TIDMAVR
RNS Number : 5128T
Avarae Global Coins PLC
14 December 2012
For Immediate Release 14 December 2012
AVARAE GLOBAL COINS PLC
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER
2012
London (AIM: AVR): 14 December 2012 - Avarae Global Coins plc
("Avarae" or the "Company"), the UK's only publicly traded
specialist company dedicated to investing in rare and high quality
coins, is pleased to announce its unaudited interim results for the
six months to 30 September 2012.
Highlights for the period include:
-- Sales for the six month period of GBP440,000 (2011: GBP1,580,000);
-- Loss on ordinary activities for the period of GBP149,000 (2011: profit GBP503,000);
-- Additions to the portfolio of GBP713,000 in the period (2011:
GBP230,000), including very high quality and rare examples of
English, Islamic and Roman coins;
-- Carrying value of coin inventory of GBP10,443,000 at the
period end (31 March 2012: GBP10,112,000, 30 September 2011:
GBP9,413,000); and
-- Net assets as at 30 September 2012 of GBP11,131,000 (31 March
2012: GBP11,428,000, 30 September 2011: GBP11,426,000);
Commenting, Matt Wood, Director of Avarae, said:
"As previously announced, the trading result in the first half
was down on the same period last year as the Company had recorded
an exceptional return from the sale of a consignment of coins at
the Hong Kong auctions in August 2011. Whilst the first half of
2012 has seen some important additions to the portfolio, including
some very rare examples of English and Islamic coins, we anticipate
a stronger second half in terms of sales with a number of coins
earmarked for auction in the fourth quarter.
Avarae remains well positioned as an alternative asset play as
the market for the highest quality rare coins should continue to
attract good demand and steady price growth. We have a strong
balance sheet with liquid assets and our highest ever carrying
value for the coin portfolio of GBP10.4 million. Continued strong
competition for the very best pieces, such as those owned by
Avarae, positions the Company well for the future."
For further information on Avarae Global Coins plc, please
contact:
Diane Clarke/Matt Wood +44 (0)16 2461 5614
Avarae Global Coins plc
Tom Griffiths/Paul Gillam +44 (0)20 7601 6100
Westhouse Securities Ltd
Toby Hall/Suzanne Johnson Walsh +44(0)20 3103 3900
gth Media Relations Financial PR
Directors' Report
Introduction
We are pleased to present the unaudited interim results of
Avarae Global Coins plc ("Avarae" or the "Company") for the six
months ended 30 September 2012. During the period under review the
Company made significant investments in, and some selective
divestments from, its portfolio of rare and high quality coins. At
the period end, the value of the Company's coin portfolio was at an
all-time high of GBP10.4 million. In line with the Company's stated
strategy, no revaluation of the coin portfolio has been undertaken
for the Company's interim results.
Avarae provides access for institutions and individuals wanting
to diversify their investment portfolios away from the traditional
asset classes such as equities, property or bonds without the need
to be an expert in the coin-collecting sector. The Board's strategy
is to invest actively in the rarest and highest quality segment of
the coin-collecting sector in various countries around the world.
We have built up and are continually adding to an impressive
portfolio of extremely high quality, rare coins which we intend to
hold predominantly for the long-term (i.e. 3 to 5 years), with the
aim of achieving long-term capital growth for our shareholders,
while also taking advantage of short-term trading opportunities, as
the market for rare coins continues to grow.
The coin-dealing sector
Activity in the rare coin market has remained broadly positive
over the period, although as mentioned in our full year results
released in August, there were signs of slowing growth rates in
certain sectors. The numismatic industry continues to witness an
influx of new buyers looking for tangible assets and fresh areas to
place their money as traditional asset classes fail to deliver
robust financial gains and exhibit high volatility. The majority of
the funds coming into the numismatic market are targeting the
higher quality coin rarities and this is adding considerable
pressure on availability. A number of important coins and coin
collections have come up for sale worldwide with auction houses
continuing to achieve record prices, particularly for the highest
quality rare pieces.
Avarae's investments
In the six month period to 30 September 2012, the Company
acquired approximately GBP713,000 worth of coins (H1 2011:
GBP230,000) and sold coins for approximately GBP440,000 (H1 2011:
GBP1,580,000). Seeking out and acquiring the very highest quality
English, Islamic and Roman coins dominated activities during the
period. Examples of rare coins acquired during the period
include:
-- a very rare James I Half Crown, mintmark Thistle (1603-04),
with excellent pedigree and believed to be one of the finest
known;
-- an excessively rare Abd al-Malik b. Marwin (c72-73h)
dechristianised copy of a Byzantine Gold Solidus of the Emperor
Heraclius and his two sons. It is the earliest gold coin to contain
the Kalima, the Islamic statement of faith, in its legends;
-- a Roman Republic, Gold Aureus, struck by Lucius Cestius and
Caius Norbanus, 43 BC, featuring the head of Africa, wearing
elephant's skin on the face, with a reverse showing a curule chair
with two snakes;
-- an 'Abd al-'Aziz al-Sa'ud, (1344-1373h) Gold Pattern Guinea
or One Riyal, Makka al Mukarrima, 1370h. This is one of the world's
rarest proof pattern coinages. There were probably only two struck,
one of which was sent by the Royal Mint in London to Saudi Arabia
for royal approval; and
-- an extremely rare George V Pattern 1910 Silver Crown. It is
as struck and we believe there are less than 10 known.
