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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Evolve Capital | LSE:EVOL | London | Ordinary Share | GB00B29WXB29 | ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.375 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMEVOL
RNS Number : 4338G
Evolve Capital PLC
29 June 2012
Evolve Capital plc
("Evolve" or the "Company")
Final Results for the year ended 31 December 2011
CHAIRMAN'S STATEMENT
I am pleased to report to you on the Company's activities during the year to 31 December 2011.
Events during the period in both Europe and closer to home conspired to create the most challenging market conditions in the UK that have been seen for many years. In response to these conditions the Company has continued to bear down on its cost base and to focus on supporting those investments which the Directors believe have the potential to generate a significant return for the Company in the medium to long term.
At the start of the period under review Evolve had a 53.61% stake in Astaire Group Plc ("Astaire"). As announced in October 2011 Evolve increased its holding in Astaire to 100% through a court sanctioned Scheme of Arrangement. This was achieved by the issue of 21,563,454 new ordinary shares in Evolve to certain Astaire shareholders and by the payment of an aggregate of GBP1,596,782 in cash to certain other of its shareholders who had elected to exit from their investment in Astaire. On 27 October 2011 Astaire's trading facility on AIM was cancelled and it ceased to be a public company in its own right.
As a consequence of this transaction Evolve has gained access to some GBP2.5 million of additional cash resources and acquired a number of additional investments from which it may be possible to generate future returns for its shareholders. As at 31 December 2011 Evolve had available cash resources of GBP1.2 million.
During the period Evolve invested a further GBP500,000 in 3D Diagnostic Imaging Plc ("3D"), an AIM listed company in which Evolve already held a significant stake. This investment was made as a part of a larger fundraising exercise by the company from which it raised GBP1.41 million. As a consequence Evolve now holds 32.8% of 3D's issued share capital. The performance of this investment has been very disappointing and is referred to in more detail below.
Also during the period under review Evolve invested GBP500,000 into Central Asian Minerals and Resources Plc ("CAMAR"), a PLUS quoted company whose wholly owned subsidiary owns a 49% stake in a joint venture gold mining project based in Tajikistan, to acquire 769,231 units. Each unit comprised one new ordinary share with an issue price of 65 pence and a warrant to acquire one additional CAMAR share at an issue price of 65 pence. This investment was made as a part of a larger fundraising exercise by the company and following that exercise Evolve now holds 5.3% of CAMAR's issued share capital. The performance of this company is referred to in more detail below.
In order to make these investments, both of which took place before Evolve had secured access to the cash resources within Astaire, Evolve borrowed an additional GBP775,000 from Kimono Investment Holdings Limited ("Kimono"), an existing shareholder of Evolve. A new loan agreement was entered into with Kimono that consolidated this additional loan and the existing indebtedness of the Company to Kimono of GBP479,636 under a single loan agreement. I also agreed to lend the Company GBP100,000 at the same rate of interest as the loan from Kimono. Full details of these arrangements were announced by Evolve on 24 August 2011 and both of these loans were subsequently repaid in full in November 2011.
Evolve's on-going strategy is to optimise its returns through a series of staged exits from the investments that it has made directly and from those acquired as a consequence of the Astaire transaction. It is currently anticipated that these exits will take a number of years to achieve.
Operations and Investment Activity
As referred to above, Astaire's trading facility on AIM has now been cancelled and it has ceased to be a public company in its own right. Over the coming years every effort will be made to optimise the returns from the orderly disposal of the underlying assets acquired from Astaire with a view to mitigating the historic losses experienced by Evolve from its investment in this group.
Evolve's other wholly owned subsidiary, St Helens Capital Partners LLP ("St Helens"), continues to be one of the leading advisers to companies on the PLUS-SX market or seeking to join that market. In March 2012 St Helens once again won the industry award for 'PLUS Adviser of the Year'.
