Final results for the year ended 31 March 2014

News Release 01 September 2014

AVARAE GLOBAL COINS PLC

FINAL RESULTS FOR THE YEAR ENDED 31 MARCH 2014

Avarae Global Coins plc ("Avarae" or the "Company"), the UK's only publicly traded specialist company dedicated to purchasing, holding and selling rare and high quality coins, is pleased to announce its final audited results for the year ended 31 March 2014.

Highlights for the year:

· Sales of £1.6 million (2013: £1.1 million);

· Profit on ordinary activities of £0.3 million (2013: £0.4 million);

· Recommended full year dividend of 0.15 pence per share (2013: 0.18 pence);

· Carrying value of portfolio of rare and high quality coins of £10.6 million (2013: £10.9 million);

· NAV per share increased for the 8th year in succession to 14.5 pence (2013: 14.4 pence).

Commenting on the results, Diane Clarke, Director of Avarae, said:

"With worldwide economies now emerging from the financial crisis of 2008, Avarae remains well positioned as an alternative asset investment. Where other alternative asset plays have suffered as a result of the downturn and the reduction in available investment capital, Avarae has continued upwards, posting ever-increasing net asset values and paying regular dividends. The Company has a strong balance sheet with a healthy cash position and no debt. The Directors, therefore, remain optimistic about the Company's future prospects."

The Company's audited report and accounts, together with the notice of the AGM, will today be posted to shareholders. An electronic copy of the audited report and accounts will also shortly be available on the Company's website: www.avarae.com.

For further information on Avarae Global Coins plc, please contact:

Directors' Report

Introduction

We are pleased to present the annual report for the year ended 31 March 2014. During the year under review, the Company continued to manage its portfolio of rare and high quality coins.

Avarae Global Coins plc ("Avarae" or the "Company") provides access for institutional investors and individuals wanting to diversify their investment portfolios away from the traditional asset classes such as equities, property and bonds without the need to be an expert in the coin-collecting sector.

The principal objective of the Company, which has not changed since its admission to AIM ("Admission") in 2006, is to achieve capital growth for its shareholders through the purchase, holding and sale of the rarest and highest quality segment of the coin-collecting sector in various countries around the world.

Investing policy

Since Admission we have built up an impressive portfolio of extremely high quality, rare coins which we intend to hold both for the long-term, i.e. 3 to 5 years, in order to achieve capital growth for our shareholders, and also the short-term, in order to take advantage of short-term trading opportunities, as the market for rare coins continues to grow. The value of each investment ranges from a few hundred pounds up to many hundreds of thousands of pounds. The most expensive coin acquired by Avarae to date is the Edward III Double Florin which was acquired for £0.4 million in 2006. The Double Florin is on display at the Fitzwilliam Museum in Cambridge.

The Board's decision on whether to acquire or dispose of a coin or coin collection is made on the recommendation of its industry expert independent Advisory Panel ("Panel") that assesses and approves all coin trading related activities. The Panel members are Sir John Wheeler and Clement Chambers, both of whom have significant expertise in the field of numismatics.

A principal objective of the Company is to achieve long-term capital growth through the appreciation in value of the coins acquired. Compound annual returns potentially achievable over the medium to long-term for the highest quality and rarest coins are expected to be around 10 per cent, which is in line with historical averages. As at the date of this report, and since its formation in 2006, the Company has no borrowings and has no present intention of securing any borrowings.

The coin-dealing sector

The market for trading coins is international in nature and significant in size. For at least the last 10 years, there has been an increasing interest in the coin sector and its prominence as an alternative investment class is illustrated by continued increases in activity around the world, where record prices have been paid for certain rare pieces. The number of interested parties in coins and coin collections appears to be continuing to grow, with auction houses reporting significant growth in the numbers of interested bidders compared to the corresponding auctions in previous years.

Activity in the rare coin market has remained positive in the year to 31 March 2014, although one needs to possess the necessary expertise in identifying which sectors are most appropriate for investment. English, Roman and Indian coins continue to show robust healthy growth, whereas the Chinese sector remains broadly flat. The numismatic industry continues to witness an influx of new buyers looking for tangible assets and fresh areas to place their money as traditional asset classes fail to deliver robust financial gains and exhibit high volatility. The majority of the funds coming into the numismatic market are targeting the higher quality coin rarities and this is adding considerable pressure on availability. A number of important coins and coin collections have come up for sale worldwide with auction houses continuing to achieve record prices, particularly for the highest quality rare pieces.

