29th Sep 2009 16:17
29 September 2009
MERCHANT HOUSE GROUP PLC
Interim results for the six months ended 30 June 2009
Chairman's statement
I am pleased to report on the first six months of 2009 which has seen a significant increase in Group revenues over the period, more than doubling revenues achieved in the whole of 2008, and a modest reduction in the Group's loss over the period compared with the same period a year ago.
During the period under review and as reported in June, our private client broking team was established and raised funds for a corporate recovery bond. Work on this continues and the Directors remain of the view that the current economic environment is well suited to a strategy of the bond investing in basically sound companies, usually with turnover in excess of £10m. They will also have a strong management, a history of positive cash flow or profits and significant assets but with short term cash flow or trading difficulties due to the current credit crunch. A large number of potential opportunities are under review and shareholders will be updated in due course. We have currently raised £891,000 for the corporate recovery bond and will shortly launch our capital protected bond.
During the period under review, Merchant Capital, our wholly owned FSA regulated subsidiary, started corporate broking activities. The company has made some solid progress here and now has four companies to which it is AIM broker and a number of other companies to which it is mandated to provide advice and fundraising services. I am pleased to report that Merchant Capital advised on a successful fundraising shortly after the end of the period under review which resulted in a fundraising of £1.11m for the client. Other fundraisings for clients are under way.
Throughout 2009, the company has been working to develop a fund administration business and a low risk joint venture foreign exchange trading capacity. I am pleased to report that teams have recently been recruited, business plans drawn up and implementation is virtually complete. Shareholders will be updated as these new business streams develop. Discussions are ongoing with a number of potential fund clients and the first one, a Spanish fund, has been signed up.
I have reported for sometime now that the Group has been in a transitional phase as it repositioned and re-launched itself. Whilst the market and hence prospects remain uncertain and cash flow continues to be monitored and managed carefully, the Group is now moving to the next stage of its development and I look forward to updating shareholders further in the months ahead on the new business streams and the opportunities before us including possible acquisition opportunities using the paper of the company. As part of this process, we expect to be making key appointments in the near future and in the meantime, I would like to thank the team for continuing progress to date.
Martin Eberhardt
Chairman
29 September 2009
Enquiries:
Merchant House Group Plc
Martin Eberhardt
Tel: 020 7332 2200
Shore Capital and Corporate LimitedPascal Keane
Tel: 020 7408 4090
MERCHANT HOUSE GROUP PLC
UNAUDITED CONSOLIDATED INCOME STATEMENT
For the six month period ended 30 June 2009
|
Note |
Six month period ended 30 June 2009 (Unaudited) £ |
Six month period ended 30 June 2008 (Unaudited) £ |
Year ended 31 December 2008 (Audited) £ |
|||
|
Revenue |
95,493 |
7,000 |
41,668 |
|||
|
Purchase of shares for proprietary trading |
- |
- |
- |
|||
|
Cost of sales |
(31,008) |
(2,492) |
(42,143) |
|||
|
Gross Profit/(Loss) |
64,485 |
4,508 |
(475) |
|||
|
Administrative expenses |
(562,979) |
(322,168) |
(671,814) |
|||
|
Loss on disposal of associate |
- |
(65,821) |
(137,822) |
|||
|
Impairment of Associate |
(10,799) |
- |
(67,492) |
|||
|
Impairment of intangible assets |
- |
- |
(88,496) |
|||
|
Other operating income |
16,969 |
10,621 |
27,770 |
|||
|
Realised gains/(losses) on current asset investments |
- |
(11,287) |
(11,287) |
|||
|
Unrealised gains/(losses) on current asset investments |
2,210 |
(10,180) |
(41,040) |
|||
|
Loss from operations |
(490,114) |
(394,327) |
(990,656) |
|||
|
Share of operating loss in associate |
- |
(129,114) |
(107,222) |
|||
|
Finance expense |
2 |
(6,435) |
(14,401) |
(27,170) |
||
|
Investment income |
241 |
1,424 |
11,176 |
|||
|
Loss Before Taxation |
(496,308) |
(536,418) |
(1,113,872) |
|||
|
Income tax expense |
3 |
- |
- |
- |
||
|
Loss for the financial period |
(496,308) |
(536,418) |
(1,113,872) |
|||
|
Loss per share (pence) |
4 |
(0.46)p |
(0.67)p |
(1.28)p |
||
|
Diluted loss per share (pence) |
4 |
(0.16)p |
(0.27)p |
(0.39)p |
The Group has no recognised gains or losses other than the results for the period as set out above.
