RNS Number:4959E
Commoditrade Inc.
26 September 2007
Commoditrade Inc.
("Commoditrade" or "the Company")
Interim results for the six months ended 30 June 2007
Commoditrade Inc., (AIM: CMM), the AIM-listed commodities investment company,
announces its interim results for the six months ended 30 June 2007.
Commoditrade joined AIM in March 2005 with the primary objective of building,
through investment and acquisition, a group specialising in the commodities
sector.
Summary of Interim Results
6 months ended 6 months ended
30 June 2007 30 June 2006
Unaudited Unaudited
#'000 #'000
Gross revenue 15,184 8,869
Net operating profit 10,444 4,621
Profit per ordinary share, adjusted for amortisation 2.79p 2.23p
and share option payment
Basic profit per ordinary share 0.94p 1.29p
Ordinary shares in issue (m) 376.3m 371.3m
* Commoditrade's gross revenue for the six months ended 30 June 2007 was
#15.2 million (after a deduction of clearing and administration fees, which are
currently charged at 25% of total revenues generated by the trading team).
* The Company's performance was underpinned by continued high trading
volumes and customer demand for its specialist brokerage services in base metals
traded on the London Metals Exchange ("LME").
* Commoditrade's net operating profit (after direct trading costs and
trader bonuses) for the period was #10.4 million. After non-cash costs, being
amortisation of #5.6 million and the issue of management share options of #1.4
million, and corporate overhead costs, the profit before tax for the period was
#3.5 million.
* The Company's adjusted profit per ordinary share, before the deduction
of non-cash items being amortisation and the share option issue, was 2.79 pence.
The unadjusted basic profit per ordinary share for the period was 0.94 pence.
* As at 30 June 2007 the Company had no debt and its cash balances stood
at #9.6 million. An additional #8.2 million of cash, earned during the period,
is due to be received from the Company's clearer at the end of October 2007,
giving an effective cash balance of #17.8 million.
Operational Review and Update
* Commoditrade has secured the services of the key members of the
trading team for a minimum period of three years.
* Additionally, Commoditrade has renegotiated its contract with Sucden
(UK) Limited, securing this agreement in future for a fixed net annual fee of
#7.5m. This represents an effective reduction in the current fee arrangement,
which is currently calculated as a percentage of revenues generated by the
trading team. The new contract will be effective from 1 May 2008 and is expected
to yield significant cost savings for Commoditrade going forward.
* During the period, Commoditrade acquired sufficient shares in the LME
to bring its total holdings to 25,000 B shares, which now entitles the Company
to apply for a Category 1 membership of the LME.
Current Trading and Outlook
Commenting, Graham Butt, Chief Executive of Commoditrade, said:
"The business has delivered strong growth in profits and cash generation over
the period and has continued to perform very strongly into the second half of
the year. Trading activity has also increased markedly during the recent
turbulent market conditions which has also benefitted the operational
performance of the business in the second half."
Enquiries:
John Bick
t: +44 (0) 20 7451 9800
m:+44 (0)7917 649362 www.commoditrade.net
James Harris/Angela Peace
Strand Partners
tel:+44(0) 20 7409 3494
Commoditrade Inc.
Interim Statement
Results
The Board is pleased to report Commoditrade's unaudited results for the six
months ended 30 June 2007. The trading team produced a very strong trading
performance over the period generating gross revenue of #15.2 million for
Commoditrade. Commoditrade's gross revenue is calculated after the deduction of
fees paid to Sucden (UK) Limited, which are currently charged at 25% of revenues
generated by the trading team.
After direct trading costs and trader bonuses, net trading profit for the
Company was #10.4 million. After deduction of non-cash items, being amortisation
of #5.6 million and costs associated with the issue of share options to the
trading team of #1.4 million, and corporate overhead costs, the profit before
tax for the period was #3.5 million.
The Company's adjusted profit per ordinary share, adjusted for non-cash items
being amortisation and the costs associated with the share option issue, was
2.79 pence. The unadjusted basic profit per ordinary share for the period was
0.94 pence.
