TIDMAVA
RNS Number : 2406I
Avanti Capital PLC
24 March 2015
24 March 2015
Avanti Capital plc
Interim Results for the six months ended 31 December 2014
Avanti Capital Plc, ("Avanti" or "the group") the AIM-quoted
investment management company, announces its interim results for
the six months ended 31 December 2014.
Highlights
-- As at 31 December 2014, the group had net assets of GBP4.6
million or 57 pence per ordinary share.
-- Key investee company, Mblox, continues to make steady
progress under the leadership CEO, Tom Cotney.
ENQUIRIES:
Avanti Capital Plc Tel: 020 7299 1459
Richard Kleiner
Panmure Gordon (UK) Ltd Tel: 020 7886 2500
Andrew Potts
Company statement
Results of the group
As at 31 December 2014, the group had net assets of GBP4.6
million (2013: GBP13.3 million) or 57 pence per share (2013: 166
pence per share).
In the period to 31 December 2014, the profit after tax was
GBP60,000 (2013: GBP3.2 million).
The above figures have been arrived at after including the
provision for the carried interest of GBP157,000 or 1.96 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 56 GBP4.5
Other assets including 24 GBP1.9
cash
Total 80 GBP6.4
Purchase of own shares
During the period, there has been no purchase by the company of
its own shares.
Mblox
Mblox the world's largest CRM mobile messaging provider
completed 2014 with its most strategic accomplishments to-date. The
company raised $43 million in loans from Horizon Technology
Partners and Comerica to refinance debt and complete two
acquisitions that accelerate its goal of being the largest Mobile
Cloud Overlay Network in the world with reach to more users than
any company in the world.
In June 2014, the company acquired CardBoardFish. This
acquisition paved the way for the company to expand its long number
products from 11 countries to 27 and its network direct connections
by 15%. The move also established Mblox as a registered mobile
operator in 10 countries gaining access to core network
capabilities at a significantly lower cost.
In July 2014, the company acquired Zoove, a voice activated
service to allow consumers to use vanity codes to dial brands like
**Sears or **NFL in the US. This voice activated service
complements its messaging product base by allowing calls to its
exclusive range of **numbers to give consumers the option of opting
in to messaging services or to deliver application downloads. The
offering is initially available in the US.
As part of the fundraising at the time of the 2 acquisitions,
along with other large shareholders in Mblox, the group invested
into a loan instrument in the amount of $367,000. The terms of the
loan instrument are included in note 6.
Through an increased focus on enterprise market penetration the
company landed nine new client relationships that increased its
global messaging volumes by 25%. This year, the company will bring
a significant advancement in platform ease of use and lower cost of
ownership to market via Atlas (the NexGen platform based on the
modified Cardboardfish platform). This new capability gives Mblox
customers access to more mobile subscribers via a single network
"hop" than any provider of its kind in the world. CEO Tom Cotney
said, "Atlas gives Mblox and its clients the lowest marginal cost
of expanded use of Mobile Messaging, thus increasing the already
high ROI of mobile CRM applications which we support."
"Our Cloud based overlay network remakes it even simpler for
clients who see the need to serve their consumers globally. Atlas
will drive our penetration of the fast growing CRM market, and its
ubiquity and scalability positions us to expand in the enterprise
space in more creative ways than ever, e.g., the rapidly developing
Internet of Things."
The company does not publish its detailed financials.
As reported in the June 2014 Annual Report, in view of the lack
of any current validation events in the form of external equity
fundraisings, the board of Avanti have decided to continue to carry
the group's investment in Mblox at cost, including the additional
investment in loan receivable of $367,000. Accordingly, and after
adjusting for movements in foreign exchange, as at 31 December
2014, the carrying value of the group's investment in Mblox was
GBP4.5 million, equating to 57p 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.
Cash burn and overheads
Following the disposal of its investment in Eclectic Bar Group
plc, the group reached agreement with its investment adviser,
Odyssey Partners Limited, to reduce the management fees by 50%.
This change took effect from 1 January 2014.
