Oryx International Growth Regulatory News (OIG)

21 Dec 2006 07:00

Oryx International Growth Fund Ld21 December 2006 FOR IMMEDIATE RELEASE RELEASED BY HSBC SECURITIES SERVICES (GUERNSEY) LIMITED ORYX INTERNATIONAL GROWTH FUND LIMITED PRELIMINARY ANNOUNCEMENT THE BOARD OF DIRECTORS OF ORYX INTERNATIONAL GROWTH FUND LIMITED ANNOUNCEUNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 OCTOBER 2006: UNAUDITED CONSOLIDATED BALANCE SHEET as at 30 September 2006 (Expressed in pounds sterling) 30 September 30 September 2006 2005 £ £ASSETSBank balances 20,581,721 4,927,702Dividends and interest receivable 335,573 143,034Amounts due from brokers 471,217 209,609Other receivables 540,822 249,047Listed investments at fair value (Cost £31,504,892: 2005 - £16,052,462) 34,397,308 18,290,313Unlisted investments at fair value (Cost £4,581,003: 2005 - £3,906,297) 5,973,675 5,181,451 TOTAL ASSETS 62,300,316 29,001,156 LIABILITIESBank overdrafts 71,921 4,337Amounts due to brokers 804,659 365,640Creditors and accrued expenses 1,792,403 101,508 TOTAL LIABILITIES 2,668,983 471,485 NET ASSETS 59,631,333 28,529,671 REPRESENTED BY:CAPITAL AND RESERVESCalled up share capital 18,029,988 5,333,045 Share premium 19,588,739 5,678,409Capital redemption reserve 1,246,500 1,246,500Other reserves 17,643,852 16,271,717 38,479,091 23,196,626 TOTAL EQUITY SHAREHOLDERS' FUNDS 56,509,079 28,529,671 Minority Interests 3,122,254 - 59,631,333 28,529,671 Net Asset Value per Share - Ordinary £ 3.10 £ 2.67 Net Asset Value per Share - C Share £ 1.06 N/a Diluted Net Asset Value per Share - Ordinary £ 3.10 £ 2.67 Diluted Net Asset Value per Share - C Share £ 1.06 N/a UNAUDITED CONSOLIDATED INCOME STATEMENT for the period ended 30 September 2006 (Expressed in pounds sterling) 6 month to 6 month to 30 September 30 September 2006 2005 £ £INCOMEDeposit interest 297,969 90,350Dividends and investment income 642,366 714,465 940,335 804,815 EXPENDITUREManagement and investment adviser's fee 225,708 156,421Finance charge - 7,220Custodian fees 12,529 8,807Administration fees 19,672 11,880Registrar and transfer agent fees 997 527Directors' fees and expenses 63,507 50,657Audit fees 6,588 6,015Insurance 4,458 4,746Legal and professional fees 1,963 78,971Termination costs of Baltimore directors and employees 459,465 -Miscellaneous expenses 49,466 13,355 844,353 338,599 NET INCOME BEFORE TAXATION 95,982 466,216Taxation (51,066) (69,392) NET INCOME FOR THE PERIOD AFTER TAXATION 44,916 396,824 Realised gain on investments 2,860,764 2,377,118Gain on foreign currency translation 49,880 13,904Movement in unrealised (loss)/gain on revaluation of investments (885,770) 10,136Transaction costs (361,468) (35,133) TOTAL SURPLUS ATTRIBUTABLE TO SHAREHOLDERS FOR THE PERIOD 1,708,322 2,762,849 Basic earnings per share for the period - Ordinary £ 0.14 £ 0.27 Basic earnings per share for the period - C Share £ 0.01 N/a Diluted earnings per share for the period - Ordinary £ 0.14 £ 0.26 Diluted earnings per share for the period - C Share £ 0.01 N/a UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS for the period ended 30 September 2006 (Expressed in pounds sterling) 6 month to 6 month to 30 September 30 September 2006 2005 £ £Net cash (outflow)/inflow from operating activities (13,863) 285,625 INVESTING ACTIVITIESPurchase of investments (23,684,207) (10,388,446)Sale of investments 21,895,483 11,292,916Transaction costs (361,468) (35,133) Net cash (outflow)/inflow from investing activities (2,150,192) 869,337 FINANCING ACTIVITIESCash acquired on acquisition of Baltimore Plc 15,907,268 - Net cash inflow from financing activities 15,907,268 - Net cash inflow 13,743,213 1,154,962 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDSNet cash inflow 13,743,213 1,154,962Exchange movements 49,880 13,904Net cash at beginning of period 6,716,707 3,754,499 Net cash at end of period 20,509,800 4,923,365 CHAIRMAN'S STATEMENT During the period under review, the Company underwent a fundamental change withthe takeover of Baltimore plc which went unconditional on 18 July 2006. Thisresulted in the creation of a "C" share which will trade