Prelim announcement
March 17 2005 - 2:00AM
UK Regulatory
RNS Number:8566J
Libertas Capital Group PLC
17 March 2005
Libertas Capital Group Plc ("Libertas" or "The Company")
17 March 2005
LIBERTAS CAPITAL GROUP PLC UNAUDITED PRELIMINARY RESULTS
FOR THE YEAR ENDED 31 DECEMBER 2004
Libertas Capital Group plc ("Libertas Capital") today announces unaudited
preliminary results for the year ended 31 December 2004.
Financial highlights:-
* Revenue of #4.7m
* Operating profit of #1.1m
* Pre tax Profit of #1.0m
* Earnings per share of 2.42 pence
* No debt at the year end
* Return on equity of 29%
Operational highlights:-
* Successful flotation on AIM in July 2004
* Completed 10 transactions including IPOs on AIM, M&A transactions and
private fundraising
* Increased investment in staff across the business to meet business demand
* Implementation of Nordic operations based in Stockholm in Autumn 2004
* Libertas Capital Securities Limited became a member of the London Stock
Exchange in February 2005
Commenting on the results, Jakob Kinde, Executive Chairman of Libertas Capital
Group plc, said:-
"I am pleased with the performance of the business in this our first year as a
member of AIM. Following the successful flotation of the company in July 2004 we
have continued to implement our strategy and have expanded our corporate finance
and securities businesses. In addition, we have enhanced our research
capabilities under Libertas Capital Research for institutionally sponsored
research and under our independent brand name, Equity Growth Research, for
corporate sponsored research. We established our Nordic operations, based in
Stockholm in the Autumn of 2004 and we are now able to offer full service
capability in this growing geographical market.
We continue to invest in talented people in each of our core business areas -
corporate finance, securities/distribution, and research - which allows us to
provide the high quality of services expected by our clients. As a result, we
are continuing to attract further corporate clients/institutional clients in the
UK, Europe, the Nordic region and the US.
We look forward to 2005 with optimism, particularly with an encouraging number
of transactions in our pipeline".
Contacts:
Libertas Capital Group plc
Jakob Kinde, Executive Chairman +44 (0)20 7569 9651
Henry Okereke, Chief Executive Officer +44 (0)20 7564 9652
Buchanan Communications
Charles Ryland / Mary-Jane Johnson +44 (0)20 7466 5000
Notes to Editors
About Libertas Capital Group plc
Libertas Capital is a UK-based financial services firm offering its clients a
full range of dedicated independent Corporate Finance Advisory, Research and
Distribution services.
Corporate Finance services include advice on M&A, public and private fund
raising, private equity encompassing development capital, MBOs and MBIs,
valuation and exit strategy. In the Securities business Libertas Capital offers
research to corporate and institutional clients, via Equity Growth Research and
Libertas Capital Research, over a global distribution network.
Libertas Capital is focused on the small to mid cap market in the UK, Northern
Europe, the Nordic region and the US, where the Group has gained widespread
experience and developed strong relationships.
Libertas Capital concentrates primarily on growth companies across a number of
industry sectors with a particular focus on environmental sciences, technology
(software and business services) and medical technology.
CHAIRMAN'S STATEMENT
2004 was an exciting year for the Group. The Group was successfully admitted to
AIM in July 2004 and raised #2.2m gross and #1.8m net. We are implementing our
strategy as detailed in the IPO prospectus dated 13 July 2004.
Overall, I am pleased to report an operating profit of #1.1m, a profit before
tax of #1.0m and closing net assets of #3.5m. Earnings per share are 2.42 pence.
Return on equity is 29%.
Our strategy is to provide a range of financial services to corporations and
institutions in the UK and Northern Europe, the Nordic region and North America
in the sectors of environmental sciences, technology (software and business
services) and medical technology.