There is no debt in the Company and cash and cash equivalents at 30 June 2007
stood at #9.6 million. An additional #8.2 million of cash, earned during the
period, is due to be received from the Company's clearer at the end of October
2007, giving an effective cash balance of #17.8 million.
Operational Review
The business delivered strong results on the back of the continued high volume
of base metal trading on the LME over the period. High volumes have been driven
primarily by a strong demand for the underlying base metals combined with
volatility in the base metal markets. There has been a resumption of buying
from China so far in 2007 and many other factors such as investment fund
activity are still providing support for the commodity market generally. The
key markets for the trading team are copper, aluminium, nickel and zinc, all of
which enjoyed a strong performance, with aluminium and nickel in particular
showing strong growth compared to the prior period.
The Company is pleased to report that it has secured the services of the key
traders in the trading team for a minimum period of three years. These traders
have been further incentivised through granting of options in Commoditrade,
which will vest over a three year period.
Commoditrade has renegotiated its contract with Sucden (UK) Limited, securing
this agreement in future for a fixed net annual fee of #7.5m. This represents
an effective reduction in the current fee arrangement, which is currently
calculated as a percentage of revenues generated by the trading team. The new
contract will be effective from 1 May 2008 and is expected to yield significant
cost savings for Commoditrade going forward.
Additionally, during the period, Commoditrade acquired sufficient shares in the
LME to bring its total holding to 25,000 shares, which now entitles the Company
to a Category 1 membership of the LME.
Corporate Update
On 13 August 2007 the Company announced that active discussions were continuing
with a number of interested parties which may or may not lead to an offer for
the Company. The Board confirms that these discussions are actively ongoing.
In addition, the Company confirmed that it was also in parallel discussions with
potential financial partners to secure additional capital for the Company, which
will enable it to pursue a number of identified growth opportunities and other
potential strategies to generate enhanced shareholder value. These discussions
are also actively ongoing and it remains the Board's intention to continue to
pursue all avenues that will enhance the growth in shareholder value.
Current Trading and Outlook
The business has delivered strong growth in profits and cash generation over the
period and has continued to perform very strongly into the second half of the
year. Trading activity has also increased markedly, which has benefitted the
operational performance of the business in the second half.
Graham Butt Chris Adams
Chief Executive Chairman
26 September 2007 26 September 2007
www.commoditrade.net
Commoditrade Inc.
Income Statement
For the six months ended 30 June 2007
Unaudited
six
Unaudited months Audited
Note Six ended year
months 30 June ended
ended 2006 31
30 June (As December
2007 restated) 2006
#'000 #'000 #'000
Continuing operations
Income from associate 8 10,444 4,621 13,979
Amortisation of (5,617) (1,875) (7,494)
intangible asset within
associate
Other income 200 - -
Administrative expenses (1,794) (151) (663)
Operating profit 3,233 2,595 5,822
Finance income 4 287 4 94
Profit for the period 3,520 2,599 5,916
before taxation
Tax charge 6 - - -
Net profit for the period 3,520 2,599 5,916
Profit per ordinary share
- Basic 7 0.94p 1.29p 2.05p
- Diluted 7 0.93p 1.27p 2.02p
- Basic (Adjusted for
amortisation and share
option payment) 2.79p 2.23p 4.64p
Commoditrade Inc.
Statement of Changes in Equity
Six months ended 30 June 2007
Share Profit
based and
Share Share Shares to Revaluation Translation payment loss
capital premium be issued reserve reserve reserve account Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
At 1 January 2006 103 339 - - - 20 (180) 282
Issue of new shares 273 34,123 1,800 - - - - 36,196
Cost of issue of new - (1,010) - - - - - (1,010)
shares
Net profit for the - - - - - - 5,916 5,916
period
Currency translation - - - - (459) - - (459)
At 31 December 2006 376 33,452 1,800 - (459) 20 5,736 40,925
(audited)
Net profit for the - - - - - - 3,520 3,520
period
Share based payment - - - - - 1,365 - 1,365
Available for sale - - - 35 - - - 35
revaluation
Currency translation - - - - (138) - - (138)
At 30 June 2007 376 33,452 1,800 35 (597) 1,385 9,256 45,707
(unaudited)
Commoditrade Inc.
