RNS Number:4958Y
Libertas Capital Group PLC
16 February 2006
For immediate release 16th February 2005
LIBERTAS CAPITAL GROUP PLC PRELIMINARY RESULTS
FOR THE YEAR ENDED 31 DECEMBER 2005
Libertas Capital Group plc (AIM: LBR) ("Libertas Capital" or "the Company"), the
financial services firm, today announces preliminary results for the year ended
31 December 2005.
Financial highlights:-
* Revenue of #9.73m (2004: #4.71m), an increase of 107%
* Operating profit of #2.22m (2004: #1.02m), an increase of 118%
* Pre tax profit of #2.20m (2004: #1.03m), an increase of 114%
* Earnings per share of 3.75 pence (2004: 2.42 pence), an increase of 55%
* Net assets at year end of #6.88m (2004: #3.51m), an increase of 96%
* Debt free at the year end
* Pre tax return on equity of 32% (2004: 29%)
* Post tax return on equity of 22% (2004: 21%)
Operational highlights:-
* 12 transactions completed including IPOs on AIM, M&A transactions and
private fundraisings
* Continued investment in staff across the business to meet demand
* Expansion into Asia and North America
* Implementation of joint venture hedge fund advisory business, DNA Advisors
* Libertas Capital Securities upgraded its licence in January 2005 and
became a member of the London Stock Exchange in February 2005
* Libertas Capital Corporate Finance was appointed as Nominated Advisers in
May 2005
Commenting on the results, Jakob Kinde, Executive Chairman of Libertas Capital
Group plc, said:-
"We are delighted with the strong performance of the business in our second year
as a public company. We have continued to implement our strategy and have
expanded our corporate finance and securities businesses with new operations in
Asia and North America to offer full service capability in these growing and
important geographical markets. In addition we have established a hedge fund
advisory business, DNA Advisors Limited, which will provide us with a new client
base and an enhanced annuity income.
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 and institutional clients in the UK,
Europe, the Nordic region, the US and Asia.
We look forward to 2006 with optimism, particularly with an encouraging number
of transactions in our pipeline".
For further information please contact:
Libertas Capital Group plc +44 (0)20 7569 9650
Jakob Kinde, Executive Chairman
Henry Okereke, Chief Executive
Shore Capital +44 (0)20 7408 4090
Guy Peters
Grant Thornton +44(0)20 7383 5100
Graeme Thom/ Fiona Owen
Buchanan Communications +44(0)20 7466 5000
Charles Ryland /Mary-Jane Johnson
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, the US and Asia 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, natural
resources, technology (software and business services) and medical technology.
Chairman's Statement
2005 was an exciting year for the Group and I am pleased to report a profit
before tax of #2.2m (2004: #1.0m) and closing net assets of #6.9m (2004:
#3.5m). The earnings per share are 3.75 pence (2004: 2.42 pence), pre tax return
on equity is 32% (2004:29%) and post tax return on equity is 22% (2004: 21%).
We were debt free at the year end.
The Group's strategy remains unchanged and is to provide a range of financial
services to corporations and institutions in the UK and Northern Europe, the
Nordic region, North America and Asia in the sectors of environmental sciences,
natural resources, technology (software and business services) and medical
technology. As explained in more detail in the Chief Executive Officer's Review,
we have commenced operations in Asia and North America, as well as establishing
a hedge fund advisory business, DNA Advisors Limited.
The Group Structure
Libertas Capital Corporate * Strategic advisory and
Finance Limited execution capabilities
* Private and public
fundraising
* Mergers and
acquisitions and corporate
restructuring
Libertas Capital Securities * Institutionally
Limtied sponsored research
* Independent corproate
sponsored research through
Equity Growth Research
* Distribution and
facilitation trading
Libertas Capital Asia Limited * Corporate finance in
Asia, specifically China
Libertas Capital
Group Cresta Libertas Capital Inc * Corporate finance in
North America
Libertas Capital Nordic AB * Corporate finance in
the Nordic region
Libertas Capital Ventures * Holds and participates
Limited in strategic/principal
investments
Libertas Capital Asset * Stand alone asset
Management Limited management division independent
of corporate finance arm
* DNA Advisors Limited -
Hedge fund advisory business
STRATEGY
The Group has enjoyed two successful years on AIM. Our strategy can be
summarised as follows:-
* Our business is based on core values and strengths which we believe
differentiates Libertas Capital from its competitors and gives 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 leverageable 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.
