ELX.L Regulatory News (ELX)

30 Mar 2007 11:37

El Oro And Exploration Co Plc30 March 2007 EL ORO AND EXPLORATION COMPANY plc CHAIRMAN'S STATEMENT Results for the period ended 31 December 2006 The Group profit before tax for the six months to 31 December 2006 was£3,049,025 (six months to 31 December 2005: £7,180,828). Group net assets at 31December 2006 under IFRS, taking all assets at fair value were £77,167,354 equalto 712p per stock unit, (31 December 2005: £65,517,760 equal to 605p per stockunit). El Oro's team of heavy hitters, has been boosted by the bane of Mr. Flintoff,and increased its score with the takeover of Hardys and Hanson by Greene King,assisted by the ever-increasing value of other Brewery holdings, such as Adnams,Fuller, Smith and Turner and Young's. The middle-order batsmen have been piling on the runs in the Property sector,with notable increases in the asset values of Daejan, Mountview and McKaySecurities. MP Evans have also thrived with their transition from Malaysia toIndonesian Palm Oil production, whilst James Halstead continue to demonstratetheir flawless ability to produce non-slip results. Hard on their heels and not to be outdone, Egdon have flourished with itsgas-storage project in the Isle of Wight. Amongst the precious metals, Troy'sreinforced team have expanded their reserves both in Brazil and Canada, and arebeginning to achieve belated recognition in the market. Hunting have soaredbeyond the expectations of many, whilst the platinum producers and explorerscontinue to flourish, upheld by a rising price due to catalytic converter andfuel-cell demand. The seemingly-insatiable demand from China and India for both metals and energyhas underpinned most metal prices, with stratospheric levels now reached innickel, and uranium, whilst copper continues to rise after a brief fall inrecent months. Within the last week, Lionore, in which in its earlier guise asFrancistown Mining and Exploration, El Oro was a founder shareholder, has agreeda takeover by Xstrata. This has precipitated further advances in the nickelsector, where the folly of Western Mining's dispersal of its nickel interests inthe Kambalda region has been the bounty of companies such as Mincor, Mirabellaand Minara. Adding Iron Ore, Molybdenum and Natural Gas, it is little wonderthat Perth property prices are now amongst the highest in Australia. WhereAustralians are not discovering new riches beneath their bountiful land, theyare developing assets overseas. We were privileged to visit Albidon's nickelmine in Zambia, and International Ferro Metals' Chrome project in South Africa.We hold high expectations for both, despite South Africa's determination toincrease turnover of Porsche Cayenne Turbos amongst Black Empowerment partners. In the longer term, and as already criticised by Mr. de Klerk, the selection ofpersonnel on racial, and in particular, black, criteria, can only damage asophisticated economy such as South Africa's. This is exacerbated by increasingcorruption, incompetence and anti-business sentiment, alongside the ever-presentviolence, which makes us fearful for the future in that beautiful country,particularly given its support for the wanton and tragic destruction of itsneighbour to the North. Sadly, however tempting the assets, we see little hopeof anything other than venality persisting in Zimbabwe. Ian Smith's hope,expressed to us recently to 'see that brigand driven out' may be accomplished,but the return of the halcyon days as the Jewel in the Crown of Africa areperhaps gone for ever. On the home front, the dismal days of this dreadful government draw slowly to aclose, with tax reimposed on the lowest level of earnings; newly-qualifieddoctors denied jobs by a selection system of unbelievable stupidity totallyunsuited to the calibre and qualifications of the applicant; a dental system indecay; an Hogarthian desire for Casinos bordering on depravity; the plaintiffcries of cows culled by Death-dealing Defra for paper-work discrepanciesringing in the ears of their uncompensated owners; the ongoing payments fiascoat that same department preceding the promotion of its perpetrator onto theworld stage, where our sailors are seized and the means of redress has probablybeen reduced beyond repair; an education system, where money has been pouredinto the morass of the lowest 20%, whilst the leading academic institutions arestarved of resources, and the need for intellectual capital becomes, againstcompetition from