TIDMCRS
15 March 2016
Crystal Amber Fund Limited
(the 'Fund' or the 'Company')
Interim Results for the period ended 31 December 2015
The Company announces its interim results for the six months ended 31 December
2015.
Highlights:
* Net asset value ("NAV") per share fell 7.3 per cent over the six-month
period to 155.9p per share at 31 December 2015. Including the dividend paid
in August 2015, NAV total return per share over the six months ended 31
December 2015 was -5.9 per cent. Over the 2015 calendar year, NAV rose 2.1
per cent and NAV total return per share was 3.7 per cent.
* Net realised gains over the six months to 31 December 2015 were GBP3.1
million.
* Dividends of 2.5p per share were paid in August 2015 and February 2016, in
line with the revised dividend policy announced in December 2014.
* Continued engagement with the Fund's main investee companies, particularly
Grainger plc, Hurricane Energy plc and Pinewood Group plc.
* Significant positive contributions to NAV from Dart Group plc, STV Group
plc and Leaf Clean Energy Company.
* The Fund continued its share buyback programme as part of its discount
management policy. Over the six months to 31 December 2015, the shares
traded at an average 0.7 per cent premium to NAV.
* After the period end, the 6.1 million shares held in treasury were sold at
NAV.
* In February 2016 Pinewood Group plc announced a strategic review to
evaluate ways to maximise value.
* Following the Fund's request to Grainger plc for a strategic review, the
outcome was announced in January 2016. The Fund's active engagement is
continuing.
William Collins, Chairman of Crystal Amber Fund, comments:
"In the six months to 31 December 2015, we intensified our engagement with our
main investee companies and this resulted in significant progress toward
realisation of value in some of our biggest holdings, progress which we expect
to continue in 2016. Though market conditions have been and remain
challenging, the Fund will continue to focus on predominantly asset backed
special situations and our activist approach which has proved its
effectiveness. The Fund continues to maintain a cautious stance, undertaking
portfolio hedging as insurance against a significant fall in markets.
Enquiries
Crystal Amber Fund Limited
William Collins (Chairman) Tel: 01481 716 000
Allenby Capital Limited - Nominated Adviser
David Worlidge/James Thomas Tel: 020 3328 5656
Numis Securities Limited - Broker
Nathan Brown/Hugh Jonathan Tel: 020 7260 1426
Crystal Amber Advisers (UK) LLP - Investment Adviser
Richard Bernstein Tel: 020 7478 9080
Chairman's Statement
I hereby present the interim results of Crystal Amber Fund Limited ("the
Company" or "the Fund"), for the six months to 31 December 2015 ("the period").
Over the period, net asset value ("NAV") per share fell 7.3 per cent to an
unaudited 155.9p per share at 31 December 2015 (168.26p at 30 June 2015). Total
return over the period, including the dividend paid, was -5.9 per cent. This
compares to a total return of -2.0 per cent for the FTSE All Share Index and
-0.9 per cent for the Numis Smaller Companies Index. Over the 2015 calendar
year, the Fund's total return was 3.7 per cent, which compares to a total
return of 1.0 per cent for the FTSE All Share and 8.8 per cent for Numis
Smaller Companies Index.
The economic backdrop was one of fragile recovery in advanced economies, led by
the US, and slowdown and uncertainty in emerging markets, led by China.
Geopolitical instability in the Middle East triggered a refugee and
humanitarian crisis. The Eurozone continued to experience problems, although
there were signs of economic recovery. The US Federal Reserve's first interest
rate rise for seven years did not improve confidence, and falling oil and metal
prices added to nervousness about global economic prospects. The Fund's
outlook and portfolio positioning remained cautious, with portfolio hedging in
place as insurance against a significant fall in markets.
At 31 December 2015, the Fund held GBP13.7m cash, equivalent to 13.8p per share
or 8.8 per cent of NAV. Cash and accrued income amounted to 14.8p per share,
9.5 per cent of NAV; this gives the Fund scope to take advantage of new
investment opportunities.
The discount management policy continued, with further share buybacks. The
Fund's share price traded at an average premium to NAV of 0.7% over the period.
During the period, 250,000 shares were purchased into treasury at an average
cost of 156.85 pence, with a total of 295,000 shares held in treasury being
sold during the period at an average price of 171.56 pence. After the period
end, the 6,118,486 shares held in treasury were sold at NAV.
The Fund continues to purchase FTSE put options as insurance against a
significant market sell-off. The net cost of these options amounted to 1.9 per
cent. of NAV over the period to 31 December 2015. From the period end to 29
February 2016, these options contributed 0.3 per cent. to NAV or 0.5p per
share.
