Last checked at 29 Jun 2012 12:21
Athol Gold and Value Limited
(formerly Athol Gold Limited)
Final Results
For the year ended 31 December 2011
Dear Shareholders,
I am pleased to present the results of your Company for the year ended 31 December 2011.
OVERVIEW
As most of you will recall, the Company appointed Tom Winnifrith as the Company's Chief Investment Officer in 2010. His remit was to seek out holdings in natural resources companies, with a particular focus on precious metals such as gold and silver which were believed to be undervalued and where such transactions had the potential to create value for Shareholders.
In October 2011 the Company changed its Investment Policy, changed its name, and appointed a new broker. The Investment Policy indicated the continuing long term nature of the Company's holdings. In December 2011 Athol completed the acquisition of the £1.3m portfolio of AIM and PLUS quoted investments from Worship Street Investments, which doubled the number of our shareholders.
Many of the investments within the Company's portfolio have had a torrid time during 2011, which accounts in large part for the operating loss recorded for the year. This loss is recorded because of the accounting treatment for fair value in investments, including the Company's substantial holding in Ascot Mining plc. Shareholders' equity increased to £3,147,000 by the year end. Net asset value per share has declined from 0.64p to 0.34p.
FINANCIAL STATEMENTS
The Financial Statements are presented in the following pages. The Company recorded a loss for the year of £2,168,000 compared to a profit of £1,063,000 in 2010. The loss per share was 0.38p, compared to earnings per share of 0.62p in 2010. During the year Athol's net assets have grown from £2,512,000 to £3,147,000.
PROSPECTS FOR 2012
In recent months the Company has acquired the investment portfolio of Agneash Soft Commodities plc and sought to acquire that of Ronaldsway Private Equity plc. Unfortunately, this latter acquisition did not proceed. More recently, the Company had sought to acquire Oilbarrel.com Limited, and this, too, did not proceed. The Company necessarily had to have its shares suspended from AIM after the Oilbarrel deal was announced, and the shares were subsequently relisted on 19th June.
Tom Winnifrith has now resigned as investment advisor and your Board is in the process of seeking a suitable replacement.
The Directors are actively seeking to strengthen the Board and look forward to focusing on delivering shareholder value.
Jennifer Allsop, Chairman
29 June 2012
www.atholgold.com
Athol Gold and Value Limited
Statement of Comprehensive Income
for the year ended 31 December 2011
2011 | 2010 | ||
Notes | £'000 | £'000 | |
Investment income | 3 | - | |
Net gains on disposal of investments | 103 | 23 | |
Net change in fair value of investments | (1,982) | 1,525 | |
(1,876) | 1,548 | ||
Operating expenses | (276) | (483) | |
Operating (loss)/profit | 2 | (2,152) | 1,065 |
Finance cost | (16) | (2) | |
(Loss)/Profit before taxation | (2,168) | 1,063 | |
Taxation expense | 3 | - | - |
(Loss)/Profit for the year from continuing operations and total comprehensive income, attributable to owners of the Company | (2,168) | 1,063 | |
(Loss)/earnings per share attributable to owners of the Company during the year from continuing and total operations: |
4 |
Pence |
pence |
Basic (pence per share) | (0.38) | 0.62 | |
Diluted (pence per share) | (0.38) | 0.56 |
Athol Gold and Value Limited
Statement of Financial Position
as at 31 December 2011
2011 | 2010 | ||
Notes | £'000 | £'000 | |
CURRENT ASSETS | |||
Financial assets | 5 | 3,262 | 2,869 |
Trade and other receivables | 73 | 28 | |
Cash and cash equivalents | 295 | 42 | |
3,630 | 2,939 | ||
CURRENT LIABILITIES | |||
Trade and other payables | 49 | 290 | |
49 | 290 | ||
NET CURRENT ASSETS | 3,581 | 2,649 | |
NON-CURRENT LIABILITIES | |||
Convertible unsecured loan notes | 6 | 434 | 137 |
434 | 137 | ||
NET ASSETS | 3,147 | 2,512 | |
EQUITY | |||
| Share capital | 7 | 1,543 | 981 |
| Share premium | 3,658 | 2,838 | |
| Shares to be issued | 8 | 1,348 | - |
| Loan note equity reserve | 109 | 45 | |
| Capital reserve | 15,736 | 15,736 | |
Retained earnings | (19,247) | (17,088) | |
Equity attributable to owners of the Company and total equity | 3,147 | 2,512 |
