TIDMAVA
RNS Number : 4569T
Avanti Capital PLC
30 March 2016
30 March 2016
Avanti Capital plc
Interim Results for the six months ended 31 December 2015
Avanti Capital plc, ("Avanti" or "the group") the AIM-quoted
investment management company, announces its interim results for
the six months ended 31 December 2015.
HIGHLIGHTS
-- As at 31 December 2015, the group had net assets of GBP3.3
million or 41 pence per ordinary share.
ENQUIRIES:
Avanti Capital Plc Tel: 020 7299 1459
Richard Kleiner
Panmure Gordon (UK) Limited Tel: 020 7886 2500
Andrew Potts
Company statement
Interim Results for the six months ended 31 December 2015
Results of the Group
As at 31 December 2015, the group had net assets of GBP3.3
million (2014: GBP4.6 million) or 41 pence per share (2014: 57
pence per share).
In the period to 31 December 2015, the loss after tax was
GBP981,000 (2014: profit after tax GBP60,000).
The above figures have been arrived at after including a fair
value adjustment in the carrying value of the investment of GBP1.33
million and a consequential reduction in the provision for the
carried interest of GBP530,000 or 6.60 pence per share. Also
included is the provision for management fees of GBP79,000 or 0.98
pence per share. The payment of such carried interest and
management fees are dependent upon the realisation of the
individual assets and,
in the case of the carried interest, being at values which are,
at least, equal to the values stated in these interim results.
The accounting policies have been applied consistently from
earlier accounting periods and reference should be made to page
8.
Net asset values per Avanti share by category were:
Carrying Value Carrying Value
Investments Pence per share GBPm
Mblox 39 GBP3.1
Other assets including 20 GBP1.6
cash
Total 59 GBP4.7
Purchase of own shares
During the period, there has been no purchase by the company of
its own shares.
Mblox
Mblox closed its 2015 fiscal year with favourable performance in
a market significantly impacted by international currency
fluctuations. The company, which is privately held, posted 12% year
on year growth in revenues by constant currency and a 14% year on
year growth in gross profit calculated in constant currency due to
high growth in key markets. Most notably, the company saw its
revenues in the United States grow by 26% during the year.
EBITDA grew during the year despite currency headwinds and the
operation of dual platforms during a period of transition to newer
technology. In constant currency, EBITDA grew at nearly 300%. Due
to the proportion of revenues billed to its customers in euros and
the conversion of all currencies into the US dollars, Mblox
recorded actual revenue growth of -1% versus 12% growth in constant
currency. Information provided is non-GAAP management reporting
from Mblox's unaudited 2015 financial statements. The company does
not publish full details of its financials due to it being a US
private company.
Revenue and EBITDA figures above are reported exclusive of Zoove
Imc., which was divested towards the end of the period. Mblox
received an unsolicited offer from a reseller for the asset that it
had acquired in Summer 2014. The transaction was completed before
the end of December 2015. The asset contributed less than 3% of
Mblox's total revenues.
In addition to the strong growth in the Americas, Mblox
completed the development of an entirely new software and hardware
base for its platform. An investment of greater than $25 million in
this new architecture will reduce the company's delivery cost per
message by 50% in the second quarter of 2016 compared to the cost
one year ago. Customers outside the US market were converted to the
new platform and infrastructure in the third and fourth quarters of
2015.
Migration of the US base is substantially complete as of the
time of the writing and will be finalised by the date of
publication of this report. Clients are reporting high performance
against key metrics demanded in the market today. Throughput and
latency are improved according to customer reports, "by orders of
magnitude." The infrastructure installed also meets new, more
stringent requirements for clients facing regulatory demand to keep
data resident in geographies where they operate.
The Mblox management expects growth in both revenue and EBITDA
in 2016 due to deployment of a new ecommerce capability for small
and medium businesses, and continued growth in in its strategic
account development efforts. In particular, higher growth is
expected from a small number of value added resellers with global
business development efforts.
Notwithstanding the notable efforts of Mblox's senior management
team and the recent improvement in the company's performance, it
has to be acknowledged that the global economic climate has
materially changed since the announcement of Avanti's 2015 results
in early November 2015. The directors of Avanti Capital note
various macroeconomic events and increased volatility in capital
markets which has had an impact on valuations generally.
