7 March 2019
Crystal Amber Fund
Limited
Interim results
for the period ended 31 December
2018
The Company announces its interim results for the six months
ended 31 December 2018.
Highlights
- Net Asset Value (“NAV”)(1) per share fell by 9.4%
over the period or 7.4% after adjusting for dividends paid.
- Over the 2018 calendar year, NAV per share grew by 18.8%, after
adjusting for the dividends paid. Over the same period, the Numis
Small Cap Index fell by 11.0%.
- NAV per share of 221.67 pence at
31 December 2018 (244.62 pence at 30 June
2018, 190.69 pence at
31 December 2017).
- In the first half of the year, the Fund realised gains in
Hurricane Energy plc, NCC Group plc, Boku Inc and Woodford Patient
Capital Trust.
- Share price discount to NAV averaged 8.4 per cent throughout
the period as the Fund continued its buy-back programme.
Christopher
Waldron, Chairman of the Fund, commented: “Despite difficult
equity markets, I am pleased to report a creditable performance
over the six-month period, and an excellent performance for 2018.
We continue to engage with management teams of our main holdings
and remain confident of making additional progress in 2019.”
For further enquiries please contact:
Crystal Amber Fund Limited |
|
Christopher Waldron (Chairman) |
Tel: 01481 742 742 |
|
|
Allenby Capital Limited - Nominated
Adviser |
|
David Worlidge/Liz Kirchner |
Tel: 020 3328 5656 |
|
|
Winterflood Investment Trusts -
Broker |
|
Joe Winkley/Neil Langford |
Tel: 020 3100 0160 |
|
|
Crystal Amber Advisers (UK) LLP -
Investment Adviser |
|
Richard Bernstein |
Tel: 020 7478 9080 |
(1) All capitalised terms
are defined in the Glossary of Capitalised Defined Terms unless
separately defined.
Chairman’s
Statement
I am pleased to present the unaudited interim results of Crystal
Amber Fund Limited (“the Fund”), for the six-month period to
31 December 2018 (“the period”).
Against a background of generally weaker equity markets, Net
Asset Value (“NAV”) fell from £238.1 million (244.62 pence per share) at 30 June 2018 to an unaudited NAV of £213.8
million (221.67 pence per share) at
31 December 2018. After adjusting for
dividends, the Fund’s fall in NAV of 7.4% compares to an 11.1% fall
by the Numis Small Cap Index. The Fund is making good activist
progress with several of its largest positions and this is
discussed further in the Investment Manager’s Report.
The fourth quarter of 2018 saw significant falls in US equities,
as the pace of monetary tightening by the Federal Reserve prompted
investors to rebalance portfolios away from relatively expensive
growth stocks. This weakness spread quickly to all major markets,
but UK investors also had to contend with the tortuous Brexit
process. At the time of writing, we are no closer to understanding
what Brexit will mean. All we currently have is a negotiated deal
that has so far failed to win parliamentary approval and while
leaving the EU with “no deal” seems an incredible prospect, it will
happen on 29 March 2019 unless a new
deal or a deferral of Brexit is agreed.
This uncertainty has eroded business confidence in the UK as
investment decisions are deferred. Forecasts of economic growth
have been downgraded and the Bank of England’s first steps to
increase interest rates have been placed on hold. This is a matter
of concern for investors as uncertainty over outcomes deters
investment and increases market volatility. The protracted nature
of the process is likely to damage future growth. Although domestic
UK equities are by many measures relatively cheap, a policy mistake
could still result in a market sell-off.
As markets weakened, the Fund continued its proactive and
accretive discount management policy of share buy-backs; during the
period 995,000 shares were acquired at an average price of
214.48 pence per share. The Fund’s
shares traded at an average discount of 8.4% over the period.
During the period under review, the Fund issued and donated
125,000 ordinary shares of £0.01 each (“Ordinary shares”) to five
different charities. Today, the Board has resolved to issue 25,000
Ordinary shares each to the following five charitable
organisations: Royal Marsden Cancer
Charity, Royal British Legion, Royal Irish Academy of Music,
Spread a Smile and Eleanor Foundation. The par value of these
125,000 shares has been paid by Richard
Bernstein.
Today’s combined donation of over £250,000 in value of Ordinary
shares brings the total value of shares gifted since March 2018 to more than £750,000. The Fund is
delighted to support such worthy causes.
Overall, I am happy to report a solid performance of the Fund
over a difficult period and excellent returns for 2018. Whilst
mindful of increased political risks, we are confident that we will
make further progress in 2019.
Christopher Waldron
Chairman
6 March 2019
Investment
Manager’s Report
Strategy and performance
During the period the Fund maintained close engagement with the
management teams of its major holdings, initiated new investments
and took profits from holdings as they reached the Fund’s target
price.
At 31 December 2018, equity
investments in 18 companies represented 88.9% of NAV. The Fund also
held other investments in those companies, including warrants, loan
notes and convertible investments that accounted for 8.1% of the
NAV. The Fund’s net cash and accruals position was £6.3 million,
net of £2.4 million accrued for the 2.5
pence per share dividend paid in January 2019.
During the period, the Fund reduced its position in Hurricane by
22% as it sold into market demand and booked a profit of £11.3
million. £5.8 million was received from a capital redemption out of
Leaf Clean Energy Company (“Leaf”), as explained in the Fund’s
previous Annual Report. The positions in NCC Group plc and Woodford
Patient Capital Trust were sold outright, realising gains of £2.5
million and £1.0 million respectively. Cash realised from those
holdings was used principally to increase the De la Rue holding by
£11.5 million and add to investments forming part of the Fund’s top
ten positions.
After adjusting for dividends paid, the Fund’s fall in value of
7.4% compares to an 11.1% fall by the Numis Small Cap index. Over
the 2018 calendar year NAV grew by 18.8%, after adjusting for the
dividends paid. The Numis Small Cap index fell by 11.0% over the
same period.
The table below lists top holdings as at 31 December 2018, showing the performance
contribution of each company during the six-month period. In
addition to these, trading in FTSE100 put options contributed 0.2%
to the NAV.
Portfolio
Top
ten shareholdings |
Pence per share |
Percentage of investee equity held |
Total return over the period |
Contribution to NAV performance(1) |
Hurricane Energy
plc |
45.0 |
5.1% |
(7.0%) |
(0.3%) |
Fair FX Group
plc |
38.7 |
20.2% |
4.4% |
0.8% |
Northgate
plc |
32.7 |
6.4% |
(2.5%) |
(0.7%) |
STV Group
plc |
27.7 |
19.7% |
(19.4%) |
(2.7%) |
De La Rue
plc |
24.3 |
5.4% |
(20.0%) |
(2.3%) |
Board Intelligence
Ltd |
4.8 |
* |
25.4% |
0.4% |
GI Dynamics
Inc. |
4.6 |
48.4% |
(53.5%) |
(0.7%) |
Sutton Harbour
Holdings plc |
3.1 |
10.0% |
(19.7%) |
(0.3%) |
Cenkos plc |
2.8 |
6.9% |
(28.9%) |
(0.5%) |
Leaf Clean Energy
Co. |
2.8 |
30.0% |
(3.0%) |
(0.1%) |
Total of ten largest
shareholdings |
186.5 |
|
|
|
Other investments |
28.6 |
|
|
|
Cash and accruals |
6.6 |
|
|
|
Total NAV |
221.7 |
|
|
|
(1) Percentage contribution
stated for equity holdings only.
