RNS Number:7535Q
Libertas Capital Group PLC
26 March 2008
For immediate release 26 March 2008
LIBERTAS CAPITAL GROUP PLC PRELIMINARY UNAUDITED RESULTS
FOR THE YEAR ENDED 31 DECEMBER 2007
Libertas Capital Group plc (AIM: LBR) ("Libertas Capital" or "the Company"), the
financial services firm, today announces preliminary unaudited results for the
year ended 31 December 2007.
Financial highlights:-
* Revenue up 54.4% to �18.3m (2006: �11.9m)
* Pre tax profit before share based payments up 53.4% to �3.1m ( 2006:
�2.02m)
* EPS before share based payments up 44.9% to 4.87 p (2006: 3.36 p)
* Net assets up 30.9% to �10.1m before reduction of �1.9m for Treasury and
EBT Shares (2006: �7.71m)
Operational highlights:-
* Strength of continuing activities and quality of transactions
* 30 transactions completed including IPOs on AIM, M&A transactions and
private fundraisings
* Successful development and growth of Securities business both in primary
and secondary activities
* Continued successful implementation of strategy including further
expansion into Asia and the Middle East
* Strong transaction pipeline continues into 2008
Commenting on the results, Jakob Kinde, Executive Chairman of Libertas Capital
Group plc, said:-
"We are pleased with the performance of the business, which shows increased
revenue year on year and continued profitability. We have continued to implement
our strategy and have expanded our corporate finance and securities businesses
in Asia and the Middle East to offer full service capability in these growing
and important geographical markets. The results for the year highlight that the
investment in building a balanced platform for future growth is beginning to
demonstrate considerable success.
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.
Despite market conditions being difficult in the second half of 2007, we have
demonstrated the strength of our business through our performance in 2007. With
the visibility of our transaction pipeline, we look forward to 2008 with
confidence"
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
Buchanan Communications +44 (0)20 7466 5000
Charles Ryland /Mary-Jane Johnson
Notes to Editors
About Libertas Capital Group plc
Libertas Capital is an international financial services firm offering its
clients a full range of dedicated independent Corporate Finance Advisory,
Research and Distribution services.
Corporate Finance services include investment bankers with substantial depth of
European M&A and general corporate finance experience, as well as entrepreneurs
and industrial professionals with extensive experience and expertise in their
particular fields, having completed in excess of US$100 billion in transactions.
In our research and distribution services we offer our clients a dedicated
research capability with deep industry knowledge in our core sectors - Renewable
Energy, Energy (including oil and gas and natural resources), Infrastructure,
Real Estate, Healthcare, Technology and Telecom - satisfying the needs of both
our corporate and institutional clients. Our extensive distribution network
covers UK, European, Asian, Middle Eastern and US institutional clients.
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.
Chairman's Statement
2007 was an exciting year for the Group and we are pleased to report a healthy
set of results. Revenue totalled �18.3m (2006: �11.9m) with profit before tax
and share based payments of �3.1m (2006: �2.0m). Closing net assets amounted to
�10.1m prior to a reduction of �1.9m for shares held within Treasury and the
Libertas Capital Employee Benefit Trust (2006 net assets: �7.7m). The earnings
per share before exceptionals are 4.87 pence (2006: 3.36 pence).
The Group's strategy is to provide a range of financial services to corporate
and institutional clients in Europe, North America, Asia and the Middle East in
the sectors of Renewable Energy, Energy (including oil and gas and natural
resources), Infrastructure, Real Estate, Healthcare, Technology and Telecom. As
explained in more detail in the Chief Executive Officer's Review, we now have
established operations in Asia and the Middle East.
