TIDMEVOL
RNS Number : 5375O
Evolve Capital PLC
30 June 2010
Evolve Capital Plc ("Evolve" or the "Group")
Preliminary results for the year ended 31 December 2009
Evolve Capital plc today announces its preliminary results for the year ended 31
December 2009.
Highlights
- Statutory loss after tax of GBP2.6 million (2008: loss of GBP0.1 million)
- Basic loss per ordinary share from continuing operations, 1.12 pence
(2008:loss of 0.33 pence)
- Basic loss per share per ordinary share from continuing and discontinued
operations. 1.59 pence (2008: loss of 0.33 pence)
- No final dividend
- Company plans fully underwritten fundraising to raise GBP1 million to support
further capital raisings by existing portfolio investments
Oliver Vaughan, Chairman of Evolve Capital, commented:
"2009 was a disappointing year in terms of a number of our holdings,
particularly Astaire Group, our largest investment. Whilst Astaire has
undergone significant restructuring in the past year, the small and mid-cap
investment banking market remains challenging.
The recent changes we announced to our Board and management have successfully
separated Evolve's activity from its investee companies and will enable us to
monitor their performance at arms' length. Whilst the economic and business
outlook remains uncertain, we have reduced our operating expenses to a minimum
and will continue to look for ways to generate value from our investment
portfolio. As part of this we are announcing today our intention to raise a
further GBP1 million via a fully underwritten fundraising to support further
capital raising within our existing investment portfolio."
Enquiries:
Maitland
020 7379 5151
Neil Bennett
George Hudson
Evolve Capital Plc
020 7937 4445
Oliver Vaughan, Chairman
Fairfax I.S. PLC
020 7598 5368
Nominated Adviser / Broker
Ewan Leggat
Chairman's Statement
I am pleased to present Evolve's results for the year ended 31 December 2009.
In the interim statement to 30 June 2009 I noted that the Group then comprised a
number of financial services businesses that at the time your board expected to
flourish. It is disappointing to report that this has not been the case and it
is fair to say that 2009 has been a very difficult year for Evolve. A great
deal of management resource has had to be applied to Astaire Group Plc
("Astaire"), including reviewing and refocusing the strategy, exiting some areas
of activity, reducing operating costs as well as pursuing complementary
acquisitions. One of the objectives was to achieve break even on a month to
month basis within the operating businesses, however this was not achieved. In
the first quarter of 2010 Astaire has still yet to achieve consistent
profitability in the operating businesses. With the restructuring of Astaire now
substantially completed Evolve has stepped back from its direct involvement in
Astaire and has reverted to treating its investment in this company in the same
manner as it treats its other investments.
As a part of this process the two companies have recently segregated their
boards so that David Snow is now the sole Evolve representative on the board of
Astaire. As a part of this exercise I have stepped down from the Astaire board
and both James Noble and Christopher Roberts have resigned from the Evolve
board. Edward Vandyk stepped down from the boards of both companies. I would
like to thank them for their very valuable contributions to Evolve whilst on the
board of the Company, they will be missed.
Results for the year
Following the acquisition of Astaire the enlarged group is required to report
under International Financial Reporting Standards ("IFRSs") for the first time
and the results for the year reflect the impact of this changed reporting basis.
The effects of these changes are more fully explained in the Financial Review.
During the period under review the Group reported a loss after tax of GBP2.6
million (15 months ended 31 December 2008: GBP0.1 million. The Directors do not
propose the payment of a dividend. As at 31 December 2009 the Group's net assets
were GBP19.6 million (2008: GBP4.2 million).
During the period under review Evolve acquired control of Astaire and completed
two further new investments; the acquisition of the whole of St Helens Capital
Partners LLP and a 19.9% stake in Bluehone Holdings Plc.
Acquisitions
Brief details of the newly acquired businesses are as follows.
Astaire Group Plc
In the last days of 2008 Evolve acquired majority control of Astaire (formerly
Blue Oar Plc) and as a result of this and of subsequent transactions within
Astaire, the Company currently owns 53.6%. Whilst this is the largest investment
Evolve has made to date and has absorbed a great deal of management time it is
the board's intention that it now simply be regarded as one investment within
Evolve's portfolio of investments.
Astaire has two principal business units:
Astaire Securities Plc which is an institutional stockbroker / corporate
financial advisor and AIM nominated adviser, and Rowan Dartington & Co. Limited
which is a well established private client stock-broking network based in the
South and West of England
During the period both businesses have been rationalised and now have the
potential to expand as and when markets improve.