Athol Gold and Value Limited
Statement of Changes in Equity
for the year ended 31 December 2011
Share capital | Share premium | Shares to be issued | Loan note reserve | Capital reserve | Accumulated losses | Total equity | |
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | |
At 1 January 2010 | 343 | 2,391 | - | - | 15,736 | (18,152) | 318 |
Profit for the year | - | - | - | - | - | 1,063 | 1,063 |
Total comprehensive income for the year | - | - | - | - | - | 1,063 | 1,063 |
Share based payments | - | - | - | - | - | 1 | 1 |
Issue of loan notes | - | - | - | 45 | - | - | 45 |
Share issues | 638 | 505 | - | - | - | - | 1,143 |
Share issue expenses | - | (58) | - | - | - | - | (58) |
At 31 December 2010 | 981 | 2,838 | - | 45 | 15,736 | (17,088) | 2,512 |
Profit for the year | - | - | - | - | - | (2,168) | (2,168) |
Total comprehensive income for the year | - | - | - | - | - | (2,168) | (2,168) |
Share based payments | - | - | - | - | - | 9 | 9 |
Issue of loan notes | - | - | - | 100 | - | - | 100 |
Conversion of loan notes | 145 | - | - | (36) | - | - | 109 |
Acquisition of share portfolio | - | - | 1,348 | - | - | - | 1,348 |
Share issues | 417 | 888 | - | - | - | 1,305 | |
Share issue expenses | - | (68) | - | - | - | (68) | |
At 31 December 2011 | 1,543 | 3,658 | 1,348 | 109 | 15,736 | (19,247) | 3,147 |
Athol Gold and Value Limited
Statement of Cash Flows
for the year ended 31 December 2011
2011 | 2010 | ||
£'000 | £'000 | ||
OPERATING ACTIVITIES | |||
(Loss)/profit before taxation | (2,168) | 1,063 | |
Adjustments for: | |||
Share based payment charge | 9 | 1 | |
Shares issued in settlement of directors remuneration | 23 | - | |
Shares issued in settlement of professional fees | 93 | - | |
Profit on disposal of trading investments | (103) | (23) | |
Fair value loss/(gain) on trading investments | 1,982 | (1,525) | |
Investment income | (3) | - | |
Finance costs | 16 | 2 | |
Operating cashflow before working capital changes | (151) | (482) | |
Decrease/(increase) in trade and other receivables | 20 | (12) | |
(Decrease)/increase in trade and other payables | (5) | 130 | |
Net cash outflow from operating activities | (136) | (364) | |
INVESTING ACTIVITIES | |||
Continuing operations: | |||
Purchases of investments | (1,773) | (1,548) | |
Disposals of investments | 875 | 227 | |
Investment income | 3 | - | |
Net cash outflow from investing activities | (895) | (1,321) | |
FINANCING ACTIVITIES | |||
Continuing operations: | |||
Proceeds from share issues | 862 | 1,143 | |
Share issue expenses | (68) | (58) | |
Proceeds from issue of convertible loan notes | 490 | 180 | |
Net cash inflow from financing activities from continuing operations | 1,284 | 1,265 | |
Net (decrease)/increase in cash and cash equivalents | 253 | (420) | |
Cash and cash equivalents as at 1 January | 42 | 462 | |
Cash and cash equivalents as at 31 December | 295 | 42 |
Athol Gold and Value Limited
Notes to the preliminary announcement
for the year ended 31 December 2011
1 | general information |
The Company was incorporated as a Corporation in the Cayman Islands which does not prescribe the adoption of any particular accounting framework. The Board has therefore adopted International Financial Reporting Standards as adopted by the European Union (IFRSs). The Company's shares are listed on the AIM market of the London Stock Exchange. The Company is an investment company, investing in natural resources, minerals, metals, and oil and gas projects. The registered office of the Company is as detailed in the Company Information on page 2. | |
GOING CONCERN The Directors have prepared cash flow forecasts through to 30 June 2012 which assume no significant investment activity is undertaken unless sufficient funding is in place to undertake the investment activity. The expenses of the Company's continuing operations are minimal and the cash flow forecasts demonstrate that the Company is able to meet these liabilities as they fall due. On this basis, the Directors have a reasonable expectation that the Company has adequate resources to continue operating for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the Company's financial statements. |
2 | OPERATING (LOSS)/PROFIT | ||
2011 | 2010 | ||
£'000 | £'000 | ||
Profit/(loss) from operations is arrived at after charging/(crediting): | |||
