21st Dec 2005 07:01
Corvus Capital Inc21 December 2005 21 DECEMBER 2005 CORVUS CAPITAL INC Interim results for the six month period ended 30 September 2005 SUMMARY • Profits are presented as returns from revenue and capital activities • Gross revenue and capital gain for the six month period ended 30 September 2005 of £3.4m • Total return of £2.0m • Basic return per share for the six months 0.76p, diluted return per share 0.68p Commenting, Graham Porter, Chairman of Corvus Capital Inc, said: "The Board will continue to monitor the performance of the Company's underlyingassets and remains alert to opportunities for making further investmentsconsistent with its investment strategy, acquiring interests in companies withconsiderable growth potential, each at varying stages of development." Enquiries: John Bick tel: 020 7451 9800 or m: 07917 649362 INTERIM STATEMENT INTRODUCTION I am delighted to present the results for the six month period ended 30September 2005 together with an update of events since the balance sheet date. RESULTS Corvus produced gross revenue and capital gain for the period of £3.4m and atotal return of £2.0m. Since the last financial year end Corvus hassuccessfully realised investments including its shareholdings in LodoreResources Inc. and Techpacific Capital Limited where, in aggregate, the Companyreceived net cash proceeds of £8.5m. As at 30 September 2005 there were 258.5m issued ordinary shares. INVESTMENTS STRATEGY The Company's strategy is to invest in companies with either of the twofollowing characteristics: • Companies with strong income generation or that have a proven or anticipated stable and cash-generating business • Companies at a relatively early stage of their development which focus on specific sectors and which either have or will seek a quotation on a recognised investment exchange or which have the potential to be acquired. Corvus's investment strategy is intended to be long-term although wherecircumstances arise where investments or companies acquired by the Company maybe floated in their own right, or disposed of at a suitable premium, such exitswill be considered, converting the investment into cash for onward investment.Corvus will continue to consider investments based predominately in Europe,North America and Asia although it may also look at investment opportunitiesoutside of these regions and across a wide range of sectors. In the medium term, leveraging the capital generated from its investmentstrategy, it is Corvus's intention to acquire, either as principal or inpartnership, a sizeable company which has a proven stable and strong cashgenerating business, which it believes has significant inherent value which isnot being realised by its incumbent management or reflected in its then marketvalue. INVESTMENT ACTIVITY I have already referred to the successful sale of our holdings in LodoreResources Inc. and Techpacific Capital Limited, both of which were referred toin our Annual Report. In that report I also provided a summary of otherinvestments and set out below an update of investment activity. Global Gaming Technologies plc ("GGT") completed the acquisition of Event DataCorrelation on 27 June 2005 and GGT's enlarged share capital was readmitted toAIM. Corvus currently holds 4.6 per cent of the issued share capital of GGT. Commoditrade Inc's shares were suspended from trading on AIM at 12.5p on 12 July2005 as the company confirmed that it was in negotiation with a potentialacquisition target. Commoditrade has subsequently announced that negotiationsare at an advanced stage to acquire a UK-based company engaged in the brokerageof commodities and derivatives. The company to be acquired is regulated by theFinancial Services Authority in the UK (the "FSA") and as such an applicationfor approval for change of controller has been submitted to the FSA. On 2 November 2005, Nanoscience Inc announced that it had completed theacquisition of Toumaz Technology Limited for £17.7 million settled through theissue of new shares. At the same time the company placed additional sharesraising £7.1 million before expenses. This acquisition follows the earlieracquisition of investments in AppliedSensor Sweden AB, and XRT Limited both ofwhich were referred to in our Annual Report. On 16 September Roeford Properties plc ("Roeford") announced its firstacquisition of a property trading asset, Lee Mill, a brown field site nearIvybridge, Devon with warehouses totalling 52,313 sq ft. for a total cashconsideration of £1.55 million. Roeford is a property company whose primaryobjective is to generate income and capital gains through a combination of theacquisition, financing and development of real estate and interests in realentities. On 