TIDMAVA
RNS Number : 1898D
Avanti Capital PLC
26 March 2014
Avanti Capital plc
Interim Results
for the six months ended 31 December 2013
Group review
Interim Results for the six months ended 31 December 2013
Avanti Capital Plc, ("Avanti" or "the group") the AIM-quoted
investment management company, announces its interim results for
the six months ended 31 December 2013.
HIGHLIGHTS
-- As at 31 December 2013, the group had net assets of GBP13.3
million or 166 pence per ordinary share.
-- Key investee company, mBlox, makes steady progress under the
leadership of CEO, Tom Cotney.
-- Eclectic Bars, in which the group had a 60% holding, achieves
an IPO on the Alternative Investment Market and in so doing enables
the group to dispose of its entire interest realising a profit of
GBP4.8 million.
25 March 2014
ENQUIRIES:
Avanti Capital Plc Tel: 020 7299 1459
Richard Kleiner
Canaccord Genuity Ltd. Tel: 020 7523 8350
Bruce Garrow
Joe Weaving
Company statement
Interim Results for the six months ended 31 December 2013
Results of the Group
As at 31 December 2013, the group had net assets of GBP13.3
million (2012: GBP12.1 million) or 166 pence per share (2012: 151
pence per share).
In the period to 31 December 2013, the profit after tax was
GBP3.2 million (2012: GBP0.5 million). This included the gain
realised on the disposal of the group's interest of Eclectic Bars
Limited of GBP4.8 million.
The above figures have been arrived at after including the
provision for the carried interest of GBP1.7 million or 21 pence
per share. The payment of such carried interest is dependent upon
the realisation of the individual assets being at values which are,
at least, equal to the values stated in these interim results.
Net asset values, per Avanti share by category were:
Carrying Value Carrying Value
Investments Pence per share GBPm
mBlox 52 GBP4.2
Other assets including 114 GBP9.1
cash
Total 166 GBP13.3
Purchase of own shares
During the period, there has been no purchase by the company of
its own shares.
Payment of dividends
Following the flotation of Eclectic Bars Limited which resulted
in a realisation of the group's investment from both its loan and
shareholding, the board resolved to pay dividends to its
shareholders equating to 105p per share. Of this amount, 62p per
share was paid on 16 January 2014 and, following the adoption of
the Capital Reduction Scheme, a further 43p per share is to be paid
shortly. Details of the Capital Reduction Scheme was set out in the
Circular that was sent to shareholders on 6 February 2014.
Eclectic Bars
As referred to above, Eclectic Bars successfully was listed on
the Alternative Investment Market in late November 2013. At the
time the funds raised by Eclectic Bars enabled the group's interest
in the company in the form of its loan of GBP7.3 million and the
whole of its shareholding to be fully realised. The gross
realisation proceeds were GBP11.7 million including a capital gain
for the group as reported in the attaching Income Statement of
GBP4.8 million. Due to the availability of capital losses, there
should be no corporation tax payable on the capital gain.
The board of Avanti Capital Plc would like to take this
opportunity to wish Reuben Harley, the CEO of Eclectic Bars and the
rest of his management team every success in the future.
Espresso
As announced in late 2013, the group disposed of the whole of
its interest in Espresso as part of a sale of the whole company. As
a result, the group realised a total consideration of GBP342,000
which was broadly in line with the carrying value of the group's
investment in Espresso, decreased for legal costs.
mBlox
As the largest independent A2P (application-to-person) mobile
messaging company in the world, mBlox helps brands, agencies and
service providers create meaningful connections with their
customers on mobile devices anytime, anywhere. mBlox's network of
more than 800 mobile operators around the world enables businesses
to reach nearly 6 billion consumers. mBlox makes it easy for
businesses to use text messages and push notifications to drive
revenue, lifetime customer value and ROI. The company's market
longevity and experience give customers peace of mind that they are
sending the right message at the right time based on industry best
practices, while an account management team of local experts
provide ongoing support in a rapidly changing mobile
environment.
mBlox offers mobile messaging solutions that drive positive
engagement throughout the customer lifecycle, with a primary focus
on mobile care. In fact, 82% of the messages delivered by mBlox are
service-oriented. Today's enterprises are relying more and more on
mobile messaging, specifically SMS, as a critical tool in both
acquiring and nurturing their customers. According to Frost &
Sullivan, text message open rates remain at 98%, compared to a
small fraction of that amount (around 12%) for email. The ubiquity
and handset agnostic nature of SMS make it the optimal channel for
applications such as two-factor identity authentication, emergency
alerts, airline schedule changes or delay communications, and
shipping notifications, just to name a few.
