Kingswood H. Regulatory News (KWG)

27 Sep 2005 09:00

Equity Pre-IPO Investments Ltd27 September 2005 27 September 2005 EQUITY PRE-IPO INVESTMENTS LIMITED UNAUDITED INTERIM RESULTS FOR THE PERIOD ENDED 30 JUNE 2005 Equity Pre-IPO Investments Limited ("Pre IPO" or "the Company"), the AIM-tradedstrategic investment company, is pleased to announce its unaudited results forthe period from incorporation to 30 June 2005. Some additional information isalso provided for the period up to 26 September 2005. Highlights: • A rise of 285.5% in the NAV to 41.29 pence per share from 1 January 2005 to 26 September 2005. • Eight investments held as at 26 September 2005 • Investment philosophy remains consistent with a focus on pre IPO financings. • Investments now being regularly realised providing funds for further investments. Martin Shires, Director of Pre IPO, commented: "Our overall aim with Pre IPO is to invest in companies that we believe will befloated within a short period of time. We believe that this strategy is nowstarting to bear fruit with a number of our investments having floated and moredue to float in the near future. We are pleased with the increase in our NAVthis year and hope that we can continue this success going forward." For further information: Martin Shires, +44 (0) 1481 751 000Director, Equity Pre-IPO Investments Limited Jonathan Freeman, +44 (0) 1600 750 432Non - executive Director, Equity Pre-IPO Investments Limited Alasdair Robinson, +44 (0) 131 225 9677Noble & Company EQUITY PRE-IPO INVESTMENTS LIMITED UNAUDITED INTERIM RESULTS FOR THE PERIOD ENDED 30 JUNE 2005 Directors Review We are delighted to present these first interim results to shareholders. Itshows the financial performance of the Company from incorporation to 30 June2005. In addition we have included some further information for the period upto 26 September 2005. Pre IPO was incorporated on 15 September 2004 but did not raise its firstmaterial funds or properly begin its investment activities until after it wasadmitted to trading on AIM on 24 February 2005. Pre IPO has, therefore, onlybeen operating for a short period of time (4 months to 30 June 2005). Giventhat the nature of the investments made take some months to realise it is tooshort a period for there to be material changes to the valuations of mostinvestments held. Net Asset Value The table below provides summary information about the progress that has beenmade with the growth in Pre IPO's Net Asset Value ("NAV"). At the beginning ofthe period, 1 January 2005, it was 14.46 pence per share. This has risen to41.29 pence per share as at 26 September 2005. This represents an increase inNAV for the period 1 January 2005 to 26 September 2005 of 285.5%. The Directorsanticipate that a further two of our investments will achieve a flotation on AIMin the short term at valuations that will further materially change Pre IPO'sNAV. During the first few months of the year we devoted considerable time to thedevelopment of Pre IPO's infrastructure, processes and procedures for theassessment and review of potential investments. We believe that this work isnow complete though, of course, the Directors will continue to monitor andreview these to ensure that they remain effective and efficient. The placingand admission to trading on AIM in February also took considerable financial andtime resources to complete. These expenditures have had a material dampeningeffect on the rise in our NAV but these are one-off costs and we do notanticipate any further costs of a similar nature. Funding Our first material fundraising occurred at the time of our admission to tradingon AIM in February 2005 when £2.5 million (gross) was raised. In addition wehave just successfully completed an additional fundraising of approximately£1.45 million (before expenses) at 42 pence per share, the details of which wereannounced on 2 September 2005. We also have an option agreement with DanemeadLimited under which it must procure the subscription of a total of £4.0 millionfor the issue of new shares in Pre IPO, with half the total due to be procuredduring the period 24 October 2005 to 23 November 2005 and the remaining halfduring the period 24 April 2006 to 23 May 2006. We had anticipated, when wewere planning the funding requirements of Pre IPO at the beginning of 2005, thatthe funds raised at the time of Admission together with the option agreementwith Danemead, would provide sufficient cash resources for Pre IPO. However wehave found that our investment activity has been much greater than expected andso we undertook the additional fundraising in September 2005 in order that PreIPO's activities were not unduly hampered by a lack of liquid funds. We expectthat the option agreement with Danemead and the realising of cash frominvestments that have achieved a flotation will provide us with sufficient cashfor the foreseeable future. Investments As of 26 September 2005 we held investments in a total of eight companies. Inaddition we