AMBR.L Regulatory News (AMBR)

26 Sep 2007 07:03

Ambrian Capital PLC26 September 2007 26th September 2007 AMBRIAN CAPITAL PLC Interim Results for the Six Months Ended 30 June 2007 Ambrian Capital plc, the independent investment bank, today announces itsinterim results for the six months ended 30 June 2007: Highlights Six months Six months Six months ended ended Year ended 2006-2007 30 June 2007 30 June 2006(1) 31 Dec 2006(1) Change £m £m £m % Investment Banking Revenue 5.35 4.23 8.43 +26.5Investment Portfolio Revenue 9.52 7.93 9.41 +20.0Total Revenue 14.87 12.16 17.84 +22.3Profit Before Tax 10.02 8.40 9.80 +19.3Earnings per Share from ContinuingOperations (pence) 6.60 5.50 6.44 +20.0Interim Dividend per Share (pence) 0.75 0.75 1.75 -Shareholders' Equity 51.91 47.31 45.75 +13.5(2)Shareholders' Equity per Share (pence) 47.81 43.78 42.33 +12.9(2) (1) 2006 figures re-stated to IFRS(2) Comparison with 31 December 2006 • Investment Banking performed well with revenues up 26.5% during the first half of 2007 - completed nine capital raisings with a total value of £68 million - commenced Market Making July 2007 - expansion of LME metals sales team - commenced trading carbon credits and soft commodities • The Investment Portfolio showed gains of £9.52 million during the first half of 2007 compared with £7.93 million for the first half of 2006 and £9.41 million for the year ended 31 December 2006 • Shareholders' equity increased by 13.5% to £51.91 million since 31 December 2006. • Cash resources, net of client deposits, totalled £19.91 million compared with £17.04 million at 31 December 2006, an increase of 16.8% • Sun Hung Kai Financial, Hong Kong's largest non-bank financial institution, acquired a 9.10% stake in Ambrian Capital in March 2007 Commenting on the results, Tom Gaffney, Chief Executive of Ambrian Capital plc,said: "During the first half of 2007 Ambrian Capital has made excellent progressin its Investment Banking business, growing revenue and building the platformfor the future growth of the Group. Our Investment Portfolio also experiencedsignificant gains over the period. We have built a strong position as a specialist Investment Bank focused on thewider resources and new technologies sectors. Our activities in these sectorsare diversified and include stockbroking, commodity dealing, asset managementand principal investment. Our sector specialisation and range of activities provide us with a competitiveadvantage and position us well to benefit from the continuing resource-intensivegrowth of China and India. Although the equity markets have been adversely affected in recent weeks by thecredit markets turmoil, we have seen the gold price surge to a 28 year high andthe oil price has recently hit an all time high. Whilst the InvestmentPortfolio has not been immune to the weakness in the equity markets,approximately 56% of the Investment Portfolio is exposed to precious metalsprices and approximately 28% to energy prices. As a result of the adoption of IFRS, we are required to mark-to-market the valueof our investments. Changes in the value of the Investment Portfolio are nowreported as revenues - this will result in short-term fluctuations in ourreported profits. Over the coming months the outlook for our business will depend on the impactthat the instability in the credit markets has on the global economy, and inparticular, emerging countries which have driven raw material demand.Nevertheless, we remain confident that the fundamental factors remain in placefor China and India to sustain their strong growth over the medium and longterm, from which we are well positioned to benefit". Enquiries: Tom Gaffney Chris Howard Justine Howarth / Louise GoodeveChief Executive Officer Collins Stewart Parkgreen CommunicationsAmbrian Capital plcTel: +44 (0)20 7776 6400 Tel: +44 (0)20 7523 8314 Tel: +44 (0)20 7851 7480 Notes to Editors: 1. Ambrian Capital is an AIM listed independent investment banking group.Ambrian Capital provides corporate finance, stockbroking, commodity broking andinvestment management services to institutional and corporate clients active inthe natural resources, alternative energy and new technology sectors. AmbrianCapital is also an active principal investor in the natural resources sector. 2. Ambrian Partners Limited, Ambrian Commodities Limited and Ambrian AssetManagement are all authorised and regulated by the Financial Services Authority.Ambrian Partners Limited is a member of the London Stock Exchange and AmbrianCommodities Limited is an Associate Broker member of the London Metal Exchange. 3. Further information on Ambrian Capital is available on the Company'swebsite: www.ambrian.com Chief Executive's Statement During the first half of 2007 Ambrian Capital has made excellent progress in itsInvestment Banking business, growing revenue and building the platform for thefuture growth of the Group. Our Investment Portfolio also experiencedsignificant gains over the period. We have further advanced our vision of creating an investment bank focused onthe wider resources sector to include mining, oil & gas, agricultural products,alternative energy and new technologies. During the first half of the year there were a number of changes to the board ofAmbrian Capital. Lawrence Banks was appointed Chairman of Ambrian Capital insuccession to Malcolm Burne who stood down at the Annual General Meeting on 22May 2007. Malcolm will remain an adviser to Ambrian Capital and to GoldenProspect Precious Metals Limited. We would also like to extend our thanks toRichard Lockwood, who stood down from the Board on 22 May, for his guidance andsupport. We are pleased to welcome Lee Seng Huang as a non-executive director of AmbrianCapital. Lee Seng Huang is Chairman of Sun Hung Kai Financial which purchased a9.10% interest in Ambrian Capital on 21 March 2007. We are also pleased to welcome Charles Crick as a Non-Executive Director.Charles trained as a Solicitor with Allen & Overy