TIDMEVOL
RNS Number : 4758T
Evolve Capital PLC
29 September 2010
29 September 2010
Evolve Capital plc
("Evolve" or the "Company")
Interim Results for the six months ended 30 June 2010
Evolve Capital Plc today announces its interim results for the six months ended
30 June 2010 which incorporate the results for its principal operating
subsidiary, Astaire Group Plc.
For further information please contact:
+----------------------------------------+--------------------+
| Evolve Capital plc | |
| Oliver Vaughan, Chairman | Tel: 020 7937 4445 |
| | |
+----------------------------------------+--------------------+
| Allenby Capital Limited | |
| Nick Naylor | Tel: 020 3328 5656 |
| Nick Athanas | |
+----------------------------------------+--------------------+
Chairman's Statement
I am pleased to report to you on developments within the Company during the six
months to 30 June 2010. A summary of the financial performance of the Group can
be found at the end of this statement.
When Evolve was formed in 2007 its stated strategy was to invest in promising
companies that were either already on the PLUS market or who were seeking to
join the PLUS market. The Company raised an initial GBP4 million to enable it to
prove the viability of this strategy.
In December 2008 the Company launched a hostile bid for an AIM listed company,
Astaire Group Plc, known then as Blue Oar Plc. The rationale was twofold;
firstly to stop what appeared to be the inevitable destruction of a
fundamentally sound company that was well known to the Evolve directors, and
secondly as a means to bolster the investment funds available to Evolve in
pursuit of its stated strategy. Evolve's bid was successful; however the litany
of structural and regulatory issues that had been built up under the stewardship
of that company's previous management prevented our objectives from being
achieved. They also drew Evolve into what has come to be recognised as a deeply
unhappy episode. Earlier this year steps were taken to separate the management
of the two companies and as a part of this exercise James Noble and Chris
Roberts resigned from the Evolve Board. It is a matter of public record that the
Board of Astaire are continuing to review various options to revive the fortunes
of that group and Evolve's Board will be supportive of whichever route enables
the greatest preservation of its shareholders' value.
To add to the challenges associated with this investment, a former client of
Astaire Securities Plc initiated proceedings against the company and included
Edward Vandyk, one of Evolve's directors, as a party to the action. In order for
him to focus on the vigorous defence of this action, Edward Vandyk stepped off
the Board of Evolve with effect from 26 May 2010 and has no ongoing involvement
in its day to day affairs.
On a more positive note a number of Evolve's PLUS-quoted investments have
performed well and since the period end, the Company has successfully raised
additional funds; in part through the disposal of a part of its investment in
unquoted Aconite Technology Limited, but principally through a fully
underwritten open offer to shareholders, which completed on 8 September and was
encouragingly well supported by shareholders. The funds raised from the open
offer have provided the Company with additional working capital and will allow
it to provide further funds to existing investments and possibly to invest in
new opportunities. Further details on Evolve's investments can be found below.
On 23 August 2010 a small group of shareholders, who at the time held 5.8% of
the Company's issued share capital, requisitioned a General Meeting of the
Company to remove me as Chairman. At the time of the requisition no explanations
were provided and no alternative candidate proposed. It has subsequently become
apparent that these shareholders were expressing unhappiness with the Astaire
situation and that they felt that the Board of Evolve were failing to
communicate adequately with shareholders about the Company's strategy and the
status of the companies in which it has invested. The resolution was put to
shareholders at a General Meeting held on the 28 September 2010 and was duly
defeated, nevertheless the Board has determined that communication with
shareholders will be improved going forward.
Evolve is now getting back to its roots as an investment company and as such it
is once again looking to make investments in quoted companies and unquoted
companies that are looking to join the PLUS market or move from PLUS to the AIM
market.
OPERATIONS
Astaire Group Plc
Astaire Group Plc has two principal trading businesses, Astaire Securities Plc
which is an institutional stockbroker, corporate financial advisor and AIM
Nominated adviser, and Rowan Dartington & Co. Ltd which is an established
private client stockbroker based in the South and West of England.
During the period, Astaire Group has received, from lawyers acting on behalf of
Izodia Plc, service of a Claim Form and Particulars of Claim filed with the High
Court, claiming compensation of approximately GBP4 million plus interest and
costs in respect of alleged events which occurred in 2002.
The Astaire Group Board are currently reviewing a number of strategic options to
revive the fortunes of the group and Evolve is keen to ensure that everything is
done to preserve the value of its holding in this group. This has proved to be a
particularly unsuccessful investment to date on a number of levels and one for
which I and my colleagues apologise wholeheartedly to all shareholders in the
Company.
