9th Sep 2008 07:00
News release
9 September 2008
Midas Capital makes strong progress in challenging markets
Midas Capital plc, the AIM quoted company encompassing Fund Management, Wealth Management and Corporate Services, announces its interim results for the six months ended 30 June 2008.
HIGHLIGHTS
Group has made good progress in its corporate development during the interim period
Midas merger positions the group as a leading multi-asset fund management group
Integration of MitonOptimal and Midas Fund management businesses with funds under management and advice of £2.7 billion
Board changes: Simon Edwards takes over as Chief Executive. Colin Rutherford moves to Executive Chairman
With an industry leading team of financial planners, iimia Wealth Management, continues to make progress
Intelli enjoying good pipeline of business
As synergy benefits of increased scale flow through, the group expects to demonstrate a significant and sustainable improvement in operating margins in the longer term
Challenging markets continue to cause short term concern, however, the board is confident of group's structure to take advantage of future upturn in the market.
FINANCIAL HIGHLIGHTS
|
First half |
First half |
|||
|
2008 |
2007 |
Movement |
||
|
Unaudited 30 June 2008 |
Unaudited 30 June 2007 |
|||
|
Revenue |
£000 |
14,994 |
5,644 |
166% |
|
Adjusted Profit * |
£000 |
1,827 |
780 |
134% |
|
Adjusted earnings per share |
p |
3.81 |
4.21 |
(9)% |
|
Funds Under Management & Advice |
£million |
2,679 |
672 |
299% |
* Adjusted Profit includes operating income but is before taxation, exceptional items, share based payment charge and amortisation.
For further information, please contact:
Simon Edwards, Chief Executive, Midas Capital plc 0151 906 2450
Roland Cross, Director, Broadgate 020 7726 6111
James Steel, Arbuthnot Securities Limited 020 7012 2000
Web: www.midascapitalplc.com
Chairman's Statement
Introduction
The six month period ended 30 June 2008 has seen the Group make progress against the backdrop of very challenging market conditions.
The merger with Midas Capital Partners Limited (MCPL) which completed on 7 March 2008 has created a leading multi-asset fund management group with strengthened investment expertise and broader distribution channels.
We are able to report significantly higher revenue of £15.0 million (2007: £5.6 million) and are on track to achieve the benefits and synergies anticipated from the merger.
The Group achieved Adjusted Profit before, tax, interest, exceptional items and amortisation of intangibles of £1.8 million (2007: £0.8 million). Adjusted earnings per share, on a diluted basis, of 3.79p (2007: 4.05p). Detailed analysis of our performance is set out in the financial statements and notes to the accounts.
To finance the MCPL merger we were delighted to secure the support of Bank of Scotland.
In the light of current market conditions we do not consider it prudent to pay any dividends for the year to 31 December 2008 but will look to resume our dividend policy when there is a substantive improvement in sentiment in the Stockmarkets.
Fund Management Division
Funds under Management (FUM) totalled £2.0 billion as at 30 June 2008 compared with £0.5 billion as at 31 December 2007. At the time of the merger, MCPL had FUM of £1.6 billion but significant downward market movements have reduced the value of our funds. We had net inflows (albeit at a lower level than expected) in each month but, in line with many in the retail facing fund management industry, we have moved into net outflows since 30 June.
Investment performance over the period has been varied across the Midas stable of products. Two funds, Strategic and Special Situations, have produced top decile performance in the recent difficult market conditions. The Growth and Income Funds, which enjoyed strong long-term performance since launch, have found the present market conditions challenging, but there are early signs that investors are again identifying value and we remain confident that our product range will deliver.
Wealth Management
The Wealth Management division (iWM) despite market attrition managed £282 million on a discretionary basis at 30 June, (£308 million at 31 December 2007). £435 million was managed on an advisory basis (£448 million at 31 December 2007). iWM traded profitably in the first half.
We believe the division is in excellent shape, with an industry-leading team of financial planners, portfolio managers and fund analysts, and with a continuing tight control on overheads, we fully expect iWM to withstand the current downturn and grow its Funds Under Management and Advice.
Corporate services
Our corporate services division is performing in line with expectations having successfully concluded a number of assignments in the first six months. The pipeline of activity for the remainder of the year is good with a diverse range of assignments in the asset management and closed end fund sectors.
Our stock broking activities continue to develop with an increasing number of clients using our services.
