Half Yearly Report

 

TIDMMAP 
 
RNS Number : 2373P 
MG Capital PLC 
20 March 2009 
 

MG CAPITAL PLC 
 
 
Interim Results 
For the six months ended 31 December 2008 
 
 
Statement by Chairman 
The very sharp deterioration of global financial conditions following the 
Lehman's collapse in mid September came at an extremely unhelpful time for the 
Company.  We have been active and successful investment advisers in the 
farming/agriculture sector for a number of years and have identified it as a key 
area for us to expand our business. We were poised to close at least one 
significant transaction in the sector at the time of the collapse, but the 
timing of our plans has now been delayed, for how long we are still not sure. 
 Investors' confidence, as we are all aware, remains very fragile and looks as 
though it will inevitably take time to recover. Nevertheless, as we test market 
our specialist farming investment vehicle we have been encouraged to find that 
interest in agriculture is still very much alive among international 
institutional investors with many of them looking to build up exposure to this 
new asset class. 
 
 
The Lehman's crisis and its aftermath has also had an unfortunate impact upon 
the capital raising that we were working on for an Australian company involved 
in fibre optics in China, as mentioned in my Statement in the last Annual Report 
and Accounts.  At the time of my Statement, this transaction was still subject 
to approval by the client company's shareholders. Subsequently this approval was 
received and the deal went unconditional and we should have then been in receipt 
of a 5% fee. However the investor was badly affected by the crisis and 
subsequently defaulted on its commitment. We are still working on this mandate 
with other potential investors but it is likely that it will take several months 
work to have a chance to bring it to a successful conclusion. 
 
 
The re-financing of Sky Express, the Russian low cost airline, is still not 
completed, with a re-financing agreement still being worked on with a new 
investor. The airline has benefited from the fall back in aviation fuel prices 
but conditions are still very tough in the Russian aviation market. 
 
 
As a result of anticipated fee revenues not being received during the period 
under review, there was an after tax loss attributable to equity holders of the 
Company of GBP289,132 for the period, compared to a loss of GBP123,372 for the 
first six months of the previous year. We are taking action to address our cost 
base and with our advisers are examining all options with an aim to bring our 
costs and revenues into balance by the end of the Company's current financial 
year, with measures that include the closure of our office in Beijing and a 
reduction in personnel and other expenses, but we will ensure that these steps 
will not affect our ability to launch our planned new products. 
 
 
 
 
Peter Hannen 
Chairman 
19 March 2009 
 
 
Unaudited Income Statement 
For the six months ended 31 December 2008 
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+ 
|                                            |          |       Unaudited |   |         Unaudited |   |       Audited | 
|                                            |    Notes |        6 months |   |          6 months |   |  12 months to | 
|                                            |          |       to 31 Dec |   |         to 31 Dec |   |        30 Jun | 
|                                            |          |            2008 |   |              2007 |   |          2008 | 
|                                            |          |             GBP |   |               GBP |   |           GBP | 
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+ 
| Revenue - continuing operations            |          |         113,210 |   |           114,185 |   |       186,667 | 
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+ 
|                                            |          |         113,210 |   |           114,185 |   |       186,667 | 
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+ 
|                                            |          |                 |   |                   |   |               | 
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+ 
| Administrative expenses                    |          |       (388,743) |   |         (299,406) |   |   (1,053,905) | 
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+ 
| Other net gains                            |          |               - |   |                 - |   |        91,627 | 
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+ 
| Operating (loss)                           |          |       (275,533) |   |         (185,221) |   |     (775,611) | 
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+ 
|                                            |          |                 |   |                   |   |               | 
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+ 
|                                            |          |                 |   |                   |   |               | 
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+ 
| Finance income                             |          |             664 |   |             1,862 |   |         4,901 | 
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+ 
| Finance costs                              |          |        (11,757) |   |           (5,619) |   |      (11,178) | 
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+ 
| (Loss) on continuing operations                       |       (286,626) |   |         (188,978) |   |     (781,888) | 
| before taxation                                       |                 |   |                   |   |               | 
+-------------------------------------------------------+-----------------+---+-------------------+---+---------------+ 
|                                            |          |                 |   |                   |   |               | 
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+ 
| Tax on loss on ordinary activities         |          |         (2,506) |   |           (4,868) |   |       (8,498) | 
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+ 
| (Loss) on ordinary activities after        |          |       (289,132) |   |         (193,846) |   |     (790,386) | 
| taxation - continuing operations           |          |                 |   |                   |   |               | 
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+ 
| Profit for the Financial Year on           |          |               - |   |            68,425 |   |       214,329 | 
| discontinued operations                    |          |                 |   |                   |   |               | 
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+ 
|                                            |          |                 |   |                   |   |               | 
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+ 
| Equity minority interest                   |          |               - |   |             2,049 |   |             - | 
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+ 
| Retained (loss) for the period             |          |       (289,132) |   |         (123,372) |   |     (576,057) | 
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+ 
|                                            |          |                 |   |                   |   |               | 
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+ 
| Loss per share - basic and diluted from    | 2        |         (6.02p) |   |           (0.03p) |   |      (16.45p) | 
| continuing operations                      |          |                 |   |                   |   |               | 
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+ 
|                                            |          |                 |   |                   |   |               | 
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+ 
 
