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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Epe Special Opportunities Limited | LSE:ESO | London | Ordinary Share | BMG3163K1053 | ORD 5P (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 169.00 | 165.00 | 173.00 | 169.00 | 169.00 | 169.00 | 560 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Unit Inv Tr, Closed-end Mgmt | 3.75M | -396k | -0.0133 | -127.07 | 50.49M |
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RNS Number : 4711U
EPE Special Opportunities PLC
15 October 2010
15 October 2010
EPE Special Opportunities plc
Unaudited Interim Results for the period ended 31 July 2010
The Board of EPE Special Opportunities plc are pleased to announce the Company's
Unaudited Results for the six months to 31 July 2010.
Highlights of the period are:
· Total gross income of GBP0.9m and a net gain for the period of GBP0.4m
· Net asset value per share as at 31 July 2010: 74.27p
· Post balance sheet event (31 August 2010): successful acquisition of
majority interest in private equity portfolio from EPIC plc for GBP22m (the
"acquisition"). Company's ownership of trading private equity assets from four
to thirteen
· Acquisition financed by GBP10m investment by the European Secondary
Development Fund IV LP ("ESD") and the issue of GBP10m of convertible loan notes
and GBP2m specie equity to EPIC plc
· In light of the investment opportunities available to the Company, the
Directors do not recommend a dividend in respect of the period ended 31 July
2010
Geoffrey Vero, Chairman, commented: "The acquisition will enable shareholders to
benefit from increased scale and diversification, greater flexibility of
investment strategy, superior alignment of interest with the Investment Advisor
and, above all, the potential for higher returns."
Enquiries:
Numis Securities Ltd Tel: +44 (0) 20 7260 1000
Nominated Advisor: Stuart Skinner / Ollie Morse
Corporate Broker: Alex Ham
EPIC Private Equity LLP Giles Brand +44 (0) 20 7553 2341
IoMA Philip Scales +44 (0) 16 2468 1250
Cardew Group Richard Spiegelberg / Catherine Maitland
+44 (0) 20 7930 0777
Chairman's Statement
Since my last report at the full year ending 31 January 2010, uncertainty in the
wider UK economy has persisted, with the Bank of England recently lowering its
growth forecasts and anticipating continued inflation at a higher rate than
initially forecasted as the economy adjusts to the reality of the new Coalition
Government. Debt finance remains in scarce supply, reserved laregely for
better-performing and asset-rich companies, with banks primarily focused on
rebuilding their balance sheets as opposed to new primary lending. The period
has therefore continued to be one of consolidation for the Company with a
positive focus on creating value in the core investments and optimising the
positioning of the smaller investments.
For the half year ending 31 July 2010, the Company had gross income of GBP0.9
million. This translated to a net gain for the Company of GBP0.4 million. Net
asset value per share as at 31 July 2010 for the Company was 74.27 pence. The
gross income from the period, received or receivable, arises from yielding
instruments in the portfolio companies.
During the period, the Investment Advisor has received significant deal flow
from both existing and new advisory contacts, analysing over 50 opportunities
since the date of the full year results. While the UK private equity market has
seen a number of transactions complete with uncharacteristically high equity
contributions from financial sponsors, the Company has yet to identify any
platform opportunities which fulfil its investment criteria.
In April 2010, the Company successfully concluded the sale of Autocue, receiving
a total cash consideration of GBP0.4 million for its entire interest in the
asset. In May 2010, Whittard of Chelsea secured a GBP2.0 million working capital
loan from EPIC plc in advance of the peak seasonal sales period in November and
December. The Company also completed the bolt-on acquisitions of two small
companies into Morada Home in a continued effort to reduce the reliance of the
business on public sector-driven revenue streams. The two companies, Gradus
Fabrics and SJ Clarke (completed in August 2010), should significantly boost
Morada Home's sales in the care homes, universities and hotel sectors.
As a post-balance sheet event, the Directors are pleased to report a successful
acquisition (see Note 15 for further details). The resolutions passed at the
Extraordinary General Meeting held on 27 August 2010, recommended unanimously by
both the Board and all existing shareholders who voted, transformed the Company
to the substantial benefit of the existing shareholders. The resolutions
included, inter alia, the acquisition of a majority interest in the private
equity portfolio of EPIC plc (the "acquisition"), the re-organisation of the
existing portfolio, a GBP10.0 million investment by the European Secondary
Development Fund IV LP ("ESD") and the issue of GBP10.0 million of Convertible
Loan Notes. The Directors believe that this transaction will enable shareholders
to benefit from increased scale and diversification, greater flexibility of
investment strategy, superior alignment of interest with the Investment Advisor
and, above all, the potential for higher returns. Following the acquisition, the
Company has:
· Gross asset value of GBP32.4 million;
· Convertible Loan Notes with a nominal value of GBP10.0 million,
redeemable on 31 December 2015 and with annual interest payable at a rate of
7.50%; and
· Net asset value of GBP21.4 million
The Directors do not recommend a dividend in respect of the half year ended 31
July 2010. In view of the completion of the acquisition of a majority interest
in the private equity portfolio of EPIC plc, the need to service an annual
interest payment on GBP10.0 million of Convertible Loan Notes, the desire to
consider share repurchases in order to manage the discount to net asset value
effectively and, moreover, in anticipation of attractive bolt-on and platform
investment opportunities, the Directors have decided to focus on preserving cash
balances at this stage.
It only remains for me to thank Giles Brand and his Investment Advisory team, as
well as my fellow Directors and professional advisors, for their considerable
efforts in concluding the acquisition. I look forward to updating you on
developments at the year end.
Geoffrey Vero
Chairman
15 October 2010
Investment Advisor's Report
In the six month period since 31 January 2010, the Investment Advisor has
continued to focus on maintaining and creating value from within the existing
portfolio, whilst at the same time seeking out new opportunities by way of
platform or bolt-on investment opportunities. Considerable time and effort was
also employed in successfully acquiring the private equity portfolio of EPIC plc
on 31 August 2010. The acquisition transforms the Company, increasing its
ownership of trading private equity assets from four to thirteen and uniting the
Investment Advisor's historic investment strategy across special situations,
distressed, growth and buyout transactions.
Prior to the acquisition, the Company had four trading assets in the portfolio.
With the restructuring of Whittard of Chelsea largely concluded, all four of
these companies are expected to be profitable at their respective year ends and
are therefore firmly entrenched in their "growth" phases, albeit at varying
degrees of progression. The fifth asset, a property in Glasgow, requires further
development to realise a potential gain. This development continues to be
delayed by the ongoing uncertainty within the UK property market.
The net asset value per share as at 31 July 2010 for the Company was 74.27
pence, calculated on the basis of 26,541,501 ordinary shares. Investment
highlights from the inception of the Company to date include:
· deployed GBP40 million of capital and already returned over GBP30 million
to the Company in capital and income;
· generated gross income of GBP15 million since the original Placing;
· paid dividends of GBP5 million;
· The Portfolio, as at 31 July 2010, is valued at a gross 1.0x money
multiple and the Company at a net 0.7x money multiple.
The Investment Advisor continues to explore opportunities for adding value to
portfolio companies through revenue enhancing and cost saving initiatives as
well as seeking to identify appropriate management to optimise performance.
Within the context of the current economic climate, the importance of these
initiatives is more acutely felt than ever before.
Investment Strategy
The Investment Advisor believes that the current economic environment continues
to create a wide range of investment opportunities. As a result, the Investment
Advisor continues to engage actively with the wider restructuring and advisory
community in communicating the Company's investment strategy. Following the
acquisition, the Company will seek to target growth and buyout opportunities, as
well as special situations and distressed transactions, making investments where
it believes pricing to be attractive and the potential for value creation is
strong. The Company will seek to invest between GBP2 million and GBP10 million
in a range of debt and equity instruments with a view to generating returns
through both yield and capital gain. Whilst in general the Company aims to take
controlling equity positions, it may seek to develop companies as a minority
investor. Occasionally the Board may authorise investments of less than GBP2
million. For investments larger than GBP1 million, the Company may seek
co-investment from third parties, either from existing shareholders or, from
time to time, non-shareholders.
The Company will consider most industry sectors and shareholding structures. The
Investment Advisor has experience in the consumer, retail, manufacturing,
financial services, healthcare, support services and media industries.
The Company will continue to target the following types of investments:
· Special situations where the Investment Advisor believes that assets are
undervalued due to specific, event-driven circumstances. Target companies may or
may not be distressed as a result of the situation. The Investment Advisor will
aim to use its restructuring and refinancing expertise to resolve the situation
and achieve a controlling position in the target company.
· Distressed companies where asset-backing may be available and the
opportunity exists for recovery and significant upside. These transactions may
involve target companies with a substantial asset base providing the Company
with considerable downside protection. The Company seeks to acquire distressed
debt, undervalued equity or the assets of target businesses in solvent or
insolvent situations.
