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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Starvest Plc | LSE:SVE | London | Ordinary Share | GB0009619817 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 11.70 | 9.00 | 20.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMSVE
RNS Number : 7997H
Starvest PLC
19 November 2018
19 November 2018
Starvest Plc ("Starvest" or "the Company")
Audited results for the year ended 30 September 2018
Chairman's Statement
I am pleased to present my annual statement to Shareholders for the year ended 30 September 2018 and the eighteenth since the Company was formed in 2000.
Results for the year
The natural resource sector made an encouraging recovery throughout 2017 but then saw a decline in market sentiment from January 2018. As a result, the Company's Net Asset Value per share has decreased year on year by approximately 14%, however it is pleasing to note the robustness of the Company's investment portfolio with a current value of GBP1.5m, effectively the same year on year (GBP1.52m to Sept 2017).
With interest in the sector declining during 2018, companies with good projects and experienced teams have seen little to encourage them to achieve a quotation on a recognised exchange when their full valuation may not be met by the market. We have restricted stock purchases during the year to 30 September 2018 to preserve our cash resources. With the oil price recently rising this may spur a renaissance in basic resources and our exposure to oil and gas stocks will likely benefit the overall portfolio value in the near term.
The majority of our investee companies have seen a small decrease in share price year on year, reflecting the lack of interest in the basic resource sector during the year. But despite the poorer market sentiment several investee companies have announced very encouraging exploration results and/or excellent progress made towards production.
Greatland Gold plc remains one of our best preforming stocks and while their share price fell back in early 2018 the company has regained ground and seen an 80% share price increase year on year, due to excellent results from field work on projects in Australia. Other companies announcing very positive results are Cora Gold which focused exploration on its flagship Sanankoro project which has shown the potential for a sizeable greenfield gold discovery, along with Ariana Resources releasing increased gold production guidance for the 2018 period. Kefi Minerals have progressed gold project development in Ethiopia and oil and gas explorer Block Energy made a successful transition to AIM. Towards the year end an all cash offer for Kuwait Energy was announced to the market with an expected valuation of approximately US$490m.
It is our belief that there still remains many undervalued opportunities in the natural resource sector and we can benefit by employing our sector knowledge and market experience in sourcing compelling investments.
Investing policy
The Company's investing policy is set out below and is also available on our website, www.starvest.co.uk. At our December 2017 AGM we put before shareholders a proposal to add Direct Investment in mining projects to our Investing Policy which was approved. This allows the Company to take ownership of its own mining projects and utilise these for stock positions in new and existing investee companies. We continue to monitor the markets and may take on projects when sentiment in the sector improves.
Trading portfolio valuation
A brief review of the Company's major portfolio companies can be found later on in this announcement. Other investee companies are listed with the websites from which further information may be obtained.
Shareholder information
The Company's shares are traded on AIM.
Announcements made to the London Stock Exchange are available from the Company's website, www.starvest.co.uk where historic reports and announcements are also available.
Callum N Baxter
Chairman and Chief Executive, 19(th) November 2018
Investing policy statement
About us
The Board, under the leadership of the previous Chairman, Bruce Rowan, had managed the Company as an investment company since January 2002. Collectively, the current Board has significant experience over many years of investing in small company new issues and pre-IPO opportunities in the natural resources and mineral exploration sectors.
Following the appointment as Chairman of Callum Baxter, the Board continues with a similar investment strategy, that is, with a focus on the natural resources sector.
Company objective
The Company is established as a source of early stage finance to fledgling businesses, to maximise the capital value of the Company and to generate benefits for Shareholders in the form of capital growth and modest dividends.
Investing strategy
Natural resources: Whilst the Company has no exclusive commitment to the natural resources sector, the Board sees this as having considerable growth potential in the medium term. Historically, investments were generally made immediately prior to an initial public offering, on AIM or NEX as well as in the aftermarket. As the nature of the market has changed since 2008, it is more likely that the future investment portfolio will include a spread of companies that generally have moved beyond the IPO stage but remain in the early stages of identifying a commercial resource and/or moving towards development with the appropriate finance.
Direct Project: The Company's investing policy is to hold shares in companies. However, the Company believes there may be opportunities to acquire shares in companies on favourable terms by taking a direct interest in mining projects and using these projects as consideration for shares in such companies; those companies would therefore become Starvest investee companies. The projects will be operated by the investee company; Starvest will not manage any project. Prior to selling any projects to corporate entities, Starvest may therefore have an interest in a number of projects. The addition of the Direct Project strategy to the Company's Investing Policy was put before shareholders for approval at the AGM of the Company held 1st December 2017 and was approved.
Investment size: Initial investments are for varying amounts but usually in the range of up to GBP100,000. These companies are invariably not generating cash, but rather they have a constant requirement to raise new equity in order to continue exploration and development. Therefore, after appropriate due diligence, the Company may provide further funding support and make later market purchases, so that the total investment may be greater than GBP100,000.
High risk: The business is inherently high risk and of a cyclical nature dependent upon fluctuations in world economic activity which impacts on the demand for minerals. However, it offers the investor a spread of investments in an exciting sector, which the Board believes will continue to offer the potential of significant returns for the foreseeable future.
Lack of liquidity: The investee companies, being small, almost invariably lack share market liquidity, even if they are quoted on AIM, NEX, ASX, or TSX-V. Therefore, in the early years it is rarely possible to sell an investment at the quoted market price with the result that extreme patience is required whilst the investee company develops and ultimately attracts market interest. If and when an explorer finds a large exploitable resource, it may become the object of a third party bid, or otherwise become a much larger entity; either way an opportunity to realise cash is expected to follow.
Success rate: Of the 25 to 30 investments held at any one time, it is expected that no more than five will prove to be 'winners'; from half of the remainder we may expect to see modest share price improvements. Overall, the expectation is that in time Shareholder returns will be acceptable if not substantial. Accordingly, the Board is unable to give any estimate of the quantum or timing of returns.
Profit distribution: When profits have been realised and adequate cash is available, it is the intention of the Board to recommend the distribution of up to half the profits realised.
Other matters: The Company currently has an investment in the following company, which itself is an investment company: Equity Resources Limited.
The Company takes no part in the active management of investee companies, although directors of the Company are, or have been, non-executive directors on the boards of several such companies. Callum Baxter, Chairman, is also an Executive Director of one such company.
Review of trading portfolio
Introduction
During the year to 30 September 2018, the portfolio comprised interests in the companies commented on below. In addition, several other active companies are included in the portfolio but not commented on in this review.
Market sentiment declined during the period and the Company focussed attention on rebalancing the existing portfolio which resulted in the minor adjustment of several positions. The Trading Portfolio Value declined by 1.3% year on year, Net Asset Value per share declined 14% year on year and market capitalisation decreased 53% reflecting the negative sentiment within the basic resources sector. The largest element of the decrease was attributed to gold focussed companies.