The directors have also examined means of reducing the group's
cash burn and overheads in light of the reduction in the size of
the investment portfolio and, in particular, the focus on achieving
an exit from the position in Mblox as soon as practicable. These
measures will include a substantial deferral of the management fees
payable to the investment adviser in order to conserve cash flow.
It is intended that this further change will be implemented with
effect from 1 July 2015, being the beginning of the forthcoming
financial year.
R H Kleiner
W A H Crewdson
23 March 2015
Condensed consolidated income statement for the six months ended
31 December 2014
Restated
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
Notes 31 Dec 31 Dec 30 Jun
2014 2013 2014
GBP000 GBP000 GBP000
Administrative expenses -
others 4 (364) (1,975) (2,249)
Administrative expenses -
foreign exchange 19 5 -
Administrative expenses -
exceptional 5 - (8) (8)
Operating (loss) (345) (1,978) (2,257)
Finance revenue 12 3 7
Finance cost - - -
Fair valuation movement of
financial assets held at
fair value through profit
or loss 393 112 (12)
Profit/(Loss) on ordinary
activities before taxation
from continuing operations 60 (1,863) (2,262)
Income tax expense - - -
Profit/(Loss) on ordinary
activities after taxation
from continuing operations 60 (1,863) (2,262)
Discontinued operation
Profits after tax for the
period from discontinued
operation - 5,110 5,110
Profit on ordinary activities
after taxation 60 3,247 2,848
Profit and total comprehensive
income for the period 60 3,247 2,848
Attributable to
Shareholders of the parent 60 3,157 2,758
Non-controlling interest - 90 90
Profit for the period 60 3,247 2,848
Profit per share attributable
to shareholders of the parent
- basic and diluted 3 0.74p 39.34p 34.36p
Basic and diluted from continuing
operations 0.74p (23.21p) (28.18)p
Basic and diluted from discontinued
operations - 62.55p 62.55p
Condensed consolidated balance sheet at 31 December 2014
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
Notes 31 Dec 31 Dec 30 Jun
2014 2013 2014
GBP000 GBP000 GBP000
ASSETS
Non-current assets
Property, plant & equipment 1 1 1
Financial assets held at
fair value through profit
or loss 4,472 4,213 4,079
Non-current financial assets 6 236 - -
Deferred tax asset - - -
4,709 4,214 4,080
Current Assets
Trade and other receivables 23 95 84
Cash and cash equivalents 1,652 10,741 2,048
1,675 10,836 2,132
TOTAL ASSETS 6,384 15,050 6,212
EQUITY AND LIABILITES
EQUITY
Issued share capital 80 4,815 80
Capital redemption reserve - 1,409 -
Other reserve - 2,045 -
Retained earnings 4,486 5,063 4,426
Equity attributable to equity
shareholders of the parent 4,566 13,332 4,506
Non-controlling interest - - -
TOTAL EQUITY 4,566 13,332 4,506
LIABILITIES
Current liabilities
Trade and other payables 30 33 75
30 33 75
Non-current liabilities
Provisions 7 1,788 1,685 1,631
Deferred tax liabilities - - -
1,788 1,685 1,631
TOTAL LIABILITIES 1,818 1,718 1,706
TOTAL EQUITY AND LIABILITIES 6,384 15,050 6,212
Approved by the board on 23 March 2015
R H Kleiner
W A H Crewdson
Condensed consolidated statement of cash flows for the six
months ended 31 December 2014
Restated
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Dec 31 Dec 30 Jun
2014 2013 2014
GBP000 GBP000 GBP000
Operating activities
Profit/(Loss) before tax from
continuing operations 60 (1,863) (2,262)
Profit from discontinued operations - 5,110 5,110
Depreciation and impairment
of property, plant and equipment - 505 505
Loss on financial assets at
fair value through profit
or loss - 8 8
(Gain)/loss in the fair value
of financial assets designated
at fair value through profit
or loss (393) (112) 12
Net foreign exchange difference (16) (5) -
Net interest (revenue)/expense (12) 35 35
(Gain) on disposal of subsidiary
undertakings - (4,563) (4,563)
(Increase) in inventories - (27) (27)
Decrease/(Increase) in trade
and other receivables 65 65 160
(Decrease)/Increase in trade
and other payables (45) 294 257
Increase/(Decrease) in provisions 157 (869) (923)
Net cash flow (used in) operating
