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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
London Asia | LSE:LDC | London | Ordinary Share | GB0008251513 | ORD 5P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 2.85 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:5867E London Asia Capital PLC 27 September 2007 27 September 2007 Embargoed for 0700hrs London Asia Capital plc ("London Asia" or "the Group") Interim Results 2007 London Asia Capital plc (AIM: LDC.L) the Asian focused investment group, today announces Interim Results for the six months ended 30 June 2007. Financial Highlights * Net assets increased 44% to #44.4 million (2006: #30.7 million), equal to 13.6p per share (2006: 13.7p); * Profit before investment revaluations for the six months up 94% to #0.6 million (2006: #0.3 million); and * Market value of listed investments #11 million at 30 June 2007. Combined value of cash and listed investments is #17.4 million, equal to 5.3p per share Operational Highlights * Recurring advisory income covers running costs * Overheads down 18% as staff numbers reduced * New clients signed up for listing on PLUS Commenting on outlook Jack Wigglesworth, Chairman said, "Our balance sheet position continues to strengthen, with net assets of #44.4 million, equal to 13.6p per share, compared to net assets of #33.1 million at the end of 2006. The significant growth in net assets relates mainly to the acquisitions completed in May and June of this year, totalling #11.3 million. Together with the recent acquisitions announced towards the end of the period, 57% of our portfolio is still shown at cost". He added: "The markets in which we operate are booming, and our own business is performing well, despite the restrictions placed on it by the collapse of the share price, which is trading at a considerable discount to reported net asset value. We are profitable, cash generative and seeing continuous growth in the value of our investment portfolio. We are working on various ways to restore the confidence of the market in our shares". For further information please visit www.londonasiacapital.com or contact: Cecilia Wong John West/Andrew Dunn Jonathan Wright London Asia Ltd Tavistock Communications Seymour Pierce Tel: +852 2251 8373 Tel: +44 (0)20 7920 3150 Tel: +44 (0)20 7107 8000 Chairman's Statement I am pleased to announce a strong set of interim results for the six months ended 30 June 2007. Highlights for the period include: * Profit before investment revaluations for the six months up 94% to #0.6 million (2006: #0.3 million); * Profit after tax and investment revaluations #0.3 million (2006: #0.8 million), hit by #0.7 million charge against the value of UK listed portfolio * Net assets increased 44% to #44.4 million (2006: #30.7 million); and * Market value of listed investments #11 million at 30 June 2007. Combined value of cash and listed investments is #17.4 million, equal to 5.3p per share Financial performance The results are prepared under International Financial Reporting Standards ("IFRS")in line with the new requirements for AIM listed companies to comply with IFRS. Turnover is up 50% to #1.2 million (2006: #0.8 million), with operating overheads down 18% to #0.6 million (2006: #0.7 million), resulting in a near doubling of profits before investment revaluations and tax to #0.6 million (2006: #0.3 million). Including movements on the investment portfolio, profits after tax were #0.3 million (2006: #0.8 million). Turnover is a mix of fund management fees, corporate finance fees and dividends, with recurring advisory revenue amounting to #0.7 million, covering our overheads. No account has been taken of any performance related fees, which may be due based on the performance of the London Asia Chinese Private Equity Fund ("LACPE Fund"). Overheads are down, primarily as a result of lower staff related costs as staff were made redundant or left, in line with the Group's change in focus to that of an investment company. The strength of sterling relative to Asian currencies resulted in a foreign exchange loss of #0.1 million on assets denominated in Chinese Renmimbi and Hong Kong Dollars. The six month period saw a net decrease of #0.2 million in the value of our investment portfolio. Gains on our investments listed in Singapore and Malaysia were offset by mark-downs of #0.7 million to reflect recent weakening of the value of UK listed China stocks and bring them to realisable value in line with our policy of accelerating the realisation of assets. Basic earnings per share (excluding investment revaluations) for the six months increased to 0.23p (2006: 0.12p), with fully diluted earnings per share 0.22p (2006: 0.12p). Our balance sheet position continues to strengthen, with net assets of #44.4 million, equal to 13.6p per share, compared to net assets of #33.1 million at the end of 2006. The significant growth in net