Last checked at 
26 Nov 2009 18:26
FOR IMMEDIATE RELEASE
RELEASED BY BNP PARIBAS FUND SERVICES (GUERNSEY) LIMITED
HALF YEARLY RESULTS ANNOUNCEMENT
THE BOARD OF DIRECTORS OF ORYX INTERNATIONAL GROWTH FUND LIMITED ANNOUNCE UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2009
CHAIRMAN'S STATEMENT
I am pleased to report that the Net Asset Value rose in the six months to 30 September 2009 by 29% to 216p. This compares to 215p at the equivalent time last year. This reflects a substantial recovery in value but as you can see from the investment manager's statement below, there is considerable uncertainty in the economy generally and in small companies in particular.
North Atlantic's investment style is highly specialist, concentrating on identifying value in target companies and then devising a strategy for unlocking that value. Considerable success has been achieved over this period with a number of good results being recorded. As I said at the time of the announcement of last year's results, this process will provide an element of protection against the volatility of the market and allow the company to continue to make progress in a difficult climate
During the period the company purchased for cancellation 930,824 shares at a cost of £1,368,782. This has resulted in the discount narrowing to NAV and as these purchases were made at a discount to the net asset value, they will benefit long term shareholders.
In line with our stated policy, no dividend will be paid for the period.
INVESTMENT ADVISER'S REPORT
In the six month period to 30 September 2009, the net asset value of the Fund rose by 29% to 216p per share. This compares with a rise in the FTSE All Share of 33%.
The quoted portfolio performed significantly better than the unquoted. Stock that performed notably well during this period included Celsis +40% which was subject to a buy out in which the Fund participated; RPC +110% as the new management team refocused the business and Dialight +50% on the announcement of major new contracts. Catalyst Media rose by 120% as SIS announced two major new long term contracts. Better than expected results resulted in AssetCo, BBA and Castle rising by 80%, 80% and 75% respectively. Finally, Gleeson and Parity (prior to sale) also rose by around 50%.
Sadly these good results were offset by the disappointing performance of Journey Group which fell by 20% due to lack of news on corporate restructuring. It was also necessary to write off AT Communications at a cost from the March valuation of around £470,000 as the company was placed into administration. Bavaria adjusted for the return of capital rose by 15% whilst Electronic Data Products was sold at the March valuation reflecting the tender offer for the company.
Unquoted Portfolio:
One new investment was made during the period of £1.5m in Nastor Investments which represents the Fund's holding in the Celsis buyout vehicle. There was a small fall in the value of those companies valued in United States dollars, whilst Avanti was increased in value to reflect accrued interest. Orthoplastics also made a small acquisition which increased the Fund's investment by £300,000. Indicant was also written up during the period following good trading results but the impact was not material.
Outlook:
Stock markets have recovered on the back of excess liquidity and better than expected earnings. However, much of the improvement has been driven by investors searching for income when the return on cash deposits has been minimal. The inevitable result has been equity valuations rising to levels that in our opinion will be hard to maintain as taxes rise to fill the parlous state of government finances and customer expenditure declines. It is therefore more than possible that any recovery in the economy will be short lived.
In these circumstances the challenge will be to find good companies in other industries which will perform well despite these difficult circumstances. In addition, the Fund should continue to benefit from corporate activity despite the ongoing difficulty to secure bank financing.
TEN LARGEST HOLDINGS
as at 30 September 2009
RPC Group Plc
Cost £3,393,591 (1,500,000 shares)
Market value £3,675,000 representing 7.46% of Net Asset Value
RPC is the largest company in Europe manufacturing plastic packaging for the food, health and beauty industries. A new chairman has recently been appointed. Results have exceeded expectations and the debt is falling rapidly through better control of the working capital.
Avanti Communications Plc
Cost £2,709,237 Senior debt
Market value £2,709,237 representing 5.50% on Net Asset Value
Avanti is launching a communications satellite into space early in 2010. The Company's investment is in the senior debt which yields LIBOR + 1000bp. Early bookings to date for the satellite are extremely encouraging.
Dialight Plc
Cost £2,428,086 (1,600,000 shares)
Market value £2,560,000 representing 5.20% of Net Asset Value
The company is the world leader in LED lighting applications for applications excluding consumer appliances. LED lighting has significant energy and environmental benefits and demand is expected to grow strongly over the next five years. The company is profitable and has no current debt. The shares have performed well since the end of September and have now been sold.
