SVE.L Regulatory News (SVE)

21 Apr 2008 07:00

Starvest PLC21 April 2008 Half-year report - six months ended 31 March 2008 Chairman's statement Investment report As announced on 1 April, the past months have been challenging, particularlyduring March when market sentiment and small volume selling have adverselyimpacted the share prices of most of the companies in which Starvest isinvested. The overall asset valuation has fallen to £11.5m, the level declaredat 30 September 2006. This is disappointing but not unexpected in the currentclimate. Furthermore, it is entirely possible that the value will fall furtherprior to an improvement in sentiment. More importantly, in spite of the decline in the net asset values, the Board hasconfidence in the business plans and management of its investee companies; asmarket conditions improve, the Board expects that market prices will recover.This is particularly true of the majority of investee companies with mineralexploration activities; these continue to make advances in their discoveries ofminerals and in developing their resources to take advantage of buoyant marketconditions. Minerals continue to be in high demand by emerging economies, afact which is unlikely to change in the medium term. Against this background, the Board is satisfied with the investments currentlyheld. Other points of note during the half year: • The net asset values are pre tax and based on mid-market closing prices on Monday 31 March 2008 or, in two cases, the Directors' lower valuation. • The share price discount to net asset value widened to 45% as at 31 March, a level of discount not seen since the first quarter of 2007. • Starvest has added to its investments in three AIM quoted mineral exploration ventures, Alba Mineral Resources plc, Lisungwe plc and Ariana Resources plc; in addition, the Company has made a small investment in PLUS quoted CAP Energy plc and a further investment in Lotus Resources plc. • The loss on ordinary activities before taxation for the period amounted to £672,206 (2007: profit of £748,670). The loss includes administrative expenses amounting to £153,380 and an impairment charge of £547,088 to reflect the unrealised losses on some investments. • Unrealised profits as at 31 March 2008: £6.6m (2007: £12.2m) before tax. • Basic loss of 1.9 pence per share (2007: earnings of 1.41 pence per share); fully diluted loss of 1.7 pence per share (2007: earnings of 1.23 pence per share). • Starvest now holds investments in thirty-four companies of which eighteen are traded on AIM, eleven on PLUS Markets, one on the Toronto exchange and one on the North American Pink Sheets; a further investee company is expecting to become PLUS quoted during the current quarter and two others have suspended their quotations. The companies are listed on pages 9 to 11 of this report. Given market conditions, the Board continues to be satisfied with progress in its portfolio of investments. Starvest continues to receive new investment proposals from businesses, mainlyin the natural resources sector. Before a commitment is made, these are closelyevaluated to ensure that they accord with the Company's medium to long terminvestment strategy. Company statistics 31 March 2008 Change since 31 31 December 31 March 2007 March 2007 2007 Portfolio net asset value £11. 5m -25% £15.2m £15.4mNet asset value - basic per share 33.01p -21% 43.63p 41.8pNet asset value - fully diluted 29.9p -21% 39.06p 37.7pper shareShare price 16.25p -38% 24.25p 26.5pShare price discount to fully 45.6% +15.9 points 37.92% 29.7%diluted net asset valueMarket capitalisation £5.67m -£4.03 £8.46m £9.7m Dividends and share buy-back The Board will consider the payment of a dividend for the current year when theresults for the full year are known after 30 September 2008; there is nointention of repeating the payment of a special dividend as in June 2007following the exceptional profits arising from the successful disposal ofAfrican Platinum plc. At the beginning of the period, the Board had authority to purchase up to3,550,000 of its own shares. On 22 November 2007 the Company purchased 250,000of its own shares in the market at an average price of 29.1 pence per share. Further