*Board Intelligence Ltd is a private company and its shares are
not listed on a stock exchange. Therefore, the percentage held is
not disclosed.
Investee companies
Our comments on a number of our principal investments are as
follows:
Hurricane Energy plc (“Hurricane”)
Over the period, Hurricane reported continued good progress with
its Lancaster Early Production System (“Lancaster EPS”) and
announced Spirit Energy’s (“Spirit”) farm-in to 50% of the Greater
Warwick Area (“Warwick”).
Hurricane’s Lancaster EPS remains on time and on budget for
first oil in the first quarter of 2019. Well completion operations
concluded in July, the mooring system was installed in August and
the subsea infrastructure was completed in September. The
infrastructure is now ready to connect with the Aoka Mizu, the
floating production storage and offloading vessel. The EPS’s
Floating Production and Storage Vessel (“FPSO”) Aoka Mizu sailed
from Dubai in October after
completing a programme of repair, upgrade and life extension. The
FPSO is now at the port of Cromarty, near Inverness, awaiting a
favourable weather window to hook up with the buoy and initiate
commissioning.
We believe that the deal with Spirit is transformational for
Hurricane. As Warwick had only been drilled once by Hurricane in
2016, it was behind Lancaster in the appraisal and development
process. Spirit’s commitment of $387
million to a detailed three-year work programme aims to
rectify this. It targets an initial development of 500 million
barrels of reserves. To achieve this goal, rig contracts have been
signed to drill three horizontal wells in 2019, fully funded by
Spirit. Long lead items have been ordered so that in 2020 one of
those wells will be tied back to the FPSO for production appraisal.
As with the Lancaster EPS, this step will enable collection of
additional reservoir data ahead of full field development. It is
expected to leverage Hurricane’s Lancaster EPS infrastructure, and
so generate incremental revenues at little additional cost.
The Fund is pleased that Spirit’s commitments validate
Hurricane’s belief that Warwick is analogous to Lancaster, and also
contains significant reserves of oil. With this deal, the cash
expected to be generated by the Lancaster EPS will be available to
further the appraisal of the Greater Lancaster Area, in which
Hurricane retains a 100% interest.
Over the period, the Fund reduced its holding in Hurricane by
22% and realised £11.3 million. This reduction takes into account
the subsequent reinvestment of £3 million in the company at the end
of the period, following share price weakness.
In 2019, the Fund looks forward to the commissioning of the EPS
in addition to the three wells that will be drilled by Hurricane
and Spirit.
FairFX Group plc (“FairFX”)
In December, FairFX announced an agreement with Metropolitan
Commercial Bank to offer its services to the US market. The
agreement is subject to additional due diligence and will cover
FairFX’s corporate expense platform as well as its international
payments service. Both are expected to go live in the first half of
2019.
The company has continued to rationalise its supply chain,
extracting synergies from its acquisitions of CardOne Banking in
2017 and City Forex in 2018.
Northgate plc (“Northgate”)
At Northgate’s annual general meeting on 18 September,
shareholders rejected the directors’ remuneration report, with 58%
of votes cast against. More than 10% of votes cast opposed the
re-election of the chairman and three of Northgate’s other
non-executive directors. The Fund voted against the remuneration
report and the re-election of the chairman and the senior
independent director.
We believe that the board should be held accountable for this
heightened shareholder discontent, and particularly the chairman
Andrew Page for his lack of
strategic leadership and failure to take responsibility for the
underperformance of the company during his tenure, both
operationally and for shareholders. Despite enjoying the tailwind
of a growth market, Northgate's number of vehicles on hire in the
UK and Ireland is lower in organic
terms than in autumn 2015, when Mr Page was appointed chairman. The
company's total shareholder return over this period has been -13%,
whilst UK equities have delivered over 25%.
With the announcement of Northgate’s interim results on 4
December, the company’s prior overly-conservative guidance for UK
and Ireland growth was upgraded.
However, this was accompanied by a downgrade to margin guidance. We
are increasingly concerned that Northgate is expanding its fleet
with insufficient regard to margins and return on capital.
The value of Northgate’s substantial Spanish business remains
unrecognised by the UK equity market, despite repeated evidence of
strong trading and financial performance. The Fund continues to
press Northgate’s board to realise some of this value at a time of
high investor interest in Spanish businesses and assets. During the
period, a significant flexible rental competitor of Northgate’s
completed a successful IPO on the Spanish market, at a material
premium to net asset value. If Northgate was to achieve a
comparable rating for its Spanish division, we believe its UK
division would be implicitly valued at just one third of book
value. For more than a year, the Fund has repeatedly requested that
Northgate seriously assesses this path as a means of releasing
shareholder value.
During the period, Northgate reached out to Crystal Amber on several occasions. Regrettably
and tellingly, this engagement was limited to the company lobbying
for its remuneration report and following the shareholder vote
against, how best to resurrect it. It is evidential where the
board’s focus lies. The Fund has been contacted by several
institutional shareholders in Northgate who independently share the
Fund’s concerns regarding lack of strategic leadership and
engagement, and the company’s financial performance.
STV Group plc (“STV”)
Over the period, STV completed the hiring for its new divisional
structure and announced deals with two retransmission partners,
Virgin TV and Sky.
In July, STV announced Richard
Williams as the managing director of its newly formed
digital division. Williams will focus on driving the growth of
STV’s player by improving consumer experience and maximising the
digital value of STV’s content. In September, STV announced
David Mortimer as managing director
of STV Productions. Both divisions have since announced new
partnerships in support of STV’s growth strategy.
In December, STV announced the launch of its player on the
Virgin TV platform. In January, STV announced that its player would
become available on the Sky platform in the second half of 2019.
The increased availability of STV’s own player product on
additional platforms will give the company more digital video
advertising inventory to sell. This inventory has achieved and
sustained premium rates relative to other digital channels.
Board Intelligence Ltd (“Board
Intelligence”)
Board Intelligence is a private British company with a mission
to improve the quality of board decision-making.
Based on their consulting experience to company boards, the
Board Intelligence founders launched a software tool in 2013. This
encompasses workflow management for drafting meeting packs and
structured communication templates to improve the effectiveness of
meetings. The primary audience is boards of directors, but the tool
can also be used for other committees. The company fills a gap in
an attractive niche market.
Board Intelligence continued its record of strong revenue growth
in 2018. The business has an impressive client list and has
received emphatic public testimonials from leading large-cap
companies.
The Fund invested in Board Intelligence in March 2018 and carried the investment in this
private company at cost. The holding was revalued at the end of
December resulting in an increase in its value as discussed in the
Interim Financial Statements. This reflects the growth acceleration
seen in the business. As activist investors, we are keen to support
improvements in UK corporate governance.