and from 1996 to 2004 was headof corporate finance and a main board director of Numis Corporation PLC. Financial Review From 2007 Ambrian Capital is required to report its full year consolidatedfinancial statements under International Financial Reporting Standards ("IFRS")as adopted by the European Union rather than under UK Generally AcceptedAccounting Principles ("UK GAAP") as we have done in the past. The consolidatedfinancial information reported for the six months to 30 June 2007 has beenprepared in accordance with accounting policies which will be adopted inpresenting the full year annual report and accounts. Accordingly (i) ourInvestment Portfolio at 30 June 2007 was valued on the Group's balance sheet atthen market prices rather than at the lower of cost or net realisable value and(ii) changes in the value of the Investment Portfolio are reported as revenue. Revenue for the first half of 2007 was £14.87 million (2006: £12.16 million),representing an increase of 22.3%. Investment Banking revenue for the first half of 2007 was £5.35 million (2006:£4.23 million). This represented a 26.5% increase over the first half of 2006and accounted for 36% of Group revenue (2006: 35%). Revenue from the Investment Portfolio was £9.52 million compared with £7.93million for the first half of 2006 and £9.41 million for the full year of 2006. Administrative expenses (including accrued incentive payments) were £4.82million (2006: £3.72 million), an increase of 29% primarily attributable toinvestment in additional staff and start-up costs associated with thecommencement of Market Making. Administrative expenses attributable toInvestment Banking (including accrued incentive payments) representedapproximately 67% of Investment Banking revenue. Profit before tax was £10.02 million (2006: £8.40 million), generating basicearnings per share from continuing operations of 6.60p, an increase of 20%. Balance Sheet The balance sheet remains strong with a substantial cash balance.Shareholders' equity was £51.91 million at 30 June 2007 compared with £45.75million at 31 December 2006, an increase of 13.5%. Our Investment Portfolio wasvalued at £34.37 million at 30 June 2007 of which 94% is in quoted investments.The Group's cash resources, net of client deposits, totalled £19.91 million at30 June 2007 compared with £17.04 million at 31 December 2006 and £6.71 millionat 30 June 2006. Our strong balance sheet ensures the resilience of our business and provides uswith the ability to take advantage of opportunities that may arise. We arecommitted to making efficient use of our capital. Dividend The Board declares payment of an interim dividend of 0.75p per share (2006:0.75p). The dividend will be payable on 2 November 2007 to all shareholders onthe register as at 12 October 2007. Investment Banking During the first half of 2007, each of our corporate finance and stockbroking,commodity dealing and asset management subsidiaries made further progress instrengthening their market positions. Our strategy of involvement in a range ofdifferent business activities in the natural resources sector has proved to besuccessful. During the first half of 2007, revenue from equity new issuesrepresented less than 25% of Investment Banking revenue. We have beenparticularly successful in developing our M&A advisory activities. Miningclients remain key to our business but these accounted for approximately 44% ofInvestment Banking revenue in the first half of 2007, demonstrating our successin building a client base that includes oil & gas, alternative energy andtechnology clients. Ambrian Partners Limited During the period, Ambrian Partners Limited, our corporate finance andstockbroking subsidiary, was involved in nine capital raisings with a totalvalue of approximately £68 million. At 31 August 2007, Ambrian Partners had 34retained corporate clients. During the first half of 2007 Ambrian Partners was involved in the followingequity placements: - £18 million for Sylvania Resources Limited- A$35 million (£15 million) for Monto Minerals Limited- £15 million for TMO Renewables Limited- £6 million for Zenergy Power plc- £4.5 million for IPSO Ventures plc Ambrian Partners was also active in providing M&A advisory services during thefirst half of 2007; notable transactions included: - Co-adviser to the Zijin Consortium on its recommended £95 million cash offer for Monterrico Metals plc - Adviser to Kalahari Minerals plc in connection with the £26.4 million merger of its uranium assets with Extract Resources Ltd. During the first half of 2007, Ambrian Partners appointed two experienced equitytraders and put in place the systems to become a registered Market Maker in theshares of selected companies on AIM. Market Making operations commenced at thebeginning of July 2007. Market Making enables Ambrian Partners to provide asuperior level of service to its institutional clients and further strengthensrevenue from secondary market activities. Ambrian Commodities Limited Ambrian Commodities' LME metals business continues to make good progress and hasbenefited from volatility in metals prices and high customer activity levels.Ambrian Commodities added to its sales team with the appointment of three highlyexperienced individuals who each brought with them his own client base tocomplement the existing one. These appointments have further strengthenedAmbrian Commodities' presence in the global metals market and at the same timehave broadened the geographical client base. Ambrian Commodities also recruited senior traders and salesmen to commencetrading in both the carbon credits and soft commodities markets. In January2007, Ambrian Commodities began trading carbon products quoted on the EuropeanClimate Exchange ("ECX") of which Ambrian Commodities is now a member. The moveinto carbon credits and soft commodity trading is a natural progression forAmbrian Commodities and is demonstrative of the Group's commitment to the widerresources