19th Jul 2016 10:09
LONDON (Alliance News) - Acorn Minerals PLC said it has still not made any investment or acquired a single asset since listing in London back in 2012 as it published its latest financial results Tuesday.
Still, Acorn shares were trading up 12% to 9.96 pence per share on Tuesday morning.
The company has only managed to come close to acquiring a company once since listing when it signed a deal to takeover Australian oil and gas exploration and extraction company Gulf Energy Ltd, but the company chose to back out of the deal when all the conditions were not met.
That was back in 2014 and since then, Acorn Minerals has delivered no progress on making an acquisition except for continually reviewing new opportunities. The focus on energy and mining will not have helped since it pulled out of that deal as that is when the downturn in markets began to emerge, but Acorn is determined to stick with its investment policy.
"We have reviewed a number of very promising resource projects however with resources not being in favour in the capital markets it has been difficult to attract the required capital," said Executive Chairman Tony Brennan on Tuesday.
"This sentiment is changing and we are currently carrying out due diligence reviews on several opportunities that the board believes could add significant value to shareholders," he added. "Whilst we are keen to find a transaction we remain disciplined to proceed only if we are convinced it will be in the best interests of shareholders."
In the most recent financial year that ended in March, Acorn Minerals posted a pretax loss of GBP67,576, the smallest loss the company has produced in the last four years. The loss is solely made up of administrative costs of GBP68,437, partly offset by net finance costs of GBP861.
Acorn delivered a pretax loss of GBP77,393 in the previous financial year ended in 2015 and in the 2014 financial year that loss amounted to GBP126,645. In the first financial year since listing, which ended in March 2013, Acorn's loss totalled GBP244,552.
The consistent year-on-year falls has been primarily down to reductions in administrative costs, with the first financial year boasting the largest loss because of some exceptional items being booked linked to the initial public offering.
With nothing but cash going out of the business since listing, Acorn's balance has dwindled over the past few years, albeit very gradually. Acorn had GBP1.42 million in cash at the end of the 2013 financial year and that has fallen 18% to GBP1.16 million at the end of March this year.
The company has never raised any equity and has been debt free since it listed, with costs being accrued through director wages, service fees and from reviewing projects.
"Whilst we have not concluded a transaction during the year we are very hopeful of doing so in the near future. This all requires considerable work by your board and on your behalf I thank my fellow directors Charles Goodfellow and Brent Fitzpatrick for their effort and commitment to this cause and I also thank you for your continuing support and look forward to updating you soon on further progress," said Brennan.
Brennan has been the chairman of Acorn since the start and is the only executive board member in the business alongside those two non-executive directors. Acorn has no head office and no staff, helping to keep costs down to a minimum.
Brennan was paid a salary of GBP19,008 in the first financial year ended in 2013 but has been consistently paid GBP15,000 per year since then. Both the non-executive directors have been with the company since listing and have each received between GBP6,000 to GBP7,000 per year since.
By Joshua Warner; [email protected]; @JoshAlliance
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