TIDMAVR
RNS Number : 5470Z
Avarae Global Coins PLC
12 December 2014
AVARAE GLOBAL COINS PLC
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER
2014
London (AIM: AVR): 12 December 2014 - 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 2014.
Highlights for the period include:
-- Net asset value of 14.3p at period end (30 September 2013: 14.0p);
-- Additions to the portfolio of GBP276,000 in the period (H1
2013: GBP327,000), including very high quality and rare examples of
English and Indian coins;
-- Carrying value of coin inventory of GBP10,808,000 at the
period end (H1 2013: GBP10,785,000);
-- Net cash balances of GBP779,000 at period end (H1 2013: GBP114,000);
-- Sales for the six month period of GBP81,000 due to lack of
relevant auctions in the period (H1 2013: GBP518,000); and
-- Loss on ordinary activities for the period of GBP207,000 (H1 2013: loss GBP142,000).
Post period highlight:
-- Sales of approximately GBP150,000 recorded with a gross
margin above carrying value of approximately GBP60,000.
Commenting, Diane Clarke, Director of Avarae, said:
"Although Avarae's sales activity over the summer period has
been limited due to the lack of relevant auctions, the board has
concentrated on seeking out only the highest quality and rarest
pieces to add to the portfolio. The directors believe that the
period has put Avarae in a better position to yield future capital
growth of coins and future cashflows through coin disposals, as has
been demonstrated by the significant return on the sales post
period end. The demand for high value alternative investments
remains strong as people look to diversify from traditional
investments and Avarae is in a good position to capitalise on this
sentiment."
For further information on Avarae Global Coins plc, please
contact:
Diane Clarke/Matt Wood +44 (0)16 2461 5614
Avarae Global Coins plc
Adrian Hadden/James Bavister +44 (0)20 7220 1666
WH Ireland Ltd
Toby Hall +44 (0)7713 341072
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 2014. During the period under review the
Company made a number of investments in, and some selective
divestments from, its portfolio of rare and high quality coins. 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 generally steady
over the period, although as mentioned in our full year results
released earlier in the year, one needs to possess the necessary
expertise in identifying which sectors are most appropriate for
investment. 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 often fail to deliver
robust financial gains and continue to exhibit high volatility. The
trend of the majority of the funds coming into the numismatic
market targeting the higher value coin rarities continues to add
considerable pressure on availability. While this trend is good for
existing holders of high quality coins, it can be challenging to
obtain new pieces to add to the portfolio.
Avarae's investments
In the six month period to 30 September 2014, the Company
acquired approximately GBP276,000 worth of coins (H1 2013:
GBP327,000) and sold coins for approximately GBP81,000 (H1 2013:
GBP518,000). The focus during the period has been towards English
coins of the utmost rarity and quality. Examples of rare coins
acquired during the period include:
-- Henry VII (1485-1509), Fine Gold Sovereign of Twenty
Shillings, Group IV (c.1502-1504), crowned full robed figure of the
King seated facing on ornate throne with high canopy, holding orb
and sceptre. Very rare.
-- Edward VI (1547-1553), Fine Gold Sovereign of Thirty
Shillings, Third Period (15 December 1550 to 6 July 1553),
Southwark mint, crowned full figure of King seated facing on ornate
throne, holding orb and sceptre, portcullis below extending to rim,
ornate throne back with large pillars. An extremely rare coin, as
fewer than ten known to be held in private hands.
-- James I (1603-1625), Rose Ryal of Thirty Shillings, third
coinage (1619-25), seated facing full figure of robed King with orb
and sceptre, on throne with plain throne back and decorated
background, portcullis below. Very rare.
-- Charles I (1625-1649), Unite of Twenty Shillings, Tower Mint
under Parliament, group G, seventh crowned bust left, value in
field behind. A superb coin, the finest known of this the final
mark of the reign and of the highest rarity, as it is thought to be
one of less than five available to collectors.
Financial Results
Sales were significantly lower at only GBP81,000, compared the
same period last year (GBP518,000), driven primarily by the lack of
auctions in the period. The Company is still experiencing strong
demand for individual sets as evidenced by sales of almost
GBP150,000 in November with a gross margin above carrying value of
approximately GBP60,000.
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.
Administrative expenses, which are always tightly controlled,
were comparable to the same period last year, at GBP198,000 (H1
2013: GBP193,000). The resulting net loss for the period was
GBP207,000 (H1 2013: loss of GBP142,000), equating to a loss per
share of 0.26 pence (H1 2013: loss per share of 0.18 pence).
Avarae proposed a final dividend in August 2014 of 0.15p per
share (2013: 0.18p per share), which, following approval by the
company's shareholders at the AGM held in October, resulted in a
payment to shareholders in October 2014 of GBP121,175. As with last
year, no dividend has been declared in respect of the interim
period. The level of the dividend reflects the Company's reported
profits over a three year period, thereby smoothing out any years
of one-off profits (or losses). The policy is 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 GBP276,000 of coins acquired in the period under
review, together with the GBP630,000 of coins acquired during the
year ended 31 March 2014, remain valued at cost. The total value of
the coin portfolio at the period end was GBP10.8 million (31 March
2014: GBP10.6 million).
