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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:4567D London Asia Capital PLC 29 September 2004 For release 29 September 2004 London Asia Capital plc Interim Results - Six months to 30 June 2004 London Asia Capital ("London Asia" or the "Company"), the AIM listed merchant banking group focused on China, announces Interim Results for the six months to 30 June 2004, featuring profits, dividends and near doubled net assets. London Asia focuses on the key growth sectors of Energy & Environment, IT, Financial Services and Media. Jack Wigglesworth, Chairman, said: "I am delighted to announce a profit and a considerable strengthening of London Asia's financial position, as we continue to expand our activities in China." Financial Highlights * Operating profit of #394k (loss #86k, six months to 30 November 2003); * Dividend of #530k from Chinese investments; * Net assets almost doubled to #8.2m; * Cash up from #2.2m to #2.8m; * Long term investments up from #3m to #4.9m; * Successful fund raisings of over #2.3m; * Investments of c. #2m in seven companies in China, Malaysia and Singapore; Other Highlights * Twin strategy in China: - Invest in profitable, growth businesses for dividends, management fees and investment realisation - Advise Chinese companies, including own investments * Increased team and network in China; recent opening of New York office * Access to +7,000 businesses in China (via business parks and Chinese venture capitalists) * Focus outside main cities of Shanghai, Beijing and Guangzhou to find attractively priced investments * Chinese Stock Market undergoing reform, making it more accessible and market driven * Chinese economy continues to grow strongly Regarding the Outlook Mr. Wigglesworth said: "Our key focus at present is on maximising the revenue opportunities that can be generated from our investments to date and the infrastructure we have built up within and outside China. We are working closely with China Financial Services management and advisors to assist in its listing. In the second half we will receive management fees from some of the companies in our portfolio; we have a number of advisory mandates where we are receiving fees; and we have a number of opportunities in the fund management sector. We are very excited about the opportunities for the Company." Enquiries: London Asia Capital plc Simon Littlewood, Chief Executive Tel: 020 7332 2219 Paul McManus, Binns & Co PR Ltd Tel: 020 7153 1485 Mob: 07980 541 893 London Asia Capital plc Interim Statement for the six months ended 30th June 2004 Chairman's Statement Results I am delighted to announce a profit for the six months to 30th June 2004 and a considerable strengthening of London Asia's financial position, as we continue to expand our activities in China. Highlights include: * dividend of #530,000 from one of our Chinese investments; * net assets nearly doubled in the period to #8.2 million; * cash at bank risen from #2.2 million to #2.8 million; * long term investments risen from #3.0 million to #4.8 million. As an investment company, we show our investments at original cost rather than actual value, and profits generated by these investments are not consolidated. We account, however, for dividends received and management fees, which we are starting to charge. Financing and investments During the period we raised over #2.3 million, via a placing in February 2004 and the exercise of 10.1 million warrants attached to shares placed in October 2003. The remaining 12.9 million warrants expire at the end of October 2004. The first months of the current financial year were marked by considerable investment activities extending our holdings in our strategic investment sectors of Energy & Environment, IT, Financial Services and Media. During the period we have made the following investments, amounting to approximately #2 million at cost: * 570,000 in Century Data, a Chinese environmental business which monitors pollution levels in China via China Mobile's GPRS system. This company has expanded considerably from its initial base in Hebei Province since our investment, and is now looking to expand its operations across several provinces in China to take advantage of recent legislation passed by the Chinese government to reduce some of the damage caused to the environment by its rapid industrialisation; * #269,000 in Tianfeng, a Chinese SMS technology business focusing on the Chinese corporate market. This company continues to expand its customer base and range of services within China, where the mobile is a more common means of communication for business people than the Internet or fixed line phones and faxes; * #375,000 in Capitalink, a venture capital group with a number of investments in the Chinese power, resource and environmental sectors. This sector is seeing rapid growth as a result of the continuing switch from an agricultural to industrial economy in China and increased urbanisation - in July we announced that Asia Water, one of Capitalink's portfolio companies, had won a large long term contract in China. We are working with