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28Β May 2009
Oakley Capital Investments LimitedΒ
("the Company")
PreliminaryΒ results for the twelveΒ months ended 31stΒ December 2008
Oakley Capital Investments Limited (AIM : OCL, "OCIL"), the AIM-listed company established to provide investors with access to the investment strategy being pursued by Oakley Capital Private Equity L.P. (the "Limited Partnership") today announces its preliminary results for theΒ twelveΒ months ended 31 December 2008.
Highlights
Β
Peter Dubens, Director, commented:
"I am pleased to report thatΒ OCILΒ had a successfulΒ 2008 and that the challengingΒ environment has provided attractive investment opportunities for the Limited Partnership. Following completion of the acquisition of Host Europe,Β theΒ companyΒ hasΒ performed positively by focussing on operational improvements and market share gains. Monument SecuritiesΒ performedΒ consistentlyΒ throughoutΒ a period ofΒ unprecedented tradingΒ conditions.Β The company's soundΒ performanceΒ wasΒ due toΒ itsΒ range of productsΒ which ensured the business was wellΒ positionedΒ to take advantage of a variety of market conditions. Our latest acquisition, Headland Media, the business-to-business media content provider, has performed well and provides us with a strong base to establish a leading provider of news, entertainment and training services to the marine, hotel and retail industries.
"The general economic and credit environments have continued to worsenΒ in 2009. Despite this, deal flow has remained strong, with a number of investment opportunities emerging at attractive multiples. Certain sectors, such as Financial Services and Media have suffered more than others, and interesting opportunities have arisen at discounted multiples. Oakley Capital believes that as a buyer with relevant sector knowledge and the ability to invest through the economic cycle it can generate considerable returns given the current compressed valuations in its target sectors. The current financial and economic environment provides opportunities that fit well with our investment strategy and hands-on operational experience."
For further information please contact:Β
Β
|
Oakley Capital Investments Limited |
+44 20 7766 6900 |
|
Peter DubensΒ (Director) |
|
|
Financial Dynamics |
+44 20 7831 3113 |
|
Juliet Clarke / Edward Bridges / Erwan Gouraud |
|
|
Liberum Capital Limited (Financial Adviser & Broker) |
+44 20 3100 2000 |
|
Steven Tredget / Steve Pearce |
|
|
Grant Thornton Capital Markets (Nominated Adviser) |
+44 20 7383 5100 |
|
Philip SecrettΒ |
|
About Oakley Capital Investments Limited
OCILΒ was established to provide investors with access to the investment strategy being pursued by the Limited Partnership.
The Company was admitted to trading on the AIM market of the London Stock Exchange in August 2007, having raised Β£100 million from the issue of 100,000,000 ordinary shares at 100 pence each, together with the issue of 50,000,000 warrants. The company currently holds 1,250,000 warrants and 7,589,000 of its issued ordinary shares acquired for 60p per share, in treasury.
The primary objective of the Limited Partnership is to invest in a diverse portfolio of private mid-market UK and European businesses, aiming to provide investors with significant long-term capital appreciation.
The investment strategy of the Limited Partnership is to focus on companies with the scope for performance improvement operating within industries with growth or consolidation potential.Β In addition,Β the Limited PartnershipΒ seeks to invest in companies with the potential to achieve scale, thereby commanding a premium on exit.
Β
Chairman'sΒ statement
TheΒ board isΒ pleased to report a successfulΒ 2008Β for Oakley Capital Investments Limited in a turbulent financial and economicΒ period.
The CompanyΒ was establishedΒ in 2007Β to provide investors with access to the investment strategy being pursued byΒ theΒ LimitedΒ Partnership.Β The primary objective of the Limited Partnership is to invest in a diverse portfolio of private midίmarket UK and European businesses, aiming to provide investors with significant longίterm capital appreciation.
In March 2008,Β the Limited PartnershipΒ drewΒ down 31.5% of the committed capital, in order toΒ benefit fromΒ attractive investment opportunities identified in theΒ web hosting,Β financialΒ services and media sectors. On 15 December 2008, OCIL committed a further β¬10 million to the Limited Partnership.Β The Company'sΒ share of the total amountΒ drawn downΒ to 31 December 2008Β was β¬51.75Β million,Β representingΒ 34.5% of the Company's total capital commitment.