The Group Structure
Libertas Capital * Strategic advisory and execution
Corporate Finance capabilities
Limited * Private and public fundraising
* Mergers and acquisitions and
corporate restructuring
Libertas Capital * Institutionally sponsored research
Securities Limited * Independent corporate sponsored
research through
Equity Growth Research
* Distribution and facilitation
trading
Libertas Capital * Corporate finance in Asia,
Libertas Capital Asia specifically China
Group Plc Limited
Libertas Capital * Corporate finance in North America
Inc
Libertas Capital * Corporate finance in the Nordic
Nordic AB region
Libertas Capital * Corporate finance and securities in
Dubai Limited the Middle East
Libertas Capital * Strategic and principal
Ventures Limited investments in core sectors
STRATEGY
The Group has enjoyed four 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 offer a breadth of financial services with a number of international
locations
* To offer senior management experience and expertise in investment
banking, broking and financial services
* To enhance shareholder value and generate good long term 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 results are strong with revenue of �18.3m and a pre tax profit before share
based payments of �3.1m. Share based payments amount to �0.9m being a charge in
respect of the fair value of awards granted in shares, in accordance with IFRS 2
"Share Based Payments". There is no cash effect for this sum. We completed some
30 transactions 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 offer a dedicated sales distribution team catering for
institutions and high net worth individuals. We have enhanced further the value
of underlying transactions completed.
DIRECTORS
It is with great sadness that we record that Mr Sven Skarendahl, a non-
executive board member, passed away on 25th January 2008 after a period of
illness. Sven has played an important role to Libertas Capital as a senior
adviser since the AIM flotation in July 2004 and since October 2004 as a
non-executive director and non-executive chairman of Libertas Capital Nordic AB.
Sven was a deeply respected and admired colleague who will be greatly missed by
all who knew and worked with him.
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, and geographical spread of operations.
DIVIDENDS
The Board did not recommend a dividend for the full year 2007 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
Despite market conditions being difficult in the second half of 2007, we have
demonstrated the strength of our business through our performance in 2007. With
the visibility of our transaction pipeline, we look forward to 2008 with
confidence.
Jakob Kinde
Executive Chairman
March 2008
Chief Executive Officer's Review
REVIEW OF THE YEAR
The Group made strong progress in 2007 as reflected in our full year's results.
All areas of our businesses have been robust and there has been a significant
increase in revenue generation, with revenue in 2007 of �18.3m compared with
�11.9m in 2006. Profit before tax and share based payments amounted to �3.1m in
2007 compared with �2.0m in 2006.
In summary, 2007 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 able to take advantage of
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 26 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.
In the Autumn of 2007 we were delighted to welcome the experienced team of
professionals from Macadam Corporate Finance Limited, a corporate finance
boutique acquired in a share for share exchange.
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. Some examples of the transactions
completed include:
* Landkom International plc - fundraising and admission to AIM
* Canton Property Investment Limited - fundraising and admission to AIM
* Plantic Technologies Limited - fundraising and admission to AIM
* AISI Realty Public Limited - fundraising and admission to AIM
* Mobile Credit - fundraising and admission to AIM
* Zeehan Zinc Limited - fundraising and admission to AIM
* Empire Energy Corporation International Inc - private placement
* Morphic Technologies - acquisition of Swiss company
* Gas Turbine Efficiency plc - secondary fundraising
* Renewable Power & Light Plc - secondary fundraising
* West Pioneer Properties Limited - secondary fundraising
* Island Gas Resources plc - reverse takeover
* Mawell - private placement
* Oceanlinx - private placement
* Grosvenor Waste Management Limited - M & A Advisory
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
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, in
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. In the summer of 2007 LCA raised, from Asian investors, US$55m for the
AIM flotation of Canton Property Investment Limited, a Chinese retail and
leisure property company.
LIBERTAS CAPITAL INC
Libertas Capital Inc is based in Los Angeles, California and 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") is 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.
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 2008.