assets relates mainly to the acquisitions completed in May and June of this year, totalling #11.3 million. Together with the recent acquisitions announced towards the end of the period, 57% of our portfolio is still shown at cost. The table below provides an analysis of the Group's net asset position: 30 June 31 Dec 2007 2006 #'000 #'000 Unlisted investments 28,434 19,221 Cash 6,417 5,391 Listed investments 11,019 10,200 Other net liabilities (1,485) (1,670) -------- -------- 44,385 33,142 ======== ======== Our cash position remains healthy at #6.4 million as at 30 June 2007, equal to 2p per share, up from #5.4 million at 31 December 2006. The increase in cash is the result of the surplus generated from the advisory side of our business as well as from the proceeds of investment realisations. The combined value of cash and listed investments is #17.4 million, equal to 5.3p per share. Investment portfolio The Group's core business has always been investment of its own capital in businesses in Asia, and the majority of our assets consist of investments in public and private companies operating in Asia. Following a period during which few investments were made while resources were focused on investing the LACPE Fund, the Group has again been active in investing in Asia, with over #11 million of new investments made in the period, increasing the amount currently invested by approximately a third. The table below provides a summary of our top holdings: LAC Zhongying 28.6% Asia Power 13.4% China Financial Services 11.8% China Exchange 7.7% Yellow River Securities 6.4% London Asia Capital Land 6.4% London Asia Limited 6.4% China Eastsea Business Software 3.4% China Biotech Healthcare 3.2% China MobileNet 1.9% Total 89.2% New investments During the period the Group invested over #10.9 million in four Asian financial services companies in which it holds 40% stakes, the combined capital of which is over #27 million. The investments were made via the issue of 97.9 million London Asia shares at an average price of just over 11p. The new businesses have already begun making investments off their own balance sheets, with over #8.8 million invested by them to date. These businesses cover a range of advisory, debt based and trading activities in Asia, where we see significant opportunities given the strong trading environment. These investments comprise: * Yellow River Securities, focussing on short term investments in Asian businesses going to IPO, and in undervalued or overlooked existing listed businesses, including those Asian businesses listed in the UK. * China Exchange Ltd ("CEL"), which has acquired a 40% stake in Xi'an Private Equity Exchange ("XPEE"), the leading private equity exchange in Northwest China. XPEE aims to take advantage of the tough requirements and long waiting list for companies to list on China's main stock exchanges resulting in equity exchanges becoming more prominent for the sale of assets and projects, particularly state owned. XPEE also provides a range of investment banking and related services, including venture capital and share custodian services, manages funds for wealthy individuals and companies and providing short term financing to enterprises and advises on financing, equity trading services, listings on local and foreign stock exchanges, and project finance. CEL also has a stake in a mortgage and pawn broking company, authorised to provide its services nationwide, and an 80% stake in SYGC, which provides credit guarantee services, mainly targeted at SMEs. * London Asia Capital Land ("LACL") which focuses on transactions in China's property sector, primarily distressed assets. * London Asia Limited, a Hong Kong based advisory business, which has acquired a 51% stake in Jin Lian Ann Insurance Broker ("JLAI"), headquartered in Beijing, China, which operates nationwide through 30 branches, focusing on corporate clients, as well as a 51% stake in Zhong Nan Auction House ("ZNAH"), based in Guangdong Province, China, whose business includes the auction of items confiscated by the Guangdong municipal government, distressed property and items with no identifiable ownership. We also invested #0.5 million in Mayapanda International, an Indonesian Bank listed on the Jakarta Stock Exchange. Operational Review There have been significant changes in the structure and operation of the Group over the past year, with a considerable simplification of the Group under the revised strategy of focusing resources primarily on investment, realising the value in the investment portfolio, and expanding our operational activities through London Asia Ltd ("LAL"), our 40% investee company, rather than directly. The diagram below sets out the revised structure of the Group: LAC plc UK listed Net assets #44.4m | | --------------------------------------------------- - - - - - - - - - | | | Investments Operating Companies London Asia Ltd #39.5m 