Blue Star Regulatory News (BLU)

28 Mar 2008 07:02

Blue Star Capital plc28 March 2008 28 March 2008 BLUE STAR CAPITAL PLC ('Blue Star' or 'the Company') Preliminary Results for the Year ended 30 September 2007 Blue Star Capital plc (AIM: BLU), the Company created to provide seed capitalfor early stage companies, presents its preliminary results for the period ended30 September 2007. Highlights •Financial turnaround - announces profit for the financial year of £135,730 (£851,716 loss 2006) •Balance sheet remains strong and strengthening - net assets of £4.2 million (£4.1 million 2006) •Significant positive activity by all portfolio companies Nigel Robertson, Blue Star's Chairman, said: "Our investment strategy based on delivering good capital growth is beginning toshow results. We have reported a financial turnaround in our profitability andour portfolio companies are showing real growth potential. I am confident thatour investee companies will continue to thrive over the next year." For further information: Blue Star Capital plc Tel: 020 7297 0010Nigel Robertson, ChairmanHaresh Kanabar, Chief Executive Landsbanki Securities (UK) Limited Tel: 020 7426 9000Mark DickensonSindre Ottesen Square1 Consulting Limited Tel: 020 7929 5599David BickMark Longson EXTRACTS FROM THE CHAIRMAN'S STATEMENT AND THE REPORT OF THE DIRECTORS I am pleased to report Blue Star's results for the year ended 30 September 2007.These results reflect further progress made by the Company as evidenced by aturnaround in our financial performance. We are reporting a profit for thefinancial year. It is the Company's strategic objective to create a diverse portfolio ofinvestments from which it hopes to see appreciation in value and thereby providereturns to shareholders. Blue Star's investments have been made across a varietyof sectors, including property, oil and gas, social networking, pest control ande-marketing. I am pleased to report that there has been significant activity within ourportfolio companies during the period under review. I have set out below a briefreview of each of the investee companies. ZENERGY POWER Plc Zenergy Power, listed on AIM (AIM: ZEN) is a global specialist manufacturer anddeveloper of commercial applications for superconductive materials. Comprisingthree operating subsidiaries located in Germany (Trithor), the USA (SC PowerSystems) and Australia (Australian Superconductors), Zenergy is developing anumber of energy efficient applications to be adopted in renewable energy powergeneration, energy distribution and large-scale, energy intensive industrialprocesses. The business has continued to successfully capitalise on many years of hardwork. Converteam has appointed Zenergy as exclusive collaborative partner forall high temperature super conductive material activities ('HTS') in the Field.In conjunction with Converteam, Zenergy will be launching a range of highlyefficient and compact electricity generators into both the global wind andhydro-power generation markets. Zenergy is also working on a project with E.ONWasserkraft GmbH ('E.ON') to install the world's first HTS hydroelectricgenerator. Following these endorsements of its technology and the continuing success inongoing development activities, Zenergy raised a further £6,000,000 placing inApril 2007 and a further £10,000,000 in December 2007. The way in which societyproduces, distributes and uses energy is an issue of great concern for a growingnumber of industrial corporations, governments, private households andindividual consumers. These are the central issues that Zenergy's HTS technologydirectly addresses and by working with corporations such as E.ON and Converteam,as well as government bodies, including the European Commission, US Departmentof Energy and the UK Government's Department of Trade and Industry. The global addressable market for Zenergy's HTS products and contribution inthese areas alone is expected to be worth up to €2.2bn per annum for wind power(a market growing at 25% per annum) and €0.4bn for hydro-power. The Converteamcollaboration is an extremely significant development for Zenergy and suitablypositions it to move into a global billion dollar market that is renowned forits high barriers to entry and where first mover advantages are significant. Itsalliance with one of the leading participants in this industry brings a directroute to market through established commercial relationships and supplychannels. Zenergy has developed and completed its proprietary HTS induction heater, whichreplaces traditionally employed copper-based components with HTS materials. TheHTS induction heater has been demonstrated to operate with energy efficiencylevels of over 90% as compared to conventional induction heaters which operateat efficiency levels of between 35% and 45%. This effective halving of the overall electrical energy requirement is particularly significant when it is considered that, dependent on the country, between 1% and 5% of the total annualelectricity consumed in industrialised countries is directly attributable to the operation of such heating equipment. Further independent validation of the environmental significance of the