AMBR.L Regulatory News (AMBR)

19 Sep 2006 07:02

Golden Prospect PLC19 September 2006 GOLDEN PROSPECT PLC INTERIM STATEMENT Highlights Golden Prospect plc (AIM:GOL), the investment bank, today announced recordinterim results for the six months ended 30 June 2006. • Basic earnings per share up 53% to 5.01p (2005: 3.26p) • Net profit up 53% to £5.38 million (2005: £3.50 million) • Profit before tax up 52% to £7.74 million (2005: £5.07 million) • Gross profits up 74.5% to £11.26 million (2005: £6.45 million) • Trading activities and realisations of portfolio investments produced gross profits of £7.18 million (2005: £5.14 million) which were up 40% • Investment Banking activities produced gross profits of £4.08 million, more than triple the prior year (2005: £1.32 million) and represented 37% of the Group's total gross profits • Shareholders' equity plus unrealised gains on listed investments of £52.32 million, or 48.4p per share, up 9% since 31 December 2005 which comprised £47.01 million net current assets at market value (cost: £29.08 million) and £5.31 million represented unquoted assets and goodwill • Cash at bank and in hand £14.17 million (2005: £6.27 million) • Annualised return on shareholders' equity of 32.7% • Interim dividend of 0.75p (2005: 0.5p) • Proposed name change to Ambrian Capital plc Commenting on the results, Malcolm Burne, Chairman of Golden Prospect plc, said: "We are pleased to report our record performance for the first half of the year.Our Investment Banking activities have grown rapidly and now representapproximately 37% of the Group's gross profits. We have at the same timecontinued to successfully realise gains from our Trading and InvestmentPortfolios. We remain confident that our highly talented team of dedicatedprofessionals can deliver even greater returns from the Group's growing range ofactivities and services." - Ends - Enquiries: Malcolm Burne, Chairman Tel: +44 (0)20 7395 1933Golden Prospect plc Tom Gaffney, Chief Executive Officer Tel: +44(0)20 7776 6411Golden Prospect plc Cathy Malins Tel: +4(0)20 7493 3713Parkgreen Communications Limited Further information on the Group and its activities is available on the Group'swebsite: www.goldenprospectplc.com Chairman's Statement Results The Directors are pleased to report that the Group's profit before tax for thesix months ended 30 June 2006 increased by more than 52% to a record £7,736,151(2005: £5,071,532). Basic earnings per share increased by 53% to 5.01p from3.26p. The Group's gross profits increased 74% to £11,260,531 from £6,449,815.Investment Banking activities accounted for approximately 37% of gross profitswhile realised profits arising from our trading and investment activitiesaccounted for approximately 63%. The Group's shareholders' equity at 30 June 2006 was £34,394,803, 30 June 2005(£28,335,878). The market value of listed investments at 30 June 2006 wasapproximately £39 million including unrealised gains of £18 million. The Group's cash resources increased to £14,166,055 compared with £6,267,222 at30 June 2005. Dividend The Board declares payment of an interim dividend of 0.75p per share (2005:0.5p). The dividend will be payable on 17 November 2006 to all shareholders onthe register on 27 October 2006. Ambrian - Investment Banking Investment Banking gross profits for the first half of 2006 were £4.08 million,up 210% from £1.31 million for the six months to 30 June 2005 reflecting therapid growth of our Investment Banking activities and favourable marketconditions. Ambrian Partners Limited Ambrian Partners Limited ("APL"), the wholly owned corporate finance andstockbroking subsidiary, was involved in ten capital raising transactions with atotal value of approximately £100 million, including three Initial PublicOfferings on AIM. At 30 June 2006 APL had 29 retained corporate clients comparedwith 13 at the same time last year. APL has made significant progress in broadening the industry sectors in which itis active and has recruited additional talented staff. APL will replicate theindustry specialist business model, which has been successfully implemented inthe natural resources sector. Broadening sectoral expertise provides new growthopportunities and ensures the development of a corporate finance andstockbroking business that is sustainable over the long term. APL is now activein six industry sectors - mining, oil & gas, soft commodities, renewable energy,telecommunications and technology - where the quality of APL's research and theexpertise of its sector teams have given APL a competitive edge. Over time, APLwill consider entry into additional industry sectors but these must offer APLthe potential to become a sector leader. The transaction "pipeline" for the second half of 2006 is healthy with mandatedtransactions in various industry sectors. Ambrian Commodities Limited In April 2006 Golden Prospect launched Ambrian Commodities Limited ("ACL"), anAssociate Broker Member of The London Metal Exchange. ACL offers its clients afull range of commodities dealing services and is a broker/dealer of aluminium,copper, lead, nickel and zinc. It is also active in physical metals dealing. InAugust 2006 ACL announced that it would commence quoting and trading in preciousmetals (gold, silver, platinum and palladium). Its business is client-driven andits clients are located throughout the world and run through the entire metalssupply chain, from miners to final industrial users. ACL made an immediate profit contribution in its first three months of tradingafter start-up costs and is rapidly becoming a significant arm of the GoldenProspect business. ACL