St Helens Capital Partners LLP ("St Helens"),
Evolve's wholly owned subsidiary St Helens continues to be the largest Corporate
Adviser to PLUS-quoted companies, by number of retained clients. In May 2010 the
business once again won the award as PLUS Adviser of the Year, a commendable
achievement, and the staff at St Helens are to be congratulated for their
continued commitment to the development of this small cap market.
Despite the inevitable restriction that the financial crisis has placed on the
number of viable corporate transactions, St Helens has in recent months
succeeded in floating two new companies on the PLUS-quoted market and its
clients have raised more than GBP1.7 million of new capital. The business
continues to trade in a satisfactory manner and the Board of Evolve is confident
that it will flourish as financial conditions improve.
UPDATE ON INVESTMENTS
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 and the company has won a number of contracts in the
mass transit arena. In the latter part of 2009 the financial crisis caused
potential customers to delay the signing of new contracts and this placed a
considerable strain on the company's cash resources. As a matter of prudence
Evolve wrote down the value of its holding in the company to GBP200,000. Since
that time the company has signed a number of new contracts and its prospects
have improved significantly.
In July 2010 Evolve sold 275,000 shares in Aconite to Elderstreet Investments
for GBP250,000 in cash, which generated a profit after expenses of GBP134,500
over the written down value of the shares. One of Evolve's Directors, Michael
Jackson, is also a director of and a shareholder in Elderstreet and as a
consequence this transaction was classified as a related party transaction under
the AIM Rules for Companies and the Companies Act 2006 and was approved by
shareholders.
Bluehone Plc ("Bluehone")
Bluehone was established in 2005 and specialises in managing funds focused on
investing in small companies. Its executive directors previously worked
together at F&C Asset Management and F&C is an investor in the business. Evolve
acquired a 19.9% stake in Bluehone through investing GBP386,763.
Pulse Group Plc ("Pulse")
Pulse is a leading provider of research process outsourcing in the Asia Pacific
region and services market research companies based throughout the world. In
recent months both the company and its chief executive, Bob Chua, have won a
number of awards for excellence and have generated a considerable volume of
positive coverage in the local Asian Pacific press. However, the company remains
relatively small in size and needs to expand in order to realise its full
potential. Evolve initially invested GBP500,000 in the ordinary share capital of
the company in June 2008 at the time of its admission to the PLUS-quoted market.
Since then, Evolve has reduced its holding in the company through a series of
disposals, and following a fall in share price the remaining holding is carried
at its fair value of GBP38,759.
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 is run by three former main board directors from BPP,
a fully listed company that is one of the UK's leading professional training
companies. The company joined the PLUS-quoted market in March 2008, has made
three acquisitions to date and is trading profitably. At 30 June 2010 Evolve's
holding is valued at GBP1,071,000, representing a notional gain of GBP621,000.
3D Diagnostic Imaging plc ("3D")
3D's wholly owned subsidiary, CarieScan Limited, has completed the development
of and is marketing a hand held, simple to use, highly accurate device for the
early detection and monitoring of dental caries (tooth decay). In June 2010 the
company signed a transformational distribution agreement with Patterson Dental,
one of the largest distributors of dental equipment in the USA with annual
turnover of some $2 billion. The USA is thought to be one of the largest markets
for the company's products in the world. The company has begun shipment of
product to Patterson, and this marks the beginning of the commercialisation of
its product.
Evolve has to date made a total investment in the ordinary share capital of 3D
of GBP839,925, and the holding had a fair value of GBP5,299,000 at 30 June 2010.
Since the period end, 3D has announced the raising of GBP745,000 of additional
capital through the issue of unsecured convertible loan notes with an interest
coupon of 5% per annum. Evolve participated in this funding round so in addition
to its equity holding, it now also holds GBP350,000 of unsecured convertible
loan notes with an interest coupon of 5% per annum, which will convert
automatically upon an admission of 3D to AIM at the lower of 15p and a price
that is a 25% discount to the price at which any IPO funds are raised. This
takes the total cost of investment by Evolve in 3D to GBP1,189,925 at the date
of these interim financial statements.