DuringΒ 2008,Β the Limited Partnership made the following investments:
Β
Web Hosting
In AprilΒ 2008,Β the Limited Partnership acquiredΒ Host EuropeΒ Corporation Limited ("Host Europe")Β the UK'sΒ market leader in domain name registration, the UK's secondΒ largest shared hosting providerΒ and theΒ leading provider ofΒ standardisedΒ managedΒ hostingΒ in Germany. Host EuropeΒ also includes Vialtus Solutions, a provider of complex managed hosting services to the UK corporate and SME market. The web hosting market is characterised by strong growth, driven by the rapid proliferation of broadband usage and the increasing sophistication of multimedia content. The Limited PartnershipΒ simultaneouslyΒ acquired Host Europe's data centre in Germany andΒ subsequentlyΒ Domain ParkingΒ International LLPΒ ("Domain Parking") a small bolt-on acquisition. The total transaction value ofΒ theseΒ investments was Β£128 million. The consideration was satisfied by a mixture of cash, vendor loan note and bank loans and mezzanine financing from the Company.
In connection with the acquisition, the CompanyΒ providedΒ Host EuropeΒ withΒ Β£19.4 million of debt financing, in the form of a secured mezzanine instrument carrying a fixed interest rate of 15.25%. This instrument matures on the earlier of 31 December 2015,Β or the date ofΒ aΒ sale or IPO of Host Europe, the note can be repaid at any time prior to this subject to an early repayment penalty.
Β
Media
InΒ January 2008, the Limited PartnershipΒ acquired Headland Media Limited ("Headland Media"), a leading provider of news services to the marine, hotel and retail industries.Β Β Headland Media'sΒ communicationΒ division provides news, e-mail, internet and weather services via satellite to cruise and merchant ships, as well as hotels in remote locations.Β Β TheΒ entertainmentΒ division of Headland Media provides in-store radio and music services to the retail industry.
During 2008,Β Headland Media completed two follow on investments,Β the acquisitions ofΒ Good Morning News SpA ("GMN") and Walport International Limited ("Walport").Β These acquisitions expandedΒ
Headland Media's presence in the marine training and entertainmentΒ sectors.Β TheΒ total transaction valueΒ wasΒ total Β£6.3Β million, whichΒ includes a mezzanine loan from the Company of Β£3.1 million carrying a fixed interest rate of 12%.
Β
Financial Services
InΒ July 2008,Β the Limited Partnership, together with management, acquired Monument SecuritiesΒ Limited ("Monument Securities")Β from Insinger de Beaufort GroupΒ ("Insinger").Β Monument Securities has traded successfullyΒ since 1991Β andΒ hasΒ built a considerable presence in the derivatives,Β equities and fixed incomeΒ markets as an experienced and professional brokerage providing servicesΒ toΒ institutional investors, hedge funds and corporate investors. The totalΒ transaction valueΒ wasΒ Β£5.5m, with theΒ Limited PartnershipΒ investingΒ Β£2.8 million representing a 51% investment.
Β
Investment outlook
TheΒ BoardΒ believes thatΒ the businesses acquired byΒ the Limited Partnership in the web hosting,Β financial services and media sectors provide a platform that is well positioned to deliver growthΒ andΒ value creation through active management. Further details of the investment portfolio companies are provided in theΒ Manager'sΒ Report.
Since the launch of the Limited PartnershipΒ in 2007, Oakley CapitalΒ Limited,Β the investment adviser to the Limited PartnershipΒ ("Oakley" or the "Investment Adviser"),Β has built a strong pipeline of attractiveΒ acquisitionΒ opportunities, across a range of industry sectors.Β Β AsΒ toughΒ economic conditionsΒ continue,Β the Company expects an increasing number of investmentΒ opportunitiesΒ toΒ emergeΒ at attractive valuations. Oakley has establishedΒ relationships withΒ aΒ number ofΒ banksΒ whichΒ remain supportive of the Limited Partnership's investment strategies.Β
AlthoughΒ cautious from a macroeconomic perspective,Β weΒ expectΒ the next 24 to 36 months to yield a significant number of attractive investment opportunities for the Company, through its exposure to the Limited Partnership's investment strategies.
