TIDMAVR
RNS Number : 6762J
Avarae Global Coins PLC
19 July 2013
News Release 19 July 2013
AVARAE GLOBAL COINS PLC
FINAL RESULTS FOR THE YEAR ENDED 31 MARCH 2013
Avarae Global Coins plc ("Avarae" or the "Company"), the UK's
only publicly traded specialist company dedicated to purchasing,
holding and selling rare and high quality coins, is pleased to
announce its final audited results for the year ended 31 March
2013.
Highlights for the year:
-- NAV per share increased for the 7(th) year in succession to 14.4 pence (2012: 14.1 pence);
-- Record carrying value of portfolio of rare and high quality
coins of GBP10.9 million (2012: GBP10.1 million);
-- Sales of GBP1.1 million (2012: GBP1.7 million);
-- Profit on ordinary activities of GBP0.4 million (2012: GBP0.5 million);
-- Recommended full year dividend of 0.18 pence per share (2012: 0.185 pence);
-- Net cash of GBP0.4 million at year end (2012: GBP1.3 million).
Commenting on the results, Diane Clarke, Director of Avarae,
said:
"With worldwide economies only now starting to believe that they
are over the worst of the deep recession of the last 5 years,
Avarae finds itself well positioned. Where other alternative asset
plays have suffered as a result of the downturn and the reduction
in available investment capital, Avarae has continued upwards,
posting ever-increasing net asset values, commenced regular
dividend payments and posted record valuations for its coin
portfolio. As the world economies recover, the Company is well
placed to capitalise. The Company has a strong balance sheet with a
healthy cash position and no debt. The Directors, therefore, remain
optimistic about the Company's future prospects."
The Company's audited report and accounts, together with the
notice of the AGM, will today be posted to shareholders. An
electronic copy of the audited report and accounts will also
shortly be available on the Company's website: www.avarae.com.
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 Limited
+44 (0)20 7822 7493 / +44
Toby Hall (0)7713 341072
GTH Communications Limited
Directors' Report
Introduction
We are pleased to present the audited results for the year ended
31 March 2013 for Avarae Global Coins plc ("Avarae"). During the
year under review, the Company continued to manage its portfolio of
rare and high quality coins.
Avarae provides access for institutional investors and
individuals wanting to diversify their investment portfolios away
from the traditional asset classes such as equities, property and
bonds without the need to be an expert in the coin-collecting
sector. The principal objective of the Company, which hasn't
changed since its admission to AIM ("Admission") in 2006, is to
achieve capital growth for its shareholders through the purchase,
holding and sale of the rarest and highest quality segment of the
coin-collecting sector in various countries around the world.
Investing policy
Since Admission, we have built up an impressive portfolio of
extremely high quality, rare coins which we intend to hold both for
the long-term, i.e. 3 to 5 years, in order to achieve capital
growth for our shareholders, and also the short-term, in order to
take advantage of short-term trading opportunities, as the market
for rare coins continues to grow. The value of each investment
ranges from a few hundred pounds up to many hundreds of thousands
of pounds. The most expensive coin acquired by Avarae to date is
the Edward III Double Florin which was acquired for GBP0.4 million
in 2006. The Double Florin is on display at the Fitzwilliam Museum
in Cambridge.
The Board's decision on whether to acquire or dispose of a coin
or coin collection is made on the recommendation of its industry
expert independent Advisory Panel ("Panel") that assesses and
approves all coin trading related activities. The Panel members are
Sir John Wheeler and Clement Chambers, both of whom have
significant expertise in the field of numismatics.
A principal objective of the Company is to achieve long-term
capital growth through the appreciation in the value of the coins
acquired. Compound annual returns potentially achievable over the
medium to long-term for the highest quality and rarest coins are
expected to be around 10 per cent., in line with historical
averages. As at the date of this report, and since its formation in
2006, the Company has no borrowings and has no present intention of
securing any borrowings.
The coin-dealing sector
The market for trading coins is international in nature and
significant in size. For at least the last 10 years, there has been
an increasing interest in the coin sector and its prominence as an
alternative investment class is illustrated by continued increases
in activity around the world, where record prices have been paid
for certain rare pieces. The number of interested parties in coins
and coin collections appears to be continuing to grow, with auction
houses reporting significant growth in the numbers of interested
bidders compared to the corresponding auctions in previous
years.
Segments of the coin market have proved relatively buoyant over
the last 12 months, with certain sectors continuing to show healthy
demand, such as English, Roman and Indian coins. Other sectors,
such as Chinese coins, have stayed flat at best and, in the case of
the European examples (excluding British coins), some have
marginally contracted. The financial difficulties across the EU
have dampened demand for German, Italian and French coins,
especially those in only very fine condition or below. Those coins
which are of extremely fine grade and above, and then only those
which are rare, continue to achieve ever higher prices, as
evidenced by a number of auction houses that have achieved record
prices for certain rarities.
