30 Apr 2013 12:25
East West Resources plc
East West Resources plc ("EWR") today announces its audited results for the 12 months ended 31 December 2012.
Financial Highlights
·; Total income for the year from continuing operations £4.05 million (2011: £2.89 million restated)
·; Significant reduction in the Group loss from continuing operations, after tax, down to £1.23 million for the year (2011: £3.32million loss restated)
·; Marked improvement in the overall Group loss for the year from all operations, after tax, at £4.46 million (2011: £ 9.61 million loss restated)
·; Modest net loss per share for the period from continuing operations of 1.23p (2011: loss 3.41p restated)
·; Tangible net asset value per voting share of 15.12p as at 31 December 2012 compared with 19.83p as at 31 December 2011.
Commenting on the results, Charles Crick, non-executive Chairman of EWR, said:
"Following another year of change for the Group and having now disposed of our biofuels business, we have finally turned a new page focusing on our metals trading activities. The business has had a good start to the year which has continued into the first quarter with orders significantly ahead of the equivalent period last year. We have also made further progress in reducing our central costs.
We look forward to the future with confidence in our business model and our strategy for growth. "
Enquiries
East West Resources plc | |
Roger Clegg, Chief Operating Officer | + 44 (0)20 7634 4700
|
Cenkos PLC | |
Jon Fitzpatrick | + 44 (0)20 7397 1953 |
Neil McDonald | + 44 (0)20 7397 1953 |
Notes to Editors:
EWR is active in the physical trading of base metals (primarily copper). It sources and supplies a variety of commodities to end users all over the world. Supported by its offices in London and Shanghai and a network of agents in North and South America, Asia and the Middle East, EWR provides producers and consumers with its marketing insight whilst emphasizing the financing and risk management aspect of its trading activities. EWR also holds and manages a number of equity investments. EWR is quoted on the AIM section of the London Stock Exchange under the ticker symbol EWR.
Further information on East West Resources plc is available on the Company's website: www.ewrplc.com
CHAIRMAN'S STATEMENT
Introduction
2012 was another year of change for the Group but one in which we have laid the foundations for a new beginning for the Group.
During the year, we formulated our strategy to focus on the Group's most profitable business and in the process sell or close our remaining legacy businesses and reduce our central costs. I am pleased to report that we made significant progress in these aims.
In March, we completed the sale of our investment banking and stockbroking business (with effect from 31 October 2011) and towards the end of the year we started negotiations for the disposal of our biofuels business - a transaction which we completed earlier this year but which was made with effect from 31 December 2012. We also disposed of our asset management business and closed our fossil fuel activities.
As a result, we have entered 2013 with the single business of metals trading and a small residual investment portfolio.
During the year we also had a number of changes at Board level, in the management of the Group and in our shareholder base, all of which are referred to below.
Results
For the year ended 31 December 2012, Ambrian Metals Limited ("AML"), our metals trading business and now our principal operating activity, produced another solid performance. AML net revenues for the year rose to £4.19 million, an increase of 12 per cent on the previous year (£3.75 million) and the company reported an operating profit before tax of £0.99 million for the year (2011: £1.65 million). The Group recorded a significantly lower post-tax loss on continuing operations of £1.23 million for the year ended 31 December 2012 compared with a post-tax loss of £3.32 million (restated) for the previous year. The loss resulted principally from the continued drain on our resources from our central overheads and a small number of one-off costs but, overall, represented a major improvement on the loss reported for the previous year. We made progress in the year to reduce our central costs and work continues on further reductions. More detail on the results is contained in the Financial Review which follows this statement.
Board changes
In July, Consolidated General Minerals PLC ("CGM") acquired a near 30 per cent interest in the Company's shares and in October we were pleased to welcome Nicolas Rouveyre to the Board as the representative of CGM. Nicolas' background and experience in metals trading gained whilst at Glencore is proving invaluable to us in assisting with the business of AML and its development.
In July, Julian McIntyre and Seng Huang Lee resigned from the Board and Peter Curry was appointed as a non-executive Director in Mr Lee's place. I re-joined the Board in October having resigned in March following completion of the sale of our investment banking and stockbroking business and in December, I was elected as Chairman following the resignation of Nathan Steinberg when Peter Curry also resigned from the Board.
