AMBR.L Regulatory News (AMBR)

16 Sep 2005 07:00

Golden Prospect PLC16 September 2005 GOLDEN PROSPECT PLC INTERIM STATEMENT ***** Golden Prospect (AIM: GOL), the natural resources investment bank, todayannounces its interim results for the six months ended 30 June 2005, thehighlights of which are: • Profit before tax: £5,071,532 up 766% (2004: £585,415)• Basic EPS of 3.26p up 539% (2004: 0.51p)• Maiden interim dividend of 0.5p (2004: nil)• Net assets of £28.3 million up 65% (2004: £17.1 million). Market value of listed investments of £35.1 million (2004: £27.7 million) including unrealised gains of £12.6 million. Net cash position of £4.0 million (2004: £2.1 million)• Gross profits: £6,449,815 (2004: £788,702) comprising £1,312,068 from investment banking activities, £1,934,739 from trading activities and £3,203,008 arising from the disposal of long-term investments Commenting on the results, Malcolm Burne, Chairman of Golden Prospect plc, said: "The Company has benefited very favourably during the period under review fromthe robust climate for resource markets and the successful implementation of itsinvestment strategies. By far the most important aspect of the Company'soutstanding progress has been the swift integration of Ambrian Partners sinceits acquisition 12 months ago which has transformed the Company into a leadingnatural resources investment bank providing capital, corporate finance and stockbroking services to the resource sector." - Ends - Enquiries: Malcolm Burne Tel: 020 7395 1930ChairmanGolden Prospect plc Tom Gaffney Tel: 020 7776 6400Chief ExecutiveGolden Prospect plc Further information on Golden Prospect plc: Further information on Golden Prospect is available on the Company's website:www.goldenprospectplc.com GOLDEN PROSPECT PLC INTERIM STATEMENT (Continued) ***** CHAIRMAN'S STATEMENT Results We are pleased to report that the Company's profit before tax for the six monthsended 30 June 2005 increased by more than eight times to a record £5,071,532.Basic earnings per share improved over six times from 0.51p to 3.26p. The Company grew gross profits to £6,449,815 from £788,702. Our new investmentbanking activities accounted for approximately 20% of gross profits whilerealised profits arising from our trading activities accounted for approximately30%. Profits from the disposal of investments in the core portfolio accountedfor approximately half the Company's gross profits. Dividend The board declares payment of a maiden interim dividend of 0.5p per share (2004:nil). The dividend will be payable on 21 October 2005 to all shareholders on theregister on 28 September 2005. Investment Banking Ambrian Partners Limited ("Ambrian") has significantly strengthened GoldenProspect's competitive position by providing new investment opportunities andnew income streams. Ambrian is a member firm of the London Stock Exchange andobtained Category 'A' authorisation from the FSA in April 2005. Ambrian's corporate finance and corporate broking activities generate revenuesfrom financial advisory fees, new issue commissions, options granted andcorporate broking retainers. Ambrian has completed as broker, co-broker orplacing agent 11 capital raising transactions with a total value of over £60million so far this year, including six Initial Public Offerings on AIM. Ambriancurrently has 13 retained corporate clients. In a short period of time Ambrianhas become recognised as one of the leading corporate brokers to the mining andoil & gas sectors. Ambrian's research, sales and trading activities generate brokerage commissionsand trading spreads. Ambrian has a highly qualified team of equity researchanalysts with backgrounds in geology, mining and chemical engineering. Thisexpertise has earned the respect of Ambrian's institutional clients and wideacclaim for its research product. Ambrian has embarked on a robust expansion programme intended to widen its rangeof activities. It has recruited a project financing specialist, begun coverageof companies active in the range of soft commodities and is building itspresence in the rapidly growing area of environmental technologies which seek tomake better use of the world's natural resources. Ambrian is also examiningopportunities in investment management and commodities broking. Such activitieswill substantially augment future earnings power and complement GoldenProspect's strategy that involves putting its significant capital to workalongside the capital of investors in selected transactions that Ambrian leadmanages. This approach will provide Golden Prospect with opportunities forgenerating