· Public companies either backing management to acquire and de-list the
company or buying ordinary equity in a listed business. The Company may consider
making investments in a number of smaller companies, primarily ones whose shares
are admitted to AIM, being companies with a market capitalisation in the region
of GBP1 million to GBP5 million. It is anticipated that these transactions
would involve the acquisition of the entire issued share capital of such
companies. The Company may offer ordinary shares as all or part of the
consideration for such investments.
The Company intends to expand its current investment strategy by also targeting
investment in growth, buyout and pre-IPO opportunities, in order to fully
utilise the Investment Advisor's investment experience, contacts and ability.
Valuation Methodology
The Company values its investments with reference to the BVCA guidelines which
state that portfolio companies should be valued on an EBITDA multiple basis
using publicly quoted comparables and/or transaction comparables, then
discounting the equity value by an appropriate percentage to account for
marketability considerations. Cost may be considered as fair value in some cases
but assets will always be held at fair value, whether this is at, above or below
cost, and the value of such assets will be reviewed periodically to ensure that
such is the case.
The Investment Advisor intends to announce an estimated net asset value per
ordinary share on a monthly basis following a review of the valuation of the
Company's investments. The Company has always endeavoured to comply with
industry-standard guidelines and, as the Fund will be applying the International
Private Equity and Venture Capital Valuation Guidelines, for consistency the
Board will consider adopting these guidelines going forward. The Company
believes that there is unlikely to be any material effect on the valuation
process as a result of such a change. The Investment Advisor adopts a
conservative approach to valuation with reference to the aforementioned
methodology but also having regard for ongoing volatile market conditions,
particularly in the UK retail sector, and credit restraints.
Current Portfolio
Process Components (2005)
Process Components is an engineering parts and equipment supplier. It was formed
in June 2009 after a significant industry cut-back in capital expenditure
programmes forced a secondary restructuring of Kemutec, formerly a manufacturer
of mixing and sifting equipment for the chemical, pharmaceutical and food
industries that was originally purchased by the Company in March 2005.
Previously constrained by its parent, the new business now supplies higher
margin products from a significantly lower cost base. The business is currently
trading ahead of budget at both the sales and EBITDA level, with credit terms
improving with key suppliers and the new operations now successfully bedded
down. The Company has a GBP1.5 million debt exposure to Process Components.
Past Times (2005)
Past Times is a niche retailer of historically inspired jewellery, gifts, books
and house-wares. Past Times was acquired in December 2005 from the
administrators of Retail Variations plc. During the initial phase of the
turnaround, Past Times underwent a major restructuring process, with the number
of stores significantly reduced, the head office cost base reduced, and the
product range improved. As a result of these improvements, the Investment
Advisor is confident of delivering a third consecutive year of profitability.
Past Times continues to expand the number of stores under the guidance of chief
executive Mike Taylor, with the Company providing further funding to increase
the number of temporary stores by up to 30 in August 2010. The impact of these
new stores on sales should significantly mitigate the effects of the current,
sluggish retail environment. The Company has a GBP10.3 million exposure to Past
Times.
Morada Home (2005)
In 2005, the Company backed a management buyout of the Morada Home business from
the administration of Morada International. The business was originally focussed
on contracts with the Ministry of Defence ("MoD") to supply curtains and blinds
for MoD living accommodation. Morada has since begun to diversify, supplying PFI
contractors as well as a large number of customers in the retail sector. To that
end, the Company recently completed the bolt-on acquisitions of Gradus Fabrics
and SJ Clarke (completed in July and August 2010, respectively) into Morada
Home, significantly enhancing the business' presence and sales in the care
homes, universities and hotel sectors. The Company has a GBP1.2 million debt
exposure to Morada Home.
Whittard of Chelsea (2008)
Whittard of Chelsea, a specialist retailer of tea and coffee, was acquired in
December 2008 following ownership by Baugur. The initial restructuring of the
business was completed in H1 2009, with the number of stores and overhead base
both significantly reduced. Following this restructuring, the business achieved
sales of GBP28 million for the financial year ending 31 December 2009. The
business has also successfully undergone the initial phase of a re-branding
exercise, with the new branding now commencing roll-out into the stores and
product packaging. Significant potential exists to develop both the wholesale
and international franchising sides of the business, with a new franchise
agreement now signed in China, a distributor agreed in Sweden and a concession
in the House of Fraser established in the UK. The provision of a GBP2 million
working capital loan by EPIC plc will also enable the business to optimise its
stocking in advance of the peak Christmas period. The Company has a GBP2.9
million debt exposure to Whittard of Chelsea.
Acquired Portfolio
Following the acquisition of the private equity portfolio of EPIC plc on 31
August 2010, the Company has an exposure to an additional nine private companies
through its holding in ESO Investments LP (see Note 15 for further details).
Brief summaries of these companies are provided below:
Pinnacle Regeneration Group
Pinnacle Regeneration Group ("PRG") is a diversified social housing services
business. The core facilities management business serves the public sector
social housing market and has a turnover of approximately GBP50 million. PRG
also owns an employment and skills business, Pinnacle People, and a Private
Finance Initiative ("PFI") bidding vehicle, Regenter, a joint venture with
Laing. EPIC plc initially invested into PRG in 2001.
Ryness
Ryness is a London-based electrical retail and wholesaler, focused on light
bulbs, lighting and small electrical goods, operating from 17 locations across
the UK. The investment follows a buy-and-build strategy, with two bolt-on
investments of electricals businesses completed in 2008. The Investment Advisor
is currently actively searching for further trade counter acquisitions, which it
believes should be available at attractive prices owing to the market downturn.
EPIC plc initially invested into Ryness in 2002, but then provided additional
financing to support the management buyout of the business in 2006.
Pharmacy2U
Pharmacy2U is an online pharmacy business, delivering National Health Service
and private prescriptions direct to the home using an innovative, in-house
developed technology, Electronic Prescription Service ("EPSr2"). The business
has experienced significant sales growth since inception. EPIC plc initially
invested into Pharmacy2U in 2002.
Nexus
Nexus Industries ("Nexus") is a manufacturer and distributor of electrical
accessories in the UK, operating under the brand names Masterplug, British
General and Ross, and supplies to both the retail and wholesale markets. The
business is now deleveraging and performing well despite the current market
conditions. The construction of a large freehold factory located in mainland
China has recently been completed and this is expected to drive both margin
improvement and sales growth over the next three to four years. EPIC plc
initially invested into Nexus in 2004.
Palatinate
Palatinate Schools ("Palatinate") operates a group of private preparatory,
pre-preparatory and nursery schools based in Central London. The schools have
good prestige value and pupil growth is anticipated to remain robust, which will
drive sales growth. The Investment Advisor manages Palatinate alongside other
private equity investors. EPIC plc initially invested into Palatinate in 2005.
Bighead
Bighead Bonding Fasteners ("Bighead") is a specialist engineering business,
manufacturing specialist load-spreading fasteners and fixings for composites,
plastics and traditional materials. The Investment Advisor, over the long-term,
aims to replicate Bighead's local success in high-end niche applications by
establishing an international network of distributors for the company's
products. EPIC plc initially invested into Bighead in 2006.
Indicia
Indicia is a direct marketing business focussed on database and multi-channel
analytics. Indicia was formed through the acquisition and consolidation of three
separate businesses and is currently in discussions with several parties with
regard to the purchase of a digital and market research business to complement
its existing database build, analysis and direct marketing portfolio of
services. EPIC plc initially invested into Indicia in 2006.
Evolving Media
Evolving Media is a young and growing integrated digital marketing agency, based
in Bedford, UK and providing digitally-focussed marketing solutions to a range
of clients. The Investment Advisor is currently focussed on establishing a
London office in order to drive business and product development and
recruitment. EPIC plc initially invested into Evolving Media in 2006.
Driver Require
Driver Require is a recruitment company for commercial drivers across all major
vehicle categories and based in Stevenage, UK. The Investment Advisor is
currently actively pursuing bolt-on investments and identifying new office sites
in its attempt to grow the business in anticipation of an expected market
recovery. EPIC plc initially invested into Driver Require in 2007.
Review reportby KPMGAudit LLCto EPE Special Opportunities plc
Introduction
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly report for the six months ended 31 July 2010,
which comprises the consolidated and company statements of comprehensive income,
the consolidated and company statements of assets and liabilities, the
consolidated and company statements of changes in equity, the consolidated and
company statements of cash flows and the related explanatory notes. We have
read the other information contained in the half-yearly report and considered
whether it contains any apparent misstatements or material inconsistencies with
the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with the terms of our
engagement. Our review has been undertaken so that we might state to the
Company those matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company for our review work, for
this report, or for the conclusions we have reached.