* To enhance shareholder value and generate good returns to shareholders.
* To donate 10% of net profits to charity.
RESULTS
Our results are strong with revenue of #9.7m and a pre tax profit of #2.2m.
Corporate Finance was particularly active with some twelve transactions
completed in IPOs, M&A and fundraisings. Corporate Finance was appointed as
Nominated Advisers in May 2005. 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 in January 2005 and became a member of the London Stock
Exchange in February 2005.
BOARD CHANGES
I am delighted that Michael Naylor was appointed as a Non-executive Director on
26 April 2005. Michael is a director and co-founder of NMH Search, a leading
European executive search company, with strong relationships with leading
executives in the renewable energy sector.
As a result of the formation of DNA Advisors Limited, John Davies has
relinquished his role as Non- executive Director. I would like to thank John
for his valuable contribution and wise counsel as a Non- executive Director and
we look forward to the development of DNA Advisors under his direction.
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 through an Employee Benefit
Trust and an appropriate 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 us a competitive
advantage. The Group aims to provide a high level of client 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 donate 10% of net profits to charity and in respect of 2005 we have donated
to the Eve Appeal (Cancer Research), The Prince's Trust, Emerald Wings,
Regeneration Trust, Hope HIV, Breast Cancer Haven, Royal Marsden Hospital and
St. Elizabeth's Hospice.
DIVIDENDS
The Board did not recommend a dividend for the full year 2005 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
I am pleased to report that our businesses are continuing to progress well and
your Board is confident of further success in 2006.
Jakob Kinde
Executive Chairman
February 2006
Chief Executive Officer's Review
REVIEW OF THE YEAR
The Group made substantial progress in 2005 as reflected in our full year's
results. All areas of our business have been strong and there has been a
significant increase in revenue generation, with revenue in 2005 of #9.7m
compared with #4.7m in 2004. Profit before tax has increased in 2005 to #2.2m
from #1.02m in 2004.
In summary, 2005 has seen Libertas Capital develop significantly with a
strengthening in both the corporate finance and securities businesses.
OPERATING SUBSIDIARIES
LIBERTAS CAPITAL CORPORATE FINANCE
The Corporate Finance business is regulated by the Financial Services Authority
and became a Nominated Adviser in May 2005. The team has been strengthened
further and now comprises some ten professionals in London, four in Sweden, two
in the US and two in Asia. They concentrate primarily on sectors in
environmental services, natural resources, technology (software and business
services), and medical technology. 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, North America and Asia.
The typical client profile is a business that is entrepreneurial, growth
orientated with an experienced and quality management and earning revenue
between #20 million and #500 million. We have been active in 2005 and examples
of the transactions we completed include:
* Beximco Pharmaceutical Limited - fundraising and admission of GDR's on AIM
* Gas Turbine Efficiency Plc - fundraising and admission to AIM
* ReEnergy Plc- private placement
* Aspen Clean Energy Plc - recapitalisation and reverse into AIM listed plc
* Libra Natural Resources Plc - fundraising and admission to AIM
* Weatherly International Plc - fundraising and reverse into AIM listed
plc
* Cambridge Biostability Limited - private placement
In February 2005, we recruited Jonathan Flory as our Head of Corporate Finance.
LIBERTAS CAPITAL SECURITIES LIMITED
This business has three activities:-
1. Provision of distribution and facilitation trading;
2. Provision of institutionally sponsored research;
3. Provision of corporate sponsored research through Equity Growth Research
We have expanded this business during the year and now have a complement of
eleven professionals. We have strengthened further the EGR brand within the
Libertas Capital stable. I am delighted that the Securities business upgraded
its FSA licence and was admitted as a member of the London Stock Exchange.
Securities now offer services as a Broker and is rapidly developing a new
corporate client base.
In November 2005, we recruited Charles Goodfellow as Head of Equity Sales.
Chief Executive Officer's Review
(continued)
Distribution
Libertas Capital Group has been building a strong Securities Distribution
capability to market equity capital market products and Libertas Capital
Research products, including a developing sales trading unit.