Board Changes
Mike Phillips has decided to leave the Group having overseen its development since its formation in 2002 and I am pleased to report the appointment of Simon Edwards as Group Chief Executive.
Following a review of the Board and senior management, we have decided to bring a greater focus by separating governance more clearly from operational matters. Over the last two years the board has grown considerably. As a consequence all the executive directors, with the exception of the Chief Executive, have stepped down from the board although they continue in their existing management roles. They will constitute a separate management committee reporting to the Board on each of the principal operating businesses.
One of our Non-Executive Directors and former Chairman, William Long, has resigned from the Board and I would like to recognise his significant contribution over the years.
To assist in this transition and to provide support to Simon in some of the broader Group issues, I shall be moving to Executive Chairman forthwith.
Future prospects
The second half has seen further deterioration in the economy and stock markets. However, the challenges presented are being met full on and your Board is committed to take whatever action is necessary to maximise shareholder value over the medium term.
Colin Rutherford
8 September 2008
CONSOLIDATED INCOME STATEMENT
FOR THE PERIOD ENDED 30 JUNE 2008
|
Notes |
Unaudited Six months to 30 June 2008 £'000 |
Unaudited Six months to 30 June 2007 £'000 |
Audited Year to 31 December 2007 £'000 |
|||
|
Revenue |
2 |
14,994 |
5,644 |
13,431 |
||
|
Administrative expenses |
||||||
|
Operating expenses |
(12,160) |
(5,324) |
(11,764) |
|||
|
IFRS 2 share based payments |
(230) |
(317) |
(674) |
|||
|
Amortisation |
7 |
(1,358) |
(29) |
(256) |
||
|
Exceptional operating expense |
3 |
(586) |
407 |
407 |
||
|
Total administrative expenses |
(14,334) |
(5,263) |
(12,287) |
|||
|
Other operating (expense)/income |
(147) |
25 |
254 |
|||
|
Operating profit |
513 |
406 |
1,398 |
|||
|
Finance revenue |
275 |
435 |
902 |
|||
|
Finance costs |
(1,206) |
- |
(13) |
|||
|
(Loss)/Profit before taxation |
(418) |
841 |
2,287 |
|||
|
Taxation |
124 |
(241) |
(735) |
|||
|
(Loss)/Profit after taxation |
(294) |
600 |
1,552 |
|||
|
pence |
pence |
pence |
||||
|
Basic earnings per share |
5 |
|||||
|
- basic |
(0.66) |
3.82 |
9.09 |
|||
|
- diluted |
(0.65) |
3.68 |
8.84 |
|||
|
Adjusted earnings per share |
5 |
|||||
|
- basic |
3.81 |
4.21 |
11.68 |
|||
|
- diluted |
3.79 |
4.05 |
11.36 |
|||
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
FOR THE PERIOD ENDED 30 JUNE 2008
|
Unaudited 30 June 2008 £'000 |
Unaudited 30 June 2007 £'000 |
Audited 31 December 2007 £'000 |
|
|
Income and expense recognised directly in equity |
|||
|
Gains on valuation of available-for-sale financial assets |
- |
7 |
7 |
|
Transfers to the income statement |
|||
|
On disposal or impairment of available-for-sale financial assets |
- |
(14) |
(16) |
|
Tax on items taken directly to or transferred from equity |
(4) |
(13) |
(98) |
|
Net expense recognised directly in equity |
(4) |
(20) |
(107) |
|
(Loss)/Profit for the period/year |
(294) |
600 |
1,552 |
|
Total recognised income and expense for the year attributable to equity holders of the parent |
(298) |
580 |
1,445 |
CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2008
|
Notes |
Unaudited 30 June 2008 £'000 |
Unaudited 30 June 2007 £'000 |
Audited 31 December 2007 £'000 |
|||
|
Non - current assets |
||||||
|
Intangible assets |
7 |
133,751 |
5,269 |
25,308 |
||
|
Property and equipment |
1,002 |
433 |
1,001 |
|||
|
Financial assets |
317 |
410 |
464 |
|||
|
Deferred tax assets |
296 |
453 |
346 |
|||
|
135,366 |
6,565 |
27,119 |
||||
|
Current assets |
||||||
|
Trade and other receivables |
4,152 |
2,603 |
3,371 |
|||
|
Income tax receivables |
- |
252 |
419 |
|||
|
Cash and cash equivalents |
9,951 |