sector. Ambrian Asset Management Limited Ambrian Asset Management is the manager of Golden Prospect Precious MetalsLimited ("GPPM"), a Guernsey registered, closed-ended investment fund listed onAIM dedicated to equity investments in the precious metals sector. GPPM was launched in November 2006 with an opening Net Asset Value ("NAV") pershare of 96.20p. GPPM had an NAV per share at 30 June 2007 of 114.84p, anincrease of 19.4% since launch. This compares with a 1.2% increase in the goldprice over the same period. GPPM's share price at 30 June 2007 was 113.5p andits market capitalisation was £14.7 million. In May 2007, Ambrian Capital placed 2.85 million shares of GPPM withinstitutional investors and reduced its interest in GPPM to 49.96%. As a resultGPPM has ceased to be a consolidated subsidiary of Ambrian Capital and is nowheld, instead, as an equity investment. Ambrian Asset Management receives a monthly management fee for managing GPPM andis eligible to receive a performance related fee at the end of the current yearequal to 20% of the increase in the NAV of GPPM after a hurdle of 8% has beenattained. Ambrian Asset Management continues to explore the possibility of launching newfunds in sectors in which the Group has expertise. Investment Portfolio The total value of Ambrian Capital's Investment Portfolio at 30 June 2007 was£34.37 million. Approximately 94% of the Investment Portfolio is in the sharesof quoted companies. Precious metals investments represented approximately 56% of the InvestmentPortfolio and energy investments represented a further 28% of the InvestmentPortfolio. The balance comprised a range of other resources and technologyorientated investments. Revenue from the Investment Portfolio for the six months ended 30 June 2007 was£9.52 million. Approximately £4.0 million of revenue from the InvestmentPortfolio was attributable to the 77.5% rise in the Jubilee Platinum share pricefrom 68.75p to 122p between 1 January 2007 and 30 June 2007. Ambrian Capitalholds 7.64 million Jubilee Platinum shares. The Investment Portfolio was valued at £32.11 million at 24 September 2007 ofwhich Jubilee Platinum represented £7.02 million. Listed Investments At 30 June 2007 the market value of our portfolio of listed investments was£32.41 million. Our top ten holdings had a total market value of £29.1 millionand were as follows: 1. Jubilee Platinum £9.3 million2. Golden Prospect Precious Metals £7.4 million3. Nido Petroleum £2.8 million4. Kairiki Energy £1.9 million5. Minerva Resources * £1.6 million6. Anglesey Mining £1.5 million7. Horizon Oil £1.4 million8. Samson Oil & Gas £1.3 million9. Nautical Petroleum £1.0 million10. Commodity Watch £0.9 million _____________ Total £29.1 million ============= * Listed 10 July 2007 Ambrian Capital's 8.8% holding in Jubilee Platinum (AIM: JLP) remains a coreinvestment as the company has valuable resource positions in South Africa andMadagascar. Our 49.96% interest in Golden Prospect Precious Metals (AIM: GPM) providesleveraged exposure to the precious metals sector. In July 2007, we concluded the successful capitalisation of our explorationassets by the sale of our exploration subsidiary, Golden Prospect Mining CompanyLimited, in exchange for 39.82% interest in the share capital of MinervaResources plc, an AIM listed exploration company. Minerva has an exciting management team and it is anticipated that withAmbrian's continued support they will unlock value from our former explorationassets. Also of note, during the first half of 2007, Commodity Watch plc (previouslycalled Minesite) was listed on Plus Markets. Ambrian Capital has a 25% holdingin the company. Unlisted Investments At 30 June 2007 the book value of Ambrian Capital's unlisted investments was£1.92 million. The reduction from £4.83 million at 31 December 2006 primarilywas attributable to the sale of the exploration assets in return for listedshares of Minerva and the listing of Commodity Watch. The unlisted investmentportfolio includes five stocks and a holding of 'A' and 'B' shares in the LondonMetal Exchange. Future Despite the fact that the majority of our Investment Portfolio is invested inthe shares of companies exposed to commodity prices, such as gold and oil, ithas not been immune to the downturn in the equity markets due to the instabilityin the credit markets to which we have no direct exposure. We remain confidentthat our Investment Portfolio comprises quality assets with good business modelsand growth potential. Moreover, our cash balances underpin a solid balancesheet. The focus of the Investment Banking businesses on the resources sector positionsus well to benefit from strength in the commodities markets and the growth inthe alternative energy sectors. The strengthening of our secondary marketequity trading operation, the expansion of our commodities trading business andthe initial contribution from our asset management business, all provide avenuesfor growth in a more volatile market environment. Tom GaffneyChief Executive26 September 2007 Unaudited condensed consolidated interim income statement 6 months to 30 6 months to 30 Year to 31 June 2007 June 2006 December 2006 £ £ £Continuing operationsRevenue 14,867,585 12,158,144 17,841,224 Administrative expenditure (4,819,484) (3,723,984) (8,003,165)Finance costs (28,652) (36,373) (36,615) ----------------------------------------------Profit before tax 10,019,449 8,397,787 9,801,444 Taxation (3,011,130) (2,574,900) (2,995,305) ----------------------------------------------Profit for the period from continuing 7,008,319 5,822,887 6,806,139operations Discontinued operationsLoss for the period from discontinued operations - - (1,732,261) ---------------------------------------------- Profit for the period 7,008,319 5,822,887 5,073,878 ==============================================Attributable to:Equity holders of the parent 7,008,319 5,822,887 5,073,878 ---------------------------------------------- 7,008,319 