Financial Results
Sales of GBP440,000 with gross profit of GBP58,000 in the period
reflected the lower level of auction consignments than in the first
half of 2011. Last year apart, the Company's second half of its
financial year has historically been its stronger half, partly as a
result of more coin auctions taking place in that period and also
due to higher margins being achieved over and above the prior
year's revaluation. However, the healthy double digit gross margin
achieved over and above the March 2012 revaluation demonstrates,
the directors believe, the continued conservative carrying value of
our coins.
Administrative expenses during the period of GBP207,000 were
marginally up on the same period in 2011 (H1 2011: GBP193,000), due
entirely to GBP19,000 of unrecovered VAT. This arose due to the
relatively high proportion of coins sold during the period which
were deemed to be "investment gold coins" by HMRC. Investment gold
coins are exempt from VAT and therefore this restricts the amount
of VAT that Avarae can recover on its costs.
The net loss for the period was GBP148,000 (H1 2011: profit of
GBP503,000), resulting in a loss per share of 0.18 pence (H1 2011:
profit per share of 0.62 pence).
Avarae declared its maiden dividend in August 2012 of 0.185p per
share, resulting in a payment to shareholders on 28 September 2012
of approximately GBP149,000. The dividend policy adopted by the
Board is intended to be a progressive one and is expected to be
declared on an annual basis. No dividend has been declared in
respect of the interim period. The level of the dividend will
reflect the Company's reported profits over a three year period,
thereby smoothing out any years of one-off profits (or losses),
such as the excellent results in the year ended 31 March 2012. The
policy will be to pay out approximately 1/3 of the average net
profits reported over the most recent three year period.
In line with our stated strategy, the Company only undertakes
its portfolio revaluation exercise at the end of each financial
year (31 March), rather than mid-year and, only then, revaluing
coins that have been held by the Company for more than 12 months.
Accordingly, the GBP713,000 of coins acquired in the period under
review, together with the GBP810,000 of coins acquired during the
year ended 31 March 2012, remain valued at cost. The total value of
the coin portfolio at the period end was the highest ever at
GBP10.44 million (31 March 2012: GBP10.11 million), reflecting the
higher levels of purchases during the year.
The Company ended the period with GBP444,000 of net cash (31
March 2012: GBP1,299,000) and no borrowings (2011: GBPnil).
Trade and other receivables at the period end totalled
GBP441,000 (31 March 2012: GBP247,000). Trade creditors and
accruals were GBP197,000 as at 30 September 2012 (31 March 2012:
GBP230,000).
At the period end, the Company had net assets of GBP11.13
million (31 March 2012: GBP11.43 million), resulting in a net asset
value per Ordinary Share of 13.8 pence (31 March 201: 14.1
pence).
Outlook
Whilst trading in the first half was down on the same period
last year, due entirely to the one-off auction in Hong Kong in
August 2011, the Directors believe that Avarae remains well
positioned as an alternative asset play as the market for the
highest quality rare coins should continue to attract good demand
and steady, predictable price growth. In these current uncertain
economic times, investments in rare coins can often outperform more
traditional investments over a sustained period, as has been proven
by Avarae over the last 6 years.
14 December 2012
Directors
Avarae Global Coins plc
Unaudited Income Statement
from 1 April 2012 to 30 September 2012
1 April 1 April 1 April 11
12 11 to 31 Mar
to 30 Sept to 30 Sept 12
12 11
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
Revenue
Sales 440 1,580 1,660
Cost of Sales (382) (885) (966)
Coin revaluation - - 196
---- ---- ----
Gross profit 58 695 890
Administrative expenses (207) (193) (387)
---- ---- ----
(Loss)/Profit on ordinary
activities before: (149) 502 503
Finance income 1 1 2
---- ---- ----
(Loss)/Profit on ordinary
activities before tax (148) 503 505
Tax on (loss)/profit on ordinary - - -
activities
---- ---- ----
(Loss)/Profit on ordinary
activities after taxation (148) 503 505
Dividends (149) - -
---- ---- ----
Retained (loss)/profit for
the period (297) 503 505
---- ---- ----
(Loss)/Earnings per share 2 (0.18)p 0.62p 0.63p
There were no recognised gains or losses other than the loss for
the period.