ZenergyHTS induction heater was provided by the German Environmental Fund, whocontributed significant development funds following extensive due diligence.This funding was provided in recognition of the potential environmentalimprovements offered by HTS technology. Zenergy has also been awarded an US$11million grant to contribute towards anoverall project to design, test and install a high-voltage version of its FaultCurrent Limiter ('HVFCL') into the Californian electricity grid. An HTS FCL acts as an instantaneously (automated) resetting fuse that protectselectrical power grids from damaging power surges, and is regarded by the U.S.Federal Government to be an essential component of future self-healing - orself-regulating - 'smart' electricity grids. Such 'smart' grids are alsoconsidered to be central to the much needed modernisation of the US's nationalelectricity grid, which are expected to become reliant upon the deployment of arange of HTS devices. The grant from the U.S. DOE was part of a US$51.8 millioninvestment in HTS research projects announced by the United States Governmentaimed at establishing a diverse and stable supply of reliable, affordable andenvironmentally responsible energy. INDIAN RESTAURANTS GROUP PLC Indian Restaurants Group plc (AIM: IRGP), is listed on AIM. The Company'soriginal strategy was to seek acquisition opportunities primarily in the Indianbusiness processing outsourcing ("BPO") market as this market continues to growstrongly. Valuations of BPO companies in India are continuing at a level wherethe creation of value from an acquisition is difficult to deliver. As a resultthe IRGP Board, in consultation with its key shareholders, decided to widen itssearch for potential acquisitions and investments to ensure that any transactionthat is carried out will create value for our shareholders. IRGP has looked at various potential projects both in India and elsewhere,within and outside the BPO sector. Most of the initial due diligence on theseprojects has been carried out in-house, thereby minimising external professionaland other costs. After a systematic and detailed review of these potentialprojects, some of them have failed to meet the required criteria and hence theseprojects did not proceed. However, Indian Restaurants announced on the 28 January 2008 that it hasconditionally agreed to acquire the Mela Group. The Consideration for thisAcquisition will be £1,998,999, to be satisfied by £100,000 in cash and theissue of the Consideration Shares (valued at 26.37p each) conditional, interalia, on Admission and, in the case of the Deferred Consideration Shares, alsoconditional on the achievement of certain targets. In conjunction with theAcquisition IRGP proposes to increase its share capital, change its originalname and increase its borrowing powers. The intent of the planned reverse acquisition of the profitable Mela Group is tocreate a chain of Indian Restaurants providing authentic, home style Indian Foodon a consistent basis across the Group. Currently the UK Indian restaurantsector has a market size of more than £3 billion and is very fragmented, with nonational branded provider. The Mela Group consists of three highly acclaimed restaurants and has receivednumerous prestigious awards, offers an outstanding opportunity to roll out thefirst UK chain of branded Indian Restaurants. Given the large but fragmentedIndian restaurant market in the UK, the IRGP board believe IRGP is particularlywell placed to replicate the success seen in pizza, pasta and tapas chains. IRGPare delighted that the award winning founders of Mela Group will be joining theIRGP Board and will play a critical role in the expansion. The IRGP Directors believe that the combination of the Mela Group's business andthe Company's existing cash resources and its access to the equity market, hasthe potential for delivering positive returns to shareholders in the mediumterm. The Directors believe that this strategy will create shareholder value andthat the Acquisition satisfies the Company's investment criteria as the MelaGroup has a management team with a track record of developing new businesses, anability to generate revenue streams and an existing platform from which furthergrowth can be achieved. A General Meeting was held on 25 February 2008 and the shareholders approved thetransaction. BLACK RAVEN PROPERTIES PLC Black Raven Properties plc (AIM: BRP) joined AIM in February 2005 with thestrategy of identifying investment opportunities in the property sector. Sinceflotation, Black Raven has pursued its strategy of seeking and making someacquisitions in the commercial, residential and leisure sectors largely inPortugal. The Company announced that White Raven Capital Partners ('White Raven'), Black Raven's wholly owned Portuguese Property Fund, has exercised its option to buy outright the Palacete Vilhena development in Lisbon in which White Raven previously held a 30% profit participation agreement. The total purchase price is €6.8 million, of which €1 million has already been paid with the balance of €5.8 million payable in cash. The cash consideration is being financed through a loan facility provided to