OUTLOOK
The 2007 results demonstrate a significant improvement in the quality of our
underlying and continuing businesses. These results are particularly impressive
given the difficult market conditions in the second half of 2007. The market
place for 2008 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 2008 looks promising particularly in our core sectors of
Renewable Energy, Energy, Infrastructure, Real Estate, Healthcare, Technology
and Telecom. We have seen a satisfactory start to the year and with some notable
mandates on board, we are confident that we will continue to increase the number
of corporate clients in 2008. 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 2008
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2007
2007 2006
Notes
�000 �000
Revenue - fees 18,318 11,860
Profit/Loss on trading investments
- ordinary 355 1,137
- exceptional - (348)
Operating expenses (including
salaries and bonuses) (15,742) (11,903)
Operating expenses - share based 2 (945) -
payments
Profit before financing 1,986 746
Finance income 774 169
Finance costs (593) (57)
Profit before tax 2,167 858
Analysed as:
Profit before adjustments 3,112 2,029
Exceptional item - loss on trading
investments - (348)
Discontinued activities - (823)
Share based payments 2 (945) -
Profit before tax 2,167 858
Tax on profit (651) (252)
Profit for the year 1,516 606
Earnings per share (pre share based 3.36p
payments and exceptional ) - basic 3 4.87p
Earnings per share - basic 3 3.39p 1.43p
Earnings per share(pre share based
payments and exceptional) - diluted 3 4.14p 2.88p
Earnings per share - diluted 3 2.88p 1.23p
There were no other recognised gains or losses made during the years ended 31
December 2006 and 2007 other than those passing through the profit and loss
account.
CONSOLIDATED BALANCE SHEET
AT 31 DECEMBER 2007
2007 2006
�000 �000
NON CURRENT ASSETS
Goodwill 2,285 825
Property, plant and equipment 1,447 273
Available for sale investments 2,525 3,276
6,257 4,374
CURRENT ASSETS
Trade and other receivables 4,840 3,085
Available for sale investments 5,458 1,537
Cash and cash equivalents 927 1,840
11,225 6,462
CURRENT LIABILITIES
Bank loans and overdrafts (2,309) (67)
Creditors (7,027) (4,077)
(9,336) (4,144)
NET CURRENT ASSETS 1,889 2,318
TOTAL ASSETS LESS CURRENT LIABILITIES 8,146 6,692
Creditors: falling due after more than - -
one year
NET ASSETS 8,146 6,692
CAPITAL AND RESERVES
Called up share capital 473 438
Share premium account 3,605 3,605
Consolidation Reserve 619 619
Profit and loss account 5,395 2,942
Other reserves - 106
Treasury Shares (1,260) (1,018)
Shares held by EBT (686) -
SHAREHOLDERS' FUNDS - EQUITY INTERESTS 8,146 6,692
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2007
Note 2007 2006
�000 �000
Cash utilised in operations 5 (2,202) (2,946)
Net interest received 181 112
Taxation paid (805) (328)
Net cash utilised by operations (2,826) (3,162)
Investing activities
Purchase of property, plant and equipment (1,374) (179)
Fixed asset investments - net receipt - 3,710
Net proceeds from available for sale investments 1,251 2,229
Net cash generated by investing activities (123) 5,760
Cash flows from financing activities
Issue of ordinary share capital - 69
Purchase of shares by EBT (686) -
Purchase of Treasury Shares (242) (1,018)
Proceeds from bank loan 686 -
Capital element of finance lease payments (31) (50)
Net cash utilised by financing activities (273) (999)
(DECREASE)/INCREASE IN CASH IN THE YEAR 6 (3,222) 1,599
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 2006
and 2007 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, which has
not been audited, was approved by the directors on 25 March 2008.
2. Exceptional item
A charge of �945,000 arose within operating expenses, being the fair value of
awards granted and vested over 3,776,513 ordinary shares, in accordance with
IFRS 2 "Share Based Payments".
Exceptional items of �348,000 in 2006 arose 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. Earnings per share
The calculation of basic earnings per ordinary share is based on the profit
after tax for the year ended 31 December 2007 of �1,516,000 (2006: �606,000) and
44,736,638 (2006: 42,300,308) 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, and amount to 52,611,007
(2006: 49,261,460).