The new dividend policy announced in December 2014 aims to distribute income
and net realised gains from investments. In keeping with the policy, a
dividend of 2.5p per share in respect of the six months ended 30 June 2015 was
paid on 14 August 2015 and an interim dividend of 2.5p per share in respect of
the six months ended 31 December 2015 was paid on 19 February 2016, making a
total of 5p per share for the 2015 calendar year. Based on the NAV at 31
December 2015, this represents a dividend yield of approximately 3.2 per cent.
William Collins
Chairman
14 March 2016
Investment Manager's Report
Strategy and performance
During the period, the Fund continued to engage closely with the boards of its
major holdings.
At 31 December 2015, equity holdings represented 90.5 per cent of net assets.
Cash reserves at the period end were GBP13.7 million, and cash and accruals
amounted to GBP14.7 million (14.8p per share).
The table below lists the top ten holdings at 31 December 2015, with the
performance contribution of each during the six month period. The main
positive contributions came from Dart Group plc (2.8 per cent), Leaf Clean
Energy Co. (2.0 per cent) and STV Group plc (1.4 per cent). Negative
contributions over the period included Hurricane Energy PLC (-3.4 per cent),
which has been affected by the continuing weakness of oil prices, and, outside
the top ten holdings, from Tribal Group plc (-3.2 per cent).
Net realised gains for the period were GBP3.1 million. This compares with GBP6.6
million for the six months ended 31 December 2014 and GBP24.4 million for the
year ended 30 June 2015 including an GBP8.7 million gain on its holding in Aer
Lingus and GBP7.5 million on its holding in Thorntons as announced on 8 September
2015, following the takeovers of these companies. While the Fund continues to
work towards realising value from all its holdings, the timing of realisations
is naturally uneven.
Top ten holdings Pence per Percentage of Total Contribution
share investee return over to NAV
equity held the period performance
Grainger plc 35.6 3.4% 2.7% 0.6%
STV Group plc 15.0 6.9% 18.5% 1.4%
Dart Group plc 14.9 1.6% 49.9% 2.8%
Leaf Clean Energy Co. 14.1 29.9% 31.1% 2.0%
Pinewood Group plc 10.9 4.1% -4.6% -0.3%
Hurricane Energy plc 10.0 14.6% -38.8% -3.4%
Sutton Harbour Holdings 9.1 29.3% -11.4% -0.7%
plc
Coats Group plc 8.8 2.4% -4.8% -0.2%
Hansard Global plc 5.1 3.1% 23.3% 0.5%
NBNK Investments plc 4.7 28.2% 4.8% 0.0%
Total of ten largest 128.2
holdings
Other investments 12.9
Cash and accruals 14.8
Total NAV 155.9
Investee Companies
Grainger plc ("Grainger")
Grainger is the UK's largest listed residential property owner and manager.
Since our initial engagement we have urged the board to streamline the
business, cut its administration costs and reduce the quantum and cost of debt.
In July 2015 we requested that Grainger carry out a strategic review.
During the period, Grainger sold its stake in a German joint venture and
announced its intention to sell its wholly-owned German portfolio. It also
refinanced its UK syndicated bank debt, reducing its cost and extending its
maturity, and implemented management changes, following which it now has a new
chief executive officer and finance director.
After the end of the period, on 4 January 2016, Grainger announced the exchange
of contracts, subject to regulatory approval, to sell its Equity Release
division on or before 30 May 2016 for an estimated gross consideration of GBP325
million, comprising GBP175 million cash and the transfer to the buyer of GBP150
million debt. Grainger said the sale would significantly reduce its financial
and operational costs.
On 28 January 2016 Grainger announced the outcome of its strategy review, which
includes plans to reduce overheads through a streamlined structure, exit
non-core development assets and reduce financing costs with a target of 4 per
cent cost of debt. It also announced plans to invest over GBP850 million by 2020
into the private rented sector to drive the growth of rental income and
dividends.
The Fund welcomes and supports Grainger's actions to streamline the business
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and cut costs; however we remain concerned both with the pace and scope of cost
cutting. We note that last year Grainger, with a GBP900 million market
capitalisation, incurred administrative costs of GBP42 million. Mountview
Estates, a company in the same sector with a market capitalisation of GBP450
million, incurred administrative costs of GBP5 million. Neither is the Fund
convinced of the merits of investing GBP850 million into the private rental
sector rather than reducing debt, particularly at the time of global financial
uncertainty for asset classes.
We continue to believe that further significant value can be realised through
either a spin-off of the regulated tenancies division or a sale of Grainger.