Avarae's investments

Purchases

In the year to 31 March 2014, the Company acquired £0.63 million worth of coins (2013: £1.2 million), resulting in the value of the coin portfolio as at 31 March 2014 being £10.62 million (2013: £10.93 million). This reduction in purchase value is a symptom of the lack of available high quality pieces rather than any change in strategy. In line with its investment strategy, the Company has focused on the purchase of only the highest quality and rarest coins. In particular, during the year, the Company increased its exposure to English and Islamic coins.

Examples of coins acquired during the year include:

· A very rare J Edward The Black Prince, Hardi d'Or; La Rochelle Mint, half-length figure of Prince standing facing, sword in his right hand, left hand pointing, fillet of roses in hair. We believe to be a very high quality and rare piece;

· A very rare Edward III, Guyennois d'Or, La Rochelle; third type, King walking right under portico, two lions below, Mint letter R on top of right column;

· Edward VII (1901-10), Satin Finish Proof Sovereign, 1908 C, Ottawa, Canada Mint, engraved by George William De Saulles, bare head facing right. Extremely rare with an estimated mintage of only 636 pieces;

· One of the finest, if not the finest known, Queen Mary of England, 1553 excessively rare, Ship Ryal in superb condition; and

· A beautiful and rare Charles I, 1642 Triple Unite from the famous Bridgewater House sale in 1972.

Sales

The highlight for the period under review was the sale of £0.9 million of Roman gold coins sold at auction in the USA in January 2014. This generated a healthy 23 per cent, gross margin over its March 2013 carrying value of £0.7 million. The balance of revenue was made up in a large part from sales of our holding of European coins, which we felt had reached maturity.

During the year, the Company also continued its efforts to rebalance the portfolio, liquidating some of the lower value items and inferior duplicates previously acquired as part of important collections. This process is ongoing and we expect to generate several hundred thousand pounds of sales during the current financial year as a result of this exercise. We ended the period under review with less than 1,100 coins, a reduction from almost 1,200 at the beginning of the period.

English milled and hammered coins represent the largest segment of the Company's portfolio, with holdings of Islamic and Indian coins also representing significant proportions of the stock. Other sectors where Avarae holds coins of notable value includes USA and South American coins. In total, Avarae holds coins from more than 50 different regions and nationalities, demonstrating its genuine global exposure.

Avarae's current intention is to hold the vast majority of its current portfolio for the foreseeable future and only make disposals of coins or collections when the Board believes it to be in the best interests of the Company and its shareholders.

Financial results

Revenue from the sale of coins or coin collections for the year ended 31 March 2014 was £1.6 million, up on the previous year's total of £1.1 million.

As at 31 March 2014, in line with our long term policy, the Company instructed industry experts to undertake a detailed revaluation of its coin portfolio. This exercise is intended to apportion changes in the value of coins over the period of their ownership by Avarae rather than allocating profits (or losses) in the year of sale only. The Company's gross profit is calculated as the difference between the sale price of each coin less its carrying value brought forward, which will either be cost or the revalued amount. The industry experts considered the open market resale value of only those coins that had been held within the Company's portfolio for more than 12 months, i.e. only those coins acquired and held by Avarae on or before 31 March 2013 and excluded those purchased during the financial year under review, which were held at cost. In each of the years since the Company's inception, the Company has recorded a gross profit, thereby demonstrating the validity of the revaluation exercise.

The result of the extensive revaluation exercise carried out on the coins as described in the accounting policies, which the Directors believe to have been particularly conservative this year, was that the overall carrying value of the portfolio as at 31 March 2014 has decreased to £10.62 million (2013: £10.93 million). The primary factor in this reduction was that we added only £0.6 million of coins to the portfolio, whereas we sold coins with a brought forward carrying value of approximately £1.3 million. The Directors would expect coins from the portfolio to achieve appreciably higher returns if sold at auction, as demonstrated by the 23 per cent. increase in carrying value achieved on the sale of Roman gold coins in January 2014.

The result of the revaluation exercise at 31 March 2014 is that, as at that date, the Company's coin portfolio comprised of coins purchased at cost for an aggregate £8.21 million (2013: £8.59 million) and a revaluation amount of £2.41 million (net of VAT payable on sale) (2013: £2.34 million).

The effect of the revaluation, together with the profits from the coin sales, resulted in the Company recording a gross profit of £0.66 million (2013: £0.71 million). Administrative expenses during the year were £0.41 million (2013: £0.36 million). Net profit for the year of £0.25 million (2013: £0.36 million), delivered earnings per share of 0.31p (2013: 0.44p).

The Company ended the year with a net cash balance of approximately £0.2 million compared to £0.4 million reported at the end of March 2013. This was largely due to trade receivables being £1.7 million at the year end, some £1.3 million higher than at the beginning of the year. A significant proportion of this balance has been received post year end.