17,790 |
16,412 |
|||
|
14,103 |
20,645 |
20,202 |
||||
|
Current liabilities |
||||||
|
Trade and other payables |
2,956 |
1,886 |
2,656 |
|||
|
Financial liabilities |
4,901 |
- |
301 |
|||
|
Income tax payable |
1,440 |
600 |
1,094 |
|||
|
Total current liabilities |
9,297 |
2,486 |
4,051 |
|||
|
Net current assets |
4,806 |
18,159 |
16,151 |
|||
|
Total assets less current liabilities |
140,172 |
24,724 |
43,270 |
|||
|
Non - current liabilities |
||||||
|
Financial liabilities |
8 |
36,635 |
- |
887 |
||
|
Deferred tax liabilities |
8,988 |
- |
1,594 |
|||
|
45,623 |
- |
2,481 |
||||
|
Net assets |
94,549 |
24,724 |
40,789 |
|||
|
Equity |
||||||
|
Share capital |
9 |
5,733 |
1,607 |
2,282 |
||
|
Share premium |
9 |
10,429 |
848 |
890 |
||
|
Treasury shares |
9 |
(294) |
(294) |
(294) |
||
|
Merger reserve |
9 |
66,684 |
11,265 |
25,391 |
||
|
Retained earnings |
9 |
11,997 |
11,298 |
12,520 |
||
|
Total equity |
94,549 |
24,724 |
40,789 |
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 JUNE 2008
|
Unaudited Six months to 30 June 2008 £'000 |
Unaudited Six months to 30 June 2007 £'000 |
Audited Year to 31 December 2007 £'000 |
|
|
Operating activities |
|||
|
(Loss)/Profit for the year |
(294) |
600 |
1,552 |
|
Adjustments to reconcile operating profit to net cash flow from operating activities |
|||
|
Tax on continuing operations |
(124) |
241 |
735 |
|
Net finance revenue / (cost) |
931 |
(435) |
(889) |
|
Depreciation |
150 |
121 |
244 |
|
Amortisation of intangible assets |
1,358 |
29 |
256 |
|
Share based payments expense |
230 |
317 |
674 |
|
(Increase)/decrease in trade & other receivables |
405 |
(525) |
(658) |
|
(Decrease) in trade and other payables |
(193) |
(673) |
(936) |
|
Profit on disposal of available for sale investments |
- |
(16) |
(7) |
|
Movement in provisions |
- |
- |
(607) |
|
Profit on disposal of held for trading assets |
- |
- |
(106) |
|
Fair value movements of investments through profit or loss |
147 |
(6) |
(132) |
|
Cash generated from operations |
2,610 |
(347) |
126 |
|
Income tax paid |
(406) |
(7) |
(150) |
|
Net cash flow from operating activities |
2,204 |
(354) |
(24) |
|
Investing activities |
|||
|
Interest received |
275 |
435 |
902 |
|
Purchase of property and equipment |
(61) |
(94) |
(180) |
|
Purchase of intangible assets |
(11) |
(181) |
(208) |
|
Settlement of loans and receivables |
- |
150 |
150 |
|
Proceeds from disposal of investments |
- |
94 |
268 |
|
Purchase of subsidiaries, net of cash and costs of acquisition |
(58,060) |
- |
(2,269) |
|
Net cash flow from investing activities |
(57,857) |
404 |
(1,337) |
|
Financing activities |
|||
|
Proceeds from share issue |
10,505 |
470 |
516 |
|
Interest paid |
(13) |
- |
(13) |
|
Dividends paid to equity shareholders of the parent |
(455) |
- |
- |
|
New borrowings |
40,000 |
- |
- |
|
Payments to acquire new borrowings |
(835) |
||
|
Repayment of borrowings |
(10) |
- |
- |
|
Net cash flow from financing activities |
49,192 |
470 |
503 |
|
Increase/(decrease) in cash and cash equivalents |
(6,461) |
520 |
(858) |
|
Cash and cash equivalents at the beginning of the period |
16,412 |
17,270 |
17,270 |
|
Cash and cash equivalents at the period end |
9,951 |
17,790 |
16,412 |
NOTES
These interim condensed and consolidated financial statements do not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. They have been prepared on the basis of the accounting policies as set out in the Group's Annual Report for the year ended 31 December 2007, which have been published on the Midas Group website (www.midascapitalplc.com). The accounting policies are drawn up in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union as they apply to the financial statements of the Group for the period ended 30 June 2008.
These unaudited financial statements were approved and authorised for issue by a duly appointed and authorised committee of the Board of Directors on 8 September 2008.