Orthoproducts Limited
Cost £1,206,964 (319 shares)
Market value £2,552,000 representing 5.18% of Net Asset Value
Orthoproducts (previously Orthoplastics) is one of two companies in the world capable of manufacturing advanced plastic materials to the orthopedics industry. In addition the company has a successful and rapidly growing plastic components for the same industry. Orthoproducts had an outstanding year to end March 2009 with profits up circa 70%. The company has made an acquisition which will give good exposure to metal components used by the orthopedics industry.
BBA Aviation plc
Cost £3,785,823 (1,500,000 shares)
Market value £2,374,500 representing 4.82% on Net Asset Value
BBA Aviation is a leading provider of flight support and aftermarket services and systems to the aviation industry. Recent results have been good and debt reduction has exceeded market expectations.
Catalyst Media Group Plc
Cost £1,444,779 (3,125,000 shares)
Market value £2,281,250 representing 4.63% on Net Asset Value
Catalyst Media is the holding company for a 21% shareholding in SIS. SIS is a highly profitable provider of services to the racing industry. It is expected that Catalyst Media will seek to enhance shareholder value over the next twelve months.
Bavaria Industriekapital AG
Cost £2,118,718 (235,000 shares)
Market value £2,272,254 representing 4.61% of Net Asset Value
Bavaria is a small German industrial holding company. The company has no debt and substantial cash balances. At 31 March 2009 the shares were trading on a very low price earnings ratio with a yield of circa 23%.
Augean Plc
Cost £4,036,992 (5,366,906 shares)
Market value £2,254,101 representing 4.58% of Net Asset Value
Augean is the UK's largest landfill company. The company has little debt and generates substantial cashflow.
Quarto Group Inc
Cost £2,470,609 (2,050,000 shares)
Market value £2,193,500 representing 4.45% of Net Asset Value
Quarto is the world's largest publisher of 'coffee table' books, but also has more traditional publishing operations.
Castle Support Services Plc
Cost £1,077,236 (3,120,035 shares)
Market value £2,059,223 representing 4.18% of Net Asset Value
Castle is the largest company in the UK that repairs and maintains electro and electro mechanical equipment. The company is substantially profitable and has been buying back its own shares and has little debt.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors confirm to the best of their knowledge that:
the interim accounts, which have been prepared in accordance with the applicable accounting standard IAS 34, give a true and fair view of the assets, liabilities, financial position and loss of the Company and its undertakings included in the consolidation taken as a whole as required by DTR 4.2.4R ;
the Interim Management Report and Investment Adviser's Report include a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and
the Interim Management Report includes a fair review of the information required by DTR4.2.8R (disclosure of related party transactions and changes therein).
By order of the Board
Nigel Cayzer Rupert Evans
Director Director
26 November 2009 26 November 2009
INTERIM MANAGEMENT REPORT
Review of Business
A summary of the performance of the Group and future outlook is provided in the Investment Adviser's report on pages 5 and 6.
Dividend
The Directors do not propose payment of a dividend (30 September 2008 - Nil, 31 March 2009 - Nil).
Capital values
At 30 September 2009 the value of the assets available to shareholders was £49,249,905 (30 September 2008 - £51,798,521, 31 March 2009 - £39,765,021) and the Net Asset Value per share was £2.16 (30 September 2008 - £2.15, 31 March 2009 - £1.67).
Related party transactions
Related party transactions are disclosed in note 8 to the condensed financial statements.
Risks and uncertainties
The main risks arising from the Group's financial instruments are:
(i) market risk, including currency risk, interest rate risk and other price risk;
(ii) liquidity risk; and
(iii) credit risk
The Company Secretary, in close cooperation with the Board of Directors and the Investment Manager, coordinates the Group's risk management. The policies for managing each of these risks are summarised below and have been applied throughout the period.
(i) Market risk
The fair value or future cash flows of a financial instrument held by the Group may fluctuate because of changes in market prices. This market risk comprises currency risk, interest rate risk and other price risk. The Board of Directors reviews and agrees policies for managing these risks, which policies have remained substantially unchanged from those applying in the year ended 31 March 2009. The Investment Manager assesses the exposure to market risk when making each investment decision and monitors the overall level of market risk on the whole of the investment portfolio on an ongoing basis.
