TIDMEVOL TIDMASTR
RNS Number : 6607Z
Evolve Capital PLC
25 September 2009
Evolve Capital Plc
INTERIM CONDENSED FINANCIAL STATEMENTS
for the six months ended 30 June 2009
Evolve Capital Plc today announces its interim results for the six months ended
30 June 2009 which incorporate the results for its principal operating
subsidiary, Astaire Group Plc.
Highlights
* Restructuring of Astaire Group largely completed
* Acquisition of St Helen Capital Partners LLP, creating the largest PLUS
corporate adviser
* Successful investment activity in 3D Diagnostic Imaging Plc and WH Ireland Group
Plc
* Underlying loss before tax * of GBP2.4 million (2008 loss of GBP4,000),
reflecting the acquisition of Astaire Group
* Basic earnings per share of 1.48 pence (2008 loss per share of 0.01 pence)
* Strong balance sheet, with GBP10.5 million of cash at period end
* Stated before share based payments, amortisation and the impairment of
intangibles, movements on fair value investments adjusted for associated
operating costs and loss on sale of subsidiaries.
Oliver Vaughan, Chairman, commented:
"The acquisition of Astaire Group has transformed Evolve into a broad based
financial services business. With leading advisory positions on the PLUS and AIM
markets and a strong private client stockbroking network across the south and
west of England, we have established a strong base in the small and mid cap
quoted sector, from which we aim to expand further."
Enquiries
+------------------------------------+------------------------------------------+
| Evolve Capital PLC | 020 7937 4445 |
+------------------------------------+------------------------------------------+
| Edward Vandyk | |
+------------------------------------+------------------------------------------+
| | |
+------------------------------------+------------------------------------------+
| Fairfax I.S. PLC, Nominated | 020 7598 5368 |
| Adviser | |
+------------------------------------+------------------------------------------+
| Jeremy Porter | |
+------------------------------------+------------------------------------------+
| | |
+------------------------------------+------------------------------------------+
| | |
+------------------------------------+------------------------------------------+
| Maitland | 020 7379 5151 |
+------------------------------------+------------------------------------------+
| Neil Bennett | |
+------------------------------------+------------------------------------------+
| George Hudson | |
+------------------------------------+------------------------------------------+
| Tom Roberts | |
+------------------------------------+------------------------------------------+
Chairman's Statement
I am pleased to present the results for the six month period ended 30 June 2009.
These results are the first the Company has prepared since acquiring a majority
stake in Astaire Group Plc ("Astaire"). The Group now comprises financial
services businesses incorporating:
* the largest advisory business focused on PLUS companies
* an institutional stockbroker and a top three AIM Nominated Adviser
* a well established private client stockbroking network in the South and West of
England
Results
Following the acquisition of Astaire, Evolve is now required to report under
International Financial Reporting Standards and the results for the period
reflect the impact of this changed reporting basis and are explained in greater
detail in the Financial Review.
The enlarged Group, incorporating Astaire, generated an underlying loss before
tax for the six months ended 30 June 2009 of GBP2,419,000 (30 June 2008:
GBP4,000 loss) and had net assets per share at 30 June 2009 of 8.84 pence (30
June 2008: 9.47 pence). An explanation of the difference between headline
profit and underlying loss is set out in the Financial Review.
Astaire Group Plc (formerly Blue Oar Plc)
During the period the Directors have, as expected, been heavily focussed on
completing the process of assuming executive control of Astaire, implementing
Board changes and conducting a strategic review of the business.
The recommendations from the strategic review, which were fully supported by the
Evolve Board, have resulted in a rationalisation of the activities of
Astaire. This included an exit from wholesale asset management, an exit from
trading in Australia, and the reshaping of the London based institutional
business. Alongside this the executive were mandated to seek economies of scale
through selective acquisitions of businesses with corporate clients and
specialist staff, with the intention of building a more robust business
servicing its corporate and institutional clients.
Since the end of the period Astaire acquired Dowgate Capital Plc (with its two
regulated subsidiaries) and Ruegg and Co Limited, adding retained corporate
clients and staff to the Group. These additions put Astaire Securities, as an
AIM Nominated Adviser, into the top three by number of retained corporate
clients.
Rowan Dartington & Co Limited
The strategic review also covered Rowan Dartington, Astaire's private client
stockbroking and asset management business. The Board of Astaire, again fully
supported by the Evolve Board, resolved to continue to invest in, and develop
this business, and this is ongoing. In the document setting out the Offer by
Evolve for Astaire, reference was made to the possibility of distributing shares
in Rowan Dartington within the next three (now two and a half) years. The Board
has subsequently concluded that there is a strong rationale for retaining
ownership of Rowan Dartington and building a consolidated financial services
group.
St Helens Capital Partners LLP
On 14 September 2009 Evolve acquired Whim Gully Capital LLP which had itself
just acquired the PLUS advisory business of St Helen's Capital Plc. The combined
business has now been renamed St Helens Capital Partners LLP. The Evolve Group
now owns the largest PLUS corporate adviser. It is expected that this business
will continue to grow the number of retained corporate clients organically and
expand its advisory activities and revenues over the next few months and years.
Evolve principal investment
The Company has continued its investing activities, including providing capital
to 3D Diagnostic Imaging Plc which was subsequently admitted to the PLUS quoted
market. At 30 June 2009, our holding was valued at GBP2,072,000, an uplift of
GBP1,544,000. During the period Evolve also purchased shares in WH Ireland Group
Plc issuing new Evolve shares as consideration. This holding in WH Ireland was
subsequently sold for cash realising a profit of GBP418,000.
2009 continues to be a year of considerable activity for the Group,
restructuring and building a sound base to maintain and develop a significant
presence in the small and mid cap quoted sectors in the UK.
Oliver Vaughan
Chairman
25th September 2009
Financial Review
Adoption of International Financial Reporting Standards
As mentioned in the Chairman's statement Evolve is adopting, for the first time,
international financial accounting rules in the form of International Financial
Reporting Standards and International Accounting Standards (collectively
"IFRS's").
Details of the ways in which IFRS's have affected the reported performance of
the Group are shown in the notes to this Interim Report, including details of
the restatement of the 2008 numbers. A full reconciliation of the difference
between the original 2008 results, reported under UK Generally Accepted
Accounting Practice ("UK GAAP") and the restated 2008 results under IFRS is
shown in note 10.
Result before tax
The result for the first six months of 2009 was a headline profit before tax of
GBP1,809,000, which on an underlying basis (the metric by which the Board now
monitors performance on an ongoing basis and which is considered to provide the
optimal comparative measure), resulted in a loss before tax of GBP2,419,000 as
detailed below:
+------------------------------------------+------------+------------+------------+
| | Unaudited | Unaudited | Unaudited |
| | six months | period to | period to |
| | to | 30 June 08 | 28 Dec 08 |
| | 30 June 09 | GBP000 | GBP000 |
| | GBP000 | | |
+------------------------------------------+------------+------------+------------+
| | | | |
+------------------------------------------+------------+------------+------------+
| Headline profit / (loss) on ordinary | 1,809 | (4) | (116) |
| activities before taxation | | | |
+------------------------------------------+------------+------------+------------+
| Add back: | | | |
+------------------------------------------+------------+------------+------------+
| Gain on fair value through profit and | (1,567) | - | - |
| loss investments | | | |
+------------------------------------------+------------+------------+------------+
| Adjustment for associated operating | 12 | - | - |
| costs | | | |
+------------------------------------------+------------+------------+------------+
| Loss of sale of subsidiary | 616 | - | - |
+------------------------------------------+------------+------------+------------+
| Impairment of goodwill | 64 | - | - |
+------------------------------------------+------------+------------+------------+
| Amortisation of other intangibles | 198 | - | - |
+------------------------------------------+------------+------------+------------+
| Negative goodwill released to income | (2,919) | - | - |
+------------------------------------------+------------+------------+------------+
| Share based payments - credit | (924) | - | - |
+------------------------------------------+------------+------------+------------+
| Share based payments - charge | 292 | - | - |
+------------------------------------------+------------+------------+------------+
| | | | |
+------------------------------------------+------------+------------+------------+
| Underlying loss on ordinary activities | (2,419) | (4) | (116) |
| before taxation | | | |
+------------------------------------------+------------+------------+------------+
Income statement
Trading performance is now reported in the Income Statement, rather than the
Profit and Loss account, although much of the presentation is relatively
unchanged.
The main features of IFRS affecting the "old" stand alone Evolve accounts relate
to the basis of valuing investments and how the movements in those valuations
are treated. Whereas previously investments would have been included at cost
less an estimate of any permanent reduction in value, with that movement being
accounted for as an expense, under IFRS all investments are now revalued at each
Balance Sheet date and depending on whether they are classified as being
"available for sale" or not, the change in valuation, positive or negative, is
accounted for through reserves or through the Income Statement.
