Final Results

    RNS Number : 2238X
  Cobra Capital Limited
  20 June 2008
   
    COBRA CAPITAL LIMITED
    Preliminary results
    For the year ended 31 December 2007


    DIRECTORS' REPORT

    We are pleased to present this annual report to shareholders for the year ended 31 December 2007 for Cobra Capital Limited ("Cobra" or
the "Company").

    Net Asset Value
    We have set out in the table below the half yearly progression of our net asset value per share ("NAV") since the Company began
investing after its admission to the AIM market of the London Stock Exchange plc ("AIM") on 27 February 2004.  

 Date    30 June    31 December 2004    30 June    31 December 2005
          2004                           2005
 NAV   (unaudited)     (audited)      (unaudited)     (audited)
         35.26p          39.43p         41.04p          42.16p

 Date    30 June    31 December 2006   30 June     31 December 2007
          2006                           2007
 NAV   (unaudited)     (audited)      (unaudited)     (audited)
         40.46p          50.97p         46.02p          34.71p

    Overall, 2007 was mixed year for the Company, containing a number of positive elements around the mid-year, but unfortunately ending the
year on a disappointing note as we had to make significant provisions against both of Cobra's unquoted investments due to events that have
come to light post year end but affected the year end values. 

    We began the year with the NAV at 50.97 pence, which had been bolstered at that time by the upward revaluation (c.8 pence of NAV) of one
of Cobra's unquoted investments. At the mid-point of 2007, as we previously reported in our interim results, we were disappointed that the
NAV had fallen by almost 5 pence to 46.02 pence. However, we were pleased to have made up all of that loss with a strong third quarter
performance, which by mid-September had returned the NAV to above 50 pence. 

    Cobra's performance over the year contrasted with that of the AIM All Share Index ("the Index") which was also decidedly mixed. The
Index ended broadly flat year on year, although that statistic masks significant movements within the year. The Index rose steadily to a
2007 high in July, but subsequently fell by more than 15% by the year end. Unfortunately, as has been well publicised, the significant
deterioration in the liquidity levels in the small cap market in the fourth quarter of 2007 materially affected Cobra's ability to exit from
some of its investments without exerting extreme downward price pressure on their respective share prices. 

    The net effect of the revaluations of the unquoted investments, together with the difficult trading conditions in the second half of the
year, meant that unfortunately, for the first time since the Company floated more than 4 years ago, Cobra's year-end NAV was lower than that
of the previous year. 


    Investment strategy
    The Company's investment strategy remains as outlined in its AIM admission document. This strategy was executed regularly during the
first three quarters of 2007, where we continued to identify seismic event companies (companies in which there is likely to be a material
event or transaction) or facilitator transactions (transactions in which Cobra participates providing more than just financial resources)
where we are confident that we can achieve good returns within a six month time frame. However, due to the reduction in the number of
capital raisings and IPOs for small companies towards the end of the year, we took the view at that time to try to exit (where possible)
from our quoted investments. This decision, which we believe was justified given the downward trend in share prices in that period,
regrettably meant that the additional investment capabilities that we obtained as a result of securing our leveraged trading facility in
July 2007 remained largely unused during the latter part of the year. Accordingly, whilst our strategy of investment remains unchanged, we have scaled down the number of new investments until the markets return
to normal.

    During the year the number of investments held at any one time varied between 10 and 18 companies.  Our 11 quoted investments as of 31
December 2007, can be split into three investment sizes as follows:


 Investment Size                Number of Investments
 Up to £250,000                 9
 Between £250,001 and £500,000  1
 Over £500,000                  1

    During the course of the year we actively increased Cobra's profile amongst the small cap broking community, both in the UK and in The
Netherlands. This in part enabled us to continue to invest and exit from investments in the early part of the year as we were seeing an
increase in the breadth of proposals from a higher number of sources.  

    During the course of 2007, the expected flotations of both of our unquoted companies did not occur. The IPO of one was aborted in late
November 2007 whilst on its fundraising roadshow due to the poor stock market conditions and the other due to trading below expectations,
coupled with an aborted trade sale, which had adversely impacted on its management's time. 

The company that subsequently aborted its float in November 2007 had undertaken a sizeable private round equity fundraising in late 2006
which placed a value on the shares held by Cobra at £1,300,000 (in accordance with the valuation principals of the European Venture Capital
Association). Unfortunately, following the aborted float, this company has recently undertaken a deeply discounted, but significant, equity
fundraising (raising £5.3 million), the effect of which is to reduce the carrying value of Cobra*s holding in that company by £900,000 (c.10
pence of NAV) to £400,000 at the year end. 