MERCHANT HOUSE GROUP PLC
UNAUDITED CONSOLIDATED BALANCE SHEET
|
Note |
As at 30 June 2009 (Unaudited) £ |
As at 30 June 2008 (Unaudited) £ |
As at 31 December 2008(Audited) £ |
|||
|
ASSETS |
||||||
|
Non Current Assets |
||||||
|
Property, plant and equipment |
2,068 |
4,706 |
3,461 |
|||
|
Investment in associate undertaking |
- |
27,613 |
- |
|||
|
2,068 |
32,319 |
3,461 |
||||
|
Receivables falling due after one year |
- |
50,000 |
- |
|||
|
Current Assets |
||||||
|
Trade and other receivables |
172,262 |
176,371 |
89,517 |
|||
|
Cash and cash equivalents |
11,554 |
78,650 |
97,783 |
|||
|
Investments |
12,310 |
40,960 |
10,100 |
|||
|
Total current assets |
196,126 |
295,981 |
197,400 |
|||
|
TOTAL ASSETS |
198,194 |
378,300 |
200,861 |
|||
|
EQUITY AND LIABILITIES |
||||||
|
Current Liabilities: Trade and other payables |
893,228 |
278,963 |
399,587 |
|||
|
Bank overdraft |
- |
32,603 |
- |
|||
|
893,228 |
311,566 |
399,587 |
||||
|
Non current liabilities: Convertible loans |
427,090 |
432,926 |
419,654 |
|||
|
1,320,318 |
744,492 |
819,241 |
||||
|
Equity and Reserves |
||||||
|
Called up share capital |
539,350 |
407,233 |
539,350 |
|||
|
Convertible loan notes |
40,910 |
35,074 |
48,346 |
|||
|
Share premium |
1,005,924 |
826,047 |
1,005,924 |
|||
|
Retained Earnings |
(2,708,308) |
(1,634,546) |
(2,212,000) |
|||
|
Total Equity |
(1,122,124) |
(366,192) |
(618,380) |
|||
|
TOTAL LIABILITIES |
198,194 |
378,300 |
200,861 |
MERCHANT HOUSE GROUP PLC
UNAUDITED STATEMENT OF CHANGES IN EQUITY
for the six month period 30 June 2009
|
|
|
Convertible Loan Note
£
|
|
Share
Capital
£
|
|
Share
Premium
£
|
|
Profit and
Loss
£
|
|
Total
£
|
|
|
Balance at 1 January 2009
|
48,346
|
|
539,350
|
|
1,005,924
|
|
(2,212,000)
|
|
(618,380)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share issue
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Movement in equity
|
(7,436)
|
|
-
|
|
-
|
|
-
|
|
(7,436)
|
|
|
Loss for the period
|
-
|
|
-
|
|
-
|
|
(496,308)
|
|
(496,308)
|
|
|
Balance at 30 June 2009
|
40,910
|
|
539,350
|
|
1,005,924
|
|
(2,708,308)
|
|
(1,112,124)
|
MERCHANT HOUSE GROUP PLC
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
for the six month period 30 June 2009
|
Six month period ended 30 June 2009 (Unaudited) £ |
Six month period ended 30 June 2008(Unaudited) £ |
Year ended 31 December 2008 (Audited) £ |
||||
|
Reconciliation of operating loss to net cash (outflow) from operating activities |
||||||
|
Operating loss |
(490,114) |
(394,327) |
(990,656) |
|||
|
Associated company losses written off |
- |
(139,666) |
(139,666) |
|||
|
(Increase) / Decrease in trade & other receivables |
(82,745) |
15,590 |
152,442 |
|||
|
Increase / (Decrease) in trade & other payables |
493,903 |
(17,049) |
92,514 |
|||
|
Depreciation |
1,393 |
3,777 |
6,589 |
|||
|
Impairment of associate |
10,799 |
- |
49,505 |
|||
|
Impairment of intangible assets |
- |
- |
88,496 |
|||
|
Realised loss |
- |
11,287 |
11,287 |
|||
|
Unrealised (gain)/loss |
(2,210) |
10,180 |
41,040 |
|||
|
Net cash outflow from operating activities |
(68,974) |
(510,208) |
(688,449) |
|||
|
Investing |
||||||
|
Investing Activities |
||||||
|
Interest received |
