ZOL.L Regulatory News (ZOL)

8 May 2008 09:55

Crosby Asset Management Inc08 May 2008 CROSBY ASSET MANAGEMENT INC. ("CROSBY") TRADING UPDATE - THREE MONTHS TO MARCH 31 2008 8 May 2008 Turnover US$7.9 million (Q1 2007 US$5.3 million) Loss attributable to shareholders US$26.2 million* (Q1 2007 US$20.8 millionloss) Assets under management US$2.2 billion (Q1 2007 US$1.4 billion) * Loss attributable to shareholders was largely caused by non-cashmark-to-market losses on Crosby's shareholding in IB Daiwa due to the fall in IBDaiwa's share price from 41 Yen on 1 January 2008 to 17 Yen on 31 March 2008. HIGHLIGHTS IB Daiwa ("IBD") - during the first quarter of 2008, Leed Petroleum, in whichIBD has a 41.7% interest, announced that it had been awarded additional leasesand interests at Main Pass and Ship Shoal in the Gulf of Mexico and thatdrilling at its Eugene Island A-6 well had been a success, with confirmed 2Preserves more than three times pre-drill estimates. An updated reserve auditshowed that as at 1 April 2008 1P, 2P and 3P reserves had increased by +43.1%,+30.3% and +17.6% respectively over 1 June 2007, with 2P reserves standing at123.5 bcfe. Crosby Wealth Management ("CWM") - due to market corrections and changes ininvestor sentiment during the first three months of the year, CWM experienced asmall decline in assets under management and a significant contraction inmargins. However, CWM remained profitable during the quarter. Crosby Forsyth ("CF") - restructuring of the business continued during the firstquarter with the appointment of a global head of sales and the rebranding of thebusiness from Forsyth Partners to Crosby Forsyth. It is anticipated that therestructuring will be completed in the second quarter. In the first three monthsof the year, assets under management fell 15% through a combination of declinesin value broadly in line with market and client redemptions. SW1 Capital ("SW1") - in February, Crosby announced that it had taken a stake inSW1, a newly formed partnership that has been established with an institutionalstandard operating and management platform to facilitate the development of anintegrated asset management business. Orchard Petroleum ("Orchard") - A reserve audit completed in late 2007, andissued in January 2008 shows an increase in 2P reserves to 16mmboe from approx10mmboe at the time of the acquisition in May 2007. As of March 31st 2008, Orchard had 32 wells on production, with a further 5wells (4 of them in the South Belridge field and one in the Forbes field) havingbeen drilled and logged but awaiting completion and being tied into production. Additionally, there are 7 other wells that have been drilled but not yet tested.It is expected that a number of these will be tested during the coming fewweeks. During the period under review, a long-term financing package of approximatelyUS$240 million in debt and equity was put into place. Some of this financing hasbeen completed and drawn-down, other parts are in late-stage documentation. As part of this funding package, US$50 million was drawn down in April andutilised to repay the original acquisition bridge facility from CommonwealthBank of Australia. Orchard also used part of the facility and bought out (andeffectively cancelled) in February a 4.25% royalty interest in South Belridgethus increasing net cash flow from the increasing number of producing wells inthis field. The fund raising package also enables Orchard to undertake a major accelerateddrilling programme in which between 30 and 50 new wells will be drilled andbought into production over the next 12 months in the South Belridge Field. Inaddition, a number of development and exploration wells will be drilled in otherleased areas that are held by the Orchard Corporate Restructuring and Name Change - alongside the publication of the 2007Interim Results in March, Crosby announced that, given the recent growth in itsasset management businesses and the opportunities within the asset managementindustry, it was restructuring its business mix to become a 'pure-play' assetmanagement company. Consequently, the company also announced that it would beseeking shareholder approval at the AGM on 1 May 2008 to change its name toCrosby Asset Management. The name change was unanimously approved at the AGM,and became effective from the 8th May 2008. Trading Summary Unaudited Unaudited three months ended three months ended 31 March 2008 31 March 2007 US$'000 US$'000 Turnover/Revenue 7,913 5,338Loss on financial assets at fairvalue through profit or loss (20,914) (9,591)Loss on financial liabilities atfair value through profit or loss - (399)Other income 226 164Administrative expenses (10,554) (8,562)Distribution expenses (1) (5)Other operating expenses (2,452) (3,192) ---------- ---------Loss from operations (25,782) (16,247) Finance costs (20) -Amortisation of intangible assets (155) -Share of profits/(losses) ofassociates / 49 (39)a jointly controlled entity ---------- ---------Loss before taxation (25,908) (16,286) Taxation expenses (76) (38) ---------- --------- Loss for the period (25,984) (16,324) ========== ========= Attributable to:Equity holders of the Company (26,180) (20,803)Minority interests 196 4,479 ---------- --------- Loss for the period (25,984) (16,324) ========== ========= Loss per share for loss attributable US cents US centsto the equity holders of the Companyduring the period - Basic (10.76) (8.56) ========== ========= - Diluted N/A N/A ========== ========= Enquiries: Crosby Asset Management Inc.Steve Fletcher - Chief Operating Officer +44 20 7590 2800 Dawnay, Day Corporate Finance LimitedDavid Rae/Ed Gay +44 20 7630 4140 This information is provided by RNS The company news service from the London Stock Exchange