The table below summarises the key investments held at 30 June 2010 and their
valuations in these interim financial statements:
+------------+---------+------------+----------------+------------+--------------+-----------+
| | | | | | Fair | Closing |
| | | Shares | | | Value |bid price |
| Investment | Market | held | Classification | Cost | at 30 | at 27 |
| | | by | | | June |September |
| | | Evolve | | | 2010 | 2010 |
+------------+---------+------------+----------------+------------+--------------+-----------+
| | | | | | | |
+------------+---------+------------+----------------+------------+--------------+-----------+
| Aconite | | | | | | |
| Technology | Private | 476,190 | AFS | GBP500,000 | GBP200,000 | Unquoted |
| Ltd | | | | | | |
+------------+---------+------------+----------------+------------+--------------+-----------+
| Bluehone | | 23,615,411 | | | | |
| Holdings | PLUS | | AFS | GBP386,763 | GBP501,827 | 2.5p |
| Plc | | | | | | |
+------------+---------+------------+----------------+------------+--------------+-----------+
| | | 6,079,888 | | | | |
| Pulse | PLUS | | AFS | GBP328,595 | GBP38,759 | 0.75p |
| Group Plc | | | | | | |
+------------+---------+------------+----------------+------------+--------------+-----------+
| Woodspeen | | 3,000,000 | | | | |
| Training | PLUS | | AFS | GBP450,000 | GBP1,071,000 | 33p |
| Plc | | | | | | |
+------------+---------+------------+----------------+------------+--------------+-----------+
| 3D | | 44,529,911 | | | | |
| Diagnostic | PLUS | | FVTPL | GBP839,925 | GBP5,299,059 | 14p |
| Imaging | | | | | | |
| Plc | | | | | | |
+------------+---------+------------+----------------+------------+--------------+-----------+
Fair value of the PLUS quoted investments is calculated based on the bid price
of the shares quoted on PLUS less a 15% discount to reflect the relative
illiquidity of the holdings concerned. At this time the Board of Evolve do not
believe that these fair values could be achieved on in a short term realisation
of these investments.
Evolve Capital Plc also owns 53.61 per cent. of the issued share capital of
Astaire Group Plc, which has a carrying value of GBP2,748,000 in the Company
balance sheet.
RESULTS
The Group generated a loss after taxation of GBP864,000 compared with a profit
after tax for the six months ended 30 June 2009 of GBP1,497,000, and these are
explained in more detail in the Financial Review.
During the period under review the Board has taken significant steps to reduce
the Company's overhead base, but this is of course minimal in comparison to the
losses generated by Astaire Group Plc which are consolidated in full within
these results.
At 30 June 2010 the Group has consolidated net current assets of GBP15.2
million, compared with GBP14.8 million at 31 December 2009 and GBP17.7 million
at 30 June 2009. Cash balances were GBP5.5 million at 30 June 2010, compared
with GBP7.9 million at 31 December 2009 and GBP10.5 million at 30 June 2009. Of
these cash balances GBP5.6 million at 30 June 2010 were held within Astaire
Group plc and not available to Evolve. Cash per share at 30 June 2009 was 3.07
pence compared to 4.42 pence at 31 December 2009.
Once again I would urge a note of caution because within the Group's cash
balances at 30 June 2010 were GBP5.6 million held with the Astaire group and not
available to Evolve.
During the coming months we intend to focus on our core strategy and I look
forward to advising you of further progress in due course.
Oliver Vaughan
Executive Chairman
29 September 2010
FINANCIAL REVIEW
Result before tax
The result for the first six months of 2010 was a loss before taxation of
GBP1,073,000 compared to a profit of GBP1,809,000 for the same period in 2009.
Income statement
The consolidated results for the period relate to the trading activities of the
Astaire Group, which is 53% owned by Evolve and therefore fully consolidated in
these Interim results, the wholly owned PLUS adviser St Helens Capital Partners
LLP and Evolve Capital Plc's other investment activities. The Astaire Group
contributed 96 per cent. of Evolve's consolidated total income.
The consolidated results include net unrealised gains on fair value through
profit and loss (FVTPL) investments of GBP1,846,000 (30 June 2009: gain of
GBP1,567,000). The gain in FVTPL investments includes a GBP2,271,000 gain
related to an increase in the market value of Evolve's holding in 3D Diagnostic
Imaging Plc and a GBP425,000 loss from investments held by Astaire Group.
Taxation
The tax credit for the period of GBP209,000 (30 June 2009: charge of GBP312,000)
reflects deferred tax on movements in the value of investments and other
intangible assets .