Capitalink's existing investments to assist them in restructuring and raising additional finance, which has the potential to generate significant fee income and additional investment opportunities for the Company going forward; * #602,000 in EAsset Management, a Malaysian investment banking boutique with existing funds under management and a corporate finance business focused on listing businesses on the Malaysian Stock Market; * #70,000 in MyEG, a Malaysian based e-government services business, part of the Governments Multi Media Super Corridor project; * #55,000 in a Chinese power saving business, which is currently applying for listing in Singapore; * #19,000 to maintain our 30% stake in London Asia Capital Singapore, which carried out a rights issue in the period to provide funds for investment in companies looking to IPO in Singapore. Our aim is to continue to build our portfolio of investments, which puts us in a strong position to make substantial gains from 2006 onwards when we believe there will be the opportunity to list some of our investments within China. The Chinese Stock Market is undergoing a period of considerable reform to make it more accessible to non state owned businesses and more market driven. We anticipate achieving higher valuations listing our investments in China rather than elsewhere once this reform process is completed and investors in China and overseas have confidence in the market. In addition to the investments made in the period, we held the following investments at 30th June 2004: Company Sector Hold Invested #'000 China Financial Services Financial services 48% 2,274 Biaoqi Media Group Media 51% 322 TCIB Financial services 25% 107 Idiom Ltd (Puca) IT (SMS) 16% 230 Europasia Education plc Education 6% 128 China Financial Services (formerly Beijing Success) Beijing Success, the operating subsidiary, continues to see strong growth, with unaudited profits after tax for the six months to 30th June 2004 of over #0.6 million, up over 30% on 2003. The listing procedure is well underway managed by Mr Peng Mun Foo, recently appointed Finance Director, who is updating the draft prospectus to incorporate the results to 30th June 2004. Depending on market conditions, we anticipate that the listing will be finalised towards the end of this year or early in 2005, depending on market conditions. Biaoqi Media Group("Biaoqi") Biaoqi consists of three investments, two in advertising businesses and one in a film, TV production and publishing business, Biaoqi Culture. Biaoqi Oriental Radio, the radio adverting business acquired in late 2003, continues to do well. Biaoqi Culture is currently working on a large project for Chinese TV, the profits from which will feed through in the second half of the year when the program is completed. TCIB TCIB provides corporate finance advice to companies within China, with a focus on advising businesses on listing in the UK and Singapore. TCIB has to date signed up three clients seeking to go to IPO, and has a number of other potential clients where TCIB is finalising the terms of their appointment with a view to listing them next year. Puca Irish based business which provides SMS marketing packages and solutions to corporate and governmental clients such as Vodafone, Guinness, Coke, Irish Television, Nestle, Mars. Puca is currently seeking to tie up with partners across Europe and Asia to leverage its expertise and client contacts. Europasia Education ("EPE") AIM listed EPE successfully completed a private placement in June, in which London Asia participated, the proceeds of which went to acquire a profitable English language school based in Bournemouth, UK. London Asia is assisting EPE in identifying suitable acquisitions in China. China Strategy We have a twin strategy in China: * Invest in profitable, growth businesses from which we can take dividends, management fees and ultimately realise our investment via sale or IPO; * Advise Chinese companies, including our own investments, on raising funds or listing outside China, or selling themselves to overseas investors. We have built up a team and network of offices in China to give us access to investment opportunities and enable us to be near the companies we invest in and advise. During the period we have increased the number of staff we employ both within China, and in our Singapore and London offices, which are responsible for managing the exit from our investments and assisting companies go to IPO. We recently opened an office in New York, headed by an experienced Wall Street investment banker, to enable us to tap into the largest financial market in the world. In addition to our own team, we have extended our existing relationships and coverage in China through alliances with Chinese Government economic zones and business parks, and Chinese venture capitalists. This gives us access to over 7,000 businesses in China. There have been various concerns expressed about the overheating of the Chinese economy and the Chinese Government's attempts to slow the growth in the economy. We focus on the following industry sectors, which we believe are less affected by the