independently from theordinary shares until the Board merge the two businesses. I am pleased to report that the ordinary shares saw an increase in net assetvalue of 5 per cent. in the last six months and 16 per cent. over the lasttwelve to £3.10. This represents the continuing success of the manager'sinvestment strategy of investing in activist situations where value can beextracted. There are no direct comparables for the "C" shares, however progressis being made to align the portfolio to the ordinary shares so that they will,in due course, be compatible. In line with our stated policy, the Board do not propose paying a dividend,however it will be our intention to continue buying in ordinary shares when thediscount allows it to be enhancing to net asset value. Nigel Cayzer Chairman INVESTMENT ADVISER'S REPORT The performance of the Company attributable to the ordinary shares can largelybe attributable to the good performance of the unquoted portfolio. Inparticular Nationwide Accident went public and has subsequently risen by nearly50%. Paramount was taken over at a 100% premium to holding cost. A number ofother investments are in discussions to be acquired and your Board has revaluedthese to reflect "fair value". The quoted portfolio has been more challenging following a very weak period inequity markets in May. Inevitably there have been successes and failures.Recent purchases such as Biotrace, Telecom Plus, Compel, Inspired Gaming andAvanti Screen Media have generally performed well. This, however, has beenoffset by a very disappointing performance by Lambert Howarth, Cardpoint andFerraris. Communisis was also disappointing but we are optimistic that a newchef executive will revitalise the company over the next eighteen months. The Company was successful in acquiring Baltimore plc. These assets are nowheld in a 'C' share pool which will be merged with the ordinary share pool assoon as the two respective portfolios merge and remaining Baltimore liabilitiesare fully qualified. Both the ordinary and Oryx C shareholders will benefit from reduced overheadcosts as these are shared over a greater asset base. Considerable progress has been made over the past few weeks to resolve theissues at Baltimore. These can be summarised as follows: 1. The Baltimore portfolio consisted of a small number of illiquid investments.These have largely been liquidated at a premium to fair asset value (i.e. valuefor purposes of the offer). 2. The lease on the company's office has been surrendered again at aconsiderable saving. 3. The outstanding contract for difference has been resolved and the sharespurchased for cancellation. 4. Nearly all current expenses of the trust have been eliminated and thecontact with Duncan Soukup terminated at a saving of some £280,000 to Oryx Cshareholders. All litigation relating to Mr. Soukup has been dropped by bothparties. 5. Baltimore's remaining liabilities have been identified and we will seek tomitigate these over the next few months. Conclusion: Despite variable market conditions, we remain optimistic that the Group willmaintain the momentum of the last six months. North Atlantic Value LLP 12 December 2006 UNAUDITED TEN LARGEST EQUITY HOLDINGS as at 30 September 2006 Bavaria Indkapital - Cost £1,933,665 (91,450 shares) This was acquired as part of the Baltimore portfolio. Recent results have beengood but this holding will be reduced when the "lock up" is released in January2007. Market value £2,441,966 representing 4.10 per cent. of Net Asset Value. Compel Group Plc - Cost £1,858,775 (2,170,000 shares) The company is a small conglomerate offering technology rental services andconsulting. Profits rose 60 per cent. last year and the outlook for the currentyears is good. The shares were acquired at a significant discount to theestimated underlying value of the business. Market value £2,126,600 representing 3.57 per cent. of Net Asset Value. Santa Maria - Cost £680,088 (96,613 Ontario Inc shares and 1,264,823 Loan Notes13 per cent. 17/5/08) Santa Maria is the leading manufacturer and wholesaler of proscuitto and salamiin Canada, with a small export