20th Mar 2008 07:01
Midas Capital PLC20 March 2008 News Release20 March 2008 Midas Capital announces preliminary results for the year to 31 December 2007 Midas Capital plc, (formerly iimia MitonOptimal plc) the AIM quoted companyencompassing Fund Management, Wealth Management and Corporate Services,announces its preliminary results for the year to 31 December 2007. Salient points • Group transformed during 2007 and early 2008 with acquisitions of MitonOptimal in October 2007 and Midas Capital in March 2008 • Mergers have created a leading multi-asset fund management business with excellent long term investment performance and a diversified product range. FUM and Advice now total £2.8 bn • Year end figures include contribution from MitonOptimal for the period since 22 October. Profit from continuing operations before tax of £2.3 million (2006 £2.1 million) • Adjusted profit on continuing operations which includes other operating income but is before tax, exceptional items, share based payment charge and amortisation of £2.8 million (2006 £3.0 million) • Board declared a maiden interim dividend of 2p per ordinary share payable on 20 March 2008. It is the Board's intention to pursue a progressive dividend policy going forward. • Diluted adjusted earnings per share on continuing operations of 11.36p (2006 15.28p) • Shareholders' funds of £40.8 million (2006 £23.4 million) • Significant merger synergies anticipated Operational Highlights • Funds under Management & Advice increased to £1.26 billion (2006 - £0.65 billion) following acquisition of MitonOptimal and John K Miln. • Wealth Management division continued to perform well • Intelli continued to trade profitably Michael Phillips, Chief Executive, Midas Capital plc, says: "The past six months have seen the Group pursue its ambition to build a nichebusiness group focused on the asset management sector with the merger withMitonOptimal and the recently completed merger with Midas Capital. "The market in 2008 looks set to pose challenges however, I believe that ourFund Management division is now well placed to become one of the leading playersin the multi-asset management sector. With excellent long term investmentperformance across the product range, we believe the mergers position us to takeadvantage of the growing demand for reduced risk and multi-asset investmentproducts. Meanwhile our Wealth Management and Corporate Services divisions facethe future with confidence." For further information, please contact: Michael Phillips, Chief Executive, Midas Capital plc 07738 181520Roland Cross, Director, Broadgate 020 7726 6111James Steel, Arbuthnot Securities Limited 020 7012 2000 Web: midascapital.co.uk Chairman's Statement 2007 and the early part of 2008 have been transformational for the Group withthe mergers in October 2007 with MitonOptimal Group Limited, and since the yearend with Midas Capital Partners Limited (Midas). Despite a difficult marketbackground we achieved a profit before tax of £2.3 million on turnover of £13.4million. Adjusted profit on continuing operations which includes other operatingincome but is before tax, exceptional items, share based payments charge andamortisation amounted to £2.8 million (2006: £3.0 million). These figures include contributions from MitonOptimal for the period since 22October 2007, the date of the completion of the merger. I will have more to say about the merger with Midas later. 2007 alone was a yearof significant growth for the Group with the merger with MitonOptimal andacquisition of John K Miln increasing the Group's Funds Under Management andAdvice (FUM&A) to over £1.25 billion at 31 December 2007 (2006: £0.65billion).FUM&A after the merger with Midas on 7 March 2008 grew to £2.8 billion. Other key points are as follows: • The broadened fund range includes 9 OEICs, of which 6 are in the top quartile of their sectors over the periods since launch. CF Miton Special Situations Portfolio reached its 10th anniversary at the end of 2007 and is ranked in the top decile of its sector over the 1, 3, 5 and 10 year periods and since launch. • Our Wealth Management operation trades under the iimia brand and continued to perform well; the acquisition of John K Miln strengthened our franchise in the south west. This business has now been successfully integrated. • Intelli Corporate Finance continued to trade profitably, despite very tough conditions for fund raising in the closed-end fund sector. I have already referred to the more difficult market conditions of 2007 and wehave inevitably felt the effect of reduced trading volumes and greater cautionfrom clients and this puts the results in perspective. The Board At the year end the Board comprised William Long, Nicholas Hamilton, BruceMcIntosh, Gordon