RNS Number:3495S
MG Capital PLC
05 March 2007
MG CAPITAL PLC
Interim Results
For the six months ended 31 December 2006
Statement by Chairman
We made further encouraging progress in the six months to 31 December 2006, as
the hard work invested in all areas of the business over the previous two years
has begun to bear fruit.
On the corporate advisory and consultancy side there is, as I stated in the last
Annual Report, a strong and now quite mature pipeline of projects. Last month we
announced the completion of one of these with the launch of Sky Express, the
first low cost airline to be set up in Russia. In consideration for work done in
introducing investors and in assisting in the setting up of the airline, we
received a 4% beneficial equity interest in Sky Express. Other investors include
the European Bank for Reconstruction and Development, other London-based
investors, and Boris Abramovich, director-general of Krasnoyarsk Airlines
(Russia's third largest carrier). The airline flew its first commercial flight
on 29th January and is now flying daily services to and from three destinations
within Russia, all within two or three hours flying time of its base at Moscow's
Vnukovo Airport. The airline plans to expand its fleet rapidly from its current
two leased Boeing 737s: to six aircraft by the end of this year and then to
sixteen during 2008. We believe that there is an enormous opportunity to provide
affordable and efficient domestic air travel to Russia's fast growing and
increasingly prosperous and demanding consumers, by providing a competitive
alternative to the railway network which still accounts for the bulk of domestic
long distance travel.
We have also made good progress on a number of other advisory and consultancy
projects several of which we hope will be completed in the current financial
year. These include transactions both in China (under the auspices of our
Beijing representative office) and in Europe. We expect these to generate
revenues for the group by way of both cash fees, performance-related fees and/or
equity in the projects.
On the asset management side, our 75% subsidiary Jade Absolute Fund Managers has
enjoyed a very good half year. With their specialist Asian equity markets
picking up strongly during the period after a more difficult few months earlier
in 2006, the Jade funds performed extremely well and earned significant
performance fees. Nevertheless despite our strenuous efforts we are aware that
the assets under management still need to grow much faster if we are to
capitalise upon the performance that the funds are delivering.
These performance fees and the Sky Express transaction have had a positive
impact on both our revenues and profits for the period. Revenues rose to
#1,153,726 compared to #352,843 for the comparable period in the previous year,
and we made a small profit of #37,469 after tax and minorities, compared to a
loss of #566,369 for the previous year, giving earnings per share of 0.78p for
the period. These results are encouraging, although I would remind Shareholders
that performance fees are by their nature "one-off" and unpredictable, and that
revenues for the corporate advisory and consultancy side of the business are
also likely to remain volatile and difficult to predict from year to year.
Moreover, as in the case of Sky Express, they may sometimes be paid in equity
rather than cash.
Looking ahead to the remainder of the current financial year, we hope to be able
in due course to report on further progress not only on the corporate advisory
and consultancy projects mentioned earlier, but also on other new business and
investment opportunities which we have been actively pursuing. We believe that
we are very much on track in our intention to build up a strong and independent
investment house offering distinctive specialised expertise in areas with
outstanding long term growth potential.
Peter Hannen 5th March 2007
Chairman
Consolidated Profit and Loss Account
For the six months ended 31 December 2006
Unaudited Unaudited Audited
Notes 6 months 6 months 12 months to 30
to 31 Dec to 31 Dec Jun
2006 2005 2006
# # #
Turnover 2
Continuing operations 1,153,726 352,843 690,374
Net operating expenses (1,053,862) (939,169) (1,702,351)
Operating profit/(loss)
Continuing operations 99,864 (586,326) (1,011,977)
Exceptional write off of investment - - (534,120)
Share of operating loss in associated - - (24,997)
company
Interest receivable and similar items 5,153 10,193 14,896
Interest payable and similar charges (3,997) (511) (868)
Profit / (loss) on ordinary activities
before taxation 101,020 (576,644) (1,557,066)
Taxation (2,146) - 5,772
Profit / (loss) on ordinary activities
after taxation 98,874 (576,644) (1,551,294)
Equity minority interest (61,405) 5,980 34,259
Dividend receivable - 4,295 4,294
Non-equity dividend (payable) / Write - - -
back
Profit / (Loss) for the financial 37,469 (566,369) (1,512,741)
period
Basic earnings per share in pence 3 0.78p (11.78p) (32.6p)
Consolidated Balance Sheet
As at 31 December 2006
Unaudited Unaudited Audited
Notes As at As at As at
31 Dec 31 Dec 30 Jun
2006 2005 2006
# # #
FIXED ASSETS
Tangible 17,581 23,275 25,357
Investments 1,034,602 1,987,083 1,074,649
Purchased Goodwill less amortisation 196,315 221,526 208,921
1,248,498 2,231,884 1,308,927
CURRENT ASSETS
Debtors 909,173 323,909 316,093
Cash at bank and in hand 142,418 246,231 200,287