The Company's cash is prudently managed across a spread of accounts, thereby reducing the risks of the creditworthiness of any one financial institution. At the date of this report, the Company's cash balances stood at approximately £0.8million.

During the year, investments of £0.63 million (2013: £1.2 million) were made in coins and coin collections. At year end, the Company had net assets of £11.74 million (2013: £11.63 million) and no borrowings. Net asset value per share ("NAV") as at 31 March 2014 again increased on the prior year to 14.5 pence (2013: 14.4 pence).

Dividend

Reflecting the Company's continued increase in its NAV year-on-year and the Board's cautiously optimistic outlook, the Board is pleased to recommend a full year dividend of 0.15 pence per share (2013: 0.18 pence per share), subject to shareholder approval to be sought at the Company's annual general meeting to be held on 13 October 2014. The dividend will be paid on or around 24 October 2014 to shareholders on the register on17 October 2014.

The dividend policy adopted by the Board is intended to be progressive and a dividend is expected to be declared on an annual basis. The level of the dividend will reflect the Company's reported profits over a three year period, thereby smoothing out any years of one-off profits (or losses). The policy will be to pay out approximately 1/3 of the average net profits reported over the most recent three year period. For the year ended 31 March 2014, the level of the dividend will be approximately £0.12 million (2013: £0.15 million).

Outlook

With worldwide economies now emerging from the financial crisis of 2008, Avarae remains well positioned as an alternative asset investment. Where other alternative asset plays have suffered as a result of the downturn and the reduction in available investment capital, Avarae has continued upwards, posting ever-increasing net asset values and paying regular dividends. The Company has a strong balance sheet with a healthy cash position and no debt. The Directors, therefore, remain optimistic about the Company's future prospects.

Statement of Comprehensive Income for the year ended 31 March 2014

Cash Flow Statement for the year ended 31 March 2014

Statement of Changes in Equity for the year ended 31 March 2014

Notes to the audited results for the year ended 31 March 2013

(1) Accounting policies

Revenue recognition

The Company's sales consist of sales of individual coins or collections of coins and are accounted for on an accruals basis.

Finance income is accounted for on a received basis.

(2) Segmental information

The Company has one class of business, that of the sale of antiquarian and collectable coins. All sales have been through dealers based in the single geographic segment of the United Kingdom. Accordingly no further segmental information is presented.

(3) Taxation

The Company is resident for tax purposes in the Isle of Man.

The Company is chargeable to Isle of Man corporate income tax at the standard rate of 0%, which took effect from 6 April 2006.

(4) Earnings per share

The retained earnings per share (basic and diluted) for the year ended 31 March 2014 was 0.31p (2013: 0.44p). The calculation of earnings per share is based on the profit of £253,000 (2013: £355,000) for the year and the weighted average number of shares in issue being 80,783,334 (2013: 80,783,334).

(5) Coin inventory

At the year end, only those coins that had been acquired by the Company before 31 March 2013 were revalued by industry experts to their expected current market value less the VAT payable on sale. Inventory purchased during the year ended 31 March 2014 has been carried at cost. This is considered by the directors to give a fair value for the inventory. Inventory of £10,620,470 (2013: £10,926,000) is carried as 'Inventory carried at fair value less costs to sell'. The purchase cost of inventory held at 31 March 2014 was £8,214,761 (2013: £8,586,152).

IFRS 13, Fair Value Measurement, requires disclosure about fair value measurements. The coin inventory revaluation is a fair value adjustment to revalue coins to their expected current market value less VAT payable on sale. It is a level 2 fair value adjustment, as it is a valuation technique where all significant inputs are directly or indirectly observable from market data, as the revaluation is based on sales of similar coins in the market.

(6) Trade and other receivables

Trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts.

(7) Payables

All creditors are due within one year.

(8) Share capital

(9) Dividends

Reflecting the Company's continued increase in its NAV year-on-year and the Board's cautiously optimistic outlook, the Board is pleased to recommend a full year dividend of 0.15 pence per share (2013: 0.18 pence per share), subject to shareholder approval to be sought at the Company's annual general meeting to be held on 13 October 2014. The dividend will be paid on or around 24 October 2014 to shareholders on the register on 17 October 2014.

The dividend policy adopted by the Board is intended to be progressive and a dividend is expected to be declared on an annual basis. The level of the dividend will reflect the Company's reported profits over a three year period, thereby smoothing out any years of one-off profits (or losses). The policy will be to pay out approximately 1/3 of the average net profits reported over the most recent three year period. For the year ended 31 March 2014, the level of the dividend will be approximately £0.12 million (2013: £0.15 million) or 0.15 pence per share (2013: 0.18 pence per share).