5,822,887 5,073,878 ============================================== Earnings per share: Pence Pence Pence Basic earnings per share from continuing operations 6.60 5.50 6.44 ========== ========== ==========Diluted earnings per share from continuing operations 6.25 5.22 6.12 ========== ========== ==========Basic earnings per share from discontinued operations - - (1.63) ========== ========== ==========Diluted earnings per share from discontinued operations - - (1.55) ========== ========== ==========Basic earnings per share 6.60 5.50 4.81 ========== ========== ==========Diluted earnings per share 6.25 5.22 4.57 ========== ========== ========== Unaudited condensed consolidated interim balance sheet 30 June 2007 30 June 2006 31 December 2006 £ £ £ ASSETS Non-current assetsProperty, plant and equipment 173,054 203,728 199,766Goodwill 1,836,828 1,836,828 1,836,828Other intangible assets - 2,626,765 - ------------------------------------------------ 2,009,882 4,667,321 2,036,594 ------------------------------------------------ Current assetsFinancial assets 32,810,513 40,357,085 34,739,291Trade and other receivables 3,976,535 6,986,820 3,856,631Cash and cash equivalents 26,796,044 14,166,055 30,408,289 ------------------------------------------------ 63,583,092 61,509,960 69,004,211 Non-current assets classified as held for sale 1,557,500 - 1,557,500 ------------------------------------------------ 65,140,592 61,509,960 70,561,711 -----------------------------------------------Total assets 67,150,474 66,177,281 72,598,305 ================================================ LIABILITIES Current liabilitiesTrade and other payables (2,034,403) (2,253,643) (4,198,794)Amounts due to clients (6,883,254) (7,457,050) (13,371,613)Current tax payable (1,573,639) (3,762,538) (3,091,685) ----------------------------------------------- (10,491,296) (13,473,231) (20,662,092) ----------------------------------------------- Non-current liabilitiesDeferred tax liabilities (4,752,717) (5,393,901) (2,706,549) ----------------------------------------------- Total non-current liabilities (4,752,717) (5,393,901) (2,706,549) ----------------------------------------------- Total liabilities (15,244,013) (18,867,132) (23,368,641) -----------------------------------------------Net assets / liabilities 51,906,461 47,310,149 49,229,664 =============================================== Unaudited Condensed consolidated interim balance sheet (continued) 30 June 2007 30 June 2006 31 December 2006 £ £ £EQUITY EquityShare capital 10,856,121 10,806,121 10,806,121Share premium 12,194,639 12,094,639 12,094,639Treasury shares (163,217) - (163,217)Related earnings 30,242,673 25,811,019 24,278,739Employee benefit trust (1,813,557) (1,813,557) (1,813,557)Reserve for share based payments 589,802 411,927 543,262 --------------------------------------------Total equity attributable to equity 51,906,461 47,310,149 45,745,987holders of the parentMinority interest - - 3,483,677 --------------------------------------------Total equity 51,906,461 47,310,149 49,229,664 ============================================ Unaudited condensed consolidated interim statement of changes in equity Share Share Other Profit and Total Minority Total capital premium equity loss interest equity account reserves account £ £ £ £ £ £ £ Balance at 31 December 2005 10,726,121 12,048,639 168,957 20,791,092 43,734,809 - 43,734,809 -------------------------------------------------------------------------------------------------Changes in equity for first halfof 2006Purchase of shares - - (1,701,921) - (1,701,921) - (1,701,921)Share option charge - - 131,334 - 131,334 - 131,334Profit for the the period - - - 5,822,887 5,822,887 - 5,822,887 ------------------------------------------------------------------------------------------------- Total recognised income andexpense for theperiod - - (1,570,587) 5,822,887 4,252,300 - 4,252,300Dividends - - - (802,960) (802,960) - (802,960)Issue of share share capital 80,000 46,000 - - 126,000 - 126,000 -------------------------------------------------------------------------------------------------Balance at 30 June 2006 10,806,121 12,094,639 (1,401,630) 25,811,019 47,310,149 - 47,310,149 ================================================================================================= Unaudited condensed consolidated interim statement of changes in equity(continued) Share Share Other Profit and Total Minority Total capital premium equity loss interest equity account reserves account £ £ £ £ £ £ £ Balance at 31 December 2005 10,726,121 12,048,639 168,957 8,529,698 31,473,415 - 31,473,415Changes in accounting policy - - - 12,261,394 12,261,394 - 12,261,394 -------------------------------------------------------------------------------------------------Restated balance at31 December 2005 10,726,121 12,048,639 168,957 20,791,092 43,734,809 - 43,734,809 ------------------------------------------------------------------------------------------------- Changes in equity for 2006Minority interest arising onacquisition - - - - - 3,483,677 3,483,677Purchase of shares - - (1,865,138) - (1,865,138) - (1,865,138)Share option charge - - 262,669 - 262,669 - 262,669Profit for the period - - - 5,073,878 5,073,878 - 5,073,878 -------------------------------------------------------------------------------------------------Total recognised income and expense for the period - - (1,602,469) 5,073,878 3,471,409 3,483,677 6,955,086Dividends - - - (1,586,231) (1,586,231) - (1,586,231)Issue of share capital 80,000 46,000 - - 126,000 - 126,000 -------------------------------------------------------------------------------------------------Balance at 31 December 2006 10,806,121 12,094,639 (1,433,512) 24,278,739 45,745,987 3,483,677 49,229,664 ================================================================================================= Unaudited condensed consolidated interim statement of changes in equity(continued) Share Share Other Profit and