Government's measures and continue to see strong growth due to the opening up of the Chinese economy to private enterprise and the rise of consumer demand within China: * Media, IT and telecom - China is the largest mobile market in the world by user numbers, and the media sector is developing rapidly as Western brands attempt to tap into the Chinese consumer market * Financial services - the financial services market in China is relatively undeveloped, and still subject to legal constraints and restrictions on non Chinese businesses taking majority holdings. As part of China's commitments to the World Trade Organisation, many of these restrictions on non Chinese businesses becoming involved in China's financial services industry are being relaxed. London Asia is currently looking at a number of opportunities in the financial services sector in China, in particular the possibility of investing in a fund management business to tap into the high savings rates within China * Environment, energy, water and waste - China's rapid growth over the last 25 years has created large power shortages and substantial damage to the environment. China is the second largest user of oil after the USA, and there are a number of power projects under construction. To counteract the damage caused by rapid industrialisation, the Chinese Government has passed a number of laws to try to prevent further damage to the environment and improve air and water quality, and develop renewable energy resources. We are increasingly focusing on areas outside the main cities of Shanghai, Beijing, and Guangzhou, in line with the Chinese government's policy of spreading investment away from the more developed coastal cities to inland cities. This enables us to continue to find attractively priced good quality investment opportunities and avoid the overheating in some sectors of the Chinese economy. China's Economy China's economy continues to grow strongly, and foreign investment into China continues to increase, with China overtaking the USA in 2003 to become the largest recipient of foreign direct investment according to figures released by the UN and OECD, with Foreign Direct Investment into China up 19% in the first eight months of 2004 to US$44 billion, with contracted investment up 39% to US$93 billion for the same period, and 28,748 new foreign invested ventures approved by the Chinese Ministry of Commerce. IMF figures show China's GDP per head in 2003 exceeded US$1,000 for the first time - placing it only 110th out of 179 countries for GDP per capita, showing the huge growth that is still required in China to bring it up to comparable levels of wealth with the West. China resisted pressure to revalue its currency upwards and has maintained the link to the US Dollar, which with sterling's continued strength against the dollar means the exchange rate remains favourable for UK based investors in China. Any upwards revaluation of the Chinese currency would mean an increase in the value of our investments in Sterling. Outlook Our key focus at present is on maximising the revenue opportunities that can be generated from our investments to date and the infrastructure we have built up within and outside China. * We have our first dividend from our portfolio companies, and in the second half of the year we will receive management fees from some of the companies in our portfolio. * We have a number of advisory mandates where we are receiving fees for assisting businesses in raising finance or going to IPO. This is a side of the business we intend to continue to expand, as it generates cash and profits without significant additional investment. * We have a number of opportunities in the fund management sector. We see considerably more opportunities to invest in China than we are able to fund from our own resources. Managing a fund will enable us to fund those deals, generating additional fee income and opportunities for capital gains. We are very excited about the opportunities for the company. I would like to take this opportunity to thank all the staff for their hard work and our shareholders for their continued support of the company. Jack Wigglesworth Chairman 29th September 2004 London Asia Capital plc Unaudited profit and loss account For the six months ended 30 June 2004 Six months ended Six months ended Period ended 30 June 30 November 2003 31 December 2003 2004 (Unaudited) (Audited) (Unaudited) #'000 #'000 #'000 Operating profit/(loss) 394 (86) (131) Net interest payable 24 (27) (29) Retained profit(loss) for the financial 418 (113) (160) period Basic earnings/(loss) per ordinary share 0.59p (0.41p) (0.50p) Diluted earnings/(loss) per ordinary share 0.44p (0.41p) (0.50p) All amounts are derived from continuing operations. There were no recognised gains or losses not dealt through the profit and loss account. London Asia Capital plc Unaudited Balance Sheet As at 30 June 2004 30 June 30 November 2003 31 December 2004 2003 (Unaudited) (Unaudited) (Audited) #'000 #'000 #'000 #'000 #'000 #'000 Fixed assets Tangible assets 6 2 3 Investments 4,924 2,959 2,974 Current assets Debtors 733 104 77 Investments 246 138 