1,051,591 570,140 516,380
CREDITORS:
Amounts falling due within one year (632,188) (213,971) (206,586)
NET CURRENT ASSETS 419,403 356,169 309,794
TOTAL ASSETS LESS CURRENT 1,667,901 2,588,053 1,618,721
LIABILITIES
CREDITORS:
Amounts falling due after more than
one year - - -
NET ASSETS 1,667,901 2,588,053 1,618,721
CAPITAL AND RESERVES
Called up share capital 7 2,402,255 4,637,458 4,637,458
Share premium account 7 - 5,101,552 5,101,552
Profit and loss account 7 (843,459) (7,275,280) (8,221,652)
Shareholders' funds (including 1,558,796 2,463,730 1,517,358
non-equity interests)
Minority Interest - equity 109,105 124,323 101,363
1,667,901 2,588,053 1,618,721
Consolidated Cash flow Statement
For the six months ended 31 December 2006
Unaudited Unaudited Audited
Notes 6 months 6 months 12 months to 30
to 31 Dec to 31 Dec Jun
2006 2005 2006
# # #
Net cash (outflow) from operating 4 (233,903) (616,466) (1,053,052)
activities
Returns on investments and servicing of finance
Interest paid (3,997) (511) (868)
Interest received 5,153 10,193 14,896
Dividend Received - - 4,294
Net cash (outflow) / inflow from returns
on investments and servicing of finance 1,156 9,682 18,322
Taxation (2,146) - -
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (6,039) (8,119) (15,565)
Payments to acquire investments (40,688) - -
Receipts from sale of investments 235,965 199,097 576,419
Net cash (outflow) / inflow from capital (45,655) 190,978 560,854
expenditure and financial investment
Financing
Expenses paid in connection with share - (828) -
issue
Net cash inflow from financing - (828) -
(Decrease) in cash 5 (45,655) (416,634) (473,876)
Notes to Financial Statements
For the six months ended 31 December 2006
1. Basis of preparation
This Interim Statement, which has not been audited and does not constitute
statutory accounts within the meaning of section 240 of the Companies Act 1985,
was approved by the Board on the 5th March 2007. It has been prepared on the
basis of the accounting policies set out in the Group's 2006 statutory accounts.
The Group's Interim Statement consolidates the financial statements of MG
Capital plc and its subsidiaries MG Global Investment Limited, MG Research
Limited, Hannen & Company Limited, Jade Absolute Fund Managers Limited, MG Maple
Capital Partners Inc and Aztec Capital Limited all of which have been made up to
31 December 2006.
The results for the year ended 30 June 2006 have been extracted from the Group's
published accounts for that period which have been filed with the Registrar of
Companies. The auditors' report on the full statutory accounts of the Group for
the year ended 30 June 2006 was unqualified.
2. Turnover - Geographical Analysis
Unaudited Unaudited Audited
6 months 6 months 12 months to 30
to 31 Dec to 31 Dec Jun
2006 2005 2006
# # #
United Kingdom 754,411 205,602 356,861
North America 133,058 124,993 239,245
Far East / Asia 70,339 22,248 23,623
Other European 195,918 - 70,645
1,153,726 352,843 690,374
3. Earnings per share
The basic earnings per share for the six months to 31 December 2006 is
calculated by dividing the Group's profit / (loss) after taxation of #37,469
(six months to 31 December 2005: (#566,369), year to 30 June 2006: (#1,512,741))
by the weighted average number of shares in issue during the period of 4,804,510
(six months to 31 December 2005: 4,804,510, year to 30 June 2006: 4,637,458).
4. Reconciliation of operating profit / (loss) to net cash inflow
from operating activities
Unaudited Unaudited Audited
6 months 6 months 12 months to 30
to 31 Dec to 31 Dec Jun
2006 2005 2006
# # #
Operating Profit/ (loss) 99,864 (586,326) (1,011,977)
Depreciation and amortisation 16,475 21,681 39,649
Investments received in consideration (195,918) - -
for consultancy services provided
Loss on disposal of investments 13,915 - -
Share of associated company loss - - (24,997)
Movement in share premium a/c - - (828)
(Increase) / decrease in debtors (593,080) (4,376) 3,440
Increase / (Decrease) in creditors 437,816 (47,445) (64,647)
Write down of fixed asset investment - - 991
Minority interest movement (12,975) - 5,317
Foreign exchange - - -
Net cash (outflow) from Operating
Activities (233,903) (616,466) (1,053,052)
5. Reconciliation of net cash flow to movement in net funds / debt
Unaudited Unaudited Audited
6 months 6 months 12 months to 30
to 31 Dec to 31 Dec Jun
2006 2005 2006
# # #
(Decrease) in cash (45,655) (416,634) (473,876)
Decrease in debt
- - -
Change in net debt arising from
cash flows
(45,655) (416,634) (473,876)
Changes in debt arising from - - -
restructuring
Net debt at beginning of period 188,073 661,949 661,949
Net funds at end of period 142,418 245,315 188,073
6. Analysis of change in net funds
Unaudited Unaudited Audited
6 months 6 months 12 months to 30
to 31 Dec to 31 Dec Jun
2006 2005 2006
# # #
Cash at bank and in hand 142,418 246,231 200,287
Bank overdraft - (916) (12,214)
Net funds at end of period 142,418 245,315 188,073
7. Capital and reserves
Court approval was given in October 2006 to cancel the deferred shares and write
back the share premium account to reserves.
Enquiries
Peter Hannen / Charles Fowler, MG Capital plc 020 7332 2040
Hugh Oram, Nabarro Wells & Co. Limited 020 7710 7400
This information is provided by RNS
The company news service from the London Stock Exchange
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