Directors' responsibilities
The half-yearly report is the responsibility of, and has been approved by, the
Directors. The Directors are responsible for preparing the half-yearly report
in accordance with the AIM Rules.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of consolidated and company financial statements in the half-yearly report
based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410 Review of Interim Financial Information
Performed by the Independent Auditor of the Entity issued by the Auditing
Practices Board. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with
International Standards on Auditing (UK and Ireland) and consequently does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express an
audit opinion.
Basis of adverse opinion on consolidated financial statements
The condensed set of financial statements included in the half-yearly financial
report has been prepared in accordance with IAS 34 Interim Financial Reporting.
As detailed in Note 2, the Group accounting policy for interests in investee
companies that are controlled by the Group is to state them at fair value
through profit or loss - not to consolidate their results as required by IAS 27
Consolidated and Separate Financial Statements. This is a departure from
International Financial Reporting Standards and has resulted in an adverse
opinion on the consolidated financial statements.
Conclusion in respect of consolidated financial statements
As stated above, the results of investee companies which are controlled by the
Group are not consolidated in the financial statements. Such investee companies
are instead stated at fair value. This is a non-compliance with IAS 27
Consolidated and Separate Financial Statements, which requires all entities over
which the Group has the power to exercise control to be consolidated.
Because of this non-compliance with IAS 27, our review indicates that the
condensed set of consolidated financial statements do not give a true and fair
view of the financial position of the Group as at 31 July 2010 and of its
financial performance and its cash flows for the six months then ended in
accordance with International Financial Reporting Standards.
Conclusion in respect of parent company financial statements
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of parent company financial statements in the half-yearly
report for the six months ended 31 July 2010 is not prepared, in all material
respects, in accordance with IAS 34 and the AIM Rules.
KPMG Audit LLC
Chartered Accountants
Heritage Court
41 Athol Street
Douglas
Isle of Man IM99 1HN
15 October 2010
Consolidated Statement of Comprehensive Income
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | | | 1 Feb 2010 to 31 | | 1 | 1 |
| | | | July 2010 | | Feb | Feb |
| | | | | | 2009 | 2009 |
| | | | | | to | to |
| | | | | | 31 | 31 |
| | | | | | July | Jan |
| | | | | | 2009 | 2010 |
+------+---------------------+--------------+-----------------------------------------+--------------+-------------+-----------+
| | | | Revenue | Capital | Total | | Total | Total |
| | | | (unaudited) | (unaudited) | (unaudited) | | (unaudited) | (audited) |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| Note | | | GBP | GBP | GBP | | GBP | GBP |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Income: | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Rental income | | 31,900 | - | 31,900 | | 26,583 | 58,484 |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Interest income | | 845,118 | - | 845,118 | | 633,245 | 1,326,742 |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Total income | | 877,018 | - | 877,018 | | 659,828 | 1,385,226 |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Expenses: | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Investment | | (194,730) | - | (194,730) | | (166,672) | (360,451) |
| | advisor's fees | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Administration fees | | (15,000) | - | (15,000) | | (15,000) | (30,000) |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Directors' fees | | (50,000) | - | (50,000) | | (41,941) | (90,629) |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Directors' and | | (6,667) | - | (6,667) | | (5,175) | (10,350) |
| | Officers' insurance | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Professional fees | | (53,597) | - | (53,597) | | (143,782) | (182,860) |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Auditors' | | (15,958) | - | (15,958) | | (14,250) | (29,697) |
| | remuneration | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Interest and other | | (13,495) | - | (13,495) | | (20,454) | (29,047) |
| | charges | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Irrecoverable VAT | | (59,133) | - | (59,133) | | (60,839) | (105,146) |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Sundry expenses | | (19,937) | - | (19,937) | | (21,317) | (72,558) |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Advisor and broker | | (22,964) | - | (22,964) | | (9,280) | (20,649) |
| | fees | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Total expenses | | (451,481) | - | (451,481) | | (498,710) | (931,387) |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Net investment | | 425,537 | - | 425,537 | | 161,118 | 453,839 |
| | income | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| 8 | Gains/(losses) on | | | | | | | |
| | investments | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Net realised losses | | - | (50,000) | (50,000) | | - | - |
| | on investments at | | | | | | | |
| | fair value through | | | | | | | |
| | profit or loss | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Unrealised losses | | - | - | - | | (750,000) | (750,000) |
| | on investments at | | | | | | | |
| | fair value through | | | | | | | |
| | profit or loss | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Revaluation of | | - | (7,222) | (7,222) | | - | (14,592) |
| | investment property | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Profit/(loss) for | | 425,537 | (57,222) | 368,315 | | (588,882) | (310,753) |
| | the period before | | | | | | | |
| | taxation | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Taxation | | - | - | - | | - | - |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Profit/(loss) for | | 425,537 | (57,222) | 368,315 | | (588,882) | (310,753) |
| | the period | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Other comprehensive | | - | - | - | | - | - |
| | income | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Total comprehensive | | 425,537 | (57,222) | 368,315 | | (588,882) | (310,753) |
| | income/(loss) for | | | | | | | |
| | the period/year | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| 10 | Basic and diluted | | 1.60 | (0.21) | 1.39 | | 5.21 | (1.59) |
| | earnings/(loss) per | | | | | | | |
| | ordinary share | | | | | | | |
| | (pence) | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
The total column of this statement represents the Group's Consolidated Statement
of Comprehensive Income, prepared in accordance with IFRS. The supplementary
revenue return and capital return columns are both prepared under Board approved
guidelines in relation to the allocation between revenue and capital. All items
in the above statement derive from continuing activities.
Company Statement of Comprehensive Income
For the six months ended 31 July 2010
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | | | 1 Feb 2010 to 31 | | 1 | 1 |
| | | | July 2010 | | Feb | Feb |
| | | | | | 2009 | 2009 |
| | | | | | to | to |
| | | | | | 31 | 31 |
| | | | | | July | Jan |
| | | | | | 2009 | 2010 |
+------+---------------------+--------------+-----------------------------------------+--------------+-------------+-----------+
| | | | Revenue | Capital | Total | | Total | Total |
| | | | (unaudited) | (unaudited) | (unaudited) | | (unaudited) | (audited) |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
|Note | | | GBP | GBP | GBP | | GBP | GBP |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Income: | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Interest income | | 212 | - | 212 | | 343 | 2,045 |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| 7 | Dividend income | | 183,790 | - | 183,790 | | 358,737 | 1,048,055 |
| | from subsidiaries | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Total income | | 184,002 | - | 184,002 | | 359,080 | 1,050,100 |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Expenses: | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Investment | | (187,781) | - | (187,781) | | (165,547) | (358,184) |
| | advisor's fees | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Administration fees | | (15,000) | - | (15,000) | | (15,000) | (30,000) |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Directors' fees | | (45,000) | - | (45,000) | | (36,191) | (80,629) |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Directors' and | | (6,667) | - | (6,667) | | (5,175) | (10,350) |
| | Officers' insurance | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Professional fees | | (50,660) | - | (50,660) | | (141,859) | (182,860) |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Auditors' | | (25,257) | - | (25,257) | | (12,000) | (22,000) |
| | remuneration | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Interest and other | | (335) | - | (335) | | (158) | (321) |
| | charges | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Irrecoverable VAT | | (59,435) | - | (59,435) | | (60,089) | (103,650) |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Sundry expenses | | (18,720) | - | (18,720) | | (21,023) | (59,963) |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Advisor and broker | | (22,964) | - | (22,964) | | (9,280) | (20,649) |
| | fees | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Total expenses | | (431,819) | - | (431,819) | | (466,322) | (868,606) |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Net investment | | (247,817) | - | (247,817) | | (107,242) | 181,494 |
| | income | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| 8 | Gains/(losses) on | | | | | | | |
| | investments | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Net realised gains | | - | 320,800 | 320,800 | | - | - |
| | on investments at | | | | | | | |
| | fair value through | | | | | | | |
| | profit or loss | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Unrealised losses | | - | - | - | | (750,000) | (750,000) |
| | on investments at | | | | | | | |
| | fair value through | | | | | | | |
| | profit or loss | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Unrealised gain on | | - | 295,332 | 295,332 | | 268,360 | 257,753 |
| | investments in | | | | | | | |
| | subsidiaries at | | | | | | | |
| | fair value through | | | | | | | |
| | profit or loss | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Profit/(loss) for | | (247,817) | 616,132 | 368,315 | | (588,882) | (310,753) |
| | the period before | | | | | | | |
| | taxation | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Taxation | | - | - | - | | - | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Profit/(loss) for | | (247,817) | 616,132 | 368,315 | | (588,882) | (310,753) |
| | the period | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Other comprehensive | | | | | | | |
| | income | | - | - | - | | - | - |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | Total comprehensive | | (247,817) | 616,132 | 368,315 | | (588,882) | (310,753) |
| | income/(loss) for | | | | | | | |
| | the period/year | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| 10 | Basic and diluted | | (0.93) | 2.32 | 1.39 | | (4.79) | (1.59) |
| | earnings/(loss) per | | | | | | | |
| | ordinary share | | | | | | | |
| | (pence) | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
| | | | | | | | | |
+------+---------------------+--------------+-------------+-------------+-------------+--------------+-------------+-----------+
The total column of this statement represents the Company's Statement of
Comprehensive Income, prepared in accordance with IFRS. The supplementary
revenue return and capital return columns are both prepared under Board approved
guidelines in relation to the allocation between revenue and capital. All items
in the above statement derive from continuing activities.