Β
Post balance sheet eventsΒ
In response to the investmentΒ opportunities identified by Oakley,Β the CompanyΒ completed a secondary placingΒ on 9 March 2009, raising proceeds of Β£18 million from new and existing investors. An additional commitment of β¬17 million was made into the Limited Partnership onΒ 20 MarchΒ 2009.
James Keyes
Chairman
The Limited Partnership
The Limited Partnership's primary objective is to invest in a diversified portfolio of private midίmarket UK and European businesses, aiming to provide investors with significant longίterm capital appreciation.
The Limited Partnership's investment strategyΒ is to focus on buyΒ out opportunities in industries withΒ theΒ potentialΒ forΒ growth,Β consolidationΒ andΒ performance improvement.Β In addition, the Limited Partnership seeks to invest in companiesΒ with scaleΒ in their industry subsectors,Β therebyΒ creating a sustainable earnings stream which shouldΒ command an exitΒ premium.
The Limited Partnership will focus on equity investments of between Β£20Β millionΒ and Β£100Β millionΒ per transaction,Β whichΒ secure a controlling position in theΒ portfolio investment.Β Β The Limited Partnership aims to deliver over 25 percent grossΒ internal rate ofΒ return (IRR) per annum on investments and a blended gross multiple of three times. The life of the Limited Partnership is expected to be approximately 10 years, including a five year investment period from the date of the Final Closing.
Oakley Capital (Bermuda) LimitedΒ (the "Manager"), a BermudianΒ company, has been appointed as manager to the Company and the Limited Partnership.Β Β The Manager has appointed Oakley as Investment Adviser to the Manager. The Investment Adviser is primarily responsible for advising the Manager on the investment of the assets of the Limited Partnership and the Company.
oakley capital investments limited
NOTES TO THE FINANCIAL STATEMENTSΒ (continued)
Year ended 31 December 2008 and Period from 28 June 2007Β (commencement of operations) to 31 December 2007
(Expressed in British Pounds)
The Manager's report
Market background
TheΒ impactΒ of theΒ economic downturnΒ has been severeΒ and further economic contraction isΒ anticipated. The availability of credit for leveraged acquisitions has been materially impaired and the cost of financing has increased. At the same time, valuation expectationsΒ are being suppressed byΒ economic uncertainty. This environment shouldΒ enableΒ the Limited Partnership to acquire targets at attractive valuations.
When considering acquisitions,Β the manager throughΒ Oakley works closely with its lenders to determine an acquisition structure appropriate for the target and the sector in which it operates.Β OakleyΒ has a strong relationship with a number of major banks, all of whom remain supportiveΒ of the Limited Partnership's investment strategy.
Β
Risk management
OakleyΒ has implemented a rigorous investment analysis and selection methodology which includes the following stages:
IdentificationΒ -Β Upon identification,Β an investment opportunity isΒ recordedΒ onΒ theΒ dealΒ registerΒ whichΒ recordsΒ key details ofΒ theΒ opportunity,Β thisΒ acts as a basis for discussion at weekly meetings.
SelectionΒ - Where an investment opportunity progresses, an overview document isΒ generated to assess the proposed investment andΒ to determine if it satisfies the Limited Partnership'sΒ investment profile.
AnalysisΒ - In advance of committing to due diligence, further analysis is undertaken and aΒ 'ConceptΒ Paper'Β is prepared to analyseΒ the investment rationale, the industry, competitive positioning, pricing, structure, funding and transaction risk.
ApprovalΒ - Following due diligence, an approval paper is submitted to the investment committee summarisingΒ keyΒ due diligenceΒ findingsΒ and identifying any material issues.Β
ConfirmationΒ - Immediately prior to funding, an 'Investment Certificate'Β is compiledΒ to identifyΒ any changes whichΒ have occurred between final approval and funding.
Investment and portfolio monitoring
OakleyΒ considers portfolio monitoring and investment plan implementation to be criticalΒ toΒ value creation. As such,Β OakleyΒ commitsΒ significant resources to ensuring portfolioΒ companies meet or exceed their investment plan and that any unforeseen issues areΒ resolved.