 
 
Consolidated Unaudited Balance Sheet 
As at 31 December 2008 
+-----------------------------------+--------+-------------+--+-------------+--+---------------+ 
|                                   | Notes  |   Unaudited |  |   Unaudited |  |       Audited | 
|                                   |        |       As at |  |       As at |  |         As at | 
|                                   |        |      31 Dec |  |      31 Dec |  |        30 Jun | 
|                                   |        |        2008 |  |        2007 |  |          2008 | 
|                                   |        |         GBP |  |         GBP |  |           GBP | 
+-----------------------------------+--------+-------------+--+-------------+--+---------------+ 
| NON-CURRENT ASSETS                |        |             |  |             |  |               | 
+-----------------------------------+--------+-------------+--+-------------+--+---------------+ 
| Property, plant and equipment     |        |       6,721 |  |      12,679 |  |         9,130 | 
+-----------------------------------+--------+-------------+--+-------------+--+---------------+ 
| Investments                       |        |     196,418 |  |     195,918 |  |       195,918 | 
+-----------------------------------+--------+-------------+--+-------------+--+---------------+ 
| Purchased Goodwill less impairment         |     115,585 |  |     115,585 |  |       115,585 | 
+--------------------------------------------+-------------+--+-------------+--+---------------+ 
|                                   |        |     318,724 |  |     324,182 |  |       320,633 | 
+-----------------------------------+--------+-------------+--+-------------+--+---------------+ 
| CURRENT ASSETS                    |        |             |  |             |  |               | 
+-----------------------------------+--------+-------------+--+-------------+--+---------------+ 
| Debtors                           |        |     224,737 |  |     691,589 |  |       219,959 | 
+-----------------------------------+--------+-------------+--+-------------+--+---------------+ 
| Cash at bank and in hand          |        |      33,022 |  |     113,231 |  |        84,008 | 
+-----------------------------------+--------+-------------+--+-------------+--+---------------+ 
|                                   |        |     257,759 |  |     804,820 |  |       303,967 | 
+-----------------------------------+--------+-------------+--+-------------+--+---------------+ 
| Disposal group held for sale      |        |           - |  |           - |  |         2,050 | 
+-----------------------------------+--------+-------------+--+-------------+--+---------------+ 
| TOTAL ASSETS                      |        |     576,483 |  |   1,129,002 |  |       626,650 | 
+-----------------------------------+--------+-------------+--+-------------+--+---------------+ 
| LIABILITIES:                      |        |             |  |             |  |               | 
+-----------------------------------+--------+-------------+--+-------------+--+---------------+ 
| Current liabilities               |        |   (519,752) |  |   (521,126) |  |     (351,459) | 
+-----------------------------------+--------+-------------+--+-------------+--+---------------+ 
| Long term borrowings              |        |   (190,672) |  |           - |  |     (120,000) | 
+-----------------------------------+--------+-------------+--+-------------+--+---------------+ 
| Total Liabilities                 |        |   (710,424) |  |   (521,126) |  |     (471,459) | 
+-----------------------------------+--------+-------------+--+-------------+--+---------------+ 
|                                   |        |             |  |             |  |               | 
+-----------------------------------+--------+-------------+--+-------------+--+---------------+ 
| NET (LIABILITIES) / ASSETS        |        |   (133,941) |  |     607,876 |  |       155,191 | 
+-----------------------------------+--------+-------------+--+-------------+--+---------------+ 
| EQUITY                            |        |             |  |             |  |               | 
+-----------------------------------+--------+-------------+--+-------------+--+---------------+ 
| Called up share capital           |        |   2,402,255 |  |   2,402,255 |  |     2,402,255 | 
+-----------------------------------+--------+-------------+--+-------------+--+---------------+ 
| Retained Earnings                 |        | (2,536,196) |  | (1,794,379) |  | (2,247,064)   | 
+-----------------------------------+--------+-------------+--+-------------+--+---------------+ 
| Equity attributable to the        |        |   (133,941) |  |     607,876 |  |       155,191 | 
| shareholders of the parent        |        |             |  |             |  |               | 
| company                           |        |             |  |             |  |               | 
+-----------------------------------+--------+-------------+--+-------------+--+---------------+ 
| Minority Interests                |        |           - |  |           - |  |             - | 
+-----------------------------------+--------+-------------+--+-------------+--+---------------+ 
| TOTAL EQUITY                      |        |   (133,941) |  |     607,876 |  |       155,191 | 
+-----------------------------------+--------+-------------+--+-------------+--+---------------+ 
|                                   |        |             |  |             |  |               | 
+-----------------------------------+--------+-------------+--+-------------+--+---------------+ 
 