Juniper Research predicts that in 2016 revenue from A2P messages
will reach $70.1 billion and overtake that of P2P (consumer
oriented Person-to-Person) SMS, while Ovum believes that the period
from 2013 until 2017 will mark a golden age for A2P SMS, with SMS
coming into its own as a bearer technology for a range of mobile
services. mBlox is well-positioned to take full advantage of this
growth within the A2P messaging market.
The combination of focus on enterprises with a rising adoption,
and A2P messaging, provides a solid strategic foundation for
growth. Portio Research, Ltd. Projects that A2P messaging will
continue to grow in excess of 13% through 2016, while internet
based messaging (Over-the-Top or OTT) will slow the growth of more
consumer oriented traffic called P2P to below 2% in the same
period.
As part of mBlox's global strategy, the company in 2013 expanded
not only geographically, but in hiring senior management talent to
lead mBlox into new territories while strengthening support for
current customers and partners. In March 2014, mBlox will be
opening a new world-class network operations center in Atlanta, USA
to support its global customer base. The Atlanta office joins
Tokyo, Japan and Prague, Czech Republic as recent additions to the
company's global footprint, complementing existing offices in
Paris, London, and Singapore, as well as the corporate headquarters
in Silicon Valley.
As reported in the June 2013 Annual Report, in view of the lack
of any further validation events, the board of Avanti Capital plc
have decided to continue to carry the group's investment in mBlox
at cost, excluding any adjustment in foreign exchange movements.
Accordingly, and after adjusting for movements in foreign exchange,
as at 31 December 2013, the carrying value of the group's
investment in mBlox was GBP4.2 million equating to 52p per
share.
Investing Policy
The group's investing policy remains unchanged as the group
continues to pursue its objectives through two complementary
activities.
-- Its investment operation, which acquires interests in
technology and trading businesses; and
-- Its consultancy operation, which offers a business
development service, to develop the investee business until an exit
opportunity arises.
As previously announced, it is Avanti's current intention not to
invest in any new investments but to support the existing
investment portfolio.
Legacy portfolio
In relation to the remainder of the legacy investments in the
group's portfolio, the board continues to seek ways of maximising
value to the group. As at 31 December 2013, all remaining legacy
portfolio investments had been written down to GBP1.
R H Kleiner
W A H Crewdson
25 March 2014
Consolidated income statement for the six months ended 31
December 2013
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
Notes 31 Dec 31 Dec 30 Jun
2013 2012 2013
GBP000 GBP000 GBP000
Revenue 3 44 10,198 21,197
Cost of sales - (2,215) (4,335)
Gross profit 44 8,073 16,862
Administrative expenses - others 5 (1,983) (7,291) (15,262)
Foreign exchange gain/(loss) 117 (174) -
Administrative expenses - exceptional 6 - (31) (68)
Operating (loss)/profit (1,822) 1,141 1,532
Finance revenue 280 2 7
Finance cost - (45) (100)
Fair valuation of financial assets
held at fair value through profit
or loss - - (1,278)
Loss/profit on ordinary activities
before taxation (1,542) 529 161
Tax expense - (54) (287)
Loss/profit on ordinary activities
after taxation from continuing operations (1,542) 480 (126)
Discontinued operation
Profit after tax for the period from
Discontinued operation 7 4,789 - -
Profit/(loss) on ordinary activities
after taxation 3,247 480 (126)
Attributable to
Shareholders of the parent 3,157 198 (423)
Non-controlling interest 90 282 297
Profit for the period 3,247 480 (126)
Profit per share attributable to
shareholders of the parent - basic
and diluted 4 39.34p 2.47p (5.27)p