Neilly, Michael Phillips, Scott Campbell and Martin Gray.Martin and Scott joined the Board at the time of the MitonOptimal merger. Wewere saddened at the death of Ronald Morgan and his valuable contribution andwise counsel will be greatly missed by his colleagues. As a consequence of the merger with Midas I joined the Board as non-executiveChairman; William Long remains as a non-executive director; Lord Wade, theformer Chairman of Midas became Deputy Chairman; Michael Phillips is ChiefExecutive of the new group; Simon Edwards, former CEO of Midas, is ManagingDirector of Fund Management; Gordon Neilly is Chairman of Intelli; ScottCampbell is Managing Director, International Fund Management. Adrian Collins hasjoined from Midas as an independent non-executive director and Nicholas Hamiltonremains as an independent non-executive director, and chairman of the AuditCommittee. Bruce McIntosh and Martin Gray stepped down from the Board on completion of theMidas deal. I should like to thank them for their contribution to the Group asdirectors and I am glad to say that both are remaining with the Group in seniorroles. Roger Bennett has succeeded Clive Warburton as Company Secretary. Dividend Policy I am very glad to say that the capital reconstruction in respect of ExeterInvestment Group (EIG) has now been completed, resulting in the holding companyhaving distributable reserves of £9.0 million as at 31 December 2007. Your Boarddeclared a maiden interim dividend of 2p per ordinary share in respect of theyear to 31 December 2007. This dividend will be paid on 20 March 2008 toshareholders on the share register as at 22 February 2008. It is the Board'sintention to pursue a progressive dividend policy going forward. Prospects for 2008 As referred to at the start of my Statement, I am very pleased to confirm thaton 6 March 2008 our shareholders gave approval to complete the merger withMidas, one of the fastest growing fund management businesses in the UK. Asdisclosed in the re-admission document to AIM the Group acquired 100% of theordinary shares of Midas for a consideration of £100 million satisfied by theissue of 27,500,129 new ordinary shares and a cash payment of £59 million. Thecash consideration has been funded by way of a placing of 7,000,000 shares of10p at £1.50 per share, existing Group cash resources and from new £40 millionborrowing facilities from Bank of Scotland. The Company changed its name toMidas Capital plc with effect from that date. With this merger we have created a leading multi-asset fund management businesswith £2.8 billion of Funds Under Management and Advice and one of the mostexperienced teams of fund managers operating in the multi-asset fund managementsector. With excellent long term investment performance across the productrange, we believe the merger positions us to take advantage of the growingdemand for reduced risk and multi-asset investment products. This confidence inthe investment products of the merged Group can be demonstrated by the Midasmanagement's commitment to reinvest a substantial proportion of the cashreceived from the transaction, at least £20 million, into these products. I would like to take this opportunity to welcome both the Midas shareholders whoon a combined basis represent approximately 48% of the enlarged Group, and thenew institutional investors who joined us as part of the financing of the dealby way of the placing. The immediate priority is to complete the integration of our fund managementbusinesses with as little interruption as possible to the process of generatingnet new funds. Given the skills available to us and the momentum that has come from theconstituent parts of the new Group, I view 2008 with confidence, subject alwaysto market conditions. To deliver the 2007 results, and prepare for 2008 required very heavy commitmentfrom all Directors and staff in the Group. On your behalf I should like to thankeveryone at all levels for the contribution they have made to the significantdevelopment of the Group. Colin RutherfordNon Executive Chairman Consolidated income statement for the year ended 31 December 2007 2007 2006 £'000 £'000 Revenue 13,431 12,360 Administrative expensesOther operating expenses (11,764) (10,399)IFRS2 share based payments (674) (204)Amortisation (256) (19)Exceptional operating expense 407 (717)Total administrative expenses (12,287) (11,339) Other operating income 254 523 Operating profit 1,398 1,544 Finance revenue 902 546Finance costs (13) (3)Profit from continuing operations before taxation 2,287 2,087 Taxation (735) (319) Profit for the year from continuing operationsafter taxation 1,552 1,768 Discontinued operationsProfit for the year from discontinued operations - 9,222 Profit for the year attributable