Earnings per share
The basic loss per share from continuing operations was 0.48 pence per share
(2009: earnings of 0.93 pence per share). 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
At 31 December 2009, the carrying value of goodwill in the balance sheet was
GBP1,400,000, however with the difficulties facing the Astaire Group (to which
much of this goodwill relates) the Board resolved to book impairment provisions
of GBP1,101,000 against this. A small impairment provision of GBP207,000 was
also taken against the value of other intangibles.
As noted above the other significant movement affecting the balance sheet was
the increase in the carrying value of FVTPL investments since 31 December 2009
by GBP1,625,000, which is related to the increase in market value of 3D
Diagnostics, offset by some adverse movements in FVTPL investments in the
Astaire Group.
At 30 June 2010 the consolidated Evolve Group held net cash balances of GBP5.5
million, a reduction of GBP2.4 million from 31 December 2009. This movement is
almost wholly due to reduced cash balances in Astaire Group. Evolve itself
utilised a short term overdraft facility which was repaid after the period end
from the proceeds of the share and loan note issue.
Going concern
The Group has adequate cash resources and a short term overdraft facility. In
addition, as more fully explained in note 5, after the period end, the Company
raised new equity and loan capital of GBP1 million before expenses, by the issue
of new shares and loan notes.
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.
Oliver Vaughan
Executive Chairman
29 September 2010
Condensed Consolidated Income Statement
for the six months ended 30 June 2010
+----------------------------------+-----------+-----------+----------+
| | Unaudited | Unaudited | Audited |
| | Six | Six | Year |
| | months to | months | ended |
| | 30 June | to | 31 |
| | 10 | 30 June | December |
| | GBP'000 | 09 | 09 |
| | | GBP'000 | GBP'000 |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| Fee and commission income | 7,679 | 6,187 | 15,476 |
+----------------------------------+-----------+-----------+----------+
| Fee and commission expenses | (1,276) | (1,028) | (2,374) |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| Net fee and commission income | 6,403 | 5,159 | 13,102 |
+----------------------------------+-----------+-----------+----------+
| Other income | 499 | 338 | 806 |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| Total income | 6,902 | 5,497 | 13,908 |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| Profit on disposal of | 24 | 540 | 705 |
| available-for-sale investments | | | |
+----------------------------------+-----------+-----------+----------+
| Gain on fair value through | 1,846 | 1,567 | 3,087 |
| profit and loss investments | | | |
+----------------------------------+-----------+-----------+----------+
| Loss on sale of subsidiary | - | (616) | (616) |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| Operating expenses | (1,308) | (64) | (1,549) |
| Impairment of goodwill and | | | |
| other intangibles | | | |
+----------------------------------+-----------+-----------+----------+
| Amortisation of other | (326) | (198) | (558) |
| intangibles | | | |
+----------------------------------+-----------+-----------+----------+
| Negative goodwill | - | 2,919 | 2,572 |
+----------------------------------+-----------+-----------+----------+
| Restructuring costs | (260) | - | (897) |
+----------------------------------+-----------+-----------+----------+
| Unrecovered debtor balances | - | - | (1,036) |
+----------------------------------+-----------+-----------+----------+
| Share-based payments credit | - | 924 | 1,041 |
+----------------------------------+-----------+-----------+----------+
| Share-based payments charge | (83) | (292) | (587) |
+----------------------------------+-----------+-----------+----------+
| Other operating expenses | (7,916) | (8,622) | (18,592) |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| Total operating expenses | (9,893) | (5,333) | (19,606) |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| Operating (loss) / profit | (1,121) | 1,655 | (2,522) |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| Investment revenue | 49 | 160 | 217 |
+----------------------------------+-----------+-----------+----------+
| Finance costs | (1) | (6) | (6) |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| (Loss) / profit on ordinary | (1,073) | 1,809 | (2,311) |
| activities before taxation | | | |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| Taxation | 209 | (312) | 452 |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| (Loss) / profit from continuing | (864) | 1,497 | (1,859) |
| operations | | | |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| Discontinued operations | | | |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| Loss from discontinued | - | (196) | (785) |
| operations | | | |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| (Loss) / profit for the period | (864) | 1,301 | (2,644) |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| Attributable to: | | | |