St Helens Capital Partners LLP
In September 2009 Evolve acquired the PLUS advisory business Whim Gully Capital
LLP, which had itself just acquired the PLUS advisory businesses of St Helen's
Capital Plc, Ruegg & Co. Limited and Dowgate Capital Advisers Limited. The
combined business was renamed St Helens Capital Partners LLP and became the
largest PLUS corporate adviser. It is expected that this business will continue
to organically grow the number of its retained corporate clients and to expand
its advisory activities. In May 2010 St Helens won the award for 'PLUS Adviser
of the Year' at the industry's PLUS Awards Dinner.
Bluehone Holdings Plc ("Bluehone")
Bluehone was established in 2005 and specialises in managing small company
focused funds. Its executive directors previously worked together at F&C Asset
Management and F&C is an investor in the business. Evolve holds a 19.9% stake.
Existing Investments
The Company's existing investments are summarised as below.
Aconite Technology Limited ("Aconite")
Aconite is a private company that has developed and is marketing a suite of open
platform software products that enable the issuers of credit cards and other
plastic payment cards to migrate to the new EMV industry standard (chip and pin)
cards without the need to replace their existing infrastructure. Aconite's
software also enables card issuers to issue and manage pre-paid debit cards and
contactless payment cards, such as those used in mass transit scenarios, on an
efficient and highly cost effective basis.Aconite's unaudited accounts for the
year ended 31 March 2009 showed no turnover and losses of GBP382,000 after
taxes. Since then the company has won a number of significant commercial
contracts.
It is the Company's intention to reduce its investment in this unlisted company
by selling a proportion of its holding to Elderstreet Investments Ltd
("Elderstreet"). Michael Jackson, one of the Company's non executive directors,
is also a director of and a shareholder in Elderstreet and as a consequence this
transaction is classified as a related party transaction under the AIM Rules for
Companies and will require the consent of shareholders pursuant to the Companies
Act 2006. Shareholder consent will be sought at the Company's upcoming annual
general meeting. Further details of the proposed transaction are set out below.
Pulse Group plc ("Pulse")
Pulse is a leading provider of RPO (research process outsourcing) in the Asia
Pacific region and services market research companies based throughout the
world. The company's shares are traded on the PLUS quoted market. Evolve
currently holds 6,079,888 shares in the company.
Woodspeen Training plc ("Woodspeen")
Woodspeen is a training company addressing the government funded vocational
training sector, with a specific focus on the Learn Direct, Train to Gain and
NVQ programmes. Woodspeen's management comprise three former main board
executive directors from BPP, a fully listed company and one of the UK's leading
professional training companies. Evolve invested GBP300,000 in the ordinary
share capital of Woodspeen in January 2008. Woodspeen was subsequently admitted
to the PLUS-quoted market and has acquired and integrated a number of training
businesses. The management team is continuing to explore other potential
acquisitions.
3D Diagnostic Imaging plc ("3D")
3D's wholly owned subsidiary, CarieScan Limited, has completed the development
of and is marketing a highly accurate hand held device for the early detection
of dental caries (tooth decay). The device now has the regulatory approvals
required for use in Europe, Canada and the USA. The company is in advanced
negotiations on distribution agreements with distributors of dental equipment in
the USA, Canada and Germany. Evolve has to date invested GBP840,000 in 3D.
Open Offer and Related Party Transaction
In view of the potential for further capital raising by companies in which
Evolve holds investments and in order to address the Company's own ongoing
working capital requirements, it is proposed to have a fully underwritten open
offer to raise GBP1m of additional capital. Further details of the open offer
will be circulated to shareholders in a separate document in due course.
As referred to above, Evolve intends to sell 275,000 of the shares that it
currently owns in Aconite to Elderstreet for GBP250,000 in cash. Michael
Jackson, a non executive director of Evolve, is also a director of and a
shareholder in Elderstreet and, as a consequence, a related party under both the
AIM Rules for Companies and under the Companies Act 2006.
The Directors, other than Michael Jackson, having been so advised by Fairfax,
consider that the proposed disposal of these shares to Elderstreet is fair and
reasonable so far as the shareholders of Evolve are concerned. Accordingly they
unanimously recommend that all shareholders vote in favour of the resolution
concerning the share disposal to be put to the annual general meeting of the
Company to be held on 26th July 2010.