Market conditions for small cap companies continue to be very difficult and speculation as to the future ownership of PLUS Stock Exchange Plc, the company that operates the PLUS-SX market, prior to its recent acquisition by ICAP has served to further dampen the level of activity in this market. That said, St Helens is continuing to maintain tight control over its cost base and is well placed to develop as market sentiment improves.
Evolve's principal investments as at 31 December 2011 can be summarised as follows.
Hot Features
Premium
Name Market Shares % Cost - GBP Fair Value
held - GBP
----------------------------- ---------- ------------ ------- ------------ ------------
3D Diagnostic Imaging
Plc AIM 78,974,354 32.80 1,789,925 503,462
----------------------------- ---------- ------------ ------- ------------ ------------
Aconite Technology Limited Private 201,190 2.69 211,250 26,750
----------------------------- ---------- ------------ ------- ------------ ------------
Bluehone Holdings Plc PLUS 23,615,411 19.23 386,763 301,096
----------------------------- ---------- ------------ ------- ------------ ------------
Central Asian Minerals
and Resources Plc PLUS 885,895 5.30 503,750 544,926
----------------------------- ---------- ------------ ------- ------------ ------------
Pulse Group Plc PLUS 6,079,888 7.33 328,595 64,599
----------------------------- ---------- ------------ ------- ------------ ------------
Woodspeen Training Group
Plc PLUS 3,000,000 14.62 450,000 573,750
----------------------------- ---------- ------------ ------- ------------ ------------
Investment Review
3D Diagnostic Imaging Plc ("3D")
3D is an AIM listed company that owns the intellectual property rights to a specific technology platform. The first commercial product, based on the technology, is a highly accurate, hand-held device for the early detection and monitoring of hidden tooth decay. The company is now believed to have successfully overcome the technology and regulatory hurdles, achieved industry recognition and received a number of complimentary testimonials from key opinion leaders. What remains to be achieved is volume sales penetration. Unfortunately, during the early part of the period under review, the company experienced a manufacturing defect, which was promptly resolved but which adversely impacted both its sales performance during the period and its available cash resources. As a consequence 3D's share price fell sharply and it was obliged to raise additional capital by issuing shares at a price of 2p per share. The sales development profile after the year-end, albeit from a modest starting position, is more encouraging. However, the company's cash resources continue to be constrained and it is once again exploring ways in which to strengthen its balance sheet. The marked drop in 3D's share price over the period under review, and subsequently, has resulted in a significant write-down in the carrying value of this investment and this write-down is a major contributor to Evolve's reported loss for the year.
Aconite Technology Limited ("Aconite")
Aconite is a private company that develops and supplies software for use in the card payment arena. During the period under review revenues have been below expectation as a consequence of delays in the signing of various contracts.
Bluehone Holdings Plc ("Bluehone")
Bluehone maintained a low profile during the period under review as its management explored various options to increase the level of funds under management. Since the year-end the company has launched a new small company secured debt fund and announced an intention to move from PLUS to the AIM market.
Central Asian Minerals and Resources Plc ("CAMAR")
CAMAR is a PLUS quoted company with a 49% stake in a joint venture gold mining project in Tajikistan. During the period under review the company raised an additional GBP4.4 million (before costs) and after the year-end raised a further $4.5 million before costs. The company is now focused on establishing the extent of the additional resources that are believed to lie within the licensing areas.
Pulse Group Plc ("Pulse")
Pulse is a PLUS quoted company and is a leading provider of research process outsourcing in the Asia Pacific region with clients drawn from around the world. During the period under review the company won a number of new contracts but continued to be sub-scale in size. The management are seeking a merger with one or more strategic partners as a means of achieving the critical mass that is anticipated will lead to a marked increase in shareholder value.
Woodspeen Training Group Plc ("Woodspeen")
Woodspeen experienced difficult trading conditions during the period under review principally due to changes and to uncertainty in the funding of the Government sponsored training sector. However, the company has a strong management team and a solid level of cash resources with which to ride out the current period of uncertainty.