Rob Ashley stood down as chief executive in October but remains on the Board as a non-executive director. At the same time, we established an executive committee comprising Roger Clegg as the Group's Chief Operating Officer, Mark Homer (the Managing Director of AML) and John Coles, the Finance Director. We preferred this structure with no chief executive because of our more focused business model. Members of the executive committee meet on a regular basis and report to the Board which meets not less frequently than every two months.
We thank all our staff for their loyalty, commitment and efforts during the year and we also thank the retiring Directors for their respective contributions to the Group during their tenure of office.
Reporting currency
Now that the Group's principal operating business is AML which accounts in US Dollars, shareholders should note that with effect from the commencement of this financial year, the Group will in future report in that currency.
Outlook
In February we announced that AML had made a good start to the year in improved market conditions. Orders continue to be significantly ahead of the equivalent position last year and we continue to make progress in reducing the Group's central overhead. More work remains to be done in managing our costs and developing our metals trading business but the groundwork has been done and we look forward to the future with confidence in our business model and our strategy for growth.
Charles Crick
Chairman
Financial review
Total Income and Pre-Tax Results
Total income from continuing operations was £4.05 million for the year ended 31 December 2012 compared with £2.89 million (restated) for the year ended 31 December 2011, a 40 per cent increase resulting principally from higher revenues in our metals trading business and reduced losses in our investment portfolio.
Operating costs from continuing operations of £5.19 million were marginally higher than the operating costs for the same period last year of £5.04 million (restated).
The loss attributable to shareholders from continuing operations before tax was £1.14 million, a significant improvement on the loss of £2.15 million (restated) for the same period last year.
As a result of the recent disposal of Ambrian Energy GmbH ("AEG") with effect from 31 December 2012 and the closure of our fossil fuels businesses during the year, we have treated the results of these operations as discontinued operations. The Group incurred trading losses in AEG in the second half and small residual closure costs in the fossil fuel businesses, giving rise to an overall post-tax loss of £3.22 million for the year attributable to our investments in these operations. The overall Group loss attributable to shareholders from all operations was £4.46 million after tax, compared with an after tax loss of £9.61 million (restated) for the year ended 31 December 2011.
Dividend
The Board is not recommending payment of a dividend in respect of the year ended 31 December 2012 (2011: nil).
Continuing operations
Net revenue from Ambrian Metals Limited ("AML"), our metals trading business, was £4.19 million for the year ended 31 December 2012 (2011: £3.75 million), a 12 per cent improvement over the year. Profits were reduced from the previous year due to a number of one-off costs including professional fees and retention bonuses.
The 2012 year continued the pattern of 2011 with volatility in the market price of copper, though within a narrower range than during 2011. Having started the year at $7,661 per tonne, the price reached a high in early February of $8,765 per tonne falling to a low of $7,220 by mid-June but ended the year at $7,907.
Global copper inventories increased steadily throughout the year - particularly in China where Shanghai Bonded warehouse rose from circa 250,000 Mt at the start of 2012 reaching close to 900,000 Mt at the end of the year. Free stocks on the LME also rose from circa 150,000 Mt to 270,000 Mt over the same period.
These statistics evidence a sharp fall in Chinese demand over the year but, despite this, AML managed to increase its sales in China by some 10 per cent over the previous year - largely due to its continued expansion in direct Chinese consumer sales. China continues to be the single largest market for AML, accounting for c.55 per cent of its sales in 2012.
Following lacklustre demand in near and Middle East regions during 2011, there were expectations of an upturn in that area for 2012. However, after an encouraging first quarter, volumes and spot business soon returned to levels approximating to those experienced in the preceding year. Nevertheless, AML's market share of available business increased slightly upon 2011 with new clientele emerging within the sales portfolio. The Middle and near East regions represented around 34 per cent of AML's turnover in 2012.
The balance of AML's sales was split between South Korea, Europe and the rest of SE Asia. The majority of AML's supplies during the year were sourced from Russia, Africa, Latin America and India.
Over the 12 months ended 31 December 2012, AML supplied a total tonnage of refined copper of 273,000 tonnes (compared with 240,000 tonnes supplied for the equivalent period in 2011).
AML continued to benefit from the strong support of its bankers in difficult economic global conditions and had uncommitted trade finance facilities as at 31 December 2012 totalling over US$295 million (31 December 2011: US$370 million).