Currency risk
The functional and presentational currency of the Group is Sterling and, therefore, the Group's principal exposure to foreign currency risk comprises investments priced in other currencies, principally US Dollars. The Investment Manager monitors the Group's exposure to foreign currencies and reports to the board on a regular basis. The Investment Manager measures the risk to the Group of the foreign currency exposure by considering the effect on the net asset value and income of a movement in the rates of exchange to which the Group's assets, liabilities, income and expenses are exposed.
Income denominated in foreign currencies is converted to Sterling on receipt.
The Group's financial assets comprise fixed and equity investments, trade receivables and cash balances.
The Group finances its investment activities through the Group's Ordinary Share capital and reserves. The Group's financial liabilities comprise trade payables.
Interest rate risk
Interest rate movements may affect:
The possible effects on fair value and cash flows that could arise as a result of changes in interest rates are taken into account when making investment decisions. The Board reviews on a regular basis the values of the unquoted loans to companies in which private equity investment is made. Interest rate risk is not significant to the Group.
Other price risk
Other price risks (i.e. changes in market prices other than those arising from currency risk or interest rate risk) may affect the value of investments.
The Group's exposure to price risk comprises mainly movements in the value of the Group's investments.
The Board of Directors manages the market price risks inherent in the investment portfolios by ensuring full and timely access to relevant investment information from the Investment Manager. The Board meets regularly and at each meeting reviews investment performance. The Board monitors the Investment Manager's compliance with the Group's objectives and is directly responsible for investment strategy and asset allocation.
(ii) Liquidity risk
This is the risk that the Group will encounter difficulty in meeting obligations associated with financial liabilities.
Liquidity risk is significant as the Group invests in unlisted equities and other investments that may not be readily realisable.
In accordance with the Group's policy, the Investment Manager monitors the Company's liquidity risk, and the Board of Directors reviews it.
(iii) Credit risk
The Group does not have any significant exposure to credit risk arising from any one individual party. Credit risk is spread across a number of counterparties, each having an immaterial effect on the Group's cash flows, should a default happen.
By order of the Board
Nigel Cayzer Rupert Evans
Director Director
26 November 2009 26 November 2009
INDEPENDENT REVIEW REPORT TO ORYX INTERNATIONAL GROWTH FUND LIMITED
Introduction
We have been engaged by the Company to review the financial statements in the half yearly financial report for the six months ended 30 September 2009 which comprise the entity's condensed balance sheet and related statements of income, changes in equity, cash flow and the related explanatory notes that have been reviewed. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.
The financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on the financial statements in the half-yearly financial report based on our review.
Scope of review
We conducted our review in accordance with the International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom.
A review of interim financial information consists of making enquiries, primarily of persons responsible for the financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2009 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months ended 30 September 2009, expressed in £ sterling
| | | Six months ended 30 September | Six months ended 30 September | Year ended 31 March |
| | | 2009 | 2008 | 2009 |
| | Notes | £ | £ | £ |
| Income | | | | |
| Interest | 2 a) | 197,239 | 317,768 | 532,972 |
| Dividends and investment income | 2 a) | 1,179,003 | 1,549,868 | 1,957,538 |
| | | | | |
| | | 1,376,242 | 1,867,636 | 2,490,510 |
| | | | | |
| Realised (losses)/gains on investments | 2 g) | (1,034,886) | 2,798,001 | (536,343) |
| Movement in unrealised gain/(loss) on revaluation of investments | 2 g) | 11,375,113 | (13,834,920) | (21,891,039) |
| Transaction costs | | (51,644) | (87,348) | (107,757) |
| (Loss)/gain on foreign currency translation | 2 f) | (12,492) | 8,279 | 4,044 |
| | | | | |
| Income and loss from investments | | 11,652,333 | (9,248,352) | (20,040,585) |
| | | | | |
| Expenses | 2 j) | | | |
| Management and Investment Adviser’s fee | | 253,032 | 324,128 | 550,833 |
| Custodian fees | | 9,962 | 11,628 | 17,025 |
| Administration fees | | 25,226 | 33,743 | 59,161 |
| Registrar and transfer agent fees | | 10,822 | 52,980 | 112,314 |
| Directors’ fees and expenses | | 92,352 | 77,302 | 170,090 |
| Audit fees | | 12,534 | 13,534 | 36,000 |
| Insurance | | 5,264 | 4,512 | 9,000 |
| Legal and professional fees | | 143,179 | 118,729 | 294,206 |
| Loan facility interest | | - | 52,714 | 117,942 |
| Write back of accruals in Baltimore Plc | | - | - | (131,000) |
| Other expenses | | 23,938 | 37,415 | 284,556 |
| | | | | |
| Total expenses | | 576,309 | 726,685 | 1,520,127 |
| | | | | |
| Net income/(loss) for the period / year before taxation | | 11,076,024 | (9,975,037) | (21,560,712) |
| Withholding tax on dividends | | 222,358 | 217,083 | 258,915 |
| Net income/(loss) for the period / year | | 10,853,666 | (10,192,120) | (21,819,627) |
| Other comprehensive income | | - | - | - |
| Total comprehensive income for the period | | 10,853,666 | (10,192,120) | (21,819,627) |
| | | | | |
| Earnings per share – basic and diluted | 7 | £0.47 | £(0.42) | £(0.90) |
All of the income for the period and the total comprehensive income for the period are attributable to the owners of the Group.