Consolidated Statement of Assets and Liabilities
As at 31 July 2010
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| | | | 31 | 31 | 31 |
| | | | July | July | January |
| | | | 2010 | 2009 | 2010 |
| | | | (unaudited) | (unaudited) | (audited) |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| Note | | | GBP | GBP | GBP |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| | Non-current assets | | | | |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| | Investment property | | 478,186 | 500,000 | 485,408 |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| 5 | Financial assets | | 14,103,452 | 11,685,464 | 14,796,452 |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| | | | 14,581,638 | 12,185,464 | 15,281,860 |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| | Current assets | | | | |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| | Cash and cash equivalents | | 3,973,103 | 5,526,790 | 3,542,388 |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| | Accrued interest and other | | 1,857,545 | 2,060,645 | 1,220,939 |
| | receivables | | | | |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| | Committed cash balances | | 5,407 | 1,247,895 | 5,407 |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| | | | 5,836,055 | 8,835,330 | 4,768,734 |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| | Current liabilities | | | | |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| | Accrued expenses and sundry | | (226,000) | (215,995) | (219,994) |
| | creditors | | | | |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| | Provision for calls under guarantee | | - | (1,239,759) | - |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| | | | (226,000) | (1,455,754) | (219,994) |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| | Net current assets | | 5,610,055 | 7,379,576 | 4,548,740 |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| | | | | | |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| | Non-current liabilities | | | | |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| 12 | Bank loan | | (478,186) | (497,977) | (485,408) |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| | Net assets | | 19,713,507 | 19,067,063 | 19,345,192 |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| | Equity | | | | |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| 9 | Share capital | | 1,327,075 | 1,327,075 | 1,327,075 |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| | Share premium | | - | 32,513,808 | - |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| | Capital reserve | | (15,518,288) | (15,446,474) | (15,461,066) |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| | Revenue reserve | | 33,904,720 | 672,654 | 33,479,183 |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| | Total equity | | 19,713,507 | 19,067,063 | 19,345,192 |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| 11 | Net asset value per share (pence) | | 74.27 | 71.84 | 72.89 |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
| | | | | | |
+------+-------------------------------------+-----------------------+--------------------+--------------------+--------------------+
Company Statement of Assets and Liabilities
As at 31 July 2010
+------+-------------------------------------+-----------------------+--------------+--------------+--------------+
| | | | 31 | 31 | 31 |
| | | | July | July | January |
| | | | 2010 | 2009 | 2010 |
| | | | (unaudited) | (unaudited) | (audited) |
+------+-------------------------------------+-----------------------+--------------+--------------+--------------+
|Note | | | GBP | GBP | GBP |
+------+-------------------------------------+-----------------------+--------------+--------------+--------------+
| | Non-current assets | | | | |
+------+-------------------------------------+-----------------------+--------------+--------------+--------------+
| | Investments in subsidiaries at fair | | 536,917 | 265,337 | 246,951 |
| | value through profit or loss | | | | |
+------+-------------------------------------+-----------------------+--------------+--------------+--------------+
| 6 | Loans to subsidiaries | | 15,862,819 | 14,952,595 | 17,262,652 |
+------+-------------------------------------+-----------------------+--------------+--------------+--------------+
| | | | 16,399,736 | 15,217,932 | 17,509,603 |
+------+-------------------------------------+-----------------------+--------------+--------------+--------------+
| | Current assets | | | | |
+------+-------------------------------------+-----------------------+--------------+--------------+--------------+
| | Cash and cash equivalents | | 3,536,878 | 4,066,171 | 2,051,903 |
+------+-------------------------------------+-----------------------+--------------+--------------+--------------+
| | Trade and other receivables | | 9,181 | 1,293 | 10,098 |
+------+-------------------------------------+-----------------------+--------------+--------------+--------------+
| | | | 3,546,059 | 4,067,464 | 2,062,001 |
+------+-------------------------------------+-----------------------+--------------+--------------+--------------+
| | Current liabilities | | | | |
+------+-------------------------------------+-----------------------+--------------+--------------+--------------+
| | Trade and other payables | | (219,063) | (193,088) | (207,821) |
+------+-------------------------------------+-----------------------+--------------+--------------+--------------+
| | | | (219,063) | (193,088) | (207,821) |
+------+-------------------------------------+-----------------------+--------------+--------------+--------------+
| | Net current assets | | 3,326,996 | 3,874,376 | 1,854,180 |
+------+-------------------------------------+-----------------------+--------------+--------------+--------------+
| | Non-current liabilities | | | | |
+------+-------------------------------------+-----------------------+--------------+--------------+--------------+
| | Investment in subsidiaries at fair | | (13,225) | (25,245) | (18,591) |
| | value through profit or loss | | | | |
+------+-------------------------------------+-----------------------+--------------+--------------+--------------+
| | Net assets | | 19,713,507 | 19,067,063 | 19,345,192 |
+------+-------------------------------------+-----------------------+--------------+--------------+--------------+
| | Equity | | | | |
+------+-------------------------------------+-----------------------+--------------+--------------+--------------+
| | Share capital | | 1,327,075 | 1,327,075 | 1,327,075 |
+------+-------------------------------------+-----------------------+--------------+--------------+--------------+
| | Share premium | | - | 32,513,808 | - |
+------+-------------------------------------+-----------------------+--------------+--------------+--------------+
| | Capital reserve | | (16,484,353) | (17,089,878) | (17,100,485) |
+------+-------------------------------------+-----------------------+--------------+--------------+--------------+
| | Revenue reserve | | 34,870,785 | 2,316,058 | 35,118,602 |
+------+-------------------------------------+-----------------------+--------------+--------------+--------------+
| | Total equity | | 19,713,507 | 19,067,063 | 19,345,192 |
+------+-------------------------------------+-----------------------+--------------+--------------+--------------+
| 11 | Net asset value per share (pence) | | 74.27 | 71.84 | 72.89 |
+------+-------------------------------------+-----------------------+--------------+--------------+--------------+
| | | | | | |
+------+-------------------------------------+-----------------------+--------------+--------------+--------------+
Consolidated Statement of Changes in Equity
For the six months ended 31 July 2010
+------------------------+-----------------------+-----------+---------+--------------+------------+------------+
| | | Six months ended 31 July 2010 |
| | | (unaudited) |
+------------------------+-----------------------+--------------------------------------------------------------+
| | | Capital | Share | Capital | Revenue | Total |
| | | |premium | reserve | Reserve | |
+------------------------+-----------------------+-----------+---------+--------------+------------+------------+
| | | GBP | GBP | GBP | GBP | GBP |
| | | | | | | |
+------------------------+-----------------------+-----------+---------+--------------+------------+------------+
| | | | | | | |
+------------------------+-----------------------+-----------+---------+--------------+------------+------------+
| Balance at 1 February | | 1,327,075 | - | (15,461,066) | 33,479,183 | 19,345,192 |
| 2010 | | | | | | |
+------------------------+-----------------------+-----------+---------+--------------+------------+------------+
| Total comprehensive | | - | - | (57,222) | 425,537 | 368,315 |
| income for the period | | | | | | |
+------------------------+-----------------------+-----------+---------+--------------+------------+------------+
| Balance at 31 July | | 1,327,075 | - | (15,518,288) | 33,904,720 | 19,713,507 |
| 2010 | | | | | | |
+------------------------+-----------------------+-----------+---------+--------------+------------+------------+
| | | | | | | |
+------------------------+-----------------------+-----------+---------+--------------+------------+------------+
+------------------------+-----------------------+-----------+------------+--------------+---------+------------+
| | | Six months ended 31 July 2009 |
| | | (unaudited) |
+------------------------+-----------------------+--------------------------------------------------------------+
| | | Capital | Share | Capital |Revenue | Total |
| | | | premium | reserve |Reserve | |
+------------------------+-----------------------+-----------+------------+--------------+---------+------------+
| | | GBP | GBP | GBP | GBP | GBP |
| | | | | | | |
+------------------------+-----------------------+-----------+------------+--------------+---------+------------+
| Balance at 1 February | | 327,075 | 28,795,404 | (14,696,474) | 511,536 | 14,937,541 |
| 2009 | | | | | | |
+------------------------+-----------------------+-----------+------------+--------------+---------+------------+
