8th Mar 2006 07:04
Golden Prospect PLC08 March 2006 GOLDEN PROSPECT PLC ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 31 DECEMBER 2005 Golden Prospect plc (AIM: GOL), the natural resources investment bank, todayannounces its final results for the 12 months ended 31 December 2005. Highlights • Profit before tax: £9,575,559 up 113% (2004: £4,490,664) • Gross profits: £13,643,750 up 181% (2004: £4,860,240), comprising £3.0 million from Investment Banking activities, £3.5 million from the Managed Portfolio and £7.1 million arising from the realisation of longer term investments in the Strategic Portfolio. • Basic EPS of 6.21p up 73% (2004: 3.59p) • Shareholders' equity plus unrealised gains: approximately £48.5 million up 21% (2004: £40.0 million), comprising £31.4 million of shareholders' equity (2004: £25.4 million) and £17.1 million of unrealised gains (2004: £14.6 million). • Final dividend of 0.75p making 1.25p for full year (2004: nil) Enquiries Malcolm Burne Tel: 020 7395 1930ChairmanGolden Prospect plc Tom Gaffney Tel: 020 7776 6400Chief Executive OfficerGolden Prospect plc Cathy Malins & Annabel Leather Tel: 020 7493 3713Parkgreen Communications Further information on Golden Prospect plc: Further information on Golden Prospect is available on the Company's website:www.goldenprospectplc.com Chairman's Statement Dear Shareholders The Board is pleased to report that the Group's profit before tax for the 12months ended 31 December 2005 more than doubled to a record £9,575,559 (2004:£4,490,664). Basic earnings per share were up 73% to 6.21p from 3.59p. The Group's gross profits increased 181% to £13,643,750 from £4,860,240.Investment Banking activities, through Ambrian Partners, and the activelyManaged Portfolio accounted for approximately 22% and 26% of gross profits,respectively. Profits from the Strategic Portfolio accounted for approximately52% of the Group's gross profits. The Group's shareholders' equity increased by 24% during 2005 to £31.4 million(2004: £25.4 million), of which £26.9 million was represented by listedinvestments and cash. The market value of listed investments at 31 December 2005was approximately £39.7 million (2004: £35.0 million) including unrealised gainsof £17.1 million. The Group's net cash position at 31 December 2005 stood at£4.3 million (2004: £2.4 million). Dividend The Board has pleasure in declaring payment of a final dividend of 0.75p pershare, making a total of 1.25p for the full year (2004: nil). The dividend willbe payable on 28 April 2006 to all shareholders on the register as at 17 March2006. Operational Review Golden Prospect ("GP") continues to enjoy favourable market conditions in thenatural resource sector and all activities within the Group witnessed stronggrowth. GP's outstanding success reflects the swift integration of AmbrianPartners, which has transformed the Group into a leading investment bank withinthe resources industry. Our Strategic Portfolio benefits from our ability to identify, analyse andrespond quickly to opportunities to fund equity investments. We focus ourinvestment strategy on companies that have well-defined projects that are in, ornear to, production. Sometimes we appoint directors to the boards of companiesin which we invest. This ability to make such principal investments vastlyimproves Ambrian Partners' competitive position. Our intention is that many ofthe companies in which GP invests will also be companies with which AmbrianPartners will have an investment banking relationship. Turning to our actively Managed Portfolio, assets are geographically allocatedand based on a bottom-up approach focused on specific stock selection.Investment opportunities are sourced from an extensive network of contactsthroughout the world, which has been built up over many years. The ManagedPortfolio also benefits from our strategic partnership with Minesite.com, whichhas over 250 junior/mid-tier exploration and mining companies subscribing to itsresearch and market news services. Cross fertilisation of ideas has provided uswith a number of profitable research driven strategies. Our Group's in-depth knowledge of the resources sector has led to many newcorporate clients seeking to retain Ambrian Partners' services as FinancialAdviser, Nominated Adviser (NOMAD) and/or Corporate Broker. Ambrian Partners iscurrently retained by 29 corporate clients. Last year Ambrian Partners wasinvolved in 16 equity