The last time Avanti recognised a fair value adjustment against
its investment in Mblox was in 2013. Since that time, and due to
the absence of any validation events, Avanti Capital's investment
in Mblox has been carried at cost (subject to adjustment for
currency fluctuations).
Having regard to the current level of inherent uncertainty and
volatility, and the continued absence of validation events, the
board has decided to adopt a prudent approach and apply a fair
value adjustment to the carrying value of approximately 1/3.
Accordingly, the carrying value of the total investment in Mblox as
at 31 December 2015 (after adjusting for currency fluctuations) is
GBP3.1m or 39p per share.
Investing policy
The group's investing policy remains unchanged as the group
continues to pursue its objectives through two complementary
activities.
-- Its investment operation, which acquires interests in
technology and trading businesses; and
-- Its consultancy operation, which offers a business
development service, to develop the investee business until an exit
opportunity arises.
As previously announced, it is Avanti's current intention not to
invest in any new investments but to support the existing
investment portfolio.
R H Kleiner
W A H Crewdson
29 March 2016
Condensed consolidated income statement
for the six months ended 31 December 2015
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
Notes 31 Dec 31 Dec 30 Jun
2015 2014 2015
GBP000 GBP000* GBP000
Administrative expenses -
others 4 316 (364) (569)
Foreign exchange gain/(loss) 16 19 (10)
Fair valuation movements
of financial designated held
at fair value through profit
or loss (1,327) 393 341
Operating (loss)/profit (995) 48 (238)
Finance revenue 14 12 26
(Loss)/Profit on ordinary
activities before taxation (981) 60 (212)
Income tax expense - - -
(Loss)/Profit on ordinary
activities after taxation
from continuing operations (981) 60 (212)
(Loss)/Profit on ordinary
activities after taxation (981) 60 (212)
(Loss)/Profit) and total
comprehensive income for
the period (981) 60 (212)
Attributable to
Shareholders of the parent (981) 60 (212)
Non-controlling interest - - -
(Loss)/Profit for the period (981) 60 (212)
(Loss)/Profit per share attributable
to shareholders of the parent
- basic and diluted 3 (12.22)p 0.74p (2.64)p
Basic and diluted 3 (12.22)p 0.74p (2.64)p
*Operating profit shown here does not correspond to the
condensed consolidated financial statements for the 6-months ended
31 December 2014 and reflects an adjustment made to reclassify the
fair valuation movements of financial assets (now included in
determining the operating profit or loss) which is consistent with
the recent 2015 annual consolidated financial statements issued and
with the current interim financial statement.
Condensed consolidated balance sheet
(MORE TO FOLLOW) Dow Jones Newswires
March 30, 2016 02:00 ET (06:00 GMT)
at 31 December 2015
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
Notes 31 Dec 31 Dec 30 Jun
2015 2014 2015
GBP000 GBP000 GBP000
ASSETS
Non-current assets
Property, plant & equipment - 1 -
Financial assets held at
fair value through profit
or loss 3,113 4,472 4,438
Non-current financial assets 5 248 236 234
3,361 4,709 4,672
Current Assets
Trade and other receivables 13 23 26
Cash and cash equivalents 1,310 1,652 1,438
1,323 1,675 1,464
TOTAL ASSETS 4,684 6,384 6,136
EQUITY AND LIABILITIES
EQUITY
Issued share capital 80 80 80
Retained earnings 3,233 4,486 4,214
TOTAL EQUITY ATTRIBUTABLE
TO EQUITY SHAREHOLDERS OF
THE PARENT 3,313 4,566 4,294
LIABILITIES
Current liabilities
Trade and other payables 47 30 67
Non-current liabilities
Provisions 6 1,324 1,788 1,775
TOTAL LIABILITIES 1,371 1,818 1,842
TOTAL EQUITY AND LIABILITIES 4,684 6,384 6,136
Approved by the board on 29 March 2016
R H Kleiner
W A H Crewdson
Condensed consolidated statement of cash flows
for the period ended 31 December 2015
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Dec 31 Dec 30 Jun
2015 2014 2015
GBP000 GBP000 GBP000
Operating activities
(Loss)/Profit after tax from
continuing operations (981) 60 (212)
Depreciation and impairment
of property, plant and equipment - - 1
Loss/(Gain) in the fair value
of financial assets designated
fair value through profit
or loss 1,327 (393) (341)
Net foreign currency difference (16) (16) (10)
Net interest income (14) (12) (26)
Decrease in trade and other
receivables 13 65 58
Increase/(Decrease) in trade
and other payables (20) (45) (8)
(Decrease)/Increase in provisions (451) 157 144
Net cash flow (used in) operating
activities (142) (184) (394)
Investing activities
Interest received 16 8 22
Purchase of loan receivable - (220) (220)
Purchase of financial assets