Total Minority Total capital premium equity loss interest equity account reserves account £ £ £ £ £ £ £ Balance at 31 December 2006 10,806,121 12,094,639 (1,433,512) 22,228,739 45,745,987 3,483,677 49,229,664 Changes in equity for 2007Elimination of minority interest - - - - - (3,483,677) (3,483,677)Share option charge - - 46,540 - 46,540 - 46,540Profit for the period - - - 7,008,319 7,008,319 - 7,008,319 -------------------------------------------------------------------------------------------------Total recognised income and expense for the period - - 46,540 7,008,319 7,054,859 (3,483,677) 3,571,182Dividends - - - (1,044,385) (1,044,385) - (1,044,385)Issue of share capital 50,000 100,000 - - 150,000 - 150,000 -------------------------------------------------------------------------------------------------Balance at 30 June 2007 10,856,121 12,194,639 (1,386,972) 30,242,673 51,906,461 - 51,906,461 ================================================================================================= Unaudited condensed consolidated interim cash flow statement 6 months to 30 6 months to 30 Year to 31 June 2007 June 2006 December 2006 Restated Restated £ £ £Cash flows from operating activitiesProfit after taxation 7,008,319 5,822,887 5,073,878Adjustments for: - - -Depreciation 43,132 23,014 79,118Foreign exchange (gain)/loss (331,825) 409,220 548,737Investment income (270,077) (148,532) (593,096)Taxation expense recognised in profit and loss 3,011,130 2,574,900 2,995,305(Increase) in trade and other receivables (119,904) (5,356,984) (2,226,795)Decrease/(increase) in financial assets 1,928,778 1,291,009 6,908,803(Decrease)/Increase in trade payables (2,164,391) 968,190 2,797,618(Decrease)/Increase in amounts owed to clients (6,488,357) 7,457,050 13,371,613Employee benefit trust - (1,701,921) (1,701,921)Share base payment reserve 46,540 131,334 262,669Loss on discontinued operations - - 1,732,261 -----------------------------------------------Cash generated from operations 2,663,345 11,470,167 29,248,190 Income taxes paid (2,483,010) (505,794) (4,302,766) -----------------------------------------------Net cash from operating activities 180,335 10,964,373 24,945,424 ----------------------------------------------- Cash flows from investing activities Purchase of property, plant and equipment (16,420) (87,943) (140,085)Purchase of intangible fixed assets - (29,895) (558,805)Investment income 270,077 148,532 593,096 -----------------------------------------------Net cash used in investing activities 253,657 30,694 (105,794) ----------------------------------------------- Cash flows from financing activitiesProceeds from issue of share capital 150,000 126,000 126,000Treasury shares acquired - - (163,217)Bank loan repayment - (1,500,000) (1,500,000)Minority interests (3,483,677) - 3,483,677Dividends paid (1,044,385) (802,959) (1,586,231) -----------------------------------------------Net cash used in financing activities (4,378,062) (2,176,959) 360,229 ----------------------------------------------- Net increase in cash and cash equivalents (3,944,070) 8,818,108 25,199,859Cash and cash equivalents at beginning of period 30,408,289 5,757,167 5,757,167Foreign exchange gains/(losses) 331,825 (409,220) (548,737) -----------------------------------------------Cash and cash equivalents at end of period 26,796,044 14,166,055 30,408,289 =============================================== Notes to the unaudited condensed consolidated interim financial statements 1 Basis of preparation These interim condensed consolidated financial statements are for the six monthsended 30 June 2007. They have been prepared in accordance with the requirementsof IFRS 1 "First-time Adoption of International Financial Reporting Standards"relevant to interim reports, because they are part of the period covered by theGroup's first IFRS financial statements for the year ended 31 December 2007.They do not include all of the information required for full annual financialstatements, and should be read in conjunction with the consolidated financialstatements of the Group for the year ended 31 December 2006. These condensed consolidated interim financial statements have been preparedunder the historical cost convention, except for revaluation of certainproperties and financial instruments. These condensed consolidated interim financial statements (the interim financialstatements) have been prepared in accordance with the accounting policies setout below which are based on the recognition and measurement principles of IFRSin issue as adopted by the European Union (EU) and are effective at 31 December2007 or are expected to be adopted and effective at 31 December 2007, our firstannual reporting date at which we are required to use IFRS accounting standardsadopted by the EU. Ambrian Capital plc's consolidated financial statements were prepared inaccordance with United Kingdom Accounting Standards (United Kingdom GenerallyAccepted Accounting Practice) until 31 December 2006. The date of transition toIFRS was 1 January 2006. The comparative figures in respect of 2006 have beenrestated to reflect changes in accounting policies as a result of adoption ofIFRS. The disclosures required by IFRS 1 concerning the transition from UK GAAPto IFRS are given in the reconciliation schedules, presented and explained innote 5. The accounting policies have been applied consistently throughout the Group forthe purposes of preparation of these condensed consolidated interim financialstatements. The financial information set out in this interim report does not constitutestatutory accounts as defined in Section 240 of the Companies Act 1985. TheGroup's statutory financial statements for the year ended 31 December 2006,prepared under UK GAAP, have been filed with the Registrar of Companies. Theauditor's report on those financial statements was unqualified/qualified and didnot/did contain a statements under Section 237(2) of the Companies Act 1985. The Interim Statement was approved by the Directors on 25 September 2007 andcopies are available to the public free of charge from the company at 8 AngelCourt, London EC2R 7HP during normal office hours, Saturdays, Sundays and BankHolidays exempted, for 14 days from today. 