Our investments and their valuations are split, by virtue of the size of
holdings, between Available for Sale Investments ("AFS") and Fair Value through
Profit and Loss Investments ("FVTPL"), as follows:
+------------------------+---------------+-------------+-------------+-------------+
| Investment | Size of | Cost | Valuation | AFS or |
| | holding | | | FVTPL |
+------------------------+---------------+-------------+-------------+-------------+
| | | GBP'000 | GBP'000 | |
+------------------------+---------------+-------------+-------------+-------------+
| | | | | |
+------------------------+---------------+-------------+-------------+-------------+
| 3D Diagnostic Imaging | 41.5% | 528 | 2,072 | FVTPL |
| Plc | | | | |
+------------------------+---------------+-------------+-------------+-------------+
| AconiteTechnology Plc | 6.2% | 500 | 200 | AFS |
+------------------------+---------------+-------------+-------------+-------------+
| Pulse Group Plc | 6.6% | 328 | 258 | AFS |
+------------------------+---------------+-------------+-------------+-------------+
| Woodspeen Training Plc | 14.6% | 450 | 1,147 | AFS |
+------------------------+---------------+-------------+-------------+-------------+
The whole of the increase in fair value of GBP1,544,000 arising on the 3D
Diagnostics investment at 30 June 2009, has been included in the 2009 Income
statement.
Another significant item appearing in the income statement is the GBP2,919,000
gain arising on the Astaire acquisition. This gain is created because of the
requirement to write off negative goodwill arising from the fair value of assets
acquired on the Astaire bid being greater than the valuation of the
consideration paid by Evolve.
In addition the first half of 2009 has benefitted from purchasing and
subsequently selling a holding in W H Ireland Group Plc, realising a profit of
GBP418,000, included in the profit on disposal of AFS investments.
A credit of GBP924,000 in respect of share-based payments relates to the
cancellation of a large number of options previously issued to staff no longer
employed within the Astaire group.
Astaire Group results, aggregated with Evolve in these figures included an
underlying loss before tax of GBP2,265,000. As expected the costs of
restructuring the businesses within Astaire were significant, and revenues in
the first half of the year were limited. Costs have been addressed, and revenues
are improving, resulting in the Astaire Group achieving profitability for the
month of June, the first monthly profit for fifteen months.
Taxation
The tax charge for the period reflects a corporation tax provision in respect of
the investments profits realised and a deferred tax charge in respect of the tax
that would arise if the FVTPL investment gain shown in the income statement had
been realised.
Loss from discontinued operations
This loss relates to Inteq Limited, an Astaire subsidiary that was sold in the
period.
Earnings per share
Basic earnings per share from continuing operations were 1.48 pence per share
(2008: 0.01 pence per share loss). As there are no options or other dilutive
instruments in issue fully diluted earnings per share are the same as basic
earnings per share.
Balance sheet
The format of the Balance Sheet has changed under IFRS. Included in the notes to
these accounts are reconciliations showing the way in which the figures
previously published have changed and the effects of re-measuring some
categories of assets and liabilities.
Other intangible assets are the values the Board are required to attribute to
the brand names and customer lists acquired with Astaire.
The most significant effect of IFRS has been the revaluation of AFS and FVTPL
investments as referred to above.
At 30 June 2009 the enlarged group held cash balances of GBP10.5 million. This
figure has fallen since the period end due to acquisitions completed by Astaire
and Evolve as well as ongoing working capital requirements.
Going concern
As part of its regular assessment of the future prospects for the Group, the
Board reviews a one year plan and further projections. Group cash balances
including those acquired have decreased during 2009, but the Group has
significant cash resources and no borrowings. As detailed above, the Group has
undertaken a strategic review and cut costs across its operating businesses.
As a result of such considerations, the Directors have a reasonable expectation
at the time of approving the interim financial statements that the Company and
the Group have adequate resources to continue in operational existence for the
foreseeable future. For this reason, they continue to adopt the going concern
basis in preparing the interim financial statements.
Edward Vandyk
Chief Executive
25th September 2009
Condensed Consolidated Income Statement
for the six months ended 30 June 2009
+----------------------------------------+-------------+-------------+-------------+
| | Unaudited | Unaudited | Unaudited |
| | Six months | Period to | Period to |
| | to | 30 June 08 | 28 December |
| | 30 June 09 | GBP'000 | 08 |
| | GBP'000 | | GBP'000 |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Fee and commission income | 6,187 | - | - |
+----------------------------------------+-------------+-------------+-------------+
| Fee and commission expenses | (1,028) | - | - |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Net fee and commission income | 5,159 | - | - |
+----------------------------------------+-------------+-------------+-------------+
| Other income | 338 | - | - |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Total income | 5,497 | - | - |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Profit on disposal of | 540 | 24 | 76 |
| available-for-sale investments | | | |
+----------------------------------------+-------------+-------------+-------------+
| Gain on fair value through profit and | 1,567 | - | - |
| loss investments | | | |
+----------------------------------------+-------------+-------------+-------------+
| Loss on sale of subsidiary | (616) | - | - |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Operating expenses | (64) | - | - |
| Impairment of goodwill and other | | | |
| intangibles | | | |
+----------------------------------------+-------------+-------------+-------------+
| Amortisation of other intangibles | (198) | - | - |
+----------------------------------------+-------------+-------------+-------------+
| Negative goodwill | 2,919 | - | - |
+----------------------------------------+-------------+-------------+-------------+
| Share-based payments credit | 924 | - | - |
+----------------------------------------+-------------+-------------+-------------+
| Share-based payments charge | (292) | - | - |
+----------------------------------------+-------------+-------------+-------------+
| Other operating expenses | (8,622) | (111) | (332) |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Total operating expenses | (5,333) | (111) | (332) |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Operating profit / (loss) | 1,655 | (87) | (256) |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Investment revenue | 160 | 83 | 140 |
+----------------------------------------+-------------+-------------+-------------+
| Finance costs | (6) | - | - |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Profit / (loss) on ordinary activities | 1,809 | (4) | (116) |
| before taxation | | | |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Taxation | (312) | - | - |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Profit / (loss) from continuing | 1,497 | (4) | (116) |
| operations | | | |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Discontinued operations | | | |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Loss from discontinued operations | (196) | - | - |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Profit / (loss) for the period | 1,301 | (4) | (116) |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Attributable to | | | |
+----------------------------------------+-------------+-------------+-------------+
| Equity shareholders of the parent | 2,238 | (4) | (116) |
+----------------------------------------+-------------+-------------+-------------+
| Minority interest | (937) | - | - |
+----------------------------------------+-------------+-------------+-------------+
| | 1,301 | (4) | (116) |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Earnings / (loss) per ordinary share | | | |
| (pence) | | | |
+----------------------------------------+-------------+-------------+-------------+
| From continuing operations | | | |
+----------------------------------------+-------------+-------------+-------------+
| - Basic and diluted | 1.48 | (0.01) | (0.36) |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| From continuing and discontinued | | | |
| operations | | | |
+----------------------------------------+-------------+-------------+-------------+
| - Basic and diluted | 1.40 | (0.01) | (0.36) |
+----------------------------------------+-------------+-------------+-------------+
Condensed Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2009
+-----------------------------------------+------------+-------------+-------------+
| | Unaudited | Unaudited | Unaudited |
| | Six months | Period to | Period to |
| | to | 30 June 08 | 28 December |
| | 30 June 09 | GBP'000 | 08 |
| | GBP'000 | | GBP'000 |
+-----------------------------------------+------------+-------------+-------------+
| | | | |
+-----------------------------------------+------------+-------------+-------------+
| Profit / (loss) for the period | 1,301 | (4) | (116) |
+-----------------------------------------+------------+-------------+-------------+
| | | | |
+-----------------------------------------+------------+-------------+-------------+
| Other comprehensive income: | | | |
+-----------------------------------------+------------+-------------+-------------+
| Gains on revaluation of | 286 | 618 | 474 |
| available-for-sale investments taken to | | | |
| equity, net of tax | | | |
+-----------------------------------------+------------+-------------+-------------+
| Exchange differences on translation of | 3 | - | - |
| foreign operations | | | |
+-----------------------------------------+------------+-------------+-------------+
| Exchange differences on sale of foreign | (3) | - | - |
| operations | | | |
+-----------------------------------------+------------+-------------+-------------+
| Transferred to profit or loss on sale | (5) | - | - |
| of | | | |
| available-for-sale investments | | | |
+-----------------------------------------+------------+-------------+-------------+
| Deferred tax relating to components of | (64) | (173) | (133) |
| other | | | |
| comprehensive income | | | |
+-----------------------------------------+------------+-------------+-------------+
| | | | |
+-----------------------------------------+------------+-------------+-------------+
| Other comprehensive income for the | 217 | 445 | 341 |
| period, net of tax | | | |
+-----------------------------------------+------------+-------------+-------------+
| | | | |
+-----------------------------------------+------------+-------------+-------------+
| Total comprehensive income for the | 1,518 | 441 | 225 |
| period | | | |
+-----------------------------------------+------------+-------------+-------------+
| | | | |
+-----------------------------------------+------------+-------------+-------------+
| Total comprehensive income attributable | | | |
| to | | | |
+-----------------------------------------+------------+-------------+-------------+
| Equity shareholders of the parent | 2,437 | 441 | 225 |
+-----------------------------------------+------------+-------------+-------------+
| Minority interest | (919) | - | - |
+-----------------------------------------+------------+-------------+-------------+
| | 1,518 | 441 | 225 |