During the year, AML received a subordinated loan of US$3 million from the Company's major shareholder, Consolidated General Minerals plc ("CGM"). The loan is due to be repaid on 30 June 2013.
Profit before tax for AML for the 12 months to 31 December 2012 was £0.99 million compared with £1.65 million for the same period in 2011 and net assets of AML at 31 December 2012 were £10.12 million (2011: £9.05 million).
Principal Investments
In the 12 months ended 31 December 2012, our investment portfolio recorded a pre-tax loss of £0.56 million compared with a pre-tax loss of £1.66 million in the 12 months ended 31 December 2011.
Following the Board's decision last year to substantially reduce the Group's exposure to junior resource stocks, the total value of the Group's investment portfolio, including all net assets, held by Ambrian Principal Investments Limited ("APIL") at 31 December 2012 was £1.00 million compared with a principal investment portfolio, including net assets, valued at £2.08 million at 31 December 2011. The investment portfolio itself was valued at £0.46 million at 31 December 2012 compared to £1.73 million at 31 December 2011.
At 31 December 2012, APIL had 5 holdings with the largest being RDX Minerals (£0.13 million). Three of the holdings are unquoted.
The Company continues to hold an 11.4 per cent interest in CGM (which in turn holds a near 30 per cent interest in the Company). CGM is managed and part-owned by employees of Ambrian Resources AG ("ARAG") which was established in February 2010 in partnership with a team of three former executives of Glencore International AG, one of whom, Nicolas Rouveyre, is a now a Director of the Company. ARAG employees are charged to CGM. CGM continues to focus on developing its clinker grinding mill and cement packaging plant in Beira, Mozambique.
In March 2013, CGM announced that it was expecting plant construction to commence shortly. At the same time, CGM reported shareholders' equity as at 31 December 2012 of US$16 million compared with US$18.8 million as at 31 December 2011. The Board considers its interest in CGM a core holding for the future development of the Group and the Company's investment in CGM has been valued at its fair value of £1.56 million.
It is to be emphasized that there is a high degree of subjectivity (and therefore uncertainty) involved in the valuation of unquoted investments. This applies to all of the Group's unquoted investments.
Discontinued operations
Biofuels - Ambrian Energy GmbH ("AEG")
In February 2013, the Company completed the sale of the whole of the issued share capital of AEG. Under the sale and purchase agreement, the change of control in AEG's business passed to the purchaser with effect from 31 December 2012. As a result, this activity has been treated as a discontinued operation in 2012.
Total revenue in AEG for the 12 months ended 31 December 2012 was £0.17 million compared with £2.19 million in 2011.
The loss arising from discontinued operations of AEG for the 12 months to 31 December 2012 was £2.68 million, compared with a profit of £0.96 million for the same period in 2011.
Fossil fuels - Ambrian Energy Limited ("AEL") and Strategic Energy Bank Limited ("SEB")
Total revenue in AEL and SEB for the 12 months ended 31 December 2012 was £0.47 million (2011: £0.40 million) and these companies recorded an aggregate loss before tax for the 12 months to 31 December 2012 of £0.46 million (2011: £1.31 million). Following the decision by the Board last year to cease providing capital to AEL and curtail its activities in these businesses, these operations have been treated as discontinued operations and there is no longer any activity in these businesses.
Further details of the discontinued operations are contained in note 4 of this announcement.
Expenses
Administrative expenses attributable to the Group's continuing operations for the year ended 31 December 2012 were £5.19 million(2011: £5.04 million restated), which included provisions for year-end profit related bonuses and share-based payment charges. Like for like expenses were broadly in line with those for last year but the expenses for 2012 included professional fees related to the disposal of certain activities and a number of one off costs.
Remuneration expenses attributable to continuing operations were £2.55 million for the 12 months ended 31 December 2012 (2011: £2.65 million restated). Total headcount in our continuing operations at 31 December 2012 was 22 (31 December 2011: 30).
Share-based payment charges were £0.02 million in the 12 months ended 31 December 2012 (2011: £ 0.16 million).
Balance Sheet
Total net assets of the Group at 31 December 2012 were £15.21 million, down from £19.86 million at 31 December 2011. The major factors impacting the Group's net assets were the losses attributable to our loss on disposal of AEG (£2.68 million), the losses on our investment portfolio (£0.56 million), the losses arising from our fossil fuels business (£0.46 million) and significant central costs.
