TIDMAVA
RNS Number : 5037A
Avanti Capital PLC
21 March 2013
Interim Results for the six months ended 31 December 2012
Avanti Capital Plc, ("Avanti" or "the group") the AIM-quoted
investment management company, announces its interim results for
the six months ended 31 December 2012.
HIGHLIGHTS
-- As at 31 December 2012, the group had net assets (excluding
the accounting effects of the consolidation of Eclectic Bars
Limited) of GBP11.2 million or 139 pence per ordinary share.
-- As at 31 December 2012, the group had net assets on a
consolidated basis of GBP12.1 million or 151 pence per ordinary
share.
-- Key investee company, mBlox appoints new CEO, Tom Cotney.
-- Eclectic Bars, in which the group has a 60% holding, achieves
site EBITDA of GBP2.75 million and company EBITDA of GBP1.7
million.
20 March 2013
ENQUIRIES:
Avanti Capital Plc Tel: 020 7299 1459
R H Kleiner
Canaccord Genuity Ltd. Tel: 020 7523 8000
Bruce Garrow
Adam Miller
Results of the Group
As at 31 December 2012, the group had net assets (excluding the
accounting effects of the consolidation of Eclectic Bars Limited)
of GBP11.2 million (2011: GBP12.1 million) or 139 pence per share
(2011: 150 pence per share). It is the view of the board that this
basis gives shareholders the most relevant measure of the
underlying value of the net assets within the guidelines for the
valuation and disclosure of venture capital portfolios.
As at 31 December 2012, the group had net assets on a
consolidated basis of GBP12.1 million (2011: GBP12.7 million) or
151 pence per share (2011: 158 pence per share).
In the period to 31 December 2012, the loss before exceptional
items, excluding the consolidation of Eclectic Bars Limited, was
GBP153,000 (2011: Profit GBP61,000). The profit on a consolidated
basis was GBP480,000 (2011: GBP1.1million).
All of the above figures have been arrived at after including
the provision for the carried interest of GBP2.8 million or 34.9
pence per share. The payment of such carried interest is dependent
upon the realisation of the individual assets being at values which
are, at least, equal to the values stated in these interim
results.
Net asset values (excluding the accounting effect of the
consolidation of Eclectic Bars Limited), per Avanti share by
category were:
Carrying Value Carrying
Value
Investments Pence per share GBPm
Eclectic Bars 91 GBP7.3
Espresso 4 GBP0.4
mBlox 63 GBP5.0
Net current assets 16 GBP1.3
including cash
Total 174 GBP14.0
Note:
The total in the above table does not take account of any
dilutory effect of the carried interest under the investment
advisory agreement. Options under the Long Term Incentive Share
Scheme lapsed in January 2012. Details of the carried interest were
set out in previous annual reports of the company.
Purchase of own shares
During the period, there has been no purchase by the company of
its own shares.
Eclectic Bars
The first six months of trading, to the end of December 2012,
has continued the trend of the previous year.
Despite the strong performance for the same period last year,
the management team continues to drive performance. Sales for the
period were slightly ahead of last year, both in total and like for
like.
In summary, for the six month period ended December 2012:
-- Sales were GBP10.2 million (2011: GBP10.0 million)
-- Site EBITDA GBP2.75 million (2011: GBP2.5 million)
-- Company EBITDA GBP1.7 million (2011: GBP1.5 million)
Trading over the period and over New Year was once again strong
and management are optimistic that the second six months will
continue the trend seen in the first half.
At the end of July 2012, Eclectic entered into a new management
contract to operate a further 33 restaurants, bars and nightclubs
on behalf of PBR Leisure Limited. PBR Leisure owns The Living Room,
a leading premium bar and restaurant brand, with a total of 14
sites, and a portfolio of 19 other bar, nightclub and hotel
businesses operated under the Ultimate Leisure umbrella. These
sites are spread all across the UK.
The PBR Leisure estate, together with Eclectic's own portfolio,
brings the number of venues under management from 16 to just under
50. This significant expansion of operations demonstrates the
management team's ability to continue to develop and grow the
Eclectic group.
