RNS Number:3849J
ACP Capital Limited
25 September 2006
25 September 2006
ACP Capital Limited ("ACP Capital" or the "Company"; AIM: APL.L)
Preliminary interim results for the period ending 30 June 2006 ("Period")
ACP Capital exceeds full year trading expectations at the Period
ACP Capital, a Jersey-incorporated niche investment and fund manager whose
shares were admitted to trading on AIM in January 2006, announces its interim
results for the six months ended 30 June 2006.
Financial Highlights
O The Company generated total income of #13.6 million and a net profit of
#10.9 million with diluted earnings per ordinary share of 16.6 pence for the
period from 6 January 2006 to 30 June 2006.
O ACP Capital has exceeded its full year 2006 targets set at the time of its
IPO in December 2005 in the period ending June 2006, and as a result expects
to meet or surpass its initially expected dividend target of 2 pence per
share forecasted in the Admission Document. The Company also continues to
deliver on its strategic objectives for 2006 as a whole.
O In May 2006, ACP Capital acquired an approximate 12% shareholding in Kamps
Food Retail Investments S.A. ("KFRI") in parallel to providing a Euro20 million
mezzanine bridge facility and a Euro9 million corporate loan. KFRI is an
acquisition vehicle targeting the continental European small/mid-cap food
retail industry. The combined funding reflects ACP Capital's integrated
finance capabilities, a key part of its strategy for the European small to
mid-cap sector.
Human Resources
O The Company has identified and hired 6 individuals, amongst others Eric
Youngblood as Chief Financial Officer and Nikolaj Larsen as Head of
Strategic Investments.
O On 4 September 2006, Jeff Bennett joined ACP Capital as Chief Investment
Officer for ACP Mezzanine Limited. Jeff was previously a Managing Director
in the Leverage Finance Group at Morgan Stanley, where he worked from
September 1999 until June 2006. Jeff will be responsible for (a) ACP
Mezzanine and (b) the development of ACP Capital's loan/senior lending
business, which together with ACP Mezzanine will enable ACP Capital,
alongside its strategic equity investment objectives, to be a leading
integrated finance provider as stated above for the small to mid-cap sector.
O ACP Capital has identified and initiated discussions with further
individuals with whom the Company would like to advance and finalise
negotiations in the period ending December 2006. Such individuals include
senior candidates with responsibility for infrastructure, real estate, and
credit analysis/portfolio management.
ACP Mezzanine
O On 26 July 2006, the Company successfully listed ACP Mezzanine Limited
("ACP Mezzanine"), its first managed vehicle, which raised Euro100 million
through an admission to AIM, together with the closing of a long-term facility
of Euro125 million from the Royal Bank of Scotland. ACP Mezzanine will focus on
mezzanine lending in continental Europe in the small to mid-cap sector,
alongside ACP Capital which will, if required, arrange/provide senior debt
funding and equity funding, as part of its stated integrated finance objectives.
O ACP Capital originated and warehoused Euro45 million of mezzanine assets to
seed ACP Mezzanine.
O ACP Capital, as Investment Manager of ACP Mezzanine, will receive a
management fee and a performance fee in line with its initial projections.
IFR Capital ("IFRC")
O It is announced that IFRC is seeking an Admission to trading on AIM and
proposes to raise up to Euro250 million by way of a placing.
O IFRC will be an acquisition platform focused on consolidating the German and
continental European food retail business and, in particular, retail
food outlets and food production with the intention of creating significant
synergies across different companies in this sector, while applying a private
equity approach during the anticipated first three years of rapid growth.
O Post IPO, it is intended that ACP Capital will act as IFRC's investment
manager and financial adviser whilst Heiner Kamps will act as its CEO
providing operational management expertise.