Pinewood Group plc ("Pinewood")
Pinewood's studios are among the leading global facilities in the film
industry. Against a very favourable backdrop of major film releases including
the latest James Bond film, Spectre, and Star Wars Episode VII: - The Force
Awakens, Pinewood's profit after tax for the six months to June 2015 rose just
GBP0.5 million to GBP4.3 million. The Fund believes that the business could be run
more efficiently, that running costs are too high and that consequently
profitability is below potential. The Fund commissioned its own analysis from
industry experts and this concluded that operating profits at Pinewood could be
increased by more than 50 per cent.
The Fund's Investment Adviser met the chief executive of Pinewood, Ivan
Dunleavy, on 2 December 2015 and proposed to Pinewood that it would pay for
management consultants to carry out work at Pinewood to recommend ways in which
profitability could be improved. In January 2016, the board of Pinewood
rejected the proposal.
The Fund believes that management incentives should be closely aligned with
shareholders' interests. Pinewood's chairman, Lord Grade of Yarmouth and chief
executive Ivan Dunleavy, who have been in their posts since 2000, own only
17,500 shares and 177,584 shares respectively, representing a combined 0.34 per
cent of Pinewood's issued share capital.
On 10 February 2016, after the period end, Pinewood said that management's
expectations of performance for the year to 31 March were higher than at the
time of the interim results. Pinewood's board appointed Rothschild "to assist
with a strategic review of the overall capital base and structure, which could
include a sale of the company". The Fund believes that whilst the strategic
review may result in the release of value at Pinewood through a possible sale,
this would have been unnecessary had management run the business more
efficiently.
At 29 February 2016 the Fund held 3.646 million Pinewood shares, equal to 6.35
per cent of Pinewood's issued share capital, with a market value and a cost of
GBP18.5 million and GBP14.4 million respectively.
STV Group plc ("STV")
STV broadcasts "free to air" TV in Scotland through the Channel 3 licence,
which is served by ITV in most of the UK.
On 27 August 2015, STV reported interim results in line with expectations, and
increased its dividend. On 24 February 2016, at its preliminary results, it
announced plans to launch an enhanced digital news service in March 2016.
The Fund regards STV as the holder of a valuable franchise with opportunities
to expand its production activities. Since the period end, the Fund has
increased its holding to 7.07 per cent.
Leaf Clean Energy Company ("Leaf")
Leaf is an investment company focused on clean energy, largely in North
America.
We maintained frequent contact with the Leaf board during the period and are
reassured by the speed and seriousness with which it has tackled the challenges
it inherited.
Since July 2014 Leaf's strategy has been to realise its assets at appropriate
times and return capital to shareholders. On 28 September 2015, Leaf reported
results for the year to June 2015, including the realisation of three
investments and a capital return of 5 pence per share.
In July 2015, Leaf 's main investee company, Invenergy Wind, agreed a disposal
of assets to Terraform Power worth $3 billion. Leaf did not consent to the
disposal and in December 2015 filed a complaint seeking a payment by Invenergy
to Leaf of US$126 million. Leaf expects Invenergy to contest the complaint.
In its 30 June 2015 annual accounts, Leaf valued its 2.3 per cent investment in
Invenergy at US$95 million. This currently equates to approximately 68 pence
per share which compares to Leaf's share price as at 29 February 2016 of 37
pence. The fund holds 35.3million shares in Leaf.
To date, Leaf has been a successful investment for the Fund and an example of
unlocking shareholder value through positive engagement. We support Leaf's
board in its efforts to realise and return value.
Hurricane Energy plc ("Hurricane")
Hurricane is an oil exploration company which targets naturally fractured
basement rock reservoirs in the West of Shetlands area, where it has made two
discoveries.
The steep fall in the crude oil price inevitably affected Hurricane's share
price over the period; the weakness of crude prices has persisted into 2016.
The Fund has engaged with Hurricane and supported its efforts to "farm out" its
assets.
To improve our understanding of Hurricane's assets we commissioned independent
research, which has underpinned our view of their quality and potential value.
The Fund is Hurricane's largest shareholder and firmly believes in the
intrinsic long term value of its assets.
Since the period end, Hurricane's chairman has been replaced, reflecting the
wishes of the Fund.
Dart Group plc ("Dart")
Dart is the parent group of leisure airline Jet2 and fresh produce distributor
Fowler Welch.
On 19 November 2015, Dart reported strong increases in turnover and profits for
the six months to 30 September 2015. During the period Dart announced orders
for a total of 30 new Boeing 737-800NG aircraft. In our view this reflects
confidence in the growth of the airline operation.
We would welcome further engagement with Dart's board and management to provide
a deeper understanding of the business and its potential. We believe that a
wider understanding of the business in the investment community would improve
the shares' rating.