+-----------------------------------------+------------+-------------+-------------+
| | | | |
+-----------------------------------------+------------+-------------+-------------+
Condensed Consolidated Balance Sheet
as at 30 June 2009
+----------------------------------------+-------------+-------------+-------------+
| | Unaudited | Unaudited | Unaudited |
| | 30 June 09 | 30 June 08 | 28 December |
| | GBP'000 | GBP'000 | 08 |
| | | | GBP'000 |
+----------------------------------------+-------------+-------------+-------------+
| ASSETS | | | |
+----------------------------------------+-------------+-------------+-------------+
| Non-current assets | | | |
+----------------------------------------+-------------+-------------+-------------+
| Other intangible assets | 2,479 | - | - |
+----------------------------------------+-------------+-------------+-------------+
| Property, plant and equipment | 602 | 8 | 7 |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Total non-current assets | 3,081 | 8 | 7 |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Current assets | | | |
+----------------------------------------+-------------+-------------+-------------+
| Trade and other receivables | 11,747 | 153 | 314 |
+----------------------------------------+-------------+-------------+-------------+
| Available-for-sale investments | 3,136 | 1,791 | 1,603 |
+----------------------------------------+-------------+-------------+-------------+
| Fair value through profit & | 2,389 | 25 | 25 |
| loss investments | | | |
+----------------------------------------+-------------+-------------+-------------+
| Cash and cash equivalents | 10,479 | 2,591 | 2,423 |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Total current assets | 27,751 | 4,560 | 4,365 |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Total assets | 30,832 | 4,568 | 4,372 |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| LIABILITIES | | | |
+----------------------------------------+-------------+-------------+-------------+
| Current liabilities | | | |
+----------------------------------------+-------------+-------------+-------------+
| Trade and other payables | 9,978 | 13 | 73 |
+----------------------------------------+-------------+-------------+-------------+
| Current tax liabilities | 105 | - | - |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Total current liabilities | 10,083 | 13 | 73 |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Non-current liabilities | | | |
+----------------------------------------+-------------+-------------+-------------+
| Deferred tax liabilities | 1,244 | 173 | 133 |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Total non-current liabilities | 1,244 | 173 | 133 |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Total liabilities | 11,327 | 186 | 206 |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| EQUITY | | | |
+----------------------------------------+-------------+-------------+-------------+
| Share capital | 1,681 | 463 | 463 |
+----------------------------------------+-------------+-------------+-------------+
| Share premium | 11,136 | 3,478 | 3,478 |
+----------------------------------------+-------------+-------------+-------------+
| Fair value and other reserves | 558 | 445 | 341 |
+----------------------------------------+-------------+-------------+-------------+
| Retained earnings | 1,490 | (4) | (116) |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Parent company's shareholders' equity | 14,865 | 4,382 | 4,166 |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Minority interest | 4,640 | - | - |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Total equity and liabilities | 30,832 | 4,568 | 4,372 |
+----------------------------------------+-------------+-------------+-------------+
Condensed Consolidated Statement of Changes in Equity
for the six months ended 30 June 2009
+---------------------------+----------+----------+----------+----------+----------+
| | Share | Share | Fair | Retained | Total |
| | capital | premium | value | earnings | equity |
| | | | and | | |
| | | | other | | |
| | | | reserves | | |
+---------------------------+----------+----------+----------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+---------------------------+----------+----------+----------+----------+----------+
| Balance at 27 September | - | - | - | - | - |
| 2007 | | | | | |
+---------------------------+----------+----------+----------+----------+----------+
| Issue of share capital | 463 | 3,478 | - | - | 3,941 |
+---------------------------+----------+----------+----------+----------+----------+
| Total comprehensive | - | - | 445 | (4) | 441 |
| income | | | | | |
| for the period | | | | | |
+---------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+---------------------------+----------+----------+----------+----------+----------+
| Balance at 30 June 2008 | 463 | 3,478 | 445 | (4) | 4,382 |
+---------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+---------------------------+----------+----------+----------+----------+----------+
| Total comprehensive | - | - | (104) | (112) | (216) |
| income | | | | | |
| for the period | | | | | |
+---------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+---------------------------+----------+----------+----------+----------+----------+
| Balance at 31 December | 463 | 3,478 | 341 | (116) | 4,166 |
| 2008 | | | | | |
+---------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+---------------------------+----------+----------+----------+----------+----------+
| Issue of ordinary share | 1,218 | 7,658 | - | - | 8,876 |
| capital | | | | | |
+---------------------------+----------+----------+----------+----------+----------+
| Share-based payments | - | - | - | (632) | (632) |
+---------------------------+----------+----------+----------+----------+----------+
| Total comprehensive | - | - | 217 | 1,301 | 1,518 |
| income | | | | | |
| for the period | | | | | |
+---------------------------+----------+----------+----------+----------+----------+
| Minority interest | - | - | - | 937 | 937 |
+---------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+---------------------------+----------+----------+----------+----------+----------+
| Balance at 30 June 2009 | 1,681 | 11,136 | 558 | 1,490 | 14,865 |
+---------------------------+----------+----------+----------+----------+----------+
Condensed Consolidated Statement of Cash Flows
for the six months ended 30 June 09
+----------------------------------------+-------------+-------------+-------------+
| | Unaudited | Unaudited | Unaudited |
| | Six months | Period | Period |
| | to | ended | ended |
| | 30 June | 30 June | 28 December |
| | 2009 | 2008 | 2008 |
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------+-------------+-------------+-------------+
| Net cash used in operating activities | (3,823) | (129) | (570) |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Investing activities | | | |
+----------------------------------------+-------------+-------------+-------------+
| Interest received | 273 | 83 | 140 |
+----------------------------------------+-------------+-------------+-------------+
| Dividends received | 21 | - | - |
+----------------------------------------+-------------+-------------+-------------+
| Proceeds on disposal of | 1,993 | 30 | 247 |
| available-for-sale investments | | | |
+----------------------------------------+-------------+-------------+-------------+
| Purchases of available-for-sale | (2,294) | (1,300) | (1,300) |
| investments | | | |
+----------------------------------------+-------------+-------------+-------------+
| Purchases of fair value through profit | (504) | (25) | (25) |
| & loss investments | | | |
+----------------------------------------+-------------+-------------+-------------+
| Purchases of property, plant and | (37) | (9) | (10) |
| equipment | | | |
+----------------------------------------+-------------+-------------+-------------+
| Purchase of subsidiary undertaking | (1,080) | - | - |
+----------------------------------------+-------------+-------------+-------------+
| Cash acquired with subsidiary | 13,601 | - | - |
| undertaking | | | |
+----------------------------------------+-------------+-------------+-------------+
| Cash divested with subsidiary | (95) | - | - |
| undertaking | | | |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Net cash from / (used in) investing | 11,878 | (1,221) | (948) |
| activities | | | |
+----------------------------------------+-------------+-------------+-------------+
| Financing activities | | | |
+----------------------------------------+-------------+-------------+-------------+
| Capital element of finance leases | (25) | - | - |
| repaid | | | |
+----------------------------------------+-------------+-------------+-------------+
| Proceeds from issue of ordinary share | - | 4,063 | 4,063 |
| capital | | | |
+----------------------------------------+-------------+-------------+-------------+
| Expenses of share issues | - | (122) | (122) |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Net cash (used in) / from financing | (25) | 3,941 | 3,941 |
| activities | | | |
+----------------------------------------+-------------+-------------+-------------+
| Net increase in cash and cash | 8,030 | 2,591 | 2,423 |
| equivalents | | | |
+----------------------------------------+-------------+-------------+-------------+
| Cash and cash equivalents at beginning | 2,423 | - | - |
| of period | | | |
+----------------------------------------+-------------+-------------+-------------+
| | | | |
+----------------------------------------+-------------+-------------+-------------+
| Effect of foreign exchange rates | 26 | - | - |
+----------------------------------------+-------------+-------------+-------------+
| Cash and cash equivalents at end of | 10,479 | 2,591 | 2,423 |
| period | | | |
+----------------------------------------+-------------+-------------+-------------+
Notes to the Interim Condensed Financial Statements
1.ACCOUNTING POLICIES
The Interim Report is unaudited and does not constitute statutory accounts
within the meaning of section 435 of the Companies Act 2006.
The information for the year ended 31 December 2008 does not constitute
statutory accounts as defined in section 240 of the Companies Act 1985. A copy
of the statutory accounts for that year has been delivered to the Registrar of
Companies. The auditors' report on those accounts was not qualified, did not
include reference to any matters to which the auditors drew attention by way of
emphasis without qualifying the report, and did not contain statements under
section 237(2) or (3) of the Companies Act 1985.
The interim condensed financial statements will be circulated to all
shareholders by 2 October 2009 and will be available from the Company's
registered office at 223a Kensington High Street, London W8 6SG and also in
accordance with Rule 20 of the AIM rules, on the Company's website at
www.evolvecapital.co.uk.
The following accounting policies have been applied in dealing with items which
are considered material in relation to the Group's financial statements:
+-------------------------+----------------------------------------------------------------------------+
| a) | Basis of preparation |
+-------------------------+----------------------------------------------------------------------------+
The Group has adopted the requirements of International Financial Reporting
Standards and International Accounting Standards as endorsed by the EU
(collectively "IFRSs") for the first time for the purpose of preparing financial
statements for the year ending 31 December 2009. The consolidated financial
information contained within these interim condensed financial statements has
been prepared in accordance with accounting policies which will be adopted in
presenting the full year annual report and accounts.