Unaudited Balance Sheet
as at 30 September 2012
As at As at As at
30 Sept 30 Sept 31 Mar 12
12 11
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
Assets
Current Assets
Coin inventory 3 10,443 9,413 10,112
Trade and other receivables 4 441 1,514 247
Cash at bank 444 608 1,299
---- ---- ----
Total Assets 11,328 11,535 11,658
---- ---- ----
Liabilities and Equity
Creditors: amounts falling
due within one year 5 197 109 230
---- ---- ----
Total Liabilities 197 109 230
---- ---- ----
Equity
Called up equity share
capital 6 808 808 808
Share premium 8,880 8,880 8,880
Profit and loss account 1,443 1,738 1,740
---- ---- ----
Total Equity Shareholders'
Funds 11,131 11,426 11,428
---- ---- ----
Total Liabilities and Equity 11,328 11,535 11,658
---- ---- ----
Diane Clarke Matt Wood
Unaudited Cash Flow Statement
as at 30 September 2012
1 April 1 April 1 April 11
12 11 to 31 Mar
to 30 Sept to 30 Sept 12
12 11
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP' 000
Cash flows from operating activities:
(Loss)/Profit for the period (149) 502 503
Adjustments for:
(decrease)/increase in payables (33) 69 190
(Increase)/decrease in receivables (194) (1,053) 214
(Increase)/decrease in inventory (331) 654 (45)
---- ---- ----
Net cash flow from operations (707) 172 862
Interest received 1 1 2
---- ---- ----
Net cash received from investing
activities 1 1 2
Dividends paid (149) - -
---- ---- ----
Net cash from financing activities (149) - -
---- ---- ----
Net (decrease)/increase in
cash and cash equivalents (855) 173 864
---- ---- ----
Opening cash position 1,299 435 435
---- ---- ----
Closing cash and cash equivalents 444 608 1,299
---- ---- ----
Notes to the Unaudited Interim Financial Statements:
(1) Accounting policies
Basis of accounting
The unaudited interim financial statements have been prepared
under the historical cost convention and in accordance with
International Financial Reporting Standards. The accounting
policies and methods of computation in the unaudited interim
financial statements are the same as those of the audited financial
statements for the year ended 31 March 2012.
(2) Earnings per share
The (loss)/earnings per share for the period was (0.18)p (H1
2011: earnings of 0.62p). The calculation of (loss)/earnings per
share is based on the loss on ordinary activities after taxation of
GBP148,000 for the period (H1 2011: profit of GBP503,000) and the
weighted average number of shares in issue during the period under
review of 80,783,334 (2011: 80,783,334).
(3) Coin inventory
At the end of each financial year, the coin inventory is
re-valued to market value less the VAT payable on sale. Inventory
purchased since 31 March 2011 is included at its original cost
price and under the current valuation policy has not been the
subject of any revaluations. The valuation of the portfolio held as
at 31 March 2012 was carried out by industry experts and only those
coins held by the Company for at least 12 months were the subject
of a revaluation exercise. This is considered by the Directors to
give a fair value for the inventory. The Directors anticipate
undertaking a further revaluation exercise for the coming financial
year end.
(4) Trade and other receivables
As at As at As at
30 Sept 30 Sept 31 Mar 12
12 11
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Trade debtors 429 1,501 202
Prepayments and other debtors 12 13 45
---- ---- ----
Total 441 1,514 247
---- ---- ----
Trade receivables do not carry any interest and are stated at
their nominal value as recorded by appropriate allowances for
estimated irrecoverable amounts.
(5) Payables
As at As at As at
30 Sept 30 Sept 31 Mar 12
12 11
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Trade creditors 121 - 172
Accrued expenses 66 99 58
Other creditors 10 10 -
---- ---- ----
197 109 230
---- ---- ----
All creditors are due within one year.
(6) Share capital
As at As at As at
30 Sept 12 30 Sept 31 Mar 12
11
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Authorised
Ordinary shares of GBP0.01
each 2,000 2,000 2,000
---- ---- ----
Allotted, called up and fully
paid
Ordinary shares of GBP0.01
each 808 808 808
---- ---- ----
(7) Preparation of the Interim Report
This report was approved by the Directors on 14 December
2012.
The results for the period ended 30 September 2012 are unaudited
and do not constitute statutory accounts as defined in the
Companies Act.
Additional copies of this report are available from the
Company's registered office, Ground Floor, West Suite, Exchange
House, 54-58 Athol Street, Douglas, Isle of Man, IM1 1JD or via the
Company's website www.avarae.com.
This information is provided by RNS
The company news service from the London Stock Exchange
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