+----------------------------------+-----------+-----------+----------+
| Equity shareholders of the | 424 | 2,238 | 315 |
| parent | | | |
+----------------------------------+-----------+-----------+----------+
| Minority interest | (1,288) | (937) | (2,959) |
+----------------------------------+-----------+-----------+----------+
| | (864) | 1,301 | (2,644) |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| (Loss) / earnings per ordinary | | | |
| share (pence) | | | |
+----------------------------------+-----------+-----------+----------+
| From continuing operations | | | |
+----------------------------------+-----------+-----------+----------+
| - Basic and diluted | (0.48) | 0.93 | (1.12) |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| From continuing and discontinued | | | |
| operations | | | |
+----------------------------------+-----------+-----------+----------+
| - Basic and diluted | (0.48) | 0.82 | (1.59) |
+----------------------------------+-----------+-----------+----------+
Condensed Consolidated Statement of Comprehensive Income
for the six months ended 30 June 2010
+----------------------------------+-----------+-----------+----------+
| | Unaudited | Unaudited | Audited |
| | Six | Six | Year |
| | months to | months to | ended |
| | 30 June | 30 June | 31 |
| | 10 | 09 | December |
| | GBP'000 | GBP'000 | 09 |
| | | | GBP'000 |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| (Loss) / profit for the period | (864) | 1,301 | (2,644) |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| Other comprehensive income: | | | |
+----------------------------------+-----------+-----------+----------+
| Gains on revaluation of | 26 | 286 | 310 |
| available-for-sale investments | | | |
| taken to equity, net of tax | | | |
+----------------------------------+-----------+-----------+----------+
| Exchange differences on | - | 3 | 3 |
| translation of foreign | | | |
| operations | | | |
+----------------------------------+-----------+-----------+----------+
| Exchange differences on sale of | - | (3) | (3) |
| foreign operations | | | |
+----------------------------------+-----------+-----------+----------+
| Transferred to profit or loss on | (4) | (5) | (5) |
| sale of | | | |
| available-for-sale investments | | | |
+----------------------------------+-----------+-----------+----------+
| Deferred tax relating to | (10) | (64) | 101 |
| components of other | | | |
| comprehensive income | | | |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| Other comprehensive income for | 12 | 217 | 406 |
| the | | | |
| period, net of tax | | | |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| Total comprehensive income for | (852) | 1,518 | (2,238) |
| the period | | | |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| Total comprehensive income | | | |
| attributable to | | | |
+----------------------------------+-----------+-----------+----------+
| Equity shareholders of the | 446 | 2,437 | 702 |
| parent | | | |
+----------------------------------+-----------+-----------+----------+
| Minority interest | (1,298) | (919) | (2,940) |
+----------------------------------+-----------+-----------+----------+
| | (852) | 1,518 | (2,238) |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
Condensed Consolidated Balance Sheet
as at 30 June 2010
+----------------------------------+-----------+-----------+----------+
| | Unaudited | Unaudited | Audited |
| | 30 June | 30 June | 31 |
| | 10 | 09 | December |
| | GBP'000 | GBP'000 | 09 |
| | | | GBP'000 |
+----------------------------------+-----------+-----------+----------+
| ASSETS | | | |
+----------------------------------+-----------+-----------+----------+
| Non-current assets | | | |
+----------------------------------+-----------+-----------+----------+
| Goodwill | 299 | - | 1,400 |
+----------------------------------+-----------+-----------+----------+
| Other intangible assets | 3,433 | 2,479 | 3,967 |
+----------------------------------+-----------+-----------+----------+
| Property, plant and equipment | 732 | 602 | 503 |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| Total non-current assets | 4,464 | 3,081 | 5,870 |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| Current assets | | | |
+----------------------------------+-----------+-----------+----------+
| Trade and other receivables | 10,899 | 11,747 | 8,296 |
+----------------------------------+-----------+-----------+----------+
| Available-for-sale investments | 2,847 | 3,136 | 2,963 |
+----------------------------------+-----------+-----------+----------+
| Fair value through profit and | | | |
| loss investments | 6,438 | 2,389 | 4,813 |
+----------------------------------+-----------+-----------+----------+
| Cash and cash equivalents | 5,655 | 10,479 | 7,895 |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| Total current assets | 25,839 | 27,751 | 23,967 |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| Total assets | 30,303 | 30,832 | 29,837 |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| LIABILITIES | | | |
+----------------------------------+-----------+-----------+----------+
| Current liabilities | | | |