The Group Structure:-
* Strategic advisory and
execution capability
Libertas Capital * Private and public
Corporate Finance Limited fundraising
* Mergers and
acquisitions and corporate
restructuring
===========================================================
* Institutionally
Libertas Capital sponsored research
Securities Limited * Independent corporate
sponsored research through
Equity Growth Research
* Distribution and
facilitation trading
===========================================================
* Corporate finance and
Libertas Capital Libertas Capital securities in the Nordic
Group plc Nordic AB region
===========================================================
* Holds strategic
Libertas Capital investments and equity options
Ventures Limited as part or full payment for
financial services
===========================================================
* Stand alone asset
Libertas Capital management division independent
Asset Management Limited of the corporate advisory arm
===========================================================
STRATEGY
The Group had a successful first year on AIM. Our strategy can be summarised as
follows:-
* Our business is based on core values and strengths which we believe both
differentiate Libertas Capital from its competitors and give us a competitive
advantage. We aim to provide a high level of customer service, that will
result in long-term client relationships based on the principles of openness,
innovation and creativity
* To build a specialist financial services group providing high quality,
highly leveragable services in Corporate Finance, Research and Securities
Distribution to both corporate and institutional clients
* To build a solid, sustainable and earnings enhancing business for
shareholders
* To exploit both internal and external synergies to grow the business
organically and through appropriate mergers/acquisitions and JVs
* To add specialist financial services operations where they bring annuity
income or synergies
I am pleased to announce that we commenced operations in the Nordic region,
based in Stockholm, in the autumn of 2004 and this business will expand during
2005 to offer the full service of corporate finance and securities distribution.
In November 2004 the London office relocated to new premises in Berkeley Street
W1 and we are already reaping the rewards of the enhanced team working more
effectively.
RESULTS
Our first full year results are pleasing with revenue of #4.7m and operating
profit of #1.1m. Corporate Finance was particularly active with some 10
transactions completed in IPOs, M&A and fundraising. The Securities business has
continued to increase in depth and quality with the offering of both
institutional sponsored research through securities and independent corporate
sponsored research through our independent brand name, Equity Growth Research.
The Securities business upgraded its FSA licence to category C in January 2005
and became a member of the London Stock Exchange in February 2005.
BOARD CHANGES
We announced the appointment of Roger Barlow as our Chief Financial Officer on
29 July 2004. Roger brings a wealth of experience to the Board, having spent 25
years at KPMG, 13 years of which were as a partner in the Manchester office. On
21 October 2004 we announced the appointment of Sven Skarendahl as a
Non-executive Director. Sven has significant experience from both Executive and
Non-executive roles and is a valuable addition to the Board. Sven is also
Chairman of our Nordic Operations.
At the same time, Tom Teichman informed the Board of his desire to step down as
a Non-executive Director of the Group as he wished to devote more time to his
other Directorships. I wish to thank Tom for his valuable contribution to
Libertas Capital, particularly in the formative stages. Tom has strong
experience in building young, growing companies and his assistance has been
invaluable. He continues as an investor and strong believer in Libertas Capital,
as well as an introducer of business to the Group. We wish him well for the
future.
EMPLOYEES
The results of our operating businesses are determined largely by the efforts
and commitment of our employees who are one of the principal assets of the
Group.
Many of our employees are already shareholders and we intend to widen this
participation by the award of shares by way of bonus and/or by the
implementation of a share option scheme. Our philosophy has always been to
motivate and incentivise all our employees by way of equity participation.
CORE VALUES
At the time of the formation of the Group, we set out our core values which we
believe distinguish the Group from our competition and give the Group a
competitive advantage. The Group aims to provide a high level of customer
service that will result in long term relationships with clients based on
transparency, integrity and innovation. These values include independence,
focus, depth and experience, geographical spread of operations and charitable
giving.
We will donate 10% of net profits to charity and in respect of the full year of
2003 we have donated, among others, to both Epic Arts and the Royal Marsden
Hospital.
DIVIDENDS
The Board does not recommend a dividend in this our first year as we believe
that it is important to retain the funds in order to grow our businesses. It is
anticipated however, that a progressive dividend policy will be pursued as the
Group continues to develop.
OUTLOOK
As the first quarter of 2005 comes to a conclusion, I am pleased to report that
our businesses are continuing to progress well and your Board is confident of
further success for the rest of 2005.