Transactions
During the year the Company did not raise capital through placings or subscriptions.
The Company took part in the IPO of Cora Gold Limited, an exploration company focused on West Africa. 303,030 new ordinary shares were purchased at a cost of 16.5p per share for GBP50,000.
Trading portfolio valuation
A flat economic climate and decreased investor confidence in the natural resources sector has been reflected in share price valuations throughout the year. Since the highs of late 2017 we have seen a minor decline in stock prices and our portfolio valuation. The decrease in portfolio value was approximately 1.3% since 30 September 2017 demonstrating the robustness of the portfolio to weather the decline in sector sentiment.
Against this background we continue to value our portfolio of investments conservatively at the lower of cost or bid price or lower directors' valuation, where we believe those facts of which we are aware cast doubt on the market prices or where the Company's interest is of such a size as to inhibit selling into a depressed market. However, we attribute no value to those of our investments that do not enjoy a market quote. The only exception to this is our holding in Kuwait Energy plc where we currently use a value provided via a recent buyout offer for the company.
The Directors are satisfied that this is the only significant management estimate made within the financial statements.
This cautious approach has proved to be appropriate; net provisions made in previous years were increased by GBP71,924 during the year (released in 2017: GBP311,121).
A review of the leading portfolio companies follows. As last year, we are not commenting on the less significant companies, although they are listed at the end of the review.
The Company Asset Value net of debt decreased during the year to 30 September 2018 to GBP1.59m and the Company made a loss of GBP316,242 compared with a profit of GBP302,329 in 2017. In addition, the Company:
-- has no debt other than a convertible loan from a shareholder and a bank overdraft facility only;
-- continues to believe that it is in a sound position to benefit from any emerging upturn in markets; and
-- believes that the fundamentals have not changed: the world is becoming more affluent with an increasing number of people expecting consumer items, motor cars, air conditioning, laptop computers and all other tools of 21(st) Century living which all require natural resources in order to both produce and power.
Company statistics
The Company considers the following statistics to be its Key Performance Indicators (KPIs) and is satisfied with the results achieved in the year given the uncertain market conditions.
Hot Features
Premium
30 September 30 September Change
2018 2017 %
at Closing at BID values
values as as adjusted
adjusted
* Trading portfolio value GBP1.50 m GBP1.52 m -1.3%
* Company asset value net of debt GBP1.59 m GBP1.88 m -12%
* Net asset value per share 3.07 p 3.56 p -14%
* Closing share price 2.15 p 4.62 p -53%
* Share price discount to net asset value 30% -30 % -100%
* Market capitalisation GBP1.16 m GBP2.44 m -53%
Since the year end values have improved marginally. As at the close of business on 31 October 2018 the Asset Value net of debt was GBP1.67m.
Review of the current market
The basic resource sector saw a gradual decline in sentiment throughout 2018 following a promising end to 2017. Demand for raw materials continues to fluctuate and is likely to be volatile in the near term.
The gold price peaked at around US$1,350 per oz in early 2018 but has since declined to lows of US$1,200 per oz. Other metals such as copper, lead, nickel and zinc have all seen decreases over the year. However, crude oil prices have risen over the period with Brent Crude increasing from around $60/bbl to over US$70/bbl.
Within the current environment, industry majors have been focused on returning capital and providing dividends to shareholders rather than putting investment into exploration and development of new mines.
This lack of investment into exploration and development of world-class mines opens the field to junior explorers and developers to realise value and generate cash flow through increasing interest in the sector, and from majors in need of replenishing diminishing reserves. The current market conditions allow for measured, strategic investment in undervalued, early stage, natural resource projects.
Interests in Gold exploration
A summary of our primary interests in gold exploration is presented here:
Ariana Resources plc (www.arianaresources.com)
Ariana Resources (Ariana) is a United Kingdom-based company engaged in the exploration, development and mining of epithermal gold-silver and porphyry copper-gold deposits in Turkey.
Ariana's Kiziltepe mine (Red Rabbit JV) delivered its first gold-silver pour in March 2017. Gold production guidance for 2018 from Ariana's JV partner at Kiziltepe was around 20,000 oz Au per year, an increase of some 47% on an annualised basis (2017: 10,191 oz Au). Gold production to the end of September 2018 totalled 19,625 ounces with annual production expected to exceed full year guidance.
The company is focusing exploration efforts on a number of areas in Turkey. As well as extending the area currently under development at Kiziltepe (near mine exploration) they are also looking at potential satellite open-pittable prospects slightly further afield but still within a distance to utilise existing mine infrastructure.
The Tavsan project, which is part of the Red Rabbit JV, has seen the resource updated to 3.98Mt at 1.32 g/t Au and 4.46 g/t Ag for 168,900 oz Au and 571,700 oz Ag. The company are targeting 300,000oz gold production, with over 60% of this open-pittable, and will be undertaking feasibility-related work to advance the project toward production.
Work is also continuing on exploration of the 100% owned Salinbas project. During the year exploration work extended the Salinbas main target by over 500m of strike to the north, and a JORC exploration target of up to 2.7Moz gold and 16.1Moz silver has been established at the project which excludes the current JORC Indicated and Inferred Resource of approximately 1Moz gold.
The Kepez resource has also been updated to 0.37Mt at 2.0 g/t Au and 14.0 g/t Ag for 23,900 oz gold and 164,300 oz silver. Metallurgical testwork following trial mining at Kizilcukur demonstrates high gold recoveries ranging from 83% to 92%.
Ariana's share of profits from Kiziltepe amounted to GBP1.8m in the year ended 31 December 2017 and GBP1.1m in 6 months to 30 June 2018. A profit (before tax) of GBP0.3m was recorded for H1 2018 with operating costs in line with reported forecasts.
Kefi Minerals plc (www.kefi-minerals.com)
Kefi Minerals is an exploration and development company focused on gold and copper deposits in the Arabian-Nubian Shield. Its main projects are Tulu Kapi in Ethiopia and the Jibal Qutman project in Saudi Arabia.
During the year Kefi continued to progress development on the Tulu Kapi Gold Project in Ethiopia. Pre-development costs of approximately US$60m have been met and the Government of Ethiopia has committed US$20m to fund construction of off-site infrastructure during 2019 and 2020.
ANS Mining Share Company is committed to spending US$30-38m to be released in stages based on government consents and finance assurances. Numerous consents have been granted during the year including development, operational, environmental and social.
Construction is scheduled to begin in early 2019 with commissioning in the later parts of 2020. Production costs are estimated at approximately US$700/oz with all-in sustaining costs of around US$800/oz.