activities (184) (1,422) (1,688)
Investing activities
Interest received 8 - -
Interest paid - (35) (35)
Purchase of loan receivable (220) - -
Purchase of property, plant
& equipment - (537) (537)
Net cash transferred with
subsidiary undertakings - (607) (607)
Proceeds from disposal of
subsidiary, net of cash sold - 11,684 11,684
Proceeds from disposal of
investment - 269 269
Purchase of business combination
net of cash - (1,087) (1,087)
Proceeds from disposal of - - -
financial assets at fair value
through profit or loss
Net cash flows (used in)/generated
from investing activities (212) 9,687 9,687
Financial activities
Dividends paid - - (8,427)
Proceeds from borrowings - 750 750
Repayment of borrowings - (162) (162)
Capital element of finance
lease rental payments - (10) (10)
Net cash flows generated/(used
in) financing activities - 578 (7,849)
Net (decrease)/increase in
cash and cash equivalents (396) 8,843 150
Cash and cash equivalents
at start of period 2,048 1,898 1,898
Cash and cash equivalents
at end of period 1,652 10,741 2,048
Condensed consolidated statement of changes in equity
(unaudited) for the six months ended 31 December 2014
Capital
Share Other Redemption Retained
Capital Reserve Reserve Earnings Totals
GBP000 GBP000 GBP000 GBP000 GBP000
At 1 July 2013 4,815 2,045 1,409 1,906 10,175
Profit for year ended
30 June 2014 - - - 2,758 2,758
Capital Reduction (4,735) (2,045) (1,409) 8,189 -
Dividends - - - (8,427) (8,427)
At 1 July 2014 80 - - 4,426 4,506
Profit for the period - - - 60 60
At 31 December 2014 80 - - 4,486 4,566
Notes to the Accounts for the six months ended 31 December
2014
1 Basis of preparation of interim financial information
Avanti Capital plc (the 'company') is a public limited company
incorporated and domiciled in England and Wales. The company's
ordinary shares are traded on the AIM market of the London Stock
Exchange. The interim condensed consolidated financial statements
comprise the interim financial statements of Avanti Capital Plc and
its subsidiaries (collectively, the 'group') for the six months
ended 31 December 2014.
The financial information for the year ended 30 June 2014 does
not constitute the company's statutory accounts for that year, but
is derived from those accounts.
Statutory accounts for 30 June 2014 have been delivered to the
Registrar of Companies. The auditors reported on those accounts:
their report was unqualified, did not draw attention to any matters
by way of emphasis and did not contain a statement under s498(2) or
(3) of the Companies Act 2006.
The interim condensed consolidated financial statements for the
6 months ended 31 December 2014 have been prepared in accordance
with the AIM Rules issued by the London Stock Exchange.
The interim condensed consolidated financial statements do not
include all the information and disclosures required in the annual
financial statements, and should be read in conjunction with the
Group's annual financial statements as at 30 June 2014 which were
prepared in accordance with IFRS as adopted by the European
Union.
Going concern
After making appropriate enquiries, the directors have a
reasonable expectation that the group has adequate resources to
continue in operational existence for the foreseeable future. For
those reasons, the board continues to adopt the going concern basis
in preparing the interim report.
Prior year restatement
The income statement in respect of the 6 months ended 31
December 2013 has been restated such that the figures for revenue
and interest receivable from discontinued operation have been
included as part of discontinued operation. The corresponding cash
flow statement for the 6 months period ended 31 December 2013 has
also been restated accordingly.
Segmentation
Following the disposal of its investment in Eclectic Bar Group
plc, the group now only has one segment being in respect of
investment activities. The information relating to the geographical
segmentation is set out in note 8. Such information will also be
reflected in the group's annual financial statements.