Investment management fee | 106 | 236 | |
Foreign exchange losses | 5 | - | |
Auditors' remuneration: | |||
- fees payable to the Company's auditors and its associates for the audit of the Company's financial statements |
12 |
15 | |
3 | TAXATION |
No provision has been made in respect of current taxation or deferred taxation as the Company is domiciled in the Cayman Islands and no corporation tax is applicable. |
4 | EARNINGS PER SHARE | |||
The basic and diluted earnings per share is calculated by dividing the profit/(loss) attributable to owners of the Company by the weighted average number of ordinary shares in issue during the year. | ||||
2011 | 2010 | |||
£'000 | £'000 | |||
(Loss)/profit attributable to owners of the Company | ||||
- Continuing operations | (2,168) | 1,063 | ||
- Discontinued operations | - | - | ||
(2,168) | 1,063 | |||
2011 | 2010 | |||
Weighted average number of shares for calculating basic earnings per share |
566,723,074 |
171,156,251 | ||
Weighted average number of shares for calculating fully diluted earnings per share* | 566,723,074 | 190,070,885 | ||
2011 | 2010 | |||
pence | pence | |||
(Loss)/earnings per share from continuing and total operations | ||||
- Basic (pence per share) | (0.38) | 0.62 | ||
- Fully diluted (pence per share) | (0.38) | 0.56 | ||
* The weighted average number of shares used for calculating the diluted loss per share for 2011 was the same as that used for calculating the basic loss per share as the effect of exercise of the outstanding share options was anti-dilutive.
5 | FINANCIAL ASSETS | ||
2011 | 2010 | ||
£'000 | £'000 | ||
Level 1 - Quoted investments: | |||
At beginning of year | 2,819 | - | |
Cost of share purchases | 2,718 | 1,498 | |
Proceeds of share disposals | (875) | (227) | |
Profit on disposal of shares | 103 | 14 | |
Fair value adjustment | (1,692) | 1,534 | |
At end of year | 3,073 | 2,819 | |
Level 3 - Unquoted investments: | |||
At beginning of year | 50 | - | |
Cost of share purchases | 428 | 50 | |
Fair value adjustment | (289) | - | |
At end of year | 189 | 50 | |
Total financial assets at end of year | 3,262 | 2,869 | |
The Company has adopted fair value measurements using the IFRS 7 fair value hierarchy. Categorisation within the hierarchy has been determined on the basis of the lowest level of input that is significant to the fair value measurement of the relevant asset as follows: Level 1 - valued using quoted prices in active markets for identical assets Level 2 - valued by reference to valuation techniques using observable inputs other than quoted prices included in Level 1. Level 3 - valued by reference to valuation techniques using inputs that are not based on observable market criteria. | |||
6 | CONVERTIBLE UNSECURED LOAN NOTES | ||
The outstanding convertible loan notes at 31 December 2010 were issued in October 2010. They are zero coupon, unsecured and unless previously purchased, redeemed or converted they are redeemable at their principal amount on 31 October 2015. The convertible loan notes issued in 2011 are zero coupon, unsecured and unless previously purchased, redeemed or converted they are redeemable at their principal amount on 31 December 2013. The net proceeds from the issue of the loan notes have been split between the liability element and an equity component, representing the fair value of the embedded option to convert the liability into equity of the Company as follows: | |||
2011 | 2010 | ||
£'000 | £'000 | ||
Liability component at 1 January | 137 | - | |
Nominal value of convertible loan notes issued | 978 | 180 | |
Equity component of convertible loan notes issued during year | (100) | (45) | |
Loan notes converted into shares | (633) | - | |
Equity component of loan notes converted | 36 | - | |
418 | 135 | ||
Interest charged | 16 | 2 | |
Liability component at 31 December | 434 | 137 | |
The interest charged during the period is calculated by applying an effective average interest rate of 10% to the liability component for the period since the loan notes were issued. The Directors estimate the fair value of the liability component of the loan notes at 31 December 2011 to be approximately £434,000 (2010: £137,000). This fair value has been calculated by discounting the future cash flows at the market rate of 10%.