| Total comprehensive | | - | - | (750,000) | 161,118 | (588,882) |
| income for the period | | | | | | |
+------------------------+-----------------------+-----------+------------+--------------+---------+------------+
| Contributions by and | | | | | | |
| distributions to | | | | | | |
| owners | | | | | | |
+------------------------+-----------------------+-----------+------------+--------------+---------+------------+
| Share issue | | 1,000,000 | 4,000,000 | - | - | 5,000,000 |
+------------------------+-----------------------+-----------+------------+--------------+---------+------------+
| Share issue costs | | - | (281,596) | - | - | (281,596) |
+------------------------+-----------------------+-----------+------------+--------------+---------+------------+
| Total transactions | | 1,000,000 | 3,718,404 | - | - | 4,718,404 |
| with owners | | | | | | |
+------------------------+-----------------------+-----------+------------+--------------+---------+------------+
| Balance at 31 July | | 1,327,075 | 32,513,808 | (15,446,474) | 672,654 | 19,067,063 |
| 2009 | | | | | | |
+------------------------+-----------------------+-----------+------------+--------------+---------+------------+
| | | | | | | |
+------------------------+-----------------------+-----------+------------+--------------+---------+------------+
| | | | | | | |
+------------------------+-----------------------+-----------+------------+--------------+---------+------------+
+------------------------+------------------------+-----------+--------------+--------------+------------+------------+
| | | Year ended 31 January 2010 |
| | | (audited) |
+------------------------+------------------------+-------------------------------------------------------------------+
| | | Capital | Share | Capital | Revenue | Total |
| | | | premium | reserve | Reserve | |
+------------------------+------------------------+-----------+--------------+--------------+------------+------------+
| | | GBP | GBP | GBP | GBP | GBP |
| | | | | | | |
+------------------------+------------------------+-----------+--------------+--------------+------------+------------+
| Balance at 1 February | | 327,075 | 28,795,404 | (14,696,474) | 511,536 | 14,937,541 |
| 2009 | | | | | | |
+------------------------+------------------------+-----------+--------------+--------------+------------+------------+
| Total comprehensive | | - | - | (764,592) | 453,839 | (310,753) |
| income for the period | | | | | | |
+------------------------+------------------------+-----------+--------------+--------------+------------+------------+
| Contributions by and | | | | | | |
| distributions to | | | | | | |
| owners | | | | | | |
+------------------------+------------------------+-----------+--------------+--------------+------------+------------+
| Share issue | | 1,000,000 | 4,000,000 | - | - | 5,000,000 |
+------------------------+------------------------+-----------+--------------+--------------+------------+------------+
| Share issue costs | | - | (281,596) | - | - | (281,596) |
+------------------------+------------------------+-----------+--------------+--------------+------------+------------+
| Cancellation of share | | - | (32,513,808) | - | 32,513,808 | - |
| premium | | | | | | |
+------------------------+------------------------+-----------+--------------+--------------+------------+------------+
| Total transactions | | 1,000,000 | (28,795,404) | - | 32,513,808 | 4,718,404 |
| with owners | | | | | | |
+------------------------+------------------------+-----------+--------------+--------------+------------+------------+
| Balance at 31 January | | 1,327,075 | - | (15,461,066) | 33,479,183 | 19,345,192 |
| 2010 | | | | | | |
+------------------------+------------------------+-----------+--------------+--------------+------------+------------+
| | | | | | | |
+------------------------+------------------------+-----------+--------------+--------------+------------+------------+
Company Statement of Changes in Equity
For the six months ended 31 July 2010
+-----------------------+----------------------+-----------+---------+--------------+------------+------------+
| | | Six months ended 31 July 2010 |
| | | (unaudited) |
+-----------------------+----------------------+--------------------------------------------------------------+
| | | Capital | Share | Capital | Revenue | Total |
| | | | premium | reserve | Reserve | |
+-----------------------+----------------------+-----------+---------+--------------+------------+------------+
| | | GBP | GBP | GBP | GBP | GBP |
+-----------------------+----------------------+-----------+---------+--------------+------------+------------+
| | | | | | | |
+-----------------------+----------------------+-----------+---------+--------------+------------+------------+
| Balance at 1 February | | 1,327,075 | - | (17,100,485) | 35,118,602 | 19,345,192 |
| 2010 | | | | | | |
+-----------------------+----------------------+-----------+---------+--------------+------------+------------+
| Total comprehensive | | - | - | 616,132 | (247,817) | 368,315 |
| income for the period | | | | | | |
+-----------------------+----------------------+-----------+---------+--------------+------------+------------+
| Balance at 31 July | | 1,327,075 | - | (16,484,353) | 34,870,785 | 19,713,507 |
| 2010 | | | | | | |
+-----------------------+----------------------+-----------+---------+--------------+------------+------------+
+------------------------+----------+-----------+------------+--------------+-----------+------------+
| | | Six months ended 31 July 2009 |
| | | (unaudited) |
+------------------------+----------+----------------------------------------------------------------+
| | | Capital | Share | Capital | Revenue | Total |
| | | | premium | reserve | Reserve | |
+------------------------+----------+-----------+------------+--------------+-----------+------------+
| | | GBP | GBP | GBP | GBP | GBP |
+------------------------+----------+-----------+------------+--------------+-----------+------------+
| Balance at 1 February | | 327,075 | 28,795,404 | (14,756,646) | 601,102 | 14,966,935 |
| 2009 as previously | | | | | | |
| reported | | | | | | |
+------------------------+----------+-----------+------------+--------------+-----------+------------+
| Effect of change in | | - | - | (1,851,592) | 1,822,198 | (29,394) |
| accounting policy | | | | | | |
+------------------------+----------+-----------+------------+--------------+-----------+------------+
| Balance at 1 February | | 327,075 | 28,795,404 | (16,608,238) | 2,423,300 | 14,937,541 |
| 2009 as restated | | | | | | |
+------------------------+----------+-----------+------------+--------------+-----------+------------+
| Total comprehensive | | - | - | (481,640) | (107,242) | (588,882) |
| income for the period | | | | | | |
+------------------------+----------+-----------+------------+--------------+-----------+------------+
| Contributions by and | | | | | | |
| distributions to | | | | | | |
| owners | | | | | | |
+------------------------+----------+-----------+------------+--------------+-----------+------------+
| Share issue | | 1,000,000 | 4,000,000 | - | - | 5,000,000 |
+------------------------+----------+-----------+------------+--------------+-----------+------------+
| Share issue costs | | - | (281,596) | - | - | (281,596) |
+------------------------+----------+-----------+------------+--------------+-----------+------------+
| Total transactions | | 1,000,000 | 3,718,404 | - | - | 4,718,404 |
| with owners | | | | | | |
+------------------------+----------+-----------+------------+--------------+-----------+------------+
| Balance at 31 July | | 1,327,075 | 32,513,808 | (17,089,878) | 2,316,058 | 19,067,063 |
| 2009 | | | | | | |
+------------------------+----------+-----------+------------+--------------+-----------+------------+
+------------------------+----------+-----------+--------------+--------------+------------+------------+
| | | Year ended 31 January 2010 (audited) |
| | | |
+------------------------+----------+-------------------------------------------------------------------+
| | | Capital | Share | Capital | Revenue | Total |
| | | | premium | reserve | Reserve | |
+------------------------+----------+-----------+--------------+--------------+------------+------------+
| | | GBP | GBP | GBP | GBP | GBP |
+------------------------+----------+-----------+--------------+--------------+------------+------------+
| Balance at 1 February | | 327,075 | 28,795,404 | (14,756,646) | 601,102 | 14,966,935 |
| 2009 as previously | | | | | | |
| reported | | | | | | |
+------------------------+----------+-----------+--------------+--------------+------------+------------+
| Effect of change in | | - | - | (1,851,592) | 1,822,198 | (29,394) |
| accounting policy | | | | | | |
+------------------------+----------+-----------+--------------+--------------+------------+------------+
| Balance at 1 February | | 327,075 | 28,795,404 | (16,608,238) | 2,423,300 | 14,937,541 |
| 2009 as restated | | | | | | |
+------------------------+----------+-----------+--------------+--------------+------------+------------+
| Total comprehensive | | | | (492,247) | 181,494 | (310,753) |
| income for the period | | | | | | |
+------------------------+----------+-----------+--------------+--------------+------------+------------+
| Contributions by and | | | | | | |
| distributions to | | | | | | |
| owners | | | | | | |
+------------------------+----------+-----------+--------------+--------------+------------+------------+
| Share issue | | 1,000,000 | 4,000,000 | - | - | 5,000,000 |
+------------------------+----------+-----------+--------------+--------------+------------+------------+
| Share issue costs | | - | (281,596) | - | - | (281,596) |
+------------------------+----------+-----------+--------------+--------------+------------+------------+
| Cancellation of share | | - | (32,513,808) | - | 32,513,808 | - |
| premium | | | | | | |
+------------------------+----------+-----------+--------------+--------------+------------+------------+
| Total transactions | | 1,000,000 | (28,795,404) | - | 32,513,808 | 4,718,404 |
