Half-yearly Report
September 26 2008 - 2:00AM
UK Regulatory
EVOLVE CAPITAL PLC ("EVOLVE" OR "THE COMPANY")
INTERIM STATEMENT FOR THE SEVEN MONTH PERIOD TO 30 JUNE 2008
CHAIRMAN'S STATEMENT
I am pleased to present Evolve's first interim accounts which show the results
of the Company for the seven month period from 1 December 2007 to 30 June 2008.
The Company was established to invest in pre IPO businesses intending to join
the PLUS-quoted market or in companies already trading on the PLUS-quoted
market.
Financial Review
In December 2007 the Company completed the raising of some �4million of new
equity capital and on 28 December 2007 the Company's shares were admitted to
trading on AIM. Evolve is believed to be the only AIM listed company offering
investors a pure opportunity to invest in the PLUS-quoted market on a
pre-selected portfolio basis.
During the period under review the Company reported a loss before and after tax
of �3,971. The Directors propose that no dividend be paid at the current time.
At 30 June 2008 the Company's net assets were �3.9million. However, as the
Company does not report under International Financial Reporting Standards
("IFRS"), investments held by the Company are included within net assets at
cost less any provision for impairment.
Evolve completed 3 investments during the period under review, brief details of
which are as follows.
Aconite Technology Limited ("Aconite")
Aconite is a private company that has developed and is marketing a suite of
open platform software products that enable the issuers of credit cards and
other plastic payment cards to migrate to the new EMV industry standard (chip
and pin) cards without the need to replace their existing infrastructure that
was designed and installed to process and manage magnetic stripe cards.
Aconite's software also enables card issuers to issue and manage pre-paid debit
cards on an efficient and highly cost effective basis. Evolve invested �500,000
in the ordinary share capital of Aconite in March 2008. On the basis of the
valuation at which a subsequent investment in Aconite was made in July 2008 by
Datacard Group, the world's largest provider of payment card solutions,
Evolve's investment would be valued at some �662,000, representing a notional
uplift of �162,000.
Woodspeen Training plc ("Woodspeen")
Woodspeen is a training company addressing the government funded vocational
training sector, with a specific focus on the Learn Direct and Train to Gain
programmes. Woodspeen's management comprise the previous Chief Executive and
co-founder as well as the previous Finance Director of BPP, a fully listed
company and one of the UK's leading professional training companies. Evolve
invested �300,000 in the ordinary share capital of Woodspeen in January 2008.
Woodspeen was subsequently admitted to the PLUS-quoted market in March 2008 as
an investment company and was readmitted in June 2008, as required under the
PLUS-quoted rules, upon completion of the reverse takeover of Future Training
Centres Limited, Woodspeen's first acquisition. Based on Woodspeen's current
bid market price, Evolve's shareholding is valued at �795,000, a notional gain
of �495,000.
Pulse Group plc ("Pulse")
Pulse is a leading provider of RPO (research process outsourcing) in Asia
Pacific and services market research companies based throughout the world.
Evolve initially invested �500,000 in the ordinary share capital of Pulse in
June 2008 and Pulse joined the PLUS-quoted market later that month. Since then,
Evolve has reduced the level of its investment to �295,600 at the date of this
report (�373,596 at 30 June 2008) through a series of share disposals. Based on
Pulse's current bid market price, Evolve's shareholding is valued at �705,483,
a notional gain of �365,763.
Details of the investments above are summarised in the following table:
Investment Cost at 30 Cost attributed to Valuation at Notional gain
June 2008 disposals between 1 July date of this at date of this
2008 and date of this report report
report
Aconite 500,000 - 661,904 161,904
Woodspeen 300,000 - 795,000 495,000
Pulse 373,596 (33,876) 705,483 365,763
Based on the current market values, the total notional gain on these
investments at the date of this report is �1,022,667, which equates to a
notional gain of 2.21p per share. However, shareholders should note that, due
to the lack of liquidity in small cap stockmarkets in general, which includes
the PLUS-quoted market, there is no guarantee that the investments discussed
above could be sold for their current market values, particularly as they
represent relatively large shareholdings in the companies invested in. In the
case of Aconite, shareholders should note that there is at present no market
for its shares, although it is the intention of Aconite to seek a quotation on
PLUS.
During the year Evolve also made a small loan and investment in the ordinary
share capital of 3D Diagnostic Imaging plc ("3D") to enable it to complete the
acquisition of the assets and business of an AIM company which had failed
earlier in the year. Evolve hopes to invest further in 3D as part of a more
comprehensive financing of the company and it is the management's current
intention that 3D will join the PLUS-quoted market in the final quarter of
2008.