Greatland Gold plc (www.greatlandgold.com)
The AIM listed exploration company holds 100% of six exploration areas in Western Australia and Tasmania in Australia. Greatland Gold concentrated work on four of its project areas during the year and together with share issues and warrant exercises the company is in a strong financial position holding more than GBP4,000,000 in cash for work on its exploration projects over the next 18-24 months.
Greatland continued to advance its exploration targets at Firetower in Tasmania and Ernest Giles in central Western Australia. Ernest Giles has an established target area, Meadows, which saw large scale mineralised zones drilled at closer spacing confirming gold mineralisation in basement greenstone lithologies. The drill programme extended two previously identified large zones of gold mineralisation, including the Western Zone which has been extended to a strike length of approximately 6.2km and remains open to the north, and the Eastern Zone with an extended strike length of approximately 2.5km. Broad zones of consistently anomalous gold were apparent in many holes for up to 40m metres down hole.
At Firetower a 3D induced polarisation (IP) geophysical survey was conducted producing excellent 3D models which highlight a large target, approximately 1,000 metres long, traversing east-west across the Firetower prospect, which is open to the east and up to depths of 400 metres. Significantly, the results illustrate the existing sub-surface gold mineralisation identified in drilling to date is spatially associated with the 3DIP chargeability anomaly.
Greatland also began work on recently acquired ground in the Paterson area of Western Australia. The first drilling campaign at Havieron, carried out in Q2 2018, yielded excellent results of 121m at 2.93g/t gold and 0.23% copper from 497m, including 11.5m at 21.23g/t gold and 0.67% copper from 568.5m (HAD001), and 21m at 3.79g/t gold 0.44% copper from 418m (HAD003). The company is currently conducting a second drill programme at Havieron, with plans for several more holes before the end of 2018 and have already reported significant mineralisation visibly similar to that of HAD001, in the first hole of the current drilling campaign.
In June 2018, Greatland Gold embarked on the first exploration efforts at its Black Hills licence. Multiple gold nuggets were found at surface in thin sand cover, illustrating the presence of high-grade gold mineralization over a 200 metre strike length at the Saddle Reefs prospect. In addition to collecting pieces of gold, rock chip samples were taken over 800m of strike at the Saddle Reefs prospect. Eleven of 28 rock chip samples collected returned gold values over 10.0g/t gold with a maximum result of 81.7g/t Au, as well as high silver values up to 106.1g/t. The company then conducted a 3D IP survey over the mineralised zone of the Saddle Reefs area which produced a 1,000m long chargeability anomaly spatially co-incident with surface gold mineralisation. Drill testing of the resultant targets at Saddle Reefs is scheduled for H1 2019.
Cora Gold Limited (www.coragold.com)
Cora Gold is an AIM listed gold exploration company focussing on Southern and Western Mali and Eastern Senegal in West Africa. Their licence portfolio covers nearly 1,500km(2) of prospective ground across two of the most prolific gold belts in the region, Yanfolila and Kenieba, from where more than 65moz gold has been discovered over the last two decades.
During the year Cora Gold focused exploration work on its flagship Sanankoro project area, extending identified zones of gold mineralisation to 8km, with the remainder of a 14km long structural corridor as yet untested. Geological setting and the scale of the anomalies suggest the potential for a reasonably sized greenfield gold discovery at Sanankoro. The management team are aiming for a +1moz deposit and SRK Consulting confirmed an initial exploration target of between 1.0-2.0moz gold.
The mineralisation has been delineated to a depth of 100m most of which is hosted within soft weathered material. From surface weathered material ranges from around 50m to in excess of 100m in depth across the project area. The soft, weathered rock would potentially allow for open cut mining and milling, potentially providing a low cost source of ore to a processing plant.
At Tekeledougou, a short reconnaissance drill programme intersected near surface gold mineralised quartz veins in weathered material. The company plans to follow up on targets to evaluate the potential for a low cost open pit mining operation with the potential to supply ore feed to the recently commissioned Yanfolila plant located 8km away and operated by Cora's major shareholder Hummingbird Resources.
A limited amount of work was completed over other licence areas including geological mapping, surface sampling and reconnaissance drilling. Extensive areas of present and historic artisanal mining works are apparent.
Interests in energy
We have three companies in the energy sector on which we comment as follows:
Alba Mineral Resources plc (www.albamineralresources.com)
Alba Mineral Resource is a diversified mineral exploration company focused on oil and gas, gold and base metals with holdings in Greenland (heavy minerals and copper), UK (oil and gas, gold) and Ireland (base metals).
The Company's UK oil and gas focus is on the Horse Hill-1 project where Alba hold an interest in the HHDL consortium developing the project, with a 10% stake in the project. During 2018 significant progress was made towards obtaining regulatory approvals for extending well tests. All planning conditions were satisfied and the Oil and Gas Authority (UK) granted permission for testing which commenced in June 2018. Test results were positive. The operator HHDL is targeting the start-up of long term Portland oil production during 2019 subject to the grant of necessary regulatory consents.
Alba also hold a 5% stake in the Brockham project in the Weald Basin and Angus Energy, the operator, announced in March 2018 that continuous production at no.2 well had resumed with planning approvals granted in August for appraisal of no.4 side-track well.
In December 2017 Alba acquired a 49% interest in Gold Mines of Wales (GMOW), owner of the Clogau Gold Project, and subsequently acquired a further 41% stake in GMOW bringing their total holding to 90%. The project comprises the Clogau Gold Mine and a number of highly prospective targets and former gold workings. Their 2018 work represents the first modern exploration campaign in the area and included surface geochemistry and geophysical surveys in order to establish new gold targets within the existing mine area. Work has already found potential extensions of mineralisation close to the existing mine workings.
Alba's Greenland activities saw a field programme completed across their Thule Black Sands ilmenite project, with mapping and drilling completed which refined zones of interest over approximately 10km of strike and some bulk sampling carried out for metallurgical test work. Copper targets have also been identified by field exploration activities at their Inglefield Project, with drill programme preparations underway.
Alba continued work on the Ireland base metal project extending tenure for a further two years. The company applied for drilling permissions on targets at Limerick and once approved the company intends to drill test one or more of these.
The Company raised over GBP1.5m (before expenses) during the year and two senior oil and gas appointments were made to bring additional expertise to the team.
Kuwait Energy plc (www.kuwaitenergy.co)
Kuwait Energy is an independent oil and gas company involved in exploration, appraisal, development and production of hydrocarbons in Iraq, Egypt, Yemen and Oman. Of the nine exploration, development and production assets held Kuwait Energy directly operates six.