All items in the above statement are derived from continuing operations.
CONDENSED CONSOLIDATED BALANCE SHEET
As at 30 September 2009, expressed in £ sterling
| | | 30 September 2009 | 30 September 2008 | 31 March 2009 |
| | Notes | £ | £ | £ |
| | | | | |
| Non-current assets | | | | |
| Investments at fair value through profit or loss | 2 b) | 44,617,393 | 53,571,431 | 38,532,549 |
| | | | | |
| Current assets | | | | |
| Other receivables | 2 c) | 88,812 | 796,399 | 368,865 |
| Dividends and interest receivable | | 207,557 | 163,683 | 318,876 |
| Amounts due from brokers | | 153,332 | - | 3,032 |
| Cash and cash equivalents | 2 d) | 5,469,891 | 655,283 | 906,097 |
| | | 5,919,592 | 1,615,365 | 1,596,870 |
| | | | | |
| Total assets | | 50,536,985 | 55,186,796 | 40,129,419 |
| | | | | |
| Current liabilities | | | | |
| Amounts due to brokers | | 959,415 | 467,401 | 15,978 |
| Interest bearing loans | | - | 2,250,000 | - |
| Creditors and accrued expenses | 2 e) | 327,665 | 670,874 | 348,420 |
| | | 1,287,080 | 3,388,275 | 364,398 |
| | | | | |
| Net assets | | 49,249,905 | 51,798,521 | 39,765,021 |
| | | | | |
| Shareholders’ equity | | | | |
| Called up share capital | 3 | 11,422,913 | 12,063,324 | 11,888,325 |
| Share premium | 3 | 42,696,509 | 42,894,039 | 42,696,509 |
| Reserves | 4 | (4,869,517) | (3,158,842) | (14,819,813) |
| | | | | |
| Total equity shareholders’ funds | | 49,249,905 | 51,798,521 | 39,765,021 |
| | | | | |
| | | | | |
| | | | | |
| Net Asset Value per Share – basic and diluted | 7 | £2.16 | £2.15 | £1.67 |
This interim report was approved by the Board of Directors on 26 November 2009 and signed on its behalf by:
Nigel Cayzer Rupert Evans
Director Director
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 September 2009, expressed in £ sterling
| | | Six months ended | Six months ended | Year ended |
| | | 30 September 2009 | 30 September 2008 | 31 March 2009 |
| | | £ | £ | £ |
| | | | | |
| Equity at beginning of period / year | | 39,765,021 | 63,308,152 | 63,308,152 |
| | | | | |
| Income/(loss) for the period / year | | 10,853,666 | (10,192,120) | (21,819,627) |
| | | | | |
| Total recognised income and expenses | | 10,853,666 | (10,192,120) | (21,819,627) |
| | | | | |
| | | | | |
| Reduction in share capital during the period / year | | | | |
| - Ordinary shares | | (1,368,782) | (1,317,511) | (1,723,504) |
| | | | | |
| Equity at end of period / year | | 49,249,905 | 51,798,521 | 39,765,021 |
| | | | | |
| | | | | |
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months ended 30 September 2009, expressed in £ sterling
| | | Six months ended | Six months ended | Year ended |
| | | 30 September 2009 | 30 September 2008 | 31 March 2009 |
| | Notes | £ | £ | £ |
| | | | | |
| Net cash inflow/(outflow) from operating activities | 5 | 5,945,068 | (327,777) | 2,523,265 |
| | | | | |
| Financing Activities | | | | |
| Cancellation of shares | | (1,368,782) | (1,317,511) | (1,663,504) |
| Proceeds of borrowings | | - | 1,500,000 | 6,400,000 |
| Repayment of borrowings | | - | - | (7,150,000) |
| Cash flow from financing activities | | (1,368,782) | 182,489 | (2,413,504) |
| | | | | |
| Net (decrease) / increase in cash and cash equivalents | | 4,576,286 | (145,288) | 109,761 |
| | | | | |
| Cash and cash equivalents at beginning of period / year | | 906,097 | 792,292 | 792,292 |
| Exchange movements | | (12,492) | 8,279 | 4,044 |
| | | | | |
| Cash and cash equivalents at end of period / year | | 5,469,891 | 655,283 | 906,097 |
NOTES TO THE CONDENSED SET OF FINANCIAL STATEMENTS
1. General
Oryx International Growth Fund limited (the "Company") was incorporated in Guernsey on 2 December 1994 and commenced activities on 3 March 1995.