business to the US. It also imports anddistributes leading branded Italian foodstuffs, such as olive oil and dry pasta.It has a strong position in the specialty retail sector and has expanded intosupermarkets, including manufacturing supermarkets; own label products. Thecompany is performing well in 2006 with results ahead of budget. There is anoffer to acquire the company at a premium to the current valuation. Market value £2,033,561 representing 3.41 per cent. of Net Asset Value. Inspired Gaming Group Plc - Cost £1,832,401 (1,000,000 shares) The company is the largest owner operator of slot machines in the UnitedKingdom. The shares were acquired on an attractive multiple of earnings andEBITDA and have the potential to double if server based gaming technology issuccessfully rolled out. Market value £1,850,000 representing 3.10 per cent. of Net Asset Value. Electronic Data Processing Plc - Cost £1,681,117 (3,090,000 shares) The company is in fact a property business. The shares were purchased at adiscount to net asset value and have performed steadily since purchase. Market value £1,792,200 representing 3.01 per cent. of Net Asset Value. Augean Plc - Cost £1,696,453 (1,177,668 shares) The company is the largest owner of hazardous waste sites in the United Kingdom.The company is a prime candidate for acquisition and trades at a discount toprivate market value. Market value £1,660,512 representing 2.78 per cent. of Net Asset Value. Telecom Plus Plc - Cost £1,414,512 (1,135,000 shares) The company is the UK's leading bill aggregate for the utility industry offeringits clients all of the major utilities through a simple monthly payment. Thecompany has substantial cash balances and no debt. Earlier this year the companyentered into a performance related contract which gave Powergen the right toacquire the business at about twice the current share price. The companyrecently stated that trading was ahead of budget. Market value £1,623,050 representing 2.72 per cent. of Net Asset Value. Nationwide Accident Repair Services Plc ("Nationwide") - Cost £237,708 (950,000shares) Nationwide was taken private in 2002 through a management buy-in. Nationwide isthe largest chain of automobile body shops in the United Kingdom. Since itspurchase, loss-making operations and peripheral assets have been disposed of.All debt has been repaid and the company has significant cash balances.Nationwide had a good year in 2005 and interim results for 2006 have also beenfavourable. The company has now gone public and has performed satisfactorilysince the IPO. Market value £1,529,500 representing 2.56 per cent. of Net Asset Value. Georgica Plc - Cost £853,997 (1,000,000 shares) Georgica plc operates pool halls and bowling alleys in the United Kingdom. Thebusiness consists of 170 billiard sites and 39 ten pin bowling facilities.Twelve non-core Megabowl sites are being disposed off. We believe there isfurther scope for margin improvement subsequent to recent renovations. Cashflowsshould improve enough to enable the company to do share buybacks with surpluscash. The share price rose substantially following an announcement that thecompany was in discussions to be acquired. Following this, one third of theholding was sold at a substantial profit. Market value £1,460,000 representing 2.45 per cent. of Net Asset Value. Gleeson (MJ) Group Plc - Cost £1,166,286 (400,000 shares) Gleeson (MJ) Group plc is a construction operations company. The Group buildshouses and private purchases housing associations and local authorities, inaddition to providing electrical/mechanical engineering contracting, propertyinvestment, and residential and commercial development services. The company hasannounced a radical restructuring of its business portfolio which is expected tosignificantly enhance shareholder value over the next twelve months. Market value £1,432,000 representing 2.40 per cent. of Net Asset Value. NOTES TO THE ACCOUNTS For the period ended 30 September 2006 1. GENERAL Oryx International Growth Fund Limited (the "Company") was incorporated inGuernsey on 2 December 1994 and commenced activities on 