The Group's own cash resources totalled £17.36 million at 31 December 2012 compared with £15.38 million at 31 December 2011. The cash resources at the year-end included the US$ 3 million loan from CGM (£1.85 million).
Net tangible asset value per share at 31 December 2012 was 15.12p(compared with 19.83p as at 31 December 2011). Net tangible asset value is based on 100,602,104 ordinary shares outstanding at 31 December 2012 (excluding Treasury shares and shares held by the Ambrian Capital Employee Benefit Trust) (2011: 100,136,584 shares).
John M Coles
Finance Director
East West Resources plc
Consolidated statement of comprehensive income
for the year ended 31 December 2012
Year to 31 December 2012 | Year to 31 December 2011 | |||
Restated | ||||
£ | £ | |||
Turnover | 1,129,067,594 | 1,549,455,324 | ||
Cost of Sales | (1,124,540,252) | (1,545,156,672) | ||
Net Revenue | 4,527,342 | 4,298,652 | ||
Investment portfolio (losses) | (476,778) | (1,409,649) | ||
Total income | 4,050,564 | 2,889,003 | ||
Administrative expenses | (5,192,299) | (5,036,082) | ||
(Loss) before tax from continuing operations | (1,141,735) | (2,147,079) | ||
Taxation | (92,829) | (1,170,369) | ||
(Loss) after tax from continuing operations | (1,234,564) | (3,317,448) | ||
(Loss) on discontinued operations net of tax | (3,220,476) | (6,290,232) | ||
(Loss) after tax from continuing and discontinued operations | (4,455,040) | (9,607,680) | ||
Other comprehensive income | ||||
Exchange (loss)/profit arising from translation of foreign operations | (216,527) | 245,460 | ||
Total other comprehensive income | (216,527) | 245,460 | ||
Total comprehensive (loss) | (4,671,567) | (9,362,220) | ||
(Loss) for the period attributable to: | ||||
Owners of the parent | (4,451,270) | (9,604,730) | ||
Non-controlling interest | (3,770) | (2,950) | ||
(4,455,040) | (9,607,680) | |||
Total comprehensive loss attributable to: | ||||
Owners of the parent | (4,667,797) | (9,359,270) | ||
Non-controlling interest | (3,770) | (2,950) | ||
(4,671,567) | (9,362,220) | |||
Earnings per share continuing and | ||||
discontinued operations: | ||||
Basic EPS in pence | (4.45) | (9.88) | ||
Continuing operations: | ||||
Basic EPS in pence | (1.23) | (3.41) |
East West Resources plc
Consolidated statement of financial position
at 31 December 2012
2012 | 2011 | |||
ASSETS | £ | £ | ||
Non-current assets | ||||
Property, plant and equipment | 53,777 | 177,747 | ||
Deferred tax asset | 33,251 | 232,071 | ||
87,028 | 409,818 | |||
Current Assets | ||||
Financial assets at fair value through profit or loss | 2,223,558 | 4,841,449 | ||
Inventory | 222,960,314 | 179,154,816 | ||
Trade and other receivables | 67,223,096 | 59,127,665 | ||
Cash and cash equivalents | 17,361,477 | 15,378,657 | ||
309,768,445 | 258,502,587 | |||
Total Assets | 309,855,473 | 258,912,405 | ||
LIABILITIES | ||||
Current liabilities | ||||
Financial liabilities at fair value through profit or loss | (597,569) | (5,008,970) | ||
Short term borrowings | (146,358,657) | (159,207,524) | ||
Short term liabilities under sale & repurchase agreements | (108,028,112) | (45,057,643) | ||
Trade and other payables | (39,648,821) | (29,459,659) | ||
Current tax payable | (12,307) | (321,799) | ||
Total liabilities | (294,645,466) | (239,055,595) | ||
Total net assets | 15,210,007 | 19,856,810 | ||
CAPITAL AND RESERVES | ||||
Share capital | 11,136,121 | 11,136,121 | ||
Share premium account | 11,105,383 | 11,105,383 | ||
Treasury shares | (1,128,716) | (1,128,716) | ||
Retained earnings | (3,891,941) | 762,273 | ||
Share-based payment reserve | 4,646,478 | 4,325,508 | ||
Employee benefit trust | (5,767,229) | (5,471,023) | ||
Exchange reserve | (844,055) | (830,472) | ||
Total equity attributable to the owner of the parent | 15,256,041 | 19,899,074 | ||
Non-controlling interest | (46,034) | (42,264) | ||
Total equity | 15,210,007 | 19,856,810 | ||
East West Resources plc
Consolidated statement of changes in equity
for the year ended 31 December 2012
Share Capital | Share premium account | Merger Reserve | Share Based Payments Reserve | Employee benefit trust | Treasury Shares | Retained earnings | Exchange reserve | Non-controlling interest | Total Equity | |