have successfully invested and sold investments in two othercompanies which achieved a flotation. Two of the eight investments currentlyheld have achieved a flotation on AIM and, of the other six investments, all ofwhich are privately held companies, two are expected to achieve a flotation inthe short term. Both these companies are finalising details of their flotationsand accompanying fundraisings and we expect the valuation of both companies atflotation to be significantly greater than the valuation at which we invested.This would, of course, also materially change our NAV. We are also workingtowards flotations in late 2005 or early 2006 with two of our other investments,one of which has recently completed a further financing at a valuation that was88% higher than the price at which we invested. As a result of the progress that has been made with our investment portfolio weare very excited about the next six months. Our work since the Company beganoperations should now begin to bear fruit and we expect the NAV to riseconsiderably as we begin realising funds for new opportunities. Outlook The Directors believe that the current NAV of 41.29 pence will increase over thenext six months as the additional value of our holdings is brought into thebalance sheet. We are working on a number of new investments and trying toensure the early flotation and realisation of our existing holdings. Martin ShiresPaul SchreibkeJonathan Freeman 27 September 2005 EQUITY PRE-IPO INVESTMENTS LIMITEDUNAUDITED STATEMENT OF TOTAL RETURNFOR THE PERIOD 1 JANUARY 2005 TO 30 JUNE 2005 For the period 15 September 2004 To 31 December 2004 Note Revenue Capital Total Revenue Capital Total £ £ £ £ £ £GAINS ON INVESTMENTSNet realised gains - - - - - -Net unrealised gains - 89,765 89,765 - 51,500 51,500 ------- ------ ------ ------- ------ ------ - 89,765 89,765 - 51,500 51,500 ------- ------ ------ ------- ------ ------ INCOMEInvestment income - - - - - -Bank interest 19,425 - 19,425 - - - ------- ------ ------ ------- ------ ------ 19,425 - 19,425 - - - ------- ------ ------ ------- ------ ------ EXPENDITURE 1Directors' fees 6,666 - 6,666 - - -Administration fees - 24,863 24,863 8,750 - 8,750Professional fees 32,566 - 32,566 4,306 - 4,306AIM admission expenses 227,823 - 227,823 - - -Consultancy fees - 50,042 50,042 - - -Audit fee 2,500 - 2,500 3,000 - 3,000Bank charges and interest 1,214 - 1,214 37 - 37Sundry expenses 3,487 - 3,487 2,500 - 2,500 ------- ------ ------ ------- ------ ------ 274,256 74,905 349,161 18,593 - 18,593 ------- ------ ------ ------- ------ ------ NET RETURN ON ORDINARY (254,831) 14,860 (239,971) (18,593) 51,500 32,907ACTIVITIES FOR THE FINANCIAL PERIOD ======= ====== ====== ======= ====== ====== Return per share - basic 5 (3.06)p 0.18p (2.88)p (0.89)p 2.47p 1.58pand diluted EQUITY PRE-IPO INVESTMENTS LIMITEDUNAUDITED BALANCE SHEET30 JUNE 2005 Note 31 December 2004FIXED ASSETSQuoted investments 3 597,264 55,500Unquoted investments 4 1,478,107 630,000 -------- ------- 2,075,371 685,500CURRENT ASSETSCash at bank and broker 7 688,065 11,657 -------- ------- 688,065 11,657 -------- -------CREDITORS - AMOUNTS FALLINGDUE WITHIN ONE YEARSundry creditors 8 11,500 5,250 -------- ------- 11,500 5,250 -------- ------- NET CURRENT ASSETS 676,565 6,407 -------- -------TOTAL ASSETS LESS CURRENT LIABILITIES 2,751,936 691,907 ======== ======= CAPITAL AND RESERVES CALLED UP SHARE CAPITAL 10 97,833 47,833SHARE PREMIUM ACCOUNT 11 2,861,167 611,167CAPITAL RESERVE REALISED 12 (74,905) - UNREALISED 12 141,265 51,500REVENUE RESERVE 12 (273,424) (18,593) -------- --------SHAREHOLDERS' FUNDS 13 2,751,936 691,907 ======== ======== Net asset value per share 6 28.13p 14.46p EQUITY PRE-IPO INVESTMENTS LIMITEDUNAUDITED CASH FLOW STATEMENTFOR THE PERIOD 1 JANUARY 2005 TO 30 JUNE 2005 15 September 2004 to Notes 31 December 2004 Net cash outflow from operating activities 9 (323,486) (13,343) Investing activities:Purchase of listed securities 9 (451,999) (4,000)Purchase of unlisted securities (848,107) (630,000) -------- -------- Net cash flow from financial investment (1,623,592) (647,343) Financing:Issue of own shares 9 2,500,000 659,000Commission on new shares (200,000) - --------- -------- £ 676,408 £ 11,657 ========= ======== Increase in cash resources £ 676,408 £ 11,657 ========= ======== EQUITY PRE-IPO INVESTMENTS LIMITEDNOTES TO THE INTERIM FINANCIAL STATEMENTS30 JUNE 2005 1. ACCOUNTING POLICIES (a) CONVENTION The financial statements have been prepared under the historical cost convention, modified to include the revaluation of investments and in accordance with applicable accounting standards and with the Statement of Recommended Practice "Financial Statements of Investment Trust Companies" issued by The Association of Investment Trust Companies in January 2003. The principal accounting policies which the directors have adopted within that convention are set out below. (b) INCOME Dividends receivable from quoted equity investments are recognised on