2 Revenue The group's revenue is derived from investment banking and management. 6 months to 30 June 2007 - unaudited Investment banking Investment Total portfolio Operating revenue 5,352,784 9,514,801 14,867,585 =========================================================== 6 months to 30 June 2006 - unaudited Investment banking Investment Total portfolio Operating revenue 4,229,172 7,928,972 12,158,144 =========================================================== Year to 31 December 2006 - unaudited Investment banking Investment Total portfolio Operating revenue 8,429,339 9,411,885 17,841,224 =========================================================== Operating revenue includes investment and other income. The investmentportfolio includes realised and unrealised gains on financial assets. 3 Share issue During the period to 30 June 2007 500,000 shares were issued as a result of theexercise of share options. Shares issued and authorised for the period to 30June 2007 may be summarised as follows: 6 months to 30 June 2007 - unaudited Number £ At 1 January 2007 108,061,208 10,806,121Issue of shares 500,000 50,000At 30 June 2007 108,561,208 10,856,121 ================================= 6 months to 30 June 2006 - unaudited Number £ At 1 January 2006 107,261,208 10,726,121Issue of shares 800,000 80,000At 30 June 2006 108,061,208 10,806,121 ================================= Year to 31 December 2006 - unaudited Number £ At 1 January 2006 107,261,208 10,726,121Issue of shares 800,000 80,000At 31 December 2006 108,061,208 10,806,121 ================================= 4 Earnings per share The calculation of the basic earnings per share is based on the earningsattributable to ordinary shareholders divided by the weighted average number ofshares in issue during the year. Shares held in employee share trusts aretreated as cancelled for the purposes of this calculation. The calculation of diluted earnings per share is based on the basic earnings pershare, adjusted to allow for the issue of shares and the post tax effect ofdividends and/or interest, on the assumed conversion of all dilutive options andother dilutive potential ordinary shares. Reconciliations of the earnings and weighted average number of shares used inthe calculations are set out below. 6 months to 30 June 2007 - unaudited Earnings Weighted average Per share number of shares amount £ Pence Total operations - all continuing operationsEarnings attributable to ordinary shareholders 7,008,319Weighted average number of shares (used for basic earnings per share) 108,207,617Shares held in Treasury and Employee Benefit Trust 2,056,712 ------------ 106,150,905Dilutive effect of options 6,024,242 ------------Diluted weighted average number of shares (used for diluted earnings per share) 112,175,147 Basic earnings per share 6.60 =========Diluted earnings per share 6.25 ========= 6 months to 30 June 2006 - unaudited Earnings Weighted average Per share number of shares amount £ Pence Total operations - all continuing operationsEarnings attributable to ordinary shareholders 5,822,887Weighted average number of shares (used for basic 107,544,081earnings per share)Shares held in Employee Benefit Trust 1,731,712 ------------ 105,812,369Dilutive effect of options 5,638,796 ------------Diluted weighted average number of shares (used for diluted earnings per share) 111,451,165 Basic earnings per share 5.50 =========Diluted earnings per share 5.22 ========= Year to 31 December 2006 - unaudited Earnings Weighted average Per share number of shares amount £ Pence Continuing operations Earnings attributable to ordinary shareholders 6,806,139Weighted average number of shares (used for basic earnings per share) 107,804,770Shares held in Treasury and Employee Benefit Trust 2,056,712 ------------ 105,448,058Dilutive effect of options 5,390,248 ------------Diluted weighted average number of shares (used for diluted earnings per share) 111,138,306 Basic earnings per share 6.44 =========Diluted earnings per share 6.12 ========= Discontinued operationsEarnings attributable to ordinary shareholders (1,732,261)Weighted average number of shares (used for basic earnings per share) 107,804,770Shares held in Treasury and Employee Benefit Trust 2,056,712 ------------ 105,448,058Dilutive effect of options 5,390,248 ------------Diluted weighted average number of shares (used for diluted earnings per share) 111,138,306 Basic earnings per share (1.63) =========Diluted earnings per share (1.55) ========= Total operationsEarnings attributable to ordinary shareholders 5,073,878Weighted average number of shares (used for basic earnings per share) 107,804,770Shares held in Treasury and Employee Benefit Trust 2,056,712 ------------ 105,448,058Dilutive effect of options 5,390,248 ------------ Diluted weighted average number of shares (used for diluted earnings per share) 111,138,306 Basic earnings per share 4.81 =========Diluted earnings per share 4.57 ========= 5. Explanation of transition to IFRS As stated in the Basis of Preparation, these are the Group's first condensedconsolidated interim financial statements for part of the period covered by thefirst IFRS annual consolidated financial statements prepared in accordance withIFRS. An explanation of how the transition from UK GAAP to IFRS has affected theGroup's financial position, financial performance and cash flows is set outbelow. IFRS 1 permits companies adopting IFRS for the first time to take certainexemptions from the full requirements of IFRS in the transition period. Theseinterim financial statements have been prepared on the basis of taking thefollowing exemptions: • business combinations prior to 1 January 2006, the Group's date oftransition