Outlook
The outlook for the future is I believe difficult to accurately predict or
portray. I believe market conditions for small cap companies are extremely
difficult and are likely to remain so for some time. I think therefore it is
appropriate to look at two scenarios: A pessimistic and an optimistic one.
The pessimistic scenario is that a majority of our investments fail or
significantly fall in value, in which case Evolve will have been a disappointing
investment for all shareholders. With this in mind the board has reduced the
running costs of the business as far as possible, taking its cue on austerity
measures from the recently elected Government.
The optimistic picture is that a number of our investments, in particular the
larger ones such as 3D, demonstrate significant progress which is reflected in
their share prices and which would ultimately enhance the value of the Group.
Expectations for 2010 must remain cautious. 2011 and beyond are less apparent.
Our Annual General Meeting will be held on 26th July 2010 and we look forward to
welcoming you.
Oliver Vaughan
Chairman
30 June 2010
Financial Review
The results of the Group for the year ended 31 December 2009 are attached and
show a loss after taxation for the period from continuing and discontinued
operations of GBP2.6 million compared to a loss of GBP0.1 million in the prior
period from incorporation on 27 September 2007 to 28 December 2008.
On 29 December 2008 the Group acquired a controlling interest in Astaire Group
Plc, the investment bank and private client stockbroker, and this was followed
with the 100 per cent. acquisition of St Helens Capital Partners LLP on 4
September 2009. During the period, the Group has also added to its investment
portfolio, increasing its investments in 3D Diagnostic Imaging Plc and Woodspeen
Training Plc, and acquiring a 19.9 per cent. holding in Bluehone Holdings Plc a
well regarded asset management business.
Adoption of International Financial Reporting Standards
The Group was required to adopt International Financial Reporting Standards
("IFRSs") for the first time in this Annual Report, and details of the effect of
this upon the results for the period and the way in which reported performance
for both the current and the prior period have been effected are shown in the
notes to this Annual Report. A full reconciliation of the differences between
the original results for the period ended 28 December 2008, reported under UK
Generally Accepted Accounting Practice ("UK GAAP"), and the restated results
under IFRS is shown in note 37 to the financial statements.
Income Statement
Trading performance is now reported in the Income Statement, rather than the
profit and loss account, where the majority of the figures are computed on a
similar basis but are presented slightly differently.
Following the acquisitions since 28 December 2008, the Group generated total
income of GBP13.9 million (15 months ended 31 December 2008: GBPnil), and
realised profits on the sale of available-for-sale investments of GBP0.7 million
compared with GBP0.1 million in the prior period.
The Group recognised a gain of GBP3.1 million (15 months ended 28 December 2008:
GBPnil) on fair value through profit an loss investments, of which GBP2.2
million related to the uplift in investments referred to in the segmental
analysis which follows, and GBP0.9 million was in respect of the increased
valuation of the options and warrants held by Astaire Group Plc.
The acquisition of Astaire Group Plc which went unconditional on 29 December
2008 resulted in negative goodwill of GBP2.6 million being credited to the
income statement.
The Board monitors the results for the Group by segment having adopted IFRS 8
Operating Segments. The segments equate to the individual businesses and
investments made by the Group and their results are reviewed below.
Astaire Group Plc
Astaire Group Plc ("Astaire") was acquired on 29 December 2008 and at the year
end, and at the date of this review, Evolve holds 53.6 per cent. of the issued
share capital. Astaire contributed fee and commission income of GBP15.4 million
and a segment loss of GBP7.5 million to the results of the Group.
Astaire made two small acquisitions during the year (see note 29), and has
therefore increased total income from continuing operations by 14.8 per cent. to
GBP13.7 million. However, some significant one-off costs have severely affected
the result for the year ended 31 December 2009.
The external audit for the year ended 31 December 2009 uncovered a discrepancy
relating to unrecovered debtor balances of up to GBP1.4 million within Rowan
Dartington. This discrepancy (now revised down to GBP1.04 million) dates back to
2008 or earlier, prior to the Evolve acquisition of Astaire. This issue and
related matters have been resolved in regulatory terms through an FSA
Enforcement action which has been concluded with a fine of GBP511,000. The
Company will continue its efforts to recover these balances, which have been
provided in full in the accounts. It is emphasised that no client has lost any
money as a result of this discrepancy and there is no ongoing issue. Further
restructuring costs of GBP897,000 have been incurred in the year (see note 5),
and Evolve has booked losses on the impairment of other intangibles relating to
its acquisition of Astaire in the year ended 31 December 2009 amounting to
GBP1,549,000 (15 months ended 28 December 2008: GBPnil).