£ | £ | £ | £ | £ | £ | £ | £ | £ | £ | |
Balance at 31 December 2010 | 11,136,121 | 11,105,383 | 1,245,256 | 4,161,508 | (5,445,444) | (1,128,716) | 10,187,976 | (1,075,932) | (39,314) | 30,146,838 |
Profit for the period | - | - | - | - | - | - | (9,604,730) | - | (2,950) | (9,607,680) |
Elimination on disposal | - | - | (1,245,256) | - | - | - | 924,392 | - | - | (320,864) |
Other comprehensive income | - | - | - | - | - | - | - | 245,460 | - | 245,460 |
Share-based payment charge | - | - | - | 164,000 | - | - | - | - | - | 164,000 |
Purchase of shares | - | - | - | - | (57,809) | - | - | - | - | (57,809) |
Sale of shares | - | - | - | - | 32,230 | - | - | - | - | 32,230 |
Dividends | - | - | - | - | - | - | (745,365) | - | - | (745,365) |
Balance at 31 December 2011 | 11,136,121 | 11,105,383 | - | 4,325,508 | (5,471,023) | (1,128,716) | 762,273 | (830,472) | (42,264) | 19,856,810 |
(Loss) for the period | - | - | - | - | - | - | (4,451,270) | - | (3,770) | (4,455,040) |
Elimination on disposal | - | - | - | - | - | - | (202,944) | 202,944 | - | - |
Other comprehensive income | - | - | - | - | - | - | - | (216,527) | - | (216,527) |
Share-based payment charge | - | - | - | 24,764 | - | - | - | - | - | 24,764 |
Transfer | - | - | - | 296,206 | (296,206) | - | - | - | - | - |
Balance at 31 December 2012 | 11,136,121 | 11,105,383 | - | 4,646,478 | (5,767,229) | (1,128,716) | (3,891,941) | (844,055) | (46,034) | 15,210,007 |
East West Resources plc
Consolidated statement of cash flows
for the year ended 31 December 2012
Year to 31 December 2012 | Year to 31 December 2011 | ||
£ | £ | ||
(Loss) for the year | (4,455,040) | (9,607,680) | |
Adjustments for: | |||
Depreciation of property, plant and equipment | 19,690 | 52,600 | |
Amortisation of intangible assets | - | 2,150,109 | |
Foreign exchange losses | 31,215 | 96,538 | |
Taxation expense | 92,829 | 1,836,807 | |
Unrealised gains on financial assets designated at fair value | 307,703 | 155,366 | |
Realised losses on financial assets designated at fair value | (564,800) | 2,213,170 | |
Net cost on acquisition of financial assets designated at fair value | 2,178,932 | 40,831 | |
(Increase)/ decrease in inventories | (45,134,639) | 58,766,701 | |
(Increase)/ decrease in trade and other receivables | (6,477,737) | 41,936,350 | |
Unrealised (losses) on financial liabilities at fair value | (4,411,401) | (13,736,490) | |
Increase/ (decrease) in trade and other payables | 10,430,606 | (43,447,274) | |
Share-based payment charge | 24,764 | 164,000 | |
Loss on disposal of subsidiaries | 814,289 | 1,500,000 | |
Cash used in operations | (47,143,589) | 42,121,028 | |
Taxation (paid) | (203,501) | (481,175) | |
Net cash flow (used)/ generated in operating activities | (47,347,090) | 41,639,853 | |
Investing activities | |||
Disposal of subsidiary undertakings | (571,394) | (868,139) | |
Purchase of property, plant and equipment | (2,417) | (83,405) | |
Disposal of property, plant and equipment | 29,859 | 141,115 | |
Net cash (used) in investing activities | (543,952) | (810,429) | |
Financing activities | |||
Purchase of shares by employee benefit trust | - | (25,579) | |
Increase/ (decrease) in short term liabilities under sale and repurchase agreements | 62,970,469 | (37,305,963) | |
(Decrease) in short term borrowings | (12,848,867) | (18,644,186) | |
Dividends paid to owners of the parent | - | (745,365) | |
Net cash generated/(used)in financing activities | 50,121,602 | (56,721,093) | |
Net increase/(decrease) in cash and cash equivalents | 2,230,560 | (15,891,669) | |
Cash and cash equivalents at the beginning of the year | 15,378,657 | 31,121,434 | |
Foreign exchange gains on translation of foreign subsidiaries | (247,740) | 148,892 | |
Cash and cash equivalents at the end of the year | 17,361,477 | 15,378,657 |
1. Basis of preparation
The financial information set out in this announcement does not constitute the Group's statutory accounts for the year ended 31 December 2012 or 2011 but is derived from those accounts. Statutory accounts for the 2011 have been delivered to the Registrar of the Companies, and those for 2012 will be delivered in due course.