Balance Sheet
At 30 June 2007
Unaudited
six
Note Unaudited months Audited
Six ended year
months 30 June ended
ended 2006 31
30 June (As December
2007 restated) 2006
#'000 #'000 #'000
Assets
Non-current assets
Investment in associate 8 20,614 31,250 26,231
Other receivable 10 1,027 1,052 1,052
21,641 32,302 27,283
Current
Available for sale 9 3,237 - 2,064
financial assets
Trade and other 10 11,255 4,466 4,772
receivables
Cash and cash 9,641 216 6,928
equivalents
Total current assets 24,133 4,682 13,764
Total assets 45,774 36,984 41,047
Liabilities
Current
Trade and other payables 11 67 404 122
Total liabilities 67 404 122
Equity
Share capital 13 376 371 376
Share premium 33,452 32,570 33,452
Shares to be issued 1,800 1,200 1,800
Translation reserve (597) - (459)
Share based payment 1,385 20 20
reserve
Revaluation reserve 35 - -
Profit and loss account 9,256 2,419 5,736
Total equity 45,707 36,580 40,925
Total equity and 45,744 36,984 41,047
liabilities
Commoditrade Inc.
Cash Flow Statement
For the six months ended 30 June 2007
Unaudited
Unaudited six months Audited
Six months ended year
ended 30 June 2006 ended 31
30 June 2007 (As restated) December 2006
#'000 #'000 #'000
Operating activities
Profit after tax 3,520 2,599 5,916
Amortisation of intangible asset in associate 5,617 1,875 7,494
Share based payment 1,365 - -
Change in trade and other receivables (6,458) (4,431) (4,737)
Change in trade and other payables (55) (580) (862)
Foreign exchange (110) - (459)
Net cash inflow/(outflow) from operating 3,879 (537) 7,352
activities
Investing activities
Purchase of associate - (16,425) (16,416)
Purchase of available for sale financial assets (1,166) - (1,177)
Net cash outflow from investing activities (1,166) (16,425) (17,593)
Financing activities
Issue of shares - 18,009 18,000
Share issue costs - (1,010) (1,010)
Net cash inflow from financing activities - 16,999 16,990
Net increase in cash and cash equivalents 2,713 37 6,749
Cash and cash equivalents at beginning of period 6,928 179 179
Cash and cash equivalents at end of period 9,641 216 6,928
COMMODITRADE INC.
Notes to the interim report
For the six months ended 30 June 2007
1 GENERAL INFORMATION
The information for the period ended 30 June 2007 does not constitute statutory
accounts as defined in Section 240 of the Companies Act 1985. The figures for
the year ended 31 December 2006 have been extracted from the 2006 statutory
financial statements. The auditors' report on those accounts was unqualified
and did not contain a statement under section 237(2) of the Companies Act 1985.
2 ACCOUNTING POLICIES
Basis of preparation
The Company was incorporated as a Corporation in the Cayman Islands which does
not prescribe the adoption of any particular accounting framework. The Board
has resolved that the Company will follow International Financial Reporting
Standards (IFRS) and apply the Companies Act 1985 when preparing its annual
financial statements. The figures for the six months ended period ended 30 June
2006 have been restated to account for the acquisition of the Tambelan Interest
as an interest in associate, rather than as an available for sale financial
asset, consistent with the treatment adopted in the 31 December 2006 audited
financial statements
The principal accounting policies of the Company are set out below.
Associates
Associates are those entities over which the Company is able to exert
significant influence but which are neither subsidiaries nor interests in a
joint venture. Investments in associates are initially recognised at cost and
subsequently accounted for using the equity method.
On initial acquisition of an associate, the investor's share of the net fair
value of the associate's identifiable assets, liabilities and contingent
liabilities is accounted for under IFRS 3 using the purchase method. Any
goodwill arising is treated in accordance with IFRS 3 and is not amortised but
instead is subject to an annual impairment review. Included in the identifiable
assets are intangible assets which meet the relevant recognition criteria. The
underlying intangible assets are thereafter amortised over their useful life.