Consolidated balance sheet
At 31 December 2013
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Dec 31 Dec 30 Jun
2013 2012 2013
GBP000 GBP000 GBP000
Assets
Non current assets
Goodwill - 4,762 5,196
Property, plant & equipment 1 5,687 5,438
Financial assets held at fair value
through profit or loss 4,213 5,444 4,442
Deferred tax asset - 191 91
4,214 16,084 15,167
Current Assets
Inventories - 370 306
Trade and other receivables 95 1,514 1,336
Cash and cash equivalents 10,741 2,236 1,898
10,836 4,120 3,540
Total Assets 15,050 20,204 18,707
Equity and Liabilities
Equity
Issued share capital 4,815 4,815 4,815
Capital redemption reserve 1,409 1,409 1,409
Merger reserve 2,045 2,045 2,045
Retained earnings 5,063 2,527 1,906
Equity attributable to equity shareholders
of the parent 13,332 10,796 10,175
Non-controlling interest - 1,296 1,311
Total Equity 13,332 12,092 11,486
Liabilities
Current liabilities
Financial liabilities - 678 676
Trade and other payables 33 2,937 2,596
33 3,615 3,272
Non-current liabilities
Financial liabilities - 1,172 808
Provisions 1,685 2,797 2,554
Deferred tax liabilities - 528 587
1,685 4,497 3,949
Total Liabilities 1,718 8,112 7,221
Total Equity and Liabilities 15,050 20,204 18,707
Approved by the board on 25 March 2014
R H Kleiner
W A H Crewdson
Consolidated statement of cash flows for the period ended 31
December 2013
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Dec 31 Dec 30 Jun
2013 2012 2013
GBP000 GBP000 GBP000
Operating activities
(Loss)/Profit before tax from continuing
operations (1,542) 529 161
Profit from discontinued operations 4,789 - -
Depreciation and impairment of property,
plant and equipment - 567 1,159
Loss on financial assets at fair value
through profit or loss - - 1,278
Currency movements on financial assets
held at fair value through profit or loss (117) 176 (139)
Loss on disposal of property, plant and
equipment - 102 102
Expenses on disposal of subsidiary undertakings (151) - 14
Gain on disposal of subsidiary undertakings (4,563) - -
Net interest expense - 45 93
(Increase) in inventories - (106) (26)
Decrease/(Increase) in trade and other
receivables (95) (370) (185)
Increase in trade and other payables 17 490 144
(Decrease)/Increase in provisions (869) 68 (175)
Net cash from operating activities 2,531 1, 501 2,426
Investing activities
Interest received - 2 7
Purchase of property, plant & equipment - (505) (749)
Net cash transferred with subsidiary undertakings (607) - -
Acquisition of business, net of cash - - (552)
Proceeds from disposal of financial assets
at fair value through profit or loss 11,981 - 25
Net cash flows used in investing activities 11,374 (503) (1,269)
Financial activities
Interest paid - (45) (100)
Proceeds from borrowings - 1,950 1,950
Repayment of borrowings - (1,961) (2,383)
Capital element of finance lease rental
payments - (12) (32)
Net cash flows used in financing activities - (68) (494)
Net increase/(decrease) in cash and cash
equivalents 8,843 930 592
Cash and cash equivalents at start of period 1,898 1,306 1,306
Cash and cash equivalents at end of period 10,741 2,236 1,898
Consolidated statement of changes in equity (unaudited) for the
six months ended 31 December 2013
Capital Non-
Share Other Redemption Retained Shareholders' controlling
Capital Reserve Reserve Earnings equity interest Totals
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 July 2013 4,815 2,045 1,409 1,906 10,175 1,311 11,486
Profit for the
period - - - 3,157 3,157 (1,311) 1,846
At 31 December
2013 4,815 2,045 1,409 5,063 13,332 - 13,332
Notes to the Accounts for the six months ended 31 December
2012
1. Basis of preparation of interim financial information
The financial information for the 6 months ended 31 December
2012 and 31 December 2013 does not constitute statutory accounts
for the purposes of S240 of the Companies Act 2006 and has not been
audited.