Financial Performance
During the period under review the Group reported a loss of GBP4.0 million (2010: loss of GBP8.8 million). The principal contributor to this loss was the GBP3.5 million deterioration in the carrying value of Evolve's investment in 3D. The losses from 2010 were a consequence of impairment and restructuring costs associated with the discontinued operations within Astaire Group.
At 31 December 2011 the Group had net assets of GBP5.1 million (31 December 2010: GBP11.5 million) which included cash resources of GBP1.2 million (31 December 2010: GBP4.5 million).
It is the Board's intention that we continue to focus on our core strategy of optimising returns from orderly exits from various of our existing investments and from continuing to support those investments where we consider there is the future potential to generate significant returns. I look forward to updating you on further progress in due course.
Oliver Vaughan
Executive Chairman
28 June 2012
For further information please contact:
Evolve Capital plc Oliver Vaughan Tel: 020 7937 4445 Allenby Capital Limited (nominated adviser and broker) Tel: 020 3328 5656 Nick Naylor Nick Athanas
FINANCIAL REVIEW
Results
The loss after tax for the year from all operations was GBP4.0 million compared with a loss of GBP8.8 million in 2010, and the loss after tax from continuing operations was GBP4.0 million in 2011 compared with a loss of GBP4.5 million in 2010.
The result before tax can be divided into the following:
2011 2010
GBP'000 GBP'000
Loss from continuing operations before taxation (4,880) (4,164)
Profit / (loss) from discontinued operations before
taxation 46 (4,990)
"Continuing operations" consists of the on-going investment activities conducted by the Group, which is actively seeking to realise value from the assets it holds and minimise its exposure to liabilities.
"Discontinued operations" relate to the activities within Astaire Group Limited. In particular the sales of both Rowan Dartington and Dowgate Capital Stockbrokers were completed and announced before Astaire itself became a wholly owned subsidiary of the Company and left the AIM market.
Income Statement
Gross fee and commission income for the Group in 2011 was GBP0.49 million and related exclusively to St Helens.
Realised gains on equity investments and option positions delivered a net gain of GBP1.2 million (2010: GBP0.4 million). The as yet unrealised movement in the valuation of options and warrants held at 31 December 2011 was a loss of GBP0.9 million (2010: GBP0.2 million). Unrealised losses in respect of Evolve's investment in 3D were responsible for a further loss of GBP3.5 million.
The disposal of Dowgate Capital Stockbrokers Plc and Rowan Dartington & Co Limited by Astaire Group, realised losses totalling GBP0.2 million within the Group.
Operating expenses excluding impairments, amortisation, share--based payments and restructuring charges, fell significantly as they were substantially concluded during 2010. Group expenses are expected to be reduced further during 2012 with lower headcount.
The carrying value of goodwill and other intangibles for discontinued operations had been reduced to GBPNil at 31 December 2010, in anticipation of their disposal during 2011. The carrying value of other intangibles for continuing operations has been reviewed and impaired as considered appropriate.
Business Review
Astaire Group Limited
As has been stated in the Chairman's statements this has been a disappointing investment, Astaire Group's reported results for 2011 including a loss after tax of GBP0.7 million.
St Helens Capital Partners LLP
Given market circumstances St Helens had a satisfactory year of trading generating GBP0.49 million of revenue and a small loss of GBP0.1 million.
Investments
During the year the Group invested further funds into both 3D and CAMAR.
Loss Per Share
The basic loss per share from continuing operations for the year was 1.40 pence compared to 2.13 pence in 2010. The loss per share from continuing and discontinued operations was 1.39 pence (2010: 4.18 pence).
Balance Sheet
Net assets per share declined from 4.06 pence at 31 December 2010 to 1.69 pence at 31 December 2011. The main contributor to this decline was the unrealised loss arising from Evolve's investment in 3D.