3 March 1995. On 26 July 2006 the Company acquired the entire issued share capital ofBaltimore plc. Under the terms of the offer, the consideration payable for theseshares was in the form of an issue of a new Class of shares, Oryx C Shares,whereby each Baltimore shareholder was entitled to 1,000 Oryx C Shares for every5,319 Baltimore shares held. On 26 July 2006, Oryx C Shares were issued as a result of Baltimore shareholdersholding 140,286,701 Baltimore shares accepting the offer. At a Directors Meeting on 3 October it was resolved that the Company acquire allthe remaining shares in Baltimore pursuant to a compulsory acquisitionprocedure. 2. ACCOUNTING POLICIES The financial statements are prepared under the historical cost convention asmodified by the revaluation of investments and in accordance with UK applicableaccounting standards. The accounting policies have been applied consistently by the Group and areconsistent with those used in the previous reporting period. a) Income Recognition Dividends arising on the Group's listed and unlisted investments have beenaccounted for on an ex-dividend basis. Deposit interest is accrued on aday-to-day basis. Loan interest is accounted using the effective interestmethod. All income is shown gross of any applicable withholding tax. b) Valuation of investments Classification All investments of the Group are designated into the financial assets at fairvalue through profit or loss category. This category comprises financial instruments designated at fair value throughprofit or loss upon initial recognition - these include financial assets thatare not held for trading purposes and which may be sold. These are principallyinvestments in listed and unlisted equities. Measurement Financial instruments are measured initially at fair value being the transactionprice. Subsequent to initial recognition, all instruments classified as fairvalue through profit or loss are measured at fair value with changes in theirfair value recognised in the Income Statement. Transaction costs are separatelydisclosed in the income statement. Fair value measurement principles Listed investments have been valued at the bid market price ruling at thebalance sheet date. In the absence of the bid market price, the closing pricehas been taken, or, in either case, if the market is closed on the balance sheetdate, the bid market or closing price on the preceding business day. Unlisted investments traded on AIM have been valued at their published bidprices at the balance sheet date. Unlisted investments where there is not anactive market are valued using an appropriate valuation technique so as toestablish fair value at the balance sheet date. Transaction costs applicable to investment transactions have been recognised inthe Income Statement. c) Foreign Currency Translation Items included in the Group's financial statements are measured using thecurrency of the primary economic environment in which it operates (the "functional currency"). This is the pound sterling which reflects the Group'sprimary activity of investing in Sterling securities. Foreign currency assets and liabilities have been translated at the exchangerates ruling at the balance sheet date. Transactions in foreign currency duringthe period have been translated into pounds sterling at the spot exchange ratein effect at the date of the transaction. Realised and unrealised gains orlosses on currency translation are recognised in the Income Statement. d) Realised and Unrealised Gains and Losses Realised gains and losses arising on the disposal of investments are calculatedby reference to the cost attributable to those investments and the salesproceeds, and are included in the Income Statement. Unrealised gains and lossesarising on investments held at the balance sheet date are also included in theIncome Statement. e) Expenses Expenses in relation to the placing of C Shares were borne by the subscribers ofthe C Shares and not by existing ordinary shareholders. f) Convertible Loan Stock at 30 September 2005 All outstanding loan stock was converted during the period ended 30 September2005. The