100 day planΒ - Where necessary Oakley executives will be onsite for an interim period to assist management teams. In the case of Host Europe,Β twoΒ seniorΒ OakleyΒ executivesΒ were onsiteΒ for the first 100 days of ownership to ensure that restructuring measures identified during due diligence were implemented.
DirectorshipsΒ - In addition to attending monthly senior management meetings,Β OakleyΒ executives are appointed to portfolio company boardsΒ to ensure that strict corporate governance and reporting procedures are adhered to. In addition,Β Oakley appoints nonΒ executive directorsΒ to bring in industry expertise and to provide support to the management team.Β
Strategic guidanceΒ - Oakley will hold strategic planning sessions with management teams to review progress and to ensure key milestones are met.Β
Financial disciplineΒ -Β OakleyΒ maintainsΒ strictΒ control overΒ the capital budgeting process to ensureΒ capitalΒ expenditure is justified.Β OakleyΒ believes thatΒ detailed financial planningΒ and analysis play a significant role in the process of value creation.
Investments
TheΒ LimitedΒ PartnershipΒ primarily invests in unquoted securities of private companies ("Portfolio Investments").Β Investments portfolio investments are valued by the Manager in compliance with the International Private Equity and Venture Capital Guidelines with particular consideration of the following factors:
Fair value is the amount at which an asset could be exchanged between knowledgeable, willing parties in an arm's length transaction.
In estimating fair value, the Manager usesΒ a methodology which is appropriate in light of the nature, facts and circumstances of the investment and its materiality in the context of the total investment portfolio and will use reasonable assumptions and estimations.
An appropriate methodology incorporates available information about all factors that are likely to materially effect the fair value of the investment.Β The valuation methodologies are applied consistently from period to period, except where a change would result in a better estimate of fair value. Any changes in valuation methodologies will be clearly disclosed in the financial statements.
Β Β
The most widely used methodologies are listed below. In assessing which methodology is appropriate, the ManagerΒ isΒ predisposed towards those methodologies that draw upon market-basedΒ measures of risk and return.
Cost of recent investment
Earnings multiples
Discounted cashflow
Net assets
Available market prices
Gains or losses arising from changes in fair value are presented through the income statement in the period in which they arise. As a result of the above basis of valuation, there is significant judgment associated with the valuation ofΒ Portfolio Investments. TheΒ Limited Partnership'sΒ Portfolio Investments are currently held atΒ cost as they were allΒ acquired within 12 months of 31 December 2008. The Manager completed a fair valueΒ analysisΒ at the year end and appointed a third party to reviewΒ the fair value analysis. The results of this process confirmedΒ thatΒ thereΒ had beenΒ no deterioration in value.
Mezzanine loans
Mezzanine loans areΒ initiallyΒ valued at the price the loan was granted.Β FollowingΒ initialΒ recognition,Β the loans are valued on a fair value basisΒ taking into account market conditions and any appreciation or deterioration in value pending a valuation review.
Β
Rolled up loan interest
A portion ofΒ theΒ financial instrumentsΒ held by the CompanyΒ accumulatesΒ interest which is only realised in cash on redemption of the instrument includingΒ paymentΒ inΒ kindΒ notes.
Β
Business reviewΒ
In valuing these instruments, the Manager assesses the expected amount to be recovered from these instruments. If deterioration indicators exist, a provision against the cost of the loan will be made to reflect this. The consideration orΒ recoverable amount will also include the existence of any reasonably anticipated enhancements such as interest rate step increases.
During 2008, Oakley, as Investment Adviser to the Manager, considered over 45 investment opportunities leading to the Limited Partnership completing six transactions and investing capital in three enterprises.Β TheseΒ threeΒ opportunities were directly sourced by Oakley.Β Β
Β
Β 1. Host Europe Group
Business overview
HostΒ EuropeΒ is made up of three divisions operating in three distinct markets within the web hosting industry. In the UK, Host Europe operatesΒ two divisions:Β (i) Webfusion, the market leader for domain name registration and theΒ second largest shared hosting provider; and (ii) Vialtus Solutions,Β a provider of complex managed hosting services to the corporate and SME market. Host Europe also operates a division in Germany, Host Europe GmbH, which is the German market leader in the standardised managed hosting market.
