TIDMAVA
RNS Number : 2444R
Avanti Capital PLC
24 October 2013
Avanti Capital plc
Annual Report and Accounts for the year ended 30 June 2013
Company statement
Results of the group
As the primary purpose of the company is to act as an investment
management business, references are made to the net assets and
results of the company, excluding the effects of the consolidating
the investment in Eclectic Bars Limited, in which the company has a
controlling right.
As at 30 June 2013 the group had net assets (excluding the
accounting affects of the consolidation of Eclectic Bars Limited)
of GBP10.5 million (2012: GBP11.3 million) or 131 pence per
ordinary share (2012: 141 pence per share).
As at 30 June 2013, the group had net assets on a consolidated
basis of GBP11.5 million (2012: GBP11.6 million) or 143 pence per
ordinary share (2012: 145 pence per share).
In the year to 30 June 2013, the loss before exceptional items,
excluding the consolidation of Eclectic Bars Limited, was GBP0.8
million (2012: GBP0.7 million). The profit before tax on a
consolidated basis was GBP0.2 million (2012: GBP0.2 million).
All the above figures have been arrived at after making a
provision for the carried interest of GBP2.6 million (or 32p per
share) (2012: GBP2.7 million). 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 the
accounts as at 30 June 2013.
In order to reflect the underlying commercial value of the
group's net assets we have provided on pages 43 and 44, by way of
additional information to our shareholders, supplementary
information comprising un-audited pro-forma accounts which reflect
the separate activities of the group.
Portfolio investments
Eclectic Bars
The company's principal activity is the management and operation
of late night bars and restaurants across the United Kingdom.
Eclectic Bars Limited carries out business under the trade names of
PoNaNa, Fez, Embargo 59, Sakura, Lola Lo and Madame Geisha.
The directors consider that the company, and its subsidiaries,
achieved their objectives for the year.
Eclectic Bars Ltd. is a leading operator of premium late night
bars and restaurants. The company's venues follow an independent
music policy; predominantly target a mid- to upper market customer
base of more sophisticated students' midweek and stylish 21 plus
adults at weekends.
The past year has seen another strong performance from the team
at Eclectic, who have continued to grow turnover, for the twelve
month period ended June 2013, with sales up 7% at GBP21.197 million
(2012: GBP19.63 million), EBITDA before head office costs was up
15% at GBP5.81 million (2012: GBP5.06 million) and company EBITDA
was up 2% at GBP2.92 million (2012: GBP2.85 million).
The past 12 months have seen another year of considerable
activity with the acquisition of one new venue, some minor refits
to the existing estate and the signing of a contract in August 2012
to manage all the day-to-day operations of thirty-three businesses
on behalf of PBR Leisure Limited. This contract, together with the
new unit acquired in the year, took the total number of venues
owned and operated from sixteen to fifty.
-- The venues managed on behalf of PBR Leisure Limited include
fourteen units trading as The Living Room, a leading premium bar
and restaurant brand; and nineteen other bar, nightclub and hotel
businesses across the United Kingdom. Eclectic has, along with day
to day operations, been responsible for the restructure and
refocusing of the business, and more recently has been assisting
the PBR Leisure board with a number of strategic disposals
including The Living Room business to Stonegate Pub Company.
-- The management contract with PBR Leisure Limited came to an
end in October 2013. The net income from this management contract
during the year ended 30 June 2013 amounted to GBP650,000.
-- Madame Geisha in Brighton was acquired in March 2013 and
brings the total sites currently owned by the company to seventeen.
This business is continuing to trade in its current format and is
expected to undertake a refit in the next financial year.
-- During the year, Reading and Manchester Sakura both had minor
refits to create additional dance floor areas, which enable them,
when required, to trade two different events concurrently. Eclectic
continues to make regular capital investment across all of its
estate, ensuring that high standards of customer experience
continue to be met.
The strong performance this year of Eclectic's owned sites have
been underpinned with quality service, strong product, table
service (with over 80% of tables pre booked at the weekends),
strong music and premium student nights throughout the weekdays. In
addition the company has demonstrated its ability to run and
operate a significantly larger estate whilst continuing to deliver
increased sales and EBITDA.
The team continues to search for suitable sites to further roll
out its brands. With a good pipeline of potential opportunities and
funding in place from Barclays Bank Eclectic's management will
continue to look to acquire two to three sites a year, targeting a
30% EBITDA return on new sites and a 25% EBITDA return on existing
sites which may be rebranded or refurbished.
Once again, Eclectic's management team have demonstrated their
ability to continue to develop and grow the Eclectic group seeking
out new opportunities and continuing to deliver strong sales and
EBITDA performance.
The company's investment, which is predominantly in the form of
a secured loan, has a book value of GBP7.3 million (2012: GBP7.3
million), equating to 91 pence per share (2012 - 91 pence per
share). The only other debt outstanding in Eclectic is a series of
senior debt facilities from Barclays Bank plc which (net of cash)
stood at GBP0.9 million as at the end of June 2013 (2012 - GBP1.5
million).
Espresso
Espresso Group Limited's preliminary unaudited results for the
year ended 31 July 2013 were once again strong with the core UK
business profitability sustaining investments in new products for
the UK that address upcoming curriculum changes in the UK market,
while at the same time sustaining the investment in the development
of the business in the USA. The cash flows from the business
continue to be healthy and since the accounts date this has allowed
the company to repay its outstanding loan obligations. For the
first time in well over 10 years, the company operates on a
debt-free basis.
The company now has businesses in the UK, the USA and a strong
partnership in Sweden for its subscription services. Its
international division also licenses and distributes content into
more than 40 countries worldwide. We believe that the strong
financial position of the company, combined with the inroads made
into new markets makes the company attractive to the many financial
and trade buyers that have expressed an interest in the
business.
As at 30 June 2013, the carrying value of the company's
investment in Espresso was GBP0.4 million (2012 - GBP0.4 million)
equating to 4 pence per share (2012 - 4 pence 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
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 behaviour,
location and local time.
With renewed focus on the messaging market, mBlox is poised to
have the best year of profitability in its 13-year history. Steady
growth in the application-to-service market, expansion in Africa,
and the complete divestiture of the Premium SMS (Ringtones,
subscriptions to horoscopes and other digital content), have
allowed the global sales force to drive improved results in a
market that was once considered a novelty play for early
adopters.
mBlox appointed a new CEO, Tom Cotney, in late 2012. Tom Cotney,
says, "Our market is as healthy as it has been since its inception.
CMO's and CIO's see mobility as a valid channel now and understand
the intrinsic value of the immediacy and responsiveness that it
brings. They no longer see it as a bleeding edge experiment. It is
a more effective and lower cost channel for B2C companies to
leverage than call centers, email, and other traditional forms of
customer contact. Our product set further differentiates our
clients by allowing them to improve the relevance of their
communication as well."
Notwithstanding the above, there continues to be real
uncertainty over the challenges that lie ahead for mBlox and in the
absence of any objective data to assess the true market values of
the company's carrying value in the mBlox investment, the board of
Avanti Capital plc have taken a prudent approach in determining the
carrying value of its investment in mBlox. Accordingly, a provision
of GBP1 million has been made against the carrying value as at 30
June 2012 in order to bring down the carrying value to cost.
As at 30 June 2013, after including the provision referred to
above, the carrying value of the group's investment in mBlox was
GBP4.0 million (2012 - GBP5.2 million) equating to 51 pence per
share (2012 - 66 pence per share).
Net asset values (excluding the accounting effects of the
consolidation of Eclectic Bars Limited) per Avanti share by
category
Carrying Carrying
value as at value as at
30 June 30 June
2013 2013
Investment Pence per
share GBPm
Eclectic Bars 91 GBP7.3
Espresso 4 GBP0.4
mBlox 51 GBP4.0
Net current assets (including
cash) 17 GBP1.4
--- ---
Total 163 GBP13.1
--- ---
Note:
The above figures do not take account of any dilutory effect of
the carried interest under the investment advisory agreement (refer
to Report of the Directors).
Purchase of own shares
During the year, there has been no purchase by the company of
its own shares.
As stated previously, the Board reaffirms its policy of the
company making purchases of its own shares in circumstances where
it believes the net asset value per share is likely to be
increased.
Richard Kleiner
William Crewdson
Directors
23 October 2013
Statement of corporate governance
Compliance with the 2010 FRC Combined Code
The company is not required to comply with the 2010 FRC Combined
Code on Corporate Governance. Set out below are the corporate
procedures that have been adopted.
The Board
The Board of Avanti Capital plc is the body responsible for the
group's objectives, its policies and the stewardship of its
resources. At the balance sheet date, the board comprised three
directors being Richard Kleiner with Philip Crawford and William
Crewdson being the independent directors.
The Board had six board meetings during the year. The two
independent directors sit on both the audit and the remuneration
committees, namely Philip Crawford and William Crewdson. Philip
Crawford is the chairman of both the audit committee and the
remuneration committee. The terms of reference of both these
committees have been approved by the Board.
Remuneration Committee
The committee's responsibilities include the determination of
the remuneration and options of other directors and senior
executives of the group and the administration of the company's
option schemes and arrangements. The committee takes appropriate
advice, where necessary, to fulfil this remit.
Audit Committee
The committee meets twice a year including a meeting with the
auditors shortly before the signing of the accounts. The terms of
reference of the audit committee include: any matters relating to
the appointment, resignation or dismissal of the external auditors
and their fees; discussion with the auditors on the nature, scope
and findings of the audit; consideration of issues of accounting
policy and presentation; monitoring the work of the review function
carried out to ensure the adequacy of accounting controls and
procedures.
Nomination Committee
The company does not maintain a nomination committee. Any board
appointments are dealt with by the Board itself.
Internal Control
The Board is responsible for the group's system of internal
control and for reviewing the effectiveness of the system of
internal control. Internal control systems are designed to meet the
particular needs of a business and manage the risks but not to
eliminate the risk of failure to achieve the business objectives.
By its nature, any system of internal control can only provide
reasonable, and not absolute, assurance against material
misstatement or loss.
Internal Audit
Given the size of the group, the Board does not believe it is
appropriate to have a separate internal audit function. The group's
systems are designed to provide the directors with reasonable
assurance that problems are identified on a timely basis and are
dealt with appropriately.
Relations with Shareholders
Aside from announcements that the company makes periodically to
the market, the Board uses the annual general meeting to
communicate with private and institutional investors and welcomes
their participation.
Going Concern
On the basis of the current financial projections, the directors
have a reasonable expectation that the company and the group have
adequate financial resources to continue in operational existence
for the foreseeable future. The directors accordingly have adopted
the going concern basis in the preparation of the group's accounts.
See page 10.
Directors' report for the year ended 30 June 2013
The directors present their report with the audited consolidated
financial statements for the year ended 30 June 2013.
Results and dividends
The profit for the year before taxation of the group amounted to
GBP0.2 million (2012 - GBP0.2 million) and the loss for the year
after taxation including non-controlling interests of the group
amounted to GBP126,000 (2012 - profit of GBP59,000). Of this loss,
a profit of GBP0.3 million (2012 - profit of GBP0.3 million) is
attributable to non-controlling interests, leaving a loss of GBP0.4
million (2012 - GBP0.3 million) attributable to the shareholders of
the parent. This was equivalent to a loss of 5.27 pence per share
(2012 - loss of 3.30 pence per share) attributable to shareholders
of the parent. The net assets of the group were GBP11.5 million
(2012 - GBP11.6 million). Of this GBP1.3 million (2012 - GBP1.04
million) is attributable to non-controlling interests leaving
GBP10.2 million (2012 - GBP10.6 million) attributable to the
shareholders of the parent.
The directors do not recommend the payment of a dividend for the
year ended 30 June 2013 (2012 - GBPnil).
Principal activity and review of the business
The company's principal activity during the year continued to be
that of an investment management and ancillary services company.
The principal activity of Eclectic Bars Limited, one of the group's
subsidiary undertakings was as an operator of bars and night clubs.
Further details are set out in the company statement on pages 3 to
6.
The board consider that the most appropriate key performance
indicator for the group is the fair valuation of its assets and the
net asset per share, as set out on page 6.
The principal risks and uncertainties facing the business and
the group's financial instruments are investment risk, interest
rate risk, liquidity risk and credit risk (see note 28). With the
exception of the investment in mBlox, the group does not have a
material exposure to foreign currency risk.
The various categories of risk are proactively managed to ensure
exposure to risk is mitigated whenever possible and appropriate.
The board has assessed that the Key Performance Indicator that is
the most effective measure of progress towards achieving the
group's strategies and as such towards fulfilling the group's
objectives is the net asset value per share.
The Board reviews policies for managing each of these risks, and
they are summarised as follows:
Investment risk
Investment risk includes investing in companies that may not
perform as expected. The group's investment criteria focus on the
quality of the business and the management team of the target
company, market potential and the ability of the investment to
attain the returns required within the time horizon set for the
investment. Due diligence is undertaken on each investment. The
group regularly reviews the investments in order to monitor the
level of risk and mitigate exposure where appropriate.
Interest rate risk
The group borrows in currencies to match the denomination at
fixed and floating rates of interest to generate the desired
interest profile and to manage the group's exposure to interest
fluctuations.
Liquidity risk
The group's policy is to finance its operations and expansion
through working capital and, in the case of investing in target
companies, to raise an appropriate level of acquisition
finance.
Credit risk
There are no significant concentrations of credit risk within
the group. The maximum credit risk exposure relating to financial
assets is presented by the carrying value as at the balance sheet
date.
Future developments
The company will be pursuing its policy of maximising the value
of its investments and, at the appropriate time, to realise such
investments.
Directors and their interests
P J Crawford
R H Kleiner
W A H Crewdson
The company has not granted indemnity on behalf of any of its
directors during the year.