241 |
1,424 |
11,176 |
|||
|
Purchase of investments |
- |
(260,400) |
(260,400) |
|||
|
Sales of investments |
- |
234,598 |
234,598 |
|||
|
Purchase of plant & equipment |
- |
- |
(1,566) |
|||
|
Investment in associate |
- |
51 |
(51) |
|||
|
Net cash (outflow)/ inflow from investing activities |
241 |
(24,327) |
16,141 |
|||
MERCHANT HOUSE GROUP PLC
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
for the six month period 30 June 2009
|
Financing activities |
||||||
|
Proceeds from share issue |
- |
460,158 |
683,656 |
|||
|
Increase/(decrease) in bank overdraft |
- |
32,602 |
- |
|||
|
Interest paid |
(6,435) |
(14,401) |
(27,170) |
|||
|
Net cash inflow from financing activities |
(6,435) |
478,359 |
656,486 |
|||
|
Decrease in cash & cash equivalents |
(75,168) |
(56,176) |
(48,104) |
|||
|
Reconciliation of net cash flow to movement in net debt |
||||||
|
Decrease in cash in the period |
(75,168) |
(56,176) |
(48,104) |
|||
|
Movement in year |
(75,168) |
(56,176) |
(48,104) |
|||
|
Net debt brought forward |
(381,278) |
(333,174) |
(333,174) |
|||
|
Net debt carried forward |
(456,446) |
(389,350) |
(381,278) |
|||
|
Analysis of changes in net debt |
At 1 January 2009 £ |
Cashflows £ |
At 30 June 2009 £ |
||
|
Cash at bank and in hand |
87,017 |
(75,168) |
11,799 |
||
|
Cash held in stockbroker's client accounts |
(245) |
- |
(245) |
||
|
Cash and cash equivalents |
86,722 |
(75,168) |
11,554 |
||
|
Debt due after one year: |
|||||
|
Secured loan notes |
(408,000) |
- |
(408,000) |
||
|
Unsecured loan notes |
(60,000) |
- |
(60,000) |
||
|
(381,278) |
(75,168) |
(456,446) |
|||
MERCHANT HOUSE GROUP PLC
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
For the six month period ended 30 June 2009
1. Accounting policies
Basis of accounting
The interim results have been prepared in accordance with International Accounting Standards 34 "Interim Financial Reporting".
The annual financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs).
The interim results have been prepared on the historical cost basis except that certain financial instruments are accounted for at fair values. The same principal accounting policies and methods of computation have been followed in the interim results as compared with the Group's 2008 Financial Statements.
Going concern
The financial statements have been prepared on a going concern basis, which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business. The group incurred a loss of £496,308 for the period ended 30 June 2009.
The financial statements have been prepared on a going concern basis because the directors believe it is appropriate to prepare the financial report on this basis based upon the company's business plan, its trading prospects and the financial support provided by Liberty Capital, an investor in the Company. The directors believe that the fund raisings referred to in the Chairman's statement will provide sufficient funds for the company to continue its operations for at least the next twelve months.
2. Loan Interest
Loan interest is payable on secured and unsecured convertible loan notes 2010, at a floating rate of 100 basis points above Barclays Bank Plc base rate.