White Raven from Banco Invest S.A. The Palacete Vilhena development in completed form has been valuedby DTZ at €10.5 million. Christies Great Estates - Lifestyle Properties has been appointed to market theproperties for sale off-plan. Construction work at Palacete Vilhena began in January 2007. White Raven has agreed to a four-month extension to its option to acquire outright the Bairro Alto development, also in Lisbon. A total of €1.1 million has been paid for a 30% profit participation agreement with the option to acquire the development outright for a total consideration of €11 million. The Bairro Alto development in completed form has been valued by DTZ at €16 million.White Raven intends to exercise the option during the extension period on similar terms to the Palacete Vilhena development. GASOL PLC Gasol plc (AIM: GAS) joined AIM in March 2005 with the strategy of seeking acquisition and investment opportunities in the oil and gas sector. There are exciting opportunities available to Gasol as a quoted, Africa-focussed pure-play liquefied natural gas ("LNG") company. LNG is a high growth business worldwide,with Western Africa emerging as a key supplier. The worldwide natural gas markets are showing exciting growth, due to high oilprices, growth in demand for energy and natural gas being competitive for powergeneration. The fact that natural gas is a clean source of energy finds favourwith governments and industry. The increasing demand for natural gas, combined with the substantial distancesbetween where gas is needed and where gas is produced, has fuelled the growth inthe LNG business. Worldwide LNG markets are expected to show high growth due toincreasing overall demand, declining sources of domestic natural gas ingas-consuming countries, the objective of consuming countries to diversifysources of supply and the desire of gas-producing countries to commercialisetheir gas resources. Gasol's strategy of creating value by connecting LNG produced in West andCentral Africa to high value markets in the US and Europe and looking furtherinto the growing markets in Asia is particularly timely. It is a well known factthat West and Central Africa, especially Nigeria, has one of the largestuntapped gas reserves. Much of the gas has fragmented ownership providing anopportunity to pool the gas into economic sizes for liquefaction and export. Theregion also has large quantities of gas being flared, which provides anopportunity for monetising flared gas by putting in place appropriate technologyand infrastructure. Gasol, through its investment in African LNG ("AFLNG"), isseeking to access substantial gas reserves and flared gas to underpindevelopment of multiple LNG trains in the region. It is increasingly accepted that West Africa will become a major supply pointfor LNG for countries throughout the Atlantic Basin including the key markets ofEurope and North America. The quantum growth in LNG-consuming markets can besustained only if West African gas can be transported to these markets via theLNG route. Utility and energy majors and large financial institutions havebecome very interested in taking strategic gas and LNG positions in the region,which provides scope for mutually beneficial partnerships and strategicalliances. Gasol has a sound strategy to deliver value across the LNG gas chain by buildinga substantial LNG business and selling LNG sourced from Africa into the highvalue markets in the US and Europe, and ultimately to Asia. It is on track toattain its objective of liquefying and selling five million tonnes of LNG perannum in about five years' time. The Company recently announced that to properly value AfLNG and its portfolio ofLNG opportunities, it is in the final stages of discussions with leading consultancies and investment banks to carry out appropriate due diligence and provide an expert independent valuation, which will commence early in 2008. Toallow time for this exercise and complete other related formalities, Gasol has negotiated an extension to its option period to acquire the balance of 80 per cent of AfLNG's shares that it does not own from 24 December 2007 to 30 April 2008. ESEEKERS LIMITED eSeekers, a private company, operates an innovative social networking site,sharenow.com, and it has recently completed a funding round raising US$4 millionat a post market value of US$40 million. A new investor Kaptek Inc subscribed onthe latest funding round and Mr David Kaplin is joining the Board of eSeekers astheir representative. The latest fundraising is at a valuation substantiallyhigher than the level at which we invested. The Company has now fully established its presence in the US, via its whollyowned subsidiary eSeekers California Inc, and leased premises in Los Angeles. The eSeekers team has been expanded with Stephan Miller, former Director ofCommunities & Operations at Myspace, joining the team as Chief Web Officer, andAndy Walraven, previously contractor to the Company, joining full time asCreative Director. A survey of current online communities has been undertaken in the sports,fashion and leisure segments. ShareNow "experts" have also been recruited ineach segment to endorse