All subsequent changes to the share of interest in the equity of the associate
are recognised in the Company's carrying amount of the investment. Changes
resulting from the profit or loss generated by the associate are credited or
charged against "income from associates" in the income statement and therefore
affect net results of the Company. These changes include subsequent
depreciation, amortisation or impairment of the fair value adjustments of assets
and liabilities.
However, when the Company's share of losses in an associate equals or exceeds
its interest in the associate, including any other unsecured receivables, the
Company does not recognise further losses, unless it has incurred obligations or
made payments on behalf of the associate. Once the associate then becomes
profit making profits are not recognised until they exceed the share of the loss
that had not previously been recognised.
Unrealised gains on transactions between the Company and its associates are
eliminated to the extent of the Company's interest in the associates.
Unrealised losses are also eliminated unless the transaction provides evidence
of an impairment of the asset transferred.
Intangible assets
Expenditure on intangible assets, including those in the Company's associates,
is capitalised at cost and amortised over its estimated useful economic life.
Impairment reviews
The Company's assets are subject to impairment testing.
For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows (cash-generating
units). As a result, some assets are tested individually for impairment and some
are tested at cash-generating unit level. Goodwill in particular is allocated
to those cash-generating units that are expected to benefit from synergies of
the related business combination and represent the lowest level within the
Company at which management controls the related cash flows.
Individual assets or cash-generating units that include goodwill and other
intangible assets with an indefinite useful life or those not yet available for
use are tested for impairment at least annually. All other individual assets or
cash-generating units are tested for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset's or
cash-generating unit's carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of fair value, reflecting market conditions
less costs to sell and value in use, based on an internal discounted cash flow
evaluation. Impairment losses recognised for cash-generating units, to which
goodwill has been allocated, are credited initially to the carrying amount of
goodwill. Any remaining impairment loss is charged pro rata to the other assets
in the cash generating unit. With the exception of goodwill, all assets are
subsequently reassessed for indications that an impairment loss previously
recognised may no longer exist.
Financial assets
The Company's financial assets include available for sale financial assets, cash
and amounts due from associate and other receivables. All financial assets are
recognised on entering into contractual arrangements. All financial assets are
initially recognised at fair value, plus transaction costs.
Derecognition of financial assets occurs when the rights to receive cash flows
from the investments expire or are transferred and substantially all of the
risks and rewards of ownership have been transferred. An assessment for
impairment is undertaken at least at each balance sheet date whether or not
there is objective evidence that a financial asset or a group of financial
assets is impaired.
Amounts due from associate and other receivables are provided against when
objective evidence is received that the Company will not be able to collect all
amounts due to it in accordance with the original terms of the receivables. The
amount of the write-down is determined as the difference between the asset's
carrying amount and the present value of estimated future cash flows.
Available for sale financial assets include non - derivative financial assets
that are either designated to this category or do not qualify for inclusion in
any other categories of financial assets. All financial assets of the category
are subsequently measured at fair value, unless otherwise disclosed, with
changes in value recognised in equity, net of any effects arising from income
taxes. Gains and losses arising from securities classified as available for
sale financial assets are recognised in the income statement when they are sold
or when the investment is impaired. In the case of impairment any loss
previously recognised in equity is transferred to the income statement. Gains
on equity instruments are not then recycled through the income statement as
these are dealt with in reserves.
Cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents comprise
cash in hand and amounts repayable on demand with banks and short-term highly
liquid investments which are readily convertible into known amounts of cash
without notice and which were within three months of maturity when acquired.
Equity
An equity instrument is any contract that evidences a residual interest in the
assets of an entity after deducting all of its liabilities.
Share capital is determined using the nominal value of shares that have been
issued.
The share premium account represents premiums received on the initial issuing of
the share capital. Any transaction costs associated with the issuing of shares
are deducted from share premium, net of any related income tax benefits.
Shares to be issued represent future shares to be issued under arrangements in
place at the balance sheet date.
The revaluation reserve reflects changes in the value of available for sale
financial assets.
Foreign currency translation differences are included in the translation
reserve.