The consolidated financial statements have been prepared under the historical
cost convention, with the exception of financial instruments, which are stated
in accordance with IAS 39 Financial Instruments: Recognition and Measurement.
IAS 1 (revised) requires the presentation of a statement of changes in equity as
a primary statement, separate from the income statement and statement of
comprehensive income. As a result, a condensed consolidated statement of changes
in equity has been included in the primary statements, showing changes in each
component of equity for each period presented.
+-------------------------+----------------------------------------------------------------------------+
| b) | Going concern |
+-------------------------+----------------------------------------------------------------------------+
As part of its regular assessment of the prospects for the Group, the Board
reviews a one year plan and further projections. Group cash balances including
those acquired have decreased during 2009, but the Group has significant cash
resources and no borrowings. As detailed in the Financial Review, the Group has
undertaken a strategic review and cut costs across its operating businesses.
As a result of such considerations, the Directors have a reasonable expectation
at the time of approving the financial statements that the Company and the Group
have adequate resources to continue in operational existence for the foreseeable
future. For this reason, they continue to adopt the going concern basis in
preparing the financial statements.
+-------------------------+----------------------------------------------------------------------------+
| c) | Basis of consolidation |
+-------------------------+----------------------------------------------------------------------------+
The consolidated financial statements incorporate the financial statements of
the Company and entities controlled by the Company (its subsidiaries) made up to
31 December each year. Control is achieved where the Company has the power to
govern the financial and operating policies of an investee entity so as to
obtain benefit from its activities. The results of subsidiaries acquired or
disposed of during the year are included in the consolidated income statement
from the effective date of acquisition or up to the effective date of disposal,
as appropriate. All intra-group transactions, balances, income and expenses are
eliminated on consolidation.
Changes in percentage interest (increases and decreases) of a controlled entity
that do not result in a change of control are accounted for as transactions with
equity holders, and no adjustment is made to goodwill. The difference between
the amount paid and the book value of the minority interest eliminated is taken
directly to equity.
+-------------------------+----------------------------------------------------------------------------+
| d) | Revenue recognition |
+-------------------------+----------------------------------------------------------------------------+
The Group follows the principles of IAS 18, 'Revenue Recognition', in
determining appropriate revenue recognition policies. In principle, therefore,
revenue is recognised to the extent that it is probable that the economic
benefits associated with the transaction will flow into the Group.
Corporate Finance: Revenue comprises the value of services supplied by the
Group, exclusive of value added tax. Advisory fees are recognised when the
relevant transaction is completed and retainer fees are recognised over the
length of time of the agreement. Stockbroking: Revenue comprises commission and
other fees and is recognised when receivable in accordance with the date of the
underlying transaction. Other income includes dividend income on
available-for-sale investments.
Interest income is accrued on a time basis by reference to the principal
outstanding and at the effective interest rate applicable.
+-------------------------+----------------------------------------------------------------------------+
| e) | Operating segments |
+-------------------------+----------------------------------------------------------------------------+
The Group has adopted International Financial Reporting Standard 8 "Operating
Segments" for its financial statements for the year ending 31 December 2009.
IFRS 8 requires operating segments to be identified on the basis of internal
reports about components of the Group that are regularly reviewed by the Chief
Executive to allocate resources to the segments and to assess their performance.
+-------------------------+----------------------------------------------------------------------------+
| f) | Business combinations |
+-------------------------+----------------------------------------------------------------------------+
The acquisition of subsidiaries is accounted for using the purchase method. The
cost of acquisition is measured as the aggregate of the fair values, at the date
of exchange, of the assets given, liabilities incurred or assumed, and equity
instruments issued by the Group in exchange for control of the acquiree, plus
any costs directly attributable to the business combination. The acquiree's
identifiable assets, liabilities and contingent liabilities that meet the
conditions for recognition under IFRS 3 are recognised at their fair value at
the acquisition date. As permitted by IFRS 1, the Group has chosen not to
restate, under IFRS, business combinations that took place prior to 27 September
2007, the date of transition to IFRS.
Goodwill arising on acquisition is recognised as an asset and initially measured
at cost, being the excess of the cost of the business over the Group's interest
in the net fair value of the identifiable assets, liabilities and contingent
liabilities recognised.
+-------------------------+----------------------------------------------------------------------------+
| g) | Goodwill |
+-------------------------+----------------------------------------------------------------------------+
Goodwill arising on consolidation represents the excess of the cost of
acquisition over the Group's interest in the fair value of the identifiable
assets and liabilities of a subsidiary, associate or jointly controlled entity
at the date of acquisition. Goodwill is initially recognised as an asset at cost
and is subsequently measured at cost less any impairment. Goodwill which is
recognised as an asset is reviewed for impairment at least annually. Any
impairment is recognised immediately and is not subsequently reversed. Any
negative goodwill is recognised immediately in the income statement.
For the purpose of impairment testing, goodwill is allocated to each of the
Group's cash-generating units expected to benefit from the synergies of the
combination. Cash-generating units to which goodwill has been allocated are
tested for impairment annually, or more frequently where there is an indication
that the unit may be impaired. If the recoverable amount of the cash-generating
unit is less than the carrying value of the unit, the impairment loss is
allocated first to reduce the carrying amount of any goodwill allocated to the
unit and then to the other assets of the unit pro-rata on the basis of the
carrying value of each asset in the unit. An impairment loss recognised for
goodwill is not reversed in a subsequent period.
On disposal of a subsidiary, associate or jointly controlled entity, the
attributable amount of goodwill is included in the determination of the profit
or loss on disposal. Goodwill arising on acquisitions before the date of
transition to IFRS has been retained at the previous UK GAAP amounts subject to
being tested for impairment at that date.
+-------------------------+----------------------------------------------------------------------------+
| h) | Intangible assets |
+-------------------------+----------------------------------------------------------------------------+
Intangible assets acquired separately are measured, on initial recognition, at
cost. Following initial recognition, intangible assets acquired separately are
carried at cost less accumulated amortisation and any accumulated impairment.
The cost of intangible assets acquired in a business combination is their fair
value at the date of acquisition.
Intangible assets are amortised over their useful economic lives. The
amortisation period and method for an intangible asset are reviewed at least
once every financial year. Changes in the expected useful economic life or the
expected pattern of consumption of future economic benefits embodied in the
asset are accounted for by changing the amortisation period or method and
treated as changes in accounting estimates. Amortisation is calculated on a
straight line basis to write down the cost of intangible assets to their
residual values.
+-------------------------+----------------------------------------------------------------------------+
| i) | Property, plant and equipment |
+-------------------------+----------------------------------------------------------------------------+
All property, plant and equipment is shown at cost less subsequent depreciation
and impairment. Cost includes expenditure that is directly attributable to the
acquisition of items. Depreciation is charged so as to write off the cost of
assets over their useful economic lives, using the straight line method, on the
following bases:
+---------------------------+----------------------------------------------------+
| Leasehold | period of lease |
| improvements | |
+---------------------------+----------------------------------------------------+
| Furniture and | 25 percent. or 20 percent. per annum |
| fittings | |
+---------------------------+----------------------------------------------------+
| Office equipment | 25 percent. per annum |
+---------------------------+----------------------------------------------------+
| Motor vehicles | 12.5 percent. per annum |
+---------------------------+----------------------------------------------------+
The assets' residual values and useful lives are reviewed, and if appropriate
asset values are written down to their estimated recoverable amounts, at each
balance sheet date. Gains and losses on disposals are determined by comparing
proceeds with the carrying amounts, and are included in the income statement.
+-------------------------+----------------------------------------------------------------------------+
| j) | Impairment of tangible and intangible assets |
| | excluding goodwill |
+-------------------------+----------------------------------------------------------------------------+
At each balance sheet date, the Group reviews the carrying amounts of its
tangible and intangible assets to determine whether there is any indication that
those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order to determine the
extent of the impairment loss (if any). Where the asset does not generate cash
flows that are independent from other assets, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs. An
intangible asset with an indefinite useful life is tested for impairment
annually and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted
to their present value, using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the
asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to
be less than its carrying amount, the carrying amount of the asset
(cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognised as an expense immediately.
Where an impairment loss subsequently reverses, the carrying amount of the asset
(cash-generating unit) is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised
for the asset (cash-generating unit) in prior years. A reversal of an impairment
loss is recognised as income immediately.
+-------------------------+----------------------------------------------------------------------------+
| k) | Trade and other receivables |
+-------------------------+----------------------------------------------------------------------------+
Trade and other receivables are measured at initial recognition at fair value,
and are subsequently measured at amortised cost using the effective interest
rate method. Appropriate allowances for estimated irrecoverable amounts are
recognised in profit or loss when there is objective evidence that the asset is
impaired. The allowance recognised is measured as the difference between the
asset's carrying amount and the present value of estimated future cash flows
discounted at the effective interest rate computed at initial recognition.