I feel that the Company's decision to focus on the PLUS-quoted market has been
vindicated by the difficult conditions encountered by small cap companies on
AIM over the last few months. We have seen and continue to see many excellent
investment opportunities in the small cap space and remain convinced that the
PLUS-quoted market is the ideal market place for such companies. We believe
that PLUS-quoted will continue to grow in size and in stature and that Evolve
is well placed to take advantage of that growth.
All in all an encouraging start!
Oliver Vaughan
Chairman
26 September 2008
Enquiries:
Evolve Capital Plc Dowgate Capital Advisers Limited
Oliver Vaughan, Chairman Nominated adviser
Telephone: +44 (0) 20 7937 4445 James Caithie
Telephone: +44 (0) 20 7492 4777
Evolve Capital Plc
Profit and loss account for the seven month period to 30 June 2008
Unaudited
7 months to
30 June 2008
�
Turnover -
Administrative expenses 110,351
Operating loss (110,351)
Profit on disposal of fixed asset investments 23,596
Loss on ordinary activities before interest (86,755)
Interest receivable and similar income 82,784
Loss on ordinary activities before and after (3,971)
taxation
Loss per share - Basic and diluted (0.01)p
Evolve Capital Plc
Balance sheet at 30 June 2008
Unaudited Unaudited
30 June 2008 30 June 2008
� �
Fixed assets
Tangible fixed assets 7,614
Fixed asset investments 1,213,596
1,221,210
Current assets
Debtors 138,122
Cash at bank 2,591,010
2,729,132
Creditors: amounts falling due within one year 13,745
Net current assets 2,715,387
Total assets less current liabilities 3,936,597
Capital and reserves
Called up share capital 462,500
Share premium account 3,478,068
Profit and loss account (3,971)
Shareholders' funds 3,936,597
Evolve Capital Plc
Cash flow statement for the seven month period to 30 June 2008
Unaudited Unaudited
30 June 2008 30 June 2008
� �
Reconciliation of operating loss to net cash
outflow from operating activities
Operating loss (110,351)
Depreciation of tangible fixed assets 1,300
Increase in debtors (9,994)
Increase in creditors 13,745
Net cash outflow from operating activities (105,300)
Returns on investments and servicing of finance
Interest received 74,656
Capital expenditure and financial investment
Payments to acquire fixed asset investments (1,340,000)
Receipts from sale of fixed asset investments 30,000
Payments to acquire tangible fixed assets (8,914)
(1,318,914)
Cash outflow before use of liquid resources and (1,349,558)
financing
Management of liquid resources
Increase in short term deposits (2,561,594)
Financing
Issue of ordinary share capital 4,012,500
Expenses paid in connection with share issue (121,932)
3,890,568
Decrease in cash (20,584)
Unaudited
30 June 2008
�
Reconciliation of net cash flow to movement in net
funds
Decrease in cash (20,584)
Cash outflow from changes in liquid resources 2,561,594
Movement in net funds 2,541,010
Opening net funds 50,000
Closing net funds 2,591,010
Evolve Capital Plc
Notes to the interim financial statements for the seven month period ended 30
June 2008
1. Nature of financial information
This interim report was approved by the board of directors on 25 September
2008.
The financial information contained in this interim report does not comprise
statutory accounts as defined by section 240 of the Companies Act 1985.
The interim financial information has been prepared in a form consistent with
that which will be adopted in the Company's annual accounts having regard to
the accounting standards applicable to such annual accounts.
The financial information for the seven month period ended 30 June 2008 is
unaudited but has been reviewed by the Company's auditors.
2. Accounting policies
Basis of preparation
The interim financial information has been prepared under the historical cost
convention and in accordance with applicable law and United Kingdom Accounting
Standards (United Kingdom Generally Accepted Accounting Practice).
The following principal accounting policies have been applied:
Valuation of investments
Investments held as fixed assets are stated at cost less any provision for
impairment.
Depreciation
Depreciation is provided to write off the cost, less estimated residual values,
of tangible fixed assets evenly over their expected useful lives. It is
calculated at the following rate:
Office equipment - 25%
Liquid resources
For the purposes of the cash flow statement, liquid resources are defined as
short term deposits.
3. Loss per share
The basic loss per share has been calculated by dividing the loss by the
weighted average number of shares in issue during the relevant period. There is
no dilution as there are no potential ordinary shares.
4. Interim report
A copy of the Interim Report will be distributed to shareholders shortly and
will be available from Evolve Capital plc, 223a Kensington High Street, London
W8 6SG during the next four weeks.
END
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