The share based payment reserve represents the value of services provided under
share based payments.
The profit and loss account includes all current and prior period results as
disclosed in the income statement.
Share based payments
All share based payment arrangements are recognised in the financial statements.
Details of share based remuneration are set out in note 14 to the interim
report.
All services received in exchange for the grant of any share based remuneration
are measured at their fair values. These are indirectly determined by reference
to the fair value of the share options/warrants awarded. Their value is
appraised at the grant date and excludes the impact of any non-market vesting
conditions (for example, profitability and sales growth targets).
Share based payments are ultimately recognised as an expense in profit or loss
or included as part of the cost of share issues with a corresponding credit to
the share based payment reserve, net of deferred tax where applicable. If
vesting periods or other vesting conditions apply, the expense is allocated over
the vesting period, based on the best available estimate of the number of share
options/warrants expected to vest. Non-market vesting conditions are included in
assumptions about the number of options that are expected to become exercisable.
Estimates are subsequently revised, if there is any indication that the number
of share options/warrants expected to vest differs from previous estimates. No
adjustment is made to the expense or share issue cost recognised in prior
periods if fewer share options/warrants ultimately are exercised than originally
estimated.
Upon exercise of share options/warrants, the proceeds received net of any
directly attributable transaction costs up to the nominal value of the shares
issued are allocated to share capital with any excess being recorded as share
premium.
Financial liabilities
Financial liabilities represent obligations to deliver cash or another financial
asset to another entity. The Company's financial liabilities include trade and
other payables.
Financial liabilities are recognised when the Company becomes a party to the
contractual agreements of the instrument. All interest related charges are
recognised as an expense in "finance cost" in the income statement.
Trade payables are recognised at their nominal value.
Taxation
Current income tax assets and/or liabilities comprise those obligations to, or
claims from, fiscal authorities relating to the current or prior reporting
period, that are unpaid at the balance sheet date. They are calculated according
to the tax rates and tax laws applicable to the fiscal periods to which they
relate, based on the taxable result for the year. All changes to current tax
assets or liabilities are recognised as a component of tax expense in the income
statement.
Deferred income taxes are calculated using the liability method on temporary
differences. This involves the comparison of the carrying amounts of assets and
liabilities in the consolidated financial statements with their respective tax
bases. In addition, tax losses available to be carried forward as well as other
income tax credits to the Company are assessed for recognition as deferred tax
assets.
Deferred tax liabilities are always provided for in full. Deferred tax assets
are recognised to the extent that it is probable that they will be able to be
offset against future taxable income. Deferred tax assets and liabilities are
calculated, without discounting, at tax rates that are expected to apply to
their respective period of realisation, provided they are enacted or
substantively enacted at the balance sheet date.
Most changes in deferred tax assets or liabilities are recognised as a component
of tax expense in the income statement. Only changes in deferred tax assets or
liabilities that relate to a change in value of assets or liabilities that is
charged directly to equity are charged or credited directly to equity.
Dividends
Dividend distributions to shareholders are included in 'other short term
financial liabilities' when the dividends are approved by the shareholders'
meeting.
Other provisions, contingent liabilities and contingent assets
Other provisions are recognised when present obligations will probably lead to
an outflow of economic resources from the Company and they can be estimated
reliably. Timing or amount of the outflow may still be uncertain. A present
obligation arises from the presence of a legal or constructive commitment that
has resulted from past events, for example, legal disputes or onerous contracts.
Provisions are measured at the estimated expenditure required to settle the
present obligation, based on the most reliable evidence available at the balance
sheet date, including the risks and uncertainties associated with the present
obligation. Any reimbursement expected to be received in the course of
settlement of the present obligation is recognised, if virtually certain as a
separate asset, not exceeding the amount of the related provision. Where there
are a number of similar obligations, the likelihood that an outflow will be
required in settlement is determined by considering the class of obligations as
a whole. In addition, long term provisions are discounted to their present
values, where time value of money is material.
All provisions are reviewed at each balance sheet date and adjusted to reflect
the current best estimate.
