3rd Oct 2013 07:00
QUORAM PLC
AUDITED RESULTS FOR THE YEAR ENDED 30 JUNE 2013
Quoram Plc ("Quoram" or the "Company) announces its audited financial results for the year ended 30 June 2013.
Highlights:
· Net assets as at 30 June 2013 of £3.22 million (2012: £4.45 million); including cash balances of £1.99 million (2012: £1.28 million)
· Transition from Oil and Gas Exploration company to Investing Company completed
· First significant investment under the newly adopted investing policy made
James Ede-Golightly, Chairman, said:
"The focus of the company is now on implementing the investment policy with the aim of delivering growth in net asset value per share, as set out in the circular published on 18 March 2013. The company continues to monitor potential investments using our highly selective approach with a view to increasing shareholder value going forward."
A full copy of the Company's Annual Report and Accounts for the year ended 30 June 2013, together with the Notice of Annual General Meeting, will shortly be posted to shareholders and is available on the Company's website at www.quoram.co.uk within the Investor Relations section.
The Company's Annual General Meeting will be held on 4 November 2013 at 2.00 p.m. at the offices of WH Ireland, 24 Martin Lane, London, EC4R 0DR.
Enquiries :
Quoram Plc
James Ede-Golightly, Chairman +44 (0)207 0997264
WH Ireland Limited (Nominated adviser)
John Wakefield, Corporate Finance +44 (0) 117 945 3470
CHAIRMAN'S STATEMENT
The year ended 30 June 2013 marked significant change for Quoram Plc as the company exited its previous strategy in oil and gas and migrated to an investment company strategy. This transition was marked by a process of exiting the US oil and gas portfolio, changes to the board structure and a general meeting to approve the change of strategy and the change of company name from Bluebird Energy Plc to Quoram Plc.
In March 2013 the company raised £1.88m through the placement of 470m new shares at 0.4 pence per share. The additional capital raised stabilised and strengthened the balance sheet ahead of the implementation of the new strategy.
The company's principal assets as at 30 June 2013 are outlined below:
Balance Sheet Value | Value per Share | |
37,055,245 Wessex Exploration Plc shares at 1.27p (being the closing price on 30/6/2013) | £0.47m | 0.04p |
844,400 shares in Plant Health Care Plc at 80p (being the closing price on 30/6/2013) | £0.69m | 0.07p |
Cash balances (primarily in sterling) | £2.00m | 0.21p |
The holding in Wessex Exploration Plc ("Wessex") is the residual interest following the distribution of 27.7m shares by specie dividend in June 2012. Even after this distribution, Wessex constituted a majority of the balance sheet value at the beginning of the financial year. As a consequence of the decline in the Wessex share price and the additional capital raised, the significance of the Wessex interest to the balance sheet of Quoram has diminished. We remain focused on ensuring the company realises appropriate value from this stake in the medium term: the ultimate realisation is important in establishing a capital base to implement the new investment strategy. Given uncertainty around the value of the Wessex stake, the board has been cautious against pursuing an investment policy on the assumption of any realisation of the holding.
On 16 April 2013 Quoram initiated its new investing policy with an investment in Plant Health Care Plc. Plant Health Care's products increase crop yields by enhancing natural processes within the plant. The need for these products has never been greater. With world population now at more than seven billion and increasing prosperity leading to demand for more and better nutrition, agriculture is facing ever greater challenges to produce enough food in ways which are sustainable, especially when resources such as water are becoming scarcer and the climate less predictable. In the last year Plant Health Care has made significant changes to its board, strategy and management team. Combined with the additional capital raised by Plant Health Care in April 2013, we believe the company is now well positioned to implement its strategy over the coming years. Plant Health Care is AIM quoted and I would encourage shareholders interested in learning more about the company to review Plant Health Care's market releases.
In the legacy US oil and gas portfolio, Quoram exited its interests in Centurion Royalties in November 2012 and its 50% joint-venture interest in Revloc in February. Despite efforts to market the Solitaire acreage in Colorado as a Mississippian oil play, the company received no interest and the decision was taken to impair the value of these leases to nil. The company's leases over the Solitaire acreage expire between the second calendar quarter of 2013 and the first calendar quarter of 2014.
Board Changes
During the year significant changes were made to the structure of the board reflecting the shifting focus of the company from Oil and Gas exploration and production to a general investment policy.
In September 2012 Andy Yeo and Fred Dekker resigned as CEO and non-executive director respectively, while Gordon Hall joined the board as a non-executive director.
In August 2013 Chris Hill joined the board as finance director, having served as financial controller and company secretary since March 2013.