5 December 2005, Gable Holdings Inc ("Gable") announced the proposedacquisition of Brown Duke AG together with a placing to raise £4.75 million.Gable is due to hold an Extraordinary General Meeting on 22 December 2005 toapprove the transaction. Completion of the acquisition, receipt of proceedsfrom the placing and admission of the enlarged share capital of Gable to tradingon AIM ("Admission") is expected to occur on 23 December 2005. On completion ofthis transaction, Corvus will hold shares representing 17.06% of the enlargedshare capital. In order to satisfy the Minimum Solvency Requirement of Gableprior to 23 December 2005, Corvus Capital Inc. has agreed to provide a shortterm loan of up to £4.3 million to Gable which Gable has undertaken to apply tosatisfy the Minimum Solvency Requirement, following approval of the acquisitionat the EGM. The loan is interest free save in the event of default and Gablewill pay a fee of 2.5 per cent. of the value of the loan to Corvus for theprovision of the loan, which Gable has undertaken to repay on the earlier ofAdmission or 13 January 2006. CHANGE OF ACCOUNTING REFERENCE DATE In our Annual Report, we announced the decision to change the Company'saccounting reference date from 31 March to 30 September. Therefore thisstatement represents a "first" Interim which will be followed by a secondInterim for the 6 month period from 1 October 2005 to 31 March 2006 followed byaudited results for the 18 month period ending 30 September 2006. OUTLOOK The Board will continue to monitor the performance of the Company's underlyingassets and remains alert to opportunities for making further investmentsconsistent with its investment strategy, acquiring interests in companies withconsiderable growth potential, each at varying stages of development. Graham PorterChairman 21 December 2005 Corvus Capital IncGroup Statement of Total Return(Incorporating the Revenue Account for the 6 months ended 30 September 2005) Unaudited Unaudited Unaudited 6 months ended 6 months ended 6 months ended 30.09.05 30.09.05 30.09.05 Note Revenue Capital Total £'000 £'000 £'000Gains on investments- realised - 1,820 1,820- unrealised - 1,365 1,365Other income 239 - 239 ------- ------- -------Gross revenue and capital gains 239 3,185 3,424Administrative expenses (1,473) - (1,473) ------- ------- -------Return on ordinary activities before interest and (1,234) 3,185 1,951taxInterest receivable and similar income 6 - 6 ------- ------- -------Return on ordinary activities before tax (1,228) 3,185 1,957 Tax on ordinary activities 2 - - - ------- ------- -------Return on ordinary activities after tax (1,228) 3,185 1,957transferred (from)/to reserves ------- ------- ------- ------- ------- -------Basic return per share (pence) 3 (0.48) 1.24 0.76 ------- ------- ------- ------- ------- -------Diluted return per share (pence) 3 (0.42) 1.10 0.68 ------- ------- ------- ------- ------- ------- There were no recognised gains or losses other than as shown above. All amounts relate to continuing activities. Corvus Capital IncGroup Statement of Total Return(Incorporating the Revenue Account for the 6 months ended 30 September 2004) Unaudited Unaudited Unaudited 6 months ended 6 months ended 6 months ended 30.09.04 30.09.04 30.09.04 Note Revenue Capital Total £'000 £'000 £'000Gains on investments- realised - 57 57- unrealised - - -Other income - - - ------- ------- -------Gross revenue and capital gains - 57 57Administrative expenses (278) - (278) ------- ------- -------Return on ordinary activities before interest and (278) 57 (221)taxInterest receivable and similar income 2 - 2 ------- ------- -------Return on ordinary activities before tax (276) 57 (219) Tax on ordinary activities 2 - - - ------- ------- -------Return on ordinary activities after tax (276) 57 (219)transferred (from)/to reserves ------- ------- ------- ------- ------- -------Basic return per share (pence) 3 (0.12) 0.02 (0.10) ------- ------- ------- ------- ------- -------Diluted return per share (pence) 3 (0.12) 0.02 (0.10) ------- ------- ------- ------- ------- ------- There were no recognised gains or losses other than as shown above. All amounts relate to continuing activities. Corvus Capital IncGroup Statement of Total Return(Incorporating the Revenue Account for the 6 months ended 30 September 2005) Audited Audited Audited Year ended Year ended Year ended 31.03.05 31.03.05 31.03.05 Note Revenue Capital Total £'000 £'000 £'000Gains on investments- realised - 68 68- unrealised - 22,044 22,044Other income 144 - 144 ------- ------- -------Gross revenue and capital gains 144 22,112 22,256Administrative expenses (1,083) - (1,083)Write-off of goodwill (2) (9,110) (9,112) ------- ------- -------Return