The interests of the directors and their immediate families and
the interests of persons connected with the directors for the
purposes of section 252 of the Companies Act 2006 in the issued
ordinary share capital of the company as at 30 June 2013 (all of
which are beneficial unless otherwise noted) are as follows:
Number of ordinary issued
shares
As at 1 July As at 30 June
2012 2013
--------------- ------------ -------------
P J Crawford 391,923 391,923
--------------- ------------ -------------
R H Kleiner 702,160 750,440
--------------- ------------ -------------
W A H Crewdson - -
--------------- ------------ -------------
The rights of the directors to subscribe for shares in Avanti
Capital plc, their immediate families and persons connected with
the directors for the purposes of section 420 of the Companies Act
2006 are as follows:
At 1 July
2012 or date
of appointment At 30 June
Rights to subscribe for shares if later Granted Cancelled Exercised 2013
------------------------------ --------------- ------- --------- --------- ----------
R H Kleiner - - - - -
------------------------------ --------------- ------- --------- --------- ----------
The company has an investment advisory agreement with Odyssey
Partners Limited ("OPL"). The principal terms of the investment
advisory agreement are that OPL, a company controlled by Richard
Kleiner, provides all of the functions previously carried out by
the executive management team in respect of the group's portfolio.
OPL bears all of its internal overheads and is paid an annual fee
of GBP264,000 per annum which is equivalent to 1.9% of the
company's asset value as at 30 June 2013. In addition, OPL has a
carried interest by reference to the realisations achieved in
relation to the assets. The threshold, after which the carried
interest becomes payable, is based on realisations of not less than
GBP6.6m or 82.5 pence per share (based on the issued share capital
of the company on 30 November 2008). There is a hurdle of 6% per
annum to protect the company from the effects of time in relation
to the realisation of the portfolio. Once realisations are achieved
in excess of GBP6.6 million, provided that the return to the
company would be at least that amount together with the hurdle,
then in relation to any excess, OPL will be entitled to 25% of such
excess up to GBP9.1m of realisations or 113 pence per share. OPL's
share will be increased by 5% for each GBP2.5m in excess of GBP9.1m
up to a maximum of 40% for realisations in excess of GBP14.1m or
176 pence per share (refer also to note 22 on page 38).
Report on directors' remuneration
The remuneration of the directors for the year ended 30 June
2013 is as follows:
Basic salary 2013 2012
and fees Benefits Total Total
GBP GBP GBP
------------------------------------ ------------ -------- ------ ------
Directors
------------------------------------ ------------ -------- ------ ------
P J Crawford 25,000 10,536 35,536 33,229
------------------------------------ ------------ -------- ------ ------
W A H Crewdson 15,000 - 15,000 15,000
------------------------------------ ------------ -------- ------ ------
J M Fellerman (deceased 17.11.2011) - - - 1,663
------------------------------------ ------------ -------- ------ ------
R H Kleiner - 4,776 4,776 5,681
------------------------------------ ------------ -------- ------ ------
40,000 15,312 55,312 55,573
------------------------------------ ------------ -------- ------ ------
(1) The above figures represent the due proportion of each
director's annual salary reflecting the period during the year for
which each director was a director of the company.
(2) There were no pension payments in respect of either
year.
(3) During the year, as part of the investment advisory
agreement entered into between the company and Odyssey Partners
Limited, Odyssey Partners Limited received fees totalling
GBP264,000 (2012: GBP264,000) including the non-executive
director's fee of Richard Kleiner.
The remuneration committee comprises Philip Crawford (chairman)
and William Crewdson. Its terms of reference are concerned
principally with the remuneration packages offered to directors in
that they should be competitive and are designed to attract, retain
and motivate directors of the right calibre.
Significant shareholdings
As at 7 July 2013, the company's significant shareholders were
Mr. R J R French 15.7%, Marlborough Fund Managers Limited 7.4%,
Stessa Investments Limited 6.2% and Prestonfield Investments
Limited 6.2%.
Employee involvement
The group is aware of the importance of good communication in
relationships with its staff. The group follows a policy of
encouraging training and regular meetings between management and
staff in order to:
-- provide common awareness on the part of staff of the
financial and economic circumstances affecting the group's
performance;
-- provide employees or their representatives with information
on matters of concern to them as employees; and
-- consult employees or their representatives on a regular
basis, so that the views of employees can be taken into account in
making decisions which are likely to affect their interests.
Disabled persons
The group gives full and fair consideration to applications for
employment from disabled persons where the candidate's particular
aptitudes and abilities are consistent with adequately meeting the
requirements of the job. Opportunities are available to disabled
employees for training, career development and promotion.
Policy and practice on payment of creditors
It is the group's policy to settle all agreed liabilities within
the terms established with suppliers. During the year the average
credit period taken was 30 days (2012 - 30 days).
Going concern
The group's principal activities, together with the risk factors
likely to have an impact on its future are set out on page 7 and in
note 28 on page 40. The directors, having assessed the responses of
the management of Eclectic Bars Limited to their enquiries have no
reason to believe that a material uncertainty exists that may cast
significant doubt about the ability of Eclectic Bars Limited to
continue as a going concern or its ability to continue with the
current level of interest payments for the group's external
loans.
The group has adequate financial and management resources
together with long term relationships with suppliers and as a
result, the directors believe that the group is well placed to
managed its business risks successfully despite the current
uncertain economic outlook.
The directors have also reviewed and considered the cashflow
forecasts of Avanti Capital plc and the group for the next twelve
months from the approval of the financial statements and on this
basis, the directors are of the view that both the company and the
group will be able to continue as a going concern for the
foreseeable future.
Purchase of own shares
During the year under review, the company has not purchased any
of its own shares. The board intends to pursue the purchase by the
company of its own shares where it believes will enhance the value
per share to the continuing shareholders.
Post-balance sheet events
On 1 October 2013, Eclectic Bars acquired a new site for
GBP700,000. The new site which currently trades under the name of
"Coalition" is situated in Brighton.
Auditor
A resolution to re-appoint Ernst & Young LLP will be put to
the members at the forthcoming Annual General Meeting.
Disclosure of information to auditor
The directors who were members of the board at the time of
approving the directors' report are listed on page 2. Having made
enquiries of fellow directors and of the company's auditor, each of
these directors confirms that:
-- To the best of each director's knowledge and belief, there is
no information relevant to the preparation of their report of which
the company's auditors are unaware; and
-- Each director has taken all the steps a director might
reasonably be expected to have taken to be aware of relevant audit
information and to establish that the company's auditors are aware
of that information.
By order of the board
Richard Kleiner
Secretary
23 October 2013
Statement of directors' responsibilities
The directors are responsible for preparing the Annual Report
and the group and parent company financial statements in accordance
with applicable United Kingdom law and regulations. Company law
requires the directors to prepare group and parent company
financial statements for each financial year. Under that law, the
directors are required to prepare group and parent company
financial statements under IFRSs as adopted by the European
Union.
Under Company Law the directors must not approve the group and
parent company financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the group
and parent company and of the profit or loss of the group and
parent company for that period. In preparing the group and parent
company financial statements the directors are required to:
-- present fairly the financial position, financial performance
and cash flows of the group and parent company;
-- select suitable accounting policies in accordance with IAS 8:
Accounting Policies, Changes in Accounting Estimates and Errors and
then apply them consistently;
-- present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
-- make judgements that are reasonable;
-- provide additional disclosures when compliance with the
specific requirements in IFRSs as adopted by the European Union is
insufficient to enable users to understand the impact of particular
transactions, other events and conditions on the group's and the
company's financial position and financial performance; and
-- state whether the group and parent company financial
statements have been prepared in accordance with IFRSs as adopted
by the European Union, subject to any material departures disclosed
and explained in the financial statements.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the group's and
parent company's transactions and disclose with reasonable accuracy
at any time the financial position of the group and parent company
and enable them to ensure that the group and parent company
financial statements comply with the Companies Act 2006. They are
also responsible for safeguarding the assets of the group and
parent company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Report of the independent auditor's to the members of Avanti
Capital plc
We have audited the financial statements of Avanti Capital plc
for the year ended 30 June 2013 which comprise the consolidated
income statement, the consolidated balance sheet, the company
balance sheet, the consolidated statement of changes in equity, the
company statement of changes in equity, the consolidated cash flow
statement, the company cash flow statement and the related notes 1
to 29. The financial reporting framework that has been applied in
their preparation is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European Union and,
as regards the parent company financial statements, as applied in
accordance with the provisions of the Companies Act 2006.
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Respective responsibilities of directors and auditors
As explained more fully in the Statement of Directors'
Responsibilities set out on page 11, the directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view. Our responsibility
is to audit and express an opinion on the financial statements in
accordance with applicable law and International Standards on
Auditing (UK and Ireland). Those standards require us to comply
with the Auditing Practices Board's Ethical Standards for
Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or error. This
includes an assessment of: whether the accounting policies are
appropriate to the group's and the parent company's circumstances
and have been consistently applied and adequately disclosed; the
reasonableness of significant accounting estimates made by the
directors; and the overall presentation of the financial
statements. In addition, we read all the financial and
non-financial information in the Company Statement, Statement of
Corporate Governance and Directors' Report to identify material
inconsistencies with the audited financial statements. If we become
aware of any apparent material misstatements or inconsistencies we
consider the implications for our report.
Opinion on financial statements
In our opinion:
-- the financial statements give a true and fair view of the
state of the group's and of the parent company's affairs as at 30
June 2013 and of the group's loss for the year then ended;
-- the group financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union;
-- the parent company financial statements have been properly
prepared in accordance with IFRSs as adopted by the European Union
and as applied in accordance with the provisions of the Companies
Act 2006; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors' report
for the financial year for which the financial statements are
prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if, in
our opinion:
-- adequate accounting records have not been kept by the parent
company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the parent company financial statements are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Philippa Jane Green (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory
Auditor
London
23 October 2013
Notes:
1. The maintenance and integrity of the Avanti Capital plc web
site is the responsibility of the directors; the work carried out
by the auditors does not involve consideration of these matters
and, accordingly, the auditors accept no responsibility for any
changes that may have occurred to the financial statements since
they were initially presented on the web site.
2. Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
Consolidated income statement for the year ended 30 June
2013
2013 2012
Notes GBP000 GBP000
------------------------------------------------- ----- -------- --------
Revenue 3 21,197 19,629
------------------------------------------------- ----- -------- --------
Cost of sales (4,335) (4,132)
------------------------------------------------- ----- -------- --------
GROSS PROFIT 16,862 15,497
------------------------------------------------- ----- -------- --------
Administrative expenses - others (15,262) (13,930)
------------------------------------------------- ----- -------- --------
Administrative expenses - exceptional items 4 (68) (251)
------------------------------------------------- ----- -------- --------
OPERATING PROFIT 5 1,532 1,316
------------------------------------------------- ----- -------- --------
Finance revenue 9 7 1
------------------------------------------------- ----- -------- --------
Finance cost 10 (100) (132)
------------------------------------------------- ----- -------- --------
Fair valuation movements of financial assets
held at fair value through profit or loss 16 (1,278) (1,000)
------------------------------------------------- ----- -------- --------
PROFIT BEFORE TAXATION 161 185
------------------------------------------------- ----- -------- --------
Tax expense 11 (287) (126)
------------------------------------------------- ----- -------- --------
LOSS AND TOTAL COMPREHENSIVE INCOME FOR THE YEAR (126) 59
------------------------------------------------- ----- -------- --------
Attributable to
------------------------------------------------- ----- -------- --------
Shareholders of the parent (423) (265)
------------------------------------------------- ----- -------- --------
Non-controlling interest 297 324
------------------------------------------------- ----- -------- --------
(126) 59
------------------------------------------------- ----- -------- --------
Loss per share attributable to shareholders of
the parent
------------------------------------------------- ----- -------- --------
Basic and diluted 13 (5.27)p (3.30)p
------------------------------------------------- ----- -------- --------
Consolidated balance sheet at 30 June 2013
2013 2012
Notes GBP000 GBP000
--------------------------------------------------- ----- ------ ------
ASSETS
--------------------------------------------------- ----- ------ ------
Non current assets
--------------------------------------------------- ----- ------ ------
Intangible assets 14 5,196 4,762
--------------------------------------------------- ----- ------ ------
Property, plant & equipment 15 5,438 5,850
--------------------------------------------------- ----- ------ ------
Financial assets held at fair value through profit
or loss 16 4,442 5,620
--------------------------------------------------- ----- ------ ------
Deferred tax asset 11 91 163
--------------------------------------------------- ----- ------ ------
15,167 16,395
--------------------------------------------------- ----- ------ ------
Current assets
--------------------------------------------------- ----- ------ ------
Inventories 18 306 264
--------------------------------------------------- ----- ------ ------
Trade and other receivables 19 1,336 1,144
--------------------------------------------------- ----- ------ ------
Cash and cash equivalents 20 1,898 1,306
--------------------------------------------------- ----- ------ ------
3,540 2,714
--------------------------------------------------- ----- ------ ------
TOTAL ASSETS 18,707 19,109
--------------------------------------------------- ----- ------ ------
EQUITY
--------------------------------------------------- ----- ------ ------
Issued share capital 23 4,815 4,815
--------------------------------------------------- ----- ------ ------
Capital redemption reserve 24 1,409 1,409
--------------------------------------------------- ----- ------ ------
Other reserves 24 2,045 2,045
--------------------------------------------------- ----- ------ ------
Retained earnings 24 1,906 2,329
--------------------------------------------------- ----- ------ ------
Equity attributable to equity shareholders of
the parent 10,175 10,598
--------------------------------------------------- ----- ------ ------
Non-controlling interest 24 1,311 1,014
--------------------------------------------------- ----- ------ ------
TOTAL EQUITY 11,486 11,612
--------------------------------------------------- ----- ------ ------
LIABILITIES
--------------------------------------------------- ----- ------ ------
Current liabilities
--------------------------------------------------- ----- ------ ------
Financial liabilities 25 676 811
--------------------------------------------------- ----- ------ ------
Trade and other payables 21 2,596 2,447
--------------------------------------------------- ----- ------ ------
3,272 3,258
--------------------------------------------------- ----- ------ ------
Non-current liabilities
--------------------------------------------------- ----- ------ ------
Financial liabilities 25 808 1,064
--------------------------------------------------- ----- ------ ------
Provision 22 2,554 2,729
--------------------------------------------------- ----- ------ ------
Deferred tax liabilities 11 587 446
--------------------------------------------------- ----- ------ ------
3,949 4,239
--------------------------------------------------- ----- ------ ------
TOTAL LIABILITIES 7,221 7,497
--------------------------------------------------- ----- ------ ------
TOTAL EQUITY AND LIABILITIES 18,707 19,109
--------------------------------------------------- ----- ------ ------
The financial statements were approved by the board on 23
October 2013.