+-------------------------+------------------------------------------------------------------------+
| l) | Available-for-sale investments |
+-------------------------+------------------------------------------------------------------------+
Investments previously classified as current and fixed asset investments
(excluding investments in associates) have been re-classified as
available-for-sale investments, and initially recognised at fair value.
Subsequent available-for-sale investments are recognised and derecognised on a
trade date where a purchase or sale of an investment is under a contract whose
terms require delivery of the investment within the timeframe established by the
market concerned, and are initially measured at cost, including transaction
costs.
At subsequent reporting dates, available-for-sale investments are measured at
fair value. Gains or losses arising from changes in fair value are recognised
directly in equity, until the security is disposed of or is determined to be
impaired, at which time the cumulative gain or loss previously recognised in
equity is included in the net profit or loss for the period. Impairment losses
recognised in profit or loss are not subsequently reversed through profit or
loss. Any increase in fair value subsequent to an impairment loss is recognised
directly in equity.
The fair values of available-for-sale investments quoted in active markets are
determined by reference to the current quoted bid price. Where independent
market prices are not available, fair values may be determined using valuation
techniques with reference to observable market data.
Available-for-sale investments are disposed of when commercially beneficial to
the Group.
+-------------------------+----------------------------------------------------------------------------+
| m) | Fair value through profit and loss, and derivative |
| | financial instruments |
+-------------------------+----------------------------------------------------------------------------+
Investments acquired where the shareholding is in excess of 20%, but where the
Group has neither control nor significant influence are designated as fair value
through profit and loss at initial recognition, and all subsequent changes in
fair value are recognised in the income statement in the period of change.
Derivatives, including share options and warrants, are measured initially at
fair value and subsequently re-measured to fair value, through the income
statement. Fair values are calculated using industry-standard valuation
techniques, including the Black-Scholes model. The valuation inputs include the
bid-price of the underlying equity, volatility measurements based on historical
equity prices, the expected life of the option and published risk free interest
rates. All derivatives are included in assets when their fair value is positive
and liabilities when their fair value is negative, unless there is the legal
ability and intention to settle net.
+-------------------------+----------------------------------------------------------------------------+
| n) | Cash and cash equivalents |
+-------------------------+----------------------------------------------------------------------------+
Cash and cash equivalents comprise cash and demand deposits, and other
short-term highly liquid investments that are readily convertible to known
amounts of cash and are subject to insignificant risk of changes in value. Such
investments are normally those with original maturities of three months or less.
+-------------------------+----------------------------------------------------------------------------+
| o) | Trade and other payables |
+-------------------------+----------------------------------------------------------------------------+
Trade and other payables are recognised initially at fair value, which is the
agreed market price at the time goods or services are provided, and are
subsequently measured at amortised cost. The Group accrues for all goods and
services consumed but as yet unbilled at amounts representing management's best
estimate of fair value.
+-------------------------+----------------------------------------------------------------------------+
| p) | Equity instruments |
+-------------------------+----------------------------------------------------------------------------+
Equity instruments issued by the Company are recorded at the proceeds received,
net of direct issue costs.
+-------------------------+----------------------------------------------------------------------------+
| q) | Dividends |
+-------------------------+----------------------------------------------------------------------------+
Equity dividends are recognised when they become legally payable. Interim equity
dividends are recognised when paid. Final equity dividends are recognised when
approved by the shareholders at an annual general meeting.
+-------------------------+----------------------------------------------------------------------------+
| r) | Pensions |
+-------------------------+----------------------------------------------------------------------------+
Contributions to the personal pension schemes of certain employees are charged
to the income statement in the year in which they become payable.
+-------------------------+--------------------------------------------------------------------+
| s) | Share-based payments |
+-------------------------+--------------------------------------------------------------------+
Where share options are awarded to employees, the fair value of the options at
the date of grant is charged to the income statement over the vesting period.
Non-market vesting conditions are taken into account by adjusting the number of
equity instruments expected to vest at each balance sheet date so that,
ultimately, the cumulative amount recognised over the vesting period is based on
the number of options that eventually vest. Market vesting conditions are
factored into the fair value of the options granted. As long as all other
vesting conditions are satisfied, a charge is made irrespective of whether the
market vesting conditions are satisfied. The cumulative expense is not adjusted
for failure to achieve a market vesting condition.
When the terms and conditions of options are modified before they vest, the
increase in the fair value of the options, measured immediately before and after
the modification, is also charged to the income statement over the remaining
vesting period.
Where equity instruments are granted to persons other than employees, the income
statement is charged with the fair value of the goods and services received.
+-------------------------+---------------------------------------------------------------------------+
| t) | Taxation |
+-------------------------+---------------------------------------------------------------------------+
The tax expense represents the sum of the tax currently payable and the deferred
tax.
The tax currently payable is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the income statement because it
excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the balance sheet liability method. Deferred
tax liabilities are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary differences
can be utilised. Such assets and liabilities are not recognised if the temporary
difference arises from the initial recognition of goodwill or from the initial
recognition (other than in a business combination) of other assets and
liabilities in a transaction that affects neither the tax profit nor the
accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, except where the Group is
able to control the reversal of the temporary difference and it is probable that
the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset is realised. Deferred tax is
charged or credited in the income statement, except when it relates to items
charged or credited directly to equity, in which case the deferred tax is also
dealt with in equity.
Deferred tax assets and liabilities are offset where there is a legally
enforceable right to set off current tax assets against current tax liabilities
and when they relate to income taxes levied by the same taxation authority and
the Group intends to settle its current tax assets and liabilities on a net
basis.
+-------------------------+----------------------------------------------------------------------------+
| u) | Foreign currencies |
+-------------------------+----------------------------------------------------------------------------+
The individual financial statements of each Group company are presented in the
currency of the primary economic environment in which it operates (its
functional currency). For the purpose of the consolidated financial statements,
the results and financial position of each Group company are expressed in pounds
sterling, which is the functional currency of the Company, and the presentation
currency for the consolidated financial statements.
In preparing the financial statements of the individual companies, transactions
in currencies other than the entity's functional currency (foreign currencies)
are recorded at the rates of exchange prevailing on the dates of the
transactions. At each balance sheet date, monetary assets and liabilities that
are denominated in foreign currencies are retranslated at the rates prevailing
on the balance sheet date. Non-monetary items carried at fair value that are
denominated in foreign currencies are translated at the rates prevailing at the
date when the fair value was determined. Non-monetary items that are measured in
terms of historical costs in a foreign currency are not retranslated.
Exchange differences arising on the settlement of monetary items, and on the
retranslation of monetary items, are included in profit or loss for the period.
Exchange differences arising on the retranslation of non-monetary items carried
at fair value are included in profit or loss for the period, except for
differences arising on the retranslation of non-monetary items in respect of
which gains and losses are recognised directly in equity. For such non-monetary
items, any exchange component of that gain or loss is also recognised directly
in equity.
For the purpose of presenting consolidated financial statements, the assets and
liabilities of the Group's overseas operations are translated at exchange rates
prevailing on the balance sheet date. Income and expense items are translated at
the average exchange rates for the period. Exchange differences arising, if any,
are classified as equity and transferred to the Group's translation reserve.
Such translation differences are recognised as income or expense in the period
in which the operation is disposed of.
Goodwill and fair value adjustments arising on the acquisition of a foreign
entity are treated as assets and liabilities of the foreign entity and
translated at the closing rate.
+-------------------------+----------------------------------------------------------------------------+
| v) | Leases |
+-------------------------+----------------------------------------------------------------------------+
Leases are classified as finance leases whenever the terms of the lease transfer
substantially all the risks and rewards of ownership to the lessee. All other
leases are classified as operating leases.
Assets held under finance leases are recognised as assets of the Group at their
fair value or, if lower, at the present value of the minimum lease payments,
each determined at the inception of the lease. The corresponding liability to
the lessor is included in the balance sheet as a finance lease obligation. Lease
payments are apportioned between finance charges and reduction of the lease
obligation so as to achieve a constant rate of interest on the remaining balance
of the liability. Finance charges are charged directly against income.
Operating lease rentals are charged to the income statement on a straight line
basis over the term of the lease. Benefits received and receivable as an
incentive to enter into an operating lease are also spread on a straight-line
basis over the lease term.
+-------------------------+----------------------------------------------------------------------------+
| w) | Client Money |
+-------------------------+----------------------------------------------------------------------------+
The Group holds money on behalf of clients in accordance with the Clients' Money
Rules of the Financial Services Authority. Such monies and the corresponding
liabilities to the clients are excluded from the balance sheet and disclosed in
the notes.
+----+----------------------------------------------------------------------------+
| 2. | TAXATION |
+----+----------------------------------------------------------------------------+
The tax charge for the six months to 30 June 2009 reflects all the necessary
provisions for current tax, taking into account the availability of losses
brought forward, and movements in deferred tax with reference to the adjustments
necessary under IFRS. In arriving at the effective tax rate account has been
taken of the change in the rate of tax charged, and the disallowance of the cost
of share-based payments charged to the income statement. Current income tax
expense is recognised in these interim consolidated financial statements based
on management's best estimates of the annual income tax liability expected for
the full financial year.