a greater return on its investment banking operations therebyenhancing earnings for shareholders. GOLDEN PROSPECT PLC INTERIM STATEMENT (Continued) ***** Principal Investments During the first six month period partial disposals were made within the coreportfolio while at the same time certain holdings in the trading portfolio wererealised as and when liquidity permitted. The Company continues to be firmlycommitted to its core portfolio and is confident of securing further substantialgains from its larger holdings in Jubilee Platinum, Mano River Resources,Uruguay Minerals, Anglesey Mining, Samson Oil & Exploration, Nautical Petroleum,Centamin Egypt and Central Asia Gold. All these companies are performing strongly with excellent news on their variousdrilling or development programmes. Each of these companies can be expected tomake important contributions to Golden Prospect's future growth. To complement our listed equity investments we are seeking to build a portfolioof income generating royalty streams and have recently acquired a 1% Net SmelterReturn Royalty over the Nixon Fork Gold Mine and Project Area in Alaska forUS$225,000. Nixon Fork is expected to commence production in 2006 and currentlyhas total reserves and resources of 115,000 ounces of gold. Although the principal investment policy favours the highest portfolio weightingin gold shares, management has diversified across the whole natural resourcessector by investing in energy (oil, gas, coal and uranium), precious metals(silver, diamonds, platinum), base metals (copper, nickel, zinc and iron ore)and agricultural commodities (softs and plantations). As always, the investment policy has been to focus on companies that havegeographical spread and the capability of either going into production in themedium term or being absorbed by a major competitor in an intensifying mergerand acquisitions market place. This investment policy should cushion values inperiods of market corrections, while providing liquidity. This rationalisation part of the cycle has begun and the next stage should bethe discovery phase of new deposits (reflecting considerable financing ofexploration) which will keep considerable focus on the sector in terms ofinvestor interest. Most of the leading industry sources remain extremely optimistic about sustainedgrowth and opportunities in the natural resources sector. The US Commodity PriceIndex adjusted for CPI still suggests commodity price levels are near tohistoric lows in real terms. Much depends on whether the rise in demand from China, India and other emergingeconomies is sustainable over the medium to longer term. Supply constraintsexist in most commodities and the argument that the world is witnessing the next"secular change" in the commodity cycle certainly has merit. If we include oiland other related energies, we believe that commodities are an asset class thatis witnessing a genuine "paradigm shift" and not a bubble. There is unlikely tobe an economic collapse in China which has a balance of payments surplus and anundervalued currency. The Company's unquoted investments in exploration joint ventures, namelylicences in Sierra Leone and Ethiopia, are planned to be hived off into a newlisted vehicle. GOLDEN PROSPECT PLC INTERIM STATEMENT (Continued) ***** Principal Investments (Continued) The Company's 25% investment in Interactive Resource Information Limited, whichowns Minesite.com (which also owns a 25% interest in Oilbarrel.com) has enabledsignificant cross fertilisation of ideas at the junior end of the market and welook forward to continued fruits from this relationship. Minesite's uniqueposition and role within the industry remains unrivalled and its growth isreflected in significantly increased profitability. Outlook Golden Prospect stands at the centre of financing the natural resource sector,which includes extraction (metals, mining, oil and other energies): agriculturalproducts and environmental technologies. We have a sustainable competitiveadvantage based on the strength of our team and sector focus. We anticipatecontinued strength in commodity prices and see many opportunities for growth inthe resource sector for investment banking services and strategic investments. The Company is being increasingly recognised for its abilities in the resourcesector which is reflected by the growing list of high quality institutionalshareholders on the Company's share register; these include Artemis, City ofLondon, Fidelity, Framlington, Gartmore, Generali and Invesco. These seveninstitutions own almost 50% of the outstanding shares