 
Consolidated Unaudited Cash flow Statement 
For the six months ended 31 December 2008 
+-------------------------------------+--------+---------------------+--+-----------+--+---------------------------+ 
|                                        Notes |           Unaudited |  | Unaudited |  |                   Audited | 
|                                              |           6 months  |  | 6 months  |  |                        12 | 
|                                              |           to 31 Dec |  | to 31 Dec |  |                    months | 
|                                              |                2008 |  |      2007 |  |                     to 30 | 
|                                              |                 GBP |  |       GBP |  |                       Jun | 
|                                              |                     |  |           |  |                      2008 | 
|                                              |                     |  |           |  |                       GBP | 
+----------------------------------------------+---------------------+--+-----------+--+---------------------------+ 
|                                     |        |                     |  |           |  |                           | 
+-------------------------------------+--------+---------------------+--+-----------+--+---------------------------+ 
| Net cash (outflow) from operating            |           (109,609) |  | (420,286) |  |                 (311,768) | 
| activities3                                  |                     |  |           |  |                           | 
+----------------------------------------------+---------------------+--+-----------+--+---------------------------+ 
| Returns of investments and servicing of      |                     |  |           |  |                           | 
| finance                                      |                     |  |           |  |                           | 
+----------------------------------------------+---------------------+--+-----------+--+---------------------------+ 
| Interest paid                                |            (11,757) |  |   (5,619) |  |                  (11,178) | 
+----------------------------------------------+---------------------+--+-----------+--+---------------------------+ 
| Interest received                            |                 664 |  |     5,527 |  |                     8,612 | 
+----------------------------------------------+---------------------+--+-----------+--+---------------------------+ 
|                                              |                     |  |           |  |                           | 
+----------------------------------------------+---------------------+--+-----------+--+---------------------------+ 
| Net cash (outflow) from returns on           |            (11,093) |  |      (92) |  |                   (2,566) | 
| investments and servicing of finance         |                     |  |           |  |                           | 
+----------------------------------------------+---------------------+--+-----------+--+---------------------------+ 
| Taxation                            |        |             (2,506) |  |   (4,868) |  |                   (8,498) | 
+-------------------------------------+--------+---------------------+--+-----------+--+---------------------------+ 
| Capital expenditure and financial investment |                     |  |           |  |                           | 
+----------------------------------------------+---------------------+--+-----------+--+---------------------------+ 
| Payments to acquire fixed assets    |        |          -          |  |   (1,499) |  |                  (33,881) | 
+-------------------------------------+--------+---------------------+--+-----------+--+---------------------------+ 
| Payments to acquire investments     |        |               (500) |  |  (64,000) |  |            -              | 
+-------------------------------------+--------+---------------------+--+-----------+--+---------------------------+ 
| Receipts from sale of investments   |        |                     |  |   281,205 |  |   -                       | 
|                                     |        |                   - |  |           |  |                           | 
+-------------------------------------+--------+---------------------+--+-----------+--+---------------------------+ 
|                                     |        |                     |  |           |  |                           | 
+-------------------------------------+--------+---------------------+--+-----------+--+---------------------------+ 
| Net cash inflow from capital        |        |               (500) |  |   215,706 |  |                  (33,881) | 
| expenditure and financial           |        |                     |  |           |  |                           | 
| investment                          |        |                     |  |           |  |                           | 
+-------------------------------------+--------+---------------------+--+-----------+--+---------------------------+ 
| Financing                           |        |                     |  |           |  |                           | 
+-------------------------------------+--------+---------------------+--+-----------+--+---------------------------+ 
| Proceeds from long term borrowings  |        |              70,672 |  |         - |  |                   120,000 | 
+-------------------------------------+--------+---------------------+--+-----------+--+---------------------------+ 
| Net cash inflow from financing      |        |              70,672 |  |         - |  |                   120,000 | 
| activities                          |        |                     |  |           |  |                           | 
+-------------------------------------+--------+---------------------+--+-----------+--+---------------------------+ 
| (Decrease) in cash                  |        |            (53,036) |  | (209,540) |  |                 (236,713) | 
+-------------------------------------+--------+---------------------+--+-----------+--+---------------------------+ 
|                                     |        |                     |  |           |  |                           | 
+-------------------------------------+--------+---------------------+--+-----------+--+---------------------------+ 
 