Convertible Loan Stock is recorded at the amount of the net proceeds.The difference between the recorded amount and the redemption value of the loanstock, the finance cost, is being charged at a constant rate over the period tomaturity to the Income Statement. Under the provisions of FRS 25, the equityportion of the Convertible Loan Stock should be separated from the debt portion.However, all the loan stock outstanding was converted during the period and theamount outstanding at 1 April 2005 was immaterial, this split between debt andequity separated from the debt portion was not deemed necessary and has not beendisclosed. 3. SHARE CAPITAL AND SHARE PREMIUM a) Authorised Share Capital £50,000,000 ordinary shares of 50p each 25,000,00040,000,000 C Shares of 50p each 20,000,000 45,000,000 On 24 July 2006, pursuant to an ordinary resolution approved at theExtraordinary General Meeting, the Company increased its Authorised ShareCapital from £25,000,000 to £45,000,000 by the creation of 40,000,000 C Sharesof 50p each. These shares carry the rights attached thereto set out in the newArticles of Association. b) Ordinary Shares Issued - 1 April 2006 to 30 September 2006 Number of Share ShareOrdinary shares of 50p each and Shares Capital PremiumManagement shares of 50p each: £ £ At 1 April 2006 10,666,088 5,333,044 5,678,410Issued during the period - - - At 30 September 2006 10,666,088 5,333,044 5,678,410 C Shares Issued - 1 April 2006 to 30 September 2006 Number of Share Share Shares Capital PremiumC Shares of 50p each: £ £ At 1 April 2006 - - -Issued during the period 25,393,888 12,696,944 13,910,329 At 30 September 2006 25,393,888 12,696,944 13,910,329 4. OTHER RESERVES Included in Other Reserves is £1,063,207 relating to share capital contracted tobe issued to holders of Baltimore Plc shares who have accepted the offer ofshares. An amount of £4,401,355 has been deducted from Other Reserves in respectof C Shares held by the Group for cancellation. 5. MINORITY INTERESTS At 30 September 2006, shares representing 9.8 per cent. of the share capital ofBaltimore plc were not owned by or contracted to the Company. The MinorityInterests in the assets of the balance sheet of the Group amount to £3,122,254. 6. RECONCILIATION OF NET INVESTMENT EXPENSE TO NET CASH FLOW FROM OPERATING ACTIVITIES Ord shares C shares Total 2006 2006 2006 2005 £ £ £ £ Net income/(expense) for the period 395,724 (350,808) 44,916 396,824Increase in dividends and interest receivable (140,109) (86,990) (227,099) (27,131)Decrease/(increase) in debtors (253,538) 287,140 33,602 (22,963)Increase/(decrease) in creditors andaccrued expenses 35,087 99,631 134,718 (68,325)Finance charge - - - 7,220 37,164 (51,027) (13,863) 285,625 7. RECONCILIATION OF NET ASSET VALUE TO PUBLISHED NET ASSET VALUE £ £Ordinary shares per share per share Published Net Asset Value 33,294,771 3.12Management shares in issue 1 -Unrealised loss on revaluation of investments at Bid/mid price (ref. Note (a) below) (270,189) (0.02) Net Asset Value attributable to shareholders 33,024,583 3.10 £ £C Shares per share per share Published Net Asset Value 26,776,644 1.06Unrealised loss on revaluation of investments at Bid/mid price (ref. Note (a) below) (169,894) - Net Asset Value attributable to shareholders 26,606,750 1.06 (a) In accordance with United Kingdom Financial Reporting Standards the Group'slong investments have been valued at bid price. However, in accordance with theCompany's principal documents the Net Asset Value reported each month reflectsthe investments being valued at the closing, last or mid-market (as theDirectors in all circumstances considers appropriate) price as notified to theGroup on the valuation day by a member of the stock exchange concerned. Certaininvestments remain valued at fair value as determined in good faith by theDirectors. 8. POST BALANCE SHEET EVENTS At a Directors Meeting on 3 October it was resolved that the Company acquire allthe remaining shares in Baltimore pursuant to a compulsory acquisitionprocedure. This information is provided by RNS The company news service from the London Stock Exchange