The web hosting market is characterised byΒ strongΒ growthΒ which isΒ driven by the rapid proliferation of broadband usage and the increasing sophistication of multimedia content. As internet users become more sophisticated,Β website ownersΒ require increasing amounts ofΒ capacityΒ in order to host, storeΒ and processΒ complex and secure content.Β Β For the majority of companies, hosting, security and traffic balancing are not core businessΒ activitiesΒ and these functions are increasingly being outsourced to specialist providers such as Host Europe.
Investment rationaleΒ
Market leader inΒ sharedΒ hosting (second largest provider in the UK and third largest in Germany)
Largest provider of UK domain names with over two million registeredΒ domainsΒ
Significant opportunities for restructuring the cost base
Strategically well placed for exit -Β the European webhosting market is fragmented and a limited number of companies have scale to be attractive to overseas purchasers
Β
2. Monument SecuritiesΒ
Business overviewΒ
Monument Securities is a global equity, derivatives and fixed income broker with an 18 year history. The company provides services to institutions, fund managers, market professionals, corporates and hedge funds. Monument Securities is a member of the NYSE,Β Euronext LIFFE, Eurex, the London Stock Exchange, the International Capital Markets Association, and is authorised and regulated by the Financial Services Authority.
One of the primary strengths of the business is the management team who have worked together for 18 years. Prior to founding Monument Securities,Β members of the management team held senior positions at Citicorp, Credit Lyonnais, and MeesPierson. They have also worked for the London Clearing House and the Chicago Board of Trade as well as being involved in the establishment of the LIFFE market. Management are highly motivated to grow the business both organically and through acquisition.Β
Investment rationale
An established and profitable platform well positioned for growthΒ and sector consolidationΒ
AttractiveΒ entry priceΒ as a result ofΒ theΒ vendor's decisionΒ to exit theΒ UKΒ market for strategic reasons at a depressed time in the financial services business cycleΒ
Proven business modelΒ whichΒ performs well in periods of economic uncertainty and high volatility (which typically coincide with economic downturns) as clients look to contain risk through the increased use of derivatives
Β
3. Headland Media, Walport and GMN
Business overview
Headland Media is a business-to-business media content provider based in Liverpool with offices inΒ the US and Europe.Β The company is the leading provider of news digest services to the hotel and shipping sectors as well as a leading provider of entertainment and training services to offshore industries, businesses in remote locations or with specialist communication needs. Headland Media distributes media content daily to an estimated 6,500 destinations using proprietary distribution channelsΒ (e.g. satellite broadcast)Β and has an audience of approximately 20 million listeners and over 250,000 readers.Β
Headland's media products include:
News digestΒ - Headland Media provides daily electronic newspapers, 24 hours a day, seven days a week, direct to cruise liners, merchant ships, yachts and hotels. More than 55 editions are produced daily in 15 different languages and are delivered ready to print to remote locations. It has a portfolio of two, four and eight page own brandΒ newspapers
Β
Internet on BoardΒ - an Internet cafΓ© system specifically designed for the cruise line market
Β
Weather - Headland Media offers a dailyΒ maritimeΒ weather information package from Applied Weather Technology. This system allows users to obtain advanced weather forecasts as a data file, giving a clear and accurate forecast every time for all ocean zones
Health and Safety VideosΒ - Headland Media is a leading provider of training videos for the maritime industry providing crews with essential information for compliance and training purposes
EntertainmentΒ - Headland Media has the rightsΒ to distribute a comprehensive movie catalogue to the maritime industry. By purchasing licensed products fleet owners ensure copyright laws are not breachedΒ when movies are shown on board
Revenue is derived from recurring (subscription) revenue andΒ someΒ non-recurring (one off installation charges). Headland Media has a loyal customer base and has provided services toΒ most ofΒ its customers for over a decade and for many in excess of 20 years. Annual customer churn is less than 10% andΒ the companyΒ currently provides services to over 1,000 hotels and 3,600 cruise and merchant ships.