| |||
7 | SHARE CAPITAL | ||
Number of ordinary shares | Value £'000 | ||
Authorised (par value of 0.25p): | |||
At 31 December 2010 and 31 December 2011 | 4,000,000,000 | 10,000 | |
Issued and fully paid (par value of 0.25p each): | |||
At 31 December 2009 | 137,401,194 | 343 | |
Shares issued in year | 254,883,672 | 638 | |
At 31 December 2010 | 392,284,866 | 981 | |
Shares issued in year | 224,829,231 | 562 | |
617,114,097 | 1.543 | ||
On 11 January 2011, 46,000,000 shares were issued at 0.25p each as a result of the conversion of loan notes. On 18 January 2011, 8,000,000 shares were issued at 0.25p each as a result of the conversion of loan notes. Between 31 January and 3 February 2011, 72,996,988 shares were issued at 0.83p each for cash, as a result of a private placing, raising £605,875 before expenses.. On 21 February 2011, 32,901,200 shares were issued at 1p each and 19,156,627 shares were issued at 0.83p each, as a result of the conversion of loan notes. On 27 June 2011, 4,000,000 shares were issued at 0.25p each as a result of the conversion of loan notes. On 9 August 2011, 731,031 shares were issued at 1.04p each and 1,359,648 shares were issued at 0.57p each, in settlement of directors' fees. On 1 September 2011, 16,333,333 shares were issued at 0.6p each for cash, as a result of a private placing, raising £98,000 before expenses.. On 4 October 2011, 1,435,184 shares were issued at 0.54p each, in settlement of directors' fees. On 25 November 2011, 21,915,220 shares were issued for cash at 0.415p each in connection with the acquisition of a shareholding in an AIM quoted company. | |||
8 | SHARES TO BE ISSUED | ||
The balance of £1,348,000 relates to the shares issued in January 2012 in respect of the acquisition of the Worship Street Investments Limited share portfolio. | |||
9 | SHARE OPTIONS | ||||
In November 2010 the Company granted 5,487,804 options to directors and employees. The fair value of options granted was determined using Black-Scholes valuation models. Significant inputs into the calculations were as follows: § 15% volatility based on expected share price (ascertained by reference to historic share prices of the Company for the 12 months prior to the date of grant) § share price of 0.82p per share at date of grant of options § exercise price of 0.82p per share § a risk free interest rate of 3.5% § 0% dividend yield § estimated option life of five years. At the year end all these options had vested and are exercisable at any time prior to the fifth anniversary of the date of grant. The share based payment charge for the year was £9,000 (2010: £1,000). | |||||
The movements on share options and their weighted average exercise price are as follows: | |||||
2011 | 2010 | ||||
Weighted average exercise price | Weighted average exercise price | ||||
Number | (pence) | Number | (pence) | ||
Outstanding at 1 January | 5,487,804 | - | - | - | |
Granted | - | 0.82 | 5,487,804 | 0.82 | |
Lapsed | - | - | - | - | |
Cancelled | - | - | - | - | |
Outstanding at 31 December | 5,487,804 | 0.82 | 5,487,804 | 0.82 | |
10 | POST BALANCE SHEET EVENTS |
Since the balance sheet date the Company has issued further shares as follows: On 25 January 2012 the Company issued 305,432,127 new ordinary shares at 0.47p each in connection with the acquisition of a portfolio of shares from Worship Street Investments Limited, which was completed on 30 December 2011. On 8 February 2012 the Company issued 1,515,152 new ordinary shares at 0.33p each as consideration for the purchase of 3,000,000 share warrants in Ariana Resources plc, exercisable at 4.75p each. The total value of the consideration shares was £5,000. On 21 February 