RNS Number:2823S
Libertas Capital Group PLC
05 March 2007
For Immediate Release 5 March 2007
LIBERTAS CAPITAL GROUP PLC
("Libertas Capital" or "the Company")
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2006
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 2006.
Financial highlights:-
* Revenue of #11.86m (2005: #9.73m)
* Pre tax profit before exceptionals and discontinued activities of #2.02m
(2005: #2.20m)
* EPS before exceptionals and discontinued activities of 3.33 p (2005:
3.75 p)
* Net assets of #7.60m before reduction of #1.02m for Treasury Shares
(2005: #6.88m)
* Cash flow positive and debt free at year end
Operational highlights:-
* Strength of continuing activities and quality of transactions
* 25 transactions completed including IPOs on AIM, M&A transactions and
private fundraisings
* Successful development of Securities business both in primary and
secondary activities
* Continued implementation of strategy including expansion into Asia,
North America and the Middle East
* Continued investment in staff across the business to meet demand
Commenting on the results, Jakob Kinde, Executive Chairman of Libertas Capital
Group plc, said:-
"We are pleased with the underlying performance of the business in our third
year as a public company, which shows increased turnover year on year and
continued profitability. We have continued to implement our strategy and have
expanded our corporate finance and securities businesses in North America, Asia
and the Middle East to offer full service capability in these growing and
important geographical markets. As part of focusing on our core activities we
have terminated the operating activities of DNA Advisors Limited. This was a
year of investment in building a balanced platform for future growth. We are
pleased to have achieved this whilst continuing our unbroken record of
profitability since inception of Libertas Capital.
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 Europe,
North America, Asia and the Middle East.
We look forward to 2007, 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
Grant Thornton +44 (0)20 7383 5100
Fiona Owen/Fiona Kindness
Buchanan Communications +44 (0)20 7466 5000
Charles Ryland /Mary-Jane Johnson
Notes to Editors
About Libertas Capital Group plc
Libertas Capital is a financial services firm offering its clients a full range
of dedicated independent Corporate Finance Advisory, Research and Distribution
services in Europe, North America, Asia and the Middle East.
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. Securities also
offers a dedicated sales distribution team catering for institutions and high
net worth individuals.
Libertas Capital is focused on the small to mid cap market in Europe, North
America, Asia and the Middle East 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 Renewable Energy, Energy (oil and gas, oil services and
natural resources), Technology (software, services and telecoms) and Healthcare.
Chairman's Statement
2006 was an exciting year for the Group and I am pleased to report a healthy set
of results. Revenue totalled #11.9m (2005: #9.7m) with profit before tax,
exceptional items and discontinued activities of #2.0m (2005: #2.2m). Closing
net assets amounted to #7.6m prior to a reduction of #1.0m for shares held
within Treasury (2005 net assets: #6.9m). The earnings per share before
exceptionals and discontinued activities are 3.33 pence (2005: 3.75 pence). We
achieved positive cash flow of #1.6m and at the year end had cash resources of
#1.8m and no external debt.
The Group's strategy remains unchanged and is to provide a range of financial
services to corporates and institutions in Europe, North America, Asia and the
Middle East in the sectors of Renewable Energy, Energy (oil and gas, oil
services and natural resources), Technology (software, services and telecoms)
and Healthcare. As explained in more detail in the Chief Executive Officer's
Review, we have commenced operations in North America, Asia and the Middle East.
THE GROUP STRUCTURE
The wholly owned companies within Libertas Capital Group Plc are as follows:
*Libertas Capital Corporate Finance Limited: strategic advisory and
execution capabilities, private and public fundraising, mergers and
acquisitions and corporate restructuring
*Libertas Capital Securities Limited: institutionally sponsored research,
independent corporate sponsored research through Equity Growth Research,
distribution and facilitation trading
*Libertas Capital Asia Limited: Corporate finance in Asia, specifically
China
*Cresta Libertas Capital Inc: Corporate finance in North America
*Libertas Capital Nordic AB: Corporate finance in the Nordic region
*Libertas Capital Dubai Limited: Corporate finance and securities in the
Middle East
*Libertas Capital Ventures Limited: Strategic and principal investments in
core sectors.
STRATEGY
The Group has enjoyed three 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 enhance shareholder value and generate good returns to 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.