 
Statement of Changes in Equity 
For the six months ended 31 December 2008 
+--------------------+------------+-------------+----------+------------+ 
|                    |      Share |    Retained | Minority |      Total | 
|                    |    Capital |    Earnings | Interest |        GBP | 
|                    |        GBP |         GBP |      GBP |            | 
+--------------------+------------+-------------+----------+------------+ 
| As at 30/06/07     |  2,402,255 | (1,671,007) |   73,877 |    805,125 | 
+--------------------+------------+-------------+----------+------------+ 
| Loss in period     |          - |   (123,372) | (73,877) |  (123,372) | 
|                    |          - |           - |          |   (73,877) | 
+--------------------+            +             +          +            + 
| Acquisition of     |            |             |          |            | 
| minority interest  |            |             |          |            | 
+--------------------+------------+-------------+----------+------------+ 
| As at 31/12/07     |  2,402,255 | (1,794,379) |        - |    607,876 | 
+--------------------+------------+-------------+----------+------------+ 
| Loss in period     |          - |   (452,685) |        - |  (452,685) | 
+--------------------+------------+-------------+----------+------------+ 
| As at 30/06/08     |  2,402,255 | (2,247,064) |        - |    155,191 | 
+--------------------+------------+-------------+----------+------------+ 
| Loss in period     |          - |   (289,132) |        - |  (289,132) | 
+--------------------+------------+-------------+----------+------------+ 
| As at 31/12/08     |  2,402,255 | (2,536,196) |        - |  (133,941) | 
+--------------------+------------+-------------+----------+------------+ 
 
 
Notes to Financial Statements 
For the six months ended 31 December 2008 
 
 
1. Basis of preparation 
 
 
This Interim Statement, which has not been audited and does not constitute 
statutory accounts within the meaning of section 434 of the Companies Act 2006, 
was approved by the Board on the 19th March 2009.  It has been prepared on the 
basis of the accounting policies set out in the Group's 2008 statutory accounts. 
 