GI Dynamics Inc (“GI Dynamics”)
Over the period, the company took its first steps to rebuild its
strategy by securing a US FDA pivotal trial, appointing a new CE
Mark notified body and reaching an agreement with Apollo Sugar for a trial in India.
In August, the US FDA approved a pivotal trial for the
EndoBarrier, GI Dynamics’s medical device for the treatment of type
2 diabetes and obesity. The company expects to complete the first
phase enrolment during the first half of 2019, with a primary
endpoint of reduced blood sugar levels one-year post-implant. The
Fund participated in a preliminary $5
million capital raising and the company expects to raise
funding for the remainder of the trial costs over the coming
months.
In October, GI Dynamics appointed Intertek as its European
notified body and expects to achieve a CE Mark for the EndoBarrier
in H2 2019.
In November, the company announced its agreement with
Apollo Sugar, a joint venture
between India’s largest hospital system Apollo and Sanofi. The
agreement covers a clinical trial that would enable
commercialisation of the EndoBarrier in India.
Sutton Harbour Holdings plc
(“Sutton”)
In November, Sutton Harbour
received planning approval for its Sugar Quay project. Interim
results reported 37.4 pence NAV per
share versus a then share price of 28.5
pence. The company launched a £3 million open offer to fund
post planning pre-construction phase project costs, capital
maintenance project costs and to provide cash headroom. The Fund
took its full entitlement and has continued to grow this
position.
Further comments on the operations of investments previously
disclosed can be found in the Fund’s 2018 Annual Report (available
at www.crystalamber.com).
Hedging activity
During the period, the Fund purchased put options on the FTSE100
index as insurance against a significant market sell-off and to
protect unrealised gains in the portfolio. As the market sold off,
puts were sold, and profits were realised. Due to the increased
market volatility and costs of the puts, the Fund closed the period
unhedged. FTSE100 puts contributed 0.2% to NAV growth.
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 under the lens of ‘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. This position 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.
For all companies in the portfolio, the Fund strives to develop
an activist angle and aims to contribute to each company’s strategy
with the goal of maximising shareholder value. Where value is
hidden or trapped, the Fund looks for ways to realise it.
Throughout the period, most of the Fund’s activism has taken place
in private, but the Fund remains willing to make its concerns
public when appropriate. The responses of management and boards to
our suggestions have 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, the Fund realised profits of £11.2 million from
Hurricane, £2.5 million from NCC Group Plc, £2.3 million from Boku
Inc, £1.9 million from FairFX and £1.0 million from Woodford
Patient Capital Trust. A loss of £0.8 million was incurred as part
of the capital redemption of Leaf. The Fund remains confident on
the outlook for additional profitable returns from Leaf, as
discussed in our 2018 Annual Report.
Outlook
Whilst at the period end, equity markets were in ‘risk off’
mode, in recent weeks, the cocktail of the volte-face from the US
Federal Reserve and its new found patience regarding the pace of
interest rate rises and normalisation of its balance sheet, hopes
of a trade deal between the US and China and increased share buybacks has seen US
equity markets rally sharply. The Dow Jones Industrial Average has
risen by 20% since Christmas. Whilst the broader S&P 500 Index
currently trades above its June 2017
levels, UK equity indices remain well below levels at that time, as
Brexit uncertainties have prevailed. UK equity markets would also
be susceptible to downside risk from a resumption of global
macro-economic or political concerns.
UK political uncertainty has depressed the willingness of
companies to invest. Whilst the trading performances of several of
the Fund’s holdings are inevitably affected by this lack of
clarity, we believe that the Fund is both defensively and securely
positioned, with its focus on special situation and strategic
holdings, which are ultimately less dependent upon macroeconomic
developments and more upon a combination of self-help and active
engagement.
Crystal Amber Asset Management (Guernsey) Limited
6 March 2019
Condensed Statement of Profit or
Loss and Other Comprehensive Income (Unaudited)
For the six months ended 31 December
2018
|
|
Six months ended 31 December |
|
Six months ended 31 December |
|
|
2018 |
|
2017 |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
Revenue |
Capital |
Total |
|
Revenue |
Capital |
Total |
|
Notes |
£ |
£ |
£ |
|
£ |
£ |
£ |
Income |
|
|
|
|
|
|
|
|
Dividend income from
listed equity investments |
|
3,048,961 |
- |
3,048,961 |
|
1,980,590 |
- |
1,980,590 |
Interest income from
listed debt instruments |
|
- |
- |
- |
|
99,072 |
- |
99,072 |
Arrangement fee
received from debt instruments |
|
- |
- |
- |
|
46,531 |
- |
46,531 |
Interest received |
|
2,172 |
- |
2,172 |
|
- |
- |
- |
|
|
3,051,133 |
- |
3,051,133 |
|
2,126,193 |
- |
2,126,193 |
Net losses on
financial assets designated at FVTPL and derivatives held for
trading |
|
|
|
|
|
|
|
|
Equities |
|
|
|
|
|
|
|
|
Net realised
gains |
4 |
- |
18,567,453 |
18,567,453 |
|
- |
202,555 |
202,555 |
Movement in unrealised
losses |
4 |
- |
(36,142,677) |
(36,142,677) |
|
- |
(4,348,174) |
(4,348,174) |
Debt
instruments |
|
|
|
|
|
|
|
|
Movement in unrealised
gains |
4 |
- |
564,244 |
564,244 |
|
- |
381,233 |
381,233 |
Derivative
financial instruments |
|
|
|
|
|
|
|
|
Realised losses |
4 |
- |
(2,426,731) |
(2,426,731) |
|
- |
(3,045,990) |
(3,045,990) |
Movement in unrealised
gains/(losses) |
4 |
- |
1,553,631 |
1,553,631 |
|
- |
(227,407) |
(227,407) |
|
|
- |
(17,884,080) |
(17,884,080) |
|
- |
(7,037,783) |
(7,037,783) |
Total
income/(loss) |
|
3,051,133 |
(17,884,080) |
(14,832,947) |
|
2,126,193 |
(7,037,783) |
(4,911,590) |
|
|
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
|
|
|
Transaction costs |
|
- |
271,340 |
271,340 |
|
- |
119,851 |
119,851 |
Exchange movements on
revaluation of investments and working capital |
|
(214,674) |
118,654 |
(96,020) |
|
- |
518,127 |
518,127 |
Management fees |
9 |
1,816,362 |
- |
1,816,362 |
|
1,649,074 |
- |
1,649,074 |
Performance fees |
9 |
- |
- |
- |
|
- |
983,800 |
983,800 |
Directors'
remuneration |
|
72,500 |
- |
72,500 |
|
81,232 |
- |
81,232 |
Administration
fees |
|
144,159 |
- |
144,159 |
|
106,441 |
- |
106,441 |
Custodian fees |
|
61,036 |
- |
61,036 |
|
45,091 |
- |
45,091 |
Audit fees |
|
12,702 |
- |
12,702 |
|
12,320 |
- |
12,320 |
Other expenses |
|
169,881 |
- |
169,881 |
|
154,426 |
- |
154,426 |
|
|
2,061,966 |
389,994 |
2,451,960 |
|
2,048,584 |
1,621,778 |
3,670,362 |
Return/(Loss) for
the period |
|
989,167 |
(18,274,074) |
(17,284,907) |
|
77,609 |
(8,659,561) |
(8,581,952) |
Basic and diluted
earnings/(loss) per share (pence) |
2 |
1.02 |
(18.82) |
(17.80) |
|
0.08 |
(8.83) |
(8.75) |
All items in the above statement derive from continuing
operations.