on ordinary activities before interest and (941) 13,002 12,061taxInterest receivable and similar income 4 - 4 ------- ------- -------Return on ordinary activities before tax (937) 13,002 12,065 Tax on ordinary activities 2 - - - ------- ------- -------Return on ordinary activities after tax (937) 13,002 12,065transferred (from)/to reserves ------- ------- ------- ------- ------- -------Basic return per share (pence) 3 (0.39p) 5.43p 5.04p ------- ------- ------- ------- ------- -------Diluted return per share (pence) 3 (0.38p) 5.27p 4.89p ------- ------- ------- ------- ------- ------- There were no recognised gains or losses other than as shown above. All amounts relate to continuing activities. Corvus Capital IncGroup Balance Sheet(Incorporating the Revenue Account for the year ended 31 March 2005) Unaudited Unaudited Audited Note 30.09.05 30.09.04 31.03.05 £'000 £'000 £'000 Fixed assetsIntangible assets - 11,352 -Tangible assets 52 19 65Investments 4 19,503 119 24,729 ---------- ----------- ----------- 19,555 11,490 24,794 ---------- ----------- ----------- Current assetsDebtors 930 413 436Cash at bank and in hand 6,797 645 5 ---------- ----------- ----------- 7,727 1,058 441Creditors: amounts falling due within one year (225) (82) (310) ---------- ----------- -----------Net current assets 7,502 976 131 ---------- ----------- ----------- Total assets less current liabilities 27,057 12,466 24,925 ----------- ----------- ----------- ----------- ----------- -----------Capital and reservesCalled up share capital 5 12,926 12,707 12,816Share premium account 6 3,045 2,914 2,980Capital reserve - realised 6 (2,847) (1,553) (10,652)Capital reserve - unrealised 6 17,424 - 22,044Revenue reserve 6 (3,491) (1,602) (2,263) ---------- ----------- -----------Total equity shareholders' funds 7 27,057 12,466 24,925 ------- ------- ------- Net asset value per share (pence) - basic 10.47 4.91 9.73 ------- ------- ------- ------- ------- ------- - diluted 9.33 4.86 9.45 ------- ------- ------- ------- ------- ------- Corvus Capital IncCash Flow StatementFor the period ended 30 September 2005 Unaudited Unaudited Audited Note 6 months ended 6 months ended Year ended 30.09.05 30.09.04 31.03.05 £'000 £'000 £'000 Net cash outflow from operating activities 8 (1,800) (658) (1,102) Returns on investmentsInterest received 6 2 4 Capital expenditure and financial investmentPurchase of subsidiary undertakings - (153) (157)Purchase of tangible fixed assets - (20) (84)Sale of tangible fixed assets - - 6Proceeds from sale of investments 8,461 58 668Purchase of investments (50) (57) (978) ------- ------- -------Net cash inflow / (outflow) from investing 8,411 (172) (545)activities ------- ------- ------- Net cash inflow / (outflow) before financing 6,617 (828) (1,643) FinancingIssue of shares 175 1,173 1,348 ------- ------- -------Movement in cash 9 6,792 345 (295) ------- ------- ------- ------- ------- -------Significant non-cash movementsIncrease in value of investments 1,365 1,851 22,044 ------- ------- ------- ------- ------- ------- NOTES TO THE INTERIM ANNOUNCEMENT 1. BASIS OF PREPARATION The Company was incorporated as a corporation in the British Virgin Islands,which does not prescribe the adoption of any particular accounting framework.Accordingly, the Board have resolved that the Company will follow UK AccountingStandards and apply the Companies Act 1985 when preparing its annual financialstatements. The principal accounting policies of the Group are set out in the Group's 2005annual report and financial statements. The policies have remained unchangedsince the previous annual report. In the 2005 annual report the method ofvaluation of quoted investments was changed to that of middle market prices atthe balance sheet date and consolidated information was presented for the firsttime. The impact of this was to replace the intangible asset at 30 September2004 with a valuation of investments at 31 March 2005 and subsequent periodends. Interim financial information in this report has been neither audited norreviewed by the Group's auditors. 