The group's investment, which is predominantly in the form of a
secured loan, has a book value of GBP 7.3 million (2011: GBP7.4
million). The only other debt outstanding in Eclectic is a senior
debt facility from Barclays Bank plc. In September 2012 the company
renewed its term debt for a further period of three years and
agreed a GBP1.5 million revolving facility to support the refit and
acquisition programme. As at December 2012, bank debt (net of cash)
stood at GBP0.66 million (2011: GBP1.85 million).
At 31 December 2012, the carrying value of the group's
investment in Eclectic was GBP 7.3 million equating to 91p per
share.
Espresso
In Espresso's core UK business, during 2012, UK school spending
largely reverted to historical levels as schools had better
confidence in budgets. That confidence has led to strong growth in
new business orders in 2012 compared to the prior year.
Profitability in the UK business grew as the business also
benefited from operational efficiencies achieved across all
functional areas. Espresso has continued to invest in the
infrastructure required to support those operational efficiencies.
The results for the year to 31 July 2012 and financial position of
the company's UK business are shown in the summary below.
Year ended Year Ended
31 July 31 July Change
2012 2011
UK Core Business (GBP millions) (GBP millions) Change (GBP
(%) millions)
Turnover 13.5 13.4 1 0.1
Earnings before interest, tax,
amortisation, FRS20 charges and
non-recurring items (excluding
US investment) 3.4 2.6 31 0.8
There has also been strong growth in the Swedish service as the
service is now used by 13% of K-6 schools in Sweden. While this has
been driven by new schools subscribing to the service, the Swedish
initiative has also benefited from increased customer renewal
levels that are approaching levels similar to those in the UK. In
North America the business continues with its expansion plans.
Given the brand recognition for the service, its market penetration
and geographic diversity of customers, the business now intends to
leverage third party distribution channels like those developed in
Sweden to further accelerate its growth. The underlying
profitability and cash generative nature of the UK business has
meant that the North American investment has been funded
internally.
As at 31 December 2012, the carrying value of the group's
investment in Espresso was GBP0.4 million equating to 4p per
share.
mBlox
mBlox, the leader in mobile engagement, helps brands, agencies
and enterprises create meaningful connections with their customers
on mobile devices anytime and anywhere. mBlox's network of more
than 800 mobile operators around the world enables businesses to
reach nearly 5 billion consumers. mBlox makes it easy to use
interactive text message campaigns, push notifications and
geolocation in order to drive revenue, lifetime customer value and
return on investment (ROI).
mBlox offers carrier-based and over-the-top (OTT) mobile
messaging services. The carrier-based services are based on
application-to-service messaging between brands and mobile devices.
OTT services are through mBlox Engage, a cloud-based platform which
enables companies to create, automate and measure meaningful
marketing campaigns for their mobile application users. Engage
automates the delivery of highly targeted, contextually relevant
messages and push notifications to consumers by auto-populating
their membership in campaigns based on their real-time behavior,
location and local time.
In 2012 mBlox recorded another record year of mobile marketing
and engagement, with 5.3 billion business-to-consumer interactions
across more than 180 countries and over 1,083 mobile network
operators. In the UK, France and Spain, mBlox saw a peak of these
interactions in June, reaching record volumes for the summer sales
period. In Italy, volumes almost doubled in 2012, with a record
peak in December, and in Sweden volumes increased by 36%. Europe,
however, was not the only geography with tremendous growth;
Australia hit an all-time volume record in December, and its yearly
volumes increased by almost 70%. mBlox processed more than 14
million standard rate application-to-person text messages on an
average every day during 2012. Messages reached the destination
mobile handsets, where available, in an average time of less than
10 seconds. In addition, consumers sent texts to enterprises
enabled by the mBlox network at the rate of 25 messages every
second.
In December 2012, mBlox announced the appointment of Thomas M.
(Tom) Cotney, Jr. as Chief Executive Officer to lead mBlox into new
growth areas for mobile engagement. Tom Cotney brings expertise in
revenue growth, global expansion and value-added software platforms
in a range of sectors and he will focus on expanding mBlox's global
scale and product range, driving growth through geographical
expansion into major new markets and new product offerings in the
fast growing mobile market. He will also drive service
efficiencies, and enhance the quality of service for which mBlox is
known in the industry.