Sutton Harbour Holdings plc ("Sutton Harbour")
Sutton Harbour owns and operates Sutton Harbour in Plymouth's historic old
port, operates the King Point Marina and holds the lease on the 113-acre site
of the former Plymouth Airport.
On 1 December 2015 it reported increased profits for the six months to 30
September 2015 and an increase in net asset value per share from 42 pence to
43.1 pence, compared to the current share price (26.65 pence).
Sutton Harbour supports the development of the former airport site, which could
release further value. The report of a government review into the future of
the site is expected, but the date of the report is uncertain.
The Fund continues to engage with Sutton Harbour's board and management and
supports its efforts to release value.
Coats Group plc ("Coats")
Coats Group is the world's largest supplier of thread and the second largest
maker of zips and fasteners.
It has been seeking to resolve historic pension issues, as a resolution could
free Coats to use its cash more productively. The Fund supports Coats' board
and management in these efforts.
In November 2015, Coats announced plans to delist its shares in New Zealand and
Australia in June 2016, following which the shares would trade only on the
London Stock Exchange. Over the two years to November 2015, New Zealand and
Australian investors reduced their holdings from 55 per cent to 14 per cent of
Coats. We will be interested to see how the share price responds when this
selling ends.
Hansard Global plc ("Hansard")
Hansard provides long term savings globally from its base in the Isle of Man.
From our initial investment in 2012 we have engaged actively with Hansard and
advocated the renewal of the board and a new commercial strategy to meet demand
for offshore savings products.
Since 2013 Hansard has appointed a chief executive, a new chairman, made other
management changes and completed a review of its sales strategy with expansion
plans in areas such as the Middle East and Asia. We continue to engage with
the board and support its sales strategy, which we see as having potential to
deliver a lower risk book of business, with potential to scale up.
The new strategy has taken time to implement but we believe the benefits are
now beginning to come through. During the period Hansard reported encouraging
business growth and increased dividends. Following the period end, in January
2016, it reported further strong growth in new business.
NBNK Investments plc ("NBNK")
NBNK was formed in 2010 to seek to build a UK retail bank, primarily by
acquisition. Its board has said that if this plan did not succeed it would
consider whether to return surplus funds to shareholders. On 10 August 2015,
it reported cash of GBP19.8 million (36.8 pence per share). This compares to a
share price on 29 February 2016 of 30 pence.
On 7 January 2016 NBNK reported that it was in discussions with target
companies with "a realistic prospect for an acquisition" and extended its
deadline for considering a return of funds to 11 April 2016.
Other holdings
Outside the top ten holdings the most significant holding with negative
performance was Tribal Group plc (-3.2 per cent) and the most significant
positive contributor was 4imprint Group plc (+0.5 per cent).
Tribal Group plc ("Tribal")
Tribal provides student management systems to schools and colleges in the UK,
Australia and elsewhere. In March 2015 the Fund reduced its holding at 176
pence per share.
On 19 October 2015 Tribal warned that lengthening procurement timelines at its
larger customers would significantly affect operating profits. The Fund then
increased its holding to 6.4 per cent, paying 67 pence per share.
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On 17 November 2015 Tribal announced board changes including a new chairman. On
14 December 2015 it issued a further profit warning and announced plans to
reduce debt through a rights issue of up to GBP35 million (of which GBP30 million
is underwritten) in the first quarter of 2016.
In February a new CEO was appointed at Tribal.
The size and pricing of the rights issue have yet to be determined. The hiatus
has contributed to a substantial fall in Tribal's share price to 44p, reducing
its market capitalisation to GBP42 million.
The Fund's holding in Tribal represents approximately 1.5 per cent of net asset
value.
Activist investment process
The Fund originates ideas mainly from its screening processes and its network
of contacts, including its institutional shareholders. Companies are valued
with focus on their replacement value, cash generation ability and balance
sheet strength. In the process, the Fund's goal is to examine the company both
'as it is' and also 'as it could be' to maximise shareholder value.
Investments are typically made after an initial engagement, which in some cases
may have been preceded by the purchase of a modest position in the company,
which allows us to meet the company as a shareholder. Engagement includes
dialogue with the company chairman and management, and normally also several
non-executive directors, as we build a network of knowledge around our
holdings. Site visits are undertaken to deepen our research and where
appropriate, independent research is commissioned. We attend investee company
annual general meetings to maintain close contact with the board and other
stakeholders.
Wherever possible, the Fund strives to develop an activist angle and aims to
contribute to the companies' strategy with the goal of maximising shareholder
value. Where value is hidden or trapped, we look for ways to realise it. Most
of the Fund's activism has taken place in private, but the Fund remains willing
to make its concerns public when appropriate. The response of management and
boards to our suggestions has generally been encouraging. We remain determined
to ensure that our investments deliver their full potential for all
shareholders, and are committed to engage to the degree required to achieve
this.