China and India, ever more acute; the disgraceful anddisastrous starving of resources for the defence sector; the theft from theLottery of funds earmarked for Sport to finance the ever-escalating cost of theOlympics; and the relentless extension of the State across ever greater areas ofsociety and employment, into every nook and cranny of human and spiritualexistence, typified, on the mundane level by the sprouting of congestion chargecameras on their lofty poles, in the Brompton Road. In the face of this accumulating crisis, the leaders of the opposition floatever upwards in their beautiful balloon, on a diet of Juniper berries:" theworld's a nicer place in my beautiful balloon, it wears a nicer face in mybeautiful balloon, we'll search the clouds for a star to guide us": theirassault on the every-day expectations of ordinary citizens to fly to their ownholidays or homes, on deeply dubious environmental grounds, whilst continuing torule out tax or spending cuts, leaves little hope for any change of substancefrom the tidal wave of expenditure, tax and regulation suffered for the past 10years. Outlook The gloom outlined above is as nothing to the Sub-Prime crisis engulfing theUnited States housing market, which has every possibility of spreading to thePrime market itself. Indications that the French housing market is alsobeginning to suffer, and that Spain is seriously over-valued, are matched byremarks made by an increasing number that the UK Commercial property market isnow in 'a bubble' fuelled by vast inflows from the Pension and Hedge Fundsectors. The trend of rising interest rates would not yet appear to have abatedin the United Kingdom, and supposedly not in the United States. There are alsoindications that both the United States dollar as always, and the British poundsterling are overvalued and destined for significant and disturbing corrections. At the same time, inflation is on an upwards trajectory: these factors, whentaken together cause a degree of caution when looking beyond the immediate floodof funds fuelling takeovers for such venerable institutions as Sainsbury's andAlliance Boots, not to mention Altadis and numerous other approaches occurringin world markets. We will therefore continue to keep our gold exposure, which appears on a risingtrend. Our other metals, whilst subject to squalls from the Chinese/Indianeconomies and their progress will in coming years boost our portfolio whichremains underpinned by those stalwarts mentioned earlier. Whilst realisedprofit will be subject to the happenstance of corporate activity and takeover,our goal remains raising the asset value per share. After 6 months on the AIM market, we have now said farewell, to Chris Burman,and welcome Steven McKeane from Scotland via Sydney, as his highly competentsuccessor. We also regrettably, have lost Rosanna to the hallowed environs ofOxford, but greet Vicky Clutterbuck stepping nimbly into her shoes; all assistedcheerfully and authoritatively by Abbie. I would like to thank them and myfellow directors for their continued support and wise advice, along with that ofour advisers, brokers and colleagues. Robin Woodbine Parish30 March 2007 EL ORO AND EXPLORATION COMPANY plc CONSOLIDATED INCOME STATEMENT (Unaudited)for the six months ended 31 December six months to six months to 31 December 2006 31 December 2005 £ £Revenue 6,978,291 9,249,151Movement in fair value through the income statement investments (240,578) 173,611Movement in fair value of investment properties 41,139 (8,313)Impairment loss on available for sale investments (2,174,506) (1,019,105)Expenses (909,295) (817,660) Profit before finance costs and taxation 3,695,051 7,577,684 Finance costs: Banks 646,026 397,297 Other - (441) 646,026 396,856Profit before taxation 3,049,025 7,180,828Taxation 870,816 2,132,403Profit for the period 2,178,209 5,048,425 Earnings per stock unit (basic and diluted) 20.10p 42.35p CONSOLIDATED STATEMENT OF CHANGES IN INCOME AND EXPENSE(Unaudited) for the six months ended 31 December six months to six months to 31 December 2006 31 December 2005 £ £Profit for the period 2,178,209 5,048,425Revaluation of available for sale investments during the period 9,835,193 13,943,864Deferred tax on revaluation of available for sale investments during (2,950,558) (4,183,159)the period Total recognised income and expense for the period 9,062,844 14,809,130 CONSOLIDATED BALANCE SHEET (Unaudited) As at 31 December 31 December 2006 31 December 2005Assets £ £Non-current assetsProperty, plant and equipment 734,895 758,338Investment properties 444,933 496,688 1,179,828 1,255,026Current assetsTrade and other receivables 191,408 327,007Financial assets: Available for sale investments 116,492,915 95,435,013Financial assets - fair valued through the income statement: Commodities 2,146,315 1,236,774Cash and cash equivalents 236,565 202,043 119,067,203 97,200,837LiabilitiesCurrent liabilitiesFinancial liabilities: Borrowings 23,564,269 15,971,052Trade and other payables 422,470 896,144Current tax liabilities 1,211,438 7,498,377 25,198,177 24,365,573Net current assets 93,869,026 72,835,264Non-current liabilitiesDeferred taxation 17,881,500 8,572,530Net assets 77,167,354 65,517,760Stockholders' equityOrdinary stock units 539,210 541,785Share premium 6,017 6,017Capital redemption reserve 347,018 344,442Merger reserve 3,564 3,564Other reserves 42,653,699 33,700,049Retained earnings reserve 33,617,846 30,921,903Total equity 77,167,354 65,517,760 CONSOLIDATED CASH FLOW STATEMENT(Unaudited)for the six months ended 31 December six months to six months to 31 December 2006 31 December 2005 £ £ Cash flow from operating activities 569,923 (314,289)Income taxes paid (503,787) (1,160,796) 66,136 (1,475,085) Cash flow from investing activities (271,780) (300,092)Cash flow from financing activities (1,922,508) (1,443,638)Net decrease in cash and cash equivalents (2,128,152) (3,218,815)Cash and cash equivalents at 30 June (20,648,219) (12,322,091)Effect of foreign exchange rate changes (259,132) 98,789Cash and cash equivalents at 31 December (23,035,503) (15,442,117) EL ORO AND EXPLORATION COMPANY plc NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL INFORMATION The Unaudited Consolidated Interim Financial Information ("Financial Information") for the six months ended 31 December 2006 does not constitute statutoryaccounts within the meaning of section 240 of the Companies Act 1985. TheFinancial Information has been prepared using accounting policies and principlesconsistent with those applied in the preparation of the audited accounts of ElOro and Exploration Company plc for the 18 month period ended 30 June 2006. Nochanges were made to those policies in the preparation of this FinancialInformation. The Directors have elected not to adopt IFRS 7 "FinancialInstruments: Disclosure" or IFRS 8 "Operating Segments" early. There was a first and final dividend of 12 pence paid on 26 October 2006 inrelation to the 18 month period ended 30 June 2006. The Financial Information was approved by a Committee of the Board of Directorson 30 March 2007. The Financial Information has not been subject to review oraudit by the Group's auditors. REVENUE six months to six months to(Unaudited) 31 December 2006 31 December 2005for the six months ended 31 December £ £ Dividends from listed available for sale investments 1,006,036 1,008,757Dividends from unlisted available for sale investments 146,775 120,983Net loss on fair value through the income statement investments (80,828) (307,437)Net profit on available for sale investments realised 5,993,499 8,494,584Currency translation losses (110,619) (109,352)Other income 23,428 41,616 6,978,291 9,249,151 EL ORO AND EXPLORATION COMPANY plc NOTES TO THE UNAUDITED CONSOLIDATED INTERIM FINANCIAL INFORMATIONRESERVES Share premium Capital Merger Other Retained redemption earnings At 1 July 2006 6,017 344,442 3,564 38,069,136 33,005,519Purchase and cancellation of own shares 2,576 (271,780)Movement in period in values of AFS 9,835,193assetsTax provided on above (2,950,558)Fair value of AFS investments recycled to (3,285,817)income statementTax relief on above 985,745Profit for the period 2,178,209Dividends paid (1,294,102) At 31 December 2006 6,017 347,018 3,564 42,653,699 33,617,846 RESERVES Share premium Capital Merger Other Retained redemption earnings At 1 July 2005 6,017 343,792 3,564 27,764,808 25,938,357Purchase and cancellation of own shares 650 (64,879)Movement in period in values of AFS 13,943,864assetsTax provided on above (4,183,159)Fair value of AFS investments recycled to (5,464,948)income statementTax relief on above 1,639,484Profit for the period 5,048,425Dividends paid - At 31 December 2005 6,017 344,442 3,564 33,700,049 30,921,903 AIM NOMAD - Grant Thornton Corporate FinancePhilip SecrettPartnerTelephone: 0870 991 2578Email: philip.j.secrett@gtuk.com This information is provided by RNS The company news service from the London Stock Exchange