information Those Shareholders who wish to receive electronic copies of regulatoryannouncements are invited to register their email address on the home page ofthe Company website: www.starvest.co.uk. Previous reports, quarterly updatesand announcements are available from the site. Your Board continues to look to the future with optimism; we expect furtherprogress in the next quarter and plan to issue the Chairman's next update duringJuly 2008. R Bruce RowanChairman & Chief Executive21 April 2008 Profit & loss account 6 months to 31 6 months to 31 Year ended March 2008 March 2007 30 September 2007 Unaudited Unaudited Audited £ £ £ Operating income 16,716 956,567 5,494,067 Direct costs (15,430) (54,974) (177,924) Gross profit 1,286 901,593 5,316,143 Administrative expenses (153,380) (128,726) (272,076) Impairment of trade investments (547,088) - - Operating (loss)/profit on ordinary activities (699,182) 772,867 5,044,067 Interest receivable 72,728 9,268 71,114 Interest payable (45,752) (33,465) (84,413) (Loss)/profit on ordinary activities before (672,206) 748,670 5,030,768taxation Tax on profit on ordinary activities - (225,000) (1,505,236) (Loss)/profit on ordinary activities after taxation (672,206) 523,670 3,525,532 (Loss)/earnings per share - see note 4 Basic (1.9) pence 1.4 pence 9.6 penceFully diluted (1.7) pence 1.2 pence 8.8 pence Balance sheet 6 months to 31 6 months to 31 Year ended March 2008 March 2007 30 September 2007 Unaudited Unaudited Audited £ £ £Fixed assets - - - Current assets Debtors 31,980 10,370 10,257Trading investments - see note 2 5,499,136 3,590,082 4,750,185Cash at bank and in hand 1,341,142 1,127,660 3,006,588 6,872,258 4,728,112 7,767,030 Creditors - amounts falling due within oneyearOther creditors (2,574,467) (1,652,860) (2,548,969) Net current assets 4,297,791 3,075,252 5,218,061 Total assets less current liabilities 4,297,791 3,075,252 5,218,061 Capital and reservesCalled up share capital 372,173 372,173 372,173Share premium account 2,026,396 2,026,396 2,026,396Profit and loss account 1,899,222 676,683 2,819,492 Equity shareholders' funds 4,297,791 3,075,252 5,218,061 Cash flow statement 6 months to 31 6 months to 31 Year ended March 2008 March 2007 30 September 2007 Unaudited Unaudited Audited £ £ £ Net cash (outflow)/inflow from operating (1,443,358) 361,491 3,484,305activitiesReturns on investment and servicing offinance:Interest receivable 72,728 9,268 71,114Interest payable (45,752) (33,465) (84,413) 26,976 (24,197) (13,299) Taxation paid - - (395,880)Equity dividends paid (175,586) - (367,172 (175,586) - (763,052) Financing:Company shares repurchased (73,478) (86,000) (577,732)New short term loan - 1,000,000 1,000,000 (73,478) 914,000 422,268 (Decrease)/increase in cash in the period (1,665,446) 1,251,294 3,130,222 Opening cash balance brought forward 3,006,588 (123,634) (123,634) Closing cash balance 1,341,142 1,127,660 3,006,588 Movement on equity shareholders' funds 6 months to 31 6 months to 31 Year ended March 2008 March 2007 30 September 2007 Unaudited Unaudited Audited £ £ £ Total recognised (loss)/profits relating to the (672,206) 523,670 3,525,532periodDividend paid (175,586) - (367,172)Purchase of own shares for Treasury - see note 3 (73,478) (85,851) (577,732) (Decrease)/increase in shareholders' funds (921,270) 437,819 2,580,628 Opening shareholders' funds 5,218,061 2,637,433 2,637,433Closing shareholders' funds 4,296,791 3,075,252 5,218,061 Interim report notes 1. Interim report The information relating to the six month periods to 31 March 2008 and 31 March2007 is unaudited. The information relating to the year ended 30 September 2007 is extracted fromthe audited accounts of the Company which have been filed at Companies House andon which the auditors issued an unqualified audit report. 2. Basis of accounting The report has been prepared using accounting policies that are consistent withthose adopted by the Company in accordance with UK GAAP for the statutoryaccounts for the year ended 30 September 2007, although the information does notconstitute statutory accounts within the meaning of section 240 of the CompaniesAct 1985. The Company will report again for the full year to 30 September 2008. The Company's investments at 31 March 2008 are valued at the lower of cost ormid market value or, in two instances, at a lower Directors' valuation. 