The full year accounts to 31 December 2007 have been filed with the Registrar of Companies. The auditors have reported on those accounts; their report was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. The figures for the six months ended 30 June 2007 and 2008 have not been audited.
The Group's operations are organised and managed separately according to the nature of the services provided, with each segment representing a strategic business unit offering a different package of related services across the Group's markets.
Substantially all of the Group's operations are based in the UK and as a result no disclosure has been made under the secondary reporting format.
The table below presents revenue and results information for the Group's business segments for the six month periods ending June 2008 and 2007, and for the year ending December 2007. The unallocated expenses relate to costs in relation to the parent company, central services teams and Group directors which are not recovered within the operating divisions.
|
Segmental information: |
|||||||||||||||
|
Six months to 30 June 2008 |
Six months to 30 June 2007 |
Year to 31 December 2007 |
|||||||||||||
|
Revenue £'000 |
Profit/(loss) £'000 |
Revenue £'000 |
Profit/(loss) £'000 |
Revenue £'000 |
Profit/(loss) £'000 |
||||||||||
|
Fund management |
10,337 |
1,883 |
1,506 |
273 |
3,506 |
630 |
|||||||||
|
Wealth management |
3,365 |
471 |
2,713 |
799 |
6,602 |
1,741 |
|||||||||
|
Corporate services |
2,186 |
526 |
1,425 |
(214) |
3,423 |
568 |
|||||||||
|
15,888 |
2,880 |
5,644 |
858 |
13,531 |
2,939 |
||||||||||
|
Intra Group sales * |
(900) |
- |
- |
- |
(100) |
- |
|||||||||
|
Unallocated expense |
- |
(1,781) |
- |
(859) |
(1,948) |
||||||||||
|
Exceptional operating (expense)/income |
6 |
(586) |
- |
407 |
- |
407 |
|||||||||
|
14,994 |
513 |
5,644 |
406 |
13,431 |
1,398 |
||||||||||
|
Other operating income/(expense) |
(147) |
- |
25 |
- |
254 |
- |
|||||||||
|
Net finance (costs)/revenue |
- |
(931) |
- |
435 |
- |
889 |
|||||||||
|
14,847 |
(418) |
5,669 |
841 |
13,685 |
2,287 |
||||||||||
NOTES (continued)
* Intra group sales represent sales between business units as if they were to a third party at market rates.
The Corporate Services division acted as financial advisor to the Group in the merger with Midas Capital Partners Ltd. As a result this business unit received a fee for its services of £1 million, £100,000 being recognised in December 2007 and the balance of £900,000 being recognised in the first six months of 2008. The corresponding cost incurred by the parent company has been reported in the segmental information within unallocated costs.
3. Exceptional operating expense/income
Following the merger with MCPL, restructuring of certain parts of the Group's activities had been decided upon at the 30th June 2008 and the related redundancy costs incurred of £225,000 have been recognised in these results.
The balance of the 2008 exceptional expense of £361,000 represents bonuses awarded following the completion of the merger.
The exceptional income of £407,000 recognised in 2007 represents the reversal of the balance of a 2006 restructuring provision.
4. Dividends
|
30 June 2008 £'000 |
30 June 2007 £'000 |
31 December 2007 £'000 |
|||
|
Declared and paid during the year |
|||||
|
Equity dividends on ordinary shares |
|||||
|
Interim dividend for 2007: 2p (2006: 0p) |
455 |
- |
- |
5. Earnings Per Share
The basic and diluted earnings per share figures have been calculated based on the profit on ordinary activities after taxation. The options issued under the LTIP have been excluded from all earnings per share calculations. The conditions of their grant fall within the definition of Contingently Issuable Shares under IAS 33 Earnings per share. The reconciliation of earnings and shares is set out below:
NOTES (continued)
5. Earnings Per Share (continued)
|
Six months ended 30 June 2008 |
Six months ended 30 June 2007 |
|||||||||
|
Loss £'000 |
Shares No. |
Earnings per share pence |
Profit £'000 |
Shares No. |
Earnings per share pence |
|||||
|
Basic |
(294) |
44,735,645 |
(0.66) |
600 |
15,687,796 |
3.82 |
||||
|
Dilutive potential |
||||||||||
|
Ordinary shares |
- |
247,038 |
- |
- |
627,610 |
- |
||||
|
Diluted |
(294) |
44,982,683 |
(0.65) |
600 |
16,315,406 |
3.68 |
||||
|
Year ended 31 December 2007 |
||||||||||
|
Profit £'000 |
Shares No. |
Earnings per share pence |
||||||||
|
Basic |
1,552 |
17,080,714 |
9.09 |
|||||||
|
Dilutive potential |
||||||||||
|
Ordinary shares |
- |
473,900 |
- |
|||||||
|
Diluted |
1,552 |
17,554,614 |
8.84 |
|||||||
|
Adjusted earnings per share |
Six months to 30 June 2008 |
Six months to 30 June 2007 |
Year to 31 December 2007 |
|||
|
pence |
pence |
pence |
||||
|
- basic |
3.81 |
4.21 |
11.68 |
|||
|
- diluted |
3.79 |
4.05 |
11.36 |
Adjusted earnings per share
Adjusted Profit includes other operating income but is before exceptional items, share based payment charge and amortisation
The Group presents as exceptional items on the face of the Income Statement, those material items of income and expense which, because of the nature or expected infrequency of the events giving rise to them, merit separate presentation. This is to allow shareholders to understand better the elements of financial performance in the year, so as to facilitate comparison with prior periods and to assess better the trends in financial performance.