 
The financial information has been prepared under the historical cost 
convention. This report is not prepared in accordance with IAS34 which is 
currently not mandatory. 
 
 
The Group's Interim Statement consolidates the financial statements of MG 
Capital plc and its subsidiaries MG Global Investment Limited, MG Research 
Limited, Hannen & Company Limited and MG Maple Capital Ltd all of which have 
been made up to 31 December 2008. 
 
 
The results for the year ended 30 June 2008 have been extracted from the Group's 
published accounts for that period which have been filed with the Registrar of 
Companies. The auditors' report on the full statutory accounts of the Group for 
the year ended 30 June 2008 was unqualified. 
 
 
At 31 December the group had net liabilities of GBP133,941. Within long term 
liabilities there are loans (convertible loan stock) from Peter Hannen amounting 
to GBP190,672. Peter Hannen has confirmed that he will not seek repayment of 
these loans and accrued interest until such time as the company can afford to 
pay them. In addition Peter Hannen has agreed to provide sufficient funding for 
the company to meet its day to day liabilities until such time as the company 
has matched revenue and costs. On that basis the directors are satisfied that 
the interim financial statements can be prepared on a going concern basis. 
 
 
 
 
 
 
2. Earnings per share 
 
 
The basic earnings per share for the six months to 31 December 2008 is 
calculated by dividing the Group's loss on continuing operations after taxation 
of GBP289,132 (six months to 31 December 2007: GBP193,846, year to 30 June 2008: 
GBP790,386) by the weighted average number of shares in issue during the period 
of 4,804,510 (six months to 31 December 2008: 4,804,510, year to 30 June 2008: 
4,804,510). 
 
3. Reconciliation of operating (loss) to net cash inflow from operating 
activities 
 
 
 
 
+--------------------------------------+---------------+---+--------------+---+----------------+ 
|                                      |     Unaudited |   |    Unaudited |   |        Audited | 
|                                      |      6 months |   |     6 months |   |   12 months to | 
|                                      |     to 31 Dec |   |    to 31 Dec |   |         30 Jun | 
|                                      |          2008 |   |         2007 |   |           2008 | 
|                                      |           GBP |   |          GBP |   |            GBP | 
+--------------------------------------+---------------+---+--------------+---+----------------+ 
|                                      |               |   |              |   |                | 
+--------------------------------------+---------------+---+--------------+---+----------------+ 
| (Loss) on ordinary activities before |     (286,626) |   |    (120,553) |   |      (567,559) | 
| taxation                             |               |   |              |   |                | 
+--------------------------------------+---------------+---+--------------+---+----------------+ 
| Interest received                    |         (664) |   |      (5,527) |   |        (8,612) | 
+--------------------------------------+---------------+---+--------------+---+----------------+ 
| Interest paid                        |        11,757 |   |        5,619 |   |         11,178 | 
+--------------------------------------+---------------+---+--------------+---+----------------+ 
| Depreciation and impairment          |         2,409 |   |        3,897 |   |         39,828 | 
+--------------------------------------+---------------+---+--------------+---+----------------+ 
| (Profit) on disposal of investments  |             - |   |     (92,627) |   |              - | 
+--------------------------------------+---------------+---+--------------+---+----------------+ 
| (Increase) / decrease in debtors     |       (4,778) |   |    (383,062) |   |        277,146 | 
+--------------------------------------+---------------+---+--------------+---+----------------+ 
| Increase in creditors                |       168,293 |   |      179,795 |   |         10,128 | 
+--------------------------------------+---------------+---+--------------+---+----------------+ 
| Minority interest movement           |               |   |      (7,828) |   |       (73,877) | 
|                                      |             - |   |              |   |                | 
+--------------------------------------+---------------+---+--------------+---+----------------+ 
| Net cash (outflow) from Operating    |     (109,609) |   |    (420,286) |   |      (311,768) | 
| Activities                           |               |   |              |   |                | 
+--------------------------------------+---------------+---+--------------+---+----------------+ 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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