2. TAXATION The company is not subject to UK corporation tax. The UKsubsidiary did not make a profit during the period and hence no tax arises inthe UK. 3. RETURN/(LOSS) PER SHARE The calculation of the basic return per share is based on the return on ordinaryactivities after taxation and on the weighted average number of ordinary sharesin issue during the period. Returns and weighted average number of shares usedin the calculations are set out below: Return Weighted average Return per £'000 number of shares share (pence)Basic return/ (loss) per share 6 months ended 30.09.05Revenue (1,228) 257,195,382 (0.48)Capital 3,185 257,195,382 1.24Total 1,957 257,195,382 0.76 6 months ended 30.09.04Revenue (276) 226,142,500 (0.12)Capital 57 226,142,500 0.02Total (219) 226,142,500 (0.10) Year ended 30.03.05Revenue (937) 239,337,552 (0.39)Capital 13,002 239,337,552 5.43Total 12,065 239,337,552 5.04 Diluted return per share 6 months ended 30.09.05Revenue (1,228) 288,642,340 (0.42)Capital 3,185 288,642,340 1.10Total 1,957 288,642,340 0.68 6 months ended 30.09.04Revenue (276) 228,403,925 (0.12)Capital 57 228,403,925 0.02Total (219) 228,403,925 (0.10) Year ended 30.09.05Revenue (937) 246,861,458 (0.38)Capital 13,002 246,861,458 5.27Total 12,065 246,861,458 4.89 The diluted return per share is on the assumption that the outstanding shareoptions and warrants are fully exercised. 4. INVESTMENTS Movements in investments during the period are as follows: Overseas AIM listed Unlisted Total £'000 £'000 £'000 £'000 Valuation at 1 April 2005 (Audited) 24,006 685 38 24,729 Additions at cost - - 50 50 Disposals:- proceeds (4,981) (3,480) - (8,461)- (loss) / gains on disposal (975) 2,795 - 1,820 Net unrealised gains in period 1,365 - - 1,365 ------- ------- ------- -------Valuation at 30 September 2005 19,415 - 88 19,503 ------- ------- ------- ------- ------- ------- ------- -------Book cost at 30 September 2005 1,991 - 88 2,079Total unrealised gains 17,424 - - 17,424 ------- ------- ------- -------Valuation at 30 September 2005 (Unaudited) 19,415 - 88 19,503 ------- ------- ------- ------- ------- ------- ------- ------- 5. SHARE CAPITAL Authorised 30.09.05 30.09.04 30.03.05 No. No. No.Ordinary shares of 5p each 400,000,000 400,000,000 400,000,000 ------- ------- ------- ------- ------- ------- £'000 £'000 £'000Ordinary shares of 5p each 20,000 20,000 20,000 ------- ------- ------- ------- ------- ------- Allotted, called up, and fully paid No. No. No.Ordinary shares of 5p each 258,517,496 254,142,500 256,329,998 ------- ------- ------- ------- ------- ------- £'000 £'000 £'000Ordinary shares of 5p each 12,926 12,707 12,816 ------- ------- ------- ------- ------- ------- Allotments during the year On 4 June 2005 and on 4 September 2005 1,093,749 ordinary shares were issued at8p per share on exercise of share options, raising £175,000 in total. 6. RESERVES Capital Capital reserve reserve Revenue Share premium (realised) (unrealised) reserve £'000 £'000 £'000 £'000 At 1 April 2005 2,980 (10,652) 22,044 (2,263)Share premium on issue of shares 65 - - -Net revenue loss for the period - - - (1,228)Unrealised gains - - 1,365 -Net gain on realisation of investments - 1,820 - -Unrealised gains brought forward realised - 5,985 (5,985) -during the period ----------- ----------- ----------- -----------At 30 September 2005 3,045 (2,847) 17,424 (3,491) ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 7. RECONCILIATION OF SHAREHOLDERS' FUNDS Unaudited Unaudited Audited 6 months ended 6 months ended Year ended 30.09.05 30.09.04 31.03.05 £'000 £'000 £'000 At beginning of period 24,925 262 262Net proceeds of share issues 175 12,423 12,598Net revenue loss for the financial period (1,228) (276) (937)Increase in capital reserves 3,185 57 13,002 ------- ------- -------At end of period 27,057 12,466 24,925 ------- ------- ------- ------- ------- ------- 8. RECONCILIATION OF RETURN ON ORDINARY ACTIVITIES BEFORE INTEREST AND TAX WITH NET CASH OUTFLOW FROM OPERATING ACTIVITIES Unaudited Unaudited Audited 6 months ended 6 months ended Year ended 30.09.05 30.09.04 31.03.05 £'000 £'000 £'000 Operating profit/(loss) 1,951 (221) 12,061Write off of goodwill - - 9,112Depreciation 13 1 13Movement in debtors (494) (298) (321)Movement in creditors (85) (83) 145Profit on disposal of investments (1,820) (57) (68)Revaluation of investments (1,365) - (22,044) ------- ------- ------- (1,800) (658) (1,102) ------- ------- ------- ------- ------- ------- 9. ANALYSIS OF CHANGES IN CASH DURING THE PERIOD Unaudited Unaudited Audited 6 months ended 6 months ended Year ended 30.09.05 30.09.04 31.03.05 £'000 £'000 £'000 Increase / (decrease) in cash 6,792 345 (295)Net funds at beginning of period 5 300 300 ------- ------- -------Net funds at end of period 6,797 645 5 ------- ------- ------- ------- ------- ------- 10. PUBLICATION OF NON-STATUTORY ACCOUNTS The financial information set out in this interim report does not constitutestatutory accounts as defined in section 240 of the Companies Act 1985. Thefigures for the year ended 31 March 2005 have been extracted from the statutoryfinancial statements. The auditors' report on those financial statements wasunqualified and did not contain a statement under section 237(2) of theCompanies Act 1985. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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