To this end, an adjusted basic and diluted earnings per share are also presented on this basis. The adjusted net profit as calculated below is divided by the weighted average number of ordinary shares for both basic and diluted amounts. Adjusted Profit attributable to equity holders of the parent is derived as follows:
NOTES (continued)
5. Earnings Per Share (continued)
|
30 June 2008 £'000 |
30 June 2007 £'000 |
31 December 2007 £'000 |
|||
|
Net (loss)/profit attributable to equity holders of the parent company - continuing operations |
(294) |
600 |
1,552 |
||
|
Amortisation |
1,358 |
29 |
256 |
||
|
Share based payments |
230 |
317 |
674 |
||
|
Exceptional items |
586 |
(407) |
(407) |
||
|
Loan arrangement costs * |
71 |
- |
- |
||
|
Taxation impact on the above |
(248) |
122 |
(80) |
||
|
Operating earnings |
1,703 |
661 |
1,995 |
* IAS 39 Financial instruments recognition and measurement requires the costs incurred in negotiating the loan with the Bank of Scotland for the acquisition of MCPL to be offset against the fair value of the loan and amortised through finance charges in the Income Statement over the life of the loan. The Directors believe that this item should be excluded from a measure of profitability which is intended to better reflect underlying profitability.
The weighted average number of shares used in the earnings per share calculation excludes 203,723 (31 December 2007 : 203,723) of the Group's own shares of which 69,921 are held by Exeter Investment Group ESOP Trustee Limited, 70,062 are held by Intelli ESOP Limited and 63,740 are held by Intelli Corporate Finance Limited.
6. Business Combinations
On 7 March 2008 the Group acquired the entire issued share capital of MCPL for a consideration of £100 million. The consideration was satisfied by way of 27,500,129 new ordinary shares and the payment of £59 million in cash. To finance part of the cash consideration £10.5 million was raised by way of a placing of an additional 7,000,000 new ordinary shares at 150p per share. The cash consideration was funded by way of £40 million of borrowing facilities from the Bank of Scotland in two facilities as disclosed below, and existing cash resources.
A term loan facility of £35.0 million ('Facility A') repayable in full on or before the date which is 60 months after Completion. Interest on amounts outstanding under Facility A will be charged at a rate of 2.75 per cent per annum plus LIBOR and mandatory costs.
A term loan facility of £5.0 million ('Facility B') repayable in full on or before the date which is 60 months after Completion. Interest on amounts outstanding under Facility B will be charged at a rate of 3.25 per cent per annum plus LIBOR and mandatory costs.
NOTES (continued)
6. Business Combinations (continued)
Book and fair values of the net assets at date of acquisition were as follows:
|
Book value |
Fair value to Group |
|
|
£'000 |
£'000 |
|
|
Intangible assets |
- |
27,722 |
|
Tangible fixed assets |
90 |
90 |
|
Debtors |
1,186 |
1,186 |
|
Cash |
2,699 |
2,699 |
|
Creditors due within one year |
(1,466) |
(1,466) |
|
Deferred tax liabilities |
- |
(7,762) |
|
Net assets |
2,509 |
22,469 |
|
Goodwill arising on acquisition |
82,068 |
|
|
Consideration |
104,537 |
|
|
Discharged by: |
||
|
£'000 |
||
|
Fair Value of 27,500,129 shares issued at £1.62 |
44,550 |
|
|
Cash |
59,000 |
|
|
Costs associated with the acquisition, settled in cash |
987 |
|
|
104,537 |
From the date of acquisition to 30th June 2008, MCPL has contributed £1,727,000 to the profit of the Group. If the combination had taken place at the beginning of the year, MCPL would have contributed revenue £6,778,000 and profit after tax £2,477,000 to the consolidated results of the Group.
