Final Results for the Year Ended 31 March 2012 (2104G)

TIDMVSA

RNS Number : 2104G

VSA Capital Group PLC

27 June 2012

27 June 2012

VSA Capital Group plc

("VSA Capital Group" or "the Group")

Final Results for the Year Ended 31 March 2012

VSA Capital Group (AIM: VSA), the AIM listed natural resources focused investment banking and institutional broking firm, is pleased to announce today its final results for the year ended 31 March 2012.

Highlights

Trading:

-- Profit after tax for full year to end 31 March 2012: GBP615,733 (2011, 15 months: GBP2,031,910 loss)

   --     Current Assets: GBP3,614,915, an increase of 171% on 2011 

-- Continued growth in the number of retained clients at VSA Capital Limited. At 27 June 2012: 26 mandated clients

   --     Global distribution capability demonstrated by a $125mn capital raise out of Hong Kong 

-- VSA Capital Limited has a good pipeline of deal flow going forward but completing deals is not easy due to the current state of the market

Post Period Event:

   --     Joe Berger appointed as Finance Director as of 2 July 2012 

Commenting on today's results, Andrew Monk, Chief Executive of VSA Capital Group, said:

"It is pleasing to have taken a loss making software business and transformed it into a profitable resource focussed investment bank. Market conditions have, and remain, very challenging and no certainty can be given for the current year but we are building a quality business that is gaining high respect and our aspirations to become the leading Independent resource focussed investment bank in London are well under way"

Chief Executive Officer's Statement

VSA Capital Group plc has reported profits after tax of GBP615,733. This is a very good achievement for a company that has effectively re-started from scratch in 2010, has been investing in growth and has been achieved despite operating in probably the toughest market conditions for decades. One major deal contributed significantly to the overall result but I believe we have now built a very credible team which can deliver ongoing results in the future. To ignore the current market turmoil would be foolish and it has been vital to change VSA's business model away from that adopted by so many domestic brokers and investment banks - a model which they continue to follow despite its drawbacks. The VSA group is focused purely on Natural Resources - a sector that has enjoyed significant long term growth despite the current global financial problems. We are exchange agnostic, are not reliant solely upon London based institutional investors, have built a global corporate and institutional client base, have demonstrated an ability to source funds from wherever investment money is still available and we are not reliant upon the standard "London to London" broking model which, in my opinion, is now struggling to be profitable. VSA has a very clear aim - to become the leading independent resource focused investment bank in London and I believe we are well on our way to achieving this and that, over time, this plan will create substantial value in our company.

As announced previously, VSA Capital Limited has applied to the Financial Services Authority for a Variation of Permissions to enable it to start secondary trading and I am hopeful this can happen very soon as this has been a stated ambition of the Company for some time. We have not rushed into this new area of business, however, as changing market conditions have significantly reduced the revenue that can be generated from this activity. New technology and dealing methods have seen the costs of entry into secondary dealing activities fall considerably as new service providers enter the market to fulfill this need. Whilst the cost of entry has fallen dramatically over recent months many existing brokers cannot benefit from this as they have already incurred substantial set up costs and remain committed to their current suppliers on expensive long term contracts. I believe that this will provide VSA Capital Limited with a significant competitive advantage when it starts secondary trading this summer. Whilst I do not expect this new area to be a major revenue generator it will be a useful facility for our clients and forms a key element of VSA's plan to become a full service firm.

VSA Capital Limited also has a stated ambition to become a NOMAD (Nominated Adviser) on the AIM market in the current financial year and, to that end, has announced the recruitment of the qualified personnel required for this to be possible. Once VSA Capital Limited has completed the required qualifying transactions to prove its competence for this demanding role it will be submitting its application to the London Stock Exchange. I remain hopeful that this can be achieved by the end of 2012.

As a firm VSA Capital Limited continues to seek out ways to differentiate itself and make itself less reliant upon routine corporate and institutional activity, including the initiation of some proprietorial capability. An example of this has been the creation, funding and launch of Anglo African Agriculture Plc, a shell company which is to be floated on the re-vitalised PLUS market before moving up to AIM when a suitable transaction has been identified. Under my leadership, VSA Capital Limited will continue to be entrepreneurial and hunt out other ways in which it can create value using the depth of expertise and knowledge within the firm.

Board Changes

This year has seen a significant change to your Board with our Chairman, Lyndon Chapman, retiring in March and Peter Joy, our Finance Director, due to be leaving at the end of June 2012. I would like to thank both for the work done and also to welcome on board our new Chairman, Gavin Casey, and new Finance Director, Jonathan Berger. As the Group grows new challenges will be presented and I believe Gavin and Jonathan are ideally suited to take up those challenges.

Current Trading

It is still too early in the year to provide any indication of either the first half or the full year outcome. In a similar way to last year the first few months have been quieter than I would have hoped for from a transaction perspective, but in the next few months VSA Capital Limited expects to close a number of the deals that it is working on at present. Likewise VSA Capital Limited has continued to build the number of its mandated corporate clients, which is encouraging. However market conditions are severe and although we have a very full pipeline of potential deal flow, successful completion of these transactions cannot be guaranteed. The fact that VSA Capital's "operating model" is different and resource focused remains beneficial. The Group has maintained a low cost base and has a relatively strong balance sheet and, as a consequence, only needs a relatively small number of deals to complete to give it a positive outcome for the current financial year.