This distribution team has dedicated UK small and mid-cap, European small-cap
and high net worth client functions.
Libertas Capital Research
Libertas Capital Research provides institutionally sponsored research,
delivering specialist analysis, in the environmental sciences, natural
resources, technology (software and business services sectors), and medical
technology to institutions in the UK, Europe and the US. This team, together
with the EGR team, is led by Iek Van Cruyningen.
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, established in the autumn of 2004, is based in Stockholm. Its
principal activity is that of LCN Corporate Finance which offers full corporate
finance services with strong integration with the London operations.
The Nordic operation is continuing to expand and we aim to continue this growth
systematically, parallel with positive earnings development. We currently have
six professionals within this unit.
LIBERTAS CAPITAL ASIA LIMITED
Libertas Capital Asia Limited ("LCA") is a wholly owned subsidiary based in Hong
Kong offering full corporate finance services for the markets in Asia,
particularly China, to complement those already provided by Libertas Capital in
London and Stockholm. We have already announced that Antonio Gelonesi is LCA's
Executive Chairman and the Chief Operating Officer is Gareth Evans, currently
based in our London office. We are currently recruiting a Chief Executive
Officer and anticipate that the company will be fully operational and revenue
generative by the end of quarter 2, 2006.
CRESTA LIBERTAS CAPITAL INC
During the latter part of 2005 we reached agreement with Cresta Partners LLC ("
Cresta") to open and develop an operation in the USA, based in Los Angeles,
California. The wholly owned subsidiary, Cresta Libertas Capital Inc, is led by
Cresta's founding members, two well respected principals within investment
banking, Craig Castilla and Gregory French. Cresta Libertas Capital will offer
full corporate finance services to the North American market as well as a
bridgehead into the Asian markets, to complement those services provided by
Libertas Capital in London, Stockholm and Asia.
LIBERTAS CAPITAL VENTURES LIMITED
This company acts as a holding company for strategic investments and takes
principal investments in our core sectors.
LIBERTAS CAPITAL ASSET MANAGEMENT LIMITED
We are delighted to announce the formation of a hedge fund advisory business,
DNA Advisors Limited, in conjunction with its founders, John Davies and Lucy
Alexander. The new company is 70% owned by Libertas Capital and 30% by the
founders. This company will provide us with a new client base and revenue of an
annuity nature.
OUTLOOK
The market place for 2006 is exciting for us at Libertas Capital, not least as
continued investment in key staff is due to bear fruit this year. We have seen a
satisfactory start to the year with some notable mandates on board and an
increasing number of companies becoming new clients. Although market conditions
are inherently volatile, we remain cautiously optimistic about the near term
market outlook and confident about Libertas Capital's long term prospects.
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 a significant proportion 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 for their
efforts in achieving these strong results and look forward to 2006.
Henry Okereke
Chief Executive Officer
February 2006
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2005
2005 2004
#000 #000
TURNOVER 9,734 4,713
Operating expenses (7,513) (3,694)
(including salaries and bonus)
OPERATING PROFIT 2,221 1,019
Interest receivable and similar income 25 15
Interest payable and similar charges (45) (7)
PROFIT ON ORDINARY ACTIVITIES 2,201 1,027
BEFORE TAXATION
Tax on profit on ordinary activities (704) (307)
PROFIT ON ORDINARY ACTIVITIES
AFTER TAXATION 1,497 720
Dividends paid and proposed - -
RETAINED PROFIT FOR THE YEAR 1,497 720
Earnings per share
Basic 3.75 pence 2.42 pence
Diluted 3.22 pence 2.41 pence
There were no other recognised gains or losses made during the years ended 31
December 2004 and 2005 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.