Richard Kleiner - Director
William Crewdson - Director
Company balance sheet at 30 June 2013
2013 2012
Notes GBP000 GBP000
--------------------------------------------------- ----- ------ ------
ASSETS
--------------------------------------------------- ----- ------ ------
Non current assets
--------------------------------------------------- ----- ------ ------
Property, plant & equipment 15 1 1
--------------------------------------------------- ----- ------ ------
Financial assets held at fair value through profit
or loss 16 10,153 10,174
--------------------------------------------------- ----- ------ ------
10,154 10,175
--------------------------------------------------- ----- ------ ------
Current assets
--------------------------------------------------- ----- ------ ------
Trade and other receivables 19 1,285 1,299
--------------------------------------------------- ----- ------ ------
Cash and cash equivalents 20 1,286 1,085
--------------------------------------------------- ----- ------ ------
2,571 2,384
--------------------------------------------------- ----- ------ ------
TOTAL ASSETS 12,725 12,559
--------------------------------------------------- ----- ------ ------
EQUITY AND LIABILITIES
--------------------------------------------------- ----- ------ ------
EQUITY
--------------------------------------------------- ----- ------ ------
Issued share capital 23 4,815 4,815
--------------------------------------------------- ----- ------ ------
Capital redemption reserve 24 1,409 1,409
--------------------------------------------------- ----- ------ ------
Other reserves 24 2,045 2,045
--------------------------------------------------- ----- ------ ------
Retained earnings 24 1,828 1,496
--------------------------------------------------- ----- ------ ------
TOTAL EQUITY 10,097 9,765
--------------------------------------------------- ----- ------ ------
LIABILITIES
--------------------------------------------------- ----- ------ ------
Current liabilities
--------------------------------------------------- ----- ------ ------
Trade and other payables 21 74 65
--------------------------------------------------- ----- ------ ------
Non-current liabilities
--------------------------------------------------- ----- ------ ------
Provision 22 2,554 2,729
--------------------------------------------------- ----- ------ ------
TOTAL LIABILITIES 2,628 2,794
--------------------------------------------------- ----- ------ ------
TOTAL EQUITY AND LIABILITIES 12,725 12,559
--------------------------------------------------- ----- ------ ------
The financial statements were approved by the board on 23
October 2013.
Richard Kleiner - Director
William Crewdson - Director
Statement of changes in equity at 30 June 2013
Consolidated Totals
Issued Capital attributable Non-
to owners
share Other redemption Retained of controlling
capital reserves reserve earnings the parent interest Totals
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------- -------- --------- ---------- --------- ------------ ----------- ------
At 1 July 2011 4,815 2,045 1,409 2,594 10,863 690 11,553
-------------------- -------- --------- ---------- --------- ------------ ----------- ------
(Loss)/profit for
the year - - - (265) (265) 324 59
-------------------- -------- --------- ---------- --------- ------------ ----------- ------
At 1 July 2012 4,815 2,045 1,409 2,329 10,598 1,014 11,612
-------------------- -------- --------- ---------- --------- ------------ ----------- ------
(Loss)/profit for
the year - - - (423) (423) 297 (126)
-------------------- -------- --------- ---------- --------- ------------ ----------- ------
At 30 June 2013 4,815 2,045 1,409 1,906 10,175 1,311 11,486
-------------------- -------- --------- ---------- --------- ------------ ----------- ------
Company Issued Capital Share-
share Other redemption Retained holders'
capital reserves reserve earnings equity Totals
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
-------------------- -------- --------- ---------- --------- ------------ -----------
At 1 July 2011 4,815 2,045 1,409 1,316 9,585 9,585
-------------------- -------- --------- ---------- --------- ------------ -----------
Profit for the year - - - 180 180 180
-------------------- -------- --------- ---------- --------- ------------ -----------
At 1 July 2012 4,815 2,045 1,409 1,496 9,765 9,765
-------------------- -------- --------- ---------- --------- ------------ -----------
Profit for the year - - - 332 332 332
-------------------- -------- --------- ---------- --------- ------------ -----------
At 30 June 2013 4,815 2,045 1,409 1,828 10,097 10,097
-------------------- -------- --------- ---------- --------- ------------ -----------
Consolidated cash flow statement for the year ended 30 June
2013
2013 2012
Notes GBP000 GBP000
------------------------------------------------------- ----- ------- -------
Operating activities
------------------------------------------------------- ----- ------- -------
Profit before tax from operations * 161 185
------------------------------------------------------- ----- ------- -------
Depreciation of property, plant and equipment 15 1,159 1,072
------------------------------------------------------- ----- ------- -------
Loss on financial assets at fair value through
profit or loss 16 1,278 1,000
------------------------------------------------------- ----- ------- -------
Currency movements on financial assets at fair
value through profit or loss 16 (139) (156)
------------------------------------------------------- ----- ------- -------
Loss on disposal of property, plant and equipment 15 102 32
------------------------------------------------------- ----- ------- -------
Loss on disposal of financial assets at fair
value through profit or loss 16 14 -
------------------------------------------------------- ----- ------- -------
Net interest expense 9,10 93 131
------------------------------------------------------- ----- ------- -------
Increase in inventories 18 (26) (14)
------------------------------------------------------- ----- ------- -------
(Increase)/decrease in trade and other receivables 19 (185) 176
------------------------------------------------------- ----- ------- -------
(Decrease)/increase in trade and other payables 21 144 (245)
------------------------------------------------------- ----- ------- -------
Decrease in provisions 22 (175) (86)
------------------------------------------------------- ----- ------- -------
Net cash flows generated from operating activities 2,426 2,095
------------------------------------------------------- ----- ------- -------
Investing activities
------------------------------------------------------- ----- ------- -------
Interest received 9 7 1
------------------------------------------------------- ----- ------- -------
Purchase of property, plant & equipment and intangible
assets 15 (749) (1,079)
------------------------------------------------------- ----- ------- -------
Acquisition of business, net of cash 17 (552) (386)
------------------------------------------------------- ----- ------- -------
Proceeds from disposal of financial assets at
fair value through profit or loss 16 25 -
------------------------------------------------------- ----- ------- -------
Net cash flows used in investing activities (1,269) (1,464)
------------------------------------------------------- ----- ------- -------
Financing activities
------------------------------------------------------- ----- ------- -------
Interest paid 10 (100) (132)
------------------------------------------------------- ----- ------- -------
Proceeds from borrowings 25 1,950 1,335
------------------------------------------------------- ----- ------- -------
Repayment of borrowings 25 (2,383) (1,638)
------------------------------------------------------- ----- ------- -------
Capital element on finance lease rental payments 25 (32) (59)
------------------------------------------------------- ----- ------- -------
Net cash flows used in financing activities (565) (494)
------------------------------------------------------- ----- ------- -------
Net increase in cash and cash equivalents 592 137
------------------------------------------------------- ----- ------- -------
Cash and cash equivalents at 1 July 1,306 1,169
------------------------------------------------------- ----- ------- -------
Cash and cash equivalents at 30 June 20 1,898 1,306
------------------------------------------------------- ----- ------- -------
* Exceptional Items
Cash flows relating to operating exceptional items
In the current year there were operating cash outflows from
exceptional items relating to redundancy and restructuring charges
of GBP10,700 (2012 - GBP132,632) and cost of abortive projects of
GBP9,817 (2012 - GBP46,633).
Company cash flow statement for the year ended 30 June 2013
2013 2012
Notes GBP000 GBP000
--------------------------------------------------- ----- ------ ------
Operating activities
--------------------------------------------------- ----- ------ ------
Profit before tax 332 180
--------------------------------------------------- ----- ------ ------
Depreciation of property, plant and equipment 15 1 1
--------------------------------------------------- ----- ------ ------
Decrease in loans to subsidiary held as fixed
asset investments 16 21 73
--------------------------------------------------- ----- ------ ------
Net interest income (602) (530)
--------------------------------------------------- ----- ------ ------
Decrease in trade and other receivables 19 14 13
--------------------------------------------------- ----- ------ ------
Increase in trade and other payables 21 9 11
--------------------------------------------------- ----- ------ ------
Decrease in provisions 22 (175) (86)
--------------------------------------------------- ----- ------ ------
Net cash flows used in operating activities (400) (338)
--------------------------------------------------- ----- ------ ------
Investing activities
--------------------------------------------------- ----- ------ ------
Interest received 600 530
--------------------------------------------------- ----- ------ ------
Purchase of property, plant & equipment 15 1 -
--------------------------------------------------- ----- ------ ------
Net cash flows generated from investing activities 601 530
--------------------------------------------------- ----- ------ ------
Net increase in cash and cash equivalents 201 192
--------------------------------------------------- ----- ------ ------
Cash and cash equivalents at 1 July 1,085 893
--------------------------------------------------- ----- ------ ------
Cash and cash equivalents at 30 June 20 1,286 1,085
--------------------------------------------------- ----- ------ ------
Notes to the consolidated and parent financial statements at 30
June 2013
1. Authorisation of financial statements and statement of compliance with IFRSs
The financial statements of Avanti Capital plc for the year
ended 30 June 2013 were authorised for issue by the board of
directors on 23 October 2013 and the balance sheet was signed on
the board's behalf by Richard Kleiner and William Crewdson. Avanti
Capital plc is a public limited company incorporated and domiciled
in England and Wales. The company's ordinary shares are traded on
the Alternative Investment Market.
The group and parent company's financial statements have been
prepared in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union as they apply to
financial statements of the Group and parent company for the year
ended 30 June 2013.
The principal accounting policies adopted by the group and
parent company are set out in note 2. No profit or loss account is
presented for the company as permitted by Section 408 of the
Companies Act 2006. The profit dealt with in the financial
statements of the parent company is GBP332,000 (2012 -
GBP180,000).
2. Accounting policies
Basis of preparation
The group and parent company's financial statements have been
prepared in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union as they apply to
financial statements of the group and parent company for the year
ended 30 June 2013 and applied in accordance with the Companies Act
2006. The accounting policies which follow set out those policies
which apply in preparing the financial statements for the year
ended 30 June 2013.
The group and parent company's financial statements are
presented in sterling and all values are rounded to the nearest
thousand pounds (GBP000) except when otherwise indicated.
The group and parent company financial statements have been
prepared under the historical cost convention as modified for
certain financial instruments, which are stated at fair value.
Judgements and key sources of estimation and uncertainty
The preparation of the group and parent company's financial
statements requires management to make judgements, estimates and
assumptions that affect the reported amount of assets and
liabilities at the balance sheet date, amounts reported for
revenues and expenses during the year, and the disclosure of
contingent liabilities, at the reporting date. However, uncertainty
about these assumptions and estimates could result in outcomes that
could require a material adjustment to the carrying amount of the
assets or liability affected in the future.
In the process of applying the group and parent company's
accounting policies, management has made the following judgements,
apart from those involving estimations, which have the most
significant effect on the amounts recognised in the financial
statements:
Estimates and assumptions
The key assumptions concerning the future and other key sources
of estimation uncertainty at the balance sheet date, that have a
significant risk of causing material adjustments to the carrying
amounts of assets and liabilities within the next financial year
are discussed below:
Financial assets designated at fair value through profit or
loss
The financial assets designated at fair value through profit or
loss is valued in accordance with the accounting policy set out
later in this note on page 21. In certain cases, the group is
required to make estimates about expected future cash flows and
discount rates, and hence they are subject to uncertainty. Further
details are given in note 16.
Operating lease commitments
The group has entered commercial property leases as a lessee it
obtains the use of property, plant and equipment. The
classification of such leases as operating or finance lease
requires the group to determine, based on an evaluation of the
terms and conditions of the arrangements, whether it retains or
acquires the significant risk and rewards of ownership of these
assets and accordingly whether the lease requires an asset and
liability to be recognised in the balance sheet.
Impairment of non-financial assets
The group assesses whether there are any indicators of
impairment for all non-financial assets at each reporting date.
Goodwill and other indefinite life intangibles are tested for
impairment annually and at other times when such indicators exist.
Other non-financial assets are tested for impairment when there are
indicators that the carrying amounts are not recoverable.
When value in use calculations are undertaken, management must
allocate the expected future cash flows from the asset to cash
generating unit and choose a suitable discount rate in order to
calculate the present value of those cash flows.
Deferred tax assets
Deferred tax assets are recognised for unused tax losses to the
extent that it is probable that taxable profit will be available
against which the losses can be utilised. Significant management
judgement is required to determine the amount of deferred tax that
can be recognised, based upon the likely timing and level of future
taxable profits together with future tax planning strategies.
Basis of consolidation
The consolidated financial statements include the financial
statements of Avanti Capital plc and the entities it controls (its
subsidiaries) for the periods reported.