40% | | -------------------------- ------------------------- | | | | Private companies Listed companies LA LA #28.5m #11.0m Corporate Finance Fund Management | | |_ LACPE Fund Day to day management of the Group is now contracted to LAL. All decision making is done by the Group's Board of Directors, based on recommendations from LAL. The majority of our former staff and offices have moved across to LAL, so that the Group now has minimal staff, reflected in the reduction in overheads. The remaining staff work primarily to support the corporate finance operations in the UK, which continues to act as corporate finance adviser to nine UK PLUS listed companies, as well as a number of new businesses looking to come to PLUS, and to provide advisory services to the UK AIM listed London Asia Chinese Private Equity Fund. The income generated from these activities is used to pay the running costs of the Group. Our 40% stake in LAL provides us with exposure to the potential upside from expanding operational activities in Asia, without the exposure - in terms of capital, management and need to account for losses and liabilities - that a majority stake would entail. LAL is working on a number of projects in the fund management and corporate finance advisory sectors for which it hopes to see results next year. Board and Management Changes Victor Ng and Simon Littlewood have both left the Board during the period, to concentrate on developing the operational side of the business, disposing of assets and managing LACPE Fund, where they still hold Board seats. The LAC Board now consists of three non executive directors. We are actively looking to increase the size of the Board going forward. Outlook The markets in which we operate are booming, and our own business is performing well, despite the restrictions placed on it by the collapse of the share price, which is trading at a considerable discount to reported net asset value. We are profitable, cash generative and seeing continuous growth in the value of our investment portfolio. We are working on various ways to restore the confidence of the market in our shares. Jack Wigglesworth Chairman 27 September 2007 INCOME STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2007 Unaudited Unaudited 30 June 30 June 2007 2006 #'000 #'000 Revenue 1,213 811 Administrative expenses (605) (734) ------- -------- Operating profit 608 77 Interest income 66 62 Increase in value of investments disposed of 3 170 Share based payment charge - (7) Foreign exchange losses (100) - Finance costs (5) (7) ------- -------- Profit before taxation and unrealised (losses)/ 572 295 profits on investments Unrealised (losses)/profits on revaluation of (247) 561 investments ------- -------- Profit before taxation 325 856 Taxation - (13) ------- -------- Profit for the period 325 843 ======= ======== Attributable to: Equity holders of the parent 331 838 Minority interest (6) 5 ------- -------- 325 843 ======= ======== Earnings per share Pence Pence Basic 0.13 0.37 Diluted 0.13 0.35 Adjusted earnings per share Pence Pence Basic 0.23 0.12 Diluted 0.22 0.12 BALANCE SHEET 30 JUNE 2007 Unaudited Unaudited 30 June 30 June 2007 2006 #'000 #'000 Non-current assets Goodwill 319 319 Property, plant and equipment 23 26 Investments 37,702 29,587 -------- -------- 38,044 29,932 ======== ======== Current assets Investments 1,821 474 Trade and other receivables 1,626 1,680 Cash and cash equivalents 6,417 4,171 -------- -------- 9,864 6,325 -------- -------- Total assets 47,908 36,256 ======== ======== Current liabilities Trade and other payables (3,379) (5,253) Current tax liabilities - (39) -------- -------- (3,379) (5,292) -------- -------- Net current assets 6,485 1,033 -------- -------- Non-current liabilities Bank loans (144) (223) -------- -------- Total liabilities (3,523) (5,515) -------- -------- Net assets 44,385 30,741 ======== ======== Equity Share capital 16,368 11,280 Share premium 27,265 21,332 Share options reserve 477 469 Retained loss (43) (2,475) -------- -------- Equity attributable to equity holders of the 44,067 30,606 parent Minority interest 318 135 -------- -------- Total equity 44,385 30,741 ======== ======== STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2007 Share Share Share Translation Retained Total capital premium options reserve loss reserve Balance at 1 January 2007 11,381 21,330 477 2 (374) 32,816 Issue of shares 4,987 5,935 10,922 Profit for the period 331 331 Exchange differences arising on translation of foreign operations (2) (2) ------------------------------------------------------------------ 16,368 27,265 477 - (43) 44,067 ================================================================== CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2007 Unaudited Unaudited 30 June 2007 30 June 2006 #'000 #'000 Net cash from operating activities 418 1,488 Investing activities Interest received 66 62 Proceeds on