3. Taxation
No provision for corporation tax has been provided for, due to tax losses incurred in the current and previous periods.
4. Loss per Share
|
|
30 June 2009
|
|
30 June 2008
|
|
31 December 2008
|
|
Loss per ordinary share (pence)
|
(0.46)p
|
|
(0.67)p
|
|
(1.28)p
|
|
|
|
|
|
|
|
|
Diluted loss per ordinary share (pence)
|
(0.16)p
|
|
(0.27)p
|
|
(0.39)p
|
|
|
|
|
|
|
|
The loss per share has been calculated on the net basis on the group deficit excluding associate for the period ended 30 June 2009, after taxation, of £(496,308) (June 2008: £(536,418), December 2008: (£1,113,872) using the weighted average number of ordinary shares in issue of 107,870,148 (June 2008: 80,033,413, December 2008: 86,870,886).
Diluted earnings per share have been calculated using the weighted average number of ordinary shares in issue, diluted for the effect of share options, loan conversion rights and warrants. There were unexercised loan conversion rights and warrants on 200,066,667 shares in existence at the period end (June 2008: 115,275,871, December 2008: 200,066,667).
5. Related party transactions
During the period ended 30 June 2009, M Eberhardt was also a director of Hollywood Media Services Plc, and Merchant Corporate Recovery Plc.
During the period ended 30 June 2009, J Holmes was also a director of Ricen B Plc (formerly Stokewell Ventures Plc), Hollywood Media Services Plc, Merchant Corporate Recovery Plc, Merchant House Finance Ltd and Microcap Equities Plc.
At the period end current asset investments held by the company include the following at market value:
|
30 June2009 £ |
30 June2008 £ |
31 December2008 £ |
|||
|
Microcap Equities Plc |
7,310 |
21,250 |
5,100 |
||
During the period ended 30 June 2009 transactions took place as follows:
|
|
Sales (Gross) 30 June 2009
£
|
Sales included in debtors at 30 June 2009
£
|
Sales (Gross) 30 June 2008
£
|
Sales included in debtors at 30 June 2008
£
|
Sales (Gross) December
2008
£
|
Sales included in debtors at December
2008
£
|
|
Ricen B Plc
|
-
|
-
|
-
|
61,746
|
-
|
61,746
|
|
Catering 4 Events Group Plc
|
387
|
387
|
-
|
-
|
387
|
387
|
|
Hollywood Media Services Plc
|
20,022
|
12,653
|
-
|
1,175
|
5,569
|
5,569
|
|
Merchant Corporate Recovery Plc
|
11,500
|
1,500
|
-
|
-
|
-
|
-
|
|
Merchant House Finance Ltd
|
3,605
|
-
|
3,605
|
3,605
|
17,988
|
-
|
Merchant House Finance Ltd and Merchant Corporate Recovery Plc are associate companies.
During the period ended 30 June 2009, Merchant House Group Plc received £162,000 (June 2008: £27,900, December 2008: £55,800) in management fees from Merchant Capital Limited, a wholly owned subsidiary. At the period end the balance owed by Merchant Capital Ltd was £13,181 (at 30 June 2008 it owed Merchant Capital Ltd: £31,657, December 2008: £Nil).
During the period ended 30 June 2009 and at 31 December 2008, J Holmes was also a Director of and owned 100% of the issued shares in Stokewell Limited, which is the holder of £150,000 secured convertible loan notes and also holds Warrants over the Company's Ordinary Shares.
6. Post Balance Sheet Event
At the Company's General Meeting held on 21 August 2008 all resolutions were passed in connection with the proposed reorganisation of its share capital contained in the circular sent to shareholders on 28 July 2009 which included, inter alia, the sub-division of the Company's ordinary share capital the effect of which was to sub-divide each ordinary share of 0.5p each into 1 new Ordinary Share of 0.01p each and 1 deferred share of 0.49p each.
On 28 August 2009 the Company issued 30,000,000 new Ordinary 0.01p shares at a price of 0.25p per share, in respect of third party creditor settlements.
Related Shares:
MHG.L