For the purposes of preparing these consolidated accounts,
subsidiaries are those entities controlled by the group. Control
exists when the company has the power, directly or indirectly, to
govern the financial and operating policies of an entity so as to
obtain benefits from its activities and is achieved through direct
or indirect ownership of voting rights, by way of contractual
agreement. The financial statements of subsidiaries, which are
prepared for the same reporting period, are included in the
consolidated financial statements from the date that control
commences until the date control ceases. All intra-group balances,
income and expenses and unrealised gains and losses resulting from
the intra-group transactions are eliminated in full. Accounting
policies of subsidiary entities are consistent with the group
accounting policies disclosed here.
Non-controlling interests represent the portion of profit or
loss and net assets in subsidiaries that is not held by the group
and is presented separately within equity in the consolidated
balance sheet, separate from parent shareholders' equity.
Foreign currency translation
The consolidated financial statements are presented in sterling
pounds, which is also the parent company's functional and
presentation currency. Each entity in the group determines its own
functional currency and items included in the financial statements
of each entity are measured using that functional currency.
Transactions in foreign currencies are initially recorded at the
functional currency rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies
are translated at the functional currency rate of exchange at the
balance sheet date. All differences are taken to the income
statement. Non monetary items that are measured in terms of
historical cost in a foreign currency are translated using the
exchange rates as the dates of the initial transactions. Non
monetary items measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair value
was determined.
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated
depreciation and impairment. Such cost includes the cost of
replacing part of the property, plant and equipment when the cost
is incurred, if the recognition criteria are met, in which case the
carrying value of the replaced part is written off. All major
repairs and maintenance costs are recognised in the income
statement as incurred.
Depreciation is calculated on a straight line basis over the
useful life of the asset as follows:
Leasehold improvements - 4 years
Furniture and fittings - 4 years
IT equipment - 3 years
Motor vehicles - 3 to 5 years
An item of property, plant and equipment is derecognised upon
disposal or when no future economic benefits are expected from its
use. Any gain or loss arising on de-recognition of the asset
(calculated as the difference between the net disposal proceeds and
the carrying amount of the asset) is included in the income
statement in the year the asset is de-recognised.
The asset's residual values, useful lives and methods of
depreciation are reviewed, and adjusted if appropriate, at each
financial year end. The assets are reviewed for impairment if
events or circumstances indicate the carrying value may not be
recoverable, and are written down immediately to their recoverable
amount.
Borrowing costs
Borrowing costs are recognised as an expense when incurred.
Business combinations and goodwill
Business combinations are accounted for in accordance with IFRS
3 (revised) for acquisitions made after 1 July 2009.
Goodwill is initially measured at cost being the excess of the
cost of the business combination over the group's share in the net
fair value of the acquiree's identifiable assets, liabilities and
contingent liabilities.
After initial recognition, goodwill is measured at cost less any
accumulated impairment losses. For the purpose of impairment
testing, goodwill acquired in a business combination is, from the
acquisition date, allocated to each of the group's cash generating
units that are expected to benefit from the synergies of the
combination, irrespective of whether other assets or liabilities of
the acquiree are assigned to those units.
Where goodwill forms part of a cash generating unit and part of
the operation within that unit is disposed of, the goodwill
associated with the operation disposed of is included in the
carrying amount of the operation when determining the gain or loss
on disposal of the operation. Goodwill disposed of in this
circumstance is measured based on the relative values of the
operation disposed of and the portion of the cash generating unit
retained.
The group assesses whether there are any indicators that
goodwill is impaired at each reporting date. Goodwill is tested for
impairment annually and when circumstances indicate that the
carrying amount may be impaired.
Impairment is determined for goodwill by assessing the
recoverable amount of the cash generating units, to which goodwill
relates. Where the recoverable amount of the cash generating units
is less than the carrying amount, an impairment loss is recognised.
Impairment losses relating to goodwill are not reversed in future
periods. The group performs its annual impairment test of goodwill
as at 30 June.
Inventories
Inventories are valued at the lower of cost and net realisable
value. Cost is determined on a first-in, first-out basis and
includes all cost incurred in bringing each product to its present
location and condition.
Investments and other financial assets
Financial assets within the scope of IAS 39 are classified as
financial assets held at fair value through profit or loss, loans
and receivables, held-to-maturity investments or available-for-sale
financial assets, as appropriate. The group currently holds no
held-to-maturity or available for sale financial assets. When
financial assets are recognised initially, they are measured at
fair value, plus, in the case of investments not at fair value
through profit and loss, directly attributable transaction
costs.
The group determines the classifications of its financial assets
on initial recognition and, where allowed and appropriate,
re-evaluates this designation at each financial year end.
All regular way purchases and sales of financial assets are
recognised on the trade date, which is the date the group commits
to purchase or sell the asset. Regular way purchases or sales of
financial assets that require delivery of assets within the period
are generally established by regulation or convention in the market
place.
Financial assets designated at fair value through profit or
loss
Financial assets held at fair value through profit or loss
includes financial assets held for trading and financial assets
designated upon initial recognition as at fair value through profit
or loss.
Financial assets are classified as held for trading if they are
acquired for the purpose of selling in the near term.
Financial assets designated at fair value through profit or loss
are those that have been designated by management upon initial
recognition. Management designated the financial assets, comprising
equity shares and share options, at fair value through profit or
loss upon initial recognition due to these assets are part of a
group of financial assets, which are managed and their performance
evaluated on a fair value basis, in accordance with a documented
risk management or investment strategy.
Financial assets at fair value through profit or loss are
recorded in the statement of financial position at fair value.
Changes in fair value are recorded in 'Fair valuation movements of
financial assets held at fair value through profit or loss'.
Interest earned or incurred is accrued in 'Interest income' or
'Interest expense' respectively, using the effective interest rate,
while dividend income is recorded in 'Other operating income' when
the right to the payment has been established.
Financial assets, comprising equity shares and share options,
are valued in accordance with the "Guidelines for the valuation and
disclosure of venture capital portfolios" published by the British
Venture Capital Association on the following basis:
a) Early stage investments: these are investments in immature
companies, including seed, start-up and early stage investments.
Such investments are valued at a cost less any provision considered
necessary, until no longer viewed as early stage or unless a
significant transaction involving an independent third party at
arm's length, values the investment at a materially different
value;
b) Development stage investments: such investments are in mature
companies having a maintainable trend of sustainable revenue and
from which an exit, by way of flotation or trade sale, can be
reasonably foreseen. An investment of this stage is periodically
re-valued by reference to open market value. Valuation will usually
be by one of five methods as indicated below:
i. At cost for at least one period unless such a basis is unsustainable;
ii. On a third party basis based on the price at which a
subsequent significant investment is made involving a new
investor;
iii. On an earnings basis, but not until at least a period since
the investment was made, by applying a discounted price/earnings
ratio to profit after taxation, either before or after interest;
or
iv. On a net asset basis, again applying a discount to reflect
the illiquidity of the investment.
v. On a comparable valuation by reference to similar business
that have objective data representing their equity value.
c) Quoted investments: such investments are valued using the
quoted market price, discounted if the shares are subject to any
particular restrictions or are significant in relation to the
issued share capital of a small quoted company.
A review of impairment in value is undertaken by reference to
funding, investment or offers in progress after the balance sheet
date and provision is made accordingly where the impairment in
value is recognised.
Loans and receivables
Loans and receivables are non-derivative financial assets with a
fixed or determinable payment that are not quoted in an active
market. After initial recognition loans and receivables are carried
at amortised cost using the effective interest rate method less any
allowance for impairment. Gains and losses are recognised in the
income statement when the loans and receivables are derecognised or
impaired, as well as through the amortisation process.
Impairment of financial assets
The group assesses at each balance sheet date whether a
financial asset or group of financial assets is impaired.
Assets carried at amortised cost
If there is objective evidence that an impairment loss on assets
carried at amortised cost has been incurred, the amount of the loss
is measured as the difference between the asset's carrying amount
and the present value of estimated future cash flows (excluding
future expected credit losses that have not been incurred)
discounted at the financial asset's original effective interest
rate (ie: the effective interest rate computed at initial
recognition). The carrying amount of the asset is reduced through
use of an allowance account. The amount of the loss is recognised
in the income statement.
If, in a subsequent period, the amount of the impairment loss
decreases and the decrease can be related objectively to an event
occurring after the impairment was recognised, the previously
recognised impairment loss is reversed, to the extent that the
carrying value of the asset does not exceed its amortised cost at
the reversal date. Any subsequent reversal of an impairment loss is
recognised in the income statement.
In relation to trade receivables, a provision for impairment is
made when there is objective evidence (such as the probability of
insolvency or significant financial difficulties of the debtor)
that the group will not be able to collect all the amounts due
under the original terms of the invoice. The carrying amount of the
receivables is reduced through use of an allowance account.
Impaired debts are derecognised when they are assessed as
uncollectable.
Fair value
The fair value of investments that are actively traded in
organised financial markets is determined by reference to quoted
market bid prices at the close of business on the balance sheet
date. For investments where there is no active market, fair value
is determined using valuation techniques. Such techniques include
using recent arm's length market transactions; reference to current
market value of another instrument which is substantially the same;
discounted cash flow analysis or other valuation models.
Cash and cash equivalents
Cash and short term deposits in the balance sheet comprise cash
at bank and short term deposits with a maturity of 3 months or
less.
For the purpose of the consolidated cash flow statement, cash
and cash equivalents consist of cash and cash equivalents as
defined above, net of outstanding bank overdrafts.
Financial liabilities
Interest bearing loans and borrowings
All loans and borrowings are initially recognised at fair value
less directly attributable transaction costs.
After initial recognition, interest bearing loans and borrowings
are subsequently measured at amortised cost using the effective
interest rate method.
Gains and losses are recognised in the income statement when the
liabilities are derecognised as well as through the amortisation
process.
De-recognition of financial assets and liabilities
Financial assets
A financial asset (or, where applicable a part of financial
asset or part of a group of similar financial assets) is
derecognised when:
-- The rights to receive cash flows from the asset have expired;
-- The group retains the right to receive cash flows from the
assets, but has assumed an obligation to pay them in full without
material delay to a third party under a 'pass through' arrangement;
or
-- The group has transferred its rights to receive cash flows
from the asset and neither (a) has transferred substantially all
the risks and rewards of the asset, or (b) has neither transferred
substantially all the risks and rewards of the asset, but has
transferred control of the asset.
When the group has transferred its rights to receive cash flows
from an asset and has neither transferred nor retained
substantially all the risks and rewards of the asset nor
transferred control of the asset, the asset is recognised to the
extent of the group's continuing involvement in the asset.
Continuing involvement that takes the form of a guarantee over the
transferred asset is measured at the lower of the original carrying
amount of the asset and the maximum amount of consideration that
the group could be required to repay.
When continuing involvement takes the form of a written and/or
purchase option (including a cash settled option or similar
provision) on the transferred asset that the group may repurchase,
except that in the case of a written put option (including a cash
settled option or similar provision) on an asset measured at fair
value, the extent of the group's continuing involvement is limited
to the lower of the fair value of the transferred asset and the
option exercise price.
Financial liabilities
A financial liability is derecognised when the obligation under
the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from
the same lender on substantially different terms, or the terms of
an existing liability are substantially modified, such an exchange
or modifications is treated as a de-recognition of the original
liability and the recognition of a new liability, and the
difference in the respective carrying amounts is recognised in the
income statement.
Provisions
Provisions are recognised when the group has a present
obligation (legal or constructive) as a result of a past event, it
is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. Where the
group expects some or all of a provision to be reimbursed, for
example under an insurance contract, the reimbursement is
recognised as a separate asset but only when the reimbursement is
virtually certain.
The expense relating to any provision is presented in the income
statement net of any reimbursement. If the effect of the time value
of money is material, provisions are discounted using a current
pre-tax rate that reflects, where appropriate, the risks specific
to the liability. Where discounting is used, the increase in the
provision due to the passage of time is recognised as a finance
cost.
Leases
The determination of whether an arrangement is, or contains a
lease is based on the substance of the arrangement at inception
date of whether the fulfilment of the arrangement is dependent on
the use of a specific asset or assets or the arrangement conveys a
right to use the asset.
Finance leases, which transfer to the group substantially all
the risk and benefits incidental to ownership of the leased item,
are capitalised at the inception of the lease at the fair value of
the leased asset or, if lower, at the present value of the minimum
lease payments. Lease payments are apportioned between the finance
charges and reduction of the leased liability so as to achieve a
constant rate of interest on the remaining balance of the
liability. Finance charges are reflected in the income
statement.
Capitalised lease assets are depreciated over the shorter of the
estimated useful life of the asset and the lease term, if there is
no reasonable certainty that the group will obtain ownership by the
end of the lease term.
Operating lease rentals are charged to the income statement on a
straight line accrual basis over the term of the lease.
Operating exceptional items
Operational exceptional items are treated as such if the matters
are material and fall within one of the categories below:
a) Restructuring costs of an activity of the group;
b) Disposals of investments; and
c) Abortive deals.
Revenue recognition
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the group and the revenue can be
reliably measured. Revenue is measured at the fair value of the
consideration received, excluding discounts, rebates and Value
Added Taxes.
Revenue from sale of goods is recognised when the significant
risks and rewards of ownership of the goods have passed to the
buyer, usually on delivery of the goods.
Interest income is recognised as interest accrues (using the
effective interest rate method).
Taxes
Current income tax
Current income tax assets and liabilities for the current and
prior periods are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax
laws used to compute the amount are those that are enacted or
substantively enacted by the balance sheet date.
Current income tax relating to items recognised directly in
equity is recognised in equity and not in the income statement.