Headland Media's Entertainment division focuses on the design, production and distribution of audio and visual services for retailers. These services are used to build brands and generate in-store sales in over 1,900 retail outlets. Headland Media's Entertainment services include:
Live radio servicesΒ - Commercial radio stations played in store which include live presenters, audience interaction by text and email, dedications, news, sport, features, jingles, promotions, advertising, out-of-hours staff training and announcements and profiled music
'As-live' radio servicesΒ - A very popular radio format with live delivery using pre-recorded presenter links
Hard disk music servicesΒ - PrimarilyΒ pre-recordedΒ music, advertising and jingles. These systems are either updated each night or each month
Investment rationale
Headland Media is the market leading provider of news digest services to the hotels and shipping sectorsΒ with opportunities to expand into other market segments
Headland Media will serve as the platform for the consolidation of niche providers of media contentΒ
Barriers to entryΒ includeΒ proprietary distribution channels, content licensing, editorial and production expertiseΒ act as barriers to entry to potential competitors
Β Β STATEMENTS OF ASSETS AND LIABILITIES
31 December 2008 and 2007
(Expressed in British Pounds)
|
31 December 2008 |
31 December 2007 |
|||
|
Notes |
Β£ |
Β£ |
||
|
Assets |
||||
|
Investments (Cost 2008: Β£65,387,060; 2007: Β£2,925,726) |
2c, 5, 7 |
64,447,295 |
2,378,310 |
|
|
Cash and cash equivalents |
3 |
32,893,846 |
97,154,262 |
|
|
Accrued interest receivable |
2,630,494 |
- |
||
|
Other receivablesΒ |
20,280 |
303,475 |
||
|
Total assetsΒ |
99,991,915 |
99,836,047 |
||
|
LiabilitiesΒ |
||||
|
Accounts payable and accrued expenses |
52,598 |
395,548 |
||
|
Bank overdraft |
- |
12,632 |
||
|
Total liabilitiesΒ |
52,598 |
408,180 |
||
|
Net assets attributable to shares |
99,939,317 |
99,427,867 |
||
|
Number of shares outstanding |
9 |
92,411,000 |
100,000,000 |
|
|
Net asset value per share |
13 |
1.08 |
0.99 |
Signed on behalf of the BoardΒ onΒ 26Β May 2009
James Keyes Ian Pilgrim
Director DirectorΒ
Β Β SCHEDULES OF INVESTMENTS
31 December 2008 and 2007
(Expressed in British Pounds)
|
2008 |
Fair value as a % of net assets |
PercentageΒ interest |
Principal amount/ Quantity Β£ |
Cost Β£ |
Fair value Β£ |
|
|
Investments in Limited Partnerships |
||||||
|
Bermuda |
||||||
|
Oakley Capital Private Equity LPΒ |
39% |
65.2% |
40,265,724 |
39,325,959 |
||
|
Unquoted debt securities |
||||||
|
Investment in mezzanine loans |
||||||
|
United Kingdom |
||||||
|
Host Europe. Interest at 15.25% p.a. Maturity date Dec 2015 |
19% |
19,400,000 |
19,400,000 |
19,400,000 |
||
|
Headland Media Limited. Interest rate at 12% p.a. Maturity date Dec 2008 |
3% |
3,100,000 |
3,100,000 |
3,100,000 |
||
|
Bermuda |
||||||
|
Cologne Data Centre (Bermuda) Ltd.Β Interest rate at 15.25% p.a. Maturity April 2015 |
3% |
2,621,336 |
2,621,336 |
2,621,336 |
||
|
Total mezzanine loans |
25% |
25,121,336 |
25,121,336 |
|||
|
Total Investments 2008 |
64% |
65,387,060 |
64,447,295 |
|||
Β Β
|
2007 |
Fair value as a % of net assets |
