Final Results

LONDON, 28 May 2015

AMBRIAN PLC

Preliminary Results for the year ended 31 December 2014

Ambrian plc ("Ambrian" or the "Company" and with its subsidiaries, the "Group") today announces its audited consolidated results for the twelve months ended 31 December 2014.

Financial highlights

· Traded volumes up 15% when compared to 2013

· Profit before exceptional costs and tax of $ 2.01 million (2013: $ 4.15 million)

· Profit after tax of $ 0.53 million (2013: $ 3.92 million)

· Net asset value per share was US cents 29.0 (2013: US cents 28.8)

· Completion of the acquisition of a cement mill in Mozambique in March 2015

Commenting on the results, Robert Adair, non-executive Chairman, stated:

"In 2014 our business was affected by lower than anticipated economic growth in our key markets compounded by tightening credit conditions for most of our end-users. Although we did not repeat the strong performance reported in 2013, we continue to develop our newer business lines and broaden our geographical footprint. When market fundamentals improve, we expect to capture the upside benefits of the efforts put into developing our sourcing and customer relationships.

The recent purchase of a cement mill operation in Mozambique represents significant progress towards meeting Ambrian's strategic objectives of acquiring near term operating assets and providing a window to other possible investment opportunities and increased trade flows. This acquisition, diversifying our product lines and expanding our areas of operations will we hope support our efforts to build a long-term sustainable business model."

Enquiries

Notes to Editors

Ambrian is primarily active in the physical trading of base metals and minerals. It sources and supplies a variety of commodities to end users all over the world. Supported by its offices in London, Shanghai, Taipei and Singapore, with further support from a network of agents in North and South America, Asia and the Middle East, Ambrian provides producers and consumers with its marketing insight whilst emphasizing the financing and risk management aspect of its trading activities. Ambrian is quoted on the AIM section of the London Stock Exchange under the ticker symbol AMBR.

Further information on Ambrian plc is available on the Company's website: www.ambrian.com

Chairman's and Chief Executive's statement

Against a softer economic background and increased competition, the year under review was testing for Ambrian plc ("Ambrian" or the "Company" and together with its subsidiaries the "Group"). Following on from benign trading conditions in the first half of the year, the market for most commodities became challenging in the second half of the year as economic growth softened markedly, compounded by tightening credit conditions in most of our end-user markets.

Despite increasing the volumes traded in copper and expanding our more recent non-ferrous business lines, lower volatility and increased competition in the sector, had the effect of reducing margins in our merchant activities. To respond to these challenges, we are concentrating on diversifying our business in terms of products, geographic location and customers serviced. Finally, to support and diversify our trade flows and revenue base, we intend to pursue selective investments in the resources sector. The sizable investment in a cement mill in Mozambique partly funded by the Industrial Development Corporation of South Africa represents a significant development in this direction.

During the year, we opened offices in Singapore and Taiwan. In addition to supporting the existing trading flows in countries in which our presence was historically marginal, both our Taiwan and Singapore offices are contributing to expanding our merchant activities in non-ferrous metals and minerals other than copper.

The significant feature which occurred since year end was the combination of the assets of Ambrian and Consolidated General Minerals plc ("CGM"). In reviewing the future prospects of the Group in 2013, it was considered that future growth and prospects remained constrained by the Group's asset base and the lack of diverse revenue streams. This acquisition represents significant progress towards meeting Ambrian's strategic objectives, in particular:

· Bringing in near term operating assets into the Group which have the potential to deliver significant value;

· Exposing the Group to the fast growing and developing markets of Mozambique and more generally Southern Africa, thus providing a window to other possible investment opportunities and increased trade flows;

· Broadening the skill set of the Group in support of our efforts to continue building a long-term sustainable business model; and

· Enlarging our shareholder base and improving the Group's profile in financial markets.

Results

For the year ended 31 December 2014, the metals and minerals trading business had a creditable performance despite the generally bearish market. Net revenues for the year were $7.79 million (2013: $13.91 million). Although we did not repeat the strong performance reported in 2013, we did develop our newer business lines in zinc, lead, tin and aluminum, while increasing overall volumes traded. When market fundamentals improve, we expect to be in a position to capture the upside benefits of the efforts we have put into in developing our sourcing and customer relationships.

In 2014, the Group recorded an operating profit before exceptional items and tax of $2.01 million (2013: $4.15 million). Exceptional costs of $0.90 million were incurred during the year (2013: nil). These exceptional costs relate to advisory fees in connection with the combination of assets of Ambrian and CGM, referred to above.

As a result of lower gross profits and one-off costs, the Group reported a pre-tax profit of $1.10 million (2013: $4.15 million).

