23 September 2008
COBRA CAPITAL LIMITED
("Cobra" or "the Company")
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2008
Cobra Capital Limited (AIM: COC), the small-cap investment company,
today announces its unaudited results for the six months ended 30 June 2008.
DIRECTORS' REVIEW
Background
In the full year statement for 2007 issued earlier this year, we
commented on the significant liquidity squeeze as a result of deteriorating
financial markets being one of the drivers of the sell off in the shares of
small companies. The first half of the financial year has seen this liquidity
squeeze intensify and move into more general industries and has been further
exacerbated by rising fuel costs. It is therefore not surprising that we have
witnessed the credit crunch have an effect on the trading of companies as a
result of low levels of consumer confidence, a dramatic slow down in mortgage
and other big ticket lending and concerns over inflationary pressures. The
impact of these gloomy economic factors has been a continued fall in small
company markets. The FTSE AIM All-Share Index, which suffered a fall of 8.3
per cent in the first half (significantly propped up by the 30 per cent
weighting in oil and gas stocks), has fallen a further 23 per cent in the
third quarter to date.
Results
The first half has seen a decline in the value of the Company's
quoted portfolio due mainly to a general market decline and some sector
specific issues, particularly in the financial sector where the Company has
exposure. In our view, any bad news being issued by small companies is being
severely punished, not only as a result of immediate selling pressures from
existing holders, but because of a growth in the levels of short selling being
experienced. Good news, on the other hand, is not being rewarded and share
prices are, at best, only being maintained.
The Company held investments in eight quoted companies at the
period end, down from 11 at beginning of the year, having exited from four
investments and making one new one. There has been no change in the valuation
of Cobra's two unquoted investments during the first half, although we do
anticipate one of them could show a material uplift in value before the year
end. As has been well documented recently, the IPO window, which has
historically been a significant part of our trading, remains firmly closed in
the short term for smaller companies and we anticipate it will remain closed
for the foreseeable future.
We are disappointed with the loss for the period of �0.8 million
(2007: loss �0.4 million), which was principally due to the fall in the value
of the Company's quoted portfolio. Administration costs were broadly as
expected at �0.3 million (2007: �0.2 million), the increase primarily due to
higher borrowing costs and exchange rate losses from our European investments.
During the period, Cobra reduced its level of borrowings from �1.1
million to �0.9 million at the period end. The Company's net asset value per
share ("NAV") stood at 25.62 pence, down from 34.71 pence at the beginning of
the period.
Outlook
The market for smaller companies is and will probably remain
difficult for some time and as a result liquidity in smaller company shares
will remain poor. We are disappointed with the share price performance of our
investment companies during the period, however we will be concentrating on
maintaining a close understanding of the factors affecting their operations
and will continue to encourage value creating opportunities within the
portfolio. We believe that many of the companies within the portfolio are
performing to expectations and, whilst we do not expect being able to make
significant realisations in the second half of the year, we will continue to
make efforts to control our costs in order to preserve cash for the future,
once the market returns.
Peter Griffin
Michael Cahill
Jonathan Freeman
23 September 2008
UNAUDITED STATEMENT OF TOTAL RETURN
FOR THE SIX MONTHS ENDED 30 JUNE 2008
For the six month period For the six month period For the year ended
ended 30 June 2008 ended 30 June 2007 31 December 2007
(unaudited) (unaudited) (audited)
Note Revenue Capital Total Revenue Capital Total Revenue Capital Total
� � � � � � � � �
LOSS ON
INVESTMENTS
Net loss
on investments
at fair value
through profit
or loss - (523,130) (523,130) - (207,662) (207,662) - (952,162) (952,162)
- (523,130) (523,130) - (207,662) (207,662) - (952,162) (952,162)
INCOME
Investment income 7,903 - 7,903 7,736 - 7,736 12,899 - 12,899
Bank interest 2,550 - 2,550 3,597 - 3,597 13,435 - 13,435
10,453 - 10,453 11,333 - 11,333 26,334 - 26,334
EXPENDITURE
Directors' fees 2,000 - 2,000 - - - 4,000 - 4,000
Administration fees 42,381 - 42,381 31,302 - 31,302 72,266 - 72,266
Professional fees 20,063 - 20,063 43,345 - 43,345 49,521 - 49,521
Consultancy fees - 91,211 91,211 - 64,634 64,634 - 168,602 168,602
Audit fee 7,750 - 7,750 6,045 - 6,045 13,150 - 13,150
Registrar and
regulatory expenses 13,546 - 13,546 7,645 - 7,645 25,931 - 25,931
Sundry expenses 2,074 - 2,074 - - - 1,508 - 1,508
Commissions paid - - - - - - 4,198 - 4,198
Bank charges
and interest 62,839 - 62,839 46,562 - 46,562 87,044 - 87,044
Loss on exchange 47,701 - 47,701 13,384 - 13,384 80,069 - 80,069
198,354 91,211 289,565 148,283 64,634 212,917 337,687 168,602 506,289
LOSS ON ORDINARY
ACTIVITIES FOR THE
FINANCIAL PERIOD/
YEAR BEFORE
TAXATION (187,901) (614,341) (802,242)(136,950) (272,296) (409,246) (311,353) (1,120,764)(1,432,117)
Withholding tax
suffered (42) - (42) (587) - (587) (1,144) - (1,144)
LOSS ON ORDINARY
ACTIVITIES FOR THE
FINANCIAL PERIOD/ YEAR
AFTER TAXATION (187,943) (614,341) (802,284)(137,537) (272,296) (409,833) (312,497) (1,120,764)(1,433,261)
Earnings per share
- basic
(pence per share)
2 (2.14) (6.99) (9.12) (1.56) (3.10) (4.66) (3.55) (12.75) (16.30)
All revenue and capital items in the above statement derive from continuing operations.