The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain statements under section 498 (2) or (3) of the Companies Act 2006. The results for the year ended 31 December 2012 were approved by the Board of Directors on 29 April 2012 and are audited.
While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of international Financial Reporting Standards (IFRS's) as endorsed for use in the European Union, this announcement does not itself contain sufficient information to comply with IFRS's. The accounting policies adopted in this announcement have been consistently applied and are consistent with the policies used in the preparation of the statutory accounts for the period ending 31 December 2012.
The consolidated financial statements of the Group have been prepared in accordance with the Companies Act 2006 and International Financial Reporting Standards (IFRS) as developed and published by the International Accounting Standards Board (IASB) as adopted by the European Union (EU).
2. Segmental analysis
The Group has two reportable segments attributable to its continuing operations and unallocated central revenues and costs:
Physical metals - comprises Ambrian Metals Limited, a physical metals merchant.
Investment portfolio - comprises the Group's principal investment portfolio held in Ambrian Principal Investments Limited.
Unallocated central revenues principally represent recharges of costs from Ambrian Resources AG ("ARAG"). Unallocated central costs relate to overheads incurred in connection with operating the public limited company and include the share-based payment charges in relation to the staff share option schemes, the remuneration of the Directors of East West Resources plc and the costs of ARAG.
During the year the Group disposed of its Asset Management business and entered into an agreement to dispose of its Biofuels business (which was completed after the year-end). During the year, the Group closed down its fossil fuels activities. As a result of these disposals and closures, the three divisions have been treated as discontinued activities of the Group.
During 2011, the Group disposed of its LME futures broking business and its Corporate finance & equities division (which was completed after the year-end). The two divisions were treated as discontinued activities of the Group in 2011.
The measurement of the segmental revenue, profit before tax, capital expenditure, depreciation, total assets, total liabilities and net assets have been prepared using consistent accounting policies across the segments.
Total income | Physical Metals | Investment Portfolio | Unallocated Central | Total | |||
Continuing operations | 2012 | 2012 | 2012 | 2012 | |||
£ | £ | £ | £ | ||||
Turnover | 1,128,734,216 | - | 333,378 | 1,129,067,594 | |||
Cost of Sales | (1,124,540,252) | - | - | (1,124,540,252) | |||
Revenue | - | (476,778) | - | (476,778) | |||
4,193,964 | (476,778) | 333,378 | 4,050,564 | ||||
Physical Metals | Investment Portfolio | Unallocated Central | Restated Total | ||||
2011 | 2011 | 2011 | 2011 | ||||
£ | £ | £ | £ | ||||
Turnover | 1,548,908,551 | - | 546,773 | 1,549,455,324 | |||
Cost of Sales | (1,545,156,672) | - | - | (1,545,156,672) | |||
Revenue | - | (1,409,649) | - | (1,409,649) | |||
3,751,879 | (1,409,649) | 546,773 | 2,889,003 |
There has been a change in the presentation of the Revenue during the 2012 financial year given the change in the Group's primary business operations. This has lead to the Revenue line being disclosed as a combination of Turnover (gross revenues generated predominantly from physical sales and a small margin of unallocated central revenue), Cost of Sales (direct costs associated with the sales of physical metals trading) and Revenue (the investment portfolio gains/(losses).