Transaction with CGM

During 2014, the Company and CGM held discussions relating to the combination of their businesses. At the time, CGM held a near 30 per cent interest in Ambrian, and Ambrian held a 11.36 per cent interest in CGM. In February 2015, we announced that the Company had entered into a conditional agreement to merge Ambrian Metals Limited and CGM (Schweiz) AG pursuant to a "merger by absorption" governed by Swiss law and the subsequent acquisition by the Company of CGM's shareholding in the resulting Swiss merged entity, together with all the indebtedness of CGM (Schweiz) AG owed to CGM. In March 2015, the Company announced that the merger had become unconditional.

Consideration for the acquisition by the Company was satisfied by the issue of convertible securities of 165,020,739 on 8 May 2015. A further 9,707,102 convertible securities remain to be issued upon the dissolution of CGM which is anticipated towards the end of 2015.

As a result of the transaction described above, the Group's core business of physical trading and logistics is supplemented by the acquisition of a custom built cement mill operation in Beira, Mozambique. The acquisition of this 110 tonne per hour facility was justified by its long-term economic rationale and also by the opportunity to build internal capabilities in servicing trade flows in bulk commodities such as the raw materials that are to be used in the cement mill.

Company premises

In June 2014, the Company relinquished its long term lease on its head office at Old Change House in London and moved into new smaller offices in the City of London. The new premises are better adapted to our activities in London and the number of employees. Costs for these premises are approximately 50 per cent less than those for the old offices.

Board changes

As a result of the transaction referred to above, we (Robert Adair and Jean-Pierre Conrad) joined the Board of the Company as Non-executive Chairman and Chief Executive Officer respectively, on 27 March 2015.

During the year, Charles Crick retired as a Non-executive Director and Chairman of the Company. The Board is grateful to Charles for his contribution to the Group over the years.

Roger Clegg joined the Board on 17 November 2014 as an Executive Director, having been the Company's Chief Operating Office for a number of years before his appointment to the Board.

As previously announced, Kevin Lyon and Ed Marlow were appointed as directors of the Company on 21 February 2014.

Outlook

During the first quarter of 2015 trading conditions in most commodities continued to be subdued following on from similar conditions in the last quarter of 2014.

Whilst long-term contracts with our customers continue to be the core of our revenues, spot business has become increasingly significant due to the uncertain economic environment and our customers' desire to limit inventories. However, there are some signs of an improving market; the negative curve on the terminal market forward spreads is easing, thus enabling the cost of financing to be partially offset, particularly in the short-term, and we are moving from a backwardation market to a more normal contango market. Accordingly, margins on premiums and volatility are increasing, creating more opportunities to physically arbitrage the products we trade.

The opening of the Taiwan office in February 2014 and the Singapore office in late 2014 has allowed the Company to gear up its expansion into other metals. The intention is to continue to expand both in terms of geography and commodities in the current year. We also intend to grow traded volumes and, more significantly, will continue to diversify our product lines into areas commanding higher margins, the target being to position the Group to generate a greater "base load" profitability. The acquisition of the cement mill business in Mozambique marks an important step change in the growth and development of the Group, increasing its asset base and also diversifying its revenues. We look forward to the start of the financial contribution from this project in the second half of 2015 as production commences at the plant.

In parallel with implementing our business strategy, we will strengthen our operations, finance and risk management systems and processes to support our enlarged operations. We will continue to provide a reliable service to our customers and counterparties whilst ensuring that our business remains resilient in rapidly changing market conditions. Also clearly critical to our business model is the availability of capital. We will continue to secure the ability to fund our working capital, primarily through trade finance banking facilities. We have increased our bank lines to $425 million at year end from $365 million at the end of 2013. We will continue fostering our existing banking relationships and strive to add more institutions to our existing banking group of over ten banks.

Finally, our business is very much driven by people. We intend introducing a revised compensation structure in 2015 to motivate a responsible commitment towards the Group's long-term success and promote management depth and stability.

Robert Adair Jean-Pierre Conrad

Chairman Chief Executive Officer

Ambrian plc

Consolidated statement of comprehensive income

for the year ended 31 December 2014

Ambrian plc

Consolidated statement of changes in equity

for the year ended 31 December 2014

Ambrian plc

Consolidated statement of financial position

at 31 December 2014

Ambrian plc

Consolidated statement of cashflows for the year ended 31 December 2014

1. Basis of preparation

The financial information set out in this announcement does not constitute the Group's statutory accounts for the year ended 31 December 2014 or 2013 but is derived from those accounts. Statutory accounts for the 2013 have been delivered to the Registrar of the Companies, and those for 2014 will be delivered in due course.

The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain statements under section 498 (2) or (3) of the Companies Act 2006. The results for the year ended 31 December 2014 were approved by the Board of Directors on 27 May 2015 and are audited.