O The proceeds are intended to be used for acquisitions. Advanced discussions
are ongoing in relation to possible offers to acquire Kamps Food Retail
Investments S.A. which is the owner of Nordsee GmbH, the largest fish
restaurant chain in Europe with a turnover of approximately Euro345 million, and
parallel acquisitions in the retail sector where due diligence is expected
to be completed around the time of the IPO. ACP Capital is again acting as
financial adviser in this transaction.
Further Managed Vehicles
O ACP Capital is in the process of evaluating the launch of further Managed
Vehicles. These include Vehicles in the continental European real
estate/sale-leaseback and infrastructure sectors, as well as a Strategic Equity
Vehicle, which for example would be the Vehicle that holds equity positions
in companies such as IFRC, where the Company, as a result of its integrated
finance capabilities, has access to excellent strategic investment
opportunities. Such a vehicle is also intended to provide first loss equity
positions in funding programmes in CLO/CDO structures.
O Given this rapid expansion, ACP Capital is currently evaluating possible
equity or equity-linked capital raising alternatives alongside additional
investment grade debt funding lines to be put in place in the near term.
Derek Vago, Chief Executive Officer said:
"ACP Capital has made strong progress in the 6-month period since the admission
in January 2006 to 30 June 2006 and is well on track to meet its first 12 month
objectives.
During the period, ACP Capital has put in place a leading professional team and
originated/warehoused mezzanine assets totalling Euro45 million in value,
transferred to ACP Mezzanine at listing in July 2006. Furthermore, it completed
its first strategic investment, in conjunction with its integrated finance
objectives, of a 12% interest in KFRI alongside a Euro20 million mezzanine bridge
and Euro9 million corporate loan facilities.
Our earnings of #10,919,205 or 16.6 pence per share, for the interim period
ending 30 June 2006 demonstrate the success of our strategy.
We continue our focus on developing and positioning the Company to become a
combined merchant bank and asset manager for the small to mid-cap sector across
both the asset-backed and non asset-backed sectors, and both in the United
Kingdom and continental Europe, focusing especially on Germany and Italy in the
short term.
This therefore includes (a) completing acquisitions by year-end in either/or
both the infrastructure and real estate sectors with a view to launching such
managed Vehicles in 2007-2008, alongside the Strategic Equity Vehicle (we are
therefore well on track in our goal of putting in place two Managed Vehicles per
year commencing in Year 2 of operations) and, (b) discussions with a series of
existing origination platforms/companies in both the United Kingdom and Europe
with a view to either a joint venture or possible investment in such platforms
which we believe will augment our origination capabilities across the continent."
For further information please contact:
Investor Relations:
Rob Bain +44 (0) 20 7822 0200
ACP Capital:
Derek Vago +44 (0) 20 7082 3922
About the Company:
ACP Capital is a Jersey-incorporated niche investment and fund manager whose
shares were admitted to trading on AIM in January 2006. The Company's strategy
is to operate as a combined hybrid merchant bank and asset manager through an
integrated finance approach whereby ACP Capital will provide funding across the
capital structure (senior debt, mezzanine debt and equity), thus procuring a
flow of assets for its various managed Vehicles, in which it has raised 3rd
party capital.
In order to augment origination, the Company may form joint ventures with or
even invest in companies who are active in the markets that ACP Capital
specialises in. These include mortgage/leasing origination platforms,
specialist debt arrangers, alternative asset managers, etc.
Independent Review Report
Introduction
We have been instructed by the company to review the financial information set
out in the Chairman's statement, Consolidated Income Statement, Consolidated
Balance Sheet, Consolidated Cash Flow Statement and associated notes on pages
9-11 and we have read the other information contained in the interim report and
considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
Directors' Responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The AIM Rules
of the London Stock Exchange require that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preceding annual accounts except where any changes, and the reasons
for them, are disclosed.
Review Work Performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board. A review consists principally of making
enquiries of group management and applying analytical procedures to the
financial information and underlying financial data and based thereon, assessing
whether the accounting policies and presentation have been consistently applied
unless otherwise disclosed. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with Auditing
Standards and therefore provides a lower level of assurance than an audit.