Included within the goodwill arising on acquisition of £82,068,000 are certain intangible assets that due to their nature cannot be individually separated and reliably measured. They result from the combination of the synergies to be obtained within the Group, the cross-referral of customers, making wider usage of the fund platforms used by MCPL, the underlying skill disciplines within the expanded Group and the economic benefits of organic growth within the business.
NOTES (continued)
7. Intangible Assets
|
Brand |
Customer Relationships |
Management Contracts |
Software |
Goodwill |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
Cost: |
||||||
|
As 1 January 2007 |
- |
- |
- |
62 |
10,035 |
10,097 |
|
Additions |
175 |
6 |
- |
181 |
||
|
At 30 June 2007 |
- |
- |
175 |
68 |
10,035 |
10,278 |
|
Additions |
- |
- |
- |
27 |
- |
27 |
|
Acquisition of subsidiaries |
- |
- |
5,856 |
4 |
14,379 |
20,239 |
|
Capital reconstruction of Exeter Investment Group |
- |
- |
- |
- |
(4,678) |
(4,678) |
|
At 31 December 2007 |
- |
- |
6,031 |
99 |
19,736 |
25,866 |
|
Additions |
- |
- |
- |
11 |
- |
11 |
|
Acquisition of subsidiaries |
903 |
15,025 |
11,794 |
- |
82,068 |
109,790 |
|
At 30 June 2008 |
903 |
15,025 |
17,825 |
110 |
101,804 |
135,667 |
|
Amortisation and impairment: |
||||||
|
As 1 January 2007 |
- |
- |
- |
27 |
4,953 |
4,980 |
|
Amortisation during the period |
- |
- |
20 |
9 |
- |
29 |
|
At 30 June 2007 |
- |
- |
20 |
36 |
4,953 |
5,009 |
|
Amortisation during the period |
- |
- |
209 |
18 |
- |
227 |
|
Capital reconstruction of EIG |
- |
- |
- |
- |
(4,678) |
(4,678) |
|
At 31 December 2007 |
- |
- |
229 |
54 |
275 |
558 |
|
Amortisation during the period |
29 |
477 |
837 |
15 |
- |
1,358 |
|
At 30 June 2008 |
29 |
477 |
1,066 |
69 |
275 |
1,916 |
|
Net book value: At 30 June 2008 |
874 |
14,548 |
16,759 |
41 |
101,529 |
133,751 |
|
Net book value: At 31 December 2007 |
- |
- |
5,802 |
45 |
19,461 |
25,308 |
|
Net book value: At 30 June 2007 |
- |
- |
155 |
32 |
5,082 |
5,269 |
NOTES (continued)
7. Intangible Assets (continued)
Brand
This intangible has been valued using a royalty relief methodology at £903,000 (2007: £nil). Based on management estimates of likely future net sales and applying an appropriate royalty rate the useful life of the brand is estimated to be 10 years.
Customer Relationships
These intangibles have been valued using the multi period excess earnings methodology at £15,025,000 (2007: £nil). Based on the historical FUM delivery profile of key Customer Relationships and management estimates of attrition rates the useful lives of those Customer Relationships is estimated to be 10 years.
Management Contracts
These intangibles have been valued using the multi period excess earnings methodology at £17,825,000 (2007: £6,031,000). Based on the age profile of the management contracts and management estimates of attrition rates the useful lives of these Management Contracts is estimated to be between 3-9 years
Software
These intangibles represent the cost or fair value of software licences acquired for use in the business. They are estimated to have a useful life that correlates to the licence period acquired.
In addition to the assets recognised above, intangible assets in respect of software developed in-house and non-compete agreements have not been recognised on the grounds of immateriality.
8. Share Capital
The company's share capital structure consists entirely of fully paid ordinary shares of 10p each.
As detailed in note 6, during the period 27,500,129 new ordinary shares were issued as part consideration for MCPL and a further 7,000,0000 new ordinary shares were issued by way of a placing at 150p per share to part finance the cash consideration for the deal.