disposal of investments 1,048 1,155 Purchase of property, plant and equipment - (10) Purchase of investments (570) (1,157) -------- -------- Net cash used from investing activities 544 50 -------- -------- Financing activities Proceeds on issue of shares 95 51 Repayment of bank loans (31) (18) -------- -------- Net cash from financing activities 64 33 -------- -------- Net increase in cash and cash equivalents 1,026 1,571 Cash and cash equivalents at beginning of year 5,391 2,600 -------- -------- Cash and cash equivalents at end of period 6,417 4,171 ======== ======== NOTES TO THE INTERIM RESULTS 1. Basis of preparation The results for the six months ended 30 June 2007 are unaudited and have not been reviewed by the Auditors. They have been prepared on accounting bases and policies that are consistent with those used in the preparation of the financial statements of the Group for the year ended 31 December 2006. The financial statements contained in the report do not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. The results for the year ended 31 December 2006 were reported on by the auditors and received an unqualified audit report. Full accounts for the year ended 31 December 2006 have been delivered to the Registrar of Companies. 2. Significant accounting policies Financial instruments Financial instruments are recognised in the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument. Investments Investments are recognised and derecognised on a trade date where a purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs except for those financial assets classified as assets at fair value through profit and loss which are initially measured at fair value. Investments are classified as assets at fair value through profit and loss and are measured at subsequent reporting dates at fair value. Gains and losses arising from changes in fair value are included in net profit or loss for the period. The fair values of quoted investments in active markets are based on current bid prices. If the market for a financial asset is not active, or the asset is an unlisted security, fair values are established by using valuation techniques. These include the use of recent arm's length transactions, discounted cash flow analysis and the valuation techniques commonly used by market participants. Trade receivables Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition. Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value and have an original maturity of three months or less. Financial liabilities and equity Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Trade payables Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method. Impairment of financial assets Financial assets, other than those assets at fair value through profit and loss, are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that as a result of one or more events that occurred after the initial recognition of the financial asset the estimated future cash flows of the investment have been impacted. For loans and receivables the amount of the impairment is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables where the carrying amount is reduced through the use of an allowance account. When a trade receivable is uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through the income statement to the extent the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. Equity instruments Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs. 3. Earnings per share 30 June 30 June 2007 2006 #'000 #'000 Earnings Earnings for the purposes of basic and diluted earnings per share being net profit attributable to equity holders of the parent 331 838 Investment revaluation losses/(gains) 247 (561) -------- -------- Adjusted earnings 578 277 -------- -------- Number of shares Weighted average number of ordinary shares for the purposes of basic earnings per share 247,766,318 224,268,852 Effect of dilutive potential ordinary shares: Share options 10,042,791 14,258,230 Warrants 1,993,390 2,175,746 ----------- ----------- Weighted average number of ordinary shares for the purposes of diluted earnings per share 259,742,500 240,702,828 =========== =========== Earnings per share Basic (pence) 0.13 0.37 ----------- ----------- Diluted (pence) 0.13 0.35 ----------- ----------- Adjusted earnings per share Basic (pence) 0.23 0.12 Diluted (pence) 0.22 0.12 4. Dividend The directors do not recommend the payment of an interim dividend. 5. Interim Results Copies of the Interim Results are available on the Company's web site, www.londonasiacapital.com, or from the Company! s registered office, 197 Providence Square, London, SE1 2DG. Send an email to cecilia.wong@londonasia.com if you would like a copy of the accounts posted to you. This information is provided by RNS The company news service from the London Stock Exchange END IR IFFLLAVIRFID
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