Avarae's investments
Purchases
In the year to 31 March 2013, the Company acquired GBP1.2
million worth of coins (2012: GBP0.81 million), resulting in the
value of the coin portfolio as at 31 March 2013 reaching its all
time high of GBP10.93 million (2012: GBP10.11 million). In line
with its investment strategy, the Company has focused on the
purchase of only the highest quality and rarest coins. In
particular, during the year, the Company increased its exposure to
Roman gold, English and Islamic coins.
Examples of coins acquired during the year 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;
-- an extremely rare George V Pattern 1910 Silver Crown. It is
as struck and we believe there are less than 10 known;
-- An 1852 Adelaide gold Pound, struck in 22 carat gold alloyed
with copper. Extremely fine and a very rare example; and
-- A 1679 Charles II Gold Two-Guineas. Very attractively toned
with plenty of copper red colour. As struck and extremely rare.
In addition to the impressive purchases set out above, we
continued to add selectively to our impressive collection of Triple
Unites and other high value collections, which we have been working
on for a number of years. Once completed, we would anticipate these
unique collections to be worth considerably more than their
individual carrying value. During the year, we also acquired a
small collection of Durrani coins.
Sales
Unlike the previous year, when the undoubted highlight was the
sale of GBP1.5 million of Chinese coins sold at auction in Hong
Kong in August 2011 which generated a gross margin in excess of
40%, 2012/13 was a more traditional year of trade for the
Company.
Total sales of GBP1.1 million were made up in a large part from
sales of our holding of European coins, which we felt had reached
maturity, for the next few years, at least, and the balance of our
Chinese holdings. As previously mentioned, the market for high-end
Chinese coins tailed off at the end of 2011/12 and we were
extremely pleased to have sold the majority of our Chinese
portfolio when we did. That said, we would now seriously consider
re-entering that market over the coming year, but again only for
the very highest quality pieces.
During the year, the Company also continued its efforts to
rebalance the portfolio, liquidating some of the lower value items
and inferior duplicates previously acquired as part of important
collections. This process is ongoing and we expect to generate
several hundred thousand pounds of sales during the current
financial year as a result of this exercise. We ended the period
under review with less than 1,200 coins, a reduction from almost
1,300 at the beginning of the period.
English milled and hammered coins represent the largest segment
of the Company's portfolio, with holdings of Ancient Roman, Islamic
and Indian coins also representing significant proportions of the
stock. Other sectors where Avarae holds coins of notable value
includes USA and South American coins.
Avarae's current intention is to hold the vast majority of its
current portfolio for the foreseeable future and only make
disposals of coins or collections when the Board believes it to be
in the best interests of the Company and its shareholders.
Financial results
Revenue from the sale of coins or coin collections for the year
ended 31 March 2013 was GBP1.1 million, down on the previous year's
record high of GBP1.7 million.
As at 31 March 2013, in line with the strategy outlined in our
Admission document and in previous reports, the Company instructed
industry experts to undertake a detailed revaluation of its coin
portfolio. This exercise is intended to apportion changes in the
value of coins over the period of their ownership by Avarae rather
than allocating profits (or losses) in the year of sale only. The
Company's gross profit is calculated as the difference between the
sale price of each coin less its carrying value brought forward,
which will either be cost or the revalued amount. The industry
experts considered the open market resale value of only those coins
that had been held within the Company's portfolio for more than 12
months, i.e. only those coins acquired and held by Avarae on or
before 31 March 2012 and excluded those purchased during the
financial year under review, which were held at cost. In each of
the years since the Company's inception, the Company has recorded a
gross profit, thereby demonstrating the validity of the revaluation
exercise.
The result of the extensive revaluation exercise carried out on
the coins as described in the accounting policies, which the
Directors believe to have been particularly conservative this year,
was that the overall carrying value of the portfolio as at 31 March
2013 has increased to GBP10.93 million (2012: GBP10.11 million).
The Directors consider this uplift in value to be particularly
conservative and would expect coins from the portfolio to achieve
appreciably higher returns if sold at auction. The result of the
revaluation exercise at 31 March 2013 is that, as at that date, the
Company's coin portfolio comprised of coins purchased at cost for
an aggregate GBP8.59 million (2012: GBP8.33 million) and a
revaluation amount of GBP2.34 million (net of VAT payable on sale)
(2012: GBP1.78 million).
The effect of the revaluation, together with the profits from
the coin sales, resulted in the Company recording a gross profit of
GBP0.71 million (2012: GBP0.89 million). The Directors continually
strive to keep the Company's cost base to a minimum. As a result,
administrative expenses during the year were down on those of the
previous year at GBP0.36 million (2012: GBP0.39 million),
representing less than 3.1 per cent. of the Company's net assets
(2012: 3.4 per cent.). Net profit for the year of GBP0.36 million
(2012: GBP0.51 million), delivered earnings per share of 0.44p
(2012: 0.63p).