The company reported average daily WI production for the half-year to end June 2018 at 28.7kboepd. At Block 9 in Iraq, Kuwait Energy saw the commencement of production from its 4th well, Faihaa-4, enabling record exit production on 30 June 2018 of approximately22 kboepd. Drilling of Faihaa-5 production well was completed and is expected to come online in tandem with the nearly complete Faihaa-6 before the end of 2018. Both new wells are expected to increase production at Block 9 to approximately 30 kboepd. At the Iraq Siba gas field pre-commissioning activities continued with commercial production of 25 mmscfd expected in H2 2018.
Kuwait Energy continued exploration on its Egypt ground with over 50% of completed exploration wells encountering oil, including a discovery at South Kheir-1X (SK-1X).
Kuwait Energy signed an Agreement with Dragon Oil in February 2018 for the transfer of a 15% participating interest in its Block 9 (Iraq) project. The Agreement composed of two different parts; a sale of 8.57% interest for US$100 million cash and a transfer of 6.43% interest as settlement of a dispute with Dragon Oil.
In September 2018 Kuwait Energy announced an agreement with United Energy Group Limited ("UEG") for the sale of its entire issued share capital. Under the terms of the acquisition the consideration comprises approximately US$490 million for all the current issued share capital of Kuwait Energy (on a fully diluted basis) which equates to approximately US$1.50 per share. The consideration is subject to foreign exchange adjustments and the price per share paid at completion may be more or less than US$1.50 per share.
Oracle Power plc (www.oraclepower.co.uk)
Over the last 12 months Oracle Power obtained a 'Letter of Intent' conditionally issued by Private Power Infrastructure Board ('PPIB') and continued work with Chinese partners under a Memorandum of Understanding (MOU). Pakistan elections saw an orderly transition of power and indications are that the new government remain in favour of the China-Pakistan Economic Corridor ("CPEC") initiative maintaining its momentum.
Oracle Power raised funds of GBP1,000,000 (gross) during the year in order to meet working capital costs while due diligence was continued by Chinese investment partners. The company acquired the minority interest in its subsidiary Sindh Carbon Energy Limited through the issue of 95,652,174 shares
In February 2018 the Company announced that the Private Power Infrastructure Board approved the issue of conditional Notice to Proceed ("NTP") and Letter of Intent ("LOI") to the Company's subsidiary, Thar Electricity (Private) Limited, subject to an increase in size of the power plant from 660 MW to 700 MW being approved within the CPEC. Once achieved, Oracle will seek approval to build, own and operate the 700MW power plant. Additional approvals will still be required, such as Environmental and Social Impact Assessments, and Electricity Tariff Petitions before a Generation Licence can be sought.
The parties to the MOU are still proceeding with financial, legal and commercial due diligence. On successful conclusion of this work the parties will move forward to the second phase of the project, drawing up definitive agreements and working towards financial close.
Interests Agricultural Products
Salt Lake Potash Limited (www.saltlakepotash.com.au)
Salt Lake Potash is the owner of the Goldfields Salt Lakes Project (GSLP), which comprises nine large salt lakes in the northern Goldfields Region of Western Australia. The Company's aim is to develop the first salt-lake brine Sulphate of Potash (SOP) operation in Australia, starting with a demonstration plant producing up to 50,000tpa of SOP.
The Company has made substantial progress during the year entering into Memorandums of Understanding (MOU) with Blackham Resources Limited (Blackham) and progressing with scoping studies and resource estimates, as well as obtaining its first Mining Lease at Lake Wells.
The MOU with Blackham is to investigate the potential development of a SOP operation based at Lake Way, near Wiluna. Under the MOU, Salt Lake Potash would construct an initial pond system to dewater Blackham's Williamson Pit offering a shorter development time due to the pits very high grade and salt saturation.
Salt Lake Potash also entered into a MOU and Co-operation Agreement with Australian Potash Limited to undertake a joint study of the potential benefits of development cost sharing for each Company's projects at Lake Wells.
The Company executed its first MOU for an Offtake Agreement with Japan based Mitsubishi Corp. for the sale and offtake rights for up to 50% of production from the demonstration plant at the GSLP for distribution into Asia and Oceania and, potentially, other markets.
Salt Lake Potash released an initial estimate of Exploration Targets for eight of the nine lakes comprising the GSLP. The ninth lake, Lake Wells, already having a Mineral Resource reported in accordance with the JORC code. The total "stored" Exploration Target for the GSLP is 290Mt - 458Mt SOP with an average grade of 4.4 - 7.1kg/m3 (including Lake Wells' Mineral Resource of 80-85Mt). On a "drainable" basis the total Exploration Target ranges from 26Mt - 153Mt of SOP.
The Company completed a Scoping Study on the development of a 50,000tpa SOP Demonstration Plant at Lake Way that supports a low capex, highly profitable, staged development model with total capital costs of approximately A$49m and average cash operating costs of approximately A$387/t. The Company's objective is to commence construction in 2018, harvesting first salts in 2019, and producing first SOP in 2020. Pilot scale crystalliser validation testwork was completed in the United States, successfully producing high quality SOP crystals representative of full-scale plant product.
Surface aquifer exploration programs were completed at Lake Ballard and Lake Irwin. This work provided preliminary data for the geological and hydrological models for surface aquifers of the Lakes, as well as brine, geological and geotechnical samples. The Company undertook initial surface brine sampling of the near surface aquifer and reconnaissance of access and infrastructure at all remaining Lakes held under the GSLP.
Salt Lake Potash intends to progress with a PFS for the Lake Way plant; and continue with other exploration and development work across the Company's multi lake portfolio.
Sunrise Resources plc (www.sunriseresourcesplc.com)
Sunrise Resources interests lie in Nevada (USA) and Australia with commodities including precious and base metals as well as industrial minerals.
The company is currently focusing on the development of its 100% owned CS Pozzolan-Perlite project in Nevada USA. First production is targeted for the first half of 2019. During 2018 a drill programme was completed to better define mineralisation of commercial interest and assist in the preparation of mine plans.
Pozzolan was intersected from surface of bedrock, directly beneath shallow colluvium at the Main Zone and Tuff Zone prospects and in step out holes. Thick perlite intersections were encountered at Main Zone. Results of testwork on three composite samples of pozzolan show that the product mitigates the impact of "concrete cancer" and places it amongst the best natural pozzolans available on the market. Perlite test results support multiple market applications including horticulture, tiles, plaster and mortar. Permitting work continued during the year, with the US Bureau of Land Management appointing an interdisciplinary project permitting team for the project.
Sunrise Resources signed two non-binding Memorandums of Understanding with potential customers in respect of future sales for perlite from the CS Project. The parties will negotiate Offtake Agreements subject to satisfactory testing results and other commercial terms.
The JV Junction Copper-Silver-Gold Project saw surface exploration and gravity surveys completed. A large gravity anomaly at Denio Summit suggests there is potential for down dip copper-silver veins. Further exploration, including an IP geophysical survey and airborne magnetic and radiometric survey, have commenced with the aim of generating robust targets for a first-pass drill programme.