| with owners | | | | | | |
+------------------------+----------+-----------+--------------+--------------+------------+------------+
| Balance at 31 January | | 1,327,075 | - | (17,100,485) | 35,118,602 | 19,345,192 |
| 2010 | | | | | | |
+------------------------+----------+-----------+--------------+--------------+------------+------------+
Consolidated Statement of Cash Flows
For the six months ended 31 July 2010
+----------------------------------------+--------------------+-------------+-------------+-------------+
| | | 31 | 31 | 31 |
| | | July | July | January |
| | | 2010 | 2009 | 2010 |
| | | (unaudited) | (unaudited) | (audited) |
+----------------------------------------+--------------------+-------------+-------------+-------------+
| | | GBP | GBP | GBP |
+----------------------------------------+--------------------+-------------+-------------+-------------+
| Operating activities | | | | |
+----------------------------------------+--------------------+-------------+-------------+-------------+
| Rental income received | | 31,900 | 26,584 | 40,964 |
+----------------------------------------+--------------------+-------------+-------------+-------------+
| Interest income received | | 158,070 | 4,642 | 157,126 |
+----------------------------------------+--------------------+-------------+-------------+-------------+
| Expenses paid | | (431,038) | (455,052) | (873,031) |
+----------------------------------------+--------------------+-------------+-------------+-------------+
| Net cash outflow from operating | | (241,068) | (423,826) | (674,941) |
| activities | | | | |
+----------------------------------------+--------------------+-------------+-------------+-------------+
| | | | | |
+----------------------------------------+--------------------+-------------+-------------+-------------+
| Investing activities | | | | |
+----------------------------------------+--------------------+-------------+-------------+-------------+
| Loan advances to investee companies | | (3,234,000) | (725,000) | (3,325,000) |
+----------------------------------------+--------------------+-------------+-------------+-------------+
| Loan repayments | | 3,583,200 | 226,000 | 1,096,000 |
+----------------------------------------+--------------------+-------------+-------------+-------------+
| Proceeds from sale of investee company | | 320,800 | - | - |
| equity interest | | | | |
+----------------------------------------+--------------------+-------------+-------------+-------------+
| Proceeds from disposal of equipment | | 22,500 | - | 17,500 |
+----------------------------------------+--------------------+-------------+-------------+-------------+
| Transfer from committed cash | | - | - | 1,215,196 |
+----------------------------------------+--------------------+-------------+-------------+-------------+
| Payments of calls under guarantee | | - | - | (1,215,196) |
+----------------------------------------+--------------------+-------------+-------------+-------------+
| Net cash inflows/(outflows) from | | 692,500 | (499,000) | (2,211,500) |
| investing activities | | | | |
+----------------------------------------+--------------------+-------------+-------------+-------------+
| | | | | |
+----------------------------------------+--------------------+-------------+-------------+-------------+
| Financing activities | | | | |
+----------------------------------------+--------------------+-------------+-------------+-------------+
| Proceeds from share issue | | - | 5,000,000 | 5,000,000 |
+----------------------------------------+--------------------+-------------+-------------+-------------+
| Share issue costs | | - | (161,596) | (161,596) |
+----------------------------------------+--------------------+-------------+-------------+-------------+
| Loan interest paid | | (13,495) | (20,296) | (28,514) |
+----------------------------------------+--------------------+-------------+-------------+-------------+
| Repayment of loans | | (7,222) | (2,382) | (14,951) |
+----------------------------------------+--------------------+-------------+-------------+-------------+
| Net cash inflows/(outflows) from | | (20,717) | 4,815,726 | 4,794,939 |
| financing activities | | | | |
+----------------------------------------+--------------------+-------------+-------------+-------------+
| Increase in cash and cash equivalents | | 430,715 | 3,892,900 | 1,908,498 |
+----------------------------------------+--------------------+-------------+-------------+-------------+
| Cash and cash equivalents at start of | | 3,542,388 | 1,633,890 | 1,633,890 |
| the period/year | | | | |
+----------------------------------------+--------------------+-------------+-------------+-------------+
| Cash and cash equivalents at end of | | 3,973,103 | 5,526,790 | 3,542,388 |
| the period/year | | | | |
+----------------------------------------+--------------------+-------------+-------------+-------------+
| | | | | |
+----------------------------------------+--------------------+-------------+-------------+-------------+
| | | | | |
+----------------------------------------+--------------------+-------------+-------------+-------------+
Company Statement of Cash Flows
For the six months ended 31 July 2010
+--+-------------------------------------+----------------------+-------------+-------------+-------------+
| | | | 31 | 31 | 31 |
| | | | July | July | January |
| | | | 2010 | 2009 | 2010 |
| | | | (unaudited) | (unaudited) | (audited) |
+--+-------------------------------------+----------------------+-------------+-------------+-------------+
| | | | GBP | GBP | GBP |
+--+-------------------------------------+----------------------+-------------+-------------+-------------+
| | Operating activities | | | | |
+--+-------------------------------------+----------------------+-------------+-------------+-------------+
| | Interest income received | | 212 | 343 | 2,045 |
+--+-------------------------------------+----------------------+-------------+-------------+-------------+
| | Expenses paid | | (419,660) | (445,955) | (842,311) |
+--+-------------------------------------+----------------------+-------------+-------------+-------------+
| | Net cash outflows from operating | | (419,448) | (445,612) | (840,266) |
| | activities | | | | |
+--+-------------------------------------+----------------------+-------------+-------------+-------------+
| | | | | | |
+--+-------------------------------------+----------------------+-------------+-------------+-------------+
| | Investing activities | | | | |
+--+-------------------------------------+----------------------+-------------+-------------+-------------+
| | Proceeds from disposal of | | 320,800 | | |
| | investments | | | | |
+--+-------------------------------------+----------------------+-------------+-------------+-------------+
| | Net loans repaid/(to) by | | 1,583,623 | (341,393) | (1,961,007) |
| | subsidiaries | | | | |
+--+-------------------------------------+----------------------+-------------+-------------+-------------+
| | Net cash inflows/(outflows) from | | 1,904,423 | (341,393) | (1,961,007) |
| | investing activities | | | | |
+--+-------------------------------------+----------------------+-------------+-------------+-------------+
| | | | | | |
+--+-------------------------------------+----------------------+-------------+-------------+-------------+
| | Financing activities | | | | |
+--+-------------------------------------+----------------------+-------------+-------------+-------------+
| | Proceeds from share issue | | - | 5,000,000 | 5,000,000 |
+--+-------------------------------------+----------------------+-------------+-------------+-------------+
| | Share issue costs paid | | - | (161,596) | (161,596) |
+--+-------------------------------------+----------------------+-------------+-------------+-------------+
| | Net cash inflows from financing | | - | 4,838,404 | 4,838,404 |
| | activities | | | | |
+--+-------------------------------------+----------------------+-------------+-------------+-------------+
| | | | | | |
+--+-------------------------------------+----------------------+-------------+-------------+-------------+
| | Increase in cash and cash | | 1,484,975 | 4,051,399 | 2,037,131 |
| | equivalents | | | | |
+--+-------------------------------------+----------------------+-------------+-------------+-------------+
| | Cash and cash equivalents at start | | 2,051,903 | 14,772 | 14,772 |
| | of the period/year | | | | |
+--+-------------------------------------+----------------------+-------------+-------------+-------------+
| | Cash and cash equivalents at end of | | 3,536,878 | 4,066,171 | 2,051,903 |
| | the period/year | | | | |
+--+-------------------------------------+----------------------+-------------+-------------+-------------+
| | | | | | |
+--+-------------------------------------+----------------------+-------------+-------------+-------------+
Notes to the Unaudited Interim Financial Statements
For the six months ended 31 July 2010
1 The Company
The Company was incorporated with limited liability in the Isle of Man with the
registered number 108834C on 25 July 2003. The Company's ordinary shares are
listed on the Alternative Investment Market ("AIM"), a market of the London
Stock Exchange plc.
The interim consolidated and company financial statements as at and for the six
months ended 31 July 2010 comprise the Company and its subsidiaries (together
"the Group"). The interim consolidated financial statements are unaudited.
The consolidated and company financial statements of the Group as at and for the
year ended 31 January 2010 are available upon request from the Company's
registered office at IOMA House, Hope Street, Douglas, Isle of Man, IM1 1AP, or
at www.epicprivateequity.com.
The Company has three wholly owned subsidiaries - EPIC Structured Finance
Limited, a company incorporated on 21 August 2003 in the Isle of Man, EPIC
Reconstruction Property Company II Limited, a company incorporated on 30
December 2004 in England and Wales, and EPIC Reconstruction Property Company
(IOM) Limited, a company incorporated on 26 September 2005 in the Isle of Man.