The Company ended the year with a net cash balance of
approximately GBP0.4 million compared to GBP1.3 million reported at
the end of March 2012. This was due to a number of factors,
including coin purchases being GBP0.4 million greater than those
made in 2012, dividends paid during the year of GBP0.15 million and
changes to working capital of GBP0.3 million. The Company's cash is
prudently managed across a spread of accounts, thereby reducing the
risks of the creditworthiness of any one financial institution.
During the year, investments of GBP1.2 million (2012: GBP0.81
million) were made in coins and coin collections. As at the year
end, the Company had net assets of GBP11.63 million (2012: GBP11.43
million) and no borrowings. Net asset value per share ("NAV") as at
31 March 2013 again increased on the prior year to 14.4 pence
(2012: 14.1 pence).
Annual General Meeting
The notice ("Notice") of annual general meeting ("AGM") to be
held at 12:00 p.m. on 3 September 2013 at the Company's registered
office has today been sent to shareholders. Copies of the Avarae's
report and accounts, Notice and form of proxy for use at the AGM
will be available shortly at the Company's registered office and on
its website www.avarae.com.
Dividend
Reflecting the Company's continued increase in its NAV
year-on-year and the Board's cautiously optimistic outlook, the
Board is pleased to recommend a full year dividend of 0.18 pence
per share (2012: 0.185 pence per share), subject to shareholder
approval to be sought at the Company's annual general meeting to be
held on 3 September 2013. The dividend will be paid on 27 September
2013 to shareholders on the register on 6 September 2013.
The dividend policy adopted by the Board is intended to be
progressive and a dividend is expected to be declared on an annual
basis. 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). The policy will be to pay
out approximately 1/3 of the average net profits reported over the
most recent three year period. For the year ended 31 March 2013,
the level of the dividend will be approximately GBP0.15 million
(2012: GBP0.15 million) or 0.18 pence per share (2012: 0.185 pence
per share).
Outlook
With worldwide economies only now starting to believe that they
are over the worst of the deep recession of the last 5 years,
Avarae finds itself well positioned. Where other alternative asset
plays have suffered as a result of the downturn and the reduction
in available investment capital, Avarae has continued upwards,
posting ever-increasing net asset values, commenced regular
dividend payments and posted record valuations for its coin
portfolio. As the world economies recover, the Company is well
placed to capitalise. The Company has a strong balance sheet with a
healthy cash position and no debt. The Directors, therefore, remain
optimistic about the Company's future prospects.
Statement of Comprehensive Income for the year ended 31 March
2013
Year ended Year ended
31-Mar-13 31-Mar-12
Note GBP'000 GBP'000
Revenue
Sales 1 1,102 1,660
Cost of Sales (995) (966)
Coin revaluation 5 605 196
---- ----
Gross profit 712 890
---- ----
Administrative expenses (359) (387)
---- ----
Profit on ordinary activities
before: 353 503
Finance income 2 2
---- ----
Profit on ordinary activities
before tax 355 505
Tax on profit on ordinary activities 5 - -
---- ----
Profit on ordinary activities
after taxation 355 505
---- ----
Dividends (149) -
---- ----
Retained profit for the year 205 505
---- ----
Earnings per share (basic and
diluted) 4 0.44p 0.63p
Statement of Financial Position as at 31 March 2013
As at As at
31-Mar-13 31-Mar-12
Note GBP'000 GBP'000
Assets
Current Assets
Coin inventory 5 10,926 10,112
Trade and other receivables 6 398 247
Cash at bank 368 1,299
---- ----
Total assets 11,692 11,658
---- ----
Liabilities and equity
Creditors: amounts falling
due within one year 7 58 230
---- ----
Total Liabilities 58 230
---- ----
Equity
Called up equity share
capital 8 808 808
Share premium 8,880 8,880
Profit and loss account 1,946 1,740
---- ----
Total Equity Shareholders'
Funds 11,634 11,428
---- ----
Total Liabilities and
equity 11,692 11,658
---- ----
Cash Flow Statement for the year ended 31 March 2013
Note Year ended Year ended
31-Mar-13 31-Mar-12
GBP'000 GBP'000
Cash flows from operating
activities:
Profit on ordinary activities
for the year 353 503
Adjustments for:
(Decrease)/increase in payables (172) 190
(Increase)/decrease in receivables (151) 214
(Increase)/decrease in inventory (814) (45)
---- ----
Net cash flow from operations (784) 860
---- ----
Interest received 2 2
---- ----
Net cash from investing
activities 2 2
---- ----
Dividends paid 9 (149) -
---- ----
Net cash from financing
activities (149) -
---- ----
Net (decrease)/increase
in cash and cash equivalents (931) 864
Opening cash position 1,299 435
---- ----
Cash and cash equivalents
at 31 March 368 1,299
---- ----
Statement of Changes in Equity for the year ended 31 March
2013
Retained
Company Share capital Share premium earnings Total
GBP'000 GBP'000 GBP'000 GBP'000
At 31 March 2011 808 8,880 1,235 10,923
Profit for the year - - 505 505
--- --- --- ---
At 31 March 2012 808 8,880 1,740 11,428
--- --- --- ---
Profit for year - - 355 355
Dividends paid - - (149) (149)
--- --- --- ---
At 31 March 2013 808 8,880 1,946 11,634
--- --- --- ---
Notes to the audited results for the year ended 31 March
2013
(1) Accounting policies
Revenue recognition
The Company's sales consist of sales of individual coins or
collections of coins and are accounted for on an accruals
basis.