There is no change to the net profit of the Group due to the change in the presentation; however the presentation better reflects the operations. Further there is no effect on the presentation of the earnings per share, nor the diluted earnings per share.
Restated | |||
2012 | 2011 | ||
Discontinued operations | £ | £ | |
Biofuels | 166,644 | 2,194,656 | |
Fossil Fuels | 466,425 | 401,285 | |
Asset Management | 30,324 | 90,000 | |
Corporate finance & equities* | - | 4,119,339 | |
LME futures broking* | - | 513,891 | |
663,393 | 7,319,171 | ||
663,393 | 7,319,171 | ||
2012 | 2011 | ||
Investment portfolio income represents: | £ | £ | |
Unrealised gains/ (losses) on financial assets designated at fair value | 278,865 | (1,260,821) | |
Realised losses on financial assets designated at fair value | (779,036) | (155,366) | |
Dividends, distributions and other | 23,393 | 6,538 | |
(476,778) | (1,409,649) |
2012 | 2011 | ||
Profit/(loss) before tax | £ | £ | |
Continuing operations | |||
Physical metals | 987,287 | 1,653,681 | |
Investment portfolio | (555,977) | (1,660,189) | |
Unallocated central | (1,573,045) | (2,140,571) | |
(1,141,735) | (2,147,079) | ||
Restated | |||
2012 | 2011 | ||
Discontinued operations | £ | £ | |
Biofuels | (2,680,185) | 689,422 | |
Fossil Fuels | (455,096) | (1,307,346) | |
Asset Management | (85,195) | (159,674) | |
Corporate finance & equities* | - | (5,458,997) | |
LME futures broking* | - | (53,637) | |
(3,220,476) | (6,290,232) | ||
(4,362,211) | (8,437,311) | ||
Capital expenditure | |||
Biofuels | - | 11,252 | |
Unallocated central | - | 72,153 | |
- | 83,405 | ||
Depreciation | |||
Biofuels | 7,214 | 22,714 | |
Unallocated central | 19,690 | 29,886 | |
26,904 | 52,600 |
\* These operations were discontinued during the 2011 financial year
2012 | 2011 | ||
Total assets | £ | £ | |
Physical metals | 303,767,119 | 239,251,286 | |
Investment portfolio | 1,109,262 | 2,084,079 | |
Unallocated central | 4,954,244 | 6,565,542 | |
Biofuels | - | 10,556,315 | |
Fossil fuels | 24,848 | 455,183 | |
309,855,473 | 258,912,405 | ||
Total liabilities | |||
Physical metals | 293,641,980 | 230,203,388 | |
Investment portfolio | 109,716 | 35,613 | |
Unallocated central | 869,166 | 1,547,696 | |
Biofuels | - | 6,514,782 | |
Fossil fuels | 24,604 | 754,116 | |
294,645,466 | 239,055,595 |
The majority of the Group's non-current assets are located in the UK. The information required to disclose the geographical analysis of revenues from customers is not available and the cost to develop it would be excessive.
3 Earnings per Ordinary Share
The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year, excluding shares held in the Employee Benefit Trust and Treasury shares.
The calculation of diluted earnings per share is based on the basic earnings per share adjusted to allow for the issue of shares through the share option schemes on the assumed conversion of all dilutive options.
Options exercisable in 2012 and 2011 have been excluded from the diluted earnings per share calculation because they are antidilutive.
Reconciliations of the earnings and weighted average number of shares in the calculations are set out below.
2012 | 2011 | ||||||
(Loss) Attributable toOwners of theCompany | Weighted average number of shares | Per share amount | (Loss) Attributable toOwners of theCompany | Weighted average number of shares | Per share amount | ||
£ | (pence) | £ | (pence) | ||||
Continuing and discontinued operations | |||||||
Basic earnings per share | (4,451,270) | 100,007,699 | (4.45) | (9,604,730) | 97,260,778 | (9.88) | |
Dilutive effect of share options | - | - | |||||
Diluted earnings per share | (4,451,270) | 100,007,699 | (4.45) | (9,604,730) | 97,260,778 | (9.88) | |
Continuing operations | |||||||
Basic earnings per share | (1,230,794) | 100,007,699 | (1.23) | (3,314,498) | 97,260,778 | (3.41) | |
Dilutive effect of share options | - | - | |||||
Diluted earnings per share | (1,230,794) | 100,007,699 | (1.23) | (3,314,498) | 97,260,778 | (3.41) | |
The loss attributable to the owners of the company for continuing and discontinued operations used in the above calculation is that presented in the consolidated statement of comprehensive income.