St Helens Capital Partners LLP
Evolve acquired St Helens Capital Partners LLP ("STHCP"), a growing PLUS
adviser, in September 2009. In the four months between acquisition and 31
December 2009, STHCP generated revenues of GBP199k resulting in a segment profit
after amortisation of GBP2,000.
Investments
The Group also holds non-controlling stakes in a number of PLUS and non-quoted
businesses as detailed in the Chairman's Statement. The most significant
investment is a 41.5% holding in 3D Diagnostic Imaging Plc which the Group
manages purely as an investment and is included within fair value through profit
and loss investments. The investment costing GBP840,000 has increased in value
by GBP2,188,000 in the year to 31 December 2009 (15 months ended 28 December
2008: GBPnil), and following the conversion to IFRS, this gain is taken directly
to the Income Statement.
The remaining investments are all holdings of less than 20% and are disclosed
within available-for-sale investments in the balance sheet. These investments
have increased in value by GBP251,000 in the year to 31 December 2009 (15 months
ended 28 December 2008: GBP341,000), and in accordance with IFRS, this gain is
booked in the available-for-sale reserve rather than the Income
Statement.Realised profits on the investment portfolio amounted to GBP431,000
(15 months ended 28 December 2008: GBP76,000), of which GBP417,000 arose on the
sale of a small stake in WH Ireland Group Plc.
Discontinued Operations
The Group made a loss of GBP785,000 (15 months ended 28 December 2008: GBPnil)
from discontinued operations as detailed in notes 4 and 12 to the financial
statements. In addition to this, a loss of GBP616,000 was realised on the sale
of Inteq Limited on 3 June 2009.
Earnings per Share
The basic loss per share from continuing and discontinued operations for the
period ended 31 December 2009 was 1.59 pence compared to the loss for the period
from incorporation to 28 December 2008 of 0.33 pence. The loss per share from
continuing operations for the current and prior periods was 1.12 pence and 0.33
pence, respectively, and there were no dilutive instruments in existence in
either period.
Balance Sheet
The format of the balance sheet has also changed under IFRS. A reconciliation
illustrating these changes, and their resultant effect for the 15 months ended
28 December 2008, is shown as note 37 to the financial statements.Net assets per
share declined from 9.01 pence at 28 December 2008 to 7.68 pence at 31 December
2009. The fall in net asset per share reflects the assets acquired less the
trading losses generated together with the impairment of intangibles.
Cash Flow
At 28 December 2008 the cash and cash equivalents held by the Company and the
Group totalled GBP2.4 million. On 29 December 2008 the Company acquired Astaire
Group Plc with cash balances of GBP13.6 million, expending GBP1.1 million on
transaction costs in the process, and since then Group cash and cash equivalents
have fallen to GBP7.9 million at 31 December 2009, representing net cash per
share of 4.42 pence (28 December 2008: 5.24 pence).
Dividends
As noted in the Chairman's Statement there is no dividend recommended in the
year ended 31 December 2009 (15 months ended 28 December 2008: GBPnil).
Oliver Vaughan
Director
30 June 2010
Consolidated Income Statement
for the year ended 31 December 2009
+-----------------------+-----+---------+----------+---------+---------+
| | | | | | 15 |
| | | | 2009 | | months |
| | | | GBP'000 | | 2008 |
| | | | | | GBP'000 |
+-----------------------+-----+---------+----------+---------+---------+
| | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| Fee and commission | | | 15,476 | | - |
| income | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| Fee and commission | | | (2,374) | | - |
| expenses | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| Net fee and | | | 13,102 | | - |
| commission income | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| Other income | | | 806 | | - |
+-----------------------+-----+---------+----------+---------+---------+
| | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| Total income | | | 13,908 | | - |
+-----------------------+-----+---------+----------+---------+---------+
| | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| Profit on disposal of | | | | | |
| available-for-sale | | | 705 | | 76 |
| investments | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| Gain on fair value | | | | | |
| through profit and | | | 3,087 | | - |
| loss investments | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| Loss on sale of | | | (616) | | - |
| subsidiary | | | | | |
| undertaking | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| Operating expenses | | | | | |
| Impairment of other | | | (1,549) | | - |
| intangibles | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| Amortisation of other | | | (558) | | - |
| intangibles | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| Negative goodwill | | | 2,572 | | - |
+-----------------------+-----+---------+----------+---------+---------+
| Restructuring costs | | | (897) | | - |
+-----------------------+-----+---------+----------+---------+---------+
| Unrecovered debtor | | | (1,036) | | |