+----+----------------------------------------------------------------------------+
| 3. | EARNINGS PER SHARE |
+----+----------------------------------------------------------------------------+
The calculation of the basic earnings / (loss) per ordinary share is based on
profit / (loss) attributable to equity shareholders of the parent on ordinary
activities after tax and on the weighted average number of ordinary shares in
issue during the period. There are no dilutive options or warrants.
Reconciliations of the earnings / (loss) and weighted average number of shares
used in the calculations are set out in the table below.
+-------------------+----------+-+-------------+-+----------+-+-+---------+-+------------+-+---------+-+
| | 6 months ended 30 June 2009 | Period ended 30 June 2008 |
+-------------------+-----------------------------------------+----------------------------------------+
| | Earnings | | Weighted | | Earnings | | Loss | | Weighted | | Loss |
| | GBP'000 | | | | per | | GBP'000 | | | | per |
| | | | Average | | share | | | | Average | | share |
| | | | Number | | (pence) | | | | Number | | (pence) |
| | | | of | | | | | | of | | |
| | | | shares | | | | | | shares | | |
+-------------------+----------+-+-------------+-+----------+---+---------+-+------------+-+---------+
| | | | | | | | | | | | |
+-------------------+----------+-+-------------+-+----------+---+---------+-+------------+-+---------+
| Earnings | 2,238 | | 159,474,267 | | 1.40 | | (4) | | 32,504,498 | | (0.01) |
| attributable to | | | | | | | | | | | |
| equity | | | | | | | | | | | |
| shareholders of | | | | | | | | | | | |
| the parent | | | | | | | | | | | |
+-------------------+----------+-+-------------+-+----------+---+---------+-+------------+-+---------+
| | | | | | | | | | | | |
+-------------------+----------+-+-------------+-+----------+---+---------+-+------------+-+---------+
| Adjustment to | 128 | | | | | | - | | | | |
| exclude | | | | | | | | | | | |
| loss from | | | | | | | | | | | |
| discontinued | | | | | | | | | | | |
| operations | | | | | | | | | | | |
+-------------------+----------+-+-------------+-+----------+---+---------+-+------------+-+---------+
| | | | | | | | | | | | |
+-------------------+----------+-+-------------+-+----------+---+---------+-+------------+-+---------+
| Earnings from | 2,366 | | 159,474,267 | | 1.48 | | (4) | | 32,504,498 | | (0.01) |
| continuing | | | | | | | | | | | |
| operations | | | | | | | | | | | |
| excluding | | | | | | | | | | | |
| discontinued | | | | | | | | | | | |
| operations | | | | | | | | | | | |
+-------------------+----------+-+-------------+-+----------+---+---------+-+------------+-+---------+
| | | | | | | | | | | | |
+-------------------+----------+-+-------------+-+----------+-+-+---------+-+------------+-+---------+-+
+----+----------------------------------------------------------------------------+
| 4. | DIVIDENDS PAID |
+----+----------------------------------------------------------------------------+
No dividends were paid or declared in any period.
+----+----------------------------------------------------------------------------+
| 5. | ACQUISITION OF ASTAIRE GROUP PLC |
+----+----------------------------------------------------------------------------+
Between 29 December 2008 when the offer became unconditional, and 13 January
2009, Astaire Group Plc (formerly Blue Oar Plc) was acquired by the issue of
111,772,658 ordinary shares of 1 pence each, whose fair market value was deemed
to be 7.47 pence per share. Costs of the transaction amounted to GBP1,080,000.
+------------------------------------------+------------+-------------+------------+
| | Book value | Fair value | Fair value |
| | GBP'000 | adjustments | GBP'000 |
| | | GBP'000 | |
+------------------------------------------+------------+-------------+------------+
| Net assets acquired: | | | |
+------------------------------------------+------------+-------------+------------+
| Property, plant and equipment | 906 | | 906 |
+------------------------------------------+------------+-------------+------------+
| Available-for-sale investments | 1,224 | (61) | 1,163 |
+------------------------------------------+------------+-------------+------------+
| Fair value through profit and loss | 522 | | 522 |
| investments | | | |
+------------------------------------------+------------+-------------+------------+
| Trade and other receivables | 7,064 | | 7,064 |
+------------------------------------------+------------+-------------+------------+
| Cash and cash equivalents | 13,601 | | 13,601 |
+------------------------------------------+------------+-------------+------------+
| Trade and other payables | (7,238) | | (7,238) |
+------------------------------------------+------------+-------------+------------+
| Current tax liabilities | (55) | | (55) |
+------------------------------------------+------------+-------------+------------+
| Deferred tax liabilities | (836) | 804 | (32) |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| | 15,188 | 743 | 15,931 |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| Less minority interest (35%) | | | (5,576) |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| | | | 10,355 |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| Other intangibles | | | 2,741 |
+------------------------------------------+------------+-------------+------------+
| Negative goodwill | | | (3,669) |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| Total consideration | | | 9,427 |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| Satisfied by: | | | |
+------------------------------------------+------------+-------------+------------+
| Shares | | | 8,347 |
+------------------------------------------+------------+-------------+------------+
| Directly attributable costs | | | 1,080 |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| | | | 9,427 |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| Net cash inflow arising on acquisition | | | |
+------------------------------------------+------------+-------------+------------+
| Directly attributable costs | | | (1,080) |
+------------------------------------------+------------+-------------+------------+
| Cash and cash equivalents acquired | | | 13,601 |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| | | | 12,521 |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| Negative goodwill calculated above | | | 3,669 |
+------------------------------------------+------------+-------------+------------+
| Deferred tax asset arising on | | | (750) |
| acquisition | | | |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| Negative goodwill credited to income | | | 2,919 |
+------------------------------------------+------------+-------------+------------+
+----+------------------------------------------------------------------------+
| 6. | ACQUISITION OF DOWGATE CAPITAL PLC |
+----+------------------------------------------------------------------------+
On 20 July 2009 the Group announced that having received acceptances for 75.80
percent. of total voting rights, the offer by Astaire Group Plc for Dowgate
Capital Plc was declared wholly unconditional. By 28 August 2009 the Group had
received acceptances for 93.74 percent. of total voting rights, and announced
that the offer was closed and that it intended to acquire compulsorily any
remaining shares that had not accepted the offer.
The details below are based on the estimated cost of acquiring 100 percent. of
Dowgate Capital Plc.
+------------------------------------------+------------+-------------+------------+
| | Book value | Fair value | Fair value |
| | GBP'000 | adjustments | GBP'000 |
| | | GBP'000 | |
+------------------------------------------+------------+-------------+------------+
| Net assets acquired: | | | |
+------------------------------------------+------------+-------------+------------+
| Property, plant and equipment | 197 | | 197 |
+------------------------------------------+------------+-------------+------------+
| Available-for-sale investments | 88 | | 88 |
+------------------------------------------+------------+-------------+------------+
| Trade and other receivables | 1,052 | | 1,052 |
+------------------------------------------+------------+-------------+------------+
| Cash and cash equivalents | 863 | | 863 |
+------------------------------------------+------------+-------------+------------+
| Trade and other payables | (706) | (161) | (867) |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| | 1,494 | (161) | 1,333 |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| Other intangibles | | | 1,305 |
+------------------------------------------+------------+-------------+------------+
| Goodwill | | | 682 |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| Total consideration | | | 3,320 |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| Satisfied by: | | | |
+------------------------------------------+------------+-------------+------------+
| Shares | | | 1,192 |
+------------------------------------------+------------+-------------+------------+
| Cash | | | 1,968 |
+------------------------------------------+------------+-------------+------------+
| Directly attributable costs | | | 160 |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| | | | 3,320 |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| Net cash outflow arising on acquisition | | | |
+------------------------------------------+------------+-------------+------------+
| Cash and directly attributable costs | | | (2,128) |
+------------------------------------------+------------+-------------+------------+
| Cash and cash equivalents acquired | | | 863 |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| | | | (1,265) |
+------------------------------------------+------------+-------------+------------+
+----+----------------------------------------------------------------------------+
| 7. | ACQUISITION OF RUEGG & CO LIMITED |
+----+----------------------------------------------------------------------------+
On 22 July 2009 a wholly owned United Kingdom registered subsidiary, Ruegg & Co
Limited, was acquired by the issue of 6.0 million Astaire Group Plc ordinary
shares of 0.1 pence each whose fair market value was deemed to be 5.25 pence per
share, and the payment of GBP334,000 in cash.
