Blue Star Regulatory News (BLU)

30 Mar 2006 07:01

Blue Star Capital plc30 March 2006 For immediate release 30 March 2006 BLUE STAR CAPITAL PLC ("Blue Star" or "the Company") Preliminary results for the period ended 30 September 2005 Blue Star Capital plc (AIM: BLU), the company created to provide seed capitalfor early stage companies, is pleased to announce its maiden preliminaryresults, for the period ended 30 September 2005. Highlights • Blue Star made six investments in the period under review and has made a further investment since the period end • The market value of these investments at 30 September 2005 was £2.677 million, compared with a balance sheet value of £1.416 million • Balance sheet remains strong - net cash of £3.65 million at 30 September 2005 • Careful cash control resulted in pre- and post-tax loss of £192,796 • Current year has started well with significant progress at portfolio companies and investment of £265,000 at the AIM flotation of Venteco plc Nigel Robertson, Blue Star's Chairman, said: "Our maiden preliminary resultsshow that Blue Star has a business model that works. During a relatively shortperiod of time we have assembled an exciting portfolio of investments, whichhave real potential to generate shareholder value." For further information: Blue Star Capital plc Tel: 020 7297 0010Nigel Robertson, ChairmanHaresh Kanabar, Chief Executive Teather & Greenwood Tel: 020 7426 9000Mark Dickenson Buchanan Communications Tel: 020 7466 5000Mark CourtElly Williamson Blue Star Capital Plc Extracts from the Chairman's statement and the report of the directors I am pleased to report Blue Star's maiden results for the period ended 30September 2005 and represent a period of significant progress that includes theflotation of the Company on 29 October 2004. Since flotation the Company has sought to fulfil its strategic objectives,specifically to create a diverse portfolio of investments from which to buildcapital value and thereby provide returns to shareholders. To this end, theCompany has invested in four newly formed AIM-traded investing companies (or "cash shells"), invested in one privately held company and, since the period end,has invested in a further AIM-traded cash shell. Blue Star's investments have been made across a variety of sectors, includingproperty, oil and gas, outsourcing, telecoms and e-marketing. This range ofsectors provides the Company's investors with exposure to a range of investmentthemes. Our most recent investment in Venteco plc, which joined AIM on 24 March2006, is focussed on opportunities in the environmentally friendly pest controlmarket. I am pleased to report that there has been significant activity within ourportfolio during the period under review. However, I would like to take thisopportunity to stress that for our shell companies the emphasis has been firmlyon finding and completing the right deal rather than rushing in to the firstdeal available. By applying this discipline I believe we are creating the bestpossible opportunity for the capital growth of our portfolio. During the period under review, the London Stock Exchange introduced newregulations concerning investing companies, particularly in relation to theamount of money a cash shell is required to raise for admission to AIM and tothe timescale during which a cash shell should complete an appropriatetransaction or substantially implement its investment strategy. Having had theopportunity to consider these changes to the regulations I am pleased to reportthat we do not believe that the changes will, on balance, impact our businessmodel significantly. As part of the introduction of the new regulations there is a possibility thattrading in the shares of some shell companies listed on AIM will be suspended on3 April 2006. We are unable to say with absolute confidence that shares in oneor more of our portfolio companies will not be suspended on 3 April 2006 as anysuch decision is under the control of the London Stock Exchange. What we can sayis that we are working closely with all of our investee companies to completeappropriate transactions but we do not intend to compromise shareholder value bycommitting to deals with inappropriate haste. The period under review, and since the period end, reveals a significant levelof progress in our investee companies as shown in the following brief review ofBlue Star's portfolio of key investments. INDIA OUTSOURCING SERVCIES PLC India Outsourcing Services plc (AIM: IOS), which joined AIM in December 2004,was the first AIM traded shell company to be formed by Blue Star. IndiaOutsourcing's strategy is to seek acquisition opportunities primarily in theIndian business processing outsourcing market. India Outsourcing raised anadditional £3 million before expenses in February 2006 from new and existinginvestors. BLACK RAVEN PROPERTIES PLC Black Raven Properties plc (AIM: BRP) joined AIM in February 2005 with thestrategy of identifying opportunities in the property sector. Since flotationBlack Raven has pursued its strategy of seeking opportunities in the commercial,residential and leisure sectors. GASOL PLC Gasol plc (AIM: GAS) joined AIM in March 2005 with the strategy of seekingacquisition and investment opportunities in the oil and gas sector. Gasol raisedan additional £3 million before expenses in February this year and at the sametime narrowed its strategic focus to natural gas opportunities in the Gulf ofGuinea region of West Africa. Blue Star Capital Plc Chairman's statement (Continued) GORDIAN INVESTMENTS PLC Gordian Investments plc joined AIM in March 2005 with a focus on the technology,media and telecoms sector. In August 2005, Gordian successfully agreed toacquire All New Video Limited. Gordian's name subsequently changed to All NewVideo plc, a company that trades under the ticker symbol ANV. MEDCENTER HOLDINGS INC Blue Star took a minority stake in the private company Medcenter Holdings Inc.,a leading provider of e-marketing intelligence and relationship marketingsolutions to the pharmaceutical industry, in June 2005. Medcenter's clientsinclude a number of the world's top five pharmaceutical companies, in additionto other well-known multi-national pharmaceutical groups. VENTECO PLC Blue Star has a 8.99 per cent stake in Venteco (AIM:VTO), a shell company thathas joined AIM since the period end on 24 March 2006. Venteco plans to investin or acquire assets, businesses or companies involved in environmentallyfriendly pest control technologies. Venteco raised net proceeds of approximately£3 million in its flotation. Financials Blue Star exercised careful cost control during the period