| balances | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| Share-based payments | | | 1,041 | | - |
| credit | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| Share-based payments | | | (587) | | - |
| charge | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| Other operating | | | (18,592) | | (332) |
| expenses | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| Total operating | | | (19,606) | | (332) |
| expenses | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| Operating loss | | | (2,522) | | (256) |
+-----------------------+-----+---------+----------+---------+---------+
| | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| Investment revenue | | | 217 | | 140 |
+-----------------------+-----+---------+----------+---------+---------+
| Finance costs | | | (6) | | - |
+-----------------------+-----+---------+----------+---------+---------+
| | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| Loss on ordinary | | | | | |
| activities before | | | (2,311) | | (116) |
| taxation | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| Taxation | | | 452 | | - |
+-----------------------+-----+---------+----------+---------+---------+
| | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| Loss from continuing | | | (1,859) | | (116) |
| operations | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| Discontinued | | | | | |
| operations | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| Loss from | | | (785) | | - |
| discontinued | | | | | |
| operations | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| Loss for the period | | | (2,644) | | (116) |
+-----------------------+-----+---------+----------+---------+---------+
| | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| Attributable to | | | | | |
| equity | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| Equity shareholders | | | 315 | | (116) |
| of the parent | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| Minority interest | | | (2,959) | | - |
+-----------------------+-----+---------+----------+---------+---------+
| | | | (2,644) | | (116) |
| | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| Loss per ordinary | | | | | |
| share (pence) | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| From continuing | | | (1.12) | | |
| operations | | | | | (0.33) |
| - Basic and diluted | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
| From continuing and | | | (1.59) | | |
| discontinued | | | | | |
| operations | | | | | (0.33) |
| - Basic and diluted | | | | | |
+-----------------------+-----+---------+----------+---------+---------+
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2009
+----------------------------+------+---+---------+---------+---------+
| | | | | | 15 |
| | | | 2009 | | months |
| | | | GBP'000 | | 2008 |
| | | | | | GBP'000 |
+----------------------------+------+---+---------+---------+---------+
| | | | | | |
+----------------------------+------+---+---------+---------+---------+
| Loss for the period | | | (2,644) | | (116) |
+----------------------------+------+---+---------+---------+---------+
| | | | | | |
+----------------------------+------+---+---------+---------+---------+
| Other comprehensive | | | | | |
| income: | | | | | |
+----------------------------+------+---+---------+---------+---------+
| Gains on revaluation of | | | | | |
| available-for-sale | | | 310 | | 474 |
| investments taken to | | | | | |
| equity, net of tax | | | | | |
+----------------------------+------+---+---------+---------+---------+
| Exchange differences on | | | | | |
| translation of foreign | | | 3 | | - |
| operations | | | | | |
+----------------------------+------+---+---------+---------+---------+
| Exchange differences on | | | | | - |
| sale of foreign operations | | | (3) | | |
+----------------------------+------+---+---------+---------+---------+
| Transferred to profit or | | | | | - |
| loss on sale of | | | (5) | | |
| available-for-sale | | | | | |
| investments | | | | | |
+----------------------------+------+---+---------+---------+---------+
| Deferred tax relating to | | | | | |
| components of other | | | 101 | | (133) |
| comprehensive income | | | | | |
+----------------------------+------+---+---------+---------+---------+
| | | | | | |
+----------------------------+------+---+---------+---------+---------+
| Other comprehensive income | | | | | |
| for the year, net of tax | | | 406 | | 341 |
+----------------------------+------+---+---------+---------+---------+
| | | | | | |
+----------------------------+------+---+---------+---------+---------+
| Total comprehensive income | | | (2,238) | | 225 |
| for the year | | | | | |
+----------------------------+------+---+---------+---------+---------+
| | | | | | |
+----------------------------+------+---+---------+---------+---------+
| Total comprehensive income | | | | | |
| attributable to: | | | | | |
+----------------------------+------+---+---------+---------+---------+
| Equity shareholders of the | | | 702 | | 225 |
| parent | | | | | |
+----------------------------+------+---+---------+---------+---------+
| Minority interest | | | (2,940) | | - |
+----------------------------+------+---+---------+---------+---------+
| | | | (2,238) | | 225 |