business benefited from robust customer activity levelsand high volatility in metals prices. ACL is actively exploring the possibility of becoming a broker/dealer in othercommodities traded on regulated exchanges. Ambrian Asset Management Ambrian Asset Management Limited ("AAM") obtained approval from the FinancialServices Authority in February 2006 to manage and advise on investments forthird parties. It plans to launch a series of funds focusing on specialistsectors, which complement the expertise of APL. In due course, we expect AAM tobecome a significant contributor of earnings generated from investmentmanagement fees and performance fees. Principal Investments Gross profits from realisations from the Managed and Strategic Portfolios forthe first half of 2006 were £7.18 million, up 40% from £5.14 million for thehalf-year ended 30 June 2005. During the first half of 2006 further partial disposals were made within theStrategic Portfolio while, at the same time, certain holdings in the ManagedPortfolio were realised as and when liquidity permitted. The Group continues to be committed to its shareholdings in Jubilee Platinum,Samson Oil & Gas, Mano River Resources, Uruguay Minerals, Anglesey Mining andCentamin Egypt. These companies are performing strongly with excellent news ontheir various exploration or development programmes. Each of these companiescan be expected to make important contributions to the principal investmentreturns in the future. The principal investment policy continues to favour the highest portfolioweighting in gold and precious metal shares (gold, silver, platinum). Energy(oil and gas, coal and particularly uranium) are also still attractively priced. As always, the investment policy has been focused on companies that complementour investment banking activities, have geographical spread and the capabilityof either going into production in the medium term or being absorbed by a majorcompetitor in an intensifying merger and acquisitions marketplace. The rationalisation leg of the current cycle continues apace and the next stageshould be the discovery phase of new deposits (reflecting considerable financingof exploration), which will keep strong focus on the resource sector in terms ofinvestor interest. The Group remains at the centre of financing the natural resources/commoditysector. The rapidly expanding BRIC economies (Brazil, Russia, India and China)continue to provide very robust conditions in most commodity markets. As supplyand demand is substantially out of balance for nearly all commodities, theDirectors believe that the bull market in this sector although volatile fromtime to time, is still in an upward cycle. The shortest commodities bull marketlasted 15 years, the longest 23 years so, in theory, the current cycle still hasa long way to go with the US commodity price index adjusted for CPI stillindicating that commodity price levels are yet to reach previous peaks. Investment funds, both large and small, are demonstrating a greater appetite formeasured risk where the case for investment can be reasoned by virtue offundamental analysis and not by momentum trading, i.e. short term volatility aswitnessed recently in nickel and copper. Certainly the base metals haveprovided investors with substantial returns in the recent past but must now bedeemed risky at these higher levels as speculation is beginning to distortfundamentals. The Directors therefore favour increasing exposure to preciousmetals. Demand from vast liquidity pools such as pension funds, insurancecompanies, trusts and other financial institutions is being satisfied by theintroduction of ETF's (Exchange Traded Funds), logically sensible investmentvehicles with their underlying assets being physical metal and bullion, as inthe case of gold, silver and platinum, for example. It is this supportinginvestment argument that attracts management to precious metals as opposed toother base metals and minerals at this time. Capital Shareholders' equity plus unrealised gains on listed investments as of 30 June2006 was £52.32 million, or 48.4p per share based on 108.1 million sharesoutstanding. £47.01 million comprised net current assets at market value (cost:£29.08 million) and the balance of £5.31 million represented Minesite,Exploration Assets and Goodwill, at cost. Golden Prospect repurchased 325,000 ordinary shares at an average price of49.85p per share, for a total cost of £162,000 in July of 2006. Further sharerepurchases will be dependent on the capital needs of the Group and prevailingmarket conditions. The Golden Prospect Employee Benefit Trust (the "GP EBT") holds 3,300,000 GoldenProspect ordinary shares, which represents 3% of the Group's issued sharecapital. The Group is committed to aligning the interests of its employees withits shareholders. The GP EBT may make further purchases of Golden Prospectshares to continue this process. Future Strategy We have made significant strides over the past two years to transform the Groupfrom a resources focused investment company into a broadly based investment bankoperating in four related business areas: principal investing; corporate financeand stock broking; commodities dealing; and investment management. Our objective is to build a highly profitable investment bank capable ofgenerating recurring income from its various business units over the long-term. Over the years the Group has built a strong track record as a principal investorin the resources sector. The Group's shareholders equity plus unrealised gainson its listed investment portfolio has grown by 248% since January 2002(compound annual growth of 