The loss attributable to owners of the company for discontinued operations is derived from the loss from continuing operations of £1,234,564 (2011: loss £3,317,448) adjusted for the loss for the period attributable to the non-controlling interest of £3,770 (2011: loss £2,950).
4 Discontinued operations
On 18 July 2012, the Group entered into an agreement to dispose of its entire interest in Ambrian Asset Management Limited ("AAM") which was completed on 7 December 2012 and on 11 December 2012, the Group entered into heads of terms to sell its entire interest in Ambrian Energy GmbH ("AEG"). The sale of AEG was completed on 18 February 2013 but with the change of control passing with effect from 31 December 2012. As a result of these disposals, the operations of AAM and AEG during the year ended 31 December 2012 have been treated as discontinued operations.
During the year the businesses carried out by Ambrian Energy Limited ("AEL") and Strategic Energy Bank Limited ("SEB"), as advisers and arrangers of fossil fuel transactions, ceased trading and have been treated as discontinued operations.
Trade and other receivables contain a sum of £1,630,468 representing the sale proceeds from the disposal of AEG. This amount had been received before the date of signing these financial statements.
The assets attributable to the discontinued operations as at their respective effective disposal dates are set out below.
At disposal | ||||||
2012 | 2011 | 2011* | ||||
£ | £ | £ | ||||
Property, plant and equipment | 76,838 | 105,439 | 697 | |||
Trade and other receivables | 12,774 | 828,133 | 3,247,998 | |||
Inventory | 1,329,141 | 5,742,300 | - | |||
Cash | 1,338,196 | 1,592,681 | 5,338,335 | |||
Trade and other payables | (266,048) | (3,493,803) | (1,716,834) | |||
Net asset position | 2,490,901 | 4,774,750 | 6,870,196 |
\* These figures are the 2011 figures for the operations that were discontinued during the 2011 financial year and are disclosed for comparative reasons only
The post-tax loss on disposal of discontinued operations was determined as follows:
Result of discontinued operations
2012 | 2011 | 2011* | ||||
£ | £ | £ | ||||
Revenue | 4,545,521 | 2,686,404 | 4,633,230 | |||
Administrative expenses | (6,951,709) | (3,197,434) | (8,245,994) | |||
Loss on operating activities | (2,406,188) | (511,030) | (3,612,764) | |||
Loss from selling discontinued operations | (814,289) | - | (1,500,000) | |||
(3,220,477) | (511,030) | (5,112,764) | ||||
Taxation (expense) | - | (266,568) | (399,870) | |||
(Loss) for the year | (3,220,477) | (777,598) | (5,512,634) | |||
(Loss) per share on discontinued operations: | ||||||
Basic in pence | (3.22) | (5.67) | ||||
\* These figures are the 2011 figures for the operations that were discontinued during the 2011 financial year and are disclosed for comparative reasons only
The total proceeds of sale from Ambrian Asset Management Limited were £63,196 and the total proceeds of sale from Ambrian Energy GmbH were £1,630,468.
Statement of cash flows from discontinued operations | 2012 | 2011 | 2011* | |||
£ | £ | £ | ||||
Operating activities | (673,247) | (55,362) | (13,483,920) | |||
Investing activities | (571,394) | - | (868,139) | |||
Net cash from discontinued operations | (1,244,641) | (55,362) | (14,352,059) |
\* These figures are the 2011 figures for the operations that were discontinued during the 2011 financial year and are disclosed for comparative reasons only
In the above tables, the comparative information for 2011 has been restated to present comparatives for the activities discontinued in 2012, rather than the results actually arising from the activities discontinued in 2011.
5 Non-controlling interest
The non-controlling interest disclosed in the statement of comprehensive income and statement of financial position represents a 20% minority interest in Ambrian Resources AG held by shareholders other than East West Resources plc.