RESULTS
Our underlying results are strong with revenue of #11.9m and a pre tax profit
before exceptionals and discontinued activities of #2.0m. Exceptional items
amount to #1.2m being a charge of #0.3m relating to the loss in value of an
investment as a result of an industry regulatory change and #0.9m relating to
the discontinuance of operating activities of DNA Advisors Limited. Corporate
Finance was particularly active with some 25 transactions completed in IPOs, M&A
and fundraisings. 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. Securities also offers a dedicated sales
distribution team catering for institutions and high net worth individuals. We
have enhanced further the value of underlying transactions completed as well as
improving the cash element of our total fees.
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, participating in the award of
shares through an Employee Benefit Trust. 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, industry focus, depth and
experience, geographical spread of operations and charitable giving.
We donated 10% of last year's net profits to various charities including
Catalyst Trust, CHASE Hospice Care for Children, Child of Lebanon, Global Canopy
Programme, Iris Ministries, Juvenile Diabetes Research Foundation, St Marks
Hospital Foundation, The Constant Gardener Trust, The Voices Foundation and
Zimbabwe A National Emergency.
DIVIDENDS
The Board did not recommend a dividend for the full year 2006 as we believe that
it is important to retain the funds in order to grow our businesses. The Board
believes 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 looks forward to 2007 with confidence.
Jakob Kinde
Executive Chairman
March 2007
Chief Executive Officer's Review
REVIEW OF THE YEAR
The Group made good progress in 2006 as reflected in our full year's results.
All areas of our continuing businesses have been strong and there has been a
significant increase in revenue generation, with revenue in 2006 of #11.9m
compared with #9.7m in 2005. Profit before tax, exceptional items and
discontinued activities amounted to #2.0m in 2006 compared with #2.2m in 2005.
In summary, 2006 has seen Libertas Capital develop significantly with
implementation of its strategy to strengthen further both the corporate finance
and securities businesses. Libertas Capital is now poised to seize these
opportunities.
OPERATING SUBSIDIARIES
LIBERTAS CAPITAL CORPORATE FINANCE
The Corporate Finance business in London is regulated by the Financial Services
Authority and is a Nominated Adviser. The global team has been strengthened
further and now comprises some 20 professionals in London, Sweden, North
America, Asia and the Middle East. They concentrate primarily on sectors in
Renewable Energy, Energy, Technology and Healthcare. The team seeks to build
long term pro-active relationships with companies and entrepreneurs operating in
these specialist sectors from Europe, North America, Asia and the Middle East.
The typical client profile is a business that is entrepreneurial, growth
orientated with an experienced and quality management and earning revenue
between #50 million and #500 million. We have been active in 2006 and some
examples of the transactions completed include:
* Ceramic Fuel Cells Plc - fundraising and admission to AIM
* Beximco Pharmaceutical Limited - secondary fundraising and admission of GDR's
on AIM
* Empire Energy Corporation International Inc - private placement
* Benchmark Oil and Gas AB - public market listing in the Nordic Region
* Aspen Clean Energy Plc - disposal of major subsidiary and capital
reorganisation
* Renewable Power & Light Plc - fundraising and admission to AIM
* ASCO Limited - M&A assignment
* Weatherly International Plc - secondary fundraising to AIM
* Venteco Plc - fundraising and admission to AIM
* West Pioneer Properties Limited - fundraising and admission to AIM
* Intellitect Limited - private placement
LIBERTAS CAPITAL SECURITIES LIMITED
This business is a member of the London Stock Exchange and regulated by the
Financial Services Authority. It 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
Chief Executive Officer's Review
(continued)
We have continued to develop this business during the year and now have a
complement of some twenty professionals. We continued to strengthen the EGR
brand within the Libertas Capital stable. Securities offers services as a Broker
and is continuing the development of a corporate client base. We are now
recognised as a leading provider of products in our core areas.
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 sales trading unit, which has continued to
develop this year.
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 our core sectors to institutions in Europe,
North America, Asia and the Middle East.
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 outsourced analysts.
LIBERTAS CAPITAL NORDIC AB
This division is based in Stockholm and offers full corporate finance services
to assist Nordic corporates in cross border activities. The Nordic operation is
continuing to expand and we aim to continue this growth systematically, parallel
with positive earnings development.