Tom Cotney has held a number of senior positions, most recently
as board advisor to Catavolt, Inc., a B2B enterprise mobility
company. Prior to that he was the Chief Executive for Air2Web where
he successfully transformed the company's business model before its
acquisition by Velti, PLC. Tom Cotney was also the GM of IBM's
business processing outsourcing division in the Americas, and prior
to that the head of its Communications Sector. Both businesses
exceeded $1 billion in revenue. The scale and content, particularly
the solution orientation of the business process outsourcing
business, are expected to be vital experience sets for mBlox's
continued expansion in global markets.
One of the new CEO's first actions was the appointment of Jonas
Lindeborg to the newly created position of Chief Technology
Officer. Mr. Lindeborg joined mBlox in 2010 as part of the
acquisition of Mashmobile, and has been integral to the delivery of
the new mBlox Engage platform. The new CTO role will focus on
ensuring that mBlox delivers the most effective solutions for
customer engagement and provides brands and enterprises the ability
to gain better ROI from their mobile initiatives.
As reported in the June 2012 Annual Report, in view of the
market conditions, the board of Avanti Capital Plc took the
decision to make a division against the then carrying value of
mBlox of GBP1 million. Accordingly, and after adjusting for
movement in foreign exchange, as at 31 December 2012, the carrying
value of the group's investment in mBlox was GBP5.0 million
equating to 63p per share.
Investing Policy
The group's investing policy remains unchanged as the group
continues to pursue its objectives through two complementary
activities.
-- its investment operation, which acquires interests in
technology and trading businesses; and
-- its consultancy operation, which offers a business
development service, to develop the investee business until an exit
opportunity arises.
As previously announced, it is Avanti's current intention not to
invest in any new investments but to support the existing
investment portfolio.
Legacy portfolio
In relation to the remainder of the legacy investments in the
group's portfolio, the board continues to seek ways of maximising
value to the group. Shortly after the period end, in January 2013,
the group's investment in XDL Intervest was finally realised in the
approximate amount of $40,000. As at 31 December 2012, the
aggregate carrying value of the legacy portfolio investments was
GBP40,000.
R H Kleiner
W A H Crewdson
20 March 2013
Consolidated income statement
for the six months ended 31 December 2012
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
Notes 31 Dec 31 Dec 30 Jun
2012 2011 2012
GBP000 GBP000 GBP000
Revenue 3 10,198 10,039 19,629
Cost of sales (2,125) (2,133) (4,132)
Gross profit 8,073 7,906 15,497
Administrative expenses - others (7,291) (6,905) (14,086)
Administrative expenses - foreign
exchange (174) 221 156
Administrative expenses - exceptional 5 (31) (81) (251)
Operating profit 577 1,141 1,316
Finance revenue 2 - 1
Finance cost (45) (70) (132)
Fair valuation of financial assets
held at fair value through profit
or loss - - (1,000)
Profit on ordinary activities before
taxation 534 1,071 185
Tax expense (54) 31 (126)
Profit on ordinary activities after
taxation 480 1,102 59
Attributable to
Shareholders of the parent 198 598 (265)
Non-controlling interest 282 504 324
Profit for the period 480 1,102 59
Profit/(loss) per share attributable
to shareholders of the parent - basic
and diluted 4 2.47p 7.45p (3.30)p
Consolidated balance sheet
At 31 December 2012
Unaudited Unaudited Audited
31 Dec 31 Dec 30 Jun
2012 2011 2012
GBP000 GBP000 GBP000
Assets
Non current assets
Goodwill 4,762 4,751 4,762
Property, plant & equipment 5,687 6,250 5,850
Financial assets held at fair value
through profit or loss 5,444 6,685 5,620
Deferred tax asset 191 252 163
16,084 17,938 16,395
Current Assets
Inventories 370 331 264
Trade and other receivables 1,514 1,339 1,144
Cash and cash equivalents 2,236 1,414 1,306
4,120 3,084 2,714
Total Assets 20,204 21,022 19,109
Equity and Liabilities
Equity
Issued share capital 4,815 4,815 4,815
Capital redemption reserve 1,409 1,409 1,409
Merger reserve 2,045 2,045 2,045
Retained earnings 2,527 3,192 2,329
Equity attributable to equity shareholders
of the parent 10,796 11,461 10,598
Non-controlling interest 1,296 1,194 1,014