2. Accounting Policies
Basis of Accounting
The annual financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS"). The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting. The same accounting policies, presentation and methods of computation are followed in the condensed set of financial statements as applied in the Company's latest annual audited financial statements.
The financial statements have been prepared on the historical cost basis except for the revaluation of certain financial instruments. The principal accounting policies are set out below. The preparation of financial statements in conformity with International Financial Reporting Standards requires the Group to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Changes in accounting policy
In the current financial period, the group has adopted International Financial Reporting Standard 8 "Operating Segments" and International Accounting Standard 1 "Presentation of Financial Statements" (revised 2007).
IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Directors to allocate resources to the segments and to assess their performance. In contrast, the predecessor Standard IAS 14 "Segmental Reporting" required the Group to identify two sets of segments (business and geographical), using a risks and rewards approach, with the Group's system of internal financial reporting to Directors serving only as the starting point for the identification of such segments. However, as the Group is engaged in a single segment of business and no such segmental reporting is undertaken, this has not resulted in any changes to the financial information provided.
IAS 1 (revised) requires the presentation of a statement of changes in equity as primary statement, separate from the income statement and statement of comprehensive income. As all result, a condensed statement of comprehensive income has been included in the primary statements, showing changes in each component of equity for each period presented.
Going Concern
The Directors believe it is appropriate to adopt the going concern basis in preparing the financial statements as, after due consideration, the Directors consider that the Group has adequate resources to continue in operational existence for the foreseeable future.
a) Income recognition
Dividends arising on the Group's listed and unlisted investments have been accounted for on an ex-dividend basis. Deposit interest is accrued on a day-to-day basis. All income is shown gross of any applicable withholding tax.
b) Investments
Classification
All investments of the Group are designated into the financial assets at fair value through profit or loss category. The investments are purchased mainly for their capital growth and the portfolio is managed, and performance evaluated, on a fair value basis in accordance with the Group's documented investment strategy. Therefore the Directors consider that this is the most appropriate classification.
This category comprises financial instruments designated at fair value though profit or loss upon initial recognition - these include financial assets that are not held for trading purposes and which may be sold. These are principally investments in listed and unlisted equities.
Measurement
Financial instruments are measured initially at fair value being the transaction price. Subsequent to initial recognition, all instruments classified as fair value through profit or loss are measured at fair value with changes in their fair value recognised in the Statement of Comprehensive Income. Transaction costs are separately disclosed in the Statement of Comprehensive Income.
Fair value measurement principles
Listed investments have been valued at the bid market price ruling at the balance sheet date. In the absence of the bid market price, the closing price has been taken, or, in either case, if the market is closed on the Balance Sheet date, the bid market or closing price on the preceding business day.
Unlisted investments are valued in accordance with the International Private Equity and Venture Capital Association (IPEVCA) guidelines. Their valuation includes all factors that market participants would consider in setting a price. The primary valuation techniques employed to value the unlisted investments are earnings multiples, recent transactions and the net asset basis. Cost is also considered appropriate for early stage investments. The relevance of this methodology can be eroded over time and in these cases the carrying values will be adjusted to reflect fair value.
For certain of the Group's financial instruments, including cash and cash equivalents, interest and other receivables and accrued expenses, the carrying amounts approximate fair value due to their immediate or short-term maturity.