to equityholders of the parent 1,552 10,990 pence pence Earnings per share- basic 9.09 71.86- diluted 8.84 69.04 Continuing earnings per share- basic 9.09 11.56- diluted 8.84 11.11 Consolidated statement of recognised income and expense for the year ended 31December 2007 2007 2006 £'000 £'000 Income and expense recognised directly in equityGains on valuation of available for salefinancial assets 7 9 Transfers to the income statementOn disposal or impairment of available-for-salefinancial assets (16) (353)Tax on items taken directly to or transferredfrom equity (98) 292 Net income recognised directly in equity (107) (52) Profit for the year 1,552 10,990 Total recognised income and expense for the yearattributable to equity holders of the parent 1,445 10,938 Consolidated balance sheet as at 31 December 2007 2007 2006 £'000 £'000 Non-current assetsIntangible assets 25,308 5,117Property and equipment 1,001 460Financial assets 464 566Deferred tax assets 346 342 27,119 6,485Current assets Trade and other receivables 3,371 2,078Income tax receivables 419 170Financial assets - 72Cash and cash equivalents 16,412 17,270 20,202 19,590 Current liabilities Trade and other payables 2,656 1,952Financial liabilities 301 -Income tax payable 1,094 159Provisions - 607 4,051 2,718 Net current assets 16,151 16,872 Total assets less current liabilities 43,270 23,357 Non current liabilitiesFinancial liabilities 887 -Deferred tax liabilities 1,594 - 2,481 - Net assets 40,789 23,357 EquityShare capital 2,282 1,569Share premium 890 416Treasury shares (294) (294)Merger reserve 25,391 11,265Retained earnings 12,520 10,395Revaluation reserve - 6 Total equity 40,789 23,357 Consolidated cash flow statement for the year ended 31December 2007 31 December 31 December 2007 2006 £'000 £'000 Operating activities Profit for the year 1,552 10,990 Adjustments to reconcile operating profit to netcash flow from operating activities: Tax on continuing operations 735 319Gain (net of trading losses) on disposal ofdiscontinued operation - (9,222)Net finance revenue (889) (543)Depreciation 244 370Amortisation of intangible assets 256 19Share based payments expense 674 251Increase in trade and other receivables (658) (524)(Decrease)/increase in trade and other payables (936) 288Profit on disposal of available for saleinvestments (7) (454)Movement in provisions (607) - Profit on disposal of held for trading assets (106) - Fair value movements in investments at fair valuethrough profit or loss (132) (69)Cash generated from operations 126 1,425Income tax paid (150) (20) Net cash flow from operating activities (24) 1,405 Investing activitiesInterest received 902 570Purchase of property and equipment (180) (171)Purchase of intangible assets (208) - Purchase of investments - (975)Settlement of loans and receivables 150 - Proceeds from disposal of investments 268 1,995Proceeds from disposal of subsidiaries, net of cashand costs of disposal - 9,980Purchase of subsidiaries, net of cash and costsof acquisition (2,269) - Net cash flow from investing activities (1,337) 11,399 Financing activitiesProceeds from share issue 516 339Interest paid (13) (3) Net cash flow from financing activities 503 336 Increase in cash and cash equivalents (858) 13,140Cash and cash equivalents at the beginning of theyear 17,270 4,130Cash and cash equivalents at the year end 16,412 17,270 Notes 1. The financial information set out above does not constitute the Group's statutory accounts for the year ended 31 December 2007. 2. Change in accounting policy. This is the first year in which the Group has prepared its financial statements under IFRS and the comparatives have been restated from UK Generally Accepted Accounting Practice (UK GAAP) to comply with IFRS. The Group issued a press release on 29 June 2007 incorporating its preliminary IFRS financial statements for 2006 and the reconciliations to IFRS from the previously published UK GAAP financial statements 3. The statutory accounts for 2007 contain an unqualified audit report and will be delivered to the Registrar of Companies following the Company's Annual General Meeting which will be held at the offices of Taylor Wessing, Carmelite, 50 Victoria Embankment, Blackfriars, London EC4Y 0DX on Thursday 22 May 2008 at 1400 hours. The statutory accounts for the period to 31 December 2006 contained an unqualified audit report and have been delivered to the Registrar of Companies. The registered office address is 23 Cathedral Yard, Exeter EX1 1HB. 4. Copies of the annual report and accounts will be published on the group's website and posted to shareholders in April 2008 and will be available to the public at the registered office at the same time. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
MGR.L