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 the Libertas Capital
group.
CRESTA LIBERTAS CAPITAL INC
Cresta Libertas Capital is based in Los Angeles, California and obtained its
regulatory licence in September 2006. Cresta Libertas Capital offers full
corporate finance services to the North American market as well as a bridgehead
into the Asian markets, to complement those services provided by the Libertas
Capital group.
LIBERTAS CAPITAL DUBAI LIMITED
Libertas Capital Dubai Limited ("LCD") was formed during 2006 and received its
regulatory licence from the Dubai Financial Services Authority in October 2006
and is also now a sponsor on the Dubai International Financial Exchange (DIFX).
LCD offers full corporate finance, agency trading and research services covering
the markets in the Middle East and the Indian Sub Continent to complement
services provided by the Libertas Capital group.
LIBERTAS CAPITAL VENTURES LIMITED
This company makes strategic and principal investments in our core sectors.
DNA ADVISORS LIMITED
As described more fully in the Chairman's Statement, we terminated the
operations of DNA Advisors Limited during the year as the Business Plan to
develop a strong annuity income stream failed to come to fruition. Accordingly
the Board decided to close the business and full provision has been made for all
such costs as an exceptional item within the caption of discontinued activities.
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 results and look forward to 2007.
OUTLOOK
The 2006 results demonstrate a significant improvement in the quality of our
underlying and continuing businesses. Since admission to AIM in 2004 our
strategy has been to improve the ratio of our equity/cash income and in 2006 we
have been able to reduce this ratio below 15% from 75% in 2005. The market place
for 2007 is exciting for us at Libertas Capital, not least as continued
investment in key staff and implementation of our strategy is bearing fruit. The
visibility for 2007 looks strong particularly in the sectors of Renewable
Energy, Natural Resources and Healthcare. We have seen a satisfactory start to
the year with some notable mandates on board and are confident that we will
continue to increase the number of corporate clients in 2007. As ever we
recognise that market conditions are inherently volatile and will remain
cautiously optimistic about the near term market outlook and confident about
Libertas Capital's long term prospects.
Henry Okereke
Chief Executive Officer
March 2007
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2006
Note 2006 2006 2006 2005
Continuing Discontinued
Activities Activities Total
#000 #000 #000 #000
REVENUE - Fees 11,748 112 11,860 9,734
Profit/Loss on trading
investments
- Ordinary 1,137 - 1,137 -
- Exceptional 2 (348) - (348) -
Operating expenses
(including salaries and (10,982) (935) (11,917) (7,513)
bonus)
PROFIT ON ORDINARY ACTIVITIES 1,555 (823) 732 2,221
BEFORE INTEREST
Interest receivable and
similar income 169 - 169 25
Interest payable and similar
charges (57) - (57) (45)
PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION 1,667 (823) 844 2,201
Tax on profit on ordinary (499) 247 (252) (704)
activities
PROFIT ON ORDINARY ACTIVITIES
AFTER TAXATION 1,168 (576) 592 1,497
Earnings per share 3
Basic before exceptional item
and discontinued activities
3.33 pence 3.75 pence
Basic 1.40 pence 3.75 pence
Diluted 1.20 pence 3.22 pence
There were no other recognised gains or losses made during the years ended 31
December 2005 and 2006 other than those passing through the profit and loss
account.