2. Accounting policies
The accounting policies used in the preparation of the financial
information for the 6 months ended 31 December 2014 are the
accounting policies as applied to the group's financial statements
for the year ended 30 June 2014, except as noted below.
Changes in accounting policies
The following amendments to existing standards and
interpretations were effective for the period, but either they were
not applicable to or did not have a material impact on the
Group:
Effective
dates*
IFRS 10 Consolidated Financial Statements 1 January
2013
IFRS 11 Joint Arrangements 1 January
2013
IFRS 12 Disclosure of Interests in Other 1 January
Entities 2013
IAS 27 Separate Financial Statements 1 January
2013
IAS 28 Investments in Associates and Joint 1 January
Ventures 2013
IAS 32 Financial Instruments: Presentation 1 January
- Offsetting Financial Assets and Financial 2014
Liabilities (Amendments)
IAS 36 Impairment of Assets - Recoverable 1 January
Amount Disclosures for Non-Financial Assets 2014
(Amendments)
IAS 39 Financial Instruments: Recognition 1 January
and Measurement - Novation of Derivatives 2014
and Continuation of Hedge Accounting (Amendments)
Investment Entities (Amendments to IFRS 1 January
10, IFRS 12 and IAS 27) 2014
IFRIC 21 Levies 1 January
2014
IAS 19 Employee Benefits - Defined Benefit 1 July
Plans: Employee Contributions (Amendments) 2014
Annual Improvements to IFRSs 2010-2012 1 July
Cycle 2014
Annual Improvements to IFRSs 2011-2013 1 July
Cycle 2014
* IFRS 10, IFRS 11, IFRS 12 and IAS 27 and IAS 28 have been
adopted by the EU with an effective date of 1 January 2014.
3. Earnings per share
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Dec 31 Dec 30 Jun
2014 2013 2014
Profit for the period
(GBP000) 60 3,157 2,758
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) 0.74p 39.34p 34.36p
4. Administrative expenses - others
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Dec 31 Dec 30 Jun
2014 2013 2014
GBP000 GBP000 GBP000
Directors' remuneration 23 20 42
Professional fees 153 199 456
Provision for carried
interest 157 1,714 1,661
Other 31 42 90
364 1,975 2,249
5. Exceptional items
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Dec 31 Dec 30 Jun
2014 2013 2014
GBP000 GBP000 GBP000
Loss on disposal of
financial asset held
at fair value through
profit or loss - 8 8
- 8 8
6. Non-current financial assets
The non-current financial asset comprises the secured loan that
was made to Mblox in July 2014 amounting to $367,000 (equivalent
amount - GBP220,000). The terms of the loan are that it has a
maturity date of 31 July 2018 and attracts interest at the rate of
11% per annum. In addition, a success fee is receivable upon a
future event, being a sale or IPO, the amount of which is dependent
on both the date and amount of value by reference to such an
event.
7. Provisions
The provision amounting to GBP1.788 million relates to the
carried interest due to the investment adviser, Odyssey Partners
Limited. As indicated in the annual report for the financial year
30 June 2014, the carried interest provision assumes that the
group's remaining investments are realised at their respective book
values.
8. Geographical segmentation
UK USA TOTAL
GBP000 GBP000 GBP000
Segment assets 1,676 236 1,912
Financial assets held
at fair value through
profit or loss - 4,472 4,472
1,676 4,708 6,384
Copies of this Announcement will be available, free of charge,
from the company's office at 73 Cornhill, London, EC3V 3QQ 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 2014, 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 8. 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 International Standard on Review Engagements
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 annual 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 2410 (UK and Ireland), "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Auditing Practices Board. 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 2014 is not prepared, in all material respects, in
accordance with the accounting policies outlined in Note 1 and Note
2, which comply with IFRSs as adopted by the European Union and in
accordance with the AIM Rules issued by the London Stock
Exchange.
Ernst & Young LLP
London
23 March 2015
This information is provided by RNS
The company news service from the London Stock Exchange
END
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