under review. TheCompany finished the period with a healthy cash position, having £3.65 millionin net cash as at 30 September 2005. The Company's operating loss of £359,112was offset by interest receivable of £166,316, resulting in a loss before andafter tax of £192,796, equivalent to a loss per share of 0.19p. At the balancesheet date, the market value of the Company's investments was £2.677 million,compared with a balance sheet value of £1.416 million. Board changes John Vergopoulos, one of the Company's co-founders, stood down as a Director ofthe Company in March 2006, after the period end. Outlook Our maiden results show that Blue Star has a business model that works. During arelatively short period of time we have assembled an exciting portfolio ofinvestments, which have real potential to generate shareholder value. I lookforward to reporting further progress on these investments in due course andalso to reporting on any new investment opportunities in which Blue Star plansto invest. We believe the Company can look forward to the future withconfidence. Results and dividends The profit and loss account shows the loss for the period. The directors do not recommend the payment of a dividend for the period. Blue Star Capital Plc Extracts from the chairman's statement and the report of the directors(continued) Principal activities, review of business and future development The principal activity of the company is to provide initial seed capital for thedevelopment of early stage companies: • To form and fund shell companies at the founder stage, upon IPO and subsequently (if required). • To fund operating businesses prior to IPO (or alternative exit) that offer strong growth prospects and significant opportunities for capital appreciation. Nigel RobertsonChairman29 March 2006 Blue Star Capital Plc Profit and loss account for the period ended 30 September 2005 £ Turnover 75,000 Administrative expenses (434,112) Operating loss (359,112) Net interest receivable 166,316 Loss on ordinary activities before taxation (192,796) Tax on loss on ordinary activities - Loss on ordinary activities after taxation (192,796) Loss per share- basic and diluted (0.19)p All amounts relate to continuing activities. All recognised gains and losses for the period have been included in the profitand loss account. Blue Star Capital Plc Balance sheet at 30 September 2005 £ £ Fixed assetsTangible assets 10,811Investments 1,416,157 1,426,968Current assetsDebtors 21,752Cash at bank and in hand 3,650,065 3,671,817 Creditors falling due within one year 153,556 Net current assets 3,518261 Total assets less current liabilities 4,945,229 Capital and reservesCalled up share capital 105,500Share premium account 5,032,525Profit and loss account (192,796) Shareholders funds - equity 4,945,229 Blue Star Capital Plc Cash flow statement for the period ended 30 September 2005 £ £ Net cash outflow from operating activities (223,428) Returns on investments and servicing of finance 167,132Interest received (816)Interest paid Net cash inflow from returns on investments and servicing of finance 166,316 Financial investments and capital expenditure Payments to acquire tangible fixed assets (14,691)Payments to acquire investments (1,416,157) Net cash outflow from financial investments and capital expenditure (1,430,848) Net cash outflow before financing (1,487,960) FinancingIssue of ordinary shares 5,600,000Expenses paid in connection with share issues (461,975) Cash inflow from financing 5,138,025 Increase in net cash in the period 3,650,065 Blue Star Capital Plc Notes forming part of the financial statements for the period ended 30 September2005 1 Accounting policies Basis of preparation The financial statements have been prepared in accordance with currentlyapplicable Accounting Standards in the United Kingdom, which have been appliedconsistently, and under the historical cost convention. Turnover Turnover represents income derived from management fees charged by the companyto investee companies based on the amounts receivable for the services provided.Turnover is recognised when the services are performed. Fixed asset investments Fixed asset investments are stated at cost less provision fordiminution in value. Tangible fixed assets Tangible fixed assets are stated at cost less depreciation. Depreciation isprovided at rates calculated to write off the cost less the estimated residualvalue of each asset over its expected useful economic life, as follows: Office and computer equipment - 2 years on a straight-line basis Impairment of assets The need for any fixed asset impairment write-down is assessed by comparison ofthe carrying value of the assets against the higher of realisable value andvalue in use. 2 Loss per ordinary share The calculation of basic and diluted loss per share of 0.19 pence is based onthe loss for the period of £192,796 and on 101,230,769 ordinary shares, beingthe weighted average number of ordinary shares in issue during the period ended30 September 2005. There were no potential ordinary shares at the period end. 3 Post Balance Sheet events On 3 February 2006 the company completed its second investment in Gasol Plc,investing a further £250,000 in 5,000,000 ordinary shares of 0.5p each at 5p viaplacing. Our current holding is now 34.01%. On 7 March 2006 the company completed its second investment in India OutsourcingServices Plc, investing a further £300,000 in 666,667 shares of 10p each at 45pvia placing. Our current holding is now 17.89%. On 24 March 2006 the company invested a total of £265,000 in Venteco Plc acompany recently established to invest in or acquire assets, businesses orcompanies involved in environmentally friendly pest control technologies,applications or related areas. Our holding is 11,333,333 ordinary shares of 0.5peach representing 8.99% of issued share capital. Basis of preparation The results have been prepared using accounting policies consistent with thoseused in the preparation of the statutory accounts. The financial information isderived from the financial statements for the period ended 30 September 2005,and does not constitute full accounts within the meaning of Section 240 of theCompanies Act 1985. The financial statements on which the auditors have given anunqualified report do not contain a statement under Section 237 (2) or (3) ofthe Companies Act and will be delivered to the Registrar of Companies in duecourse. The Annual Report will be sent to all shareholders. Additional copies areavailable from 22, Soho Square, London W1D 4NS. This information is provided by RNS The company news service from the London Stock Exchange