CONSOLIDATED BALANCE SHEET
AT 31 DECEMBER 2006
2006 2005
#000 #000
FIXED ASSETS
Goodwill 817 826
Tangible fixed assets 273 202
Fixed asset investments 3,276 5,886
4,366 6,914
CURRENT ASSETS
Debtors 3,085 1,655
Investments 1,431 2,249
Cash at bank and in hand 1,840 241
6,356 4,145
CREDITORS
Amounts falling due within one year (4,144) (4,147)
NET CURRENT ASSETS/(LIABILITIES) 2,212 (2)
TOTAL ASSETS LESS CURRENT LIABILITIES 6,578 6,912
Creditors: falling due after more than - (31)
one year
NET ASSETS 6,578 6,881
CAPITAL AND RESERVES
Called up share capital 438 415
Share premium account 3,605 3,538
Consolidation Reserve 619 586
Profit and loss account 2,934 2,342
Treasury Shares (1,018) -
SHAREHOLDERS' FUNDS - EQUITY INTERESTS 6,578 6,881
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2006
Note 2006 2005
#000 #000
NET CASH OUTFLOW FROM OPERATING ACTIVITIES 6 (2,946) (3,241)
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received 169 25
Interest paid (57) (45)
NET CASH INFLOW/(OUTFLOW) FROM RETURNS ON INVESTMENTS 112 (20)
AND SERVICING OF FINANCE
TAXATION
Corporation tax paid (328) -
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Purchase of tangible fixed assets (179) (89)
Purchase of fixed asset investments - (31)
Receipts from sale of fixed assets investments 3,710 2,069
NET CASH INFLOW FOR CAPITAL EXPENDITURE 3,531 1,949
ACQUISITIONS AND DISPOSALS
Net cash acquired with subsidiary - 1,265
NET CASH INFLOW FROM ACQUISITIONS & DISPOSALS - 1,265
NET CASH INFLOW/(OUTFLOW) BEFORE MANAGEMENT OF LIQUID 369 (47)
RESOURCES AND FINANCING
MANAGEMENT OF LIQUID RESOURCES
Purchase of current asset investments (2,660) -
Sale of current asset investments 4,889 -
NET CASH INFLOW FROM MANAGEMENT OF LIQUID RESOURCES 2,229 -
FINANCING
Issue of ordinary share capital 69 -
Purchase of Treasury Shares (1,018) -
Capital element of finance lease payments (50) (49)
NET CASH OUTFLOW FROM FINANCING (999) (49)
INCREASE/(DECREASE) IN CASH IN THE YEAR 7 1,599 (96)
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 2005
and 2006 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 5th March 2007.
2. Exceptional item
Exceptional items of #348,000 arise following the flotation of an overseas
technology company whereby Libertas Capital invested in shares; this charge
relates to the subsequent write down of that investment to current market value
as a result of an industry regulatory change.
3. Discontinued Activities
In 2005 discontinued activities represented revenue of #268,000, operating
expenses of #259,000 and profit on ordinary activities of #9,000.
4. Earnings per share
The calculation of basic earnings per ordinary share is based on the profit
after tax for the year ended 31 December 2006 of #592,000 (2005: #1,497,000) and
42,300,308 (2005: 39,883,967) 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, 2006 49,261,460 (2005:
46,420,007).
The Directors believe it is appropriate to show adjusted earnings per share in
order to reflect the impact of the exceptional item and discontinued activities
in the year.
During the year the Company acquired 3,662,800 ordinary shares at an aggregate
price of #1,018,316 and these shares are held as Treasury Shares.
5. Dividend
The Board did not recommend the payment of a dividend for the full year.
6. Reconciliation of operating profit to net cash flow from operating
activities
2006 2005
#000s #000s
Operating profit 732 2,221
Depreciation of tangible fixed assets 108 74
Amortisation of goodwill 8 10
Profit on disposal of investments (789) 140
Foreign exchange reserve 34 (26)
(Increase)/decrease in debtors (1,261) 60
Increase/(decrease) in creditors (66) 1,600
Fixed asset investments received as fees (1,712) (7,320)
Net cash outflow from operating (2,946) (3,241)
activities
NOTES TO THE PRELIMINARY ANNOUNCEMENT (continued)
7. ANALYSIS OF NET FUNDS
31 December Cash Flow Other Non 31 December
Cash Changes 2006
2005
#000 #000
#000 #000
Cash at bank 241 1,599 - 1,840
Finance leases (81) 50 - (31)
LIQUID RESOURCES
Current asset 2,249 - (818) 1,431
investments
Net Funds 2,409 1,649 (818) 3,240
8. RECONCILIATION OF NET CASHFLOW TO MOVEMENT IN NET FUNDS
2006 2005
#000 #000
Increase/(decrease) in cash in the year 1,599 (96)
Cash outflow from repayment of lease financing 50 49
Cash outflow from increase in liquid resources - -
Changes in net funds from cash flow 1,649 (47)
New finance leases - (5)
Net movement in current asset investments (818) 1,766
Movement in net funds in the period 831 1,714
Opening net funds 2,409 695
Closing net funds 3,240 2,409
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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