In those cases where the possible outflow of economic resource as a result of
present obligations is considered improbable or remote, or the amount to be
provided for cannot be measured reliably, no liability is recognised in the
balance sheet. Probable inflows of economic benefits to the Company that do not
yet meet the recognition criteria of an asset are considered contingent assets.
Functional currency
The functional currency of the Company is United States dollars. However, for
presentation purposes, the financial statements are prepared in United Kingdom
sterling.
Transactions in foreign currencies are translated into the presentational
currency at the approximate rates ruling on the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated
into the presentational currency at the approximate rates ruling on the balance
sheet date. Gains and losses arising on exchange from the functional to the
presentational currency are taken to the currency translation reserve in equity.
Financial instruments
Financial liabilities and equity instruments are classified according to the
substance of the contractual arrangements entered into. An equity instrument is
any contract that evidences a residual interest in the assets of the entity
after deducting all of its financial liabilities.
Where the contractual obligations of financial instruments (including share
capital) are equivalent to a similar debt instrument, those financial
instruments are classed as financial liabilities. Financial liabilities are
presented as such in the balance sheet. Finance costs and gains or losses
relating to financial liabilities are included in the statement of total return.
Finance costs are calculated so as to produce a constant rate of return on the
outstanding liability.
Where the contractual terms of share capital do not have any terms meeting the
definition of a financial liability then this is classed as an equity
instrument. Dividends and distributions relating to equity instruments are
debited direct to equity.
Key sources of estimation uncertainty and critical judgements
The key source of estimation uncertainty and critical judgement in preparing the
interim report concerns the valuation of the share options granted and the
estimate of the period over which the share options are likely to vest. The
Directors have decided that a vesting period of three years is most likely and
therefore the fair value of share options granted is being charged to the income
statement over this period.
3 SEGMENTAL REPORTING
(a) By business segment (primary segment):
As defined under International Accounting Standard 14 (IAS14), the only material
business segment the Company has is that of an investment company.
(b) By geographical segment (secondary segment):
Under the definitions contained in IAS 14, the only material geographic segment
that the Company operates in is currently Dubai.
4 FINANCE INCOME
Unaudited Unaudited Audited
six months six months year ended
ended ended 31 December
30 June 2007 30 June 2006 2006
#'000 #'000 #'000
Interest paid and payable (45) - -
Interest received and receivable 332 4 94
287 4 94
5 EMPLOYEES REMUNERATION
Employee benefits expense
Expense recognised for employee benefits is analysed below:
Unaudited Unaudited Audited
six months six months year ended
ended ended 31 December
30 June 2007 30 June 2006 2006
#'000 #'000 #'000
Directors fees 133 20 109
Share based payment charge 1,365 - -
1,498 20 109
The average number of persons (including directors)
employed by the Company during the period was: 5 3 5
6 TAX
There is no tax charge for any period. The Company does not operate in the
United Kingdom and there is no tax arising on its operations. The relationship
between the expected tax expense at 30% and the tax expense actually recognised
in the income statement can be reconciled as follows:
Unaudited
six
months Audited
Unaudited ended year
six months 30 June ended
ended 2006 31
30 June (As December
2007 restated) 2006
#'000 #'000 #'000
Profit for the period 3,520 2,599 5,916
before taxation
Tax rate 30% 30% 30%
Expected tax expense 1,056 780 1,775
Income not subject to (1,056) (780) (1,775)
tax
Actual tax expense - - -
7 PROFIT PER ORDINARY SHARE
The calculation of the basic profit per ordinary share is based on the net
profit for the period of #3,520,000 (period ended 30 June 2006 : #2,599,000 as
restated; year ended 31 December 2006 : #5,916,000) divided by the weighted
average number of shares in issue during the period of 376,273,114 (period ended
30 June 2006 : 200,950,417; year ended 31 December 2006 : 288,715,832).
The diluted profit per ordinary share is based on a weighted average number of
shares in issue on a fully diluted basis of 380,035,845, (period ended 30 June
2006 : 204,663,148; year ended 31 December 2006 : 292,478,563).