The total column of this statement represents the Company’s
Statement of Profit or Loss and Other Comprehensive Income prepared
in accordance with IFRS. The supplementary information on the
allocation between revenue return and capital return is presented
under guidance published by the AIC.
The Notes to the Unaudited Condensed Financial Statements form
an integral part of these Interim Financial Statements.
Condensed Statement of Financial
Position (Unaudited)
As at 31 December 2018
|
|
As
at |
|
As
at |
|
As
at |
|
|
31
December |
|
30
June |
|
31
December |
|
|
2018 |
|
2018 |
|
2017 |
|
|
(Unaudited) |
|
(Audited) |
|
(Unaudited) |
Assets |
Notes |
£ |
|
£ |
|
£ |
Cash and cash
equivalents |
|
8,916,616 |
|
1,168,729 |
|
835,330 |
Trade and other
receivables |
|
985,834 |
|
57,873 |
|
448,599 |
Financial assets
designated at FVTPL and derivatives held for trading |
4 |
207,465,843 |
|
249,009,853 |
|
187,669,649 |
Total
assets |
|
217,368,293 |
|
250,236,455 |
|
188,953,578 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Trade and other
payables |
|
3,555,118 |
|
12,158,971 |
|
2,623,425 |
Total
liabilities |
|
3,555,118 |
|
12,158,971 |
|
2,623,425 |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Capital and
reserves attributable to the Company’s equity shareholders |
|
|
|
|
|
|
Share capital |
6 |
992,498 |
|
991,248 |
|
989,998 |
Treasury shares
reserve |
7 |
(5,346,498) |
|
(3,212,448) |
|
(2,182,262) |
Distributable
reserve |
|
95,309,557 |
|
100,156,159 |
|
100,156,159 |
Retained earnings |
|
122,857,618 |
|
140,142,525 |
|
87,366,258 |
Total
equity |
|
213,813,175 |
|
238,077,484 |
|
186,330,153 |
|
|
|
|
|
|
|
Total liabilities
and equity |
|
217,368,293 |
|
250,236,455 |
|
188,953,578 |
|
|
|
|
|
|
|
NAV per share
(pence) |
3 |
221.67 |
|
244.62 |
|
190.69 |
The Interim Financial Statements were approved by the Board of
Directors and authorised for issue on 6
March 2019.
Christopher Waldron
Jane
Le Maitre
Chairman
Director
6 March 2019
6 March 2019
Condensed Statement of Changes in
Equity (Unaudited)
For the six months ended 31 December
2018
|
|
Share |
Treasury
shares |
Distributable |
Retained earnings |
|
Total |
|
Notes |
capital |
reserve |
reserve |
Capital |
Revenue |
Total |
equity |
|
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
Opening balance at 1
July 2018 |
|
991,248 |
(3,212,448) |
100,156,159 |
143,277,348 |
(3,134,823) |
140,142,525 |
238,077,484 |
Issue of Ordinary
shares |
6 |
1,250 |
- |
- |
- |
- |
- |
1,250 |
Purchase of Ordinary
shares into Treasury |
7 |
- |
(2,134,050) |
- |
- |
- |
- |
(2,134,050) |
Dividends paid in the
period |
8 |
- |
- |
(4,846,602) |
- |
- |
- |
(4,846,602) |
(Loss)/Return for the
period |
|
- |
- |
- |
(18,274,074) |
989,167 |
(17,284,907) |
(17,284,907) |
Balance at 31 December
2018 |
|
992,498 |
(5,346,498) |
95,309,557 |
125,003,274 |
(2,145,656) |
122,857,618 |
213,813,175 |
|
|
|
|
|
|
|
|
For the six months
ended 31 December 2017
|
|
Share |
Treasury
shares |
Distributable |
Retained earnings |
|
Total |
|
Notes |
capital |
reserve |
reserve |
Capital |
Revenue |
Total |
capital |
|
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
Opening balance at 1
July 2017 |
|
989,998 |
(972,800) |
105,058,397 |
98,217,020 |
(2,268,810) |
95,948,210 |
201,023,805 |
Purchase of Ordinary
shares into Treasury |
7 |
- |
(1,209,462) |
- |
- |
- |
- |
(1,209,462) |
Dividends paid in the
period |
8 |
- |
- |
(4,902,238) |
- |
- |
- |
(4,902,238) |
(Loss)/Return for the
period |
|
- |
- |
- |
(8,659,561) |
77,609 |
(8,581,952) |
(8,581,952) |
Balance at 31 December
2017 |
|
989,998 |
(2,182,262) |
100,156,159 |
89,557,459 |
(2,191,201) |
87,366,258 |
186,330,153 |
|
|
|
|
|
|
|
|
Condensed Statement of Cash Flows
(Unaudited)
For the six months ended 31 December
2018
|
|
Six
months |
|
Six
months |
|
|
ended |
|
ended |
|
|
31
December |
|
31
December |
|
|
2018 |
|
2017 |
|
|
(Unaudited) |
|
(Unaudited) |
|
|
£ |
|
£ |
Cash flows from
operating activities |
|
|
|
|
Dividend income
received from listed equity investments |
|
2,116,794 |
|
1,584,253 |
Interest income
received from listed debt instruments |
|
- |
|
99,072 |
Arrangement fee
received from debt instruments |
|
- |
|
46,531 |
Bank interest
received |
|
4,498 |
|
- |
Management fees
paid |
|
(1,816,362) |
|
(1,649,074) |
Performance fee
paid |
|
(10,964,740) |
|
(3,338,552) |
Directors’ fees
paid |
|
(72,500) |
|
(73,834) |
Other expenses
paid |
|
(369,144) |
|
(374,690) |
Net cash outflow
from operating activities |
|
(11,101,454) |
|
(3,706,294) |
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
Purchase of equity
investments |
|
(34,694,153) |
|
(9,957,618) |
Sale of equity
investments |
|
56,988,813 |
|
20,359,191 |
Purchase of debt
instruments |
|
(69,032) |
|
(6,178,430) |
Purchase of derivative
financial instruments |
|
(6,250,850) |
|
(3,869,720) |
Sale of derivative
financial instruments |
|
7,712,140 |
|
- |
Transaction charges on
purchase and sale of investments |
|
(271,632) |
|
(127,550) |
Net cash inflow
from investing activities |
|
23,415,286 |
|
225,873 |
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
Proceeds from issue of
Company Shares |
|
1,250 |
|
- |
Purchase of Ordinary
shares into Treasury |
|
(2,134,050) |
|
(1,185,573) |
Dividends paid |
|
(2,433,145) |
|
(2,456,619) |
Net cash outflow
from financing activities |
|
(4,565,945) |
|
(3,642,192) |
|
|
|
|
|
|
|
|
|
|
Net
increase/(decrease) in cash and cash equivalents during the
period |
|
7,747,887 |
|
(7,122,613) |
Cash and cash
equivalents at beginning of period |
|
1,168,729 |
|
7,957,943 |
Cash and cash
equivalents at end of period |
|
8,916,616 |
|
835,330 |
Notes to the Unaudited Condensed
Financial Statements
For the six months ended 31 December
2018
General Information
Crystal Amber Fund Limited (the “Company”) was incorporated and
registered in Guernsey on 22 June
2007 and is governed in accordance with the provisions of
the Companies Law. The registered office address is Heritage Hall,
Le Marchant Street, St. Peter Port,
Guernsey, GYI 4HY. The Company was established to provide
shareholders with an attractive total return which is expected to
comprise primarily capital growth with the potential for
distributions of up to 5 pence per
share per annum following consideration of the accumulated retained
earnings as well as the unrealised gains and losses at that time.