The Company ended the period under review with net cash of
GBP779,000 (30 September 2013: GBP114,000) and no borrowings. The
higher cash balances is primarily as a result of movements in
working capital at the period end, which were higher than in the
comparable period last year. Trade and other receivables were
GBP1.2 million at the period end (H1 2013: GBP 0.9 million) and
payables at GBP1.3 million (H1 2013: GBP0.5 million).
At the period end, the Company had net assets of GBP11.5 million
(30 September 2013: GBP11.3 million), resulting in a net asset
value per Ordinary Share of 14.3p (30 September 2013: 14.0p).
Outlook
Although Avarae's sales activity over the summer period has been
limited due to the lack of relevant auctions, the board has
concentrated on seeking out only the highest quality and rarest
pieces to add to the portfolio. The directors believe that the
period has put Avarae in a better position to yield future capital
growth of coins and future cashflows through coin disposals, as has
been demonstrated by the significant return on the sales post
period end. The demand for high value alternative investments
remains strong as people look to diversify from traditional
investments and Avarae is in a strong position to capitalise on
this sentiment.
11 December 2014
Directors
Avarae Global Coins plc
Unaudited Income Statement
from 1 April 2014 to 30 September 2014
1 April 1 April 13 1 April
14 to 30 Sept 13
to 30 Sept 13 to 31 Mar
14 14
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
Revenue
Sales 81 518 1,592
Cost of Sales (90) (468) (1,301)
Coin revaluation - - 367
---- ---- ----
Gross profit (9) 50 658
Administrative expenses (198) (193) (406)
---- ---- ----
(Loss)/Profit on ordinary
activities before: (207) (143) 252
Finance income - 1 1
---- ---- ----
(Loss)/Profit on ordinary
activities before tax (207) (142) 253
Tax on (loss)/profit on - - -
ordinary activities
---- ---- ----
(Loss)/Profit on ordinary
activities after taxation (207) (142) 253
Dividends - (145) (145)
---- ---- ----
Retained (loss)/profit for
the period (207) (287) 108
---- ---- ----
(Loss)/Earnings per share 2 (0.26)p (0.18)p 0.31p
There were no recognised gains or losses other than the loss for
the period.
Unaudited Balance Sheet
as at 30 September 2014
As at As at As at
30 Sept 14 30 Sept 13 31 Mar 14
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
Assets
Current Assets
Coin inventory 3 10,808 10,785 10,621
Trade and other receivables 4 1,203 942 1,810
Cash at bank 779 114 171
---- ---- ----
Total Assets 12,790 11,841 12,602
---- ---- ----
Liabilities and Equity
Creditors: amounts falling
due within one year 5 1,255 494 860
---- ---- ----
Total Liabilities 1,255 494 860
---- ---- ----
Equity
Called up equity share
capital 6 808 808 808
Share premium 8,880 8,880 8,880
Profit and loss account 1,847 1,659 2,054
---- ---- ----
Total Equity Shareholders'
Funds 11,535 11,347 11,742
---- ---- ----
Total Liabilities and
Equity 12,790 11,841 12,602
---- ---- ----
Unaudited Cash Flow Statement
From 1 April 2014 to 30 September 2014
1 April 1 April 1 April 13
14 13 to 31 Mar
to 30 Sept to 30 Sept 14
14 13
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP' 000
Cash flows from operating activities:
(Loss)/Profit for the period (207) (143) 253
Adjustments for:
Increase in payables 395 436 802
Decrease/(increase) in receivables 607 (544) (1,414)
(Increase)/decrease in inventory (187) 141 306
---- ---- ----
Net cash flow from operations 608 (110) (53)
Interest received - 1 1
---- ---- ----
Net cash received from investing
activities - 1 1
Dividends paid - (145) (145)
---- ---- ----
Net cash from financing activities - (145) (145)
---- ---- ----
Net Increase / (decrease) in
cash and cash equivalents 608 (254) (197)
---- ---- ----
Opening cash position 171 368 368
---- ---- ----
Closing cash and cash equivalents 779 114 171
---- ---- ----
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 2014.
(2) Earnings per share
The loss per share for the period was 0.26p (H1 2013: loss of
0.18p). The calculation of (loss)/earnings per share is based on
the loss on ordinary activities after taxation of GBP207,000 for
the period (H1 2013: loss of GBP142,000) and the weighted average
number of shares in issue during the period under review remained
unchanged at 80,783,334 (2013: 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 2013 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 2014 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 14
14 13
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Trade debtors 1,129 926 1,749
Prepayments and other debtors 74 16 61
---- ---- ----
Total 1,203 942 1,810
---- ---- ----
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 14
14 13
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Trade creditors 1,243 327 800
Accrued expenses 12 140 60
Other Creditors - 27 -
---- ---- ----
1,255 494 860
---- ---- ----
All creditors are due within one year.
(6) Share capital
As at As at As at
30 Sept 14 30 Sept 31 Mar 14
13
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 11 December
2014.
The results for the period ended 30 September 2014 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
END
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