Profit per ordinary share adjusted to exclude the impact of amortisation of
intangible assets within the associate and the share options charge is
calculated as follows:
Unaudited
six
Unaudited months Audited
six ended year
months 30 June ended
ended 2006 31
30 June (As December
2007 restated) 2006
#'000 #'000 #'000
Profit for the 3,520 2,599 5,916
period before
taxation
Amortisation of 5,617 1,875 7,494
intangible asset
within associate
Share options charge 1,365 - -
Adjusted profit for 10,502 4,474 13,410
the period before
taxation
Based on the adjusted profit for the period before taxation and the basic and
fully diluted weighted average number of shares in issue as detailed above, the
basic and fully diluted adjusted profit per share is as follows:
Unaudited
Unaudited six Audited
six months year
months ended ended
ended 30 June 2006 31
30 June (As December
2007 restated) 2006
pence pence pence
Basic 2.79 2.23 4.64
Diluted 2.76 2.19 4.58
8 INVESTMENT IN ASSOCIATE
Unaudited
Unaudited six months Audited
six months ended year ended
ended 30 June 2006 31 December
30 June 2007 (As restated) 2006
#'000 #'000 #'000
Additions at cost - 33,125 33,725
Profit for the period 10,444 4,621 13,979
Transferred to prepayments and accrued income (2,366) - -
Foreign exchange 109 (235) (239)
Amortisation (5,617) (1,875) (7,494)
2,570 35,636 39,971
Included in trade and other receivables (8,187) (4,386) (4,473)
Cash received from associate - - (9,267)
Net movement (5,617) 31,250 26,231
Net book value brought forward 26,231 - -
Net book value carried forward 20,614 31,250 26,231
9 AVAILABLE FOR SALE FINANCIAL ASSETS
The available for sale financial assets represent the following:-
1. Cost of acquiring a 75% interest in the net profits of commodities
investment management company AMCO Commodities LLP ("AMCO") together with the
Company's investment in the AMCO Commodities Fund Limited which is managed by
AMCO.
2. Costs of acquiring shares in LME Holdings Limited.
In accordance with the accounting policy of the Company all available for sale
financial assets are measured at fair value.
10 TRADE AND OTHER RECEIVABLES
Unaudited Unaudited Audited
30 June 30 June 31
2007 2006 December
2006
#'000 #'000 #'000
Non-current
Other 1,027 1,052 1,052
receivables
Current
Amounts due from 8,187 4,386 4,473
associate
Other 342 69 142
receivables
Prepayments and 2,726 11 157
accrued income
Trade and other 11,255 4,466 4,772
receivables, net
The non-current other receivable represents a deposit held by Sucden (UK)
Limited to support any losses which the trading team may incur. It is repayable
on termination of the agreement with Sucden (UK) Limited.
Amounts due from associate and other receivables are usually due within 30 - 120
days and do not bear any effective interest rate.
Prepayments and accrued income includes a prepaid bonus of #2.4 million to the
trading team.
The fair value of these short term financial assets is not individually
determined as the carrying amount is a reasonable approximation of fair value.
11 TRADE AND OTHER PAYABLES
Unaudited Unaudited Audited
30 June 30 June 31 December
2007 2006 2006
#'000 #'000 #'000
Trade and other 40 290 91
payables
Other creditors - 95 -
Accruals and 27 19 31
deferred income
Trade and other 67 404 122
payables, net
The fair value of trade and other payables has not been disclosed as, due to
their short duration, management considers the carrying amounts recognised in
the balance sheet to be a reasonable approximation of their fair value.
12 DEFERRED TAX ASSETS AND LIABILITIES
There are no deferred taxes arising from temporary differences at 30 June 2007,
30 June 2006 or 31 December 2006.
13 SHARE CAPITAL
Unaudited Unaudited Audited
30 June 30 June 31 December
2007 2006 2006
#'000 #'000 #'000
Authorised
1,000,000,000 ordinary shares of 0.1p 1,000 1,000 1,000
Allotted, issued and fully paid
376,273,114 (30 June 2006: 371,273,114;
31 December 2006: 376,273,114) ordinary shares of 0.1p 376 371 376
Warrants
On 8 March 2005 a warrant was issued to Strand Partners Limited, the Company's
Nominated Advisor, in connection with their role in the admission of the Company
to the AIM market. The warrant entitles Strand Partners Limited to subscribe,
at a price of 0.1p per share, for such number of ordinary shares as are
equivalent (on a fully diluted basis) to one per cent. of the issued ordinary
share capital of the Company at that time. The issued warrant may be exercised
at any time during the period from 8 March 2005 to 8 March 2010.