The Company seeks to achieve this through 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
£100 million and £1,000 million.
The Company’s Ordinary shares were listed and admitted to
trading on AIM, on 17 June 2008. The
Company is also a member of the AIC.
All capitalised terms are defined in the Glossary of Capitalised
Defined Terms unless separately defined.
1.
SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of
these Interim Financial Statements are set out below. These
policies have been consistently applied to those balances
considered material to the Interim Financial Statements throughout
the current period, unless otherwise stated.
Basis of preparation
The Interim Financial Statements have been prepared in
accordance with 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 2018. The Annual Financial Statements
have been prepared in accordance with 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 2018.
The presentation of the Interim Financial Statements is
consistent with the Annual Financial Statements. Where
presentational guidance set out in the SORP “Financial Statements
of Investment Trust Companies and Venture Capital Trusts”, issued
by the AIC in November 2014 and
updated in January 2017, is
consistent with the requirements of IFRS, the Directors have sought
to prepare the Interim Financial Statements on a basis compliant
with the recommendations of the SORP. In particular, supplementary
information which analyses the Statement of Profit or Loss and
Other Comprehensive Income between items of a revenue and capital
nature has been presented alongside the total Statement of Profit
or Loss and 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.
Continuation vote
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. The next continuation vote
will be proposed at the 2019 AGM.
Segmental reporting
Operating segments are reported in a manner consistent with
internal reporting provided to the chief operating decision maker.
The chief operating decision maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the Board as a whole. 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 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 Interim Financial
Statements.
For management purposes, the Company is domiciled in Guernsey
and is engaged in a single segment of business mainly in one
geographical area, being investment in UK equity instruments, and
therefore the Company has only one operating segment.
2.
BASIC AND DILUTED LOSS PER SHARE
Loss per share is based on the following data:
|
|
Six
months |
|
Six
months |
|
|
ended |
|
ended |
|
|
31
December |
|
31
December |
|
|
2018 |
|
2017 |
|
|
(Unaudited) |
|
(Unaudited) |
Loss for the
period |
|
(£17,284,907) |
|
(£8,581,952) |
Weighted average
number of issued Ordinary shares |
|
97,085,658 |
|
98,071,325 |
Basic and diluted loss
per share (pence) |
|
(17.80) |
|
(8.75) |
3.
NAV PER SHARE
NAV per share is based on the following data:
|
As
at |
|
As
at |
|
As
at |
|
31
December |
|
30
June |
|
31
December |
|
2018 |
|
2018 |
|
2017 |
|
(Unaudited) |
|
(Audited) |
|
(Unaudited) |
NAV per Condensed
Statement of Financial Position |
213,813,175 |
|
238,077,484 |
|
£186,330,153 |
Weighted average
number of issued Ordinary shares (excluding Treasury shares) |
96,455,780 |
|
97,325,780 |
|
97,712,280 |
NAV per share
(pence) |
221.67 |
|
244.62 |
|
190.69 |
4.
FINANCIAL ASSETS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS
AND DERIVATIVES HELD FOR TRADING
|
1
July |
|
1
July |
|
1
July |
|
2018
to |
|
2017
to |
|
2017
to |
|
31
December |
|
30
June |
|
31
December |
|
2018 |
|
2018 |
|
2017 |
|
(Unaudited) |
|
(Audited) |
|
(Unaudited) |
|
£ |
|
£ |
|
£ |
Equity
investments |
190,087,261 |
|
229,682,729 |
|
170,344,729 |
Debt instruments |
5,706,034 |
|
5,320,186 |
|
10,292,085 |
Financial assets
designated at FVTPL |
195,793,295 |
|
235,002,915 |
|
180,636,814 |
Derivative
financial instruments held for trading |
11,672,548 |
|
14,006,938 |
|
7,032,835 |
Total
financial assets designated at FVTPL and derivatives held for
trading |
207,465,843 |
|
249,009,853 |
|
187,669,649 |
Equity
investments |
|
|
|
|
|
Cost brought
forward |
172,761,740 |
|
156,798,987 |
|
156,798,987 |
Purchases |
34,694,153 |
|
69,198,617 |
|
8,539,686 |
Sales |
(56,988,813) |
|
(73,610,743) |
|
(20,359,191) |
Net realised
gains |
18,567,453 |
|
20,374,879 |
|
202,555 |
Cost carried
forward |
169,034,533 |
|
172,761,740 |
|
145,182,037 |
|
|
|
|
|
|
Unrealised gains
brought forward |
57,316,659 |
|
29,708,411 |
|
29,708,411 |
Movement in unrealised
(losses)/ gains |
(36,142,677) |
|
27,608,248 |
|
(4,348,174) |
Unrealised gains
carried forward |
21,173,982 |
|
57,316,659 |
|
25,360,237 |
Effect of exchange
rate movements on revaluation |
(121,254) |
|
(395,670) |
|
(197,545) |
Fair value of
equity investments |
190,087,261 |
|
229,682,729 |
|
170,344,729 |
Debt
instruments |
|
|
|
|
|
Cost brought
forward |
5,547,350 |
|
9,318,984 |
|
9,318,984 |
Purchases |
- |
|
2,066,642 |
|
804,530 |
Sales |
- |
|
(6,755,428) |
|
- |
Net realised
gains |
- |
|
917,152 |
|
- |
Cost carried
forward |
5,547,350 |
|
5,547,350 |
|
10,123,514 |
|
|
|
|
|
|
Unrealised gains
brought forward |
203,233 |
|
290,017 |
|
290,017 |
Movement in unrealised
gains/(losses) |
564,244 |
|
(86,784) |
|
381,233 |
Unrealised gains
carried forward |
767,477 |
|
203,233 |
|
671,250 |
Effect of exchange
rate movements on revaluation |
(608,793) |
|
(430,397) |
|
(502,679) |
Fair value of debt
instruments |
5,706,034 |
|
5,320,186 |
|
10,292,085 |
Total financial
assets designated at FVTPL |
195,793,295 |
|
235,002,915 |
|
180,636,814 |
|
|
|
|
|
|
Derivative
financial instruments held for trading |
|
|
|
|
|
Cost brought
forward |
3,888,021 |
|
360,001 |
|
360,001 |
Purchases |
6,250,850 |
|
18,079,220 |
|
3,869,720 |
Sales |
(7,712,140) |
|
(19,953,704) |
|
- |
Net realised
(losses)/gains |
(2,426,731) |
|
5,402,504 |
|
(3,045,990) |
Cost carried
forward |
- |
|
3,888,021 |
|
1,183,731 |
|
|
|
|
|
|
Unrealised gains
brought forward |
10,118,917 |
|
6,076,511 |
|
6,076,511 |
Movement in unrealised
gains/(losses) |
1,553,631 |
|
4,042,406 |
|
(227,407) |
Unrealised gains
carried forward |
11,672,548 |
|
10,118,917 |
|
5,849,104 |
Fair value of
derivatives held for trading |
11,672,548 |
|
14,006,938 |
|
7,032,835 |
Total derivative
financial instruments held for trading |
11,672,548 |
|
14,006,938 |
|
7,032,835 |
Total financial
assets designated at FVTPL and derivatives held for
trading |
207,465,843 |
|
249,009,853 |
|
187,669,649 |
At the reporting date, the warrant instruments in FairFX, GI
Dynamics and Hurricane were valued using a Black Scholes valuation
technique.