31.7%). We have not only been able to identify undervalued investment opportunities butwe have also been successful in realising investment gains for cash. However,gains on our investment portfolio are taxed at the Corporation Tax Rate of 30%.To make our future investment process more tax effective we intend to establisha range of investment funds open to outside investors focused on sectors inwhich the Group has expertise. The first fund that we intend to launch andinvest in will be a Precious Metals investment fund which will be registered inGuernsey and listed on the AIM market of the London Stock Exchange. By operating within the fund structure, the gains on investment disposals willnot be subject to tax within the fund so enabling enhanced investmentperformance. Ambrian Asset Management Limited, our FSA regulated investment managementsubsidiary, will with the benefit of the Group's expertise in the sector managethe investments made by the Precious Metals investment fund. Ambrian AssetManagement will receive an annual fee for managing the fund and may receive anadditional performance fee based on the performance of the fund. To reflect the broadening of the Group's activities, it is intended to call anExtraordinary General Meeting to change the Group's name to Ambrian Capital plcin the near future. A name change from Golden Prospect to Ambrian Capital will more readily identifythe group's position amongst its peers in the quoted investment banking sectorof the market. With regard to the non-quoted assets, i.e. our joint venture explorationproperties and our 25% shareholding in Minesite.com, it is expected that thesewill be separately floated in the next six months. In summary, we remain confident that the excellent returns obtained over manyyears can be sustained, if not improved, as a result of the transformation ofthe Group, we are currently undertaking. M A BurneChairman GOLDEN PROSPECT PLC UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT Six Months ended 30 June 2006 Six Six Months Months To To 30/6/06 30/6/05 £ £ Operating income 11,260,531 6,449,815 Gross profit 11,260,531 6,449,815 Other operating income - dividends received 5,093 40,184 Administrative expenses (3,641,632) (1,416,379) Operating profit - continuing operations 7,623,992 5,073,620 Interest receivable 148,532 54,640Interest payable and similar charges (36,373) (56,728) Profit on ordinary activities before taxation 7,736,151 5,071,532 Tax on profit on ordinary activities (2,351,704) (1,571,121) Profit on ordinary activities after taxation 5,384,447 3,500,411 Profit per ordinary share - basic 5.01p 3.26p GOLDEN PROSPECT PLC UNAUDITED CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2006 30/6/06 30/6/05 £ £ £ £ FIXED ASSETSTangible fixed assets 203,728 106,367Intangible assets 4,414,611 4,300,614Investments 695,418 465,560 5,313,757 4,872,541 CURRENT ASSETSInvestments 21,401,402 22,525,028Debtors 6,986,820 676,947Cash at bank and in hand 14,166,055 6,267,222 42,554,277 29,469,197CREDITORS: Amounts falling duewithin one year 13,473,231 5,469,554 NET CURRENT ASSETS 29,081,046 23,999,643TOTAL ASSETS LESS CURRENT LIABILITIES 34,394,803 28,872,184 CAPITAL AND RESERVESCalled up share capital 10,806,121 10,726,121Share premium account 10,849,383 10,803,383Merger reserve 1,245,256 1,245,256Profit and loss account 13,307,600 6,097,424Employee benefit trust (1,813,557) - EQUITY SHAREHOLDERS' FUNDS 34,394,803 28,872,184 GOLDEN PROSPECT PLC UNAUDITED CONSOLIDATD CASH FLOW STATEMENT Six months ended 30 June 2006 Unaudited Unaudited Six months to Six months to 30/06/06 30/06/05 £ £ Net cash inflow/(outflow) from operating activities 11,612,276 2,607,691 Interest receivable 148,532 54,640Interest payable (36,373) (56,728) Net cash inflow/(outflow) from returns on investment andservicing of finance 112,159 (2,088)Taxation (505,794) -Capital expenditure and financial investmentPayments to acquire intangible fixed assets (29,895) (98,983)Payments to acquire tangible fixed assets (87,943) (81,855)Payments to acquire fixed asset investment (105,736) - Net cash inflow/(outflow) from capital expenditure andfinancial investment (223,574) (180,838)Equity dividend paid (802,959) - Net cash inflow/(outflow) before financing 10,192,108 2,424,765Issue of ordinary share capital 126,000 -Bank loan repaid (1,500,000) - Net cash inflow/(outflow) from financing (1,374,000) - Increase in cash 8,818,108 2,424,765 GOLDEN PROSPECT PLC NOTES TO THE UNAUDITED INTERIM ACCOUNTS Six months ended 30 June 2006 1 The calculation of earnings per share is based on the profit after tax of £5,384,447 (Period ended 30 June 2005 - £3,500,411) and on the number of shares in issue being the adjusted weighted average number of shares in issue during the period of 107,544,081 (Period ended 30 June 2005 - 107,261,208). 2 The interim statement for the six months ended 30 June 2006 is unaudited and was approved by the Directors on 18 September 2006. 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 2005 apart from the definition of turnover. For the current year, operating income is used to describe revenue rather than turnover as required by the Companies Act 1985, as the directors consider it better reflects the nature of the business. Operating income comprises institutional brokerage commission and net trading profit or loss on trading positions, corporate broking retainers, commodity commissions, deal fees (comprising cash based on advisory fees and the award of options to the Group) and placing commissions. The comparatives reflect this change in policy. 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