Realisations
Over the period net realised gains amounted to GBP3.1 million. The Fund realised
part of its holding in 4Imprint at a profit of GBP2.0 million. It realised GBP0.9
million of profits from Leaf Clean Energy's share redemption.
Previous profitable exits include Aer Lingus, Thorntons, Pinewood Shepperton,
Norcros, 3i Quoted Private Equity, Delta PLC, Kentz Corporation, Tate & Lyle
and Chloride Group.
Hedging Activity
The Fund continues to purchase FTSE put options as insurance against a
significant market sell-off. The net cost of these options amounted to 1.9 per
cent of NAV over the period to 31 December 2015.
Outlook
A year ago we stated: 'we believe that the underlying causes of the global
financial crisis, including excessive debt, have not been addressed. The key
driver of asset prices has been unprecedented loose monetary policy. In our
view markets remain vulnerable to significantly reduced liquidity when monetary
policies normalise. Our views have not changed. Of late, markets have been weak
amid renewed concerns of financial instability and growing concerns about the
strength of emerging economies, particularly China.
These issues make the global outlook uncertain and challenging. We believe that
the Fund is defensively positioned and its investee companies can look to a
combination of self-help and our active engagement. Our hedging activity gives
us some additional protection against a significant market sell-off. Over the
period from 31 December 2015 to 29 February 2016 the options contributed 0.3
per cent to NAV or 0.5p per share.
Crystal Amber Asset Management (Guernsey) Limited
Investment Manager
Condensed Statement of Comprehensive Income (Unaudited)
For the six months ended 31 December 2015
Six months ended 31 December Six months ended 31 December
2015 2014
(Unaudited) (Unaudited)
Revenue Capital Total Revenue Capital Total
Notes GBP GBP GBP GBP GBP GBP
Income
Dividend income 923,915 - 923,915 1,573,199 - 1,573,199
from listed
investments
Other income - - - 2,226 - 2,226
Fixed deposit 48 - 48 - - -
interest
Bank interest 10,471 - 10,471 2,117 - 2,117
934,434 - 934,434 1,577,542 - 1,577,542
Net gains on
financial assets
at fair value
through profit
or loss
Equities
Net realised 4 - 3,102,272 3,102,272 - 6,645,943 6,645,943
gain
Movement in 4 - (8,957,963) (8,957,963) - (12,822,335) (12,822,335)
unrealised
losses
Money Market
Investments
Realised gain 4 - - - - 4,217 4,217
Movement in 4 - 4,496 4,496 - (4,190) (4,190)
unrealised gains
/(losses)
Derivative
Financial
Instruments
Realised (loss)/ 4 - (190,420) (190,420) - 992,190 992,190
gain
Movement in 4 - (2,727,640) (2,727,640) - (131,995) (131,995)
unrealised
losses
Total income/ 934,434 (8,769,255) (7,834,821) 1,577,542 (5,316,170) (3,738,628)
(loss)
Expenses
Transaction - 133,100 133,100 - 328,170 328,170
costs
Exchange - (378,656) (378,656) - 636,460 636,460
movements on
revaluation of
investments
Management fees 8 1,314,947 - 1,314,947 1,080,166 - 1,080,166
Directors' 57,500 - 57,500 57,408 - 57,408
remuneration
Administration 91,965 - 91,965 70,156 - 70,156
fees
Custodian fees 38,621 - 38,621 29,307 - 29,307
Audit fees 10,091 - 10,091 9,911 - 9,911
Other expenses 97,549 - 97,549 66,301 - 66,301
1,610,673 (245,556) 1,365,117 1,313,249 964,630 2,277,879
(Loss)/Return (676,239) (8,523,699) (9,199,938) 264,293 (6,280,800) (6,016,507)
for the period
Basic and 2 (0.73) (9.20) (9.93) 0.35 (8.27) (7.93)
diluted (loss)/
earnings per
share (pence)
All items in the above statement derive from continuing operations.
The total column of this statement represents the Company's Statement of
Comprehensive Income prepared in accordance with International Financial
Reporting Standards. The supplementary income return and capital return columns
are presented under guidance published by the Association of Investment
Companies ("AIC").
The Notes to the Unaudited Condensed Financial Statements below form part of
these financial statements.