The Directors believe it is appropriate to show adjusted earnings per share in
order to reflect the impact of the exceptional items.
During the year the Company acquired 721,149 ordinary shares at an aggregate
price of �242,000 and these shares are held as Treasury Shares. Treasury shares
now amount to 4,383,949 shares.
4. Dividend
The Board did not recommend the payment of a dividend for the full year.
5. Cash utilised by operations
2007 2006
�000s �000s
Profit before financing 1,986 746
Depreciation of tangible fixed assets 199 108
Share based payments 945 -
Profit on disposal of available for sale
investments (355) (789)
Foreign exchange reserve - 28
Increase in debtors (1,717) (1,261)
Increase/(decrease) in creditors 2,279 (66)
Investments received as fees (5,539) (1,712)
Cash utilised by operations (2,202) (2,946)
NOTES TO THE PRELIMINARY ANNOUNCEMENT (continued)
6. Analysis of Net Funds
31 December Cash Flow Other Non Cash 31 December
2006 Changes 2007
�000 �000 �000 �000
Cash at bank/(overdraft) 1,840 (2,645) - (805)
Bank loans - (577) - (577)
Decrease in cash 1,840 (3,222) - (1,382)
Finance Leases (31) 31 - -
1,809 (3,191) - (1,382)
7. Reconciliation of Net Cashflow to Movement in Net Funds
2007 2006
�000 �000
(Decrease)/ increase in cash in the year (2,645) 1,599
Bank loans (577) -
Changes in net funds from cash flow (3,222) 1,599
Repayment of lease financing 31 50
Movement in net funds in the period (3,191) 1,649
Opening net funds 1,809 160
Closing net funds (1,382) 1,809
NOTES TO THE PRELIMINARY ANNOUNCEMENT (continued)
8. Transition to IFRS
The Group reported under UK GAAP in its previously published financial
statements for the year ended 31 December 2006.
The analysis below shows a reconciliation of equity and profits as reported
under UK GAAP as at 31 December 2006 to the revised equity and profits under
IFRS as reported in these financial statements.
Reconciliation of Equity as at
31 December 2006
�000
Equity shareholders funds under UK GAAP 6,578
Adjustments:
Goodwill 8
Available for sale investments (note c) 106
Shareholders funds under IFRS 6,692
Reconciliation of Profit
Reconciliation of Profit for the year ended December �000
2006
Profit before financing 732
Foreign Exchange (note a) 6
Goodwill (note b) 8
Restated under IFRS 746
Explanation of adjustment to profit
a) Foreign Currencies
Under UK GAAP the profit and loss accounts of foreign subsidiaries were
converted to pounds sterling for consolidation purposes at the year end rate.
Under IFRS income and expenses have been translated at average rates for the
period. This change has resulted in an increase in group profits for the year to
31 December 2006 of �6,000.
NOTES TO THE PRELIMINARY ANNOUNCEMENT (continued)
b) Goodwill
Under UK GAAP, capitalised goodwill was amortised over its useful economic life.
Under IFRS, this goodwill is no longer amortised but is tested at least annually
for impairment. The impairment tests carried out by the Group have identified no
impairment loss and amortisation provided under UK GAAP has been reversed. The
adjustments to profits relating to the reversal of amortisation, amounts to
�8,000 for the year ended 31 December 2006.
c) Available for Sale Investments
Available for sale investments are initially measured at cost. At subsequent
reporting dates they are measured at fair value or cost where fair value is not
readily ascertainable. Gains and losses arising from change in fair value are
recognised directly in equity until the investment is disposed of or is
determined to be impaired, at which time the cumulative gain or loss recognised
previously in equity is included in the income statement for the period. This
revaluation reserve had been realised by 30 June 2007, with the resultant
realised profit on disposal included within the income statement.
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
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