Accordingly, we do not express an audit opinion on the financial information.
Review Conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2006.
Kingston Smith LLP
Chartered Accountants
Devonshire House
60, Goswell Road
London
EC1M 7AD
Dated: 21 September 2006
Consolidated Income Statement (Unaudited)
For the period ended 30 June 2006
Period to
30.06.2006
Note Unaudited
#
Investments
Gains on investments at fair value through profit or loss
12,077,832
Foreign exchange gains
150,286
Net investment result
12,228,118
Income
Interest
1,023,040
Fee income
342,615
Total Income
13,593,773
Expenses
Administration expenses
(510,774)
Return before exceptional items
13,082,999
Provisions
(25,000)
Exceptional item - Cost of share awards and options
(2,138,794)
Net return for the period
10,919,205
Earnings per share:
Basic 3 17.0p
Diluted 3 16.6p
All items in the above statement are derived from continuing operations.
All income is attributable to the Ordinary Shareholders of the Company.
The accompanying notes form an integral part of the financial statements.
Consolidated Balance Sheet (Unaudited)
As at 30 June 2006
As at 30 June
2006
Note Unaudited
#
Non-current assets
Property, plant and equipment 4 22,804
Investments at fair value through profit or loss 14,350,957
Loans and receivables 6,396,793
20,770,554
Current Assets
Available for sale financial assets 22,950,268
Trade and other receivables 5 511,360
Cash and cash equivalents 23,799,977
Total current assets 47,261,605
Total Assets 68,032,159
Current liabilities
Trade and other payables 6 (302,024)
Total liabilities (302,024)
Net Assets 67,730,136
Equity
Share capital 7 64,194
Share premium account 54,744,437
Capital reserve in respect of share awards and options 2,002,300
Retained earnings 10,919,205
Total equity 67,730,136
Consolidated Statement of Changes in Shareholder's Equity (Unaudited)
For the period ended 30 June 2006
Share Capital Share Share Capital Accumulated Total
Capital Premium Reserve Profits
# # # # #
Earnings for the period - - - 10,919,205 10,919,205
Total recognised income and expense - - - 10,919,205 10,919,205
Issue of Ordinary Shares 64,194 57,032,815 - - 57,097,009
Capital reserve in respect of share awards - - 1,735,800 - 1,735,800
Capital reserve in respect of share option scheme - - 266,500 - 266,500
Costs related to issue of Ordinary Shares - (2,288,378) - - (2,288,378)
Balance at 30 June 2006 64,194 54,744,437 2,002,300 10,919,205 67,730,136
Consolidated Cash Flow Statement (Unaudited)
For the period ended 30 June 2006
6 months to
30 June 2006
Unaudited
# #
Cash flow from operating activities
Profit for the period before interest receivable 9,896,165
Adjustments for:
Interest received 949,978
Unrealised foreign exchange gain (150,286)
Fair value of investments recognised through profit or (12,077,832)
loss
Increase in provisions 25,000
Cost of share awards and options 2,138,794
(9,114,346)
Operating cash flow before movements in working capital
781,819
Purchase of tangible assets (22,804)
Increase in receivables (361,074)
Increase in payables 140,530
(243,348)
Net cash from operating activities 538,471
Financing activities
Proceeds from issue of Ordinary Shares 57,097,009
Costs related to issue of Ordinary Shares (2,288,378)
Purchased short term Investments (22,950,266)
Purchased long term Investments (8,596,859)
Net cash from financing activities 23,261,506
Net increase in cash and cash equivalents 23,799,977
Cash and cash equivalents at the end of the period 23,799,977
Notes to the Unaudited Interim Financial Statements
For the period ended 30 June 2006
1. Accounting Policies
a. Basis of preparation
The financial information contained in this document is unaudited and does not
constitute statutory accounts within the meaning of the Jersey Companies
legislation.