A 1.5km trend of surface showings of copper-silver-gold quartz veins and pegmatites has been reported. A potassium depletion anomaly approximately 800m long has been defined by airborne magnetic and radiometric survey coincident with the soil anomaly (gold enrichment in 86 soil samples on 10 lines covering 1km of the surface trend of showings), and coincident with an interior low in the gravity high anomaly at the Denio Summit target.
The 100% owned Bakers Gold Project in Western Australia has had mapping and chip sampling of gold bearing quartz-stockwork veins in the Dicky Lee open pit; gold values averaged 1.7 g/t Au and peaked at 32.1g/t Au. Infill soil sampling at DRL4 target confirms 500m long gold-in-soil anomaly.
The company raised over GBP500,000 (before expenses) through share issues during the year.
Other investments
The remaining non-core investments are available for sale when the conditions are deemed to be right. These include: Marechale Capital plc (www.marechalecapital.com), and Regency Mines plc (www.regency-mines.com). In addition, there are a number of failed or almost failed ventures to which we attribute no value, although we always hope and seek to crystallise value where possible.
Strategic report
Principal activities and business review
Since Bruce Rowan was appointed Chief Executive on 31 January 2002, the Company's principal trading activity was the use of his expertise to identify and, where appropriate, support small company new issues, pre-IPO and on-going fundraising opportunities with a view to realising profit from disposals as the businesses mature in the medium term. The directors expect this to continue in the future under the leadership of Callum Baxter, appointed Chief Executive in September 2015.
The Company's investing policy is stated above.
The Company's key performance indicators and developments during the year are given in the Chairman's statement and in the trading portfolio review, all of which form part of the Directors' & Strategic reports.
Finance Review
Over the past 12 months the Company recorded a loss of GBP316,242, equating to a loss of 0.60 pence per share with net cash outflow for the year of GBP278,933. This compares to a profit of GBP302,329 in the previous year that equated to a profit of 0.64 pence per share. The Company's cash deposits stood at GBP153,849 at the period end.
Key risks and uncertainties
This business carries with it a high level of risk and uncertainty, although the rewards can be outstanding. The risk arises from the very nature of early stage mineral exploration where there can be no certainty of outcome. In addition, often there is a lack of liquidity in the Company's trading portfolio, most of which is, or in the case of pre-IPO commitments is expected to be, quoted on AIM or NEX, such that the Company may have difficulty in realising the full value in a forced sale. Accordingly, a commitment is only made after thorough research into both the management and the business of the target, both of which are closely monitored thereafter. Furthermore, the Company limits the amount of each commitment, both as to the absolute amount and percentage of the target company.
Statement of directors' responsibilities
Directors' responsibilities for the financial statements
The Directors are responsible for preparing the Directors' report, the Strategic report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs and profit or loss of the company for that period. In preparing those financial statements, the directors are required to:
-- select suitable accounting policies and then apply them consistently; -- make judgments and estimates that are reasonable and prudent;
-- state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors confirm that so far as each of the Directors is aware:
-- there is no relevant audit information of which the Company's auditor is unaware; and
-- the Directors have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Corporate governance statement
The board of Starvest plc are committed to the principles of good corporate governance and believe in the importance and value of robust corporate governance and in our accountability to our shareholders and stakeholders.
The AIM Rules for companies require AIM companies to apply a recognised corporate governance code. Starvest has chosen to adhere to the Quoted Company Alliance's Corporate Governance Code for Small and Mid-Size Quoted Companies (the "QCA Code").
The Chairman's Statement on Corporate Governance, which is included in the Annual Report and which is also available on the website, provides more details on how the board itself operates as well as the steps taken to ensure that its staff adhere to principles such as compliance with the UK anti-bribery legislation.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 30 SEPTEMBER 2018
Year ended
Year ended 30 30 September
Note September 2018 2017
GBP GBP
Revenue - 526,595
Cost of sales - (266,466)
--------------- -------------
Gross profit - 260,129
Administrative expenses (250,147) (274,506)
Amounts written off against trade
investments 11 (686,932) (277,277)
Amounts written back against trade
investments 11 615,008 588,398
--------------- -------------
Operating (loss)/profit 5 (322,071) 296,744
Interest receivable 6 5,829 5,585
(Loss)/profit on ordinary activities
before tax (316,242) 302,329
Tax on (loss)/profit on ordinary
activities 8 - -
(Loss)/profit for the financial
year attributable to
Equity holders of the Company (316,242) 302,329
=============== =============
(Loss)/earnings per ordinary share
Basic 9 (0.60) pence 0.64 pence
Diluted 9 (0.51) pence 0.54 pence
There are no other recognised gains and losses in either year other than the result for the year. All operations are continuing.
STATEMENT OF FINANCIAL POSITION
30 SEPTEMBER 2018
Year ended Year ended
30 September 30 September
Note 2018 2017
GBP GBP
Current assets
Trade and other receivables 10 55,992 29,589
Trade investments 11 1,498,059 1,519,983
Cash and cash equivalents 153,849 432,782
------------- -------------
Total current assets 1,707,900 1,982,354
------------- -------------
Current liabilities
Trade and other payables 12 (119,401) (101,613)
Total current liabilities (119,401) (101,613)
------------- -------------
Net current assets 1,588,499 1,880,741
============= =============
Capital and reserves
Called up share capital 13 539,649 528,982
Share premium account 1,654,209 1,640,876
Retained earnings (607,859) (291,617)
Equity reserve 2,500 2,500
------------- -------------
Total equity shareholders' funds 1,588,499 1,880,741
============= =============
These financial statements were approved and authorised for issue by the Board of Directors on 19(th) November 2018.
STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 SEPTEMBER 2018
Equity reserve Total Equity attributable
Share capital Share premium Retained earnings to shareholders
GBP GBP GBP GBP GBP
At 1 October 2016 396,185 1,514,673 5,000 (593,946) 1,321,912
============= ============= ============== ================= =========================
Profit for the period - - - 302,329 302,329
Total recognised income
and expenses for the
period - - - 302,329 302,329
------------- ------------- -------------- ----------------- -------------------------
Shares issued 132,797 133,703 - - 266,500
Cost of issue - (7,500) - - (7,500)
Equity component of
convertible loan - - (2,500) - (2,500)
------------- ------------- -------------- ----------------- -------------------------
Total contributions by and
distributions to owners 132,797 126,203 (2,500) - 256,500
At 30 September 2017 528,982 1,640,876 2,500 (291,617) 1,880,741
------------- ------------- -------------- ----------------- -------------------------
Loss for the period - - - (316,242) (316,242)
Total recognised income
and expenses for the
period - - - (316,242) (316,242)
------------- ------------- -------------- ----------------- -------------------------
Shares issued 10,667 13,333 - - 24,000
Cost of issue - - - - -
Equity component of - - - - -
convertible loan
------------- ------------- -------------- ----------------- -------------------------
Total contributions by and
distributions to owners 10,667 13,333 - - 24,000
At 30 September 2018 539,649 1,654,209 2,500 (607,859) 1,588,499
------------- ------------- -------------- ----------------- -------------------------
STATEMENT OF CASH FLOWS
FOR THE YEARED 30 SEPTEMBER 2018
Note 30 September 30 September
2018 2017
GBP GBP
Cash flows from operating activities
Operating (loss)/profit (322,071) 296,744
Net interest receivable 5,829 5,585
Share based payment charge 24,000 46,500
(Increase)/decrease in debtors (26,403) 42,078
Increase in creditors 17,788 16,886
Net cash used in operating activities (300,857) 407,793
------------ ------------
Cash flows from investing activities
Purchase of current asset investments 11 (50,000) (100,000)
Sale of current asset investments - 523,883
Profit on sale of current asset investments - (260,129)
Increase in investment provisions 686,932 277,277
Decrease in investment provisions (615,008) (588,398)
Net cash used in investing activities 21,924 (147,367)
------------ ------------
Cash flows from financing activities
Proceeds from issue of shares - 170,000
Transaction costs of issue of shares - (7,500)
Net cash flows from financing activities - 162,500
------------ ------------
Net (decrease)/increase in cash and cash equivalents (278,933) 422,926
Cash and cash equivalents at beginning of period 432,782 9,856
Cash and cash equivalents at end of year 15 153,849 432,782
============ ============
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 SEPTEMBER 2018
1. Company Information
Starvest plc is a Public Limited Company incorporated in England & Wales. The registered office is Salisbury House, London Wall, London, EC2M 5PS. The Company's shares are listed on the AIM market of the London Stock Exchange. These Financial Statements (the "Financial Statements") have been prepared and approved by the Directors on 19(th) November 2018 and signed on their behalf by Callum Baxter and Gemma Cryan.
2. Basis of Preparation
These financial statements have been prepared in accordance with applicable United Kingdom accounting standards, including Financial Reporting Standard 102 - 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland' ('FRS102'), and with the Companies Act 2006. The financial statements have been prepared on the historical cost basis. There are no fair value adjustments other than to the carrying value of the Company's trade investments.
Going concern
The Company's day to day financing is via cash at bank, the use of short term loans and, on occasion, may utilise a bank overdraft facility. The Company's formal overdraft facility was last confirmed by the bank in early 2018.
Whilst the Directors fully expect a sufficient overdraft facility to remain in place for the foreseeable future, they are confident that sufficient funding can be raised as required to meet the Company's current and future liabilities, which has been confirmed within the cash flow forecast prepared by the Board for the 12 months ending 30 November 2019. In the very unlikely event that such finance could not be raised, the Directors could raise sufficient funds by disposal of certain of its current asset trade investments, although such a 'forced' sale is to be avoided if at all possible.
For the reasons outlined above, the Directors are satisfied that the Company will be able to meet its current and future liabilities, and continue trading, for the foreseeable future and, in any event, for a period of not less than twelve months from the date of approving the financial statements. The preparation of the financial statements on a going concern basis is therefore considered to remain appropriate.
3. Principal Accounting Policies
Revenue
Revenue represents amounts receivable for trade investment sales. Revenue is recognised on the date of sale contract.
Cost of sales
Direct costs include the book cost of investments sold during the year.
Administrative expenses
All administrative expenses are stated inclusive of VAT, where applicable, as the company is not eligible to reclaim VAT incurred on its costs.
Taxation
Corporation tax payable is provided on taxable profits at the current rates enacted or substantially enacted at the balance sheet date.
Deferred tax
Deferred tax is provided on an undiscounted full provision basis on all timing differences which have arisen but not reversed at the balance sheet date using rates of tax enacted or substantively enacted at the balance sheet date.
Deferred tax assets are only recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits, and are recognised within debtors. The deferred tax assets and liabilities all relate to the same legal entity and being due to or from the same tax authority are offset on the balance sheet.
Trade Investments
Current asset trade investments are stated at the lower of cost and net realisable value, excluding Kuwait Energy plc which has been valued based on the value of a recent buyout offer for the company. Net realisable value is the lower of bid price and Directors' valuation. The lower Directors' valuation is applied where the Company's interest in the investee company amounts to typically 3% or more of the investee Company's issued share capital or more than 7% of the investment portfolio or where there are factors of which the Directors are aware which call for some further adjustment. At 30 September 2018, these provisions totalled GBP142,000 (2017: GBP143,000).
Investments in unlisted company shares, are remeasured to available market values, or directors' valuations at each balance sheet date. Gains and losses on remeasurement are recognised in the income statement for the period.
Investments in listed company shares, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the income statement for the period.
Financial instruments:
Trade and other receivables
Trade and other receivables are not interest bearing and are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method less provision for impairment.
Cash and cash equivalents
Cash and cash equivalents include cash on hand and deposits held at call with banks.
Trade and other payables
Trade and other payables are not interest bearing and are recognised initially at fair value and subsequently measured at amortised cost.
Convertible debt
The proceeds received on issue of the convertible debt are allocated into their liability and equity components and presented separately in the balance sheet. The amount initially attributed to the debt component equals the discounted cash flows using a market rate of interest that would be payable on a similar debt instrument that did not include an option to convert.
The difference between the net proceeds of the convertible debt and the amount allocated to the debt component is credited direct to equity and is not subsequently re-measured. On conversion, the debt and equity elements are credited to share capital and share premium as appropriate.
Financial liabilities
All financial liabilities are recognised initially at fair value and are subsequently measured at amortised cost. There are no financial liabilities classified as being at fair value through the income statement.
Share capital
The Company's ordinary shares are classified as equity.
Treasury shares
Where the Company acquired its own shares ('treasury shares') these are deducted from retained profits. No profit or loss is recognised on purchase or subsequent sale of treasury shares. On cancellation of treasury shares, the original purchase costs are deducted from share capital and profit and loss account by a reserve transfer within equity.
The share premium account
Represents premiums received on the initial issuing of the share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits.
4. Turnover and Segmental Analysis
Turnover
Turnover represents the sales of trade investments on recognised listed stock exchanges. Turnover for the year to 30 September 2018 was GBPnil (2017: GBP526,595).
Segmental information
An operating segment is a distinguishable component of the Company that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the Company's chief operating decision maker to make decisions about the allocation of resources and assessment of performance and about which discrete financial information is available.
The Company is to continue to operate as a single UK based segment with a single primary activity to invest in businesses so as to generate a return for the shareholders. No segmental analysis has been disclosed as the Company has no other operating segments. The Directors will review the segmental analysis on a regular basis and update accordingly.
