents at
beginning of period 2,010,003 1,863,785 339,625 24,813
CASH AND CASH EQUIVALENTS AT OF PERIOD 6 1,273,122 2,010,003 267,292 339,625
------------ ---------- --------- ----------
A prior year adjustment has been made to the cash flow statement
to reflect the fact that the tangible fixed asset purchases were
not all in cash. The adjustment was to reduce the purchase of
tangible fixed assets by GBP595,111 to GBP252,540 and the finance
lease liability reducing by the same amount to GBP194,638.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 31 MARCH 2023
1 Statutory Information
VSA Capital Group plc is a public limited company limited by
shares, is listed on the Aquis Stock Exchange, is incorporated in
the UK and registered in England and Wales (Company Number
04918684). The Company's registered and head office is at Park
House, 16-18 Finsbury Circus, London, United Kingdom, EC2M 7EB.
2 Revenue
Segmental reporting
Group Revenue of GBP4,358,875 (2022: GBP3,605,562)
comprises:
Corporate Finance fees of GBP3,455,272 (2022: GBP2,797,340);
Broking fees of GBP711,950 (2022: GBP578,069);
Bond trading of GBP85,212 (2022: GBP85,462),
Research fees of GBP102,083 (2022: GBP138,750); and,
Other income of GBP4,358 (2022: GBP5,941).
3 Employees and Directors (Group)
31/3/23 31/3/22
GBP GBP
---------- ----------
Wages and salaries 1,738,138 1,763,882
Social security costs 223,792 217,903
Other pension costs 32,526 33,926
---------- ----------
1,994,456 2,015,711
---------- ----------
The average number of employees during the year was as
follows:
31/3/23 31/3/22
-------- --------
Directors 5 5
Corporate finance 6 6
Research and sales 7 9
Account and administration 3 2
-------- --------
21 22
-------- --------
4 Net finance costs
Finance income: deposit account 2023: GBP1,936 2022: GBP736
interest
----------------- --------------------
Financial Income 2023: GBP1,936 2022: GBP736
Finance costs: finance lease interest 2023: ( 2022: (GBP13,282)
GBP1,035)
Finance costs: other interest 2023: (1,622) 2022: GBPNIL
----------------- --------------------
Financial Expenses 2023: (2,657) 2022: (13,282)
Total 2023: (GBP721) 2022: (GBP12,546)
-------------------------------------- ----------------- --------------------
5 Taxation
Analysis of the tax charge
Corporation tax is payable on investment income.
Factors affecting the tax charge
The tax assessed for the year is lower than the standard rate of
corporation tax in the UK. The difference is explained below:
2023 2022
GBP GBP
---------- ---------
Profit on ordinary activities before
tax 280,761 68,374
Profit on ordinary activities multiplied
by the
standard rate of corporation tax
in the UK of 19% (2022: 19%) 53,345 12,991
Effects of:
Tax losses utilised (75,768) (12,991)
Tax paid on Investment Income 8,338 26,482
Other adjustments 47,303 -
Tax Charge 33,218 26,482
---------- ---------
Due to the uncertainty of the timing of taxable profits for the
Company in the future, a deferred tax asset in respect of the tax
losses has not been included in the accounts. Tax losses of GBP2.7m
(2022: GBP2.9m) have been carried forward as at 31 March 2023. The
rate of corporation tax is set to rise to 25% in 2023.
6 Cash
Group Group Company Company
2023 2022 2023 2022
GBP GBP GBP GBP
------------ ------------ ---------- ----------
Cash at bank 1,273,122 2,010,003 267,292 339,625
------------ ------------ ---------- ----------
7 Profit & Loss Per Share
As at 31 As at 31
March 2022 March 2022
Audited Audited
------------ ------------
Basic
Profit/ (Loss) for the period attributable
to owners of the Company (GBP) 247,543 41,892
Weighted average number of shares: 19,428,966 19,428,966
Basic earnings/(loss) per share (pence): 1.3 0.2
------------ ------------
Diluted
Profit/ (Loss) for the period attributable
to owners of the Company (GBP) 247,543 41,892
Weighted average number of shares: 30,944,566 30,279,466
Diluted earnings/(loss) per share
(pence): 0.8 0.1
------------ ------------
The basic and diluted earnings per share were determined by
dividing the profit or loss attributable to the equity
holders of the Company by the weighted average number of shares
outstanding during the periods.
8 Annual Report and Accounts
Copies of the 2023 Report and Accounts will be posted to
shareholders shortly. Copies will also be available from the
Company's registered office and from the Company's website
www.vsacapital.com
The statutory accounts for the year ended 31 March 2023 will be
delivered to the Registrar of Companies in due course.
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