Total Equity 12,092 12,655 11,612
Liabilities
Current liabilities
Financial liabilities 678 908 811
Trade and other payables 2,937 2,605 2,447
3,615 3,513 3,258
Non-current liabilities
Financial liabilities 1,172 1,448 1,064
Provisions 2,797 3,029 2,729
Deferred tax liabilities 528 377 446
4,497 4,854 4,239
Total Liabilities 8,112 8,367 7,497
Total Equity and Liabilities 20,204 21,022 19,109
Approved by the board on 20 March 2013
R H Kleiner
W A H Crewdson
Consolidated statement of cash flows
For the period ended 31 December 2012
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Dec 31 Dec 30 Jun
2012 2011 2012
GBP000 GBP000 GBP000
Operating activities
Profit before tax from operations 534 1,071 185
Depreciation and impairment of property,
plant and equipment 567 203 1,072
Loss on financial assets at fair value through
profit or loss - - 1,000
Currency movements on financial assets held
at fair value through profit or loss 176 (221) (156)
Loss on disposal of property, plant and
equipment 102 - 32
Net interest expense 45 70 131
(Increase) in inventories (106) (98) (31)
(Increase)/decrease in trade and other receivables (370) (81) 114
Increase in trade and other payables 490 312 59
Increase/(decrease) in provisions 68 214 (86)
Net cash from operating activities 1,506 1,470 2,320
Investing activities
Interest received 2 - 1
Purchase of property, plant & equipment (505) (1,152) (1,690)
Net cash flows used in investing activities (503) (1,152) (1,689)
Financial activities
Interest paid (45) (70) (132)
Proceeds from borrowings 1,950 1,119 1,335
Repayment of borrowings (1,961) (1,072) (1,638)
Capital element of finance lease rental
payments (17) (50) (59)
Net cash flows used in financing activities (73) (73) (494)
Net increase in cash and cash equivalents 930 245 137
Cash and cash equivalents at start of period 1,306 1,169 1,169
Cash and cash equivalents at end of period 2,236 1,414 1,306
Consolidated statement of changes in equity (unaudited)
for the six months ended 31 December 2012
Capital Non-controlling
Share Merger Redemption Retained Shareholders'
Capital Reserve Reserve Earnings equity interest Totals
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 July 2012 4,815 2,045 1,409 2,329 10,598 1,014 11,612
Profit for the
period - - - 198 198 282 480
At 31 December
2012 4,815 2,045 1,409 2,527 10,796 1,296 12,092
Notes to the Accounts
for the six months ended 31 December 2012
1. Basis of preparation of interim financial information
The financial information for the 6 months ended 31 December
2011 and 31 December 2012 does not constitute statutory accounts
for the purposes of S240 of the Companies Act 2006 and has not been
audited.
Information that has been extracted from the June 2012 accounts
are those from the audited accounts that have been filed at
Companies House.
The interim financial statements have been prepared in
accordance with those IFRS standards, as adopted by the EU, and
IFRIC Interpretations issued and effective for the period ended 31
December 2012.
2.Accounting policies
The accounting policies used in the preparation of the financial
information for the 6 months ended 31 December 2012 are the
accounting policies as applied to the group's financial statements
for the year ended 30 June 2012.
3. Segmental information
Unaudited Unaudited Audited
6 months ended 6 months ended 12 months
ended
31 Dec 2012 31 Dec 2011 30 Jun 2012
GBP000 GBP000 GBP000
Revenue by products and services
Bars and nightclubs 10,198 10,039 19,629
10,198 10,039 19,629
4. Earnings per share
Unaudited Unaudited Audited
6 months 6 months ended 12 months
ended ended
31 Dec 2012 31 Dec 2011 30 Jun 2012
Profit/(loss) for the period
(GBP000) 198 598 (265)
Basic weighted and diluted
number of shares (number) 8,025,752 8,025,752 8,025,752
Earnings/(loss) per share (pence)
- Basic and diluted (pence) 2.47p 7.45p (3.30)p
5. Exceptional items
Unaudited Unaudited Audited
6 months ended 6 months ended 12 months
ended
31 Dec 2012 31 Dec 2011 30 Jun 2012
GBP000 GBP000 GBP000
Deal and merger costs:
- Redundancy costs 2 11 133
- Cost of abortive deals 20 54 47
- Others 1 16 -
Restructuring charges 8 - 72
31 81 252
6. Pro-forma Profit & Loss and Balance Sheets
The Accounting Standards require the group to consolidate
Eclectic Bars Limited. Shareholders may find it useful to see the
separate trading results and net assets of Avanti Capital plc and
Eclectic Bars Limited as shown in this pro-forma.