+------------------------------------------+------------+-------------+------------+
| | Book value | Fair value | Fair value |
| | GBP'000 | adjustments | GBP'000 |
| | | GBP'000 | |
+------------------------------------------+------------+-------------+------------+
| Net assets acquired: | | | |
+------------------------------------------+------------+-------------+------------+
| Property, plant and equipment | 3 | | 3 |
+------------------------------------------+------------+-------------+------------+
| Available-for-sale investments | 27 | 114 | 141 |
+------------------------------------------+------------+-------------+------------+
| Trade and other receivables | 154 | | 154 |
+------------------------------------------+------------+-------------+------------+
| Cash and cash equivalents | 180 | | 180 |
+------------------------------------------+------------+-------------+------------+
| Trade and other payables | (54) | | (54) |
+------------------------------------------+------------+-------------+------------+
| Current tax liabilities | (66) | | (66) |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| | 244 | 114 | 358 |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| Other intangibles | | | 174 |
+------------------------------------------+------------+-------------+------------+
| Goodwill | | | 134 |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| Total consideration | | | 666 |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| Satisfied by: | | | |
+------------------------------------------+------------+-------------+------------+
| Shares | | | 315 |
+------------------------------------------+------------+-------------+------------+
| Cash | | | 334 |
+------------------------------------------+------------+-------------+------------+
| Directly attributable costs | | | 17 |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| | | | 666 |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| Net cash outflow arising on acquisition | | | |
+------------------------------------------+------------+-------------+------------+
| Cash and directly attributable costs | | | (351) |
+------------------------------------------+------------+-------------+------------+
| Cash and cash equivalents acquired | | | 180 |
+------------------------------------------+------------+-------------+------------+
| | | | |
+------------------------------------------+------------+-------------+------------+
| | | | (171) |
+------------------------------------------+------------+-------------+------------+
+----+----------------------------------------------------------------------------+
| 8. | ACQUISITION OF WHIM GULLY CAPITAL LIMITED LIABILITY PARTNERSHIP |
+----+----------------------------------------------------------------------------+
On 28 August 2009, Evolve Capital Plc announced that it had entered into an
agreement to acquire 100 percent. of the membership interests in Whim Gully
Capital LLP ("WGC") for an aggregate cash consideration of GBP475,000, subject
to the fulfilment of certain conditions including the passing of the Resolution.
In conjunction with this acquisition WGC and St Helen's Capital Plc contracted
to sell the business and assets of St Helen's Capital Plc to WGC for cash
consideration of GBP200,000. On 4 September 2009, the Resolution was duly passed
at the Group's Extraordinary General Meeting. WGC changed its name on 16
September 2009, and is now incorporated under the name of St Helens Capital
Partners LLP.
The Group is in the process of identifying the other intangibles, and of fair
valuing the assets acquired.
+----+----------------------------------------------------------------------------+
| 9. | DISPOSAL OF INTEQ LIMITED |
+----+----------------------------------------------------------------------------+
On 3 June 2009 Astaire Group Plc completed the disposal of Inteq Limited, its
Australian corporate finance subsidiary. The disposal was effected as part of
the Group's strategy to cut costs and exit loss making areas of the business.
The results of the discontinued operations, which have been included in the
consolidated income statement, were as follows:
+----------------------------------------------------+--+------------+
| | | GBP'000 |
+----------------------------------------------------+--+------------+
| | | |
+----------------------------------------------------+--+------------+
| Total income | | 210 |
+----------------------------------------------------+--+------------+
| Profit on disposal of available-for-sale | | 44 |
| investments | | |
+----------------------------------------------------+--+------------+
| Operating expenses | | (450) |
+----------------------------------------------------+--+------------+
| | | |
+----------------------------------------------------+--+------------+
| Loss on ordinary activities before taxation | | (196) |
+----------------------------------------------------+--+------------+
| | | |
+----------------------------------------------------+--+------------+
| Attributable tax expense | | - |
+----------------------------------------------------+--+------------+
| | | |
+----------------------------------------------------+--+------------+
| Loss on disposal of discontinued operations | | (196) |
+----------------------------------------------------+--+------------+
A loss of GBP619,000 arose on the disposal of Inteq Limited as shown below:
+----------------------------------------------------+--+------------+
| | | GBP'000 |
+----------------------------------------------------+--+------------+
| | | |
+----------------------------------------------------+--+------------+
| Property, plant and equipment | | 215 |
+----------------------------------------------------+--+------------+
| Available-for-sale investments | | 375 |
+----------------------------------------------------+--+------------+
| Fair value through profit and loss investments | | 232 |
+----------------------------------------------------+--+------------+
| Trade and other receivables | | 159 |
+----------------------------------------------------+--+------------+
| Cash and cash equivalents | | 95 |
+----------------------------------------------------+--+------------+
| Trade and other payables | | (457) |
+----------------------------------------------------+--+------------+
| | | |
+----------------------------------------------------+--+------------+
| | | 619 |
+----------------------------------------------------+--+------------+
| | | |
+----------------------------------------------------+--+------------+
| Loss on sale of subsidiary | | (619) |
+----------------------------------------------------+--+------------+
| | | |
+----------------------------------------------------+--+------------+
| Total consideration | | - |
+----------------------------------------------------+--+------------+
| | | |
+----------------------------------------------------+--+------------+
| Net cash outflow arising on disposal: | | |
+----------------------------------------------------+--+------------+
| Cash consideration | | - |
+----------------------------------------------------+--+------------+
| Cash and cash equivalents disposed of | | (95) |
+----------------------------------------------------+--+------------+
| | | |
+----------------------------------------------------+--+------------+
| | | (95) |
+----------------------------------------------------+--+------------+
+-----+--------------------------------------------------------------------------+
| 10. | IFRS RECONCILIATION |
+-----+--------------------------------------------------------------------------+
(i) Reconciliation of equity at 27 September 2007 (Date of transition to IFRS)
(Unaudited)
The Company was incorporated on 27 September 2007, which was also the date of
transition to IFRS. The balance sheet at transition date consisted solely of two
unpaid ordinary shares of 0.1 pence each issued at par and there were no
differences between UK GAAP and IFRS.
(ii) Reconciliation of equity at 30 June 2008 (Unaudited)
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| | | | Effect of transition to | |
| | | | IFRS | |
+-----------------------+-----+-------------+------------------------------------+-------------+
| | | UK GAAP | Re-measurement | Re-classification | IFRS |
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| ASSETS | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Non-current Assets | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Tangible fixed assets | | 8 | - | (8) | - |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Property, plant and | (a) | - | - | 8 | 8 |
| equipment | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Fixed asset | | 1,214 | - | (1,214) | - |
| investments | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Total non-current | | 1,222 | - | (1,214) | 8 |
| assets | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Current assets | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Trade and other | | - | - | 153 | 153 |
| receivables | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Debtors | | 137 | - | (137) | - |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Available-for-sale | (b) | - | 618 | 1,173 | 1,791 |
| investments | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Fair value through | (c) | - | - | 25 | 25 |
| profit & | | | | | |
| loss investments | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Cash and cash | | 2,591 | - | - | 2,591 |
| equivalents | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Total current assets | | 2,728 | 618 | 1,214 | 4,560 |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Total assets | | 3,950 | 618 | - | 4,568 |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| LIABILITIES | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Current liabilities | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Trade and other | | - | - | 13 | 13 |
| payables | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Creditors: amounts | | 13 | - | (13) | - |
| falling | | | | | |
| due within one year | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Total current | | 13 | - | - | 13 |
| liabilities | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Non-current | | | | | |
| liabilities | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Deferred tax | (d) | - | 173 | - | 173 |
| liabilities | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Total non-current | | - | 173 | - | 173 |
| liabilities | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Total liabilities | | 13 | 173 | - | 186 |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| EQUITY | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Share capital | | 463 | - | - | 463 |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Share premium | | 3,478 | - | - | 3,478 |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Fair value reserves | | - | 445 | - | 445 |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Retained earnings | | (4) | - | - | (4) |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Parent company's | | 3,937 | 445 | - | 4,382 |
| Shareholders' | | | | | |
| equity | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Total equity and | | 3,950 | 618 | - | 4,568 |
| liabilities | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
Notes to the Interim Condensed Financial Statements
10. IFRS RECONCILIATION
(iii) Reconciliation of equity at 28 December 2008 (Unaudited)
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| | | | Effect of transition to | |
| | | | IFRS | |
+-----------------------+-----+-------------+------------------------------------+-------------+
| | | UK GAAP | Re-measurement | Re-classification | IFRS |
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| ASSETS | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Non-current Assets | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Fixed asset | | 1,154 | - | (1,154) | - |
| investments | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Tangible fixed assets | | 7 | - | (7) | - |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Property, plant and | (a) | - | - | 7 | 7 |
| equipment | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Total non-current | | 1,161 | - | (1,154) | 7 |
| assets | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Current assets | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Trade and other | | - | - | 314 | 314 |
| receivables | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Debtors | | 314 | - | (314) | - |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Available-for-sale | (b) | - | 474 | 1,129 | 1,603 |
| investments | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Fair value through | (c) | - | - | 25 | 25 |
| profit & | | | | | |
| loss investments | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Cash and cash | | 2,423 | - | | 2,423 |
| equivalents | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Total current assets | | 2,737 | 474 | 1,154 | 4,365 |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Total assets | | 3,898 | 474 | - | 4,372 |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| LIABILITIES | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Current liabilities | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Trade and other | | - | - | 73 | 73 |