+----------------------------+------+---+---------+---------+---------+
| | | | | | |
+----------------------------+------+---+---------+---------+---------+
Consolidated Balance Sheet
as at 31 December 2009
+--------------------------------+-----+----------+----------+-----------+
| | | 31 | 28 | 27 |
| | | December | December | September |
| | | 2009 | 2008 | 2007 |
| | | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------+-----+----------+----------+-----------+
| ASSETS | | | | |
+--------------------------------+-----+----------+----------+-----------+
| Non-current assets | | | | |
+--------------------------------+-----+----------+----------+-----------+
| Goodwill | | 1,400 | - | - |
+--------------------------------+-----+----------+----------+-----------+
| Other intangible assets | | 3,967 | - | - |
+--------------------------------+-----+----------+----------+-----------+
| Property, plant and equipment | | 503 | 7 | - |
+--------------------------------+-----+----------+----------+-----------+
| | | | | |
+--------------------------------+-----+----------+----------+-----------+
| Total non-current assets | | 5,870 | 7 | - |
+--------------------------------+-----+----------+----------+-----------+
| | | | | |
+--------------------------------+-----+----------+----------+-----------+
| Current assets | | | | |
+--------------------------------+-----+----------+----------+-----------+
| Trade and other receivables | | 8,296 | 314 | - |
+--------------------------------+-----+----------+----------+-----------+
| Available-for-sale investments | | 2,963 | 1,603 | - |
+--------------------------------+-----+----------+----------+-----------+
| Fair value through profit and | | 4,813 | 25 | - |
| loss investments | | | | |
+--------------------------------+-----+----------+----------+-----------+
| Cash and cash equivalents | | 7,895 | 2,423 | - |
+--------------------------------+-----+----------+----------+-----------+
| | | | | |
+--------------------------------+-----+----------+----------+-----------+
| Total current assets | | 23,967 | 4,365 | - |
+--------------------------------+-----+----------+----------+-----------+
| | | | | |
+--------------------------------+-----+----------+----------+-----------+
| Total assets | | 29,837 | 4,372 | - |
+--------------------------------+-----+----------+----------+-----------+
| | | | | |
+--------------------------------+-----+----------+----------+-----------+
| LIABILITIES | | | | |
+--------------------------------+-----+----------+----------+-----------+
| Current liabilities | | | | |
+--------------------------------+-----+----------+----------+-----------+
| Trade and other payables | | 8,638 | 73 | - |
+--------------------------------+-----+----------+----------+-----------+
| Current tax liabilities | | 20 | - | - |
+--------------------------------+-----+----------+----------+-----------+
| Provisions | | 511 | - | - |
+--------------------------------+-----+----------+----------+-----------+
| | | | | |
+--------------------------------+-----+----------+----------+-----------+
| Total current liabilities | | 9,169 | 73 | - |
+--------------------------------+-----+----------+----------+-----------+
| | | | | |
+--------------------------------+-----+----------+----------+-----------+
| Non-current liabilities | | | | |
+--------------------------------+-----+----------+----------+-----------+
| Deferred tax liabilities | | 1,082 | 133 | - |
+--------------------------------+-----+----------+----------+-----------+
| | | | | |
+--------------------------------+-----+----------+----------+-----------+
| Total non-current liabilities | | 1,082 | 133 | - |
+--------------------------------+-----+----------+----------+-----------+
| | | | | |
+--------------------------------+-----+----------+----------+-----------+
| Total liabilities | | 10,251 | 206 | - |
+--------------------------------+-----+----------+----------+-----------+
| | | | | |
+--------------------------------+-----+----------+----------+-----------+
| EQUITY | | | | |
+--------------------------------+-----+----------+----------+-----------+
| Share capital | | 1,785 | 463 | - |
+--------------------------------+-----+----------+----------+-----------+
| Share premium account | | 11,457 | 3,478 | - |
+--------------------------------+-----+----------+----------+-----------+
| Fair value and other reserves | | 728 | 341 | - |
+--------------------------------+-----+----------+----------+-----------+
| Retained earnings | | (255) | (116) | - |
+--------------------------------+-----+----------+----------+-----------+
| | | | | |
+--------------------------------+-----+----------+----------+-----------+
| Parent company's shareholders' | | 13,715 | 4,166 | - |
| equity | | | | |
+--------------------------------+-----+----------+----------+-----------+
| Minority interest | | 5,871 | - | - |
+--------------------------------+-----+----------+----------+-----------+
| | | | | |
+--------------------------------+-----+----------+----------+-----------+
| Total equity and liabilities | | 29,837 | 4,372 | - |
+--------------------------------+-----+----------+----------+-----------+
Consolidated Statement of Changes in Equity
Year ended 31 December 2009