The additional share capital that has been issued in the period is to satisfy the share options that have been exercised by employees of the Group at prices ranging from £0.50 to £1.55 under the Group's various share option schemes.
NOTES (continued)
9. Reconciliation of Movements in Equity
|
Share capital £'000 |
Share premium £'000 |
Treasury shares £'000 |
Merger reserve £'000 |
Retained earnings £'000 |
Revaluation reserve £'000 |
Total £'000 |
|
|
At 1 January 2007 |
1,569 |
416 |
(294) |
11,265 |
10,395 |
6 |
23,357 |
|
Shares issued |
38 |
432 |
- |
- |
- |
- |
470 |
|
Share based payments |
- |
- |
- |
- |
317 |
- |
317 |
|
Attributable profit for the period |
- |
- |
- |
- |
586 |
(6) |
580 |
|
At 1 July 2007 |
1,607 |
848 |
(294) |
11,265 |
11,298 |
- |
24,724 |
|
Shares issued |
4 |
42 |
- |
- |
- |
- |
46 |
|
Shares issued on acquisition |
671 |
- |
- |
14,126 |
- |
- |
14,797 |
|
Share based payments |
- |
- |
- |
- |
357 |
- |
357 |
|
Attributable profit for the period |
- |
- |
- |
- |
865 |
- |
865 |
|
Balance at 1 January 2008 |
2,282 |
890 |
(294) |
25,391 |
12,520 |
- |
40,789 |
|
Shares issued |
701 |
9,804 |
- |
- |
- |
- |
10,505 |
|
Shares issued on acquisition |
2,750 |
- |
- |
41,800 |
- |
- |
44,550 |
|
Share issue costs |
- |
(265) |
- |
(507) |
- |
- |
(772) |
|
Share based payments |
- |
- |
- |
- |
230 |
- |
230 |
|
Attributable profit for the period |
- |
- |
- |
- |
(298) |
- |
(298) |
|
Equity Dividends Paid |
- |
- |
- |
- |
(455) |
- |
(455) |
|
Balance at 30 June 2008 |
5,733 |
10,429 |
(294) |
66,684 |
11,997 |
- |
94,549 |
MIDAS CAPITAL PARTNERS LIMITED
COMPANY INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH 2008
|
Notes |
Year to 31 March 2008 £'000 |
Year to 31 March 2007 £'000 |
||
|
Revenue |
9,636 |
4,884 |
||
|
Administrative expenses |
||||
|
Other operating expenses |
(2,255) |
(1,480) |
||
|
Amortisation |
(38) |
(38) |
||
|
Exceptional operating expense |
2 |
(294) |
- |
|
|
Total administrative expenses |
(2,587) |
1,518 |
||
|
Other operating income |
6 |
- |
||
|
Operating profit |
7,055 |
3,366 |
||
|
Finance revenue |
174 |
89 |
||
|
Finance costs |
(3) |
(1) |
||
|
Profit before taxation |
7,226 |
3,454 |
||
|
Taxation |
(2,284) |
(1,048) |
||
|
Profit after taxation |
4,942 |
2,406 |
||
|
Dividend |
3 |
(3,641) |
(2,449) |
|
|
Profit/(loss) for the period attributable to equity holders of the parent |
1,301 |
(43) |
MIDAS CAPITAL PARTNERS LTD
COMPANY BALANCE SHEET
AS AT 31 MARCH 2008
|
Notes |
31 March 2008 £'000 |
31 March 2007 £'000 |
||
|
Non - current assets |
||||
|
Intangible assets |
82 |
120 |
||
|
Property and equipment |
95 |
100 |
||
|
177 |
220 |
|||
|
Current assets |
||||
|
Trade and other receivables |
1,062 |
775 |
||
|
Cash and cash equivalents |
3,103 |
2,494 |
||
|
4,165 |
3,269 |
|||
|
Current liabilities |
||||
|
Trade and other payables |
259 |
766 |
||
|
Financial liabilities |
7 |
13 |
||
|
Income tax payable |
1,090 |
1,022 |
||
|
Total current liabilities |
1,356 |
1,801 |
||
|
Net current assets |
2,809 |
1,468 |
||
|
Total assets less current liabilities |
2,986 |
1,688 |
||
|
Non - current liabilities |
||||
|
Financial liabilities |
- |
4 |
||
|
Provisions |
15 |
15 |
||
|
Deferred tax liabilities |
27 |
26 |
||
|
42 |
45 |
|||
|
Net assets |
2,944 |
1,643 |
||
|
Equity |
||||
|
Share capital |
4 |
87 |
87 |
|
|
Share premium |
4 |
1,264 |
1,264 |
|
|
Retained earnings |
4 |
1,593 |
292 |
|
|
Total equity |
2,944 |
1,643 |