The Company has not generated any revenues from external customers during the period.
5. Operating Profit
Year ended Year ended
30 September 30 September
2018 2017
GBP GBP
This is stated after charging:
Auditor's remuneration
- audit services 14,400 14,400
- other services - -
Director's emoluments - note 7 137,035 128,500
============= =============
6. Interest receivable
Year ended Year ended
30 September 30 September
2018 2017
GBP GBP
---------------------------------------- ------------- --------------------
Bank interest receivable 329 85
Interest on short term loans to related
parties 5,500 5,500
5,829 5,585
---------------------------------------- ------------- --------------------
7. Directors' Emoluments
There were no employees during the period apart from the directors. No directors had benefits accruing under money purchase pension schemes.
Shares
issued
Amounts in lieu
paid to of fees
Pension third parties - see
Year ended 30 September Fees GBP - see note note Total
2018 GBP GBP GBP GBP
------------------------ ------ ---------- --------------- -------- -------
C Baxter 4,000 - 57,000 19,000 80,000
J Watkins (resigned
8 May 2018) 6,044 - 6,044 - 12,088
G Cryan 20,000 200 15,000 5,000 40,200
ACR Scutt (appointed
8 May 2018) 4,747 - - - 4,747
------------------------ ------ ---------- --------------- -------- -------
34,791 200 78,044 24,000 137,035
------------------------ ------ ---------- --------------- -------- -------
Shares
issued
Amounts in lieu
Pension paid to of fees
GBP third parties - see
Year ended 30 September Fees - see note note Total
2017 GBP GBP GBP GBP
------------------------ ------ ---------- --------------- -------- -------
C Baxter 3,000 - 57,000 20,000 80,000
J Watkins 9,000 - 14,000 9,000 32,000
G Cryan 7,000 - 6,500 3,000 16,500
------------------------ ------ ---------- --------------- -------- -------
19,000 - 77,500 32,000 128,500
------------------------ ------ ---------- --------------- -------- -------
Amounts paid to third parties and shares issued in lieu of fees
Included in the above are the following amounts paid to third parties:
-- In respect of the management services of Callum Baxter, GBP76,000 (2017: GBP77,000) is payable to Baxter Geological, a company of which he is a director and shareholder. Of this amount, GBP19,000 was settled in shares in the Company. At 30 September 2018, GBP19,000 (2017: GBP19,000) was outstanding.
-- In respect of the professional services of John Watkins, FCA, GBP6,044 (2017: GBP23,000) of the above remuneration was payable through his personal business. At 30 September 2018, GBPnil (2017: GBP2,500) was outstanding.
-- In respect of the professional services of Gemma Cryan, GBP20,000 (2017: GBP9,500) was payable to her personal business. Of this amount GBP5,000 was settled in shares in the Company. At 30 September 2018 GBP5,000 (2017: GBP2,500) remained outstanding.
8. Income Taxes
a) Analysis of charge in the period
Year ended Year ended
30 September 30 September
2018 2017
GBP GBP
United Kingdom corporation tax at 19%
(2017: 19/20%) - -
Deferred taxation - -
- -
============== ==============
b) Factors affecting tax charge for the period
The tax assessed on the loss on ordinary activities for the year differs from the standard rate of corporation tax in the UK of 19% (2017: 19/20%). The differences are explained below:
Year ended Year ended
30 September 30 September
2018 2017
GBP GBP
(Loss)/profit on ordinary activities
before tax (316,242) 302,329
============= =============
(Loss)/profit multiplied by standard
rate of tax (60,086) 59,710
Effects of:
Utilised against carried forward losses - (59,710)
Losses carried forward not recognised
as deferred tax assets 60,086 -
- -
============= =============
9. (Loss)/Earnings Per Share
The basic earnings per share is derived by dividing the profit for the year attributable to ordinary shareholders by the weighted average number of shares in issue.
Year ended Year ended
30 September 30 September
2018 2017
GBP GBP
-------------------------------------------- ------------- -------------
(Loss)/profit for the year (316,242) 302,329
-------------------------------------------- ------------- -------------
Weighted average number of Ordinary shares
of GBP0.01 in issue 53,012,136 47,287,952
(Loss)/profit per share - basic (0.60) pence 0.64 pence
-------------------------------------------- ------------- -------------
Warrants in issue 8,500,000 8,500,000
Weighted average number of Diluted Ordinary
shares of GBP0.01 in issue 61,512,136 55,787,952
(Loss)/profit per share - diluted (0.51) pence 0.54 pence
-------------------------------------------- ------------- -------------
10. Trade and Other Receivables
Year ended Year ended
30 September 30 September
2018 2017
GBP GBP
------------------------------------ ------------- --------------------
Prepayments 55,992 29,589
Short term loans to related parties - -
55,992 29,589
------------------------------------ ------------- --------------------
Short term loans to related parties
-- At 30 September 2018 loans to Equity Resources ltd ("EQR") totalling GBP20,000 remain unpaid. The purpose of the loans was to assist EQR meet its necessary operational costs during a period when it seemed inappropriate that EQR should realise cash from its investments. The advances were approved at 0% interest with no formal agreement as to repayment date. The Company holds 28.41% of the equity in EQR. However, the Company has made a full provision for these loans, totalling GBP20,000.
-- At 30 September 2018, loans totalling GBP27,500 advanced to Block Energy plc ("BEP") (formerly Goldcrest Resources plc ("GCRP")) at 20% pa interest in order to assist BEP in funding its necessary operational costs prior to its now completed AIM listing remain unpaid. Interest totalling GBP17,153 has been accrued on these loans at the year end. However, the Company has made a full provision for these loans & interest charges, totalling GBP44,653.
11. Current Trade Investments
30 September 30 September
2018 2017
GBP GBP
--------------------------------------- ------------ ------------
Cost
At 30 September 2017 & 2016 5,522,574 5,686,328
Additions at cost 50,000 100,000
Disposals - (263,754)
At 30 September 2018 & 2017 5,572,574 5,522,574
--------------------------------------- ------------ ------------
Market value movement & provisions
At 30 September 2017 & 2016 4,002,591 4,313,712
Released during the year (615,008) (588,398)
Provided during the year 686,932 277,277
At 30 September 2018 & 2017 4,074,515 4,002,591
--------------------------------------- ------------ ------------
Fair value amount
At 30 September 2018 & 2017 1,498,059 1,519,983
--------------------------------------- ------------ ------------
The fair value carrying values of the
investments above were as follows:
Quoted on AIM 1,373,783 1,370,565
Quoted on NEX 7,366 10,692
Quoted on foreign stock exchanges 367 1,782
Unquoted at Directors' valuation 116,543 136,944
1,498,059 1,519,983
--------------------------------------- ------------ ------------
The Company has holdings in the companies described in the review of our portfolio earlier in this announcement. Of these, the Company has holdings amounting to 20% or more of the issued share capital of the following companies:
Capital
and reserves
Profit at last
Class Percentage for the balance
Country of shares of issued last financial sheet Accounting
Name of incorporation held capital year date year end
Equity Resources
Limited - see England 31 May
note [1] & Wales Ordinary 28.41% GBP3,045 (GBP31,823) 2017
Note [1]: Equity Resources Limited is considered to be an associated undertaking. Equity accounting has not been used as Equity Resources Limited has a written down value of GBPnil.