The adjustments shown within the pro-forma financial information
enable a reconciliation to be made to the consolidated interim
results which comprise the usual consolidation items including fees
and interest charged by the group to Eclectic Bars Limited and the
inclusion within the pro-forma Profit and Loss, of EBITDA for
Eclectic Bars Limited for the 26 weeks period ended 23 December
2012.
Avanti Eclectic Group
Bars
Capital Limited Adjustments Total
plc
Profit & loss GBP000 GBP000 GBP000 GBP000
Turnover 53 10,198 (53) 10,198
Cost of sales - (2,125) - (2,125)
Gross profit 53 8,073 (53) 8,073
Operating expenses (326) (6,451) 53 (6,724)
EBITDA (273) 1,622 - 1,349
Foreign exchange loss on investments (174) - - (174)
Depreciation & goodwill (1) (566) - (567)
Interest payable - (344) 299 (45)
Interest receivable 290 2 (290) 2
(Loss)/Profit on ordinary
activities before Taxation
and exceptional items (158) 714 9 565
Exceptional items - other - (31) - (31)
(Loss)/Profit on ordinary
activities before taxation (158) 683 9 534
Taxation - - (54) (54)
(Loss)/Profit for the period (158) 683 (45) 480
Pro-forma Balance Sheet
Net Assets
Non-current assets
Goodwill - 6,784 (2,022) 4,762
Tangible assets 2 5,685 - 5,687
Investments 12,751 - (7,307) 5,444
Deferred tax assets - - 191 191
12,753 12,469 (9,138) 16,084
Current assets
Stock - 370 - 370
Debtors 40 1,474 - 1,514
Cash and cash equivalents 1,197 1,039 - 2,236
1,237 2,883 - 4,120
Creditors: amounts falling
due within one year 24 3,591 - 3,615
Net current assets/(liabilities) 1,213 (708) - 505
13,966 11,761 (9,138) 16,589
Creditors: amounts falling
due after one year
Shareholders' loan - (7,307) 7,307 -
Other creditors - (1,172) - (1,172)
13,966 3,282 (1,831) 15,417
Non-current liabilities
Provisions (2,797) - - (2,797)
Deferred tax liabilities - - (528) (528)
Net assets 11,169 3,282 (2,359) 12,092
Represented by:
Called up share capital 4,815 - - 4,815
Capital redemption reserve 1,409 - - 1,409
Other reserve 2,045 - - 2,045
Profit & loss account 2,900 3,282 (3,655) 2,527
Non-controlling interest - - 1,296 1,296
Shareholders' funds 11,169 3,282 (2,359) 12,092
Copies of this Announcement will be available, free of charge,
from the company's office at 25 Harley Street, London, W1G 9BR for
a period of 1 month from the date of this Announcement. A copy of
this Announcement will also be available on the company's website
at www.avanticap.com.
Independent review report to Avanti Capital plc
Introduction
We have been engaged by the company to review the condensed
financial statements in the half-yearly financial report for the
six months ended 31 December 2012, which comprises the Consolidated
income statement, the Consolidated balance sheet, the Consolidated
statement of cash flows, the Consolidated statement of changes in
equity and the related notes 1 to 6. We have read the other
information contained in the half yearly financial report and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
This report is made solely to the company in accordance with the
guidance contained in ISRE 2410 (UK and Ireland) "Review of Interim
Financial Information Performed by the Independent Auditor of the
entity" issued by the Auditing Practices Board. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company, for our work, for this report, or
for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the Interim Report in accordance with the AIM Rules
issued by the London Stock Exchange which require that it is
presented and prepared in a form consistent with that which will be
adopted in the company's annual accounts having regard to the
accounting standards applicable to such accounts.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with the AIM Rules issued by the London Stock
Exchange.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with the International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 31
December 2012 is not prepared, in all material respects, in
accordance with the accounting policies outlined in Note 1, which
comply with IFRS's as adopted by the European Union and in
accordance with the AIM Rules issued by the London Stock
Exchange.
Ernst & Young LLP
London
20 March 2013
This information is provided by RNS
The company news service from the London Stock Exchange
END
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