Condensed Statement of Financial Position (Unaudited)
As at 31 December 2015
As at As at As at
31 December 30 June 31 December
2015 2015 2014
(Unaudited) (Audited) (Unaudited)
ASSETS Notes GBP GBP GBP
Cash and cash equivalents 7,673,427 19,500,047 1,565,319
Trade and other receivables 347,738 295,487 932,733
Financial assets designated at fair 4 137,009,952 142,663,130 112,682,338
value through profit or loss
Total assets 145,031,117 162,458,664 115,180,390
LIABILITIES
Trade and other payables 227,325 6,253,178 156,057
Total liabilities 227,325 6,253,178 156,057
EQUITY
Capital and reserves attributable to
the Company's equity shareholders
Share capital 5 989,998 989,998 782,297
Treasury shares 6 (8,972,339) (9,009,985) (4,117,527)
Distributable reserve 111,941,615 114,181,017 82,543,503
Retained earnings 40,844,518 50,044,456 35,816,060
Total equity 144,803,792 156,205,486 115,024,333
Total liabilities and equity 145,031,117 162,458,664 115,180,390
Net asset value per share (pence) 3 155.90
168.26 152.72
The financial statements were approved by the Board of Directors and authorised
for issue on 14 March 2016.
Christopher
Waldron
Nigel Ward
Director
Director
14 March
2016
14 March 2016
The Notes to the Unaudited Condensed Financial Statements below form part of
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these financial statements.
Condensed Statement of Changes in Equity (Unaudited)
For the six months ended 31 December 2015
Share Treasury Distributable Retained earnings Total
Notes Capital Shares Reserve Capital Revenue Total Equity
GBP GBP GBP GBP GBP GBP GBP
Opening balance 989,998 (9,009,985) 114,181,017 49,606,601 437,855 50,044,456 156,205,486
at 1 July 2015
Purchase of 6 - (393,061) - - - - (393,061)
Company shares
into treasury
Sale of Company 6 - 430,707 - - - - 430,707
shares from
treasury
Premium on sale - - 75,405 - - - 75,405
of Company
shares from
treasury
Dividends paid 7 - - (2,314,807) - - - (2,314,807)
in the period
Loss for the - - - (8,523,699) (676,239) (9,199,938) (9,199,938)
period
Balance at 31 989,998 (8,972,339) 111,941,615 41,082,902 (238,384) 40,844,518 144,803,792
December 2015
Share Treasury Distributable Retained earnings Total
Notes Capital Shares Reserve Capital Revenue Total Equity
GBP GBP GBP GBP GBP GBP GBP
Opening balance 782,297 (2,483,196) 82,926,112 41,249,276 583,291 41,832,567 123,057,780
at 1 July 2014
Purchase of - (1,634,331) - - - - (1,634,331)
Company shares
into treasury
Dividends paid - - (382,609) - - - (382,609)
in the period
Return/(Loss) - - - 264,293 (6,280,800) (6,016,507) (6,016,507)
for the period
Balance at 31 782,297 (4,117,527) 82,543,503 41,513,569 (5,697,509) 35,816,060 115,024,333
December 2014
The Notes to the Unaudited Condensed Financial Statements below form part of
these financial statements.
Condensed Statement of Cash Flows (Unaudited)
For the six months ended 31 December 2015
Six months Six months
ended ended
31 December 31 December
2015 2014
(Unaudited) (Unaudited)
GBP GBP
Cashflows from operating activities
Dividend income received from listed investments 679,359 745,983
Fixed deposit interest received 48 -
Bank interest received 11,502 6,103
Other income received - 2,226
Management fees paid (1,314,947) (1,080,168)
Performance fee paid (653,962) (1,747,285)
Directors' fees paid (57,500) (48,271)
Other expenses paid (247,381) (201,469)
Net cash outflow from operating activities (1,582,881) (2,322,881)
Cashflows from financing activities
Purchase of Company shares into treasury (393,061) (1,634,331)
Sale of Company shares from treasury 506,112 -
Dividends paid (2,314,807) (382,609)
Net cash outflow from financing activities (2,201,756) (2,016,940)
Cashflows from investing activities
Purchase of equity investments (16,855,037) (41,878,459)
Sale of equity investments 14,722,108 42,442,053
Purchase of derivative financial instruments (4,845,800) (3,453,005)
Sale of derivative financial instruments 5,069,846 3,900,550
Purchase of money market investments (6,000,000) -
Transaction charges on purchase and sale of investments (133,100) (328,170)
Net cash (outflow)/inflow from investing activities (8,041,983) 682,969
Net decrease in cash and cash equivalents during the (11,826,620) (3,656,852)
period
Cash and cash equivalents at beginning of period 19,500,047 5,222,171
Cash and cash equivalents at end of period 7,673,427 1,565,319
The Notes to the Unaudited Condensed Financial Statements below form part of
these financial statements.