+---------------+----------+---------+----------+----------+---------+----------+---------+
| | | | Fair | | | | |
| | Share | Share | value | Retained | | | Total |
| | capital | premium | and | earnings | | Minority | equity |
| | | | other | | Total | Interest | |
| | | | reserves | | | | |
+---------------+----------+---------+----------+----------+---------+----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------+----------+---------+----------+----------+---------+----------+---------+
| | | | | | | | |
+---------------+----------+---------+----------+----------+---------+----------+---------+
| Balance at 27 | - | - | - | - | - | - | - |
| September | | | | | | | |
| 2007 | | | | | | | |
+---------------+----------+---------+----------+----------+---------+----------+---------+
| Issue of | 463 | 3,478 | - | - | 3,941 | - | 3,941 |
| share capital | | | | | | | |
+---------------+----------+---------+----------+----------+---------+----------+---------+
| Total | - | - | 341 | (116) | | | 225 |
| comprehensive | | | | | 225 | - | |
| income | | | | | | | |
| for the | | | | | | | |
| period | | | | | | | |
+---------------+----------+---------+----------+----------+---------+----------+---------+
| | | | | | | | |
+---------------+----------+---------+----------+----------+---------+----------+---------+
| Balance at 28 | 463 | 3,478 | 341 | (116) | 4,166 | - | 4,166 |
| December 2008 | | | | | | | |
+---------------+----------+---------+----------+----------+---------+----------+---------+
| | | | | | | | |
+---------------+----------+---------+----------+----------+---------+----------+---------+
| Issue of | 1,322 | 7,979 | - | - | 9,301 | 8,811 | 18,112 |
| share capital | | | | | | | |
+---------------+----------+---------+----------+----------+---------+----------+---------+
| Share-based | - | - | - | (454) | (454) | - | (454) |
| payments | | | | | | | |
| credit | | | | | | | |
+---------------+----------+---------+----------+----------+---------+----------+---------+
| Loss for the | | | | 315 | 315 | (2,959) | (2,644) |
| year | | | | | | | |
+---------------+----------+---------+----------+----------+---------+----------+---------+
| Other | - | - | 387 | - | 387 | | 406 |
| comprehensive | | | | | | 19 | |
| income | | | | | | | |
| for the year | | | | | | | |
+---------------+----------+---------+----------+----------+---------+----------+---------+
| | | | | | | | |
+---------------+----------+---------+----------+----------+---------+----------+---------+
| Balance at 31 | 1,785 | 11,457 | 728 | (255) | 13,715 | 5,871 | 19,586 |
| December 2009 | | | | | | | |
+---------------+----------+---------+----------+----------+---------+----------+---------+
Consolidated Cash Flow Statement
for the year ended 31 December 2009
+------------------------------------+------+------------+------------+
| | | | 15 months |
| | | 2009 | 2008 |
| | | GBP'000 | GBP'000 |
+------------------------------------+------+------------+------------+
| | | | |
| Net cash used in operating | | (5,045) | (570) |
| activities | | | |
+------------------------------------+------+------------+------------+
| | | | |
+------------------------------------+------+------------+------------+
| | | | |
+------------------------------------+------+------------+------------+
| Investing activities | | | |
+------------------------------------+------+------------+------------+
| Interest received | | 343 | 140 |
+------------------------------------+------+------------+------------+
| Dividends received | | 21 | - |
+------------------------------------+------+------------+------------+
| Proceeds on disposal of | | 3,341 | 247 |
| available-for-sale investments | | | |
+------------------------------------+------+------------+------------+
| Purchases of available-for-sale | | (3,230) | (1,300) |
| investments | | | |
+------------------------------------+------+------------+------------+
| Purchases of fair value through | | (815) | (25) |
| profit and loss investments | | | |
+------------------------------------+------+------------+------------+
| Purchases of property, plant and | | (201) | (10) |
| equipment | | | |
+------------------------------------+------+------------+------------+
| Acquisition of subsidiary | | 10,651 | - |
+------------------------------------+------+------------+------------+
| Disposal of subsidiary | | (95) | - |
+------------------------------------+------+------------+------------+
| | | | |
+------------------------------------+------+------------+------------+
| Net cash from / (used in) | | 10,015 | (948) |
| investing activities | | | |
+------------------------------------+------+------------+------------+
| | | | |
+------------------------------------+------+------------+------------+
| | | | |
+------------------------------------+------+------------+------------+
| Financing activities | | | |
+------------------------------------+------+------------+------------+
| Capital element of finance leases | | (25) | - |
| repaid | | | |
+------------------------------------+------+------------+------------+
| Proceeds from issue of ordinary | | 501 | 4,063 |
| share capital | | | |
+------------------------------------+------+------------+------------+