Percentage interest |
Principal amount/ Quantity Β£ |
Cost Β£ |
Fair value Β£ |
|
|
Investments in Limited Partnerships |
||||||
|
Bermuda |
||||||
|
Oakley Capital Private Equity LPΒ |
2.4% |
66.3% |
2,925,726 |
2,378,310 |
||
|
Total Investments 2007 |
2.4% |
66.3% |
2,925,726 |
2,378,310 |
||
Β Β
STATEMENTS OF OPERATIONS
Year ended 31 December 2008 and Period from 28 June 2007 (date of incorporation)Β
to 31 December 2007
(Expressed in British Pounds)
|
2008 |
2007 |
|||
|
Notes |
Β£ |
Β£ |
||
|
Investment income |
||||
|
Interest |
5,429,842 |
2,117,617 |
||
|
Total income |
5,429,842 |
2,117,617 |
||
|
Expenses |
||||
|
Organisation expenses |
- |
4,593,684 |
||
|
Management fee |
4(a) |
- |
156,318 |
|
|
Other |
216,189 |
83,041 |
||
|
Professional fees |
6 |
198,852 |
65,395 |
|
|
Interest |
19,875 |
141 |
||
|
Total expenses |
434,916 |
4,898,579 |
||
|
Net investment income/(loss) |
4,994,926 |
(2,780,962) |
||
|
Realised and unrealised gains and losses on foreign exchange and investmentsΒ |
||||
|
Net realised gain/(loss) on foreign exchange |
491,648 |
(681) |
||
|
Net change in unrealised (loss)/gain on foreign exchange |
(6,459) |
2,756,926 |
||
|
Net change in unrealised losses on investments |
(392,349) |
(547,416) |
||
|
Net realised and unrealised gains on foreign exchange and investments |
92,840 |
2,208,829 |
||
|
Net increase/(decrease) in net assets resulting from operations |
5,087,766 |
(572,133) |
||
|
Net gain/(loss) per share |
13 |
0.06 |
(0.01) |
Β
Β Β STATEMENTS OF CHANGES IN NET ASSETS
Year ended 31 December 2008 and Period from 28 June 2007 (date of incorporation) to 31 December 2007
Β (Expressed in British Pounds)
|
2008 |
2007 |
|||
|
Β£ |
Β£ |
|||
|
Net increase/(decrease) in net assets resulting from operations |
||||
|
Net investment gain/(loss) |
4,994,926 |
(2,780,962) |
||
|
Net realised gain/(loss) on foreign exchange |
491,648 |
(681) |
||
|
Net change in unrealised (loss)/gain on foreign exchange |
(6,459) |
2,756,926 |
||
|
Net change in unrealised losses on investments |
(392,349) |
(547,416) |
||
|
Net increase/(decrease) in net assets resulting from operations |
5,087,766 |
(572,133) |
||
|
Capital share transactions |
||||
|
Proceeds on issue of shares |
- |
100,000,000 |
||
|
Repurchase of shares |
(4,576,316) |
- |
||
|
Net (decrease) increase in net assets from capital share transaction |
(4,576,316) |
100,000,000 |
||
|
Net increase in net assets |
511,450 |
99,427,867 |
||
|
Net assets at beginning of year/period |
99,427,867 |
- |
||
|
Net assets at end of year/period |
99,939,317 |
99,427,867 |
Β
STATEMENTS OF CASH FLOWS
Year ended 31 December 2008 and Period from 28 June 2007 (date of incorporation) to 31 December 2007
(Expressed in British Pounds)
|
2008 |
Β 2007 |
|||
|
Β£ |
Β£ |
|||
|
Cash flows from operating activities |
||||
|
Net increase/(decrease) in net assets resulting from operations |
5,087,766 |
(572,133) |
||
|
Adjustments to reconcile net increase/(decrease) in net assets resulting from operations to net cash used in operating activities: |
||||
|
Β Net realised and unrealised gains on foreign exchange and investments |
(92,840) |
(2,208,829) |
||
|