Deferred income tax
Deferred income tax is provided using the liability method on
temporary differences at the balance sheet date between the tax
bases of assets and liabilities and their carrying amounts for
financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable
temporary differences, except:
-- where the deferred income tax liability arises from the
initial recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and, at the time of
the transaction, affects neither the accounting profit nor taxable
profit or loss; and
-- in respect of taxable temporary difference associated with
investments in subsidiaries, associates and interest in joint
ventures, where the timing of the reversal of the temporary
differences can be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible
temporary differences, carry forward of unused tax credits and
unused tax losses, to the extent that it is probable that taxable
profit will be available against which the deductible temporary
differences, and the carry forward of unused tax credits and unused
tax losses can be utilised except:
-- where the deferred income tax asset relating to the
deductible temporary difference arises from the initial recognition
of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss; and
-- in respect of deductible temporary differences associated
with investments in subsidiaries, associates and interest in joint
ventures, deferred income tax assets are recognised only to the
extent that it is probable that the temporary differences will
reverse in the foreseeable future and taxable profit will be
available against which the temporary difference can be
utilised.
The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the deferred tax asset to be utilised. Unrecognised
deferred tax assets are reassessed at each balance sheet date and
are recognised to the extent that it has become probable that the
future taxable profit will allow the deferred tax asset to be
recovered.
Changes in accounting policies
The following standards and interpretations are applicable to
and have been adopted by the group:
Effective dates
IAS 1 Presentation of Financial Statements (Amendments) 1 July 2012
IAS 12 Income taxes (Amendment) 1 January 2012
There was no significant impact on the consolidated or company
financial statements.
New standards and interpretations not applied
The following standards and interpretations in issue are not yet
effective for the group and have not been adopted by the group:
Effective dates*
IFRS 7 Financial Instruments: transition to IFRS 9 1 January 2013
IFRS 9 Financial Instruments: Classification and Measurement 1 January 2015
IFRS 10 Consolidated financial statements - Amended by 1 January 2013
Investments Entities
IFRS 12 Disclosure of interests in other entities - Amended 1 January 2013
by Investment Entities
IAS 27 Separate Financial Statements - Amended by Investment 1 January 2014
Entities
IAS 32 Financial Instruments: Presentation (Amendment) 1 January 2014
IIAS 19 Employee benefits (Amendment) 1 January 2013
IAS 27 Separate Financial Statements 1 January 2013
IAS 28 Investments in Associates and Joint Ventures 1 January 2013
IFRS 11 Joint Arrangements 1 January 2013
IFRS 13 Fair value measurement 1 January 2013
IAS 36 Impairment of assets (Amendment) 1 January 2014
IAS 39 Financial instruments: Recognition and measurement 1 January 2014
(Amendment)
IFRIC 21 Levies 1 January 2014
The directors do not expect the adoption of these standards and
interpretations to have a material impact on the consolidated or
company financial statements in the period of initial adoption.
* The effective dates stated above are those given in the
original IASB/IFRIC standards and interpretations. As the group
prepares its financial statements in accordance with IFRS as
adopted by the European Union (EU), the application of new
standards and interpretations will be subject to their having been
endorsed for use in the EU via the EU Endorsement mechanism. In the
majority of cases this will result in an effective date consistent
with that given in the original standard or interpretation but the
need for endorsement restricts the group's discretion to early
adopt standards.
3. Segmental information
The primary reporting format is determined to be business
segments as the group's risks and rates of return are affected
predominantly by differences in the business segments. Secondary
segment information is reported geographically. For management
purposes, the group organised into business units based on their
products and services, and has 2 reportable business segments as
follows:
-- Investment and ancillary services provides management
services in respect of the investment market.
-- Bar and night clubs segment relates to the UK late-night,
entertainment-led venues and restaurants.
No operating segments have been aggregated to form the above
reportable operating segments.
Management monitors the operating results of its business units
separately for the purpose of making decisions about resource
allocation and performance assessment. Segment performance is
evaluated based on operating profit or loss.
Transfer prices between operating segments are on an arm's
length basis in a manner similar to transactions with third
parties.
Primary reporting format - business segments
The following tables present revenue and loss and certain asset
and liability information regarding the group's business segments
for the years ended 30 June 2013 and 2012.
Year ended 30 June 2013
Investments Bars &
& ancillary Night clubs Eliminations Total
GBP000 GBP000 GBP000 GBP000
------------------------------------------ ----------- ----------- ------------ -------
Revenue
------------------------------------------ ----------- ----------- ------------ -------
Sales to external customers - 21,197 - 21,197
------------------------------------------ ----------- ----------- ------------ -------
Inter segment sales 105 - (105) -
------------------------------------------ ----------- ----------- ------------ -------
Segment revenue 105 21,197 (105) 21,197
------------------------------------------ ----------- ----------- ------------ -------
Results
------------------------------------------ ----------- ----------- ------------ -------
Segment results (156) 1,688 - 1,532
------------------------------------------ ----------- ----------- ------------ -------
Group operating(loss)/profit (156) 1,688 - 1,532
------------------------------------------ ----------- ----------- ------------ -------
Net finance cost 600 (698) 5 (93)
------------------------------------------ ----------- ----------- ------------ -------
Fair valuation of financial assets held
at fair value through profit or loss (1,278) - - (1,278)
------------------------------------------ ----------- ----------- ------------ -------
(Loss)/Profit before taxation (834) 990 5 161
------------------------------------------ ----------- ----------- ------------ -------
Tax expense - (224) 16 (208)
------------------------------------------ ----------- ----------- ------------ -------
(Loss)/Profit for the year (834) 766 21 (47)
------------------------------------------ ----------- ----------- ------------ -------
Assets and liabilities
------------------------------------------ ----------- ----------- ------------ -------
Other segment assets 1,380 12,811 74 14,265
------------------------------------------ ----------- ----------- ------------ -------
Financial assets held at fair value
through profit or loss 4,442 - - 4,442
------------------------------------------ ----------- ----------- ------------ -------
Total assets 5,822 12,811 74 18,707
------------------------------------------ ----------- ----------- ------------ -------
Segment liabilities 2,633 4,001 587 7,221
------------------------------------------ ----------- ----------- ------------ -------
Total liabilities 2,633 4,001 587 7,221
------------------------------------------ ----------- ----------- ------------ -------
Other segment disclosures
------------------------------------------ ----------- ----------- ------------ -------
Capital expenditure:
------------------------------------------ ----------- ----------- ------------ -------
Property, plant and equipment - additions 1 848 - 849
------------------------------------------ ----------- ----------- ------------ -------
Financial assets held at fair value - - - -
through profit or loss - additions
------------------------------------------ ----------- ----------- ------------ -------
Depreciation 1 1,158 - 1,159
------------------------------------------ ----------- ----------- ------------ -------
Year ended 30 June 2012
Investments Bars &
& ancillary Night clubs Eliminations Total
GBP000 GBP000 GBP000 GBP000
------------------------------------------ ----------- ----------- ------------ -------
Revenue
------------------------------------------ ----------- ----------- ------------ -------
Sales to external customers - 19,629 - 19,629
------------------------------------------ ----------- ----------- ------------ -------
Inter segment sales 105 - (105) -
------------------------------------------ ----------- ----------- ------------ -------
Segment revenue 105 19,629 (105) 19,629
------------------------------------------ ----------- ----------- ------------ -------
Results
------------------------------------------ ----------- ----------- ------------ -------
Segment results (214) 1,530 - 1,316
------------------------------------------ ----------- ----------- ------------ -------
Group operating (loss)/profit (214) 1,530 - 1,316
------------------------------------------ ----------- ----------- ------------ -------
Net finance cost 530 (661) - (131)
------------------------------------------ ----------- ----------- ------------ -------
Fair valuation of financial assets held
at fair value through profit or loss (1,000) - - (1,000)
------------------------------------------ ----------- ----------- ------------ -------
(Loss)/profit before taxation (684) 869 - 185
------------------------------------------ ----------- ----------- ------------ -------
Tax expense - - (103) (103)
------------------------------------------ ----------- ----------- ------------ -------
(Loss)/profit for the year (684) 869 (103) 82
------------------------------------------ ----------- ----------- ------------ -------
Assets and liabilities
------------------------------------------ ----------- ----------- ------------ -------
Other segment assets 1,178 12,148 241 13,567
------------------------------------------ ----------- ----------- ------------ -------
Financial assets held at fair value
through profit or loss 5,620 - - 5,620
------------------------------------------ ----------- ----------- ------------ -------
Total assets 6,798 12,148 241 19,187
------------------------------------------ ----------- ----------- ------------ -------
Segment liabilities 3,195 4,258 500 7,953
------------------------------------------ ----------- ----------- ------------ -------
Total liabilities 3,195 4,258 500 7,953
------------------------------------------ ----------- ----------- ------------ -------
Other segment disclosures
------------------------------------------ ----------- ----------- ------------ -------
Capital expenditure:
------------------------------------------ ----------- ----------- ------------ -------
Property, plant and equipment - additions - 1,679 - 1,679
------------------------------------------ ----------- ----------- ------------ -------
Financial assets held at fair value - - - -
through profit or loss - additions
------------------------------------------ ----------- ----------- ------------ -------
Depreciation 1 1,071 - 1,072
------------------------------------------ ----------- ----------- ------------ -------
Secondary reporting format - Geographical segments
The following tables present revenue certain asset and capital
expenditure information regarding the group's geographical segments
for the years ended 30 June 2013 and 2012.
Year ended 30 June 2013
UK USA Total
GBP000 GBP000 GBP000
--------------------------------------------------- ------ ------ ------
Revenue
--------------------------------------------------- ------ ------ ------
Sales to external customers 21,197 - 21,197
--------------------------------------------------- ------ ------ ------
Revenue from continuing operations 21,197 - 21,197
--------------------------------------------------- ------ ------ ------
Other segment information
--------------------------------------------------- ------ ------ ------
Segment assets 14,265 - 14,265
--------------------------------------------------- ------ ------ ------
Financial assets held at fair value through profit
or loss 351 4,091 4,442
--------------------------------------------------- ------ ------ ------
Total assets 14,616 4,091 18,707
--------------------------------------------------- ------ ------ ------
Capital expenditure:
--------------------------------------------------- ------ ------ ------
Property, plant and equipment - additions 849 - 849
--------------------------------------------------- ------ ------ ------
Year ended 30 June 2012
UK USA Total
GBP000 GBP000 GBP000
--------------------------------------------------- ------ ------ ------
Revenue
--------------------------------------------------- ------ ------ ------
Sales to external customers 19,629 - 19,629
--------------------------------------------------- ------ ------ ------
Revenue from continuing operations 19,629 - 19,629
--------------------------------------------------- ------ ------ ------
Other segment information
--------------------------------------------------- ------ ------ ------
Segment assets 13,567 - 13,567
--------------------------------------------------- ------ ------ ------
Financial assets held at fair value through profit
or loss 391 5,229 5,620
--------------------------------------------------- ------ ------ ------
Total assets 13,958 5,229 19,187
--------------------------------------------------- ------ ------ ------
Capital expenditure:
--------------------------------------------------- ------ ------ ------
Property, plant and equipment - additions 1,679 - 1,679
--------------------------------------------------- ------ ------ ------
4. Administrative expenses - exceptional items
2013 2012
GBP000 GBP000
---------------------------- ------ ------
Deal and merger costs:
---------------------------- ------ ------
- Redundancy costs 11 132
---------------------------- ------ ------
- Cost on abortive projects 10 47
---------------------------- ------ ------
Restructuring charges 47 72
---------------------------- ------ ------
68 251
---------------------------- ------ ------
5. Group operating profit
This is stated after charging/(crediting):
2013 2012
GBP000 GBP000
------------------------------------------------------- ------ ------
Depreciation of property, plant and equipment 1,159 1,072
------------------------------------------------------- ------ ------
Net foreign currency differences (145) (156)
------------------------------------------------------- ------ ------
Cost of inventories recognised as an expense (included
in cost of sales) 4,335 4,129
------------------------------------------------------- ------ ------
Operating lease payments - land and buildings 1,398 1,241
------------------------------------------------------- ------ ------
Provision for carried interest (175) (86)
------------------------------------------------------- ------ ------
6. Auditors' remuneration
2013 2012
GBP000 GBP000
------------------------------------------ ------ ------
Audit of the group's financial statements 38 43
------------------------------------------ ------ ------
Other fees to auditors:
------------------------------------------ ------ ------
- auditing the accounts of subsidiaries 41 30
------------------------------------------ ------ ------
79 73
------------------------------------------ ------ ------
There are no non-audit fees paid to the auditor.
7. Staff costs
2013 2012
GBP000 GBP000
---------------------- ------ ------
Wages and salaries 4,957 4,664
---------------------- ------ ------
Social security costs 150 183
---------------------- ------ ------
5,107 4,847
---------------------- ------ ------
There were no pension contributions during the year.
The average monthly number of employees during the year was as
follows:
2013 2012
No. No.
-------------------- ---- ----
Investment holdings 3 4
-------------------- ---- ----
Bar and night clubs
-------------------- ---- ----
- Bar staff 508 354
-------------------- ---- ----
- Head office 15 15
-------------------- ---- ----
526 373
-------------------- ---- ----
8. Directors' remuneration
2013 2012
GBP000 GBP000
----------- ------ ------
Emoluments 55 56
----------- ------ ------
An analysis of directors' remuneration is set out in the
directors' report. There were no pension payments in respect of
either year. Included in the report on directors' remuneration are
details of fees payable to Odyssey Partners Limited, a company
controlled by Richard Kleiner, in respect of the management
agreement between the company and Odyssey Partners Limited.
9. Finance revenue
2013 2012
GBP000 GBP000
----------------------------- ------ ------
On deposits and liquid funds 7 1
----------------------------- ------ ------
10. Finance cost
2013 2012
GBP000 GBP000
-------------------------- ------ ------
Bank loans and overdrafts 96 128
-------------------------- ------ ------
Finance lease interest 4 4
-------------------------- ------ ------
100 132
-------------------------- ------ ------
Details of the movements during the year for financial assets
held at fair value through profit or loss are set out in note
16.