Included in assets, at 31 December 2011 was GBP1.2 million of cash (31 December 2010: GBP4.5 million).
Cash Flow
At 31 December 2010 the cash and cash equivalents held by the consolidated group totalled GBP4.5 million. Since then Group cash and cash equivalents have fallen to GBP1.2 million at 31 December 2011, representing net cash per share of 0.38 pence (31 December 2010: 1.58 pence).
Dividends
The Board are not recommending the payment of a final dividend for 2011 (2010: GBPNil).
Oliver Vaughan
Director
28 June 2012
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2011
2011 2010
GBP'000 GBP'000
Fee and commission income 492 533
Fee and commission expenses (2) (23)
Net fee and commission income 490 510
Other income 639 -
Total income 1,129 510
Profit on disposal of available-for-sale
investments 1,159 359
Loss on fair value through profit and
loss investments (4,481) (186)
Loss on sale of subsidiary undertakings (241) (1,052)
Operating expenses
Impairment of goodwill - (299)
Impairment of other intangibles (31) (63)
Amortisation of other intangibles (77) (76)
Share-based payments credit - 85
Other operating expenses (2,348) (3,445)
----------------------------------------------- ---------- ----------
Total operating expenses (2,456) (3,798)
Operating loss (4,890) (4,167)
Investment revenue 50 36
Finance costs (40) (33)
Loss on ordinary activities before taxation (4,880) (4,164)
Taxation credit / (charge) 846 (327)
Loss from continuing operations (4,034) (4,491)
Discontinued operations
Profit / (loss) from discontinued operations 46 (4,346)
Loss for the period (3,988) (8,837)
========== ==========
Attributable to :
Owners of the Company (3,723) (5,279)
Non-controlling interests (265) (3,558)
(3,988) (8,837)
========== ==========
Loss per ordinary share (pence)
From continuing operations
- Basic (1.40) (2.13)
========== ==========
- Diluted (1.11) (1.85)
From continuing and discontinued operations
- Basic (1.39) (4.18)
========== ==========
- Diluted (1.10) (3.65)
========== ==========
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2011
2011 2010
GBP'000 GBP'000
Loss for the period (3,988) (8,837)
Other comprehensive income:
Gains on revaluation of available-for-sale
investments taken
to equity (618) 208
Transferred to profit or loss on sale
of available-for-sale
investments (1) (63)
Deferred tax relating to components of
other comprehensive
income 146 (171)
Other comprehensive income for the year,
net of tax (473) (26)
Total comprehensive income for the year (4,461) (8,863)
========== ==========
Total comprehensive income attributable
to:
Owners of the Company (4,294) (5,286)
Non-controlling interests (167) (3,577)
(4,461) (8,863)
========== ==========
CONSOLIDATED BALANCE SHEET
as at 31 December 2011
31 December 31 December 31 December
2011 2010 2009
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Goodwill - - 1,400
Other intangible assets 52 160 3,967
Property, plant and equipment 3 7 503
Total non-current assets 55 167 5,870
Current assets
Trade and other receivables 734 1,816 8,296
Available-for-sale investments 3,462 2,346 2,963
Fair value through profit and
loss investments 503 4,484 4,813
Cash and cash equivalents 1,169 4,463 7,895
Assets held for sale - 7,272 -
Total current assets 5,868 20,381 23,967
Total assets 5,923 20,548 29,837
============= ============= =============
LIABILITIES
Current liabilities
Trade and other payables 739 2,478 8,638
Current tax liabilities - 1 20
Provisions - - 511
Liabilities directly associated - 5,373 -
with assets held for sale
Total current liabilities 739 7,852 9,169
Non-current liabilities
Deferred tax liabilities 40 1,032 1,082
Convertible loan stock - 172 -
Total non-current liabilities 40 1,204 1,082
Total liabilities 779 9,056 10,251
------------- ------------- -------------
EQUITY
Share capital 1,911 1,890 1,785
Share premium account 11,758 11,789 11,457
Equity reserve 247 247 -
Fair value and other reserves 150 721 728
Retained deficit (8,922) (5,448) (255)
Parent Company's shareholders'
equity 5,144 9,199 13,715