3. Share buy back On 22 November 2007, the Company bought 250,000 of its own shares at an averageprice of 29.1 pence to be held in Treasury. Shareholders' funds were reduced by£73,478. 4. Earnings per share 6 months to 31 6 months to 31 Year ended March 2008 March 2007 30 September 2007 Unaudited Unaudited Audited £ £ £ These have been calculated on a (loss)/ (672,206) 523,670 3,525,532 profit of: The weighted average number of shares used 34,997,860 37,022,204 36,608,492 was: Basic (loss)/profit per share: (1.9) pence 1.4 pence 9.6 pence The weighted average number of shares and 40,572,860 42,597,204 40,229,710 outstanding options used was: Fully diluted (loss)/profit per share: (1.7) pence 1.2 pence 8.8 pence Investment portfolio Starvest now holds trade investments in the following companies: • Addworth plc Active capital investment company www.addworth.co.uk • Alba Mineral Resources plc Nickel, uranium & gold in Scotland, Mauritania, Sweden and Ireland www.albamineralresources.com • Agricola Resources plc Platinum and uranium exploration www.agricolaresources.com • Ariana Resources plc Gold exploration in Turkey www.arianaresources.com • Belmore Resources (Holdings) plc Zinc exploration in Ireland www.belmoreresources.com • Beowulf Mining plc Gold and copper exploration in Sweden www.beowulfmining.com • Black Rock Oil & Gas plc Oil and gas in Colombia www.blackrockoil.com • Brazilian Diamonds Limited Diamond exploration in Brazil www.braziliandiamonds.com • CAP Energy plc Oil & gas production in North America www.capenergy.co.uk • Carpathian Resources Limited Oil and gas exploration in Central Europe www.carpathian.com.au • Concorde Oil & Gas plc Operational oil and gas projects in the Russian Federation • The Core Business plc Personal care and beauty products www.thecorebusiness co.uk • DTT plc Driver training and recruitment services to the road haulage industry www.dttdriving.co.uk • Equity Resources plc Investment holding company • Franconia Minerals Corporation North American minerals www.franconiaminerals.com • Fundy Minerals Limited Gold and base metal exploration in Canada and West Africa www.fundyminerals.com • Gippsland Limited Tantulum exploration in Egypt www.gippslandltd.com.au • Goliath Resources Inc. Copper, gold & molybdenum in Canada and Zambia www.goliathresources.com • Greatland Gold plc Gold exploration in Western Australia and Tasmania www.greatlandgold.com • Guild Acquisitions plc Investment holding company • Hidefield Gold plc Gold exploration in North and South America www.hidefield.co.uk • India Star Energy plc Oil and gas investments • Kefi Minerals plc Mineral exploration in Turkey www.kefi-minerals.com • Lisungwe plc Nickel, uranium & gold in Malawi www.lisungwe.com • Lotus Resources plc Mineral exploration in China www.lotus-resources.com • Matisse Holdings plc Cash shell • Myhome International plc Domestic services franchiser www.myhomeplc.com • Oracle Coalfields plc Coal mining in Pakistan www.oraclecoalfields.com • Red Rock Resources plc Iron ore and manganese exploration in Australia and Zambia www.rrrplc.com • Regency Mines plc Copper & nickel exploration in Australia and Papua New Guinea www.regency-mines.com • Sheba Exploration (UK) plc Gold exploration in Ethiopia www.shebagold.com • St Helens Capital plc Corporate finance advisor www.sthelenscapital.com • Sunrise Diamonds plc Diamond exploration in Finland www.sunrisediamonds.com • Treslow Limited Copper & nickel in Ontario, Canada Copies of this interim report are available free of charge by application inwriting to the Company Secretary at the Company's registered office, 123Goldsworth Road, Woking, GU21 6LR, by email to email@starvest.co.uk or from theCompany's website at www.starvest.co.uk. Enquiries to: Bruce Rowan, Chairman, telephone 020 7486 3997 or John Watkins, Finance Director, telephone 01483 771992 or to john@starvest.co.uk Grant Thornton Corporate Finance020 7383 5100Gerry BeaneyColin Aaronson END This information is provided by RNS The company news service from the London Stock Exchange