23rd Nov 2006 07:00
Avarae Global Coins PLC23 November 2006 Avarae Global Coins plc Unaudited Interim Results for the Period from 6 February 2006 to 30 September 2006 23 November 2006 AVARAE GLOBAL COINS PLC UNAUDITED INTERIM RESULTS FOR THE PERIOD FROM 6 FEBRUARY 2006 TO 30 SEPTEMBER 2006 Avarae Global Coins plc ("Avarae" or the "Company"), the UK's only publiclytraded specialist investment company dedicated to investing in rare and highquality coins, is pleased to announce its maiden unaudited interim results forthe period ended 30 September 2006. Highlights for the period include: • Successful admission to trading on AIM on 24 May 2006, raising £5.0 million. • Secondary placing of new Avarae Shares in June 2006 to a major institutional investor, raising a further £1.1 million of new funds for investment. • First significant investment in rare quality coins made on 2 June 2006, including the 1933 Pattern Penny, thought to be one of only four in the world. • Avarae is now more than 40 per cent. invested and its portfolio now boasts some of the world's most important coins and coin collections, including: - the 1344 Edward III Gold Double Florin or "Double Leopard", one of only three known specimens and the only one in private hands; and - a complete collection of 236 German gold, silver and bronze coins minted over a period of some 2,000 years. • First coin sale made, generating 15 per cent. return on investment before costs. • Net loss for the period of £0.024 million. • Net assets as at 30 September 2006 of £5.94 million. Commenting, Brian Hatton, Executive Director of Avarae, said: We are delighted with the start that Avarae has made to life as a public companyand in particular, we are extremely pleased to have built up such a high qualityportfolio of coins at such an early stage. Furthermore, we are encouraged withthe positive impact that we feel that Avarae has made, not only in thenumismatic world, but also in the field of alternative investments, where webelieve that there is increasing interest from institutional investors andprivate clients alike in the returns that can be made from assets such as rarecoins. Although it is still early in the investment cycle of the Company regarding anysignificant realisations from the resale of coins, we are optimistic that, asthe rare coin market continues to grow, Avarae is well placed to make somesignificant gains over the course of the next few years. For further information on Avarae Global Coins plc, please contact: Gordon Puckey or Sarah Scott, +44 (0)20 7947 2856/7Phoenix Financial PR AVARAE GLOBAL COINS PLC Directors' Review Introduction We are delighted to present our first interim report to shareholders and providean update to the market following our half-year trading update released on 4October 2006. The following pages show the financial position of the Company forthe period from its incorporation on 6 February 2006 to 30 September 2006.During this time, the Company floated on the AIM market of the London StockExchange and simultaneously raised its first material funds for investmentpurposes. Avarae is the UK's only publicly traded specialist Investment Company dedicatedto investing in rare and high quality coins. It provides access for institutionsand individuals wanting to diversify their investment portfolios away from thetraditional asset classes such as equities, property, bonds etc without the needto be an expert in the coin collecting sector. Its strategy is to investactively in the coin collecting sector in various countries across the world. Itis currently building up an impressive portfolio of coins which it intends tohold both for the long term (i.e. more than one year), in order to achieve longterm capital growth for its shareholders, and also the short term, in order totake advantage of short term trading opportunities, as the market for rare coinscontinues to grow. Financing Avarae is registered and incorporated in the Isle of Man. Since itsincorporation it has raised more than £6.5 million in a number of financingrounds, including raising £5.0 million (before expenses), in conjunction withits admission to trading on AIM on 24 May 2006, and raising a further £1.1million (before expenses) through a placing with a single major Londoninstitution in June 2006. For a publicly traded company, Avarae maintains a very low operational cost baseof less than £0.3 million per annum on an ongoing basis, which includes thecosts associated with all of the Company's numismatic advisers. The coin dealing sector The market for trading coins is international in nature and significant in size.Over the last few months, there has been an increasing interest in the coinsector and its prominence as an alternative investment class is illustrated byrecent increases in activity across the world, where record prices have beenpaid for certain rare pieces, especially in the UK and in the US. The UK marketis still trading below the levels of the US market, but the gap is narrowing andthe US market does provide an insight into the significant sums being paid forindividual coins. For example, in the US a 1933 double eagle coin sold for over$7.6 million, whereas the most expensive individual British coin was soldearlier this year for £0.4 million. The number of interested parties in coins and coin collections appears to becontinuing to grow rapidly, with auction houses, particularly in the UK, in somecases witnessing increases of more than 50 per cent. in the numbers ofinterested bidders compared to the corresponding auctions the previous year. Historically, if purchased correctly, investments in coins can not only reducethe risk of overall investment portfolios, but can also produce significantlybetter returns than investments in equities, bonds or property. Individual coinsand coin collections have historically produced annual compound returns inexcess of 10 per cent. Avarae's Investments Avarae floated on 24 May 2006 and made its first purchase of rare coins the weekfollowing, on 2 June 2006. Since it floated, the Company has made a total offive purchases of coins or coin collections, investing more than £2.5 million inaggregate. This equates to approximately 40 per cent. of the current funds thatthe Company has for investment purposes. Coins or collections of note purchasedinclude: • An important collection of English hammered and milled gold and silver and bronze including 17 English gold five guinea pieces struck during the reigns of Charles II, James II, William & Mary, William III, Anne, George I, II and III; • A 1933 English Pattern Penny, thought to be one of only four in the world; • A 1344 Edward III Gold Double Florin (or "Double Leopard"), one of only three in the world and the only one in private hands; • A complete collection of 236 German gold, silver and bronze coins, minted under German rulers over a period of 2,000 years; • A collection of excessively rare multiple Talers issued in Transylvania, Switzerland, Netherlands, Italy, France, Germany and The Holy Roman Empire between the 16th and 18th century; • A collection of rare Islamic and Indian gold and silver coins covering approximately 500 years; • A collection of high quality Chinese gold and silver coinage from 19th and 20th century; and • A collection of South American gold and silver coinage from the 18th to 20th century. Avarae's current intention is to hold the vast majority of its current portfoliofor the foreseeable future and only make disposals of coins or collections whenit and its Advisory Panel believe it to be in the best interest of the Companyand its shareholders. Financial Results The financial review relates principally to the four month period from the datethat the Company was admitted to trading on AIM (24 May 2006) to 30 September2006. This is because prior to 24 May 2006, the Company did not have anysignificant funds for investment purposes. During this period, the Company made one disposal, selling a single coin for£23,000 and achieving a gross profit margin of 15 per cent., having previouslypurchased the coin earlier in the same month. Administrative costs during the period of £98,000 include some one-off costsrelating to the Company's admission to AIM and also include approximately£12,000 of costs relating to the period from the Company's incorporation to 31March 2006. Ongoing half-yearly administrative expenses are anticipated to be ofthe order of not more £150,000. Interest receivable of £71,000 during the period is expected to reduce on apro-rata basis over time as more of the IPO proceeds are invested in coins. Net loss for the period was £24,000, resulting in a loss per share ofapproximately 0.07 pence. At the period end, the Company had net assets of £5.94 million, of whichapproximately £3.5 million was in cash or short term deposits. The Company hadno borrowing during the period. Appointment of Director The Directors are pleased to today announce the appointment of Matthew GrahamWood as a Non-executive Director of the Company with immediate effect. Matt, 33, is currently a director of Combined Management Services Limited, acompany providing consultancy services to a number of AIM companies, includingAvarae, and is also a non-executive director of Eskimo Group ehf., an Icelandicbased branding business. After graduating with a first class honours degree inEconomics, Matt qualified as a chartered accountant in 1999 and then spent thenext six years as a corporate financier with Evolution Securities, previouslywith Beeson Gregory. Matt's experience of small cap public companies, together with his extensiveknowledge of current corporate governance will prove invaluable to the Companyas it continues to build its profile amongst the investment community,particularly in London. There is no further information required to be disclosedunder Schedule 2, Para (g) of the AIM Rules, pursuant to Matt's appointment. Outlook The Directors believe that Avarae has made excellent progress in its first fewmonths as a public company and so far has executed each element of its strategyand business plan in line with our expectations. We are delighted with thecontributions that both Noble Investments, as our numismatic advisor, and SirJohn Wheeler and David Pinckney, as our Advisory Panel members, have made to theCompany and we very much hope that their contributions will continue over thecoming months and years. It is their combined efforts and introductions thathave enabled the Company to build up such an impressive portfolio