AIM rules require that the consolidated financial statements of the company, for
the year ended 31 December 2007, be prepared in accordance with International
Financial Reporting Standards (IFRSs) adopted for use in the EU ('adopted
IFRS'). As a result, the directors have decided on early adoption of IFRSs
with effect from the year ended 31 December 2006.
This interim report has been prepared in accordance with these International
Accounting Standards (IAS) and IFRS issued by the International Accounting
Standards Board (IASB), that are expected to be adopted by the European Union,
and available for use when the annual report and accounts for the year ended 31
December 2006 are prepared. However, the accounting policies may need to be
updated for interpretations issued by the International Financial Reporting
Interpretations Committee, new standards issued by the IASB, or continuing
evolution of interpretation of existing IAS and IFRS.
The adoption of IFRS has had no impact on net assets or the net income of the
group.
b. Basis of preparation
The consolidated financial statements comprise the financial statements of the
company and its subsidiaries.
c. Investments
In accordance with IFRS 39 'Financial Instruments: Recognition and Measurement'.
Investments in non-quoted equity instruments are designated as at fair value
through profit or loss and are stated at fair value, with any resultant gain or
loss being recognised in the income statement. The Directors have used this
designation as these financial assets are managed and evaluated on a fair value
basis in accordance with a documented investment strategy.
Financial assets classified as at fair value through profit or loss are
recognised/derecognised by the Group on the date it commits to purchase/sell the
investments.
Loans and receivables are measured at amortised cost using the effective
interest method.
Available for sale financial assets are measured at their fair value.
d. Property, plant and equipment
Property, plant and equipment are stated at cost or valuation, net of
depreciation and any provision for impairment. Depreciation has been calculated
on the straight line method and aims to write down the cost, less estimated
residual value, of property, plant and equipment over their expected useful
lives, using the following periods:
Computer Equipment: 3 years
e. Share-based payments
In accordance with IFRS 2 'Share-Based Payments', share awards and options are
measured at fair value (excluding the effect of non market-based vesting
conditions) at the date of grant. The fair value determined at the grant date
of the equity-settled share-based payments is expensed on a straight line basis
over the vesting period, based on the group's estimate of the shares that will
eventually vest and adjusted for the effect of non market-based vesting
conditions.
Fair value is measured using a modified Black-Scholes pricing model. The
expected life used in the model has been adjusted, based on management's best
estimate, for the effects of non-transferability, exercise restrictions and
behavioural considerations.
2. Taxation
The company is a tax-exempt Jersey limited company. Accordingly, no provision
for income taxes is made.
3. Earnings per share
The basic earnings per share is based on the profit for the period of
#10,919,205 and the weighted average number of ordinary shares in issue during
the period of 64,194,018 (six months average) in accordance with IAS33.
The earnings per share has been fully diluted to take into account potentially
dilutive shares held under option and award agreements. This increased the
weighted average number of shares used in the basis EPS calculation from
64,194,018 to 65,644,290 used in the fully diluted EPS calculation.
Earnings for the puposes of basic earnings per share being net profit attributable to equity 10,919,205
holders
Weighted average number of Ordinary Shares for the purposes of basic earning per share 64,194,018
Share options 1,450,272
Weighted average number of Ordinary Shares for the purposes of diluted earnings per share 65,644,290
4. Property, plant and equipment (Net book value)
30.06.2006
#
Computer Equipment 22,804
22,804
5. Trade and other receivables
30.06.2006
#
Trade debtors 345,024
Prepayments and accrued income 11,250
Other debtors 155,086
511,360
6. Trade and other payables
30.06.2006
#
Trade creditors 62,799
Accruals and deferred income 77,731
Provision 161,494
302,024
7. Share Capital
30.06.2006
#
Authorised
100,000,000 Ordinary shares of 0.1p each 100,000
Allotted, called up and fully paid
64,194,018 Ordinary shares of 0.1p each 64,194
This information is provided by RNS
The company news service from the London Stock Exchange
END
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