ShareNow's proposition and facilitate migration ofcommunity websites to the ShareNow platform. ShareNow is currently negotiating with XPO over the launch of an internationalModel Search competition. The proposal is to take over Hawaiian Tropiccompetition infrastructure (being dismantled further to business sale).Competition would include live events supported by online registration andinteractivity. MEDCENTER HOLDINGS INC Blue Star holds a minority stake in this private company. Medcenter is amultinational pharmaceutical marketing company specialising in innovativesolutions that increase drug sales and business effectiveness. Operating forover 10 years with offices in Europe and the Americas, Medcenter works with 50of the most important international laboratories comprising 80 of the most soldproducts in the global market. Medcenter has a team of highly qualifiedpharmaceutical marketing professionals ready to respond with creativity to theneeds of the pharmaceutical industry, with solutions in the areas of medicaleducation, promotion, market research and marketing. These solutions aredesigned to strengthen the relationship between the pharmaceutical industry,physicians and patients in order to increase product prescription, market shareand sales. VENTECO PLC Venteco plc is listed on AIM (VTO) and aims to capitalise on the growing trendtowards non-toxic pest control, by offering green pest control technologies andservices to the food industry and pest control companies worldwide. The keydriving force in this trend is that end customers, regulators/legislators andinternational food/retail companies share a common goal of reducing the overallimpact on the environment. Within an industry generally known for its lack of innovation, Venteco'sCryonite technology provides a new and unique solution for control of crawlingpests and infestation. The global market opportunity for Cryonite, Venteco'spatented technology, is potentially vast, ranging from professional applicationswithin 'clean' commercial and industrial environs such as hospitals, foodproducers, pharmaceutical companies, hotels and restaurants, through to moregeneral kitchen locations and the retail market. Ongoing product developmentcontinues, with a view to making available a complete offering that satisfiesusers ranging from professional pest control operators ("PCO") through todomestic users. Venteco sees a very significant market opportunity for such arange of patent-protected Cryonite products and seeks to satisfy this demand. Its two acquisitions of Silvandersson, a leading manufacturer of insect gluetraps, in January 2007 and Valiguard, the food industry certification andservices body in February 2007, have strengthened and expanded Venteco'sportfolio of products. They can now offer a range of technologies and relatedservices that will help it to capitalise on the increased regulation of hygieneand safety in the food manufacturing and logistics sectors. Distribution ofVenteco's Cryonite technology and sales presence has been further extended in anumber of new areas, which now include South Africa, Nigeria, Greece andSlovenia. In recent years the market for pest control products has moved towardsenvironmentally-friendly solutions. Against an increasingly regulated landscapethis is expected to accelerate still further; attitudes within government andindustry now tend toward policies of greater social responsibility, while anever more 'ecologically-aware' public recognises the damaging effect ofexcessive use of toxins. FINANCIALS We continued to exercise careful cost control and are pleased to see a reductionin our administrative costs excluding impairment of £123,561 year on year. TheCompany finished the year with a healthy cash position, having £1.13 million innet cash as at 30 September 2007 and it has net assets of £4.2 million at theyear end. Blue Star does not have any debt on its balance sheet as all itsoperations are funded through equity. The Company results shows profit after taxof £135,730 after charging an impairment which is recognised when the marketvalue of fixed asset investments falls below carrying value. This chargeamounted to £89,620. As the Company invests in early stage businesses, thetiming of actually selling our shares cannot be predicted with ease. However, wereduced our holdings in Zenergy in the year and locked in profits. We arereporting earnings per share of 0.13p. At the balance sheet date, the marketvalue of the Company's investments was £4.24 million, compared with a balancesheet value of £2.79 million as at 30 September 2007. OUTLOOK I am pleased with the turnaround seen in this year's financial results and thelevel of activity at our investee companies gives us confidence for the future. Nigel RobertsonChairman Results and dividends The directors do not recommend the payment of a dividend for the year. 