138 Cash at bank and in hand 2,786 2,278 2,234 3,765 2,520 2,449 Creditors: amounts falling due within one (43) (2,183) (783) year Net current assets 3,722 337 1,666 Total assets less current liabilities 8,652 3,298 4,643 Creditors: amounts falling due after more (474) (447) (459) than one year Total assets less liabilities 8,178 2,851 4,184 Capital and reserves Called up share capital 4,057 2,337 2,736 Share premium account 10,070 6,834 7,815 Profit and loss account (5,949) (6,320) (6,367) Equity shareholders' funds 8,178 2,851 4,184 London Asia Capital plc Unaudited cash flow statement For the six months ended 30 June 2004 Six months ended Six months ended Period ended 30 June 30 November 2003 31 December 2003 2004 (Unaudited) (Unaudited) (Audited) #'000 #'000 #'000 #'000 #'000 #'000 Net cash inflow/(outflow) from operating (992) 1,954 538 activities Returns on investment Net interest paid 24 (27) (29) Net cash outflow from returns on 24 (27) (29) investments Capital expenditure Payment to acquire tangible assets (3) (2) (4) Purchase of investments (466) - (10) Net cash (outflow)/inflow from capital (469) (2) (14) expenditure Acquisitions and disposals Payment to acquire subsidiary (314) (2,175) (789) undertakings and investment in associates Net cash outflow before management of (1,751) (250) (294) liquid resources and financing Management of liquid resources Current asset investments (108) 156 156 Bank deposits - (1,000) - Net cash (outflow)/inflow from management (108) (844) 156 of liquid resources Financing Proceeds from issue of shares 2,406 2,293 2,282 Net proceeds from convertible loan stock 5 211 222 Repayment of bank loan - (230) (230) Net cash inflow from financing 2,411 2,274 2,274 Increase/(decrease) in cash 552 1,180 2,136 Reconciliation of movements in shareholders' funds 30 June 30 November 2003 31 December 2003 2004 (Unaudited) (Unaudited) (Audited) #'000 #'000 #'000 Profit/(loss) for the period 418 (113) (160) Issue of ordinary share capital 3,576 2,296 3,676 Net addition to shareholders' funds 3,994 2,183 3,516 Opening shareholders' funds 4,184 668 668 Closing shareholders' funds 8,178 2,851 4,184 London Asia Capital plc Notes to the interim results 1. Basis of preparation The results for the six months ended 30 June 2004 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 company for the period ended 31 December 2003. The financial statements contained in this report do not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. The results for the period ended 31 December 2003 were reported on by the auditors and received an unqualified audit report. Full accounts for the period ended 31 December 2003 have been delivered to the Registrar of Companies. 2. Significant accounting policies Fixed asset investments Fixed asset investments are stated at cost less provision for diminution in value. Current asset investments Current asset investments comprise marketable and quoted investments held for resale and are stated at lower of cost and net realisable value. Group accounts The financial statements present information about the company as an individual undertaking and not about its group. The company has taken advantage of the exemptions provided by section 229(3) of the Companies Act 1985 not to prepare group accounts on the basis that severe long term restrictions are in place which hinder the exercise of the company's rights over the assets and management of its subsidiary undertakings that, in the case of certain of the subsidiary undertakings, these companies are not material to the company's financial statements. Furthermore, due to restrictions faced by the company in relation to its subsidiary undertakings, income derived from these investments is accounted for on a received basis. Associated undertakings and participating interests The company has not treated certain investments in which it holds more than 20% of the shares as associated undertakings as the directors consider that the company does not have the required significant influence over the operations of these undertakings. 3. Earnings per share The calculation of the basic earnings per share is based on the profit after tax of #418,000 on 70,901,779 ordinary shares being the weighted average number of ordinary shares in issue during the period. The convertible loan stock, options and warrants were anti-dilutive in respect of the period. The calculation of diluted earnings per share is based on basic earnings per share adjusted to allow for the issue of ordinary shares on the assumed conversion of all options, warrants and convertible debt resulting in 101,773,426 ordinary shares. 4. Dividend The directors do not recommend the payment of an interim dividend. 5. Taxation No taxation is expected to arise due to tax losses brought forward. 6. Interim Results Copies of the Interim Results are available on the company's web site, www.londonasia.com, or from the Company's registered office, 11 Central House, High Street, Ongar, Essex, CM5 9AA. Send an email to accounts@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 IFFSIAEITFIS
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