Information that has been extracted from the June 2013 accounts
are those from the audited accounts that have been filed at
Companies House.
The interim financial statements have been prepared in
accordance with those IFRS standards, as adopted by the EU, and
IFRIC Interpretations issued and effective for the period ended 31
December 2013.
2. Accounting policies
The accounting policies used in the preparation of the financial
information for the 6 months ended 31 December 2013 are the
accounting policies as applied to the group's financial statements
for the year ended 30 June 2013.
3. Segmental information
Unaudited Unaudited Audited
6 months ended 6 months ended 12 months
ended
31 Dec 2013 31 Dec 2012 30 Jun 2013
GBP000 GBP000 GBP000
Revenue by products and services
Bars and nightclubs - 10,198 21,197
Management fees 44 - -
44 10,198 21,197
4. Earnings per share
Unaudited Unaudited Audited
6 months ended 6 months ended 12 months
ended
31 Dec 2013 31 Dec 2012 30 Jun 2013
Profit/(loss) for the period
(GBP000) 3,157 198 (423)
Basic weighted and diluted
number of shares (number) 8,025,752 8,025,752 8,025,752
Earnings per share (pence)
- Basic and diluted (pence) 39.34p 2.47p (5.27)p
5. Administrative expenses - others
GBP000
Directors' remuneration 20
Provision for carried interest 1,714
Loss on disposal of fixed asset investments
through profit and loss 8
Other 241
1,983
6. Exceptional items
Unaudited Unaudited Audited
6 months ended 6 months ended 12 months
ended
31 Dec 2013 31 Dec 2012 30 Jun 2013
GBP000 GBP000 GBP000
Deal and merger costs:
- Redundancy costs - 1 11
- Cost of abortive deals - 20 10
- Others - 1 -
Restructuring charges - 8 47
- 31 68
7. Discontinued operations
During the period under review, the group disposed of its
interest in Eclectic Bars Limited following its flotation on the
Alternative Investment Market.
GBP000
Profit & loss
Turnover 9,337
Less: Cost of sales (1,957)
Gross profit 7,380
Operating expenses (6,070)
EBITDA 1,310
Depreciation (503)
Interest payable (319)
Profit/(Loss) on ordinary activities before
taxation and exceptional items 488
Exceptional items - other (98)
Profit on ordinary activities before taxation 390
Taxation (164)
Profit for the period from discontinued operations 226
Gain on disposal of the discontinued operations 4,563
Total 4,789
Copies of this Announcement will be available, free of charge,
from the company's office at 25 Harley Street, London W1G 9BR for a
period of 1 month from the date of this Announcement. A copy of
this Announcement will also be available on the company's website
at www.avanticap.com.
Independent review report to Avanti Capital plc
Introduction
We have been engaged by the company to review the condensed
financial statements in the half-yearly financial report for the
six months ended 31 December 2013, which comprises the Consolidated
income statement, the Consolidated balance sheet, the Consolidated
statement of cash flows, the Consolidated statement of changes in
equity and the related notes 1 to 7. We have read the other
information contained in the half yearly financial report and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
This report is made solely to the company in accordance with the
guidance contained in ISRE 2410 (UK and Ireland) "Review of Interim
Financial Information Performed by the Independent Auditor of the
entity" issued by the Auditing Practices Board. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company, for our work, for this report, or
for the conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the Interim Report in accordance with the AIM Rules
issued by the London Stock Exchange which require that it is
presented and prepared in a form consistent with that which will be
adopted in the company's annual accounts having regard to the
accounting standards applicable to such accounts.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with the AIM Rules issued by the London Stock
Exchange.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with the International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 31
December 2013 is not prepared, in all material respects, in
accordance with the accounting policies outlined in Note 1, which
comply with IFRS's as adopted by the European Union and in
accordance with the AIM Rules issued by the London Stock
Exchange.
Ernst & Young LLP
London
25 March 2014
This information is provided by RNS
The company news service from the London Stock Exchange
END
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