Andrew Monk Chief Executive Officer

For further information, please contact:

VSA Capital Group plc

   Andrew Monk, CEO                                            020 3005 5000 

Blythe Weigh Communications

   Tim Blythe                                                         020 7138 3204 

Shore Capital and Corporate Limited

   Bidhi Bhoma or Toby Gibbs                                 020 7408 4090 

Rivington Street Corporate Finance

   Jon Levinson                                                     020 7562 3357 

NOTES TO EDITORS

VSA Capital Group plc is an international investment banking and institutional broking group headquartered in London. Via its subsidiary, VSA Capital Limited, the group provides corporate finance, broking, research, sales and capital raising capabilities to companies in the natural resources sectors; Oil & Gas, Mining, Agriculture and Timber.

VSA Capital Limited is authorised and regulated by the FSA and advises companies listed in London (AIM and the Main Market), Canada (TSX) Australia (ASX) and the USA (OTCBB) with assets on every continent. The firm currently has 24 retained corporate clients with an aggregate market value of over $1bn.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For The Year Ended 31 March 2012

 
                                                                      15 months 
                                                           2012          2011 
                                                           GBP           GBP 
 Continuing operations 
 Revenue                                                 3,494,665        253,636 
 Cost of sales                                            (53,039)       (15,333) 
                                                         _________      _________ 
 GROSS PROFIT                                            3,441,626        238,303 
 
 Other operating income                                     70,484          5,390 
 Other gains and losses                                          -      (205,390) 
 Administrative expenses                               (2,724,651)    (1,742,065) 
 Exceptional items                                               -      (183,003) 
 
  Operating profit/(loss) from continuing 
  operations                                               787,459    (1,886,765) 
 
  Finance income                                             1,159            389 
 Finance costs and similar charges                       (172,885)       (69,462) 
                                                         _________      _________ 
 Profit/(loss) for the year from continuing 
  operations                                               615,733    (1,955,838) 
 
 Discontinued operations 
 Loss for the year from discontinued operations                  -       (76,072) 
                                                         _________      _________ 
 
 Total comprehensive income for the year                   615,733    (2,031,910) 
                                                         _________      _________ 
 
 
 Earnings per share 
 Basic earnings per share from continuing 
  operations                                                 1.66p        (0.41p) 
 Diluted earnings per share from continuing 
  operations                                                 1.35p        (0.32p) 
           -     (0.01p) 
 
 
 

GROUP BALANCE SHEET

31 March 2012

 
                                             2012              2011 
                                              GBP               GBP 
 ASSETS 
 Non-current assets 
 Goodwill                                       -                 - 
 Property, plant and equipment            343,272           679,700 
 Trade and other receivables                    -            73,310 
                                       __________        __________ 
 Total non-current assets                 343,272           753,010 
                                       __________        __________ 
 
 Current Assets 
 Investments                               16,976            31,797 
 Trade and other receivables            1,948,882         1,169,621 
 Cash and cash equivalents              1,649,057           133,904 
                                       __________        __________ 
 Total current assets                   3,614,915         1,335,322 
                                       __________        __________ 
 
 TOTAL ASSETS                           3,958,187         2,088,332 
 
 EQUITY & LIABILITIES 
 
 Share capital                            562,642           540,406 
 Share premium account                    843,587         5,644,003 
 Share based payments reserve             105,089            56,510 
 Retained earnings                        724,638       (5,473,375) 
                                       __________        __________ 
 Total equity                           2,235,956           767,544 
                                       __________        __________ 
 
 Non-current liabilities 
 Borrowings                               650,000           770,000 
 
 Current liabilities 
 Trade and other payables                 952,231           430,788 
 Borrowings                               120,000           120,000 
                                       __________        __________ 
                                        1,072,233           550,788 
                                       __________        __________ 
 Total liabilities                      1,722,233         1,320,788 
                                       __________        __________ 
 TOTAL EQUITY & LIABILITIES             3,958,188         2,088,332 
                                       __________        __________ 
 
 
 

GROUP CASH FLOW STATEMENT

For The Year Ended 31 March 2012

 
 