of the Company. Moreover, Golden Prospect is extremely encouraged by the recent appointment ofCollins Stewart Ltd as its Nominated Advisor and Corporate Broker. The board has agreed to establish a new equity incentive plan for the benefit ofits staff, under which options will be granted to purchase Golden Prospectshares. The share options will have certain vesting conditions. Shares requiredto meet option exercises will be purchased in the market and will accordinglynot dilute shareholders' interests; such share purchases will be hedged by theCompany. The purpose of these share options is to closely align the interests ofour staff with those of our shareholders. In summary, and as anticipated in our last report to shareholders the value ofthe Company is rapidly shifting from an emphasis on net asset value to anearnings growth valuation so that an investment decision should be based on aprice earnings ratio and other relevant fundamental factors. In this respectGolden Prospect stands significantly undervalued. Malcolm BurneChairman 16 September 2005 GOLDEN PROSPECT PLC UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT Six Months ended 30 June 2005 Six Six Months Months To To 30/6/05 30/6/04 £ £ Sales 14,030,636 2,471,796 Cost of sales (7,580,821) (1,683,094) Gross profit 6,449,815 788,702 Other operating income - dividends received 40,184 42,583 Administrative expenses (1,416,379) (260,131) Operating profit - continuing operations 5,073,620 571,154 Interest receivable 54,640 14,261Interest payable and similar charges (56,728) - Profit on ordinary activities before taxation 5,071,532 585,415 Tax on profit on ordinary activities (1,571,121) (126,817)Profit on ordinary activities after taxation 3,500,411 458,598Dividend (536,306) - Profit for the financial period 2,964,105 458,598 Profit per ordinary share - basic 3.26p 0.51p GOLDEN PROSPECT PLC UNAUDITED CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2005 30/6/05 30/6/04 £ £ £ £ FIXED ASSETSTangible fixed assets 106,367 3,129Intangible assets 4,300,614 2,234,986Investments 465,560 3,839,660 4,872,541 6,077,775 CURRENT ASSETS Investments 22,525,028 11,512,999Debtors 676,947 87,051Cash at bank and in hand 6,267,222 649,642 29,469,197 12,249,692CREDITORS: Amounts falling duewithin one year 6,005,860 1,218,609 NET CURRENT ASSETS 23,463,337 11,031,083TOTAL ASSETS LESS CURRENT LIABILITIES 28,335,878 17,108,858 CAPITAL AND RESERVESCalled up share capital 10,726,121 9,038,493Share premium account 12,048,639 8,365,450Profit and loss account 5,561,118 (295,085) EQUITY SHAREHOLDERS' FUNDS 28,335,878 17,108,858 GOLDEN PROSPECT PLC UNAUDITED CONSOLIDATD CASH FLOW STATEMENT Six months ended 30 June 2005 Unaudited Unaudited Six months to Six months to 30/06/05 30/06/04 £ £ Net cash inflow/(outflow) from operating activities 2,607,691 (157,160) Interest receivable 54,640 14,261Interest payable (56,728) - Net cash inflow/(outflow) from returns on investment andservicing of finance (2,088) 14,261 Capital expenditure and financial investmentPayments to acquire intangible fixed assets (98,983) (34,986)Payments to acquire tangible fixed assets (81,855) -Payments to acquire fixed asset investment - (453,837) Net cash inflow/(outflow) from capital expenditure andfinancial investment (180,838) (488,823) Net cash inflow/(outflow) before financing 2,424,765 (631,722)Issue of ordinary share capital - 349,989 Net cash inflow from financing - 349,989 Increase/(Decrease) in cash 2,424,765 (281,733) GOLDEN PROSPECT PLC NOTES TO THE UNAUDITED INTERIM ACCOUNTS Six months ended 30 June 2005 1 The calculation of earnings per share is based on the profit after tax of £3,500,411 (Period ended 30 June 2004 - £458,598) and on the number of shares in issue being the adjusted weighted average number of shares in issue during the period of 107,261,208 (Period ended 30 June 2004 - 90,045,211). 2 The interim statement for the six months ended 30 June 2005 is unaudited and was approved by the Directors on 15 September 2005. The financial information set out above does not constitute statutory accounts within the meaning of s.240 of the Companies Act 1985. 3 The accounting policies remain as stated in the Annual Report for the year ended 31 December 2004. 4 Copies of the Interim Report are available to the public free of charge from the company at Manfield House, 5th Floor, 1 Southampton Street, London WC2R 0LR during normal office hours, Saturdays, Sundays and bank holidays excepted, for 14 days from today . This information is provided by RNS The company news service from the London Stock Exchange