+----------------------------------+-----------+-----------+----------+
| Trade and other payables | 10,401 | 9,978 | 8,638 |
+----------------------------------+-----------+-----------+----------+
| Current tax liabilities | 20 | 105 | 20 |
+----------------------------------+-----------+-----------+----------+
| Borrowings | 182 | - | - |
+----------------------------------+-----------+-----------+----------+
| Provisions | - | - | 511 |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| Total current liabilities | 10,603 | 10,083 | 9,169 |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| Non-current liabilities | | | |
+----------------------------------+-----------+-----------+----------+
| Deferred tax liabilities | 873 | 1,244 | 1,082 |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| Total non-current liabilities | 873 | 1,244 | 1,082 |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| Total liabilities | 11,476 | 11,327 | 10,251 |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| EQUITY | | | |
+----------------------------------+-----------+-----------+----------+
| Share capital | 1,785 | 1,681 | 1,785 |
+----------------------------------+-----------+-----------+----------+
| Share premium | 11,457 | 11,136 | 11,457 |
+----------------------------------+-----------+-----------+----------+
| Fair value and other reserves | 740 | 558 | 728 |
+----------------------------------+-----------+-----------+----------+
| Retained earnings | 252 | 1,490 | (255) |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| Parent company's shareholders' | 14,234 | 14,865 | 13,715 |
| equity | | | |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| Minority interest | 4,593 | 4,640 | 5,871 |
+----------------------------------+-----------+-----------+----------+
| | | | |
+----------------------------------+-----------+-----------+----------+
| Total equity and liabilities | 30,303 | 30,832 | 29,837 |
+----------------------------------+-----------+-----------+----------+
Condensed Consolidated Statement of Changes in Equity
As at 30 June 2010
+------------------+---------+---------+----------+----------+---------+----------+---------+
| | | | 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 28 | 463 | 3,478 | 341 | (116) | 4,166 | - | 4,166 |
| December 2008 | | | | | | | |
+------------------+---------+---------+----------+----------+---------+----------+---------+
| Issue of share | 1,218 | 7,658 | - | - | 8,876 | 5,577 | 14,453 |
| capital | | | | | | | |
+------------------+---------+---------+----------+----------+---------+----------+---------+
| Share-based | - | - | - | (632) | (632) | - | (632) |
| payments | | | | | | | |
+------------------+---------+---------+----------+----------+---------+----------+---------+
| Profit for the | - | - | - | 2,238 | 2,238 | (937) | 1,301 |
| period | | | | | | | |
+------------------+---------+---------+----------+----------+---------+----------+---------+
| Other | - | - | 217 | - | 217 | | 217 |
| comprehensive | | | | | | - | |
| income | | | | | | | |
| for the period | | | | | | | |
+------------------+---------+---------+----------+----------+---------+----------+---------+
| | | | | | | | |
+------------------+---------+---------+----------+----------+---------+----------+---------+
| Balance at 30 | 1,681 | 11,136 | 558 | 1,490 | 14,865 | 4,640 | 19,505 |
| June 2009 | | | | | | | |
+------------------+---------+---------+----------+----------+---------+----------+---------+
| | | | | | | | |
+------------------+---------+---------+----------+----------+---------+----------+---------+
| Issue of share | 104 | 321 | - | - | 425 | 3,234 | 3,659 |
| capital | | | | | | | |
+------------------+---------+---------+----------+----------+---------+----------+---------+
| Share-based | - | - | - | 178 | 178 | - | 178 |
| payments | | | | | | | |
+------------------+---------+---------+----------+----------+---------+----------+---------+
| Loss for the | - | - | - | (1,923) | (1,923) | (2,022) | (3,945) |
| period | | | | | | | |
+------------------+---------+---------+----------+----------+---------+----------+---------+
| Other | - | - | 170 | - | | | 189 |
| comprehensive | | | | | 170 | 19 | |
| income | | | | | | | |
| for the period | | | | | | | |
+------------------+---------+---------+----------+----------+---------+----------+---------+
| | | | | | | | |
+------------------+---------+---------+----------+----------+---------+----------+---------+
| Balance at 31 | 1,785 | 11,457 | 728 | (255) | 13,715 | 5,871 | 19,586 |
| December 2009 | | | | | | | |
+------------------+---------+---------+----------+----------+---------+----------+---------+
| | | | | | | | |
+------------------+---------+---------+----------+----------+---------+----------+---------+
| Share-based | - | - | - | 83 | 83 | - | 83 |
| payments | | | | | | | |
+------------------+---------+---------+----------+----------+---------+----------+---------+
| Loss for the | - | - | - | 424 | 424 | (1,288) | (864) |
| period | | | | | | | |
+------------------+---------+---------+----------+----------+---------+----------+---------+
| Other | - | - | 12 | - | | | 22 |