                                                                       2011 
                                                         2012     15 months 
                                                          GBP           GBP 
 Cash flows from operating activities 
 Operating profit/(loss)                              787,459   (1,822,706) 
 Adjustments for: 
 Depreciation of property, plant and equipment         49,931        35,257 
 Impairment of property, plant and equipment          300,000       175,000 
 Impairment of goodwill and other intangible 
  assets                                                    -       183,003 
 Share based payment expense                           48,579        56,510 
 Losses on disposal of property, plant 
  and equipment                                             -       (3,000) 
 Changes in working capital: 
 Inventories                                                -        61,546 
 Current asset investments                             14,821             - 
 Trade and other receivables                        (705,951)     (692,156) 
 Trade and other payables                             521,443       392,740 
                                                  ___________     _________ 
 Net cash flows generated by/(used in) 
  operating activities                              1,016,282   (1,613,806) 
                                                  ___________     _________ 
 Cash flows from investing activities 
 Interest received                                      1,159           389 
 Investments held to maturity                               -             - 
 Purchases of available-for-sale investments                -      (23,125) 
 Proceeds from disposal of subsidiaries, 
  net of cash transferred                                   -     1,081,020 
 Proceeds from disposal of property, plant 
  and equipment                                             -             - 
 Purchases of property, plant and equipment          (13,503)             - 
 Purchases of subsidiary undertakings                       -   (1,281,065) 
                                                  ___________     _________ 
 Net cash flows used in investing activities         (12,344)     (222,781) 
                                                  ___________     _________ 
 Cash flows from financing activities 
 Interest paid                                      (172,885)      (97,042) 
 Proceeds from issue of ordinary shares               804,100     1,557,480 
 Costs of issuing shares                                    -      (19,000) 
 Proceeds from issue of convertible loan 
  notes                                                     -       300,000 
 Costs of issuing convertible loan notes                    -      (10,000) 
 (Decrease)/increase in borrowings                  (120,000)     (296,341) 
 Proceeds from vendor loan                                  -       600,000 
                                                  ___________     _________ 
 Net cash raised from financing activities            511,215     2,035,097 
                                                  ___________     _________ 
 Net increase/(decrease) in cash and cash 
  equivalents                                       1,515,153       198,510 
 Cash and cash equivalents at beginning 
  of year                                             133,904      (64,606) 
                                                  ___________     _________ 
 Cash and cash equivalents at end of year           1,649,057       133,904 
                                                  ___________     _________ 
 
 

GROUP STATEMENT OF CHANGES IN EQUITY

For The Year Ended 31 March 2012

 
                            Share capital   Share premium     Share      Retained 
                                                              Based       Earnings      Total 
                                                             Payments 
                                                             Reserve 
 
 Equity as at 1 April 
  2011                            540,406       5,644,003      56,510   (5,473,375)     767,544 
 
 Profit for the year                    -               -           -       615,733     615,733 
 Shares issued                     22,236         781,864           -             -     804,100 
 Cancellation of 
  share premium account 
  balance                                     (5,582,280)                 5,582,280           - 
 Increase in share 
  based payments reserve                -               -      48,579             -      48,579 
                                _________         _______     _______    __________   _________ 
 Equity as at 31 
  March 2012                      562,642         843,587     105,089       724,638   2,235,956 
                            _________             _______     _______    __________   _________ 
 

Notes:

1. General Information

The financial information set out above does not constitute the Company's financial statements for the year ended 31 March 2012. The financial information for 2011 is derived from the financial statements for 2011 which have been delivered to the Registrar of Companies. The auditors have reported on 2011 statements; their report was unqualified and did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006. The financial statements for 2012 will be delivered to the Registrar of Companies following the Company's Annual General Meeting.

2. Basis of preparation

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Group's financial statements with the exception of certain policies subject to the transitional arrangements of Endorsed IFRS.

The Group's consolidated financial statements have been prepared and approved by the Directors in accordance with International Financial Reporting Standards as endorsed for use in the EU (Endorsed IFRS). The Company has elected to prepare its parent company financial statements in accordance with UK Generally Accepted Accounting Practice (GAAP).

3. Going Concern

The Group earned a profit for the year of GBP615,733 (2011: GBP2,031,910 loss after exceptional items). The Directors have formed a judgement, at the time of approving the financial statements, that it is appropriate to adopt the going concern basis in preparing the financial statements the validity of which assumes that one material debtor of GBP1,639,805 will be received as it falls due. These financial statements do not include any adjustments that would arise if the Group was unable to continue to trade.

4. Earnings per Share

The basic earnings per share is calculated by dividing the profit after taxation by the weighted average number of shares in issue.

 
                                                2012 number   2011 number 
 The weighted average number of shares 
  were: 
 Basic weighted average number of shares         37,031,403   482,172,925 
 
 Details of potential dilutive ordinary 
  shares are set out below. 
                                                2012 number   2011 number 
 Employee share options                           4,869,365    75,312,308 
 Contractual termination payment to Director        500,000    10,000,000 
 Convertible Loan Note                            2,727,273    54,545,455 
 Warrants attached to Convertible Loan 
  Note                                              250,000     5,000,000 
 Warrants attached to GBP5m Equity Financing 
  Facility                                          250,000     5,000,000 
 

Availability of Report and Accounts

The Company will post the Report and Accounts for the period ended 31 March 2012 to shareholders on 29 June 2012. The Accounts are also available on the Company's website www.vsacapitalgroup.com. Copies of the Report and Accounts will be available for collection from the Company's Trading Office at 14 Austin Friars, London EC2N 2HE.

This information is provided by RNS

The company news service from the London Stock Exchange

END

FR BRGDLIDDBGDL