offerings (including six AIM initial public offerings)that raised over £100 million. Obtaining approval to act as a NOMAD for AIM bythe London Stock Exchange was an important milestone for Ambrian Partnersfollowing its earlier FSA Category "A" authorisation. The brokerage division isalso building a strong reputation for quality research. During the last yearresearch coverage was broadened to include the renewable energy sector, softcommodities and environmental technologies. The pipeline of transactions for2006 is strong and includes initial public offering mandates for companiesactive in these new and exciting areas. As a logical extension to the investment banking activities, Ambrian CommoditiesLimited has applied to become a Category 4 Associate Broker Member of the LondonMetal Exchange ("LME"). The LME is the world's premier non-ferrous metalsmarket with highly liquid contracts, a world-wide reputation and turnover inexcess of US$3,000 billion per annum. With a new team of highly experiencedprofessionals it is intended to expand the client base to include specialist andnon-specialist investment funds that have become increasingly active in thecommodities market. With such professional experience being forged it becameobvious that a fund management division would augment the Group's potential andto this end Ambrian Asset Management Limited ("AAM") was formed and veryrecently obtained approval from the Financial Services Authority to manage andadvise on investments. We intend to launch an open-ended investment fund basedin Guernsey which will focus on the wider resources sector to include renewableenergy and soft commodities. AAM will also take full advantage of theexceptional track record that Golden Prospect's portfolio managers havedisplayed over recent years. In our September Interim Statement we covered comprehensively the reasons behindthe robust nature of the natural resources market and attempted to explain thecommodities boom. We continue to believe that the combination of high demandgrowth, under-investment in exploration and lack of major discoveries willcontinue to drive metals and minerals prices for some considerable time to come.Most leading industry sources remain extremely optimistic about the sustainedgrowth and opportunities in the overall natural resource sector. The UScommodity price index adjusted for CPI still suggests that commodity pricelevels are near to historic lows in real terms. The M&A rationalisation stageof the cycle has only just begun and the discovery phase of new deposits has yetto fuel market speculation. Healthy price corrections will occur from time totime but are perfectly normal in strong and sustainable bull markets. In summary, the Golden Prospect Ambrian Group stands at the centre of financingthe natural resource universe and is increasingly being recognised for itsabilities in this area, best reflected by the growing list of high qualityinstitutional shareholders joining the Group's share register. Moreover, wewere extremely encouraged by the appointment of Collins Stewart as our ownNominated Adviser and joint Corporate Broker with Ambrian Partners during theyear. This overall support is also in recognition that the Group has rapidlyshifted from an emphasis on net asset value to an earnings valuation so thatinvestment decisions can now be based on a price earnings multiple and otherrelevant fundamental factors. Moving forward, I am personally very excited by the sheer abundance of executivetalent within the Group, led by our visionary CEO, Tom Gaffney, who has built aprofessional team second to none. To capitalise further on this human resourcecapability the Board agreed to establish a new equity incentive plan for thereward and benefit of the Group's employees, whereby options will be granted toemployees to purchase Golden Prospect shares from an Employee Benefit Trust.The purpose of these share options is to closely align the interest of ouremployees with those of our shareholders. Finally, I would like to take this opportunity of thanking all our friends withwhom we network, our shareholders who share our vision, our employees for theircommitment and my fellow directors without whose vast experience the Group'saccelerated growth would not have been possible. Malcolm A BurneExecutive ChairmanAs reported on 7 March 2006 GOLDEN PROSPECT PLCCONSOLIDATED PROFIT AND LOSS ACCOUNTYear ended 31 December 2005 2005 2004 £ £ Turnover 32,517,783 10,117,214Cost of sales (18,874,033) (5,256,974) ------------ ----------Gross profit 13,643,750 4,860,240 Other operating income - dividends 52,999 101,444receivedAdministrative expenses (4,100,109) (1,182,774)Provision for impairment written back - 759,560 ------------ ------------Operating profit - continuing operations 9,596,640 4,538,470 Interest receivable 102,399 34,427Interest payable and similar charges (123,480) (82,233) ------------- -----------Profit on ordinary activities before 9,575,559 4,490,664taxation Tax on profit on ordinary activities (2,910,153) (1,139,968) ------------ ---------Profit for the financial year 6,665,406 3,350,696 ============ ========= Profit per ordinary share - basic 6.21p 3.59p - diluted 5.98p 3.32p CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2005 2005 2004 £ £ £ £ FIXED ASSETSIntangible assets 4,433,698 4,201,631Tangible assets 138,799 24,512Investments 589,682 465,560 ------------ ------------ 5,162,179 4,691,703CURRENT ASSETSDebtors: Amounts falling duewithin one year 1,629,836 539,506Investments 23,542,135 20,059,578Cash at bank and in hand 5,757,167 3,639,452 ------------- ------------ 30,929,138 24,238,536CREDITORS: Amounts fallingdue within one year (4,702,080) (3,558,466) ------------- -----------NET CURRENT ASSETS 26,227,058 20,680,070 ------------- ------------TOTAL ASSETS LESS CURRENTLIABILITIES 31,389,237 25,371,773 ============= ============ CAPITAL AND RESERVESCalled up share capital 10,726,121 10,726,121Share premium account 10,803,383 10,803,383Merger reserve 1,245,256 1,245,256Profit and loss account 8,726,113 2,597,013Employee benefit trust (111,636) - ------------- ------------EQUITY SHAREHOLDERS'FUNDS 31,389,237 25,371,773 ============= ============ CONSOLIDATED CASH FLOW STATEMENTYear ended 31 December 2005 2005 2004 £ £ £ £Net cash inflow/(outflow)from operating activities 5,485,019 (861,284) Returns on investments andservicing of financeInterest receivable 102,399 34,427Interest payable (123,480) (46,233) ---------- ---------Net cash (outflow) from returns oninvestment and servicing of finance (21,081) (11,806) Taxation (2,148,597) (901,862) Capital expenditure and financial investmentPayments to acquire intangible fixedassets (330,031) (66,839)Payments to acquire tangible fixed assets (148,132) (21,731)Payments to acquire fixed assetinvestments (124,122) (115,572)Sale of fixed asset investment - 1,157 -------------- ------------Net cash (outflow) from capitalexpenditure and financial investment (602,285) (202,985) AcquisitionsPayments to acquire subsidiary - (349,374)Bank and cash balances acquired withsubsidiary - 13,486 ------------ -----------Net cash (outflow) from acquisitions - (335,888) Equity Dividend paid (536,306) - ------------ ----------Net cash inflow/(outflow) before financing 2,176,750 (2,313,825) FinancingIssue of ordinary share capital - 3,612,500Expenses of share issues - (109,567)Bank loan - 1,500,000 ------------ -----------Net cash inflow fromfinancing - 5,002,933 ------------ ------------Increase in cash 2,176,750 2,689,108 ============ ============ NOTES 1. The financial information set out does not constitute statutory accountswithin the meaning of s.240 of the Companies Act 1985. 2. Earnings per share The calculation of the basic earnings per share is based on the earningsattributable to ordinary shareholders divided by the weighted average number ofshares in issue during the year. The calculation of diluted earnings per share is based on the basic earnings pershare adjusted to allow for the issue of shares on the assumed conversion of alldilutive options. Reconciliation of the earnings and weighted average number of shares in thecalculations are set out below. 2005 2004 Earnings Weighted Per Share Earnings Weighted Per Share average number average number £ of shares Amount £ of shares Amount (pence) (pence) Basic 6,665,406 107,261,208 6.21p 3,350,696 93,368,570 3.59pearnings pershare ======= ======= ======= =======Dilutive 4,076,700 7,526,215effect ofshare options ------------- -------------Diluted 6,665,406 111,337,908 5.98p 3,350,696 100,894,785 3.32pearnings pershare ======= ======= ======= ======= ======= ======= 3. Dividends 2005 2004 £ £ Paid - 0.5p per share 536,306 -Proposed - 0.75p per share 804,459 - ======== ===== This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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