The following table details the Company’s positions in
derivative financial instruments:
|
Nominal amount |
Value |
|
(Unaudited) |
(Unaudited) |
31 December
2018 |
|
£ |
Derivative
financial instruments |
|
|
FairFX warrant
instrument |
6,000,000 |
5,523,840 |
Hurricane warrant
instrument |
23,333,333 |
5,589,873 |
GI Dynamics warrant
instrument |
97,222,200 |
558,835 |
|
126,555,533 |
11,672,548 |
|
|
|
|
Nominal amount |
Value |
|
(Audited) |
(Audited) |
30 June
2018 |
|
£ |
Derivative
financial instruments |
|
|
Puts on FTSE100 Index
7200 (expiry: July 2018) |
2,000 |
180,000 |
Puts on FTSE 100 Index
7400 (expiry: July 2018) |
4,000 |
900,000 |
FairFX warrant
instrument |
6,000,000 |
5,259,942 |
Hurricane warrant
instrument |
23,333,333 |
6,511,213 |
GI Dynamics warrant
instrument |
97,222,200 |
1,155,783 |
|
126,561,533 |
14,006,938 |
5.
FINANCIAL INSTRUMENTS
Fair value measurements
The Company measures fair values using the following fair value
hierarchy that prioritises the inputs to valuation techniques used
to measure fair value. The hierarchy gives the highest priority to
unadjusted quoted prices in active markets for identical assets or
liabilities (Level 1 measurements) and the lowest priority to
unobservable inputs (Level 3 measurements). The three levels of the
fair value hierarchy under IFRS 13 are as follows:
Level 1: Quoted price
(unadjusted) in an active market for an identical instrument.
Level 2: Valuation
techniques based on observable inputs, either directly (i.e. as
prices) or indirectly (i.e. derived from prices). This category
includes instruments valued using: quoted prices in active markets
for similar instruments; quoted prices for identical or similar
instruments in markets that are considered less than active; or
other valuation techniques for which all significant inputs are
directly or indirectly observable from market data.
Level 3: Valuation
techniques using significant unobservable inputs. This category
includes all instruments for which the valuation technique includes
inputs that are not based on observable data, and the unobservable
inputs have a significant effect on the instrument’s valuation.
This category includes instruments that are valued based on quoted
prices for similar instruments for which significant unobservable
adjustments or assumptions are required to reflect differences
between the instruments.
The level in the fair value hierarchy within which the fair
value measurement is categorised in its entirety is determined on
the basis of the lowest level input that is significant to the fair
value measurement. For this purpose, the significance of an input
is assessed against the fair value measurement in its entirety. If
a fair value measurement uses observable inputs that require
significant adjustment based on unobservable inputs, that
measurement is a Level 3 measurement. Assessing the significance of
a particular input to the fair value measurement in its entirety
requires judgement, considering factors specific to the asset or
liability.
The determination of what constitutes ‘observable’ requires
significant judgement by the Company. The Company considers
observable data to be that market data that is readily available,
regularly distributed or updated, reliable and verifiable, not
proprietary, and provided by independent sources that are actively
involved in the relevant market.
The objective of the valuation techniques used is to arrive at a
fair value measurement that reflects the price that would be
received if an asset was sold or a liability transferred in an
orderly transaction between market participants at the measurement
date.
The following tables analyse, within the fair value hierarchy,
the Company’s financial assets measured at fair value at
31 December 2018 and 30 June 2018:
|
Level
1 |
Level
2 |
Level
3 |
Total |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
31 December
2018 |
£ |
£ |
£ |
£ |
Financial assets
designated at FVTPL and derivatives held for trading: |
|
|
|
|
Equities – listed
equity investments |
185,441,237 |
- |
- |
185,441,237 |
Equities – unlisted
equity investments |
- |
- |
4,646,024 |
4,646,024 |
Debt – loan notes |
- |
- |
5,706,034 |
5,706,034 |
Derivatives – warrant
instruments |
- |
11,672,548 |
- |
11,672,548 |
|
185,441,237 |
11,672,548 |
10,352,058 |
207,465,843 |
|
Level
1 |
Level
2 |
Level
3 |
Total |
|
(Audited) |
(Audited) |
(Audited) |
(Audited) |
30 June
2018 |
£ |
£ |
£ |
£ |
Financial assets
designated at FVTPL and derivatives held for trading: |
|
|
|
|
Equities – listed
equity investments |
225,976,612 |
- |
- |
225,976,612 |
Equities – unlisted
equity investments |
- |
- |
3,706,117 |
3,706,117 |
Debt – loan notes |
- |
- |
5,320,186 |
5,320,186 |
Derivatives – listed
derivative instruments |
1,080,000 |
- |
- |
1,080,000 |
Derivatives – warrant
instruments |
- |
12,926,938 |
- |
12,926,938 |
|
227,056,612 |
12,926,938 |
9,026,303 |
249,009,853 |
The Level 1 equity investments were valued by reference to the
closing bid prices in each investee company on the reporting
date.
The Level 2 derivative investments were valued using a Black
Scholes valuation technique.
The Level 3 equity investment in Board Intelligence was valued
with reference to the valuation multiples of publicly-listed cloud
software companies, after applying a discount equivalent to that
which prevailed at the time of investment in March 2018. The loan notes were classified as
Level 3 debt instruments as there was no observable market data.