Financial Results
The financial results for the year were significantly impacted by the decline in the Wessex share price, impairments to the US oil and gas portfolio reflecting failure to attract interest in the acreage and the sale of Cimarron Royalties at a discount to carrying value.
Administrative expenses of £852k include £335k of non-cash costs related to the accelerated recognition of share based payments on the departure of former directors and management. Operating cash flows before changes in working capital improved to an outflow of £0.4m compared to an outflow of £1.6m in the prior financial year.
As a consequence of the decline in activity in the company's US based subsidiaries, the company's reporting currency has now changed to GBP.
Outlook
The focus of the company is now on implementing the investment policy with the aim of delivering growth in net asset value per share, as set out in the circular published on 18 March 2013. The company continues to monitor potential investments using our highly selective approach with a view to increasing shareholder value going forward.
Net asset value per share at 30 June 2013 was 0.33p per share: with the transition now complete and the Wessex stake now accounting for a small proportion of value, this is the reference point against which the board will judge the future success of the strategy.
CONSOLIDATED INCOME STATEMENT
for the year ended 30 June 2013
RESTATED | |||
2013 | 2012 | ||
Continuing operations: | £'000 | £'000 | |
Portfolio investment return | 29 | - | |
Impairment of available-for-sale investments | (154) | - | |
Other income | 22 | 3 | |
Portfolio return and revenue | (103) | 3 | |
Administrative expenses | (852) | (1,730) | |
Exceptional administrative expenses | (1,032) | (621) | |
Total administrative expenses | (1,884) | (2,351) | |
Operating loss | (1,987) | (2,348) | |
Finance income | 4 | 4 | |
Profit on disposal of available-for-sale investments | - | 1,639 | |
Share of losses of associates | - | (23) | |
Loss before taxation | (1,983) | (728) | |
Taxation | - | (5) | |
Loss for the financial year from continuing operations | (1,983) | (733) | |
Discontinued operations: | |||
Loss for the financial year from discontinued operations | - | (267) | |
Loss for the financial year | (1,983) | (1,000) | |
Attributable to: | |||
Equity shareholders of the Company | (1,983) | (1,000) | |
Loss per share from continuing and discontinued operations | |||
Basic and diluted loss per share (p) | (0.31) | (0.20) | |
Loss per share from continuing operations | |||
Basic and diluted loss per share (p) | (0.31) | (0.15) |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 30 June 2013
RESTATED | |||
2013 | 2012 | ||
£'000 | £'000 | ||
Loss for the financial year | (1,983) | (1,000) | |
Other Comprehensive income | |||
Items that may be reclassified subsequently to profit or loss: | |||
Available-for-sale financial assets: | |||
Fair value (losses)/gains arising during the year | (1,930) | 2,429 | |
Less: reclassification adjustments for gains in profit or loss | - | (1,639) | |
Tax movement on available-for-sale financial assets | 451 | (168) | |
Foreign exchange gains/losses on consolidation | 24 | (29) | |
Other comprehensive income for the financial year net of tax | (1,455) | 593 | |
Total comprehensive income for the financial year | (3,438) | (407) |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 June 2013
RESTATED | RESTATED | |||
2013 | 2012 | 2011 | ||
£'000 | £'000 | £'000 | ||
Assets | ||||
Non-current assets | ||||
Available-for-sale financial assets | 473 | 2,557 | 1,866 | |
Portfolio investments | 688 | - | - | |
Total portfolio investment assets held | 1,161 | 2,557 | 1,866 | |
Property, plant and equipment | - | 494 | 607 | |
Intangible assets | - | 584 | 2,692 | |
1,161 | 3,635 | 5,165 | ||
Current assets | ||||
Trade and other receivables | 111 | 62 | 168 | |
Cash and cash equivalents | 1,991 | 1,279 | 388 | |
2,102 | 1,341 | 556 | ||
Total assets | 3,263 | 4,976 | 5,721 | |
Liabilities | ||||
Current liabilities | ||||
Trade and other payables | (48) | (71) | (965) | |
Non-current liabilities | ||||
Deferred tax | - | (452) | (230) | |
Total liabilities | (48) | (523) | (1,195) | |
Net assets | 3,215 | 4,453 | 4,526 | |
Capital and reserves attributable to the Company's equity shareholders: | ||||
Share capital | 2,420 | 1,245 | 689 | |