    The second unquoted investment, a company in which Cobra invested in January 2007, suffered an unexpected poor period of trading
mid-year yet, whilst trading is expected to remain challenging during 2008, the company's management are confident about its future
prospects. However, in consultation with our advisers, we have taken the decision to make a provision of approximately £100,000 (approx 1
pence of NAV) against this investment. 

    Accordingly, an aggregate reduction of more than 11 pence in Cobra's NAV was caused by the reduction in the carrying values attributed
to its unquoted investments. 

    Funds available for investment
    We have not raised any new funds during the course of 2007 and, therefore, the total equity funds raised by Cobra remains at £3,590,500
(before costs) since its incorporation on 27 February 2004. The total net assets of the company, as of 31 December 2007, stood at
£3,051,898.  

    In previous reports, we had been concerned about the dilutive effects of raising further funds for investment purposes from the equity
markets whilst Cobra's share price was languishing behind its NAV. To this end, we initiated discussions with a number of EU banks with a
view to securing appropriate debt facilities for Cobra. These discussions culminated in the Company signing a trading and leverage facility
agreement, as announced in July, which could provide Cobra with up to £20 million of available funds to invest.

    Given our strategy of divestment rather than investment in the latter part of the year, the net borrowing levels of the Company stood at
£727,550 at the year end.

    Share Price
    Our share price began 2007 at 28.5 pence. Pleasingly, following some extensive investor relations activities undertaken during May and
June in conjunction with our new financial PR company, the share price climbed to an all time high of 64.5 pence in early August, shortly
after we announced the new leveraged trading facility. The fact that Cobra's shares are relatively illiquid, something that we've
continually commented on in previous reports was, we believe, the principal reason for the higher than expected share price rise during the
middle of the year. Unsurprisingly, the price then slipped back during the second half of the year to close at 55.5 pence at 31 December
2007 and has since fallen (in line with the market) to 41.5 pence as of 31 May 2008. Whilst we are extremely pleased to have finally
achieved some material uplifts in share value for shareholders during 2007, we remain very cautious about achieving similar price increases
in the near future as a result of the capital markets remaining closed for smaller companies. 


    Outlook
    The Directors are ultimately disappointed with Cobra*s recent NAV performance, despite the Company*s operational progress achieved
during the year. The public markets remain relatively closed for small company fundraisings, although we do anticipate activity to pick up
in the second half of the current financial year. We also expect to exit from one of our unquoted companies in the second half of the year.

    We therefore remain cautious over the future. 


    Going Concern
    After due consideration, the Directors believe that the Company has adequate resources for the period of at least 12 months from the
date of approval of the financial statements, and consequently that it is appropriate to apply the going concern principle in preparing the
financial statements.

    Activities
    The Company was incorporated on 27 February 2004 and was admitted to trading on AIM on 24 March 2004.

    The principal activity of the Company is the investment, holding and sale of equity investments in companies which are located in
Europe.

    Creditors Payment Policy and Practice
    It is the Company's payment policy and actual practice to ensure settlement of suppliers' invoices in accordance with the stated terms
of the invoices.

    On behalf of the Board,


    
 Peter Griffin  Michael Cahill
 Director             Director



    20 June 2008

      Statement of total return for the year ended 31 December 2007

    
    For the year ended  For the year ended
      31 December 2007    31 December 2006


                                         Note           Revenue     Capital       Total      Revenue    Capital      Total
                                                           £           £            £           £          £           £
 (LOSS)/GAINS ON INVESTMENTS
 Net (loss)/gains on investments at fair 
   value through profit or loss                               -     (952,162)    (952,162)         -   1,193,145   1,193,145 
                                                              -     (952,162)    (952,162)         -   1,193,145   1,193,145 

 INCOME
 Dividend income                                         12,899            -       12,899        778           -         778 
 Interest income                                         13,435            -       13,435     11,012           -      11,012 
                                                         26,334            -       26,334     11,790           -      11,790 

 EXPENDITURE
 Directors' fees                                          4,000            -        4,000      4,000           -       4,000 
 Administration fees                                     72,266            -       72,266     63,407           -      63,407 
 Professional fees                                       49,521            -       49,521     82,114           -      82,114 
 Consultancy fees                                             -      168,602      168,602          -     154,540     154,540 
 Audit fee                                               13,150            -       13,150      8,090           -       8,090 
 Registrar and regulatory expenses                       25,931            -       25,931     16,286           -      16,286 
 Sundry expenses                                          1,508            -        1,508        700           -         700 
 Commissions paid                                         4,198            -        4,198          -           -           - 
 Interest expense                                        87,044            -       87,044     33,363           -      33,363 
 Loss on exchange                                        80,069            -       80,069      4,528           -       4,528 
                                                        337,687      168,602      506,289    212,488     154,540     367,028 