The Board has concluded that fair value is approximate to the share
market price had the loan notes been converted to equity and valued
at the closing bid price on the reporting date.
For financial instruments not measured at FVTPL, the carrying
amount is approximate to their fair value.
Fair value hierarchy - Level 3
The following table shows a reconciliation from the opening
balances to the closing balances for fair value measurements in
Level 3 of the fair value hierarchy:
|
Six
months |
Six
months |
|
ended |
ended |
|
31
December |
31
December |
|
2018 |
2017 |
|
(Unaudited) |
(Unaudited) |
|
£ |
£ |
Opening balance at 1
July |
9,026,303 |
3,846,387 |
Purchases |
- |
744,491 |
Movement in unrealised
gain |
1,504,151 |
119,834 |
Effect of exchange
rate movements |
(178,396) |
(143,556) |
Closing balance at 31
December |
10,352,058 |
4,567,156 |
The Company recognises transfers between levels of the fair
value hierarchy on the date of the event of change in circumstances
that caused the transfer.
There have been no transfers between levels during the period
ended 31 December 2018.
At the period end and assuming all other variables are held
constant:
- If unobservable inputs in Level 3 investments had been 5 per
cent higher/lower (2017: 5 per cent higher/lower), the Company’s
return and net assets for the six months ended 31 December 2018 would have increased/decreased
by £517,603 (2017: £228,358); and
- There would have been no impact on the other equity
reserves.
6.
SHARE CAPITAL AND RESERVES
The authorised share capital of the Company is £3,000,000
divided into 300 million Ordinary shares of £0.01 each.
The issued share capital of the Company is comprised as
follows:
|
31 December 2018 |
30 June 2018 |
|
(Unaudited) |
(Audited) |
|
Number |
£ |
Number |
£ |
Issued, called up and
fully paid Ordinary shares of £0.01 each |
99,249,762 |
992,498 |
99,124,762 |
991,248 |
During the period, the Company issued 125,000 Ordinary shares of
£0.01 divided equally amongst five charitable organisations, the
nominal value of which has been paid by Richard Bernstein, who is a shareholder of the
Company, a director and shareholder of the Investment Manager and a
member of the Investment Adviser.
7.
TREASURY SHARES RESERVE
|
Six months ended |
Year ended |
|
31 December 2018 |
30 June 2018 |
|
(Unaudited) |
(Audited) |
|
Number |
£ |
Number |
£ |
Opening balance |
(1,798,982) |
(3,212,448) |
(635,000) |
(972,800) |
Treasury shares
purchased during the period/year |
(995,000) |
(2,134,050) |
(1,163,982) |
(2,239,648) |
Closing balance |
(2,793,982) |
(5,346,498) |
(1,798,982) |
(3,212,448) |
During the period ended 31 December
2018: 995,000 (2017: 652,482) Treasury shares were purchased
at an average price of 214.48 pence
per share (2017: 185.4 pence per
share), representing an average discount to NAV at the time of
purchase of 11.9 per cent (2017: 5.2 per cent). During the period
ended 31 December 2018, Nil (2017:
Nil) Treasury shares were sold.
8.
DIVIDENDS
On 6 July 2018, the Company
declared an interim dividend of £2,433,145, equating to
2.5 pence per Ordinary share, which
was paid on 17 August 2018 to
shareholders on the register on 20 July
2018.
On 13 December 2018, the Company
declared an interim dividend of £2,413,457, equating to
2.5 pence per Ordinary share, which
was paid on 18 January 2018 to
shareholders on the register on 21 December
2018.
9.
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 (30 June
2018: 10,000) Ordinary shares in the Company, representing
0.01 per cent (30 June 2018: 0.01 per
cent) of the voting share capital of the Company at 31 December 2018.
During the period, the Company incurred management fees of
£1,816,362 (2017: £1,649,074) none of which was outstanding at
31 December 2018 (30 June 2018: £Nil). The Company also accrued
performance fees of £Nil (2017: £Nil) none of which was outstanding
or included in trade and other payables as at 31 December 2018 (30 June
2018: £10,964,740 was outstanding and included in trade and
other payables).
Under the terms of the IMA, the Investment Manager is entitled
to a performance fee in certain circumstances. This fee is
calculated by reference to the increase in NAV per Ordinary share
over the course of each performance period.
Payment of the performance fee is subject to:
1. the achievement of a performance
hurdle condition: the NAV per Ordinary share at the end of the
relevant performance period must exceed an amount equal to the
placing price, increased at a rate of; (i) 7% per annum on an
annual compounding basis in respect of that part of the performance
period which falls from (and including) the date of Admission up to
(but not including) the date of the 2013 Admission; (ii) 8% per
annum on an annual compounding basis in respect of that part of the
performance period which falls from (and including) the date of the
2013 Admission up to (but not including) the date of the 2015
Admission; and (iii) 10% per annum on an annual compounding basis
in respect of that part of the performance period which falls from
(and including) the date of the 2015 Admission up to the end of the
relevant performance period with all dividends and other
distributions paid in respect of all outstanding Ordinary shares
(on a per share basis) during any performance period being deducted
on their respective payment dates (and after compounding the
distribution amount per share at the relevant annual rate or rates
for the period from and including the payment date to the end of
the performance period) (“the Basic Performance Hurdle”). Such
Basic Performance Hurdle at the end of a performance period is
compounded at the relevant annual rate to calculate the initial per
share hurdle level for the next performance period, which will
subsequently be adjusted for any dividends or other distributions
paid in respect of all outstanding Ordinary shares during that
performance period; and
2. the achievement of a “high
watermark”: the NAV per Ordinary share at the end of the relevant
performance period must be higher than the highest previously
reported NAV per Ordinary share at the end of a performance period
in relation to which a performance fee, if any, was last earned
(less any dividends or other distributions in respect of all
outstanding Ordinary shares declared (on a per share basis) since
the end of the performance period in relation to which a
performance fee was last earned).
As the NAV per share at 31 December
2018 did not exceed the high watermark of 239.62 pence per share at that date, a
performance fee has not been accrued in the Interim Financial
Statements. In the event that, on 30 June
2019, the NAV per share exceeds both the performance hurdle
and the high watermark, the performance fee will be an amount equal
to 20 per cent of the excess of the NAV per share at that date over
the higher of these hurdles multiplied by the time weighted average
number of Ordinary shares in issue during the year ending
30 June 2019. Depending on whether
the Ordinary shares are trading at a discount or a premium to the
Company’s NAV per share at 30 June
2019, the performance fee will be either payable in cash
(subject to the Investment Manager being required to use the cash
payment to purchase Ordinary shares in the market) or satisfied by
the sale of Ordinary shares out of Treasury or by the issue of new
fully paid Ordinary shares at the closing mid-market closing price
on 30 June 2019, respectively.