to IFRS, have not been restated to comply with IFRS 3 "BusinessCombinations". Goodwill arising from these business combinations of £1,836,828has not been restated other than as set out in note a below. • cumulative translation differences on foreign operations are deemedto be nil at 1 January 2006. Any gains and losses recognised in theconsolidated income statement on subsequent disposal of foreign operations willexclude translation differences arising prior to the transition date • the entity has elected not to apply IAS 21 "The Effects of Changesin Foreign Exchange Rates" retrospectively to goodwill and fair valueadjustments arising on business combinations before the Group's date oftransition to IFRS. Such goodwill and fair value adjustments are not treated asforeign currency assets and so are not retranslated at each reporting date. Reconciliation of equity at 1 January 2006 - unaudited Note UK GAAP a b c d e f IFRS £ £ £ £ £ £ £ £ Non-current assets Property, plant and equipment 138,799 - - - - - - 138,799Goodwill 1,836,828 - - - - - - 1,836,828Other intangible assets 2,596,870 - - - - - - 2,596,870Deferred tax assets 84,178 - - - - (84,178) - - Current assets Financial assets 24,131,817 - 17,516,277 - - - - 41,648,094Trade and other receivables 1,629,836 - - - - - - 1,629,836Cash and cash equivalents 5,757,167 - - - - - - 5,757,167 Current liabilities Trade and other payables (1,149,443) - - - - - - (1,149,443)Short-term borrowings (1,500,000) - - - - - - (1,500,000)Current tax payable (1,916,627) - - - - - - (1,916,627)Other taxes and social security (136,010) - - - - - - (136,010) Non-current liabilities Deferred tax - - - - (5,254,883) 84,178 - (5,170,705) ----------------------------------------------------------------------------------------------Net assets 31,473,415 - 17,516,277 - (5,254,883) - - 43,734,809 ==============================================================================================Equity Share capital 10,726,121 - - - - - - 10,726,121Share premium account 12,048,639 - - - - - - 12,048,639Profit and loss account 8,529,698 - 17,516,277 - (5,254,883) - - 20,791,092Reserve for share based payments 280,593 - - - - - - 280,593Employee benefit trust (111,636) - - - - - - (111,636) ----------------------------------------------------------------------------------------------Total equity 31,473,415 - 17,516,277 - (5,254,883) - - 43,734,809 ============================================================================================== Reconciliation of equity at 30 June 2006 - unaudited Note UK GAAP a b c d e f IFRS £ £ £ £ £ £ £ £ Non-current assets Property, plant and equipment 203,728 - - - - - - 203,728Goodwill 1,787,846 48,982 - - - - - 1,836,828Other intangible assets 2,626,765 - - - - - - 2,626,765Deferred tax assets 84,178 - - - - (84,178) - - Current assets Financial assets 22,096,820 - 18,260,265 - - - - 40,357,085Trade and other receivables 6,986,820 - - - - - - 6,986,820Cash and cash equivalents 14,166,055 - - - - - - 14,166,055 Current liabilities Trade and other payables (9,710,693) - - - - - - (9,710,693)Current tax payable (3,762,538) - - - - - - (3,762,538) Non-current liabilities Deferred tax - - - - (5,478,079) 84,178 - (5,393,901) ----------------------------------------------------------------------------------------------Net assets 34,478,981 48,982 18,260,265 - (5,478,079) - - 47,310,149 ============================================================================================== Equity Share capital 10,806,121 - - - - - - 10,806,121Share premium account 12,094,639 - - - - - - 12,094,639Profit and loss account 13,111,185 48,982 18,260,265 (131,334) (5,478,079) - - 25,811,019Reserve for share based payments 280,593 - - 131,334 - - - 411,927Employee benefit trust (1,813,557) - - - - - - (1,813,557) ----------------------------------------------------------------------------------------------Total equity 34,478,981 48,982 18,260,265 - (5,478,079) - - 47,310,149 ============================================================================================== Reconciliation of equity at 1 January 2007 - unaudited Note UK GAAP a b c d e f IFRS £ £ £ £ £ £ £ £ Non-current assets Property, plant and equipment 199,766 - - - - - - 199,766Goodwill 1,738,864 97,964 - - - - - 1,836,828Other intangible assets 3,155,675 - - - - - (3,155,675) -Deferred tax assets 1,727,034 - - - - (1,727,034) - - Current assets Financial assets 19,960,680 - 14,778,611 - - - - 34,739,291Trade and other receivables 3,856,631 - - - - - - 3,856,631Cash and cash equivalents 30,408,289 - - - - - - 30,408,289Non-current assets classified as held for sale - - - - - - 1,557,500 1,557,500 Current liabilities Trade and other payables (17,436,322) - - - - - (134,085) (17,570,407)Current portion of long-term borrowings - - - - - - - -Current tax payable (3,091,685) - - - - - - (3,091,685)Non-current liabilities Deferred tax - - - - (4,433,583) 1,727,034 - (2,706,549) ----------------------------------------------------------------------------------------------Net assets 40,518,932 97,964 14,778,611 - (4,433,583) - (1,732,260) 49,229,664 ==============================================================================================Equity Share capital 10,806,121 - - - - - - 10,806,121Share premium account 12,094,639 - - - - - - 12,094,639Treasury shares (163,217) - - - - - - (163,217)Profit and loss account 15,568,007 97,964 14,778,611 - (4,433,583) - (1,732,260) 24,278,739Reserve for share based payments 543,262 - - - - - - 543,262Employee benefit trust (1,813,557) - - - - - - (1,813,557) ----------------------------------------------------------------------------------------------Total equity 40,518,932 97,964 14,778,611 - (4,433,583) - (1,732,260) 49,229,664 ============================================================================================== Reconciliation of profit for the 6 months ended 30 June 2006 - unaudited UK GAAP a b c d e f IFRS £ £ £ £ £ £ £ £ Continuing operationsRevenue 11,414,156 - 743,988 - - - - 12,158,144Administrative costs (3,641,632) 48,982 - (131,334) - - - (3,723,984)Finance costs (36,373) - - - - - - (36,373) ----------------------------------------------------------------------------------------------Profit before tax 7,736,151 48,982 743,988 (131,334) - - - 8,397,787Taxation (2,351,704) - - - (223,196) - - (2,574,900) ----------------------------------------------------------------------------------------------Profit for the period from continuing operations 5,384,447 48,982 743,988 (131,334) (223,196) - - 5,822,887Loss for the period from discontinued operations - - - - - - - - ----------------------------------------------------------------------------------------------Profit before tax 5,384,447 48,982 743,988 (131,334) (223,196) - - 5,822,887 ============================================================================================== Reconciliation of profit for the year to 31 December 2006 - unaudited UK GAAP a b c d e f IFRS £ £ £ £ £ £ £ £ Continuing operations Revenue 20,578,890 - (2,737,666) - - - - 17,841,224Administrative costs (8,101,128) 97,964 - - - - - (8,003,164)Finance costs (36,616) - - - - - - (36,616) ----------------------------------------------------------------------------------------------Profit before tax 12,441,146 97,964 (2,737,666) - - - - 9,801,444Taxation (3,816,605) - - - 821,300 - (2,995,305) ----------------------------------------------------------------------------------------------Profit for the period from continuing operations 8,624,541 97,964 (2,737,666) - 821,300 - - 6,806,139Profit for the period from discontinued operations - - - - - - (1,732,261) (1,732,261) ----------------------------------------------------------------------------------------------Profit before tax 8,621,541 97,964 (2,737,666) - 821,300 - (1,732,261) 5,073,878 ============================================================================================== Notes on reconciliations of equity a) Goodwill recognised by the Group on acquisition of its subsidiaries under UKGAAP was amortised over a period of 20 years. Under IFRS goodwill is notamortised, but tested annually for impairment. The goodwill amortisation chargerecognised in accordance with UK GAAP in 2006 was written back. However,intangible assets identified on this business combination in accordance withIFRS as described above are included at their net book value as at 31 December2005. b) Under UK GAAP the group included listed and unlisted investments at cost.However, under IFRS these are included at market value. Accordingly, anunrealised gain of £17,516,277 at 1 January 2006 has been credited to the incomestatement. Operating income has been increased by £743,988 for the 6 monthsended 30 June 2006 and decreased by £2,737,666 for the year ended 31 December2006. c) Under FRS 20 liabilities in respect of share based payments have only beenrecognised in the financial statements for the year ended 31 December 2006, withthe balance sheet as at 31 December 2005 duly restated. Under IFRS theseliabilities are recognised in all accounting periods under review.Accordingly, a charge of £131,334 is made to the income statement for the 6months ended 30 June 2006. d) Under FRS 19 deferred tax was only recognised on timing differences; incontrast, IAS 12 "Income Taxes" requires the recognition of all temporarydifferences. Under UK GAAP, investments are carried on the balance sheet atcost, and no deferred tax arises whereas under IRFS investments are carried onthe balance sheet at market value and deferred tax liabilities are recognised.The effect of this adjustment is to create deferred tax liabilities of£5,254,883 at 1 January 2006, £5,470,080 at 30 June 2006, and £4,433,583 at 31December 2006 and to increase the tax charge for the period ended 30 June 2006by £506,810 and decrease the tax charge for the year ended 31 December 2006 by£821,300. e) The UK GAAP financial statements include a deferred tax asset of £84,178 at 1January 2006 and 30 June 2006 and £162,979 at 31 December 2006 in respect of thetaxation relief on the charge to profits for share based payment. This deferredtax asset has been offset against the deferred tax liabilities set out at (d)above. The UK GAAP accounts at 31 December 2006 include a further deferred tax asset of£1,564,055 in respect of taxation charged on the profits on the sale ofinvestments between group companies. As the profit has been recognised underIFRS with the appropriate taxation charge, the deferred asset has been debitedto deferred tax for the year ended 31 December 2006. f) In November 2006, the group commenced negotiations for the sale of itsexploration assets to Palladex plc in exchange for Palladex shares. In the UKGAAP accounts these explorations assets were included in intangible fixed assetsat cost of £3,155,675. Under IFRS, these assets should be disclosed asnon-current assets classified as held for sale at their fair value of£1,557,500. Accordingly, the IFRS accounts for the year ended 31 December 2006include a loss on discontinued activities of £1,732,261. Explanation of material adjustments to the cash flow statement Application of IFRS has resulted in reclassification of certain items in thecash flow statement as follows: (i) under UK GAAP, payments to acquire property, plant and equipment wereclassified as part of 'Capital expenditure and financial investment'. UnderIFRS, payments to acquire property, plant and equipment have been classified aspart of 'Investing activities'. (ii) income taxes of £4,302,766 paid during 2006 are classified as operatingcash flows under IFRS, but were included in a separate category of tax cashflows under previous GAAP. There are no other material differences between the cash flow statementpresented under IFRS and the cash flow statement presented under UK GAAP. This information is provided by RNS The company news service from the London Stock Exchange