2012 the Company issued 207,622,728 new ordinary shares at 0.33p each as consideration for the acquisition of a portfolio of shares from Agneash Soft Commodities plc. The total value of the consideration shares was £685,155. On 1 March 20102 the Company issued 3,662,743 shares at 0.37p each in settlement of fees amounting to £13,552 due to the Company's investment manager. On 1 May 2012 the company announced that it had entered into heads of terms ("Heads") to acquire Oilbarrel.com Limited ("Oilbarrel")from Rivington Street Holdings plc ("RSH") for a total consideration of £750,000. Completion of the transaction is subject to due diligence on Oilbarrel by Athol and approval by Athol's shareholders. As part of the Heads, Athol agreed to provide a refundable deposit of £575,000 by way of a secured loan ("Loan") to RSH, bearing interest at a rate of 5% per annum to be repayable in full if the transaction did not proceed. The acquisition of Oilbarrel was classed as a reverse takeover under AIM Rules for Companies. Consequently the Transaction required the publication of an admission document on the Company as enlarged by the acquisition of Oilbarrel, and trading in Athol shares on AIM was suspended pending the publication of the admission document On 19 June 2012 the Company announced that it had decided not to proceed with the acquisition of Oilbarrel and had issued notification to RSH terminating the acquisition process with immediate effect. Under the terms of the heads of agreement, RSH is due to repay the £575,000 deposit plus accrued interest as soon as possible but in any event not later than 18 September 2012. Athol will retain a charge over the shares and the assets of Oilbarrel until such time as the deposit is repaid in full. Following this announcement the suspension of the ordinary shares on AIM was lifted. |
11 | RELATED PARTY TRANSACTIONS |
The chief investment officer and investment manager of the Company are also responsible for the investment management of SF t1ps Smaller Companies Gold Fund and SF t1ps Smaller Companies Growth Fund, which have major shareholdings in the Company, as detailed in the Directors' report. The fee due to t1ps Investment Management (IOM) Ltd in respect of 2011 was £107,000 (2010: £236,000) which has been charged in the Income Statement. At the year-end management fees of £13,552 (2010: £nil) were due and were settled on 1 March 2012 by the issue of 3,662,743 shares at 0.37p each. In February 2011, £329,012 convertible loan notes (convertible at 1p per share) were issued to t1ps Investment Management (IOM) Ltd in settlement of fees due for the period to 25 January 2011. On 31 August 2011, t1ps Investment Management (IOM) Ltd subscribed for £490,000 convertible unsecured loan stock, repayable on 31 December 2013. Rivington Street Corporate Finance Limited, an associated company of t1ps Investment Management (IOM) Ltd, charged the Company £5,000 for broking services in respect of 2011 (2010: £1,000). . |
The statement of financial position at 31 December 2011 and the statement of comprehensive income, the statement of changes in equity, the statement of cash flows and the associated notes for the year then ended have been extracted from the Company's financial statements upon which the auditor's opinion is unqualified and does not include any statement under section 498 of the Companies Act 2006.
The accounts for the year ended 31 December 2011 are being posted to shareholders and will be laid before the Company at the Annual General Meeting in due course. Copies will also shortly be available from the registered office of the Company and via the Company's website www.atholgold.com.