| comprehensive | | | | | 12 | 10 | |
| income | | | | | | | |
| for the period | | | | | | | |
+------------------+---------+---------+----------+----------+---------+----------+---------+
| | | | | | | | |
+------------------+---------+---------+----------+----------+---------+----------+---------+
| Balance at 30 | 1,785 | 11,457 | 740 | 252 | 14,234 | 4,593 | 18,827 |
| June 2010 | | | | | | | |
+------------------+---------+---------+----------+----------+---------+----------+---------+
Condensed Consolidated Statement of Cash Flows
for the six months ended 30 June 10
+----------------------------------+-----------+-----------+-----------+
| | Unaudited | Unaudited | Unaudited |
| | Six | Six | Year |
| | months to | months to | ended |
| | 30 June | 30 June | 31 |
| | 10 | 09 | December |
| | GBP'000 | GBP'000 | 09 |
| | | | GBP'000 |
+----------------------------------+-----------+-----------+-----------+
| | (2,123) | (3,823) | (5,045) |
| Net cash used in operating | | | |
| activities | | | |
+----------------------------------+-----------+-----------+-----------+
| | | | |
+----------------------------------+-----------+-----------+-----------+
| | | | |
+----------------------------------+-----------+-----------+-----------+
| Investing activities | | | |
+----------------------------------+-----------+-----------+-----------+
| Interest received | 49 | 273 | 343 |
+----------------------------------+-----------+-----------+-----------+
| Dividends received | 17 | 21 | 21 |
+----------------------------------+-----------+-----------+-----------+
| Proceeds on disposal of | 92 | 1,993 | 3,341 |
| available-for-sale investments | | | |
+----------------------------------+-----------+-----------+-----------+
| Purchases of available-for-sale | (38) | (2,294) | (3,230) |
| investments | | | |
+----------------------------------+-----------+-----------+-----------+
| Purchases of fair value through | - | (504) | (815) |
| profit & loss investments | | | |
+----------------------------------+-----------+-----------+-----------+
| Purchases of property, plant and | (419) | (37) | (201) |
| equipment | | | |
+----------------------------------+-----------+-----------+-----------+
| Acquisition of subsidiaries | - | 12,521 | 10,651 |
+----------------------------------+-----------+-----------+-----------+
| Disposal of subsidiary | - | (95) | (95) |
+----------------------------------+-----------+-----------+-----------+
| | | | |
+----------------------------------+-----------+-----------+-----------+
| Net cash (used in) / from | (299) | 11,878 | 10,015 |
| investing activities | | | |
+----------------------------------+-----------+-----------+-----------+
| | | | |
+----------------------------------+-----------+-----------+-----------+
| | | | |
+----------------------------------+-----------+-----------+-----------+
| Financing activities | | | |
+----------------------------------+-----------+-----------+-----------+
| Capital element of finance | - | (25) | (25) |
| leases repaid | | | |
+----------------------------------+-----------+-----------+-----------+
| Proceeds from issue of ordinary | - | - | 501 |
| share capital | | | |
+----------------------------------+-----------+-----------+-----------+
| | | | |
+----------------------------------+-----------+-----------+-----------+
| Net cash (used in) / from | - | (25) | 476 |
| financing activities | | | |
+----------------------------------+-----------+-----------+-----------+
| | | | |
+----------------------------------+-----------+-----------+-----------+
| | | | |
+----------------------------------+-----------+-----------+-----------+
| Net (decrease) / increase in | (2,422) | 8,030 | 5,446 |
| cash and cash equivalents | | | |
+----------------------------------+-----------+-----------+-----------+
| | | | |
+----------------------------------+-----------+-----------+-----------+
| | | | |
+----------------------------------+-----------+-----------+-----------+
| Cash and cash equivalents at | 7,895 | 2,423 | 2,423 |
| beginning of period | | | |
+----------------------------------+-----------+-----------+-----------+
| | | | |
+----------------------------------+-----------+-----------+-----------+
| Effect of foreign exchange rates | - | 26 | 26 |
+----------------------------------+-----------+-----------+-----------+
| | | | |
+----------------------------------+-----------+-----------+-----------+
| | | | |
+----------------------------------+-----------+-----------+-----------+
| Cash and cash equivalents at end | 5,473 | 10,479 | 7,895 |
| of 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 accounting policies used in the preparation of the Interim Report are
consistent with those set out in the Annual Report and Accounts for the year
ended 31 December 2009. For the year ended 31 December 2010 the Group has
adopted International Financial Reporting Standard 3 "Business Combinations"
(revised 2008) and International Accounting Standard 27 "Consolidated and
Separate Financial Statements" (revised 2008). There is no impact associated
with these changes in these Interim Condensed Financial Statements.