| Expenses of share issues | | - | (122) |
+------------------------------------+------+------------+------------+
| | | | |
+------------------------------------+------+------------+------------+
| Net cash from financing activities | | 476 | 3,941 |
+------------------------------------+------+------------+------------+
| | | | |
+------------------------------------+------+------------+------------+
| | | | |
+------------------------------------+------+------------+------------+
| Net increase / (decrease) in cash | | 5,446 | (2,423) |
| and cash equivalents | | | |
+------------------------------------+------+------------+------------+
| | | | |
+------------------------------------+------+------------+------------+
| | | | |
+------------------------------------+------+------------+------------+
| Cash and cash equivalents at | | 2,423 | - |
| beginning of year | | | |
+------------------------------------+------+------------+------------+
| | | | |
+------------------------------------+------+------------+------------+
| Effect of foreign exchange rates | | 26 | - |
+------------------------------------+------+------------+------------+
| | | | |
+------------------------------------+------+------------+------------+
| | | | |
+------------------------------------+------+------------+------------+
| Cash and cash equivalents at end | | 7,895 | 2,423 |
| of year | | | |
+------------------------------------+------+------------+------------+
| | | | |
+------------------------------------+------+------------+------------+
| | | | |
+------------------------------------+------+------------+------------+
| | | | |
+------------------------------------+------+------------+------------+
| | | | |
+------------------------------------+------+------------+------------+
Notes to the Preliminary Announcement
for the year ended 31 December 2009
1. Basis of preparation
This announcement has been based on the Group's financial statements which have
been prepared in accordance with IFRS as adopted by the European Union and IFRIC
interpretations and with the Companies Act 2006.
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.
2. Going concern
As part of its regular assessment of the prospects for the Group, the Board
reviews a detailed one year plan and further projections. Group cash balances
have decreased during 2009 and since the year end.
The Board assesses the prospects of the Company only, as the prospects and going
concern basis as applied to investee companies including Astaire Group Plc are
assessed by the Boards of those entities. The Company has no arrangement or
undertaking in respect of providing to, or receiving funding from, those
investee companies and hence the Board of the Company does not include them in
its assessment of going concern.
The Company currently has an overdraft facility of GBP200,000, which is being
utilised. The Board have produced a detailed eighteen month plan to 31 December
2011 focusing on the Company's investing activities. In order to move towards
profitability, the Board continues to adopt measures to reduce the cost base of
the Company. The eighteen month plan incorporates assumptions in respect of an
issue of new shares, which is fully underwritten, to raise GBP1,000,000, and the
partial realisation of an investment to raise a further GBP250,000 which has
been contracted and is subject only to shareholder approval.
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.
3. Preliminary announcement
Whilst the financial information included in this preliminary announcement has
been prepared in accordance with the recognition and measurement criteria of
International Financial Reporting Standards (IFRS), this announcement does not
itself contain sufficient information to comply with IFRS. Full financial
Statements that comply with IFRS were approved by the Board of Directors on 30
June 2010 and are expected to be published on the Group's website,
www.evolvecapital.co.uk and posted to shareholders as soon as is practicable.
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 December 2009 or 2008, but is derived
from those accounts. Statutory accounts for 2008 have been delivered to the
Registrar of Companies and those for 2009 will be delivered following the
Company's annual general meeting. The auditors have reported on these accounts;
their reports were unqualified, did not draw attention to any matters by way of
emphasis without qualifying their report and did not contain statements under
s498(2) or (3) of the Companies Act 2006 or equivalent preceding legislation.
This announcement was approved at a meeting of the Board of Directors held on 30
June 2010.
4. Availability of report and accounts
The Group's full report and accounts will be dispatched to shareholders as soon
as is practicable. Copies will also be available on the Group's website,
www.evolvecapital.co.uk, and on request from the Group's head office at 223a
Kensington High Street LONDON W8 6SG.
5. Annual General Meeting
The Annual General Meeting is to be held on 26 July 2010. Notice of the AGM will
be dispatched to shareholders with the Group's report and accounts.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR URUURRAANOAR
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