Payments for purchases of investments |
(62,461,334) |
(2,925,726) |
||
|
Change in accrued interest receivable |
(2,630,494) |
- |
||
|
Change in other receivables |
283,195 |
(303,475) |
||
|
Change in accounts payable and accrued expenses |
(342,950) |
395,548 |
||
|
Net cash used in operating activities |
(60,156,657) |
(5,614,615) |
||
|
Cash flows from capital transactions (Repayment of) cash provided by short term borrowing |
(12,632) |
12,632 |
||
|
Proceeds on issuance of shares |
- |
100,000,000 |
||
|
Paid on repurchase of shares |
(4,576,316) |
- |
||
|
Net cash provided by capital transactions |
(4,588,948) |
100,012,632 |
||
|
Net effect of foreign exchange gain |
485,189 |
2,756,245 |
||
|
Net (decrease) increase in cash and cash equivalents |
(64,260,416) |
97,154,262 |
||
|
Cash and cash equivalents at the beginning of year/period |
97,154,262 |
- |
||
|
Cash and cash equivalents at the end of year/period |
32,893,846 |
97,154,262 |
||
|
Interest paid during the year/period |
19,875 |
141 |
The notes on pages 26 to 37 form an integral part of these financial statements
Β
Year ended 31 December 2008 and Period from 28 June 2007 (date of incorporation) to 31 December 2007(Expressed in British Pounds)
|
Β
|
Β
|
2008
|
Β
|
2007
|
|
Cash
|
Β
|
Β£ 168,291
|
Β
|
Β£ 3,743
|
|
Short-term deposits
|
Β
|
32,725,555
|
Β
|
97,150,519
|
|
Β
|
Β
|
Β£ 32,893,846
|
Β
|
Β£ 97,154,262
|
Β
|
Β
|
Β
Β
Quoted prices
(Level 1)
|
Β
|
Other significant observable inputs
Β (Level 2)
|
Β
|
Significant unobservable inputs
(Level 3)
|
|
Investments in Securities
|
Β£ -
|
Β
|
Β£ -
|
Β
|
Β£ 64,447,295
|
|
Β
|
Investment in Securities
|
Β
|
Β
|
|
Balance at 1 January 2008
|
Β£ 2,378,310
|
Β
|
Β
|
|
Change in unrealized depreciation
|
(392,349)
|
Β
|
Β
|
|
Net purchases
|
62,461,334
|
Β
|
Β
|
|
Balance at 31 December 2008
|
Β£ 64,447,295
|
Β
|
Β
|
Β
|
Β
|
Common stock
|
Β
|
Warrants
|
|
Β
|
Β
|
Β
|
Β
|
|
Balance as at 1 January 2008
|
100,000,000
|
Β
|
50,000,000
|
|
Issued
|
-
|
Β
|
-
|
|
Repurchased
|
7,589,000
|
Β
|
1,250,000
|
|
Balance as at 31 December 2008
|
92,411,000
|
Β
|
48,750,000
|
|
Β
|
Β
|
Β
|
Β
|
|
Β
|
2008
|
Β
|
2007
|
|
Β
|
Β£
|
Β
|
Β£
|
|
Per share operating performance
|
Β
|
Β
|
Β
|
|
Net asset value per share, at start of year/date of subscription
|
0.99
|
Β
|
1.00
|
|
Gain/(loss) from investment operations
|
Β
|
Β
|
Β
|
|
Net investment income
|
0.06
|
Β
|
(0.03)
|
|
Net realised and unrealised gain on investments and foreign exchange
|
-
|
Β
|
0.02
|
|
Total from investment operations
|
0.06
|
Β
|
(0.01)
|
|
Repurchase of shares
|
0.03
|
Β
|
-
|
|
Net asset value per share, end of year/period
|
1.08
|
Β
|
0.99
|
|
Β
|
Β
|
Β
|
Β
|
|
Total return for year/period1
|
Percentage
|
Β
|
Percentage
|
|
Total return
|
5.01
|
Β
|
(0.57)
|
|
Β
|
Β
|
Β
|
Β
|
|
Ratio of expenses to average net assets1,2
|
Β
|
Β
|
Β
|
|
Operating expenses
|
0.44
|
Β
|
4.91
|
|
Ratio of net investment income to average net assets1,2
|
Β
|
Β
|
Β
|
|
Net investment income (loss)
|
5.01
|
Β
|
(2.79)
|
|
1 Not annualised for periods less than or greater than a year
2 Expenses include interest expenses of: 2008 Β£19,875; 2007 Β£141
|
Β
|
Β
|
Β
|
Follow the stocks