Notes to the Unaudited Condensed Financial Statements
For the six months ended 31 December 2015
General Information
Crystal Amber Fund Limited was incorporated and registered in Guernsey on 22
June 2007 and is governed under the provisions of the Companies (Guernsey) Law,
2008 as amended. The Company has been established to provide shareholders with
an attractive total return which is expected to comprise primarily capital
growth but with the potential for distributions. The Company will achieve this
through the investment in a concentrated portfolio of undervalued companies
which are expected to be predominantly, but not exclusively, listed or quoted
on UK markets and which have a typical market capitalisation of between GBP100
million and GBP1,000 million.
The Company was listed and admitted to trading on the Alternative Investment
Market ('AIM'), operated by the London Stock Exchange, on 17 June 2008. The
Company is also a member of the Association of Investment Companies ('AIC').
1.SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of these financial
statements are set out below. These policies have been consistently applied
throughout the current period, unless otherwise stated.
Basis of preparation
The interim financial statements have been prepared in accordance with the
International Accounting Standard ("IAS") 34, Interim Financial Reporting.
The interim financial statements do not include all the information and
disclosures required in the annual financial statements and should be read in
conjunction with the Company's annual financial statements for the year to 30
June 2015. The annual financial statements have been prepared in accordance
with International Financial Reporting Standards ("IFRS").
The same accounting policies and methods of computation are followed in the
interim financial statements as in the annual financial statements for the year
ended 30 June 2015.
The presentation of the interim financial statements is consistent with the
annual financial statements. Where presentational guidance set out in the
Statement of Recommended Practice ("SORP") for Investment Trusts issued by the
AIC in January 2003 (revised November 2014) is consistent with the requirements
of IFRS, the Directors have sought to prepare the financial statements on a
basis compliant with the recommendations of the SORP. In particular,
supplementary information which analyses the Statement of Comprehensive Income
between items of a revenue and capital nature has been presented alongside the
total Statement of Comprehensive Income.
The Company does not operate in an industry where significant or cyclical
variations as a result of seasonal activity are experienced during the
financial year. Income and dividends from investments will vary according to
the construction of the portfolio from time to time.
Going concern
The Directors are confident that the Company has adequate resources to continue
in operational existence for the foreseeable future and do not consider there
to be any threat to the going concern status of the Company.
The Directors have specifically considered the implications of the continuation
vote scheduled to occur every two years on the application of the going concern
basis. At the AGM held on 20 November 2015, an Extraordinary Resolution was
proposed that the Company cease to continue as constituted; the resolution was
not passed. Therefore the Directors conclude that there is no material
uncertainty which may cast significant doubt on the ability of the Company to
continue as a going concern. For this reason, they continue to adopt the going
concern basis in preparing the financial statements.
Segmental reporting
The Board has considered the requirements of IFRS 8 'Operating Segments', and
is of the view that the Company is domiciled in Guernsey and is engaged in a
single segment of business, being investment mainly in UK equity instruments,
and mainly in one geographical area, the UK, and therefore the Company has only
one operating segment. The Board, as a whole, has been determined as
constituting the chief operating decision maker of the Company. The key measure
of performance used by the Board to assess the Company's performance and to
allocate resources is the total return on the Company's Net Asset Value
("NAV"), as calculated under IFRS, and therefore no reconciliation is required
between the measure of profit or loss used by the Board and that contained in
these financial statements.