As at 31 December 2018, the
Investment Manager held 6,203,326 Ordinary shares (30 June 2018: 3,530,930) of the Company,
representing 6.40 per cent (30 June
2018: 3.63 per cent) of the voting share capital. Subsequent
to the period end, the Investment Manager purchased 10,000 Ordinary
shares of the Company on 5 February
2019 and now holds 6,213,326 Ordinary shares of the
Company.
The interests of the Directors in the share capital of the
Company at the period/year end, and as at the date of this report,
are as follows:
|
31 December 2018 |
|
30 June 2018 |
|
Number of Ordinary shares |
Total
voting rights |
|
Number
of Ordinary shares |
Total
voting rights |
Christopher
Waldron(1) |
15,000 |
0.02% |
|
10,000 |
0.01% |
Jane Le
Maitre(2) |
6,000 |
0.01% |
|
N/A |
N/A |
Total |
21,000 |
0.03% |
|
10,000 |
0.01% |
(1) Chairman of
the Company
(2) Ordinary Shares
held indirectly
All related party transactions are carried out on an arm’s
length basis.
10. POST
BALANCE SHEET
EVENTS
The Company purchased 73,800 of its own Ordinary Shares during
the period between 1 January 2019 and
10 January 2019, which were held as
Treasury shares. Following these purchases, the total number of
Ordinary Shares held as Treasury shares by the Company is
2,867,782.
On 5 February 2019, the Investment
Manager purchased 10,000 Ordinary shares of the Company and now
holds 6,213,326 Ordinary shares of the Company.
On 11 February 2019, the Company
reported that its unaudited NAV at 31
January 2019 was 216.96 pence
per share.
11.
AVAILABILITY OF INTERIM REPORT
Copies of the Interim Report will be available to download from
the Company’s website www.crystalamber.com.
Glossary of
Capitalised Defined Terms
“AGM” means the annual general meeting of the
Company;
“AIC” means the Association of Investment Companies;
“AIM” means the Alternative Investment Market of the
London Stock Exchange;
“Annual Financial Statements” means the audited annual
financial statements of the Company, including the Statement of
Profit or Loss and Other Comprehensive Income, the Statement of
Financial Position, the Statement of Changes in Equity, the
Statement of Cash Flows and associated notes;
“Annual Report” means the annual publication of the
Company to the shareholders to describe their operations and
financial conditions, together with the Company’s financial
statements;
“Black Scholes” means the Black Scholes model, a
mathematical model of a financial market containing derivative
instruments;
“Board” or “Directors” or “Board of
Directors” means the directors of the Company;
“Brexit” means the departure of the UK from the European
Union;
“Company” or “Fund” means Crystal Amber Fund
Limited;
“Companies Law” means the Companies (Guernsey) Law, 2008,
(as amended);
“Dow Jones Industrial Average” means a stock market index
that indicates the value of thirty large publicly owned companies
based in the US;
“EGM” or “Extraordinary General Meeting” means an
extraordinary general meeting of the Company;
“FDA” means food and drug administration;
“FPSO” means floating production storage and offloading
vessel;
“FTSE” means Financial Times Stock Exchange;
“FVTPL” means Fair Value Through Profit or Loss;
“IAS” means international accounting standards as issued
by the Board of the International Accounting Standards
Committee;
“IFRS” means the International Financial Reporting
Standards, being the principles-based accounting standards,
interpretations and the framework by that name issued by the
International Accounting Standards Board, as adopted by the
European Union;
“IMA” means the investment management agreement between
the Company and the Investment Manager, dated 16 June 2008, as amended on 21 August 2013, further amended on 27 January 2015 and further amended on
12 June 2018;
“Interim Financial Statements” means the unaudited
condensed interim financial statements of the Company, including
the Condensed Statement of Profit or Loss and Other Comprehensive
Income, the Condensed Statement of Financial Position, the
Condensed Statement of Changes in Equity, the Condensed Statement
of Cash Flows and associated notes;
“Interim Report” means the Company’s interim report and
unaudited condensed financial statements for the period ended 31
December;
“IPO” means initial public offering;
“Lancaster EPS” means Lancaster Early Production
System;
“NAV” or “Net Asset Value” means the value of the
assets of the Company less its liabilities as calculated in
accordance with the Company’s valuation policies and expressed in
Pounds Sterling;
“NAV per share” means the Net Asset Value per Ordinary
share of the Company and is expressed in pence;
“Small Cap Index” means an index of small market
capitalisation companies;
“Ordinary share” means an allotted, called up and fully
paid Ordinary share of the Company of £0.01 each;
“S&P 500 Index” means a US stock market index based
on the market capitalisations of 500 large companies having common
stock listed;
“SORP” means Statement of Recommended Practice;
“Treasury” means the reserve of Ordinary shares that have
been repurchased by the Company;
“Treasury shares” means Ordinary shares in the Company
that have been repurchased by the Company and are held as Treasury
shares;
“UK” or “United Kingdom” means the United Kingdom of Great Britain and Northern Ireland;
“US” means the means the United
States of America, its territories and possessions, any
state of the United States and the
District of Columbia;
“US$” means United
States dollars; and
“£” or “Pounds Sterling” or “Sterling”
means British pound sterling and “pence” means British
pence.
Directors and
General Information
Directors
Christopher Waldron (Chairman)
Fred Hervouet
Jane Le Maitre (Chairman of Audit Committee)
Nigel Ward (Chairman of Remuneration and Management Engagement
Committee)
Investment Adviser
Crystal Amber Advisers (UK) LLP
17c Curzon Street
London W1J 5HU
United Kingdom
Administrator and Secretary
Estera International Fund Managers (Guernsey) Limited
Heritage Hall
Le Marchant Street
St. Peter Port
Guernsey GY1 4HY
Broker
Winterflood Investment Trusts
The Atrium Building
Cannon Bridge House
25 Dowgate Hill
London EC4R 2GA
United Kingdom
Independent Auditor
KPMG Channel Islands Limited
Glategny Court
Glategny Esplanade
St. Peter Port
Guernsey GY1 1WR
Identifiers
ISIN: GG00B1Z2SL48
Sedol: B1Z2SL4
Ticker: CRS
Website: crystalamber.com
LEI: 213800662E2XKP9JD811 |
Registered Office
Heritage Hall
Le Marchant Street
St. Peter Port
Guernsey GY1 4HY
Investment Manager
Crystal Amber Asset Management (Guernsey) Limited
Heritage Hall
Le Marchant Street
St. Peter Port
Guernsey GY1 4HY
Nominated Adviser
Allenby Capital Limited
5 St. Helen’s Place
London EC3A 6AB
United Kingdom
Legal Advisers to the Company
As to English Law
Norton Rose Fulbright LLP
3 More London Riverside
London SE1 2AQ
United Kingdom
As to Guernsey Law
Carey Olsen
PO Box 98
Carey House
Les Banques
St. Peter Port
Guernsey GY1 4BZ
Custodian
ABN AMRO (Guernsey) Limited
PO Box 253
Martello Court
Admiral Park
St. Peter Port
Guernsey GY1 3QJ
Registrar
Link Asset Services
65 Gresham Street
London
EC2V 7NQ
United Kingdom |