The Company also owns 80% of ESO Investments LLP, a limited liability
partnership incorporated on 7 November 2008 in England and Wales.
2 Statement of compliance
These interim consolidated and company financial statements have been prepared
in accordance with IAS 34 Interim Financial Reporting except, in the case of the
consolidated interim financial statements, for the non-consolidation of certain
companies. As part of the Group's investing in businesses emerging from
distressed situations the Group may receive preference and ordinary shares. Such
shares permit the Group to participate in any increase in the value of portfolio
companies. However, the Directors consider that consolidation would render the
consolidated financial statements misleading, as such interests were acquired
for nil consideration, as part of loan finance arranged for such companies and
such interests were acquired with a view to income and capital appreciation
through future disposals.
The interim consolidated and company financial statements do not include all of
the information required for full annual financial statements, and should be
read in conjunction with the consolidated financial statements of the Group and
Company as at and for the year ended 31 January 2010.
The interim consolidated and company financial statements were approved by the
Board of Directors on 14 October 2010.
3 Significant accounting policies
The accounting policies applied by the Group and Company in these interim
consolidated and company financial statements are the same as those applied by
the Group and Company as at and for the year ended 31 January 2010.
4 Financial risk management
The Group and Company financial risk management objectives and policies are
consistent with those disclosed in the consolidated and company financial
statements as at and for the year ended 31 January 2010.
5 Non-current assets
+----------------------------------------+-------------------+-------------+-------------+------------+
| Group non-current assets | | 31 | 31 | 31 |
| | | July | July | January |
| | | 2010 | 2009 | 2010 |
+----------------------------------------+-------------------+-------------+-------------+------------+
| | | (unaudited) | (unaudited) | (audited) |
+----------------------------------------+-------------------+-------------+-------------+------------+
| | | GBP | GBP | GBP |
+----------------------------------------+-------------------+-------------+-------------+------------+
| | | | | |
+----------------------------------------+-------------------+-------------+-------------+------------+
| Investment property | | 478,186 | 500,000 | 485,408 |
+----------------------------------------+-------------------+-------------+-------------+------------+
| Financial assets | | | | |
+----------------------------------------+-------------------+-------------+-------------+------------+
| Secured loans | | 13,891,334 | 11,685,464 | 14,584,334 |
+----------------------------------------+-------------------+-------------+-------------+------------+
| Unquoted equity investments | | 212,118 | - | 212,118 |
+----------------------------------------+-------------------+-------------+-------------+------------+
| | | 14,581,638 | 12,185,464 | 15,281,860 |
+----------------------------------------+-------------------+-------------+-------------+------------+
Unquoted equity investments are stated at Directors' valuations. The secured
loans are secured by way of a floating charge and bear interest at fixed rates
between 15 and 20%. The loans are repayable as follows:
+----------------------------------------+-------------------+-----------+----------+------------+
| | | Principal | Interest | Maturity |
| | | | Rate | |
+----------------------------------------+-------------------+-----------+----------+------------+
| | | GBP | % | |
+----------------------------------------+-------------------+-----------+----------+------------+
| Past Times Trading Limited (1) | | 7,750,000 | 15% | 30/04/2011 |
+----------------------------------------+-------------------+-----------+----------+------------+
| Past Times Trading Limited (2) | | 1,168,870 | 15% | 31/12/2012 |
+----------------------------------------+-------------------+-----------+----------+------------+
| Process Components Limited | | 1,423,464 | 9% | 31/05/2013 |
+----------------------------------------+-------------------+-----------+----------+------------+
| Morada Home Limited | | 1,065,000 | 15% | 31/01/2011 |
+----------------------------------------+-------------------+-----------+----------+------------+
| Whittard of Chelsea (Hamsard 3146 | | 2,484,000 | 20% | 22/12/2010 |
| Limited) | | | | |
+----------------------------------------+-------------------+-----------+----------+------------+
6 Loans to subsidiaries
+----------------------------------------+-------------------+-------------+-------------+------------+
| | | 31 | 31 | 31 |
| | | July | July | January |
| | | 2010 | 2009 | 2010 |
+----------------------------------------+-------------------+-------------+-------------+------------+
| | | (unaudited) | (unaudited) | (audited) |
+----------------------------------------+-------------------+-------------+-------------+------------+
| | | GBP | GBP | GBP |
+----------------------------------------+-------------------+-------------+-------------+------------+
| | | | | |
+----------------------------------------+-------------------+-------------+-------------+------------+
| EPIC Structured Finance Limited | | 13,404,674 | 13,967,856 | 14,672,854 |
+----------------------------------------+-------------------+-------------+-------------+------------+
| EPIC Reconstruction Property Company | | 110,100 | - | 3,531 |
| II Limited | | | | |
+----------------------------------------+-------------------+-------------+-------------+------------+
| ESO Investments LLP | | 2,348,045 | 984,739 | 2,586,267 |
+----------------------------------------+-------------------+-------------+-------------+------------+
| | | 15,862,819 | 14,952,595 | 17,262,652 |
+----------------------------------------+-------------------+-------------+-------------+------------+
The loans to subsidiaries are unsecured, interest free and not subject to any
fixed repayment terms.
7 Dividend income from subsidiaries
Dividend income from subsidiaries represents the net investment income of EPIC
Structured Finance Limited, which is declared semi-annually and paid through
intercompany loan account movements.
+----------------------------------------+-------------------+-------------+-------------+-----------+
| | | 31 | 31 | 31 |
| | | July | July | January |
| | | 2010 | 2009 | 2010 |
+----------------------------------------+-------------------+-------------+-------------+-----------+
| | | (unaudited) | (unaudited) | (audited) |
+----------------------------------------+-------------------+-------------+-------------+-----------+
| | | GBP | GBP | GBP |
+----------------------------------------+-------------------+-------------+-------------+-----------+
| Dividend income from EPIC Structured | | 183,790 | 358,737 | 1,048,055 |
| Finance Limited | | | | |
+----------------------------------------+-------------------+-------------+-------------+-----------+
8 Gains/(losses) on investments
The company presents separately the realised gains and losses on investments
from the unrealised gains and losses on investments in subsidiaries. Realised
gains and losses refer to completed deals. Unrealised gains and losses represent
movements in the value of the assets held and are more subjective in nature than
realised gains and losses. The Company revalues its holdings in the subsidiaries
to reflect the value of underlying investments and classifies these separately
from gains and losses arising on assets held by the parent company.