The Company's share of the gross assets of its Associates at 30 September 2018 is GBP865. The share of gross assets has been derived from the latest available financial information in respect of the Associates. The company's share of the items making up the profit and loss account and cash flow statements of its Associates has not been disclosed as the numbers are not considered material.
12. Trade and Other Payables: Amounts falling due within one year
30 September 30 September
2018 2017
GBP GBP
----------------- ------------ ------------
Trade creditors 20,791 33,243
Accruals 42,317 20,870
Employment costs 8,793 -
Loans 47,500 47,500
----------------- ------------ ------------
119,401 101,613
----------------- ------------ ------------
A bank overdraft facility is secured by a charge over certain of the Company's investments having a market value at the balance sheet date of GBP467,074.
In September 2015, the Company received a loan of GBP100,000 from a shareholder repayable in 12 months with an interest rate of 0% and with a conversion option at 3 pence per share. On 5 January 2017, GBP50,000 of the loan was satisfied by the issue of 2,500,000 new Ordinary shares at a price of 2 pence per share. In September 2017 the Company agreed with Mr Rowan to extend the existing loan term to 1 November 2018. The terms of this loan are currently being re-negotiated.
13. Share Capital
The Called up share capital of the Company was as follows:
Called up, allotted, issued and fully
paid
Number of Shares GBP
--------------------------------------- ---------------- --------
As at 30 September 2016 39,618,446 396,185
--------------------------------------- ---------------- --------
Issued 17 October 2016 in lieu of fees 725,000 7,250
Issued 5 January 2017 on conversion
of loan 2,500,000 25,000
Issued 5 January 2017 in lieu of fees 800,000 8,000
Issued 11 May 2017 for cash placing 8,500,000 85,000
Issued 17 May 2017 in lieu of fees 754,717 7,547
--------------------------------------- ---------------- --------
As at 30 September 2017 52,898,163 528,982
--------------------------------------- ---------------- --------
Issued 22 August 2018 in lieu of fees 1,066,666 10,667
As at 30 September 2018 53,964,829 539,649
--------------------------------------- ---------------- --------
Share Warrants
On 11 May 2017, as part of the Placing, the Company issued 8,500,000 warrants to subscribe for new Ordinary Shares in Starvest at an exercise price of 4.0p per warrant, within a 24 month exercise period. As at 30 September 2018, 8,500,000 warrants remain outstanding (2017: 8,500,000).
14. Share options
The Company's share option scheme, established on 14 February 2005, expired on 31 January 2015. During the year ended 30 September 2018 no new options were granted.
15. Cash and Cash Equivalents
Year ended Year ended
30 September Cash flow 30 September
2017 GBP 2018
GBP GBP
------------------------------ ------------- ------------- -------------
Cash at bank 432,782 (278,933) 153,849
------------------------------ ------------- ------------- -------------
Net cash and cash equivalents 432,782 (278,933) 153,849
------------------------------ ------------- ------------- -------------
16. Capital Commitments
As at 30 September 2018 and 30 September 2017, the Company had no commitments other than for expenses incurred in the normal course of business.
17. Contingent Liabilities
There were no contingent liabilities at 30 September 2018 (2017: GBPnil).
18. Related Party Transactions
There were no related party transactions during the year other than those disclosed in notes 7 and 10.
The key management of the Company are considered to be the Directors, the compensation for whom was GBP137,035 (2017: GBP128,500).
19. Financial Instruments
The Company's financial instruments comprise investments, cash at bank and various items such as other debtors, loans and creditors. The Company has not entered into derivative transactions nor does it trade financial instruments as a matter of policy.
Credit Risk
The Company's credit risk arises primarily from short term loans to related parties and the risk the counterparty fails to discharge its obligations. At 30 September 2018, these loans included GBP64,653 (2017: GBP59,153) which have been provided for in full.
Liquidity Risk
Liquidity risk arises from the management of cash funds and working capital. The risk is that the Company will fail to meet its financial obligations as they fall due. The Company operates within the constraints of available funds and cash flow projections are produced and regularly reviewed by management.
Interest rate risk profile of financial assets
The only financial assets (other than short term debtors) are cash at bank and in hand, which comprises money at call. The interest earned in the year was negligible. The directors believe the fair value of the financial instruments is not materially different to the book value.
Foreign currency risk
The Company has no material exposure to foreign currency fluctuations.
Market risk
The Company is exposed to market risk in that the value of its investments would be expected to vary depending on trading activity of its shares.
Categories of financial instruments
Year ended 30 September Year ended 30 September
2018 2017
GBP GBP
Financial assets
Trade investments 1,498,059 1,519,983
Loans and receivables 55,992 29,589
1,554,051 1,549,572
======================= =======================
Financial liabilities
Loans and payables 119,401 101,613
119,401 101,613
======================= =======================
20. Capital Management
The Company's objective when managing capital is to safeguard the entity's ability to continue as a going concern and develop its investment activities to provide returns for shareholders. The Company's funding comprises equity and debt. The directors consider the Company's capital and reserves to be capital. When considering the future capital requirements of the Company and the potential to fund specific investment activities, the directors consider the risk characteristics of all of the underlying assets in assessing the optimal capital structure.
21. Events After the End of the Reporting Period
There are no events after the end of the reporting period to disclose.
22. Ultimate controlling party
There is no ultimate controlling party.
Copies of the annual report and financial statements are being posted to Shareholders shortly and will be available for a period of one month thereafter from the Company's registered office: Salisbury House, London Wall, London EC2M 5PS or by email at info@starvest.co.uk
Alternatively, from 19(th) November 2018 the report may be downloaded from the Company's website at www.starvest.co.uk
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon publication of this announcement, this inside information is now considered to be in the public domain.
Enquiries to:
Starvest PLC
Callum Baxter Chairman/CEO 07922 255 933 cbaxter@starvest.co.uk
Grant Thornton UK LLP (Nomad)
Colin Aaronson,Harrison Clarke and Seamus Fricker 02073 835 100
SI Capital Ltd (Broker)
Nick Emerson and Alan Gunn 01483 413 500
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
FR ZMMMMDLMGRZM
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