the ex-dividend date. Dividends receivable from equity investments where no ex-dividend date is quoted are recognised when the company's right to receive payment is established. Interest receivable on cash deposits is accounted for on an accruals basis. (c) FOREIGN CURRENCY TRANSLATION Assets and liabilities denominated in foreign currencies other than sterling have been translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions during the period have been translated at the rates of exchange ruling at the date of the transaction. (d) VALUATION OF INVESTMENTS Quoted investments are valued at middle market prices. Unquoted investments are valued by the Board according to the valuation principles of the British Venture Capital Association. Realised gains or losses on the disposal of investments are taken to the capital reserve - realised. Unrealised gains or losses on revaluation of investments are taken to the capital reserve - unrealised. (e) EXPENDITURE All expenses are accounted for on an accruals basis. Expenses are charged through the revenue account except where the expense is incidental to the acquisition or disposal of an investment in which case the expense is added to the cost of the investment or deducted from the sale proceeds. Expenses that are directly attributable to the management of investments are charged directly to the capital account. With the Directors' long term target for returns on investments being entirely capital gain there is no requirement to apportion these expenses between the revenue and capital account. 2. TAXATION The company has been granted exempt status under the Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989, and is therefore subject to the payment of an annual fee which is currently £600. 3. QUOTED INVESTMENTS 31 December 2004 At cost £ 455,999 £ 4,000 ======== ========= At market value £ 597,264 £ 55,000 ======== ========= 4. UNQUOTED INVESTMENTS At cost £ 1,478,107 £ 630,000 ======== ========= 5. The calculation of basic earnings per share is based on the loss on ordinary activities after tax for the period and on 8,326,981 shares being the weighted average number of shares in issue during the period. The calculation of diluted earnings per share is based on the loss on ordinary activities after tax for the period and on 8,326,981 shares being the weighted average number of shares in issue during the period adjusted for any dilutive effects. 6. The calculation of net asset value is based on the net assets of £2,751,936 and on the ordinary shares in issue of 9,783,335 at the balance sheet date. 7. CASH AT BANK 31 December 2004 MeesPierson (C.I.) Limited Current account 688,065 11,657 -------- --------- £ 688,065 £ 11,657 ======== ========= 8. SUNDRY CREDITORS Audit fees 2,500 3,000 Administration fees 9,000 2,250 -------- --------- £ 11,500 £ 5,250 ======== ========= 9. RECONCILIATION OF REVENUE RETURN ON ORDINARY ACTIVITIES BEFORE TAXATION TO NET CASH FLOW FROM OPERATING ACTIVITIES 31 December 2004 Net return on ordinary activities for (254,831) (18,593) the financial period before taxation Expenses charged to capital (74,905) - Increase in creditors 6,250 5,250 -------- --------- Net cash outflow from £ (323,486) £ (13,343) operating activities ======== ========= 10. CALLED UP SHARE CAPITAL 31 December 2004 Authorised 50,000,000 ordinary shares of £ 500,000 £ 500,000 £0.01 each ======== ========= Allotted and fully paid 9,783,335 ordinary shares of £ 97,833 £ 47,833 £0.01 each ======== ========= On 18 February 2005 1,280,000 ordinary shares of £0.01 each were issued at a premium of £0.49 each ranking pari passu with the existing shares in issue. On 23 February 2005 3,720,000 ordinary shares of £0.01 each were issued at a premium of £0.485 each ranking pari passu with the existing shares in issue. 11. SHARE PREMIUM ACCOUNT Balance at 1 January 2005 611,167 Premium on shares issued 2,450,000 Commission on new shares (200,000) -------- Balance at 30 June 2005 £ 2,861,167 ======== 12. RESERVES Capital Capital Revenue Reserve Reserve Reserve Total - - Realised Unrealised Balance at 1 January 2005 - 51,500 (18,593) 32,907 Net return for the financial (74,905) - (254,831) (329,736) period Net realised gains/(losses) - - - - Net unrealised gains - 89,765 - 89,765 -------- --------- --- -------- --------- Balance at 30 June 2005 £ (74,905) 141,265 (273,424) (207,064) ======== ========= === ======== ========= 13. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS 31 December 2004 Net Return for the financial period (239,971) 32,907 Dividends paid (net) - - --------- --------- (239,971) 32,907 New share capital subscribed 2,500,000 659,000 Commission on subscriptions (200,000) - --------- --------- Net addition to shareholders' funds 2,060,029 691,907 Opening shareholders' funds 691,907 - --------- --------- Closing shareholders' £ 2,751,936 £ 691,907 funds ========= ========= This information is provided by RNS The company news service from the London Stock Exchange