+----------------+-------------------------+-----------+---------+-----------+-----------+-----------+-----------+
| | | 31 July | 31 July | 31 January |
| | | 2010 | 2009 | 2010 |
| | | (unaudited) | (unaudited) | (audited) |
+----------------+-------------------------+---------------------+-----------------------+-----------------------+
| | | Group | Company | Group | Company | Group | Company |
+----------------+-------------------------+-----------+---------+-----------+-----------+-----------+-----------+
| | | GBP | GBP | GBP | GBP | GBP | GBP |
+----------------+-------------------------+-----------+---------+-----------+-----------+-----------+-----------+
| Net realised | | | | | | | |
| gains/(losses) | | | | | | | |
| on investments | | | | | | | |
| at fair value | | | | | | | |
| through profit | | | | | | | |
| or loss | | | | | | | |
+----------------+-------------------------+-----------+---------+-----------+-----------+-----------+-----------+
| Disposal of | | (370,800) | - | - | - | - | - |
| debt interest | | | | | | | |
+----------------+-------------------------+-----------+---------+-----------+-----------+-----------+-----------+
| Disposal of | | 320,800 | 320,800 | - | - | - | - |
| equity | | | | | | | |
| interests | | | | | | | |
+----------------+-------------------------+-----------+---------+-----------+-----------+-----------+-----------+
| | | (50,000) | 320,800 | - | - | - | - |
+----------------+-------------------------+-----------+---------+-----------+-----------+-----------+-----------+
| Unrealised | | | | | | | |
| losses on | | | | | | | |
| assets at fair | | | | | | | |
| value through | | | | | | | |
| profit or loss | | | | | | | |
+----------------+-------------------------+-----------+---------+-----------+-----------+-----------+-----------+
| Revaluation of | | - | - | (750,000) | (750,000) | (750,000) | (750,000) |
| equity | | | | | | | |
| interests | | | | | | | |
+----------------+-------------------------+-----------+---------+-----------+-----------+-----------+-----------+
| | | - | - | (750,000) | (750,000) | (750,000) | (750,000) |
+----------------+-------------------------+-----------+---------+-----------+-----------+-----------+-----------+
| Unrealised | | | | | | | |
| gains in | | | | | | | |
| investments in | | | | | | | |
| subsidiaries | | | | | | | |
| at fair value | | | | | | | |
| through profit | | | | | | | |
| or loss | | | | | | | |
+----------------+-------------------------+-----------+---------+-----------+-----------+-----------+-----------+
| ESO | | - | 289,966 | - | 264,212 | - | 246,951 |
| Investments | | | | | | | |
| LLP | | | | | | | |
+----------------+-------------------------+-----------+---------+-----------+-----------+-----------+-----------+
| EPIC | | - | 5,366 | - | 4,148 | - | 10,802 |
| Reconstruction | | | | | | | |
| Property | | | | | | | |
| Company II | | | | | | | |
| Limited | | | | | | | |
+----------------+-------------------------+-----------+---------+-----------+-----------+-----------+-----------+
| | | - | 295,332 | - | 268,360 | - | 257,753 |
+----------------+-------------------------+-----------+---------+-----------+-----------+-----------+-----------+
| | | | | | | | |
+----------------+-------------------------+-----------+---------+-----------+-----------+-----------+-----------+
9 Share capital
+----------------+-------------------------+------------+-----------+------------+-----------+------------+-----------+
| | | 31 July | 31 July | 31 January |
| | | 2010 | 2009 | 2010 |
| | | (unaudited) | (unaudited) | (audited) |
+----------------+-------------------------+------------------------+------------------------+------------------------+
| | | Number | GBP | Number | GBP | Number | GBP |
| | | | | | | | |
+----------------+-------------------------+------------+-----------+------------+-----------+------------+-----------+
| Authorised | | | | | | | |
+----------------+-------------------------+------------+-----------+------------+-----------+------------+-----------+
| Ordinary | | 33,000,000 | 1,650,000 | 33,000,000 | 1,650,000 | 33,000,000 | 1,650,000 |
| shares of 5 | | | | | | | |
| pence each | | | | | | | |
+----------------+-------------------------+------------+-----------+------------+-----------+------------+-----------+
| Called up, | | | | | | | |
| allotted and | | | | | | | |
| fully paid | | | | | | | |
+----------------+-------------------------+------------+-----------+------------+-----------+------------+-----------+
| Ordinary | | 26,541,501 | 1,327,075 | 26,541,501 | 1,327,075 | 26,541,501 | 1,327,075 |
| shares of 5 | | | | | | | |
| pence each | | | | | | | |
+----------------+-------------------------+------------+-----------+------------+-----------+------------+-----------+
10 Basic and diluted earnings/(loss) per ordinary share
The basic earnings per share is calculated by dividing the profit for the period
attributable to ordinary shareholders by the weighted average number of shares
outstanding during the period of 26,541,501 (six month period ended 31 July
2009: 12,430,390 after share consolidation, year ended 31 January 2010:
19,582,597).
Fully diluted earnings per share is the same as the basic earnings per share.
11 Net asset value per share (pence)
The net asset value per share is based on the net assets at the period end of
GBP19,713,507 divided by 26,541,501 ordinary shares in issue at the end of the
period (31 July 2009: GBP19,067,063 and 26,541,501 ordinary shares, 31 January
2010: GBP19,345,192 and 26,541,501 ordinary shares).
12 Bank loan
+----------------------------------------+----------+-------------+-------------+-----------+
| | | 31 | 31 | 31 |
| | | July | July | January |
| | | 2010 | 2009 | 2010 |
+----------------------------------------+----------+-------------+-------------+-----------+
| | | (unaudited) | (unaudited) | (audited) |
+----------------------------------------+----------+-------------+-------------+-----------+
| | | GBP | GBP | GBP |
+----------------------------------------+----------+-------------+-------------+-----------+
| Mortgage loan | | 478,186 | 497,977 | 485,408 |
+----------------------------------------+----------+-------------+-------------+-----------+
The mortgage bank loan bears interest at LIBOR plus 4.0% margin per annum,
calculated on a daily basis subject to a maximum 12.9%. The loan is secured on
investment property valued in the financial statements at GBP478,186 (31 July
2009: GBP500,000 and 31 January 2010: GBP485,408). The loan expiration date is
May 2029.
13 Related party transactions
During the period one of the investee companies controlled by the company
obtained a working capital loan from EPIC plc. EPIC plc is advised by the
Investment Advisor and is a shareholder in the Company. The loan is secured on
stock and wholesale debtors and interest is payable at 12.0% per annum monthly
in arrears. The loan is guaranteed by the Company.
Following the period end, the Company acquired a portfolio of assets from EPIC
plc, details of which are given in Note 15.
14 Financial commitments and guarantees
The Company provides certain guarantees to Lloyds TSB Bank plc ("Lloyds") on the
facilities that Lloyds provides to Past Times Trading Limited. Such obligations
are limited to a maximum of GBP3,000,000 and relate to the provision of
facilities such as a Letter of Credit facility, customs and excise guarantees, a
BACS facility and corporate credit cards.
15 Post balance sheet events
On 31 August 2010, the Company completed the acquisition of the private equity
portfolio from EPIC plc for an aggregate consideration of GBP22 million. The
consideration for the acquisition comprised the issue of GBP10 million of
Convertible Loan Notes and GBP2 million of Consideration Shares to EPIC plc and
payment of GBP10 million in cash funded by ESD in return for a participation in
ESO Investments LLP (the "Fund"). As a result of the issuance of GBP2 million of
Consideration Shares to EPIC plc and GBP430,000 of shares in lieu of transaction
fees to EPIC Private Equity (issued at 55.86 pence per share), the Company's
ordinary share capital increased from 26,541,501 to 30,891,661. On exercise of
the Convertible Loan Notes in full, redeemable on 31 December 2015, the
Company's ordinary share capital will increase from 30,891,661 to 36,774,013.
Investment Structure (as at 31 July 2010)
As at 31 July 2010, the Company held its equity investments in Morada Home and
Past Times directly whilst its debt investments in the two companies were held
indirectly through EPIC Structured Finance Limited ("ESF"), a wholly-owned
subsidiary of the Company. ESF also held the Group's debt and equity interests
in Process Components. ESO Investments LLP, a limited liability partnership of
which the Company is a member, held the equity and debt investments in Whittard
of Chelsea. Additionally, EPIC Reconstruction Property Company II Limited
("ERPC"), a wholly-owned subsidiary of the Company, held one commercial
property, with a net book value of zero.
Investment Structure following the Acquisition
Following the acquisition, the combined portfolio (the four existing companies
of the Company, with the exception of Process Components, and the portfolio
companies of EPIC plc) were transferred into a new limited partnership, ESO
Investments LLP (the "Fund"). The Company will hold a majority limited partner
interest in the Fund. ESD, which has invested GBP10 million into the Fund, will
hold the residual minority limited partner interest in the Fund in accordance
with the terms of the Limited Partnership Agreement summarised in Part VIII of
the Admission Document and which was circulated to shareholders on 4 August
2010.
As part of the re-organisation, ESF therefore transferred its assets (including
its debt and equity investments in Process Components but excluding its debt
investments in Morada Home and Past Times) and liabilities to the Company. The
Company also contributed to the Fund, as part consideration for its limited
partner interest in the Fund:
(i) its entire shareholding and debt investments in ESF; and
(ii) its equity interests in Past Times, Morada and ESO Investments LLP
(holding the Company's equity and debt interests in Whittard of Chelsea)
ERPC remains a wholly-owned subsidiary of the Company. The Company's equity and
debt investments in Process Components were transferred to a new vehicle, ESO
Investments II LP (currently being established), in which the Company is a
member and through which all future investments (other than follow-on
investments into companies held in the Fund) will be made by the Company.
As a result of the transaction, the Company has agreed to commit an additional
GBP2.0 million to the Fund by way of follow-on investment into the combined
portfolio, pro rata with its holding in the Fund. ESD has therefore committed a
total of GBP0.8 million for this purpose.
Investment Management
The acquisition reduces the Directors' level of control over individual
investments in the Fund, including control over any decision on follow-on
investments in the combined portfolio and realisation of such investments, from
that which the Directors have previously exercised. However, the Directors
believe that, having regard to the controls retained by the Company, they still
maintain sufficient control over the Company's investment in the Fund to
exercise their duties properly. The Investment Advisor has full discretion over
any decisions pertaining to the Fund's investments, while its discretion over
decisions pertaining to the remainder of the Company's investments remains
unchanged.
16 Directors' interests
+----------------------------------------+-------------------+----------+----------+----------+
| | | 31 | 31 | 31 |
| | | July | July | January |
| | | 2010 | 2009 | 2010 |
+----------------------------------------+-------------------+----------+----------+----------+
| | | Ordinary | Ordinary | Ordinary |
| | | Shares | Shares | Shares |
+----------------------------------------+-------------------+----------+----------+----------+
| | | number | number | number |
| | | | | |
+----------------------------------------+-------------------+----------+----------+----------+
| G O Vero | | 40,000 | 40,000 | 40,000 |
+----------------------------------------+-------------------+----------+----------+----------+
| N V Wilson | | 20,000 | 20,000 | 20,000 |
+----------------------------------------+-------------------+----------+----------+----------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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