 (LOSS)/PROFIT ON ORDINARY ACTIVITIES FOR THE          (311,353)  (1,120,764)  (1,432,117)  (200,698)  1,038,605     837,907 
 FINANCIAL YEAR BEFORE TAXATION
 Withholding tax suffered                                (1,144)           -       (1,144)       (78)          -         (78)

 (LOSS)/PROFIT ON ORDINARY ACTIVITIES FOR THE          (312,497)  (1,120,764)  (1,433,261)  (200,776)  1,038,605     837,829 
 FINANCIAL YEAR AFTER TAXATION

 Earnings per share:                                1
  - basic (pence per share)                               (3.55)      (12.75)      (16.30)     (2.28)      11.81        9.53 

 All revenue and capital items in the above statement derive from continuing operations.

 No operations were acquired or discontinued during the year.


 BALANCE SHEET
 31 DECEMBER 2007
                                               31 December 2007              31 December 2006
 FIXED ASSETS
 Investments at fair value through profit or                     3,967,504              5,045,800 
 loss

 CURRENT ASSETS
 Cash and cash equivalents                             160,389                20,958 
 Other debtors and prepayments                          26,704                     - 
                                                       187,093                20,958 
 CREDITORS - AMOUNTS FALLING                                                         
 DUE WITHIN ONE YEAR
 Loans payable and overdrafts                        1,069,181               568,716 
 Other creditors and accruals                           33,518                15,873 
                                                     1,102,699               584,589 
                                                                                     
 NET CURRENT LIABILITIES                                          (915,606)              (563,631)

 TOTAL ASSETS LESS CURRENT LIABILITIES                        £  3,051,898          £   4,482,169 
  
 CAPITAL AND RESERVES

 CALLED UP SHARE CAPITAL                                            87,932                 87,932 
 SHARE PREMIUM ACCOUNT                                           3,502,568              3,502,568 
 CAPITAL RESERVE
                         REALISED                                  187,524                567,025 
                         UNREALISED                                164,951                906,214 
 SHARE OPTION RESERVE                                               62,990                 60,000 
 REVENUE RESERVE                                                  (954,067)              (641,570)

 SHAREHOLDERS' FUNDS                                          £  3,051,898          £   4,482,169 
                                                                                                  
 Net asset value per share (pence per share)                         34.71                  50.97 

      
 CASH FLOW STATEMENT
 FOR THE YEAR ENDED 31 DECEMBER
 2007
                                                      For the year ended     For the year ended
                                                            31 December             31 December
                                                                    2007                   2006

 Net cash outflow from                                         (390,181)              (395,441)
 operating activities

 Returns on investment and
 servicing of finance:
 Interest paid on loans payable                                 (74,032)               (29,708)
 Net cash outflow from investment and servicing of              (74,032)               (29,708)
 finance


 Investing activities:
 Purchase of listed securities                               (3,270,498)            (4,554,767)
 Purchase of unlisted                                          (144,578)                     - 
 securities
 Proceeds from disposals of                                   3,518,255              4,471,240 
 listed securities
 Net cash inflow/ (outflow)                                     103,179                (83,527)
 from financial investment

 Financing:
 Loans payable advanced                                         500,465                369,541 
 Net cash inflow from financing                                 500,465                369,541 

 Increase/(decrease) in cash                       £            139,431   £           (139,135)
 resources for the year


 RECONCILIATION OF NET CASH FLOW TO MOVEMENT
 IN NET DEBT

 Increase/(decrease) in cash                                    139,431               (139,135)
 resources for the year

 Cash inflow from increase in                                  (500,465)              (369,541)
 debt financing 

 Change in net debt resulting                                  (361,034)              (508,676)
 from cashflows

 Net debt at 1 January 2007                                    (547,758)               (39,082)

 Net debt at 31 December 2007                      £           (908,792)  £           (547,758)



NOTES TO THE FINANCIAL STATEMENTS                                                                                
31 DECEMBER 2007                                                                                                       
 
1.             EARNINGS PER SHARE     
                                                                                               
The calculation of basic earnings per share is based on the return on ordinary activities after tax for the year and on 8,793,200 shares
being the weighted average number of shares in issue during the year.
                                                                                                                                            

FRS 22 "Earnings Per Share" defines dilution as a reduction in earnings per share or as an increase in loss
per share. When calculating the dilutive earnings per share the loss per share decreased. Accordingly dilutive loss per share is not
disclosed.   The company has 500,000 share options in issue which could potentially dilute basic earnings per share in the future.
 
2.           NET ASSET VALUE PER SHARE                                                                                     
                                                                                                                                            
                  
The calculation of net asset value per share is based on the net assets of £3,051,898 and on the
ordinary shares in issue of 8,793,200 at the balance sheet date.
      


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