No operations were acquired or discontinued during the period.
UNAUDITED BALANCE SHEET
FOR THE SIX MONTHS ENDED 30 JUNE 2008
Note 30 June 2008 30 June 2007 31 December 2007
(unaudited) (unaudited) (audited)
FIXED ASSETS
Investments at fair value through
profit or loss 3,131,138 4,819,991 3,967,504
CURRENT ASSETS
Cash and cash equivalents 41,592 382,052 160,389
Debtors and prepayments - - 26,704
41,592 382,052 187,093
CREDITORS - AMOUNTS FALLING
DUE WITHIN ONE YEAR
Loans payable and overdrafts 863,433 1,098,676 1,069,181
Other creditors and accruals 56,693 30,604 33,518
920,126 1,129,280 1,102,699
NET CURRENT LIABILITIES (878,534) (747,228) (915,606)
TOTAL ASSETS LESS CURRENT LIABILITIES � 2,252,604 � 4,072,763 � 3,051,898
CAPITAL AND RESERVES
CALLED UP SHARE CAPITAL 87,932 87,932 87,932
SHARE PREMIUM ACCOUNT 3,502,568 3,502,568 3,502,568
CAPITAL RESERVE
REALISED (11,720) 455,843 187,524
UNREALISED (158,935) 745,100 164,951
SHARE OPTION RESERVE 65,980 60,427 62,990
REVENUE RESERVE (1,233,221) (779,107) (954,067)
SHAREHOLDERS' FUNDS � 2,252,604 � 4,072,763 � 3,051,898
Net asset value per share (pence per share) 3 25.62 46.32 34.71
APPROVED BY THE BOARD OF DIRECTORS
P F Griffin M T Cahill
Director Director
Date: 23 September 2008
UNAUDITED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2008
Six month Six month Year ended
period ended period ended 31 December
30 June 2008 30 June 2007 2007
(unaudited) (unaudited) (audited)
Net cash outflow from operating activities (164,318) (187,012) (390,181)
Returns on investment and servicing of finance:
Interest paid on loans payable (61,967) - (74,032)
Net cash outflow from investment and servicing of finance (61,967) - (74,032)
Investing activities:
Purchase of listed securities (237,911) (1,203,169) (3,270,498)
Purchase of unlisted securities - (144,578) (144,578)
Proceeds from disposals of listed securities 551,147 1,365,893 3,518,255
Net cash inflow from financial investment 313,236 18,146 103,179
Financing:
Loans payable repaid (205,748) - -
Loans payable received - - 500,465
Net cash (outflow)/inflow from financing (205,748) - 500,465
(Decrease)/increase in cash for the period/year � (118,797) � (168,866) � 139,431
RECONCILIATION OF NET CASHFLOW TO MOVEMENT IN CASH
AND CASH EQUIVALENTS
(Decrease)/increase in cash for the period/year (118,797) (168,866) 139,431
Cash inflow from increase in debt finance - - (500,465)
Cash outflow from decrease in debt finance 205,748 - -
Change in net debt resulting from cash flows 86,951 (168,866) (361,034)
Opening funds brought forward (908,792) (547,758) (547,758)
Closing net (debt)/funds carried forward � (821,841) � (716,624) � (908,792)
UNAUDITED NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2008
1. ACCOUNTING POLICIES
(a) CONVENTION
These unaudited interim financial statements have been prepared using the same
accounting policies, presentation and methods of computation adopted in the
last audited financial statements, which were prepared in accordance with
applicable United Kingdom Accounting Standards.
2. EARNINGS PER SHARE
The calculation of basic earnings per share is based on the return on ordinary
activities after tax for the period and on 8,793,200 shares being the weighted
average number of shares in issue during the period.
FRS 22 "Earnings Per Share" defines dilution as a reduction in earnings per
share or as an increase in loss per share. When calculating the dilutive
earnings per share the loss per share decreased; accordingly dilutive loss per
share is not disclosed. The company has 500,000 share options in issue which
could potentially dilute basic earnings per share in the future.
3. NET ASSET VALUE PER SHARE
The calculation of net asset value per share is based on the net assets of
�2,252,604 and on the ordinary shares in issue of 8,793,200 at the balance
sheet date.
The report is available to view and download from the Company's website at
www.cobracapital.net
For further information:
Peter Griffin +44 (0)1481 751 000
Cobra Capital Limited
Jonathan Freeman +44 (0)1600 750 432
Cobra Capital Limited
Geoff Nash +44 (0)20 7600 1658
FinnCap
GTH Communications +44 (0)20 7153 8035
Toby Hall/Christian Pickel
END
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