11. Taxation
The major components of income tax for the years ended 30 June
2013 and 2012 are:
(a) Analysis of charge in year:
2013 2012
GBP000 GBP000
-------------------------------------------------- ------ ------
Current tax
-------------------------------------------------- ------ ------
UK corporation tax on the profit for the year 74 -
-------------------------------------------------- ------ ------
Deferred tax
-------------------------------------------------- ------ ------
Utilisation of tax losses (note 11(c)) 112 -
-------------------------------------------------- ------ ------
Origination and reversal of temporary differences 179 126
-------------------------------------------------- ------ ------
Prior year overstatement of deferred tax asset (78) -
-------------------------------------------------- ------ ------
Total tax charge for year 287 126
-------------------------------------------------- ------ ------
(b) Factors affecting current tax charge for the year:
The tax assessed for the year differs from the standard rate of
corporation tax in the UK. The differences are explained below:
2013 2012
GBP000 GBP000
---------------------------------------------------------- ------ ------
Profit on ordinary activities before tax 161 185
---------------------------------------------------------- ------ ------
Profit on ordinary activities multiplied by standard rate
of corporation tax in the UK of 23.75% (2012 - 25.5%) 38 47
---------------------------------------------------------- ------ ------
Effects of:
---------------------------------------------------------- ------ ------
Revaluation of investments 303 153
---------------------------------------------------------- ------ ------
Disallowable expenses and non-taxable income (87) 90
---------------------------------------------------------- ------ ------
Adjustment to prior periods (78) (79)
---------------------------------------------------------- ------ ------
Losses brought forward utilised - (61)
---------------------------------------------------------- ------ ------
Change in tax laws and rates (21) (24)
---------------------------------------------------------- ------ ------
Capital allowances in arrears of depreciation 132 -
---------------------------------------------------------- ------ ------
Total tax charge for year (note 11a) 287 126
---------------------------------------------------------- ------ ------
(c) Deferred tax
2013 2012
GBP000 GBP000
---------------------------------- ------ ------
Recognised in balance sheet:
---------------------------------- ------ ------
Deferred tax liability - Goodwill (587) (446)
---------------------------------- ------ ------
Deferred tax asset
---------------------------------- ------ ------
Tax losses - 112
---------------------------------- ------ ------
Capital allowances 91 51
---------------------------------- ------ ------
91 163
---------------------------------- ------ ------
On 20 March 2013 the UK Government announced a reduction in the
main rate of UK corporation tax rate to 23% with effect from 1
April 2013. This change became substantively enacted in July 2013
and therefore the effect of the rate reduction creates a reduction
in the total deferred tax asset and liabilities which have been
included in the figures shown above. This change will also reduce
the group's future current tax charge accordingly. The UK
Government also proposed changes to further reduce the main rate of
corporation tax by one per cent per annum to 21% by 1 April 2014
and by a further one per cent from 21% to 20% by 1 April 2015. The
overall effect of the further reductions from 23% to 21% and
subsequently to 20%, if these applied to the total deferred tax
balance at 30 June 2013 would be to reduce the deferred tax asset
by approximately GBP12,000 and deferred tax liability by
GBP77,000.
The group has tax losses, predominantly in the form of capital
losses, arising in the UK of approximately GBP21.8 million (2012 -
GBP20.8 million) that are available indefinitely for offset against
future taxable profits of those companies in which the losses
arose. Deferred tax assets of GBP5.2 million (2012 - GBP5.3
million) in respect of such losses have not been recognised in
respect of these losses as they may not be used to offset taxable
profits elsewhere in the group. If investments classified as
'Financial assets held at fair value through profit or loss' were
sold at their valuations at the balance sheet date, capital losses
of GBP2.3 million (2012: GBP2.0 million) would arise.
In addition, deferred tax assets of GBP0.1 million (2012 -
GBP0.1 million) arising on decelerated capital allowances of GBP0.4
million (2012 - GBP0.4 million) and deferred tax assets of GBP0.6
million (2012 - GBP0.6 million) arising on the carried interest
provision of GBP2.6 million (2011 - GBP2.7 million) have also not
been recognised as there is not sufficient certainty of future
profits against which the temporary difference will unwind.
12. Dividends
No dividend will be declared for the year ended 30 June 2013
(2012 - GBPnil).
13. Earnings per share
The earnings per share calculation is based on the group's
retained loss attributable to the shareholders of the parent for
the year of GBP423,000 (2012 - loss GBP265,000) and the weighted
average number of shares in issue for the year of 8,025,752 (2012 -
8,025,752).
The earnings attributed to ordinary shareholders and the
weighted average number of shares for the purposes of calculating
the diluted earnings per share is identical to those used for basic
earnings per share.
14. Intangible assets
Goodwill
GBP000
---------------------------------------------------- --------
Cost:
---------------------------------------------------- --------
At 1 July 2011 4,751
---------------------------------------------------- --------
Acquired through business combination (see note 17) 11
---------------------------------------------------- --------
At 1 July 2012 4,762
---------------------------------------------------- --------
Acquired through property purchase (see note 17) 434
---------------------------------------------------- --------
As at 30 June 2013 5,196
---------------------------------------------------- --------
Net book value as at 30 June 2013 5,196
---------------------------------------------------- --------
Net book value as at 30 June 2012 4,762
---------------------------------------------------- --------
Goodwill arose through the acquisition of Eclectic Bars Limited
and the addition relates to an acquisition made by Eclectic Bars
Limited during the year, and so has been allocated to this single
cash generating unit for the purpose of impairment testing.
The calculation of fair value less costs to sell has indicated
no impairment in the goodwill arising on the acquisition. The key
assumptions in calculating the fair value less costs to sell
are:
-- Site EBITDA being the EBITDA at site level before deduction
of central infrastructure and head office costs.
-- EBITDA multiples being the relevant multiple applied to the
site EBITDA in arriving at an appropriate enterprise value
(including goodwill) for the business.
The board believes that no reasonably possible change in any of
the above key assumptions would cause the carrying value of
goodwill to exceed its recoverable amount.
The adjustments stated above were made to reflect the amended
value with regards to the acquisition made last year.
15. Property, plant and equipment
Group Leasehold IT Furniture Motor
improvements equipment and fittings vehicles Total
GBP000 GBP000 GBP000 GBP000 GBP000
--------------------------------- ------------ --------- ------------ -------- ------
Cost:
--------------------------------- ------------ --------- ------------ -------- ------
At 30 June 2011 1,511 611 4,853 147 7,122
--------------------------------- ------------ --------- ------------ -------- ------
Additions 195 39 1,356 89 1,679
--------------------------------- ------------ --------- ------------ -------- ------
Disposals (49) (2) (3) (59) (113)
--------------------------------- ------------ --------- ------------ -------- ------
At 30 June 2012 1,657 648 6,206 177 8,688
--------------------------------- ------------ --------- ------------ -------- ------
Additions 131 19 599 - 749
--------------------------------- ------------ --------- ------------ -------- ------
Acquired in business combination 40 - 60 - 100
--------------------------------- ------------ --------- ------------ -------- ------
Disposals (130) - (62) - (192)
--------------------------------- ------------ --------- ------------ -------- ------
At 30 June 2013 1,698 667 6,803 177 9,345
--------------------------------- ------------ --------- ------------ -------- ------
Depreciation:
--------------------------------- ------------ --------- ------------ -------- ------
At 30 June 2011 627 82 1,062 50 1,821
--------------------------------- ------------ --------- ------------ -------- ------
Charge for the year 194 24 834 20 1,072
--------------------------------- ------------ --------- ------------ -------- ------
Disposals (35) - (1) (19) (55)
--------------------------------- ------------ --------- ------------ -------- ------
At 30 June 2012 786 106 1,895 51 2,838
--------------------------------- ------------ --------- ------------ -------- ------
Charge for the year 216 30 885 28 1,159
--------------------------------- ------------ --------- ------------ -------- ------
Disposals (28) - (62) - (90)
--------------------------------- ------------ --------- ------------ -------- ------
At 30 June 2013 974 136 2,718 79 3,907
--------------------------------- ------------ --------- ------------ -------- ------
Net book value:
--------------------------------- ------------ --------- ------------ -------- ------
At 30 June 2013 724 531 4,085 98 5,438
--------------------------------- ------------ --------- ------------ -------- ------
At 30 June 2012 871 542 4,311 126 5,850
--------------------------------- ------------ --------- ------------ -------- ------
At 30 June 2011 884 529 3,791 97 5,301
--------------------------------- ------------ --------- ------------ -------- ------
The carrying value of plant and equipment held under finance
leases and hire purchase contracts at 30 June 2013 was GBP46,000
(2012: GBP78,000). Leased assets and assets under hire purchase
contracts are pledged as security for the related finance leases
and hire purchase liabilities.
Company IT Furniture
equipment and fittings Total
GBP000 GBP000 GBP000
--------------------------------- --------- ------------ ------
Cost:
--------------------------------- --------- ------------ ------
At 30 June 2011 14 3 17
--------------------------------- --------- ------------ ------
Additions - - -
--------------------------------- --------- ------------ ------
Disposal - - -
--------------------------------- --------- ------------ ------
At 30 June 2012 14 3 17
--------------------------------- --------- ------------ ------
Additions 1 - 1
--------------------------------- --------- ------------ ------
Disposal - - -
--------------------------------- --------- ------------ ------
At 30 June 2013 15 3 18
--------------------------------- --------- ------------ ------
Depreciation:
--------------------------------- --------- ------------ ------
At 30 June 2011 12 3 15
--------------------------------- --------- ------------ ------
Depreciation charge for the year 1 - 1
--------------------------------- --------- ------------ ------
Disposal - - -
--------------------------------- --------- ------------ ------
At 30 June 2012 13 3 16
--------------------------------- --------- ------------ ------
Depreciation charge for the year 1 - 1
--------------------------------- --------- ------------ ------
Disposal - - -
--------------------------------- --------- ------------ ------
At 30 June 2013 14 3 17
--------------------------------- --------- ------------ ------
Net book value:
--------------------------------- --------- ------------ ------
At 30 June 2013 1 - 1
--------------------------------- --------- ------------ ------
At 30 June 2012 1 - 1
--------------------------------- --------- ------------ ------
At 30 June 2011 2 - 2
--------------------------------- --------- ------------ ------
16. Financial assets held at fair value through profit or loss
Group Company Group Company
2013 2013 2012 2012
GBP000 GBP000 GBP000 GBP000
------------------------------------ ------ ------- ------ -------
Unlisted investments 4,442 - 5,620 -
------------------------------------ ------ ------- ------ -------
Investment in unlisted subsidiaries - 10,153 - 10,174
------------------------------------ ------ ------- ------ -------
4,442 10,153 5,620 10,174
------------------------------------ ------ ------- ------ -------
Group - Unlisted investments
Cost Provision Revaluation Book value
GBP000 GBP000 GBP000 GBP000
--------------------- ------ --------- ----------- ----------
At 30 June 2011 14,023 (8,305) 746 6,464
--------------------- ------ --------- ----------- ----------
Exchange differences - 156 - 156
--------------------- ------ --------- ----------- ----------
Revaluation - - (1,000) (1,000)
--------------------- ------ --------- ----------- ----------
At 30 June 2012 14,023 (8,149) (254) 5,620
--------------------- ------ --------- ----------- ----------
Disposals (251) 212 - (39)
--------------------- ------ --------- ----------- ----------
Exchange differences - 139 - 139
--------------------- ------ --------- ----------- ----------
Revaluation - - (1,278) (1,278)
--------------------- ------ --------- ----------- ----------
At 30 June 2013 13,772 (7,798) (1,532) 4,442
--------------------- ------ --------- ----------- ----------
Company - Unlisted investments
Cost Provision Revaluation Book value
GBP000 GBP000 GBP000 GBP000
---------------- ------ --------- ----------- ----------
At 30 June 2011 11,891 (1,644) - 10,247
---------------- ------ --------- ----------- ----------
Repayments (73) - - (73)
---------------- ------ --------- ----------- ----------
At 30 June 2012 11,818 (1,644) - 10,174
---------------- ------ --------- ----------- ----------
Repayments (21) - - (21)
---------------- ------ --------- ----------- ----------
At 30 June 2013 11,797 (1,644) - 10,153
---------------- ------ --------- ----------- ----------
Fair value hierarchy
As at 30 June 2013, the group held the following financial
instruments measured at fair value:
The group uses the following hierarchy for determining and
disclosing the fair value of financial instruments by valuation
technique:
Level 1: quoted (unadjusted) prices in active markets for
identical assets or liabilities
Level 2: other techniques for which all inputs which have
significant effect on the recorded fair value are observable,
either directly or indirectly
Level 3: techniques which use inputs which have a significant
effect on the recorded fair value that are not based on observable
market data
Assets measured at fair value
Total Level 1 Level 2 Level 3
GBP000 GBP000 GBP000 GBP000
------------------------------------ ------- ------- ------- -------
Financial assets held at fair value
through profit or loss:
------------------------------------ ------- ------- ------- -------
Equity shares
------------------------------------ ------- ------- ------- -------
At 30 June 2011 6,464 - 6,073 391
------------------------------------ ------- ------- ------- -------
Exchange differences 156 - 156 -
------------------------------------ ------- ------- ------- -------
Revaluation (1,000) - (1,000) -
------------------------------------ ------- ------- ------- -------
At 30 June 2012 5,620 - 5,229 391
------------------------------------ ------- ------- ------- -------
Disposals (39) - (39) -
------------------------------------ ------- ------- ------- -------
Exchange differences 139 - 139 -
------------------------------------ ------- ------- ------- -------
Revaluation (1,278) - (1,278) -
------------------------------------ ------- ------- ------- -------
At 30 June 2013 4,442 - 4,051 391
------------------------------------ ------- ------- ------- -------
During the reporting period, there were no transfers between
level 1 and level 2 and no transfers into and out of level 3. There
were no changes made to the assumptions in valuing level 3 assets
during the year, however the directors do not consider that any
reasonable change would result in a significant adjustment to the
fair value of these assets.
