TIDMEVOL
RNS Number : 0323N
Evolve Capital PLC
25 September 2012
25 September 2012
Evolve Capital plc
("Evolve" or the "Company")
Interim results for the six months ended 30 June 2012
Evolve Capital plc today announces its interim results for the
six months ended 30 June 2012.
For further information please contact:
Evolve Capital plc
Oliver Vaughan Tel: 020 7937 4445
Allenby Capital Limited
(nominated adviser and broker)
Nick Naylor Tel: 020 3328 5656
Nick Athanas
CHAIRMAN'S STATEMENT
I am pleased to report to you on the Company's activities during
the six months to 30 June 2012.
As has been well documented, the economic environment for
smaller, emerging companies remains particularly challenging in the
UK.
During the period under review your Board has continued with its
stated strategy of holding, and where necessary nurturing our
existing investments. Meanwhile, we have where possible made
further cuts to our own overheads in order to reduce the cost of
what we believe will be a long wait for the market to revive.
We feel that we have an interesting spread of investments, a
number of which have been harder hit than others by the adverse
economic environment and some of which can be expected to flourish
sooner than others. The diversity in our investments means that we
are not exposed to any particular sector.
Evolve's investments at 30 June 2012 can be summarised as
follows:
Investment Market Shares held Holding Cost (GBP) Fair Value
by Evolve % at 30 June
2012 (GBP)
----------- -------------- ---------- -------------
Aconite Technology
Ltd Private 201,190 2.7 211,249 22,738
----------- -------------- ---------- ------------- --------------
Bluehone Holdings
Plc PLUS 23,615,411 19.9 386,763 301,096
----------- -------------- ---------- ------------- --------------
Central Asian
Minerals
and Resources
Plc PLUS 1,002,259 7.3 507,450 536,871
----------- -------------- ---------- ------------- --------------
Pulse Group Plc PLUS 6,079,888 6.6 328,595 59,431
----------- -------------- ---------- ------------- --------------
Woodspeen Training
Plc PLUS 3,000,000 8.3 450,000 267,750
----------- -------------- ---------- ------------- --------------
3D Diagnostic
Imaging Plc AIM 78,974,354 32.8 1,789,925 312,146
----------- -------------- ---------- ------------- --------------
Fair value of the PLUS quoted investments is calculated by
reference to the bid price of the shares less a 15 per cent
discount to reflect the relative illiquidity of the holdings
concerned. At this time the Board of Evolve does not believe that
the fair values could be achieved in a short-term realisation of
the investments.
FINANCIAL PERFORMANCE
During the period under review the Group reported a loss before
taxation of GBP613,000 (six months to 30 June 2011 loss before
taxation GBP2,880,000). A major proportion of the reported loss in
the period under review is represented by provisions for the
diminution in value of the Group's investments and other
assets.
At 30 June 2012 the Group had net assets of GBP4.3 million (30
June 2011 GBP6.9 million), which sum included cash balances of
GBP0.8 million (31 December 2011 GBP1.2 million, 30 June 2011
GBP4.7 million).
During the coming months we will continue to focus on our core
strategy and I look forward to advising you of further progress in
due course.
Oliver Vaughan
Executive Chairman
24 September 2012
FINANCIAL REVIEW
Result before tax
During the first six months of 2012 the Company has reported a
loss before taxation from Group operations of GBP613,000 as
compared with a loss of GBP2,880,000 for the same period in
2011.
Income statement
The Group's results for the period include the results of the
Company's wholly owned subsidiaries Astaire Group Limited, and St
Helens Capital Partners LLP as well as the results of Evolve's
other investment activities.
Taxation
There is no taxation charge for the period. During the same
period in 2011 there was a tax credit of GBP849,000 for deferred
tax on movements in the value of investments.
Earnings per share
The basic loss per share from continuing operations was 0.20
pence (30 June 2011: loss of 0.72 pence per share). The diluted
loss per share from continuing operations was 0.16 pence (30 June
2011: loss of 0.53 pence per share). The dilution arises from the
issue of warrants, with a subscription price of 0.5 pence per share
and exercisable at any time up until 30 June 2020, in substitution
for the Unsecured Convertible Loan Notes 2020 that were redeemed in
August 2011.
Balance sheet
At 30 June 2012, the carrying value of intangible assets on the
balance sheet was GBP13,000 (2011: GBP121,000) which related wholly
to St Helens Capital Partners LLP.
At 30 June 2012 the Group held net cash balances of GBP0.8
million (30 June 2011: GBP4.7 million).
Going concern
As part of its regular assessment of the prospects for the
Group, the Board has reviewed a plan to 31 December 2013. Whilst
Group cash balances have decreased during 2012, the Directors
believe that the Group has sufficient cash resources to meet its
requirements.