Jakob Kinde
Executive Chairman
CHIEF EXECUTIVE OFFICER'S REVIEW
REVIEW OF THE YEAR
The Group made substantial progress in 2004 with the successful flotation on AIM
in July 2004. We raised #2.2m gross cash with a market valuation of #10m. All
areas of our business have been strong, and there has been significant increase
in revenue generation. Total revenue in 2004 was #4.7m compared with #0.2m in
2003. We have formed the Group and strengthened our offering to the SME
marketplace.
In summary, 2004 has seen Libertas Capital's businesses develop significantly. I
believe that, as we approach the end of the first quarter of 2005, with the
visibility of a strong transaction pipeline, we are confident of further income
and profitability growth.
OPERATING SUBSIDIARIES
LIBERTAS CAPITAL CORPORATE FINANCE LIMITED
The Corporate Finance business is regulated by the Financial Services Authority.
The team has been strengthened during 2004 and now comprises some 10
professionals, concentrating primarily on sectors in environmental services,
technology (software and business services), and medical technology sectors. The
team seeks to build long term pro-active relationships with companies and
entrepreneurs operating in these specialist sectors from the UK, Northern
Europe, the Nordic region and North America.
The typical client profile will be a business that is entrepreneurial, growth
orientated with an experienced and quality management and earning revenue
between #10 and #500 million. We have been active in 2004 and examples of the
deals we completed include:
* Solar Integrated Technologies Inc. - fundraising and admission to AIM
* Supercart plc - advice on restructuring and admission to AIM
* All IPO - adviser to All IPO Limited and reverse acquisition into AIM
shell
* Solar Integrated Technologies Inc - adviser on acquisition of stake in
Germany company
* Gatekeeper Systems LLC - fundraising and admission to AIM
* Cambridge Biostability - private placement
In February 2005 we recruited Jonathan Flory as Global Head of Corporate
Finance.
LIBERTAS CAPITAL SECURITIES LIMITED
This business has three business units:-
1. Distribution and facilitation trading
2. Institutionally sponsored research through Libertas Capital Research
3. Corporate sponsored research through Equity Growth Research
We have expanded this business during the year and now have a complement of 10
professionals. We recently strengthened the EGR brand within the Libertas
Capital stable. I am delighted that the Securities business has recently
upgraded its FSA licence to Category C and has been admitted as a member of the
London Stock Exchange. Securities will now be able to offer services as a
Nominated Broker.
Distribution
Libertas Capital Group has been building a strong Securities Distribution
capability to market equity capital market products and Libertas Capital
Research products. This distribution team has dedicated UK small and mid-cap,
European small-cap and private client functions.
Libertas Capital Research
Libertas Capital Research provides institutionally sponsored research,
delivering specialist analysis, in the environmental sciences technology
(software and business services sectors) and medical technology to institutions
in the UK, Europe and the US.
Equity Growth Research (EGR)
EGR focuses on smaller, high growth companies that deserve greater attention.
Through a sponsored investment research model, EGR brings the quality of
analysis and frequency of reporting normally reserved for the FTSE 350
constituents to its client companies. The research is distributed via a number
of channels (electronically/printed). EGR employs a number of in-house
professionals in addition to the outsourced analysts.
LIBERTAS CAPITAL NORDIC AB
This division was established in the autumn of 2004 and is based in Stockholm.
Its two wholly owned subsidiaries are:-
1. Libertas Capital Nordic Corporate Finance which offers full corporate
finance services with strong integration with the London operations.
2. Libertas Capital Nordic Fondkommission is active in securities research,
has a full brokerage licence and is regulated by the Swedish Financial
Services Authority.
The Nordic operation is continuing to expand and we aim to continue this growth
systematically in parallel with positive earnings development. We currently have
8 professionals within this unit.
LIBERTAS CAPITAL VENTURES LIMITED
This company has been established to be a holding company for strategic
investments and also when we receive equity options and stock as part or full
payment of financial services fees.
LIBERTAS CAPITAL ASSET MANAGEMENT LIMITED
The Directors intend to build a stand-alone asset management division for the
Group, independent of the corporate advisory arm. The objective will be to
establish consistent longer-term revenue streams and balance sheet value for the
Group.