at fair value through profit
or loss (2) - (18)
Net cash flows generated from
(used in) investing activities 14 (212) (216)
Financing activities - - -
Net (decrease) in cash and
cash equivalents (128) (396) (610)
Cash and cash equivalents
at start of period 1,438 2,048 2,048
Cash and cash equivalents
at end of period 1,310 1,652 1,438
Condensed consolidated statement of changes in equity
(unaudited)
for the six months ended 31 December 2015
Total
attributable
Share Other Redemption Retained to owners
Capital Reserve Reserve Earnings of the
parent
GBP000 GBP000 GBP000 GBP000 GBP000
At 1 July 2014 80 - - 4,426 4,506
Profit for the period - - - 60 60
At 31 December 2014 80 - - 4,486 4,566
Loss for period - - - (272) (272)
At 30 June 2015 80 - - 4,214 4,294
Loss for the period - - - (981) (981)
At 31 December 2015 80 - - 3,233 3,313
Notes to the interim condensed consolidated financial
statements
for the six months ended 31 December 2015
1. Basis of preparation of interim financial information
Avanti Capital plc (the 'company') is a public limited company
incorporated and domiciled in England and Wales. The company's
ordinary shares are traded on the AIM market of the London Stock
Exchange. The interim condensed consolidated financial statements
comprise the interim financial statements of Avanti Capital Plc and
its subsidiaries (collectively, the 'group') for the six months
ended 31 December 2015.
The financial information for the year ended 30 June 2015 does
not constitute the company's statutory accounts for that year, but
is derived from those accounts. Statutory accounts for 30 June 2015
have been delivered to the Registrar of Companies. The auditors
reported on those accounts: their report was unqualified, did not
draw attention to any matters by way of emphasis and did not
contain a statement under s498(2) or (3) of the Companies Act
2006.
The interim condensed consolidated financial statements for the
6 months ended 31 December 2015 have been prepared in accordance
with the AIM Rules issued by the London Stock Exchange.
The interim condensed consolidated financial statements do not
include all the information and disclosures required in the annual
financial statements, and should be read in conjunction with the
Group's annual financial statements as at 30 June 2015 which were
prepared in accordance with IFRS as adopted by the European
Union.
Going concern
After making appropriate enquiries, the directors have a
reasonable expectation that the group has adequate resources to
continue in operational existence for the foreseeable future. For
those reasons, the board continues to adopt the going concern basis
in preparing the interim report.
Segmentation
The group has only one segment being in respect of investment
activities. The information relating to the geographical
segmentation is set out in note 7. Such information will also be
reflected in the group's annual financial statements.
2. Accounting policies
The accounting policies used in the preparation of the financial
information for the 6 months ended 31 December 2015 are the
accounting policies as applied to the group's financial statements
for the year ended 30 June 2015, except as noted below:
Change in accounting policies
The following amendments to existing standards and
interpretation were effective for the period, but either there were
not applicable to or did not have a material impact on the
group:
Effective
dates*
IFRS 10 Consolidate Financial Statements 1 January
2013
IFRS 11 Joint Arrangements 1 January
2013
IFRS 12 Disclosures of Interest in Other 1 January
Entities 2013
IAS 27 Separate Financial Statements 1 January
2013
IAS 28 Investments in Associates and Joint 1 January
Ventures 2013
IAS 32 Financial Statements: Presentation 1 January
- offsetting Financial Assets and liabilities 2014
(Amendments)
IAS 36 Impairment of Assets - Recoverable 1 January
Amount Disclosures for Non-Financial Assets 2014
(Amendments)
IAS 39 Financial Instruments: Recognition 1 January
and Measurement - Novation of Derivatives 2014
and Continuation Of Hedge Accounting (Amendments)
IFRIC 21 Levies 1 January
2014
IAS 19 Employee Benefits - Defined Benefit 1 July
Plans: Employee Contribution (Amendments) 2014
Annual Improvements to IFRSs 2010-2012 1 July
Cycle 2014
Annual Improvements to IFRSs 2011-2013 1 July
Cycle 2014
IAS 19 Employee Benefits - Defined Benefit 1 February
Plans: Employee Contribution (Amendments) 2015
Annual Improvements to IFRSs 2010-2012 1 February
Cycle 2015
(MORE TO FOLLOW) Dow Jones Newswires
March 30, 2016 02:00 ET (06:00 GMT)
Annual Improvements to IFRSs 2011-2013 1 January
Cycle 2015
* Mandatory effective dates as adopted by the EU.