Derecognition of financial assets occur when the rights to receive cash flows from financial instruments expire or are transferred and substantially all of the risks and rewards of ownership have been transferred.
c) Other receivables
Other receivables do not carry any interest and are short term in nature and are accordingly stated at their amortised cost as reduced by appropriate allowances for impairment.
d) Cash and cash equivalents
Cash and cash equivalents are defined as cash in hand and short term deposits in banks.
e) Other accruals and payables
Other accruals and payables are not interest bearing and are stated at their amortised cost.
f) Foreign currency translation
Items included in the Group's financial statements are measured using the currency of the primary economic environment in which it operates (the "functional currency"). This is the pound sterling which reflects the Group's primary activity of investing in sterling securities. The Group's shares are also issued in sterling.
Foreign currency assets and liabilities have been translated at the exchange rates ruling at the Balance Sheet date. Transactions in foreign currency during the period have been translated into pounds sterling at the spot exchange rate in effect at the date of the transaction. Realised and unrealised gains and losses on currency translation are recognised in the Statement of Comprehensive Income.
g) Realised and unrealised gains and losses
Realised gains and losses arising on the disposal of investments are calculated by reference to the cost attributable to those investments and the sales proceeds, and are included in the Statement of Comprehensive Income. Unrealised gains and losses arising on investments held at the Balance Sheet date are also included in the Statement of Comprehensive Income.
h) Financial liabilities
All bank loans and borrowings are initially recognised at cost, being the fair value of the consideration received, less issue costs where applicable. After initial recognition, all interest bearing loans and borrowings are subsequently measured at amortised cost. Any difference between cost and redemption value has been recognised in the Statement of Comprehensive Income over the period of the borrowings on an effective interest basis.
Financial liabilities are derecognised from the balance sheet only when the obligations are extinguished either through discharge, cancellation or expiration.
i) Equity
Share Capital represents the nominal value of equity shares.
Share Premium Account represents the excess over nominal value of the fair value of consideration received for equity shares, net of expenses of the share issue.
Reserves include all current and prior results as disclosed in the Statement of Comprehensive Income.
j) Expenses
Expenses are recognised in the Statement of Comprehensive Income upon utilisation of the service or at the date they are incurred.
k) Consolidation
These consolidated financial statements comprise the financial statements of the Company and its wholly owned subsidiary undertakings, Baltimore plc and American Opportunity Trust PLC both UK regulated. The results of the subsidiary undertakings and the businesses acquired are included in the Consolidated Statement of Comprehensive Income. The investments in the wholly owned subsidiaries are included in the accounts of the parent company at cost less any provisions for impairment.
3. Share Capital and Share Premium
a) Authorised Share Capital
| Number of Shares | £ | ||||||
| Authorised: | |||||||
| Ordinary shares of 50p each | 90,000,000 | 45,000,000 | |||||
b) Ordinary Shares cancelled - 1 April 2009 to 30 September 2009
| Ordinary Shares of 50p each and Management Shares of 50p each | Number of Shares | Share Capital £ | Share Premium £ | |||
| At 1 April 2009 | 23,776,649 | 11,888,325 | 42,696,509 | |||
| Share buy back | (930,824) | (465,412) | - | |||
| At 30 September 2009 | 22,845,825 | 11,422,913 | 42,696,509 |
During the period the Company repurchased for cancellation 930,824 shares at an average cost of £1.471 per share. A further 300,000 shares have been repurchased after the period end at an average cost of £1.758 per share.