While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of international Financial Reporting Standards (IFRS's) as endorsed for use in the European Union, this announcement does not itself contain sufficient information to comply with IFRS's. The accounting policies adopted in this announcement have been consistently applied and are consistent with the policies used in the preparation of the statutory accounts for the period ending 31 December 2014.

The consolidated financial statements of the Group have been prepared in accordance with the Companies Act 2006 and International Financial Reporting Standards (IFRS) as developed and published by the International Accounting Standards Board (IASB) as adopted by the European Union (EU). 

Presentational currency

The financial statements have been presented in US Dollars which is the functional currency of the company's principal trading subsidiary, Ambrian Metals Limited. 

2. Segmental analysis

The Group has two reportable segments attributable to its operations and unallocated central revenues and costs:

o Physical metals and minerals trading

o Investment portfolio - comprises the Group's investment portfolio

o Head office costs relate to overheads incurred in connection with operating the public limited company and providing support functions to the Group.

The measurement of the segmental revenue, profit before tax, capital expenditure, depreciation, total assets, total liabilities and net assets have been prepared using consistent accounting policies across the segments.

3. Earnings per ordinary share

The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year, excluding shares held in the Employee Benefit Trust and Treasury shares.

The calculation of diluted earnings per share is based on the basic earnings per share adjusted to allow for the issue of shares through the share option schemes on the assumed conversion of all dilutive options.

Reconciliations of the earnings and weighted average number of shares in the calculations are set out below.

The profit attributable to the owners of the Company for continuing operations used in the calculation below is that presented in the consolidated statement of comprehensive income.

4. Financial assets at fair value through profit or loss

Included in the unlisted investment portfolio is the Company's stake in CGM valued at $3.08 million. This valuation is based upon the transaction with Ambrian plc, as noted in the post balance sheet event note.

All amounts presented in respect of unlisted securities have been determined with reference to financial information available at the time of the original investment updated to reflect all relevant changes to that information at the reporting date. This determination requires significant judgement in determining changes to fair value since the last valuation date. In making this judgement the Board evaluates, among other factors, changes in the business outlook affecting a particular investment, performance of the underlying business against original projections and valuations of similar quoted companies and the most recent fund raise achieved by the investee company.

All financial assets/liabilities at fair value through profit or loss represent commodity futures. These are used to hedge inventory of metals, and purchases and sales of metals. Hedges take into account both contango and backwardation market conditions and are marked to market at the year-end closing price.

5. Non-controlling interest

The non-controlling interest disclosed in the statement of comprehensive income and statement of financial position represents a 20% minority interest in Ambrian Resources AG held by shareholders other than Ambrian plc.

6. Post balance sheet events

During the financial year 2014, Ambrian plc entered into discussions with the board of directors of Consolidation General Minerals plc ("CGM"), about a possible acquisition of their CGM Schweiz operation, which owns a newly constructed cement manufacturing plant in Mozambique. On 17 February 2015 Ambrian announced that it had entered into a conditional agreement relating to the merger of Ambrian plc's Swiss subsidiary, Ambrian Metals Limited, with CGM Schweiz pursuant to a 'merger by absorption' process governed by Swiss law and a subsequent acquisition by Ambrian plc of CGM's shareholding in the resulting Swiss Merged Entity, together with all the indebtedness of the CGM Schweiz Group owed to CGM.

On 6 March 2015 the deal was approved by a majority shareholding of both entities. On 27 March 2015 the deal was declared unconditional with all conditions precedent having been met. At this point, CGM had two directors appointed to the board of Ambrian plc, Robert Adair (as Chairman) and Jean-Pierre Conrad (as Chief Executive Officer).

The transaction serves a strategic purpose in diversifying Ambrian plc's revenue stream by bringing an operating asset into the Group, while giving it further exposure to the fast growing and developing market of Mozambique. Further it helps increase Ambrian plc's shareholder base, with the consequent prospects of additional liquidity in share trading and improving the Group's profile with institutional investors.

Details of the fair value of identifiable assets and liabilities acquired, and purchase consideration are as follows:

The value applied to the equity to be issued is based on Ambrian plc's closing price (11.62 pence) on the day the transaction completed (27 March 2015). The closing exchange rate on the day the transaction completed was USD 1.4874, and was applied to the Sterling share price above.

The convertible securities to be issued are made up of 3 tranches and will be issued once specific criteria have been met.

· Tranche 1: issued. The number of convertible securities issued in this tranche is 165,020,739

· Tranche 2: convertible securities will not convert to ordinary shares, as a specific condition has not been satisfied

· Tranche 3: issued

There has been no material change to the CGM Schweiz business with regard to income or expenses since the take on balances as shown above.