| payables | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Creditors: amounts | | 73 | - | (73) | - |
| falling | | | | | |
| due within one year | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Total current | | 73 | - | - | 73 |
| liabilities | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Non-current | | | | | |
| liabilities | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Deferred tax | (d) | - | 133 | - | 133 |
| liabilities | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Total non-current | | - | 133 | - | 133 |
| liabilities | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Total liabilities | | 73 | 133 | - | 206 |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| EQUITY | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Share capital | | 463 | - | - | 463 |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Share premium | | 3,478 | - | - | 3,478 |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Fair value reserve | | - | 341 | - | 341 |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Retained earnings | | (116) | - | - | (116) |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Parent company's | | 3,825 | 341 | - | 4,166 |
| Shareholders' | | | | | |
| equity | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
| Total equity and | | 3,898 | 474 | - | 4,372 |
| liabilities | | | | | |
+-----------------------+-----+-------------+----------------+-------------------+-------------+
+-----+--------------------------------------------------------------------------+
| 10. | IFRS RECONCILIATION |
+-----+--------------------------------------------------------------------------+
(iv) Reconciliation of total comprehensive income for the period ended 30 June
2008 (Unaudited)
+------------------------+----+-------------+----------------+-------------------+-------------+
| | | | Effect of transition to | |
| | | | IFRS | |
+------------------------+----+-------------+------------------------------------+-------------+
| | | UK GAAP | Re-measurement | Re-classification | IFRS |
| | | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------------+----+-------------+----------------+-------------------+-------------+
| | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| Fee and commission | | - | - | - | - |
| income | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| Fee and commission | | - | - | - | - |
| expenses | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| Net fee and commission | | - | - | - | - |
| income | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| Other income | | - | - | - | - |
+------------------------+----+-------------+----------------+-------------------+-------------+
| Cost of sales | | - | - | - | - |
+------------------------+----+-------------+----------------+-------------------+-------------+
| | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| Gross profit / Total | | - | - | - | - |
| income | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| Profit on disposal of | | | - | 24 | 24 |
| available-for-sale | | | | | |
| investments | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| Profit on disposal of | | 24 | - | (24) | - |
| fixed asset | | | | | |
| investments | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| Administrative | | (111) | - | 111 | - |
| expenses | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| Operating expenses - | | - | - | (111) | (111) |
| other | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| Operating loss | | (87) | - | - | (87) |
+------------------------+----+-------------+----------------+-------------------+-------------+
| | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| Investment revenue | | 83 | - | - | 83 |
+------------------------+----+-------------+----------------+-------------------+-------------+
| | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| Loss on ordinary | | (4) | - | - | (4) |
| activities before | | | | | |
| taxation | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| Taxation | | - | - | - | - |
+------------------------+----+-------------+----------------+-------------------+-------------+
| | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| Loss on ordinary | | (4) | - | - | (4) |
| activities after | | | | | |
| taxation | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| Loss attributable to | | (4) | - | - | (4) |
| equity shareholders of | | | | | |
| the parent | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| Other comprehensive | | | | | |
| income | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| Gains on revaluation | | - | 618 | - | 618 |
| of available-for-sale | | | | | |
| investments | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| Deferred tax relating | | - | (173) | - | (173) |
| to components of other | | | | | |
| comprehensive income | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| Other comprehensive | | - | 445 | - | 445 |
| income for the period | | | | | |
| net of tax | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| Total comprehensive | | (4) | 445 | - | 441 |
| income for the period | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
| Total comprehensive | | (4) | 445 | - | 441 |
| income attributable to | | | | | |
| equity shareholders of | | | | | |
| the parent | | | | | |
+------------------------+----+-------------+----------------+-------------------+-------------+
+-----+--------------------------------------------------------------------------+
| 10. | IFRS RECONCILIATION |
+-----+--------------------------------------------------------------------------+
(v) Reconciliation of total comprehensive income for the period ended 31
December 2008 (Unaudited)
+------------------------+------------+----------------+-------------------+------------+
| | | Effect of transition to | |
| | | IFRS | |
+------------------------+------------+------------------------------------+------------+
| | UK GAAP | Re-measurement | Re-classification | IFRS |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------------+------------+----------------+-------------------+------------+
| | | | | |
+------------------------+------------+----------------+-------------------+------------+
| Fee and commission | - | - | - | - |
| income | | | | |
+------------------------+------------+----------------+-------------------+------------+
| Fee and commission | - | - | - | - |
| expenses | | | | |
+------------------------+------------+----------------+-------------------+------------+
| | | | | |
+------------------------+------------+----------------+-------------------+------------+
| Net fee and commission | - | - | - | - |
| income | | | | |
+------------------------+------------+----------------+-------------------+------------+
| Other income | - | - | - | - |
+------------------------+------------+----------------+-------------------+------------+
| Cost of sales | - | - | - | - |
+------------------------+------------+----------------+-------------------+------------+
| | | | | |
+------------------------+------------+----------------+-------------------+------------+
| Gross profit / Total | - | - | - | - |
| income | | | | |
+------------------------+------------+----------------+-------------------+------------+
| | | | | |
+------------------------+------------+----------------+-------------------+------------+
| Profit on disposal of | | - | 76 | 76 |
| available-for-sale | | | | |
| investments | | | | |
+------------------------+------------+----------------+-------------------+------------+
| Profit on disposal of | 76 | | (76) | - |
| fixed asset | | | | |
| investments | | | | |
+------------------------+------------+----------------+-------------------+------------+
| Administrative | (332) | | 332 | - |
| expenses | | | | |
+------------------------+------------+----------------+-------------------+------------+
| Operating expenses | - | | (332) | (332) |
+------------------------+------------+----------------+-------------------+------------+
| | | | | |
+------------------------+------------+----------------+-------------------+------------+
| Operating loss | (256) | | | (256) |
+------------------------+------------+----------------+-------------------+------------+
| | | | | |
+------------------------+------------+----------------+-------------------+------------+
| Investment revenue | 140 | | | 140 |
+------------------------+------------+----------------+-------------------+------------+
| | | | | |
+------------------------+------------+----------------+-------------------+------------+
| Loss on ordinary | (116) | | | (116) |
| activities before | | | | |
| taxation | | | | |
+------------------------+------------+----------------+-------------------+------------+
| | | | | |
+------------------------+------------+----------------+-------------------+------------+
| Taxation | - | | | - |
+------------------------+------------+----------------+-------------------+------------+
| | | | | |
+------------------------+------------+----------------+-------------------+------------+
| Loss on ordinary | (116) | | | (116) |
| activities after | | | | |
| taxation | | | | |
+------------------------+------------+----------------+-------------------+------------+
| | | | | |
+------------------------+------------+----------------+-------------------+------------+
| Loss attributable to | (116) | - | - | (116) |
| equity shareholders of | | | | |
| the parent | | | | |
+------------------------+------------+----------------+-------------------+------------+
| | | | | |
+------------------------+------------+----------------+-------------------+------------+
| Other comprehensive | | | | |
| income | | | | |
+------------------------+------------+----------------+-------------------+------------+
| Gains on revaluation | - | 474 | - | 474 |
| of available-for-sale | | | | |
| investments | | | | |
+------------------------+------------+----------------+-------------------+------------+
| Deferred tax relating | - | (133) | - | (133) |
| to components of other | | | | |
| comprehensive income | | | | |
+------------------------+------------+----------------+-------------------+------------+
| | | | | |
+------------------------+------------+----------------+-------------------+------------+
| Other comprehensive | - | 341 | - | 341 |
| income for the period | | | | |
| net of tax | | | | |
+------------------------+------------+----------------+-------------------+------------+
| | | | | |
+------------------------+------------+----------------+-------------------+------------+
| Total comprehensive | (116) | 341 | - | 225 |
| income for the period | | | | |
+------------------------+------------+----------------+-------------------+------------+
| | | | | |
+------------------------+------------+----------------+-------------------+------------+
| Total comprehensive | (116) | 341 | - | 225 |
| income attributable to | | | | |
| equity shareholders of | | | | |
| the parent | | | | |
+------------------------+------------+----------------+-------------------+------------+
NOTES TO RECONCILIATIONS OF EQUITY AND COMPREHENSIVE INCOME
+----+----------------------------------------------------------------------------+
| a) | Property, plant and equipment |
+----+----------------------------------------------------------------------------+
| | As a result of the adoption of IAS 16, 'Property, Plant and Equipment', |
| | items previously classified as tangible fixed assets have been |
| | re-classified as property, plant and equipment. |
+----+----------------------------------------------------------------------------+
| | |
+----+----------------------------------------------------------------------------+
| b) | Available-for-sale investments |
+----+----------------------------------------------------------------------------+
| | Assets previously classified as fixed and current asset investments have |
| | been re-classified as available-for sale investments, and recognised at |
| | fair value as detailed in the accounting policies. Fair value adjustments |
| | to available-for-sale investments are taken directly to the fair value |
| | reserve. |
+----+----------------------------------------------------------------------------+
| | |
+----+----------------------------------------------------------------------------+
| c) | Fair value through profit and loss investments |
+----+----------------------------------------------------------------------------+
| | The Group's derivative financial instruments which consist of share |
| | options and warrants are not recognised in the UK GAAP financial |
| | statements but are included at fair value in the IFRS financial |
| | statements. Fair value adjustments to fair value through profit and loss |
| | investments are recognised through the income statement. |
+----+----------------------------------------------------------------------------+
| | |
+----+----------------------------------------------------------------------------+
| d) | Deferred tax assets and liabilities |
+----+----------------------------------------------------------------------------+
| | Many of the adjustments referred to in this note have related tax effects, |
| | nearly all of which are deferred. |
+----+----------------------------------------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR GUGDCUDDGGCU
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