NEW BUSINESS
The market place for 2005 is exciting with the Group keen to expand and
strengthen its existing operations and to form joint ventures in those markets
where we are not currently represented, e.g. North America and the Far East.
EMPLOYEES
We continue to recognise the importance of developing a culture where employees'
interests are closely aligned with those of the Group's shareholders. At present
the Directors and employees own almost three quarters of the Group's shares and
we wish to continue to incentivise employees with both share options and the
award of shares. It is our firm belief that incentivising and retaining our key
employees is in the best interests of the Group's shareholders.
I would like to take this opportunity to thank all members of staff in their
efforts in achieving these strong results and look forward to 2005.
Henry Okereke
Chief Executive Officer
UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2004
2004 2003
#000 #000
TURNOVER 4,713 163
Administrative expenses (3,608) (307)
Other operating income - 6
Exceptional income - 373
------- -------
OPERATING PROFIT 1,105 235
Exceptional item
- profit on disposal of discontinued operations - 80
- amounts written off investments (86) -
PROFIT ON ORDINARY ACTIVITIES
BEFORE INTEREST 1,019 315
Interest receivable and similar income 15 10
Interest payable and similar charges (7) -
------- -------
PROFIT ON ORDINARY ACTIVITIES 1,027 325
BEFORE TAXATION
Tax on profit on ordinary activities (307) -
------- -------
PROFIT ON ORDINARY ACTIVITIES 720 325
AFTER TAXATION
Dividends paid and proposed - (100)
------- -------
RETAINED PROFIT FOR THE YEAR 720 225
------- -------
Earnings per share
Basic 2.42 pence 2.19 pence
Diluted 2.41 pence 2.19 pence
There were no other recognised gains or losses made during the year ended 31
December 2004 and other than those passing through the profit and loss account.
All amounts shown in the consolidated profit and loss account derive from
continuing operations of the Group.
UNAUDITED CONSOLIDATED BALANCE SHEET
AT 31 DECEMBER 2004
2004 2003
#000 #000
FIXED ASSETS
Intangible fixed assets 200 -
Tangible fixed assets 182 4
Fixed asset investments 2,509 -
------- -------
2,891 4
------- -------
CURRENT ASSETS
Debtors 1,713 131
Investments 483 198
Cash at bank and in hand 337 438
------- -------
2,533 767
CREDITORS
Amounts falling due within one year (1,838) (47)
------- -------
NET CURRENT ASSETS 695 720
TOTAL ASSETS LESS CURRENT LIABILITIES 3,586 724
Creditors: falling due after more than one year (76) -
Provision for liabilities and charges - -
------- -------
NET ASSETS 3,510 724
------- -------
CAPITAL AND RESERVES
Called up share capital 348 216
Share premium account 1,705 -
Merger reserve 612 383
Profit and loss account 845 125
------- -------
SHAREHOLDERS' FUNDS - EQUITY INTERESTS 3,510 724
------- -------
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2004
Note 2004 2003
#000 #000
NET CASH OUTFLOW FROM OPERATING ACTIVITIES 4 (1,667) (220)
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received 16 10
Interest paid (7) -
------- -------
NET CASH INFLOW FROM RETURNS ON INVESTMENTS AND
SERVICING OF FINANCE 9 10
TAXATION
Corporation tax paid - -
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Purchase of tangible fixed assets (44) (5)
Purchase of fixed asset investments (9) -
------- -------
NET CASH FROM CAPITAL EXPENDITURE (53) (5)
ACQUISITIONS AND DISPOSALS
Net cash acquired with subsidiary 4 373
Net proceeds from sale of investment - 80
------- -------
NET CASH INFLOW FROM ACQUISITIONS & DISPOSALS 4 453
Equity dividends paid - (101)
------- -------
NET CASH (OUTFLOW/INFLOW BEFORE MANAGEMENT OF LIQUID
RESOURCES AND FINANCING (1,707) 137
MANAGEMENT OF LIQUID RESOURCES
Purchase of current asset investments (278) (38)
Sale of current asset investments 17 -
Bank deposits 420 (420)
------- -------
NET CASH INFLOW/(OUTFLOW) FROM MANAGEMENT OF LIQUID
RESOURCES 159 (458)
FINANCING
Issue of ordinary share capital pre IPO 130 339
Issue of ordinary share capital under IPO 2,195 -
Cost of issuing shares under IPO (439) -
Capital element of finance lease payments (20) -
------- -------
NET CASH INFLOW FROM FINANCING 1,866 339
------- -------
INCREASE IN CASH IN THE YEAR 5 318 18
NOTES TO UNAUDITED PRELIMINARY ANNOUNCEMENT
1. General
The financial statements set out in this preliminary announcement do not
constitute the company's statutory accounts for the year ended 31 December 2004
within the meaning of section 240 of the Companies Act 1985.They have been
extracted from the unaudited accounts of the Group.