The fair value of the warrants granted was determined using the Black-Scholes
valuation model and #20,000 of share based expense has been included in the
share premium account as a cost of the admission to AIM which gave rise to a
share based payment reserve. No liabilities were recognised due to share based
payment transactions.
14 SHARE OPTIONS
The Company has adopted an employee Share Option Scheme (the "Employee Share
Option Scheme") in order to incentivise key management and staff. The fair
value of options granted was determined using the Black- Scholes valuation
model. Significant inputs into the calculations were as follows:
* 100% volatility based on expected share price (ascertained by reference
to historic share prices of both the Company and comparable listed
companies)
* a risk free interest rate of 5.25%
At 30 June 2007, the Company had the following options outstanding:
Market
price at
date of At 30 June Fair value
Grant issue 2007 at 30 June
Date of original grant Dates exercisable price Number 2007
After 30 April 2010 subject to
1 May 2007 any take over of the Company 0.1p 54.0p 45,500,000 53.992p
A share based payment expense of #1,365,000 has been recognised in the income
statement for the period ended 30 June 2007 (period ended 30 June 2006: #nil;
year ended 31 December 2006 : #nil).
15 RELATED PARTY TRANSACTIONS
In the period ended 30 June 2007 companies within a group headed by a
shareholder in the Company, charged fees amounting to #221,853 for accounting
and administrative services to the Company (period ended 30 June 2006 :
#207,611; year ended 31 December 2006: #444,763).
16 FINANCIAL INSTRUMENTS
The Company uses financial instruments comprising cash and equity investments.
The Company seeks to manage financial risk, to ensure sufficient liquidity is
available to meet foreseeable needs and to invest cash safely and profitably.
The Company is exposed to a variety of financial risks which result from both
its operating and investing activities. The Company's risk management is
closely monitored by the board of directors, and focuses on actively securing
the Company's short to medium term cash flows by minimising the exposure to
financial markets.
Borrowing facilities
The Company has no borrowing facilities available to it.
Interest rate risk
The Company finances its operations through cash at bank and through share
capital raised. All financial assets earn interest at floating rates, based
upon Bank of England base rates.
The Company seeks to manage financial risks to ensure sufficient liquidity is
available to meet foreseeable needs and to invest cash assets safely and
profitably. The Company is exposed to interest rate risk as it has significant
cash deposits. Exposures are managed by depositing funds in short term bank
accounts. The cash and cash equivalents are invested such that the maximum
available interest rate is achieved.
The Company currently has no financial liabilities with floating interest rates.
Market price risk
The Company's exposure to market price risk consists mainly of uncertainty
concerning future movements in the level or volatility of market prices of
metals traded on the London Metals Exchange in which the trading team hold a
position. This risk arises due to the Company bearing the full losses, if
incurred, of the trading team. This risk is managed by the use of various
mechanisms put in place by Sucden (UK) Limited who control the trading team.
The Company monitors the exposure via regular reports from Sucden (UK) Limited.
Foreign currency risk
The principal foreign currency in which the Company earns income is United
States Dollars and therefore the Company's profits can be affected significantly
by movements in US dollar exchange rates. The Company does not seek to hedge
this exposure, instead it operates bank accounts in both dollars and sterling in
an attempt to mitigate its downside exposure to currency fluctuations.
Included within trade and other receivables in an amount of #8.2 million which
is receivable in US$.
--------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR OKPKDKBKBDCB
Commoditrade (LSE:CMM)
Historical Stock Chart
From Jun 2024 to Jul 2024
Commoditrade (LSE:CMM)
Historical Stock Chart
From Jul 2023 to Jul 2024