of coins andcoin collections so early in its evolution. To that end, the Directors aredelighted to announce that one of the Company's key "flagship" coins, the "Leopard" is now safely installed, on loan by Avarae, at the Fitzwilliam Museumin Cambridge. This only goes to reinforce our view that the coin is of greathistorical importance being the only one known to exist outside the BritishMuseum. We are also pleased to have increased the size of the investment fund through asecondary placing so soon after floating and with such a notable financialinstitution, and we must look to maintain this momentum of widening theCompany's shareholder base during the second half of the current financial year. We believe that the coin and coin collecting market is showing considerablegrowth at present and that there is room for significant further growth andtherefore, we remain optimistic for the future. Brian Hatton, Executive Director,23 November 2006 AVARAE GLOBAL COINS PLC UNAUDITED INTERIM RESULTS FOR THE PERIOD FROM 6 FEBRUARY 2006 TO 30 SEPTEMBER 2006 Unaudited interim profit and loss account 6 Feb. 2006 - 30 Sept. 2006 Note £'000Turnover 1 23Cost of Sales (20)Gross profit 3Administrative expenses (98)Loss on ordinary activities before interest (95)Interest received 71Interest paid 0Loss on ordinary activities before tax (24)Tax on profit/(loss) on ordinary activities 0Loss on ordinary activities after taxation (24) Loss per share 2 (.07p) There were no recognised gains or losses other than the loss for the period. AVARAE GLOBAL COINS PLC UNAUDITED INTERIM RESULTS FOR THE PERIOD FROM 6 FEBRUARY 2006 TO 30 SEPTEMBER 2006 Unaudited interim balance sheet As at 30 Sept 2006 Note £'000 Current AssetsCoin inventory 3 2,576Debtors 130Cash at bank 3,526 6,232 Creditors: amounts falling due within one year 4 (295)Net current assets 5,937 Net Assets 5'937 Capital and ReservesCalled up equity share capital 621 5Share premium 5,340 6Profit and loss account (24)Total Equity Shareholders' Funds 5,937 AVARAE GLOBAL COINS PLC UNAUDITED INTERIM RESULTS FOR THE PERIOD FROM 6 FEBRUARY 2006 TO 30 SEPTEMBER 2006 Cash flow statement 6 Feb. 2006 - 30 Sept. 2006 (£'000) NoteNet cash outflow from operating activities 7 (2,506)Returns on investment and servicing of financeInterest received 71Interest paid 0 (2,435)Taxation 0Net cash outflow before financing (2,435) FinancingIssue of equity shares 5,961Increase in cash in the period 3,526 Reconciliation of net cash to movement in net funds 6 Feb. 2006 - 30 Sept. 2006 £'000 Increase in cash in the period 3,526Movement in net funds in period 3,526Net funds at start of period 0Net funds at end of period 3,526 AVARAE GLOBAL COINS PLC UNAUDITED INTERIM RESULTS FOR THE PERIOD FROM 6 FEBRUARY 2006 TO 30 SEPTEMBER 2006 Notes to the interim results 1) Accounting policies Basis of accounting The financial statements have been prepared under the historical cost convention and in accordance with United Kingdom Financial Reporting Standards. Turnover Turnover represents the sale of coins exclusive of VAT 2) Earnings per Share The loss per share for the period was 0.07p. The calculation of earnings per share is based on the loss of £24,290 for the period and the weighted average number of shares in issue (35,737,700). 3) Coin Inventory Coin inventory represents the original value of coins purchased, less the cost of those sold. It is intended to revalue the coin inventory at the end of each financial year. 4) Creditors As at 30 Sept. 06 £'000Trade creditors 274Accruals 21 295 All creditors are due within one year. 5) Share Capital As at 30 Sept. 06 £'000Authorised100,000,000 ordinary shares of £0.01 each 1,000Allotted, called up and fully paid62,133,334 ordinary shares of £0.01 each 621 Notes to the interim results (continued) 6) Share Premium Account As at 30 Sept. 06 £'000Total funds raised 6,500Less expenses (539)Less nominal capital (621)Share premium 5,340 7) Reconciliation of operating loss to net cash outflow from operating activities 6 Feb. 2006 - 30 Sept. 2006 £'000Operating loss (95)(Increase) in debtors (130)(Decrease) in creditors 295(Increase) in inventory (2,576) (2,506) 8) Preparation of the Interim Report This report was approved by the Directors on 22 November 2006. 9) The results for the period ended 30 September 2006 are unaudited and do not constitute statutory accounts as defined in The Companies Acts. 10) The financial results included in this report are from the date of the Company's inception, 6 February 2006, through to 30 September 2006. Included in the results is a retained loss of £12,000 relating to the period before 1 April 2006, which comprised nil turnover and administrative costs of £12,000. These figures were included in accountants' report on the Company for the period from its inception to 31 March 2006 which are included in the Company's AIM admission document dated 19 May 2006. 11) The interim report is being sent to shareholders as soon practicably possible. In addition copies are available from the Company's registered office, Hillberry Trust Company Limited, Exchange House, 54-58 Athol Street, Douglas, Isle of Man, IM1 1JD This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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