Non-controlling interests - 2,293 5,871
Total equity and liabilities 5,923 20,548 29,837
============= ============= =============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2011
Fair
value Non-
Share Share Equity and other Retained controlling Total
capital premium reserve reserves earnings Total interests equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31
December
2009 1,785 11,457 - 728 (255) 13,715 5,871 19,586
Issue of share
capital 105 419 - - - 524 - 524
Share issue
expenses - (87) - - - (87) - (87)
Issue of
convertible
loan stock - - 241 - - 241 - 241
Share-based
payments
credit - - - - 92 92 - 92
Loss for the
year - - - - (5,279) (5,279) (3,558) (8,837)
Transfer between
reserves - - 6 - (6) - - -
Other
comprehensive
income
for the year - - - (7) - (7) (20) (27)
Balance at 31
December
2010 1,890 11,789 247 721 (5,448) 9,199 2,293 11,492
Issue of share
capital 21 259 - - - 280 - 280
Share issue
expenses
/ Costs
associated with
acquisition of
non-controlling
interest - (290) - - - (290) - (290)
Consideration
given
for non-
controlling
interest - - - - - - (1,877) (1,877)
Transfer of
equity
reserves
arising from
acquisition
of
non-controlling
interest - - - - 249 249 (249) -
Transfer between - -
reserves - - - - - -
Loss for the
year - - - - (3,723) (3,723) (265) (3,988)
Other
comprehensive
income
for the year - - - (571) - (571) 98 (473)
Balance at 31
December
2011 1,911 11,758 247 150 (8,922) 5,144 - 5,144
================== ========== ========== ========== ============ =========== ========= ============= =========
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2011
2011 2010
GBP'000 GBP'000
Net cash generated / (used) in operating
activities 600 (3,653)
---------- ----------
Investing activities
Interest received 32 49
Dividends received 18 17
Proceeds on disposal of available-for-sale
investments 47 599
Purchases of available-for-sale investments (619) (211)
Purchases of fair value through profit
and loss investments (500) (450)
Proceeds on disposal of property, plant
and equipment - 1
Purchases of property, plant and equipment - (437)
Acquisition of non-controlling interest (1,877) -
of subsidiary
Disposal of subsidiaries (506) (263)
Net cash from investing activities (3,405) (695)
---------- ----------
Financing activities
Repayment of loan stock (1,254) -
Repayment of director's loan (100) -
Proceeds from issue of ordinary share
capital 280 524
Proceeds from issue of loan stock 775 480
Loan raised on director 100 -
Expenses of share issues (290) (88)
Net cash from financing activities (489) 916
---------- ----------
Net decrease in cash and cash equivalents (3,294) (3,432)
Cash and cash equivalents at beginning
of year 4,463 7,895
Cash and cash equivalents at end of
year 1,169 4,463
========== ==========
NOTES TO THE PRELIMINARY ANNOUNCEMENT
for the year ended 31 December 2011
1. Basis of preparation
This announcement has been based on the Companies financial statements which have been prepared in accordance with IFRS as adopted by the European Union and IFRIC interpretations and with the Companies Act 2006.
The consolidated financial statements have been prepared under the historical cost convention, with the exception of financial instruments, which are stated in accordance with IAS 39 Financial Instruments: Recognition and Measurement.
2. Going concern
As part of its regular assessment of the prospects for the Group, the Board has reviewed a plan to 31 December 2013. Group cash balances have decreased further during 2011 and since the year-end, but the Group has sufficient cash resources to meet its requirements.
The Board assesses the prospects of the Company only, as the prospects and going concern basis as applied to investee companies including Astaire Group Plc and subsidiaries are assessed by the Boards of these entities. As a result of their considerations, the Directors have a reasonable expectation at the time of approving the financial statements that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the financial statements.