In the light of this consideration and of the other resources
and options currently available to the Group, the Directors have a
reasonable expectation at the time of approving the interim
financial statements that the Company and the Group will 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
24 September 2012
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended 30 June 2012
Unaudited Unaudited Audited
Six months Six months Year ended
to to 31 December
30 June 12 30 June 11 11
GBP'000 GBP'000 GBP'000
Fee and commission income 143 287 492
Fee and commission expenses - - (2)
Net fee and commission income 143 287 490
Other income 20 639 639
Total income 163 926 1,129
Profit on disposal of available-for-sale
investments - 1,139 1,159
Loss on fair value through profit
and loss investments (191) (3,567) (4,481)
Loss on sale of subsidiary undertaking - (241) (241)
Operating expenses
Impairment of other intangibles - - (31)
Amortisation of other intangibles (38) (38) (77)
Other operating expenses (563) (1,112) (2,348)
------------------------------------------- ------------- ------------- --------------
Total operating expenses (601) (1,150) (2,456)
Operating loss (629) (2,893) (4,890)
Investment revenue 16 30 50
Finance costs - (17) (40)
Loss on ordinary activities before
taxation (613) (2,880) (4,880)
Taxation credit - 849 846
Loss from continuing operations (613) (2,031) (4,034)
Discontinued operations
Profit from discontinued operations - 73 46
Loss for the period (613) (1,958) (3,988)
============= ============= ==============
Attributable to:
Owners of the Company (613) (1,831) (3,723)
Non-controlling interests - (127) (265)
------------- ------------- --------------
(613) (1,958) (3,988)
============= ============= ==============
Loss per ordinary share (pence)
From continuing operations
- Basic (0.20) (0.48) (0.72)
- Diluted (0.16) (0.48) (0.53)
============= ============= ==============
From continuing and discontinued
operations
- Basic (0.20) (0.48) (0.69)
- Diluted (0.16) (0.48) (0.51)
============= ============= ==============
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 June 2012
Unaudited Unaudited Audited
Six months Six months Year ended
to to 31 December
30 June 12 30 June 11 11
GBP'000 GBP'000 GBP'000
Loss for the period (613) (1,958) (3,988)
============= ============= ==============
Other comprehensive income:
Gains on revaluation of available-for-sale
investments
taken to equity, net of tax (240) (448) (618)
Transferred to profit or loss
on sale of
available-for-sale investments - (1) (1)
Deferred tax relating to components
of other
comprehensive income 20 84 146
Other comprehensive income for
the
period, net of tax (220) (365) (473)
Total comprehensive income for
the period (833) (2,323) (4,461)
============= ============= ==============
Total comprehensive income attributable
to:
Owners of the Company (833) (2,223) (4,294)
Non-controlling interests - (100) (167)
------------- ------------- --------------
(833) (2,323) (4,461)
============= ============= ==============
CONDENSED CONSOLIDATED BALANCE SHEET
as at 30 June 2012
Unaudited Unaudited Audited
30 June 30 June 31 December
12 11 11
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Intangible assets 13 121 52
Property, plant and equipment 4 5 3
Total non-current assets 17 126 55
Current assets
Trade and other receivables 645 1,345 734
Available-for-sale investments 3,127 3,050 3,462
Fair value through profit and
loss investments 312 918 503
Cash and cash equivalents 836 4,740 1,169
Total current assets 4,920 10,053 5,868
Total assets 4,937 10,179 5,923
=========== =========== ==============
LIABILITIES
Current liabilities
Trade and other payables 606 733 739
Total current liabilities 606 733 739
Non-current liabilities
Deferred tax liabilities 20 99 40
Convertible loan stock - 178 -
Total non-current liabilities 20 277 40
Total liabilities 626 1,010 779
----------- ----------- --------------
EQUITY
Share capital 1,911 1,890 1,911
Share premium 11,758 11,789 11,758
Equity reserve 247 247 247
Fair value and other reserves 27 329 150
Retained deficit (9,632) (7,279) (8,922)
Parent Company's shareholders'
equity 4,311 6,976 5,144
Non-controlling interests - 2,193 -
Total equity and liabilities 4,937 10,179 5,923
=========== =========== ==============
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2012
Equity Fair Total Minority
reserve value interest
and
Share Share other Retained Total
capital premium reserves earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31
December
2010 1,890 11,789 247 721 (5,448) 9,199 2,293 11,492
Loss for the
period - - - - (1,831) (1,831) (127) (1,958)
Other
comprehensive
income
for the period - - - (392) - (392) 27 (365)
Balance at 30
June
2011 1,890 11,789 247 329 (7,279) 6,976 2,193 9,169
Issue of share
capital 21 259 - - - 280 - 280
Share issue
expenses
/ Costs
associated with
acquisition of
non-controlling
interest - (290) - - - (290) - (290)
Consideration
given
for non-
controlling
interest - - - - - - (1,877) (1,877)
Transfer of
equity
reserves
arising from
acquisition
of
non-controlling
interest - - - - 249 249 (249) -
Loss for the
period - - - - (1,892) (1,892) (138) (2,030)
Other
comprehensive
income
for the period - - - (179) - (179) 71 (108)
Balance at 31
December
2011 1,911 11,758 247 150 (8,922) 5,144 - 5,144
Loss for the