Management has estimated the potential effect on level 2
financial assets using reasonably possible alternatives for
price-earnings ratios would result in the range of difference in
fair value from a reduction of approximately GBP2.4 million (2012 -
GBP2.4 million) using less favourable assumptions to an increase of
approximately GBP2.4 million (2012 - GBP2.4 million) using more
favourable assumptions. Management has used, for the purposes of
the above figures, price-earnings ratios that they believe are
comparable to the group's investments.
Details of the significant investments in which the company
holds, directly or indirectly, 20% or more of the nominal value of
any class of share capital are as follows:
Proportion of
voting rights
Name of Company Holding and shares held Nature of business
Subsidiary undertakings:
Avanti Holdings plc Ordinary shares 100% Private equity
Avanti Partners NV * Ordinary shares 100% Private equity
Eclectic Bars Limited Ordinary shares 60% Operation of
(formerly Barclub Limited) late night bars
and night clubs
HSB Clubs Limited Ordinary shares 60% Operation of
late night bars
and night clubs
Avanti Partners NV is directly owned by Avanti Holdings plc; HSB
Clubs Limited is directly owned by Eclectic Bars Limited; and the
rest of the subsidiaries above are directly owned by Avanti Capital
plc.
*Incorporated in Belgium. All other subsidiaries are domiciled
and incorporated in England & Wales.
The fair values of financial assets are determined in accordance
with the valuation guidelines issued by the British Venture Capital
Association as set out in accounting policy note 2.
Fair valuation for the carrying value of financial assets held
at fair value through profit or loss has been considered and,
except for the provision in the group's investments in mBlox and
Medcenter, no other provision was considered necessary.
17. Business combinations
On 20 June 2011 Eclectic Bars Limited acquired 100 per cent of
the outstanding ordinary shares of HSB Clubs Limited, a private
company based in the UK and specialising in late night bars and
night clubs.
The fair value of the identifiable assets and liabilities of HSB
Clubs Limited as at the date of acquisition were:
Fair value of assets acquired
Fair value
recognised Fair value Fair value
on
June 2011 revised adjustments
GBP000s GBP000s GBP000s
---------------------------------------------- ---------- ---------- -----------
Assets
---------------------------------------------- ---------- ---------- -----------
Tangible assets 314 304 (10)
---------------------------------------------- ---------- ---------- -----------
Inventories 17 17 -
---------------------------------------------- ---------- ---------- -----------
Cash 6 12 6
---------------------------------------------- ---------- ---------- -----------
Prepayments 62 24 (38)
---------------------------------------------- ---------- ---------- -----------
Liabilities
---------------------------------------------- ---------- ---------- -----------
Creditors (269) (279) (10)
---------------------------------------------- ---------- ---------- -----------
Total identifiable net assets at fair value 130 78 (52)
---------------------------------------------- ---------- ---------- -----------
Goodwill arising on acquisition (see note 14) 297 308 11
---------------------------------------------- ---------- ---------- -----------
Purchase consideration transferred 427 386 (41)
---------------------------------------------- ---------- ---------- -----------
Purchase consideration
---------------------------------------------- ---------- ---------- -----------
Cash 392 392 -
---------------------------------------------- ---------- ---------- -----------
Contingent consideration 35 (6) (41)
---------------------------------------------- ---------- ---------- -----------
Total purchase consideration 427 386 (41)
---------------------------------------------- ---------- ---------- -----------
The fair values attributed to the HSB Clubs Limited acquisition,
which were determined provisionally in 2011 have subsequently been
finalised and adjustments have been made in the 2012 accounts. The
original contingent consideration of GBP35,000 was adjusted
subsequently which had the impact of reducing the total
consideration from GBP427,000 to GBP386,000.
On 13 March 2013 Eclectic Bars Limited acquired the leasehold
property from Madame Geisha Limited. The fair value of the
identifiable assets and liabilities that came with the property as
at the date of acquisition were:
Fair value of assets acquired
Fair value
Recognised
on
March 2013
GBP000s
---------------------------------------------- ----------
Assets
---------------------------------------------- ----------
Tangible assets 100
---------------------------------------------- ----------
Inventories 16
---------------------------------------------- ----------
Cash 5
---------------------------------------------- ----------
Prepayments 7
---------------------------------------------- ----------
Liabilities
---------------------------------------------- ----------
Creditors (5)
---------------------------------------------- ----------
Total identifiable net assets at fair value 123
---------------------------------------------- ----------
Goodwill arising on acquisition (see note 14) 434
---------------------------------------------- ----------
Purchase consideration transferred 557
---------------------------------------------- ----------
Purchase consideration
---------------------------------------------- ----------
Cash 557
---------------------------------------------- ----------
Total purchase consideration 557
---------------------------------------------- ----------
18. Inventories
Group Group
2013 2012
GBP000 GBP000
------------------ ------ ------
Goods for re-sale 306 264
------------------ ------ ------
19. Trade and other receivables
Group Company Group Company
2013 2013 2012 2012
GBP000 GBP000 GBP000 GBP000
---------------------------- ------ ------- ------ -------
Trade receivables 209 - 111 -
---------------------------- ------ ------- ------ -------
Amounts due from subsidiary
company - 1,285 - 1,299
---------------------------- ------ ------- ------ -------
Other debtors 1,127 - 1,033 -
---------------------------- ------ ------- ------ -------
1,336 1,285 1,144 1,299
---------------------------- ------ ------- ------ -------
Trade receivables are non-interest bearing and are generally on
30-90 days terms. Fair valuation for the provision of impairment
has been considered and no provision was considered necessary.
At both 30 June 2013 and 30 June 2012 none of the trade
receivables were past due or impaired.
The credit quality of trade receivables that are neither past
due nor impaired can not be quantified as no credit rating
information for the trade receivables is available.
Of the balance in respect of counterparties with internal
ratings, 100% of existing customers are with no history of
defaults.
Other debtors comprise prepayments and accrued income
predominantly in respect of Eclectic Bars Limited
20. Cash and cash equivalents
Group Company Group Company
2013 2013 2012 2012
GBP000 GBP000 GBP000 GBP000
------------------------- ------ ------- ------ -------
Cash at bank and on hand 615 3 225 4
------------------------- ------ ------- ------ -------
Short-term deposits 1,283 1,283 1,081 1,081
------------------------- ------ ------- ------ -------
1,898 1,286 1,306 1,085
------------------------- ------ ------- ------ -------
The fair value and the carrying value of the group's cash and
cash equivalent assets were considered and no provision was
considered necessary.
21. Trade and other payables
Group Company Group Company
2013 2013 2012 2012
GBP000 GBP000 GBP000 GBP000
-------------------------------- ------ ------- ------ -------
Trade payables 942 12 672 5
-------------------------------- ------ ------- ------ -------
Other taxes and social security
costs 621 - 660 -
-------------------------------- ------ ------- ------ -------
Accruals and other creditors 1,033 62 1,115 60
-------------------------------- ------ ------- ------ -------
2,596 74 2,447 65
-------------------------------- ------ ------- ------ -------
22. Provision
Group and
company
GBP000
------------------------- ---------
Carried interest
------------------------- ---------
At 30 June 2011 2,815
------------------------- ---------
Written back in the year (86)
------------------------- ---------
At 30 June 2012 2,729
------------------------- ---------
Written back in the year (175)
------------------------- ---------
At 30 June 2013 2,554
------------------------- ---------
In November 2008, the company entered into a new arrangement
with Odyssey Partners Limited in relation to the management of the
group's portfolio. The terms include a hurdle over which the
carried interest has a positive value. This hurdle, based on net
assets, is equivalent to 82.5p per share (a 23% premium to the
price as at 4 November 2008, the date the new arrangement was
effected and a 54% premium to the share price on 19 September
2013).
The carried interest has been provided on the basis of terms of
agreement between the company and Odyssey Partners Limited. The
amount has been calculated by reference to the net assets as at 30
June 2013 which assumes that the amounts attributable to each asset
will be realised at the amounts so stated. The timing of each
asset's realisation event is uncertain.
23. Share capital
Allotted,
called up
and fully
Authorised paid
2013 2012 2013 2012
No. No. No. No.
--------------------------- ---------- ---------- --------- -----------
Ordinary shares of GBP0.60
each 20,833,333 20,833,333 8,025,752 8,025,752
--------------------------- ---------- ---------- --------- -----------
GBP000 GBP000 GBP000 GBP000
--------------------------- ---------- ---------- --------- -----------
Ordinary shares of GBP0.60
each 12,500 12,500 4,815 4,815
--------------------------- ---------- ---------- --------- -----------
As at 30 June 2013 there were 8,025,752 ordinary shares of 60
pence each in the capital of the company. There has been no
purchase by the company of its own shares during the year.
24. Reserves
Capital redemption reserve
Capital redemption reserve arose from the purchase and
cancellation of own share capital, and represents the nominal
amount of the share capital cancelled.
Other reserves
Other reserves represent share premium paid on the acquisition
of subsidiary company.
Non-controlling interest
Non-controlling interest represents the 40% of Eclectic Bars
Limited not owned by the parent.
25. Financial liabilities
Effective 2013 2012
Interest Maturity GBP000 GBP000
rates %
--------------------------------- ---------- --------- ------ ------
Group
--------------------------------- ---------- --------- ------ ------
Current:
--------------------------------- ---------- --------- ------ ------
Obligations under finance leases
and
--------------------------------- ---------- --------- ------ ------
hire purchase contracts 26 32
-------------------------------------------------------- ------ ------
Other loans:
--------------------------------- ---------- --------- ------ ------
GBP1.438m bank loans (2012 2% above
- GBP1.797 m) Base* Variable 650 779
--------------------------------- ---------- --------- ------ ------
676 811
------------------------------------------------------ ------ ------
Non-current:
--------------------------------- ---------- --------- ------ ------
Obligations under finance leases
and
--------------------------------- ---------- --------- ------ ------
hire purchase contracts 20 46
-------------------------------------------------------- ------ ------
Other loans:
--------------------------------- ---------- --------- ------ ------
GBP1.438m bank loans (2012 2% above
- GBP1.797 m) Base* Variable 788 1,018
--------------------------------- ---------- --------- ------ ------
808 1,064
------------------------------------------------------ ------ ------
*Base refers to Barclays Bank plc base rate
The bank loans and overdrafts are secured by a floating charge
over certain of the assets of Eclectic Bars Limited and its
subsidiaries. The bank overdraft has a facility limit of
GBP600,000. As part of the arrangements with its bankers, Eclectic
Bars and its subsidiaries are required to report on a quarterly
basis regarding certain covenants including leverage (EBITDA/Net
debt), interest cover and fixed charge cover.
The bank loan is repayable in quarterly instalments of
GBP162,504 and is repayable by July 2014.
In September 2012, Eclectic successfully concluded additional
banking facilities from Barclays Bank plc comprising a new
three-year Revolving Loan Facility of GBP1.5 million which is
available for both refit of existing sites and for new
acquisitions.
26. Related party transactions
In the period under review, Odyssey Partners Limited, a company
in which Richard Kleiner has a material interest, provided
investment advisory services amounting to GBP264,000 (2012 -
GBP264,000). The group also paid GBP47,450 (2012 - GBP45,500) in
respect of accountancy and administration services to Gerald
Edelman, a firm in which Richard Kleiner has a partnership
interest.
The group considers its key management personnel to be the
directors of the company. The compensation of key management
personnel is disclosed in Report on Directors' Remuneration on page
9.
Included in provisions is an amount of GBP2.554 million (2012:
GBP2.729 million) which relates to carried interest that would be
payable to Odyssey Partners Limited if the net assets were to be
realised at their carrying value at the balance sheet date (see
note 22).
There were no other related party transactions.
27. Commitments and contingences
Operating lease commitments
At 30 June 2013, the group had total minimum commitments under
non-cancellable operating leases as set out below:
2013 2012
GBP000 GBP000
------------------------------- ------ ------
Land and Buildings
------------------------------- ------ ------
Operating leases which expire:
------------------------------- ------ ------
- in less than one year 1,355 1,219
------------------------------- ------ ------
- within two to five years 4,868 4,798
------------------------------- ------ ------
- in over five years 12,538 13,342
------------------------------- ------ ------
18,761 19,359
------------------------------- ------ ------
The company had no commitments under non-cancellable operating
leases.
Finance lease and hire purchase contracts
At 30 June 2013, the group had total minimum commitments under
finance leases and hire purchase contracts as set out below:
2013 2012
GBP000 GBP000
------------------------------------------- ------ ------
Within one year 23 23
------------------------------------------- ------ ------
After one year but no more than five years 23 55
------------------------------------------- ------ ------
Total minimum lease payments 46 78
------------------------------------------- ------ ------
Less amounts representing finance charges (2) (2)
------------------------------------------- ------ ------
Present value of minimum lease payments 44 76
------------------------------------------- ------ ------
The company has no commitments under finance leases or hire
purchase contracts.
28. Financial risk management objectives and policies
The group's financial instruments comprise investments, cash and
liquid resources, and various items, such as trade receivables and
trade payables that arise directly from its operations. The vast
majority of the group's financial investments are denominated in
sterling.
The group does not enter into derivatives or hedging
transactions.
The fair values of the group's financial instruments approximate
the carrying values as at 30 June 2013 and 30 June 2012.