CONSOLIDATED BALANCE SHEET
AT 31 DECEMBER 2005
2005 2004
#000 #000
FIXED ASSETS
Goodwill 826 200
Tangible fixed assets 202 182
Fixed asset investments 5,886 2,509
6,914 2,891
CURRENT ASSETS
Debtors 1,655 1,713
Investments 2,249 483
Cash at bank and in hand 241 337
4,145 2,533
CREDITORS
Amounts falling due within one year (4,147) (1,838)
NET CURRENT ASSETS/(LIABILITIES) (2) 695
TOTAL ASSETS LESS CURRENT LIABILITIES 6,912 3,586
Creditors: falling due after more than one year (31) (76)
Provision for liabilities and charges - -
NET ASSETS 6,881 3,510
CAPITAL AND RESERVES
Called up share capital 415 348
Share premium account 3,538 1,705
Consolidation Reserve 586 612
Profit and loss account 2,342 845
SHAREHOLDERS' FUNDS - EQUITY INTERESTS 6,881 3,510
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2005
Note
2005 2004
#000 #000
NET CASH OUTFLOW FROM OPERATING ACTIVITIES 5 (3,241) (1,667)
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received 25 15
Interest paid (45) (7)
NET CASH (OUTFLOW)/INFLOW FROM RETURNS ON INVESTMENTS AND SERVICING OF FINANCE (20) 8
TAXATION
Corporation tax paid - -
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Purchase of tangible fixed assets (89) (44)
Purchase of fixed asset investments (31) (9)
Receipts from sale of fixed assets investments 2,069 -
NET CASH INFLOW/(OUTFLOW) FOR CAPITAL EXPENDITURE 1,949 (53)
ACQUISITIONS AND DISPOSALS
Net cash acquired with subsidiary 1,265 4
Net proceeds from sale of investment - -
NET CASH INFLOW FROM ACQUISITIONS & DISPOSALS 1,265 4
NET CASH (OUTFLOW/INFLOW) BEFORE MANAGEMENT OF LIQUID RESOURCES AND FINANCING (47) (1,707)
MANAGEMENT OF LIQUID RESOURCES
Purchase of current asset investments - (277)
Sale of current asset investments - 17
Bank deposits - 420
NET CASH INFLOW FROM MANAGEMENT OF LIQUID RESOURCES - 160
FINANCING
Issue of ordinary share capital pre IPO - 130
Issue of ordinary share capital under IPO - 2,195
Cost of issuing shares under IPO - (439)
Capital element of finance lease payments (49) (20)
NET CASH (OUTFLOW)/INFLOW FROM FINANCING (49) 1,866
(DECREASE)/INCREASE IN CASH IN THE YEAR 6 (96) 319
NOTES TO THE PRELIMINARY ANNOUNCEMENT
1. General
The financial statements set out in this preliminary announcement do not
constitute the company's statutory accounts for the years ended 31 December 2004
and 2005 within the meaning of section 240 of the Companies Act 1985.
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.
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 15th February 2006.
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 2005 of #1,497,000 (2004: #720,000) and
39,883,967 (2004: 29,730,591) 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 did not recommend the payment of a dividend for the full year.
4. Investments
The market value of investments held within fixed assets is #5,435,000 (cost
#5,886,000) and within current assets #3,477,000 (cost #2,249,000).
5. Reconciliation of operating profit to net cash flow from operating activities
2005 2004
#000s #000s
Operating profit 2,221 1,019
Depreciation of tangible fixed assets 74 12
Amortisation of goodwill 10 11
Revaluation/loss on disposal of investments 140 (18)
Foreign exchange reserve (26) -
Decrease in debtors 60 (1,547)
Increase in creditors 1,600 1,356
Fixed asset investments received as fees (7,320) (2,500)
Net cash outflow from operating activities (3,241) (1,667)
6. ANALYSIS OF NET FUNDS
31 Other 31
December Cash Flow Non Cash December
2004 Changes 2005
#000 #000 #000 #000
Cash at bank 337 (96) - 241
Finance leases (125) 49 (5) (81)
LIQUID RESOURCES
Current asset investments 483 - 1,766 2,249
Bank deposit - - - -
483 - 1,766 2,249
Net Funds 695 (47) 1,761 2,409
7. RECONCILIATION OF NET CASHFLOW TO MOVEMENT IN NET FUNDS
2005 2004
#000 #000
(Decrease)/Increase in cash in the year (96) 319
Cash outflow from repayment of lease financing 49 20
Cash (inflow)/outflow from increase in liquid resources - (135)
Changes in net funds from cash flow (47) 204
New finance leases (5) (145)
Net movement in current asset investments 1,766 -
Movement in net funds in the period 1,714 59
Opening net funds 695 636
Closing net funds 2,409 695
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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