2.BASIC AND DILUTED EARNINGS PER SHARE
Basic and diluted earnings per share is based on the following data:
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Six months Six months
ended ended
31 December 31 December
2015 2014
(Unaudited) (Unaudited)
Loss for the period GBP(9,199,938) GBP(6,016,507)
Weighted average number of issued Ordinary 92,674,999 75,916,930
Shares
Basic and diluted earnings per share (pence) (9.93) (7.93)
3.NET ASSET VALUE PER SHARE
Net asset value per share is based on the following data:
As at As at As at
31 December 30 June 31 December
2015 2015 2014
(Unaudited) (Audited) (Unaudited)
Net asset value per statement of GBP144,803,792 GBP156,205,486 GBP115,024,333
financial position
Total number of issued Ordinary shares 92,881,276 92,836,276 75,318,703
(excluding treasury shares)
Net asset value per share (pence) 155.90
168.26 152.72
4.FINANCIAL ASSETS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS
1 July 1 July 1 July
2015 to 2014 to 2014 to
31 December 30 June 31 December
2015 2015 2014
(Unaudited) (Audited) (Unaudited)
GBP GBP GBP
Equity investments 130,701,056 139,350,130 111,979,688
Money market investments 6,004,496 -
-
Derivative financial instruments 304,400 3,313,000 702,650
137,009,952 142,663,130 112,682,338
Equity investments
Cost brought forward 160,110,908 125,439,328 125,439,328
Purchases 11,492,838 126,294,308 37,822,732
Sales proceeds (14,664,877) (118,083,952) (40,720,310)
Net realised gain 3,102,272 26,461,224 6,645,943
Cost carried forward 160,041,141 160,110,908 129,187,693
Unrealised losses brought forward (20,171,543) (3,271,624) (3,271,624)
Movement in unrealised losses (8,957,963) (16,899,919) (12,822,335)
Unrealised losses carried forward (29,129,506) (20,171,543) (16,093,959)
Effect of exchange rate movements (210,579) (589,235) (1,114,046)
Fair value of equity investments 130,701,056 139,350,130 111,979,688
Money Market investments
Cost brought forward - 1,543,438 1,543,438
Purchases 6,000,000 20,000,000 -
Sales proceeds - (21,554,308) (1,547,655)
Realised gain - 10,870 4,217
Cost carried forward 6,000,000 - -
Unrealised gains brought forward - 4,190 4,190
Movement in unrealised gains 4,496 (4,190) (4,190)
Unrealised gains carried forward 4,496 - -
Fair value of money market investments 6,004,496 - -
Derivative financial instruments
Cost brought forward 1,078,000 582,051 582,051
Purchases 4,845,800 8,342,932 3,453,005
Sales proceeds (4,936,340) (5,767,065) (3,900,551)
Realised (losses)/gains (190,420) (2,079,918) 992,190
Cost carried forward 797,040 1,078,000 1,126,695
Unrealised gains /(losses) brought forward 2,235,000 (292,050) (292,050)
Movement in unrealised gains/(losses) (2,727,640) 2,527,050 (131,995)
Unrealised (losses)/gains carried forward (492,640) 2,235,000 (424,045)
Fair value of derivative financial instruments 304,400 3,313,000 702,650
Total financial assets designated at fair value 137,009,952 142,663,130 112,682,338
through profit or loss
At the reporting date the Company's derivative financial instruments consisted
of 2 (2014:3) FTSE 100 Index put option positions, purchased as a protection
against a significant market sell-off. The following table details the
Company's positions in derivative financial instruments:
Nominal Amount Value
31 December 2015 GBP
Derivative financial instruments
Puts on UKX P5700 (Expiry: January 2016) 1,000 50,000
Puts on UKX P5700 (Expiry: February 2016) 795 254,400
1,795 304,400
Nominal Amount Value
30 June 2015 GBP
Derivative financial instruments
Puts on UKX P6450 (Expiry: July 2015) 800 608,000
Puts on UKX P6700 (Expiry: July 2015) 1,000 1,975,000
Puts on UKX P6450 (Expiry: August 2015) 500 730,000
2,300 3,313,000
5.SHARE CAPITAL AND RESERVES
The authorised share capital of the Company is 300 million Ordinary shares of GBP
0.01 each.
The issued share capital of the Company is comprised as follows:
31 December 2015 30 June 2015
(Unaudited) (Audited)
Number GBP Number GBP
Opening balance 98,999,762 989,998 782,297
78,229,665
Ordinary shares issued during the period/year - - 20,770,097 207,701
Allotted, called up and fully paid Ordinary shares 98,999,762 989,998 98,999,762
at GBP0.01 each 989,998
6.TREASURY SHARES
Six months ended Year ended
31 December 2015 30 June 2015
(Unaudited) (Audited)
Number GBP Number GBP
Opening balance 6,163,486 1,707,856
9,009,985 2,483,196
Treasury shares purchased 250,000 393,061 4,455,630 6,526,789
during the period/year
Treasury shares sold during (295,000) (430,707) - -
the period/year
Closing balance 6,118,486 8,972,339 6,163,486
9,009,985
During the period ended 31 December 2015, 250,000 (2014: 1,203,106) treasury
shares were purchased at an average cost of 156.85p per share, and 295,000
(2014: Nil) treasury shares were sold at an average price of 171.56p per share.
7.DIVIDENDS
On 7 July 2015 the Company declared an interim dividend of GBP2,314,807, equating
to 2.5p per Ordinary share, which was paid on 14 August 2015 to shareholders on
record on the register on 17 July 2015.
Subsequent to the period end, on 13 January 2016, the Company declared an
interim dividend of GBP2,474,994, equating to 2.5p per ordinary share, which was
paid on 19 February 2016 to shareholders on record on the register on 22
January 2016.
8.RELATED PARTIES
Richard Bernstein is a Director and a member of the Investment Manager, a
member of the Investment Adviser and a holder of 10,000 (2014: 10,000) Ordinary
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