MIDAS CAPITAL PARTNERS LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2008
|
31 March 2008 £'000 |
31 March 2007 £'000 |
||||
|
Operating activities |
|||||
|
Profit for the year |
4,942 |
2,406 |
|||
|
Adjustments to reconcile operating profit to net cash flow from operating activities: |
|||||
|
Tax on continuing operations |
2,284 |
1,048 |
|||
|
Net finance revenue |
(171) |
(88) |
|||
|
Depreciation |
24 |
26 |
|||
|
Amortisation of intangible assets |
38 |
38 |
|||
|
Increase in trade and other receivables |
(287) |
(305) |
|||
|
(Decrease) / increase in trade and other payables |
(507) |
311 |
|||
|
Cash generated from operations |
6,323 |
3,436 |
|||
|
Income tax paid |
(2,215) |
(325) |
|||
|
Net cash flow from operating activities |
4,108 |
3,111 |
|||
|
Investing activities |
|||||
|
Interest received |
174 |
89 |
|||
|
Purchase of property and equipment |
(19) |
(30) |
|||
|
Purchase of intangible assets |
- |
(32) |
|||
|
Net cash flow from investing activities |
155 |
27 |
|||
|
Financing activities |
|||||
|
Proceeds from share issue |
- |
263 |
|||
|
Interest paid |
(3) |
(1) |
|||
|
Dividends paid to equity shareholders |
(3,641) |
(2,449) |
|||
|
Repayment of hire purchase contracts |
(10) |
(1) |
|||
|
Net cash flow from financing activities |
(3,654) |
(2,188) |
|||
|
Increase in cash and cash equivalents |
609 |
950 |
|||
|
Cash and cash equivalents at the beginning of the period |
2,494 |
1,544 |
|||
|
Cash and cash equivalents at the period end |
3,103 |
2,494 |
MIDAS CAPITAL PARTNERS LTD
KEY NOTES
Midas Capital Partners Ltd (MCPL) became a wholly owned subsidiary of Midas Capital plc as a result of the merger transaction completed on the 7 March 2008. The full year audited accounts to 31 March 2008 for MCPL have now been completed under UK GAAP and have been filed with the Registrar of Companies. As instructed by the Regulation division of the Alternative Investment Market (AIM) those MCPL Financial Statements have been restated under International Financial Reporting Standards (IFRS) and the Income Statement, Balance Sheet, Cash Flow and key notes have been extracted and are presented in this report. MCPL's results from the date of merger on 7 March to 30 June 2008 have been consolidated within the Group's 2008 Interim Statement.
The following exceptional expenses were incurred during the acquisition of the Company on the 7 March 2008 by Midas Capital plc
|
31 March 2008 |
31 March 2007 |
|
|
£'000 |
£'000 |
|
|
Auditors' remuneration: |
||
|
- Corporate finance |
88 |
- |
|
- Other assurance services |
12 |
- |
|
Other exceptional legal and professional costs |
194 |
- |
|
|
294 |
- |
|
31 March 2008 |
31 March 2007 |
|
|
£'000 |
£'000 |
|
|
Declared and paid during the year |
||
|
Equity dividends on ordinary shares |
||
|
- 2007 Interims |
- |
1,799 |
|
- 2007 Final |
- |
650 |
|
- 2008 Interims |
3,641 |
- |
|
3,641 |
2,449 |
KEY NOTES (continued)
|
Share Capital |
Share Premium |
Retained Earnings |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
|
At 1 April 2006 |
86 |
1,002 |
335 |
1,423 |
|
Total recognised income and expense for the year |
- |
- |
2,406 |
2,406 |
|
Shares issued |
1 |
262 |
- |
263 |
|
Equity dividends paid |
- |
- |
(2,449) |
(2,449) |
|
At 1 April 2007 |
87 |
1,264 |
292 |
1,643 |
|
Total recognised income and expense for the year |
- |
- |
4,942 |
4,942 |
|
Equity dividends paid |
- |
- |
(3,641) |
(3,641) |
|
At 31 March 2008 |
87 |
1,264 |
1,593 |
2,944 |
Related Shares:
MGR.L