The information for the year ended 31 December 2009 does not constitute
statutory accounts as defined in section 434 of the Companies Act 2006. A copy
of the statutory accounts for that year has been delivered to the Registrar of
Companies. The auditors reported on those accounts; their report was
unqualified, did not draw attention to any matters by way of emphasis and did
not contain a statement under section 498(2) or (3) of the Companies Act 2006.
The interim condensed financial statements will be circulated to all
shareholders by 8 October 2010 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.
2. TAXATION
The tax credit for the six months to 30 June 2010 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 condensed 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 (loss) / earnings per ordinary share is based on
(loss) / profit 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 (loss) / earnings and weighted average number of shares
used in the calculations are set out in the table below.
+----------+----------------+---------+-+-------------+-+----------+-----+----------+-+-------------+-+----------+----------+
| | | Six months ended 30 June 2010 | Period ended 30 June 2009 |
+----------+----------------+--------------------------------------------+--------------------------------------------------+
| | | | | | | | | | | | | |
| | | | Weighted | | | | | | Weighted | | | |
| | | | Average | | Earnings | | | | Average | | Earnings | |
| | Loss | | Number | | per | | Earnings | | Number | | per | |
| | GBP'000 | | of | | share | | GBP'000 | | of | | share | |
| | | | shares | | (pence) | | | | shares | | (pence) | |
+---------------------------+---------+-+-------------+-+----------+-----+----------+-+-------------+-+----------+----------+
| | | | | | | | | | | | | |
+---------------------------+---------+-+-------------+-+----------+-----+----------+-+-------------+-+----------+----------+
| | | | | | | | | | | | | |
| (Loss) / earnings from | | | | | | | | | | | | |
| continuing and | | | | | | | | | | | | |
| discontinued operations | (864) | | 178,486,235 | | (0.48) | | 1,301 | | 159,474,267 | | 0.82 | |
+---------------------------+---------+-+-------------+-+----------+-----+----------+-+-------------+-+----------+----------+
| | | | | | | | | | | | | |
+---------------------------+---------+-+-------------+-+----------+-----+----------+-+-------------+-+----------+----------+
| Adjustment to exclude | | | | | | | | | | | | |
| loss from discontinued | | | | | | | | | | | | |
| operations | - | | - | | | | (196) | | - | | | |
+---------------------------+---------+-+-------------+-+----------+-----+----------+-+-------------+-+----------+----------+
| | | | | | | | | | | | | |
+---------------------------+---------+-+-------------+-+----------+-----+----------+-+-------------+-+----------+----------+
| (Loss) / earnings from | | | | | | | | | | | | |
| continuing operations | | | | | | | | | | | | |
| excluding discontinued | | | | | | | | | | | | |
| operations | (864) | | 178,486,235 | | (0.48) | | 1,497 | | 159,474,267 | | 0.93 | |
+---------------------------+---------+-+-------------+-+----------+-----+----------+-+-------------+-+----------+----------+
| | | | | | | | | | | | | | |
+----------+----------------+---------+-+-------------+-+----------+-----+----------+-+-------------+-+----------+----------+
4. CONTINGENT LIABILITIES
The Astaire Group has received, from lawyers acting on behalf of Izodia Plc,
service of a Claim Form and Particulars of Claim filed with the High Court,
claiming compensation of approximately GBP4 million plus interest and costs in
respect of alleged events which occurred in 2002.
The Astaire Group is receiving legal advice in respect of this matter and
expects to present a vigorous defence to the allegations which it believes to be
wholly unfounded.
5. POST BALANCE SHEET EVENTS
In July 2010 Evolve sold 275,000 shares in Aconite Technology Limited to
Elderstreet Investments Limited for GBP250,000 in cash, generating a profit
after expenses of GBP134,500 over the written down value of the shares at 30
June 2010. One of Evolve's Directors, Michael Jackson, is also a Director of and
a shareholder in Elderstreet and as a consequence this transaction was
classified as a related party transaction under the AIM Rules for Companies and
the Companies Act 2006.
On 8 September 2010 the Company announced that it had raised GBP1,003,985 by way
of an open offer to existing shareholders. The funds were raised by the issue of
104,869,864 ordinary shares of 0.1 pence each, and GBP479,636 of loan notes.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DBGDCIGDBGGI
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