Finance income is accounted for on a received basis.
(2) Segmental information
The Company has one class of business, that of the sale of
antiquarian and collectable coins. All sales have been through
dealers based in the single geographic segment of the United
Kingdom. Accordingly no further segmental information is
presented.
(3) Taxation
The Company is resident for tax purposes in the Isle of Man.
The Company is chargeable to Isle of Man corporate income tax at
the standard rate of 0%, which took effect from 6 April 2006.
Year ended Year ended
31-Mar-13 31-Mar-12
GBP'000 GBP'000
Profit before tax 355 505
---- ----
Isle of Man tax at 0% - -
---- ----
Tax expense for the - -
year
---- ----
(4) Earnings per share
The retained earnings per share (basic and diluted) for the year
ended 31 March 2013 was 0.44p (2012: 0.63p). The calculation of
earnings per share is based on the profit of GBP355,000 (2012:
GBP505,000) for the year and the weighted average number of shares
in issue being 80,783,334 (2012: 80,783,334).
(5) Coin inventory
As at
31-Mar-13
Coins GBP'000
At Cost
At 01 April 2012 8,333
Additions 1,204
Disposal of coins (951)
----------
At 31 March 2013 8,586
----------
Revaluation
At 01 April 2012 1,779
Revaluation for the year 605
Disposal of coins (44)
At 31 March 2013 2,340
----------
Net Book Values
At 31 March 2013 10,926
==========
At 31 March 2012 10,112
==========
At the year end, only those coins that had been acquired by the
Company before 31 March 2012 were revalued by industry experts to
their expected current market value less the VAT payable on sale.
Inventory purchased during the year ended 31 March 2013 has been
carried at cost. This is considered by the directors to give a fair
value for the inventory. Inventory of GBP10,926,000 (2012:
GBP10,112,000) is carried as 'Inventory carried at fair value less
costs to sell'. The purchase cost of inventory held at 31 March
2013 was GBP8,586,152 (2012: GBP8,332,905).
(6) Trade and other receivables
As at As at
31-Mar-13 31-Mar-12
GBP'000 GBP'000
Trade debtors 368 202
Other debtors 21 29
Prepaid expenses 9 16
---- ----
Total 398 247
---- ----
Trade receivables do not carry any interest and are stated at
their nominal value as reduced by appropriate allowances for
estimated irrecoverable amounts.
(7) Payables
As at As at
31-Mar-13 31-Mar-12
GBP'000 GBP'000
Trade creditors - 172
Accrued expenses 58 58
---- ----
58 230
---- ----
All creditors are due within one year.
(8) Share capital
As at As at
31-Mar-13 31-Mar-12
GBP'000 GBP'000
Authorised
200,000,000 ordinary shares of GBP0.01
each 2,000 2,000
---- ----
Allotted, called up and fully paid
80,783,334 ordinary shares of GBP0.01
each (2012: 80,783,334) 808 808
---- ----
(9) Dividends
Reflecting the Company's continued increase in its NAV
year-on-year and the Board's cautiously optimistic outlook, the
Board is pleased to recommend a full year dividend of 0.18 pence
per share (2012: 0.185 pence per share), subject to shareholder
approval to be sought at the Company's annual general meeting to be
held on 3 September 2013. The dividend will be paid on or around 27
September 2013 to shareholders on the register on 6 September
2013.
The dividend policy adopted by the Board is intended to be
progressive and a dividend is expected to be declared on an annual
basis. 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). The policy will be to pay
out approximately 1/3 of the average net profits reported over the
most recent three year period. For the year ended 31 March 2013,
the level of the dividend will be approximately GBP0.15 million
(2012: GBP0.15 million) or 0.18 pence per share (2012: 0.185 pence
per share).
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UWSNROKABAAR
Avarae Global Coins (LSE:AVR)
Historical Stock Chart
Von Dez 2024 bis Jan 2025
Avarae Global Coins (LSE:AVR)
Historical Stock Chart
Von Jan 2024 bis Jan 2025