4. Reserves
| 31 March 2009 £ | Movement £ | 30 September 2009 £ | ||||
| Net investment income | 2,027,652 | 525,931 | 2,553,583 | |||
| Realised gain on investments | 23,971,965 | (1,034,886) | 22,937,079 | |||
| Loss on foreign currency transactions | (884,369) | (12,492) | (896,861) | |||
| Unrealised loss on revaluation of investments held | (35,657,208) | 11,375,113 | (24,282,095) | |||
| Capital redemption reserve | 1,246,500 | - | 1,246,500 | |||
| Repurchase of ordinary shares | (4,195,463) | (903,370) | (5,098,833) | |||
| Repurchase of warrants | (8,179) | - | (8,179) | |||
| Discount on repurchase of Convertible Loan Stock | (1,320,711) | - | (1,320,711) | |||
| (14,819,813) | 9,950,296 | (4,869,517) |
5. Cash Flows from Operating Activities
| Six months ended 30 September | Six months ended 30 September | Year ended 31 March | ||||
| 2009 | 2008 | 2009 | ||||
| £ | £ | £ | ||||
| Net income/(loss) for the period / year | 10,853,666 | (10,192,120) | (21,819,627) | |||
| Realised losses/(gains) on investments | 1,034,886 | (2,798,001) | 536,343 | |||
| Movement in unrealised loss on revaluation of investments | (11,375,113) | 13,834,920 | 21,891,039 | |||
| Loss / (gain) on foreign currency translation | 12,492 | (8,279) | (4,044) | |||
| (10,327,735) | 11,028,640 | 22,423,338 | ||||
| Purchase of investments | (9,750,871) | (19,964,966) | (24,245,236) | |||
| Proceeds from sale of investments | 14,799,391 | 18,736,582 | 26,210,816 | |||
| 5,048,520 | (1,228,384) | 1,965,580 | ||||
| Decrease in dividends and interest receivable | 111,319 | 132,613 | (22,580) | |||
| Decrease in debtors | 280,053 | 1,203 | 428,737 | |||
| (Decrease)/increase in creditors and accrued charges | (20,755) | (69,729) | (452,183) | |||
| 370,617 | 64,087 | (46,026) | ||||
| 5,945,068 | (327,777) | 2,523,265 | ||||
6. Reconciliation of Net Asset Value to Published Net Asset Value
| 30 September | 30 September | 31 March | |||||
| 2009 | 2008 | 2009 | |||||
| Ordinary Shares | £ | £ per share | £ | £ per share | £ | £ per share | |
| Published Net Asset Value | 50,460,569 | 2.21 | 52,784,399 | 2.19 | 41,608,087 | 1.75 | |
| Management Shares in issue | 1 | - | - | 1 | - | ||
| Unrealised loss on revaluation of investments at bid / mid price (ref note 6(a) below) | (1,195,665) | (0.05) | (985,878) | (0.04) | (1,535,067) | (0.07) | |
| Reduction in value of Subsidiary | (15,000) | - | - | - | (308,000) | (0.01) | |
| Net Asset Value attributable to shareholders | 49,249,905 | 2.16 | 51,798,521 | 2.15 | 39,765,021 | 1.67 | |
In accordance with International Financial Reporting Standards the Group's long investments have been valued at bid price. However, in accordance with the Group's principal documents the Net Asset Value reported each month reflects the investments being valued at the closing, last or mid- market (as the Directors in all circumstances consider appropriate) price as notified to the Group on the valuation day by a member of the stock exchange concerned. Certain investments remain at fair value as determined in good faith by the Directors.
7. Earnings per Share and Net Asset Value per Share
The calculation of basic earnings per share for the Ordinary Share is based on a profit of £10,853,666 (30 September 2008 - loss £10,192,120, 31 March 2009 - loss £21,819,627) and the weighted average number of shares in issue during the period of 23,112,553 shares (30 September 2008 - 24,689,085 shares, 31 March 2009 - 24,318,802 shares). In accordance with IAS 33 - Earnings per Share, the diluted earnings per share is also disclosed. At 30 September 2009 there was no difference in the diluted earnings per share calculation for the Ordinary Shares.
The calculation of Net Asset Value per Ordinary Share is based on a Net Asset Value of £49,249,905 (30 September 2008 - £51,798,521, 31 March 2009 - £39,765,021) and the number of shares in issue at the period end of 22,845,825 shares (30 September 2008 - 24,126,649 shares, 31 March 2009 - 23,776,649 shares). The diluted Net Asset Value per share is also disclosed. At 30 September 2009 there was no difference in the diluted Net Asset Value per share calculation for the Ordinary Shares.
8. Related Parties
The Manager and Investment Adviser are considered to be related parties. The fees paid are included in the Consolidated Statement of Comprehensive Income. At 30 September 2009 £132,305 included in creditors and accrued expenses was payable to the Investment Adviser.
The Directors are also considered to be related parties and their fees are disclosed in the Consolidated Statement of Comprehensive Income. At 30 September 2009 £33,432 included in creditors and accrued expenses was payable to the Directors.
There were no transactions between the Company and its subsidiaries in the period.
Enquiries:
Sara Bourne
BNP Paribas Fund Services (Guernsey) Limited Tel: 01481 750858
Alastair Moreton
Hannah Pearce
Arbuthnot Securities Limited Tel: 020 7012 2000