Share premium account | 3,813 | 3,123 | 1,573 | |
Foreign exchange translation reserve | 1,115 | 1,091 | 1,120 | |
Retained earnings | (5,007) | (1,545) | 961 | |
Share-based payment reserve | 874 | 539 | 183 | |
Total equity | 3,215 | 4,453 | 4,526 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 30 June 2013
Share capital | Share premium account | Foreign exchange translation reserve | Retained earnings | Share-based payment reserve | Total | |
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
Balance at 1 July 2010 | 601 | 13,931 | 1,120 | (2,019) | 106 | 13,739 |
Profit for the financial period | - | - | - | (10,938) | - | (10,938) |
Other comprehensive income: | ||||||
Fair value gain on available-for-sale financial assets | - | - | - | 83 | - | 83 |
Tax on gain on available-for-sale investments | - | - | - | (96) | - | (96) |
Capital reduction | - | (13,931) | - | 13,931 | - | - |
Total comprehensive income | - | (13,931) | - | 2,980 | - | (10,951) |
Share-based payments | - | - | - | - | 77 | 77 |
Issue of share capital | 88 | 1,667 | - | - | - | 1,755 |
Issue costs | - | (94) | - | - | - | (94) |
Balance at 30 June 2011 | 689 | 1,573 | 1,120 | 961 | 183 | 4,526 |
Balance at 1 July 2011 | 689 | 1,573 | 1,120 | 961 | 183 | 4,526 |
Loss for the financial period | - | - | - | (1,000) | - | (1,000) |
Other comprehensive income: | ||||||
Fair value gain on available-for-sale financial assets | - | - | - | 790 | - | 790 |
Tax on gain on available-for-sale investments | - | - | - | (168) | - | (168) |
Foreign exchange gains on consolidation | - | - | (29) | - | - | (29) |
Total comprehensive income | - | - | (29) | (378) | - | (407) |
Share-based payments | - | - | - | - | 356 | 356 |
Issue of share capital | 556 | 1,665 | - | - | - | 2,221 |
Issue costs | - | (115) | - | - | - | (115) |
Specie dividend | - | - | - | (2,128) | - | (2,128) |
Balance at 30 June 2012 | 1,245 | 3,123 | 1,091 | (1,545) | 539 | 4,453 |
Balance at 1 July 2012 | 1,245 | 3,123 | 1,091 | (1,545) | 539 | 4,453 |
Loss for the financial period | - | - | - | (1,983) | - | (1,983) |
Other comprehensive income: | ||||||
Fair value loss on available-for-sale financial assets | - | - | - | (1,930) | - | (1,930) |
Tax on loss on available-for-sale investments | - | - | - | 451 | - | 451 |
Foreign exchange gains on consolidation | - | - | 24 | - | - | 24 |
Total comprehensive income | - | - | 24 | (3,462) | - | (3,438) |
Share-based payments | - | - | - | - | 335 | 335 |
Issue of share capital | 1,175 | 705 | - | - | - | 1,880 |
Issue costs | - | (15) | - | - | - | (15) |
Balance at 30 June 2013 | 2,420 | 3,813 | 1,115 | (5,007) | 874 | 3,215 |
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 30 June 2013
2013 | RESTATED 2012 | ||
£'000 | £'000 | ||
Loss for the financial year | (1,983) | (1,000) | |
Finance income | (4) | (4) | |
Unrealised profit on revaluation of portfolio investments | (29) | - | |
Loss from associates | - | 24 | |
Share-based payment | 335 | 356 | |
Gain on disposal of investments | - | (1,639) | |
Loss on disposal of business | 47 | 281 | |
Expenses paid for discontinued operations | - | (267) | |
Revenue received from discontinued operations | - | (15) | |
Impairment of available-for-sale investments | 154 | ||
Impairment of intangible assets | 529 | 488 | |
Impairment of land assets | 503 | 133 | |
(448) | (1,643) | ||
Changes in working capital | |||
Purchase of portfolio investments | (659) | - | |
Increase in trade and other receivables | (49) | (55) | |
Decrease in trade and other payables | (23) | (1,129) | |
Net cash outflow from operating activities | (1,179) | (2,827) | |
Cash flow from investing activities | |||
Purchase of intangible assets | - | (100) | |
Purchase of available-for-sale investments | - | (536) | |
Proceeds from disposal of business | 17 | 1,978 | |
Interest received | 4 | 4 | |
Net cash generated from investing activities | 21 | 1,346 | |
Cash flow from financing activities | |||
Proceeds on issue of new shares | 1,880 | 2,226 | |
Expenses of new share issue | (15) | (118) | |
Net cash generated from financing activities | 1,865 | 2,108 | |
Net increase in cash and cash equivalents | 707 | 627 | |
Cash and cash equivalents at beginning of financial year | 1,279 | 388 | |
Effects of exchange rate changes | 5 | 264 | |
Cash and cash equivalents at end of financial year | 1,991 | 1,279 |
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