period - - - - (613) (613) - (613)
Transfer between
reserves - - - 97 (97) - - -
Other
comprehensive
income
for the period - - - (220) - (220) - (220)
Balance at 30
June
2012 1,911 11,758 247 27 (9,632) 4,311 - 4,311
================== =========== =========== =========== ========== =========== ========= =========== ==========
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months ended 30 June 2012
Unaudited Unaudited Audited
Six months Six months Year ended
to to 31 December
30 June 12 30 June 11 11
GBP'000 GBP'000 GBP'000
Net cash generated/(used) in operating
activities (343) (2,215) 600
------------- ------------- --------------
Investing activities
Interest received - 20 32
Dividends received 16 14 18
Proceeds on disposal of available-for-sale
investments - 2,508 47
Purchases of available-for-sale
investments (5) (931) (619)
Purchases of fair value through
profit and loss
Investments - - (500)
Purchases of property, plant and
equipment (1) - -
Acquisition of non-controlling
interest of subsidiary - - (1,877)
Disposal of subsidiary - 881 (506)
Net cash from/(used in) investing
activities 10 2,492 (3,405)
------------- ------------- --------------
Financing activities
Repayment of loan stock - - (1,254)
Repayment of director's loan - - (100)
Proceeds from issue of ordinary
share capital - - 280
Proceeds from issue of convertible
loan stock - - 775
Loan raised on director - - 100
Expenses of share issue - - (290)
Net cash from financing activities - - (489)
------------- ------------- --------------
Net increase/(decrease) in cash
and cash equivalents (333) 277 (3,294)
Cash and cash equivalents at beginning
of period 1,169 4,463 4,463
Cash and cash equivalents at end
of period 836 4,740 1,169
============= ============= ==============
NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS
for the six months ended 30 June 2012
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 2011.
The information for the year ended 31 December 2011 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.
A copy of the Interim Report will be sent to shareholders in
October 2012, will be available from the Company's registered
office at 223a Kensington High Street, London W8 6SG and will also
be available on the Company's website at
www.evolvecapital.co.uk.
2. EARNINGS PER SHARE
The calculation of the basic and diluted loss per ordinary share
is based on the following data.
Six months ended 30 June 2012 Six months ended 30
June 2011
Continuing Continuing Continuing Continuing
operations & discontinued operations & discontinued
operations operations
GBP'000 GBP'000 GBP'000 GBP'000
Earnings
Loss for the purposes of basic
loss per share (613) (613) (2,031) (1,958)
Effect of dilutive potential
ordinary shares:
Interest on convertible loan
notes - - 17 17
Loss for the purposes of diluted
earnings per share (613) (613) (2,014) (1,941)
============== ================= ============== =================
No. No. No. No.
Weighted average number of
shares
Number of shares for the purposes
of basic
loss per share 304,919,553 304,919,553 283,356,099 283,356,099
Effect of dilutive potential
ordinary shares:
Convertible loan notes 76,741,720 76,741,720 95,927,150 95,927,150
Number of shares for the purposes
of diluted
loss per share 381,661,273 381,661,273 379,283,249 379,283,249
============== ================= ============== =================
Reconciliations of the loss and weighted average number of
shares used in the calculations are set out in the table below.
Six months ended 30 June Six months ended 30 June
2012 2011
Loss Weighted Earnings Loss Weighted Earnings
GBP'000 Average per share GBP'000 Average per share
Number (pence) Number (pence)
of of
shares shares
Basic loss per
share
Loss from
continuing
and
discontinued
operations (613) 304,919,553 (0.20) (1,958) 283,356,099 (0.69)
============= =============
Adjustment to - - 73 -
exclude
earnings from
discontinued
operations
Loss from
continuing
operations
excluding
discontinued
operations (613) 304,919,553 (0.20) (2,031) 283,356,099 (0.72)
============= =============
Diluted loss
per
share
Loss from
continuing
and
discontinued
operations (613) 381,661,273 (0.16) (1,941) 379,283,249 (0.51)
============= =============
Adjustment to - - 73 -
exclude
earnings from
discontinued
operations
Loss from
continuing
operations
excluding
discontinued
operations (613) 381,661,273 (0.16) (2,014) 379,283,249 (0.53)
============= =============
3. POST BALANCE SHEET EVENTS
In August 2012 one of the Company's investment companies, 3D
Diagnostic Imaging plc, announced that it had made significant
reductions to its cost base and intended to delist from the AIM
market. In September 2012, 3D announced that it had subsequently
entered into an agreement to sell its operating business to a
limited company that was to be established especially for the
purpose, to adopt a new investment policy and to become an
investment company.
Also in September another of the Company's investment companies,
Pulse Group plc, announced that it was to delist from the
PLUS-quoted market.
Whilst these developments may prove to be in the long term
interest of the companies, the short term impact has been to
significantly reduce the companies' share prices.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BRGDCXDDBGDS
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