The Group's financial statements consolidate the financial statements of the
Company and its subsidiary undertakings. The results of subsidiaries acquired
are consolidated from the date on which control passes. Libertas Capital
Corporate Finance Limited was acquired by means of a share for share exchange in
May 2004. The transaction has been classified as a "group reconstruction" in
accordance with FRS 6. Accordingly, merger accounting has been used to reflect
the results of this subsidiary, as permitted by that standard.
As a consequence, the financial statements include the profits and losses of
Libertas Capital Corporate Finance Limited for the entire year ended 31st
December 2004, notwithstanding that it was only acquired in May 2004. In
addition, as a result of the use of merger accounting the Group is deemed to
have existed throughout the period ended 31st December 2003 and therefore
comparative figures have been presented on that basis.
The published audited accounts will be delivered to the Registrar of Companies
following the Annual General Meeting. This preliminary announcement was approved
by the directors on 16th March 2005.
2. Earnings per share
The calculation of basic earnings per ordinary share is based on the profit
after tax for the year ended 31 December 2004 of #720,260(2003:#325,419) and
29,730,591 (2003:14,829,970) ordinary shares, being the weighted average number
of ordinary shares in issue during the year. Diluted earnings per share are
based on the basic earnings per share adjusted to allow for the issue of shares
in the assumed conversion of all dilutive options.
3. Dividend
The Board does not recommend the payment of a dividend.
4. Reconciliation of operating profit to net cash flow from operating activities
2004 2003
#000s #000s
Operating profit 1,105 235
Depreciation of tangible fixed assets 12 1
Amortisation of goodwill 11 -
Revaluation of current asset investments (104) -
(Increase)/decrease in debtors (1,547) (131)
Increase in creditors 1,356 48
Forgiveness of debt - ( 373)
Fixed asset investments received as fees (2,500) -
------------ ------------
Net cash outflow from operating activities (1,667) (220)
============ ============
5. ANALYSIS OF NET FUNDS
31 December Cash Flow Other Non Cash 31 December
Changes 2004
2003 #000 #000 #000
#000
Cash at bank 18 318 - 337
Finance leases - 20 (145) (125)
Current asset
investments 198 286 - 483
Bank deposit 420 (420) - -
---------- -------- ---------- ----------
618 (134) - 483
---------- -------- ---------- ----------
---------- -------- ---------- ----------
Net Funds 636 204 (145) 695
========== ======== ========== ==========
6. RECONCILIATION OF NET CASHFLOW TO MOVEMENT IN NET FUNDS
2004 2003
#000 #000
Increase in cash in the period 318 18
Cash outflow from repayment of lease financing 20 -
Cash (inflow)/outflow from increase in liquid resources (134) 618
Changes in net funds from cash flow 204 636
New finance leases (145) -
---------- ----------
Movement in net funds in the period 59 636
Opening net funds 636 -
---------- ----------
Closing net funds 695 636
========== ==========
Further copies
A copy of the audited Report and Accounts is to be sent to all shareholders in
due course. Copies of this announcement are available for one month from:
The Company Secretary
Libertas Capital Group plc
16 Berkeley Street
London
W1J 8DZ
This information is provided by RNS
The company news service from the London Stock Exchange
END
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