3. Discontinued operations
On 22 October 2010 the Group completed the disposal of Astaire Securities Plc, its London based investment banking business. The Group had also taken the decision, prior to the year-end, to sell both Dowgate Capital Stockbrokers Limited and Rowan Dartington & Co Limited.
Contracts were exchanged for the sale of Dowgate Capital Stockbrokers Limited on 24 December 2010 and the disposal subsequently completed on 14 February 2011. The Group had also entered into an agreement granting exclusivity to certain parties who subsequently exchanged contracts and then completed on the acquisition of Rowan Dartington & Co Limited on 8 March 2011. Accordingly the activities of Astaire Securities Plc, Dowgate Capital Stockbrokers Limited and Rowan Dartington & Co Limited have been treated as discontinued.
The results of the discontinued operations, which have been included in the consolidated income statement, were as follows:
2011 2010
GBP'000 GBP'000
Total income 1,104 10,996
(Loss) / profit on disposal of investments (35) 6
Expenses (1,023) (15,992)
Profit / (loss) before taxation 46 (4,990)
Attributable taxation credit - 644
46 (4,346)
Loss on disposal of discontinued operations (241) (1,052)
Attributable taxation credit - 217
Loss from discontinued operations (attributable
to owners of the Company) (195) (5,181)
========== ==========
A loss after taxation of GBP44,000 arose on the disposal of Dowgate Capital Stockbrokers Plc. During the year Dowgate Capital Stockbrokers Limited contributed an outflow of GBP82,000 (2010: inflow of GBP472,000) to the Group's net operating cash flows, received GBPNil (2010: GBP2,900) in respect of investing activities and paid GBPNil (2010: GBP451,000) in respect of financing activities.
A loss after taxation of GBP197,000 arose on the disposal of Rowan Dartington & Co Limited. During the year Rowan Dartington & Co Limited contributed an inflow of GBP208,000 (2010: outflow of GBP409,000) to the Group's net operating cash flows, paid GBPNil (2010: GBP429,000) in respect of investing activities and received GBP1,000 (2010: GBP865,000) in respect of financing activities.
A loss after taxation of GBP835,000 arose on the disposal of Astaire Securities Plc in 2010. During that year Astaire Securities Plc contributed an outflow of GBP382,000 to the Group's net operating cash flows and paid GBP2,800 in respect of investing activities.
The major classes of assets and liabilities comprising the operations classified as held for sale are as follows:
2011 2010
GBP'000 GBP'000
Property, plant and equipment - 577
Trade and other receivables - 5,885
Cash and bank balances - 810
Total assets classified as held for sale - 7,272
Trade and other payables - (5,373)
Total liabilities associated with assets classified
as held for sale - (5,373)
----------- ----------
Net assets of disposal group - 1,899
=========== ==========
4. Preliminary announcement
Whilst the financial information included in this announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS), this announcement does not itself contain sufficient information to comply with IFRS. Full financial statements that comply with IFRS were approved by the Board of Directors on 28 June 2012 and are expected to be published on the Group's website, www.evolvecapital.co.uk and posted to shareholders before 30 June 2012.
The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2011 or 2010, but is derived from those accounts. Statutory accounts for 2010 have been delivered to the Registrar of Companies and those for 2011 will be delivered following the Company's annual general meeting. The auditors have reported on these accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under s498(2) or (3) of the Companies Act 2006 or equivalent preceding legislation.
This announcement was approved at a meeting of the Board of Directors held on 28 June 2012.
5. Availability of report and accounts
The Group's full report and accounts will be dispatched to shareholders as soon as is practicable and in any event no later than 30 June 2012. Copies will also be available on the Group's website, www.evolvecapital.co.uk, and on request from the Group's head office at 223a Kensington High Street, London W8 6SG.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UWRBRUKANUAR
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