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. Blue Star Capital PlcProfit and Loss Account for the year ended 30 September 2007 Notes Year ended Year ended 30 September 30 September 2007 2006 £ £ ____________________________ Impairment to the value of fixed asset | | investments | (89,620) (387,200)| | |Other administrative expenses | (463,894) (587,455)| ____________________________ Administrative expenses (553,514) (974,655) Other operating income 632,135 10,512______________________________________________________________________________ Operating profit/(loss) 78,621 (964,143) Net interest receivable 57,109 112,427______________________________________________________________________________Profit/(loss) on ordinary activities before taxation 135,730 (851,716) Tax on profit/(loss) on ordinary activities - -______________________________________________________________________________Profit/(loss) on ordinary activities after taxation 135,730 (851,716)______________________________________________________________________________Earnings per share - basic and diluted 2 0.13p (0.81p)______________________________________________________________________________ All amounts relate to continuing activities. All recognised gains and losses for the year ended have been included in theprofit and loss account. Blue Star Capital PlcBalance sheet as at 30 September 2007 2007 2006 Notes £ £______________________________________________________________________________ Fixed assets Tangible assets - 7,605Investments 2,790,036 3,038,731______________________________________________________________________________ 2,790,036 3,046,336Current assets Debtors 423,009 53,148Cash at bank and in hand 1,135,479 1,122,166______________________________________________________________________________ 1,558,488 1,175,314 Creditors: amounts falling due within one year (119,281) (128,137)______________________________________________________________________________Net current assets 1,439,207 1,047,177______________________________________________________________________________Total assets less current liabilities 4,229,243 4,093,513______________________________________________________________________________ Capital and reservesCalled up share capital 105,500 105,500Share premium account 5,032,525 5,032,525Profit and loss account (908,782) (1,044,512)______________________________________________________________________________Shareholders' funds 4,229,243 4,093,513______________________________________________________________________________ Blue Star Capital PlcCash Flow Statement for the year ended 30 September 2007 Year ended Year ended 30 September 30 September 2007 2006 £ £ Net cash outflow from operating activities (835,006) (635,662) Returns on investments and servicing of financeInterest received 57,109 112,488Interest paid - (61)______________________________________________________________________________ Net cash inflow from returns on investments and servicing of finance 57,109 112,427 Financial investments and capital expenditurePurchase of tangible fixed assets - (5,402)Payments to acquire investments (209,115) (2,046,256)Sale of investments 1,000,325 46,994______________________________________________________________________________ Net inflow/(outflow) outflow from financial investments and capital expenditure 791,210 (2,004,664)______________________________________________________________________________ Net cash inflow/(outflow) before financing 13,313 (2,527,899)______________________________________________________________________________ Increase /(decrease) in net cash 13,313 (2,527,899)______________________________________________________________________________ Blue Star Capital PlcNotes to the financial statements 1 Accounting policies Basis of preparation The results have been prepared using accounting policies consistent with those used in the preparation of the statutory accounts. The financial information is derived from the financial statements for the Years ended 30 September 2006 and 2007, and does not constitute full accounts within the meaning of Section 240 of the Companies Act 1985. The financial statements on which the auditors have given an unqualified report do not contain a statement under Section 237 (2) or (3) of the Companies Act. Statutory Accounts for 2006 have been delivered to the Registrar of Companies and Accounts for 2007 will be delivered to the Registrar of Companies in due course. The financial statements have been prepared under the historical cost convention and in accordance with the United Kingdom, Generally Accepted Accounting Practice. The following principal accounting policies have been applied: Fixed asset investments In accordance with FRS 9, investments held as part of an investment portfolio are stated at cost less provision for diminution in value. 2 Loss per share The calculation of profit per share of 0.13 pence (2006 - loss 0.81 pence) is based on the profit for the year of £135,730 (2006 - loss £851,716) and on the weighted average number of shares in issue during the year of 105,500,000 (2006 - 105,500,000). There is no difference between basic and diluted earnings per share. There are no potentially dilutive shares in issue. The Annual Report will be sent to all shareholders. Additional copies are available from 22 Soho Square, London W1D 4NS. - ENDS - This information is provided by RNS The company news service from the London Stock Exchange