It is, and has been throughout the period under review, the
group's policy that no trading in financial instruments shall be
undertaken.
The main risks arising from the group's financial instruments
are investment risk, interest rate risk and liquidity risk. With
the exception of the investment in mBlox, the group does not have a
material exposure to foreign currency risk. The board reviews
policies for managing each of these risks, and they are summarised
as follows:
Investment risk
Investment risk includes investing in companies that may not
perform as expected. The group's investment criteria focus on the
quality of the business and the management team of the target
company, market potential and the ability of the investment to
attain the returns required within the time horizon set for the
investment. Due diligence is undertaken on each investment. The
group regularly reviews the investments in order to monitor the
level of risk and mitigate exposure where appropriate.
Interest rate risk
The group borrows in currencies to match the denomination at
fixed and floating rates of interest to generate the desired
interest profile and to manage the group's exposure to interest
fluctuations.
The following table demonstrates the sensitivity to a reasonably
possible change in interest rates, with all other variables held
constant, of the group's loss before tax (through the impact on
floating rate borrowings)
Increase/decrease Effect on
profit
In basis before tax
points 2013
GBP000
--------- ----------------- ----------
2013
--------- ----------------- ----------
Sterling + 100 (2)
--------- ----------------- ----------
Sterling - 100 2
--------- ----------------- ----------
2012
--------- ----------------- ----------
Sterling + 100 (2)
--------- ----------------- ----------
Sterling - 100 2
--------- ----------------- ----------
Liquidity risk
The group's policy is to finance its operations and expansion
through working capital and, in the case of investing in target
companies, to raise an appropriate level of acquisition
finance.
The table below summarises the maturity profile of the group's
financial liabilities at 30 June 2013 and 2012 based on contractual
(undiscounted) payments.
Year ended 30 June 2013
Up to
Total On demand 1 year 1-2 years 2-5 years
GBP000 GBP000 GBP000 GBP000 GBP000
--------------------------- ------ --------- ------ --------- ---------
Interest-bearing loans and
borrowings 1,438 - 650 650 138
--------------------------- ------ --------- ------ --------- ---------
Trade and other payables 456 - 456 - -
--------------------------- ------ --------- ------ --------- ---------
Year ended 30 June 2012
Up to
Total On demand 1 year 1-2 years 2-5 years
GBP000 GBP000 GBP000 GBP000 GBP000
--------------------------- ------ --------- ------ --------- ---------
Interest-bearing loans and
borrowings 1,797 - 779 859 159
--------------------------- ------ --------- ------ --------- ---------
Trade and other payables 672 - 672 - -
--------------------------- ------ --------- ------ --------- ---------
The group aims to mitigate liquidity risk by managing cash
generation by its operations, and applying cash collection targets
throughout the group. Investment is carefully controlled, with
authorisation limits operating up to board level and cash payback
periods applied as part of the investment appraisal process.
Credit risk
There are no significant concentrations of credit risk within
the group. The maximum credit risk exposure relating to financial
assets is represented by the carrying value as at the balance sheet
date.
Short-term trade receivables and payables
Amounts dealt with in the numerical disclosures in this note
exclude short-term debtors and creditors.
There is no material difference between the fair values and book
values of any of the group's financial instruments.
Strategies for managing capital
The primary objective of the group's capital management is to
ensure it is able to support its business and maximise shareholder
value.
The group manages its capital structure and makes adjustments to
it, in light of economic conditions. To maintain or adjust the
capital structure, the group may return capital to shareholders or
perhaps issue new shares. No changes were made in the objectives or
policies during the years ended 30 June 2012 and 30 June 2011.
Financial assets
The group has financial assets as shown below:
Floating Non-interest Floating Non-interest
rate bearing rate bearing
financial financial financial financial
assets assets assets assets
2013 2013 2012 2012
Currency GBP000 GBP000 GBP000 GBP000
--------------------------------- --------- ------------ --------- ------------
Sterling - cash and short-term
deposits 1,898 - 1,306 -
--------------------------------- --------- ------------ --------- ------------
Sterling - unquoted investments - 351 - 351
--------------------------------- --------- ------------ --------- ------------
US Dollar - unquoted investments - 4,091 - 5,269
--------------------------------- --------- ------------ --------- ------------
1,898 4,442 1,306 5,620
--------------------------------- --------- ------------ --------- ------------
The floating rate assets earn interest at rates based upon
LIBOR. Non-interest bearing financial assets are available on
demand.
29. Post-balance sheet events
On 1 October 2013, Eclectic Bars acquired a new site for
GBP700,000. The new site which currently trades under the name of
"Coalition" is situated in Brighton.
Supplementary information (unaudited) at 30 June 2013
Pro Forma Profit & Loss and Balance Sheets
Notes to the Pro Forma Profit & Loss and Balance Sheets
The pro forma financial information has not been audited.
The pro forma financial information has been prepared to
illustrate the effect of not consolidating the results and net
assets of Eclectic Bars Limited and therefore sets out the
investment activity of Avanti Capital plc as distinct from the bars
and clubs activity operated by Eclectic Bars Limited.
The adjustments shown within the pro forma financial information
enables a reconciliation to be made to the audited figures included
within this annual report and 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 & Loss, of EBITDA for Eclectic Bars Limited in
respect of the 53-weeks period from 25 June 2012 to 30 June
2013.
Avanti Eclectic Adjustment Group Total
Bars
Profit & Loss GBP000 GBP000 GBP000 GBP000
--------------------------------------- ------- -------- ---------- -----------
Turnover
--------------------------------------- ------- -------- ---------- -----------
- continuing operations 105 21,197 (105) 21,197
--------------------------------------- ------- -------- ---------- -----------
105 21,197 (105) 21,197
--------------------------------------- ------- -------- ---------- -----------
Less: cost of sales - (4,335) - (4,335)
--------------------------------------- ------- -------- ---------- -----------
Gross profit 105 16,862 (105) 16,862
--------------------------------------- ------- -------- ---------- -----------
Operating expenses (1,538) (13,947) 105 (15,380)
--------------------------------------- ------- -------- ---------- -----------
EBITDA (1,433) 2,915 - 1,482
--------------------------------------- ------- -------- ---------- -----------
Depreciation & goodwill
--------------------------------------- ------- -------- ---------- -----------
amortisation (1) (1,159) - (1,160)
--------------------------------------- ------- -------- ---------- -----------
Interest payable - (700) 600 (100)
--------------------------------------- ------- -------- ---------- -----------
Interest receivable 600 2 (595) 7
--------------------------------------- ------- -------- ---------- -----------
(Loss)/profit on ordinary activities
before Taxation and exceptional items 1,058 5 229
--------------------------------------- ------- -------- ---------- -----------
Exceptional items - other - (68) - (68)
--------------------------------------- ------- -------- ---------- -----------
(Loss)/profit on ordinary activities
before taxation (834) 990 5 161
--------------------------------------- ------- -------- ---------- -----------
Taxation - (224) (63) (287)
--------------------------------------- ------- -------- ---------- -----------
(Loss)/profit for the period (834) 766 (58) (126)
--------------------------------------- ------- -------- ---------- -----------
Supplementary information (unaudited) at 30 June 2013
Pro Forma Balance Sheet
Avanti Eclectic Adjustments Group Total
Bars
Net Assets GBP000 GBP000 GBP000 GBP000
-------------------------------------- ------- -------- ----------- -----------
Non-current assets
-------------------------------------- ------- -------- ----------- -----------
Goodwill - 7,218 (2,022) 5,196
-------------------------------------- ------- -------- ----------- -----------
Tangible assets 1 5,437 - 5,438
-------------------------------------- ------- -------- ----------- -----------
Investments 11,741 - (7,299) 4,442
-------------------------------------- ------- -------- ----------- -----------
Deferred tax assets - 17 74 91
-------------------------------------- ------- -------- ----------- -----------
11,742 12,672 (9,247) 15,167
-------------------------------------- ------- -------- ----------- -----------
Current assets
-------------------------------------- ------- -------- ----------- -----------
Stock - 306 - 306
-------------------------------------- ------- -------- ----------- -----------
Debtors 39 1,297 - 1,336
-------------------------------------- ------- -------- ----------- -----------
Cash at bank & in-hand 1,340 558 - 1,898
-------------------------------------- ------- -------- ----------- -----------
1,379 2,161 - 3,540
-------------------------------------- ------- -------- ----------- -----------
Creditors: amounts falling due within
one year (79) (3,193) - (3,272)
-------------------------------------- ------- -------- ----------- -----------
Net current assets/(liabilities) 1,300 (1,032) - 268
-------------------------------------- ------- -------- ----------- -----------
13,042 11,640 (9,247) 15,435
-------------------------------------- ------- -------- ----------- -----------
Creditors: amounts falling due after
one year
-------------------------------------- ------- -------- ----------- -----------
Shareholders' loan - (7,299) 7,299 -
-------------------------------------- ------- -------- ----------- -----------
Other creditors - (808) - (808)
-------------------------------------- ------- -------- ----------- -----------
13,042 3,533 (1,948) 14627
-------------------------------------- ------- -------- ----------- -----------
Non-current liabilities
-------------------------------------- ------- -------- ----------- -----------
Provisions (2,554) - - (2,554)
-------------------------------------- ------- -------- ----------- -----------
Deferred tax liabilities - - (587) (587)
-------------------------------------- ------- -------- ----------- -----------
10,488 3,533 (2,535) 11,486
-------------------------------------- ------- -------- ----------- -----------
Represented by:
-------------------------------------- ------- -------- ----------- -----------
Share capital 4,815 - - 4,815
-------------------------------------- ------- -------- ----------- -----------
Capital redemption reserve 1,409 - - 1,409
-------------------------------------- ------- -------- ----------- -----------
Other reserve 2,045 - - 2,045
-------------------------------------- ------- -------- ----------- -----------
Profit & loss account 2,219 3,533 (3,846) 1,906
-------------------------------------- ------- -------- ----------- -----------
Non-controlling interest - - 1,311 1,311
-------------------------------------- ------- -------- ----------- -----------
Shareholders' funds 10,488 3,533 (2,535) 11,486
-------------------------------------- ------- -------- ----------- -----------
Notice of Annual General Meeting
Notice is hereby given that the 2013 Annual General Meeting of
Avanti Capital plc ("the Company") will be held at the offices of
Berwin Leighton Paisner LLP, St. Magnus House, Lower Thames Street,
London EC3R 6HE on the 12 day of December 2012 at 11.30 a.m. to
transact the following business.
Ordinary Business
1 To receive and adopt the Directors' Report, the financial
statements and the auditors report for the year ended 30 June
2013.
2 That the Directors' Remuneration Report as set out on page 9
of the report and accounts (as referred to in 1 above) be and is
hereby approved.
3 To re-elect Philip Crawford as a director.
4 To confirm the re-appointment of Ernst & Young LLP as auditor of the Company.
5 To authorise the directors to fix the auditor's remuneration.
Special Business
As special business, to consider and, if thought fit, pass the
following resolution 6, which will be proposed as a special
resolution:
6 That the Company be generally and unconditionally authorised
for the purposes of Section 701 of the Companies Act 2006 (the
"Act") to make market purchases (within the meaning of Section 693
of the Act) of ordinary shares of 60p each in the capital of the
Company ("Ordinary Shares") provided that;
(a) the maximum aggregate number of Ordinary Shares hereby
authorised to be purchased is 1,994,667;
(b) the minimum price which may be paid for an Ordinary Share is
60p per share;
(c) the maximum price which may be paid for an Ordinary Share is
an amount equal to 105 per cent of the average of the middle market
quotations for an Ordinary Share as derived from the London Stock
Exchange Daily Official List for the five business days immediately
preceding the day on which the Ordinary Share is purchased;
(d) the authority hereby conferred expires at the conclusion of
the next annual general meeting of the Company to be held in 2014
or, if earlier, twelve months after the date of the passing of this
resolution unless such authority is renewed, varied or revoked
prior to such a time; and
the Company can make a contract or contracts to purchase
Ordinary Shares under this authority before the expiry of the
authority; and may make a purchase of Ordinary Shares in pursuance
of any such contract or contract.
BY ORDER OF THE BOARD
Richard Kleiner
Secretary
23 October 2013
Registered Office:
25 Harley Street,
London
W1G 9BR
Notes:
(1) A member entitled to attend and vote at the above-mentioned
Annual General Meeting may appoint one or more proxies to attend
and, on a poll, to vote instead of him. A proxy need not be a
member of the Company.
(2) A prepaid form of proxy is enclosed. To be valid, the form
of proxy (together with the power of attorney or other authority
(if any) under which it is signed or a notarially certified copy of
such an authority) must be deposited at the offices of the
Company's Registrars, Capita Registrars, PXS, 34 Beckenham Road,
Beckenham, BR3 4TU no later than 11.30 a.m. on 10 December 2013.
Completion of the form of proxy will not preclude a member from
attending and voting in person.
(3) The Company, pursuant to regulation 41 of The Uncertificated
Securities Regulations 2001, specifies that only those shareholders
registered in the register of members of the Company as at 6.00
p.m. on 10 December 2013 shall be entitled to attend or vote at the
Annual General Meeting in respect of the number of shares
registered in their name at that time. Changes to entries on the
relevant register of securities after that time will be disregarded
in determining the rights of any person to attend or vote at the
Annual General Meeting.
(4) There will be available for inspection at the registered
office of the Company, during usual business hours on any weekday
from the date of this notice until the date of the meeting and at
the place of the meeting for 15 minutes prior to and during the
meeting, copies of any directors' service agreements with the
Company.
Enquiries:
Avanti Capital plc Tel: 020 7299 1459
Richard Kleiner
Canaccord Genuity Limited Tel: 020 7523 8350
Bruce Garrow
Joe Weaving
This information is provided by RNS
The company news service from the London Stock Exchange
END
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