Financial assets designated at fair value through profit or
loss
The group has applied the same accounting policies regarding
financial assets in designated at fair value through profit or loss
as included in the audited financial statements for the year ended
30 June 2015. Refer to the accounting policy in the 2015 annual
report on page 20. Refer to the Company Statement for further
information on fair value adjustment recorded during the period in
the amount of GBP1.33 million.
3. (Loss)/Earnings per share
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Dec 31 Dec 30 Jun
2015 2014 2015
(Loss)/Profit for the
period (GBP000) (981) 60 (212)
Basic weighted and
diluted number of shares
(number) 8,025,752 8,025,752 8,025,752
(Loss)/Earnings per
share (pence) - Basic
and diluted (pence) (12.22)p 0.74p (2.64)p
4. Administrative expenses - others
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Dec 31 Dec 30 Jun
2015 2014 2015
GBP000 GBP000 GBP000
Directors' remuneration 23 23 45
Professional fees 86 74 183
Provision for carried
interest (530) 157 144
Management fees 79 79 145
Other 26 31 52
(316) 364 569
5. Non-current financial assets
The non-current financial asset comprises the secured loan that
was made to Mblox in July 2014 amounting to USD367,000 (equivalent
amount - GBP220,000). The terms of the loan are that it has a
maturity date of July 2018 and attracts interest of 11% per annum.
In addition, a success fee is receivable upon a future event, being
a sale or IPO, the amount of which is dependent on both the date
and amount of value by reference to such an event.
6. Provisions
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 Dec 31 Dec 30 Jun
2015 2014 2015
GBP000 GBP000 GBP000
Carried interest 1,245 1,788 1,775
Management fees payable 79 - -
1,324 1,788 1,775
Both the carried interest and the management fees payable are
due to the investment adviser, Odyssey Partners Limited, a company
in which Richard Kleiner has a material interest. As indicated in
the annual report for the financial year ended 30 June 2015, the
carried interest provision assumes that the group's remaining
investments are realised at their respective book values. The
management fees only become payable if there is a realisation of
the group's remaining investment on a GBP for GBP basis.
7. Geographical segmentations
UK USA TOTAL
GBP000 GBP000 GBP000
Segment assets 1,323 248 1,571
Financial assets held
at fair value through
profit or loss - 3,113 3,113
1,323 3,361 4,684
Copies of this Announcement will be available, free of charge,
from the company's office at 73 Cornhill, London, EC3V 3QQ for a
period of 1 month from the date of this Announcement. A copy of
this Announcement will also be available on the company's website
at www.avanticap.com.
Independent review report to Avanti Capital plc
Introduction
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 31 December 2015, which comprises the condensed
consolidated income statement, the condensed consolidated balance
sheet, the condensed consolidated statement of cash flows, the
condensed consolidated statement of changes in equity and the
related notes 1 to 7. 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 condensed set of financial
statements.
This report is made solely to the company in accordance with the
guidance contained in International Standard on Review Engagements
2410 (UK and Ireland) "Review of Interim Financial Information
Performed by the Independent Auditor of the entity" issued by the
Auditing Practices Board. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
company, for our work, for this report, or for the conclusions we
have formed.
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 Interim Report in accordance with the AIM Rules
issued by the London Stock Exchange which require that it is
presented and prepared in a form consistent with that which will be
adopted in the company's annual accounts having regard to the
accounting standards applicable to such annual accounts.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with the AIM Rules issued by the London Stock
Exchange.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of 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 2410 (UK and Ireland), '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
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 31
December 2015 is not prepared, in all material respects, in
accordance with the accounting policies outlined in Note 1 and Note
2, which comply with IFRS's as adopted by the European Union and in
accordance with the AIM Rules issued by the London Stock
Exchange.
Ernst & Young LLP
London
29 March 2016
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BLGDXLDDBGLC
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