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Ambrian Capital PLC (AMBR)

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Tuesday 23 March, 2010

Ambrian Capital PLC

Final Results

RNS Number : 9890I
Ambrian Capital PLC
23 March 2010
 



23 March 2010

 

 

 

AMBRIAN CAPITAL PLC

 

Preliminary Announcement of Results

for the year ended 31 December 2009

 

Ambrian Capital plc, the specialist investment bank, today announced its preliminary results for the year ended 31 December 2009.

 

Highlights

 

·              Total income £18.78 million in 2009 compared to negative total income of £(1.07) million in 2008.

 

·              Revenue £17.51 million in 2009, up 82% compared to 2008 (excluding gains and losses from the Investment Portfolio).

 

·              Corporate Finance & Equities revenue £8.95 million in 2009, up more than two and a half times compared to 2008.

 

·              Commodities revenue £8.56 million in 2009, an increase of 34% compared to 2008.

 

·              Profit before share-based payment charges and tax £4.01 million compared to a loss on the same basis of £(16.30) million in 2008.

 

·              Ambrian ranked 1st in small cap metals & mining research (Thomson Reuters Extel Survey 2009) and 1st by number of retained corporate clients in the AIM Basic Materials Sector (Hemscott Fourth Quarter 2009).

 

·              Ambrian handled 213,382 tonnes of refined copper in 2009, an amount equivalent to approximately 6.9% of China's total imports of refined copper in 2009.

 

·              Net tangible asset value per share increased 7.23% during the year to 31.18p at 31 December 2009.

 

·              Basic earnings per share 2.76p in 2009 compared to a loss per share of (12.92)p in 2008.

 

·              Second interim dividend of 0.75p per share declared and no final dividend proposed, taking total dividends for the year to 1.50p per share, unchanged from 2008.

 

Commenting on the results, Tom Gaffney, Chief Executive of Ambrian Capital plc, said:

 

"Ambrian's strong performance in 2009 demonstrates the substantial opportunities for growth in our two businesses.  Corporate Finance & Equities revenue increased by more than two and a half times and Commodities revenue increased by 34%. Our growth is reflected in Ambrian's bottom line results.

 

We have had an encouraging start to 2010 and are well positioned to benefit from continuing Chinese demand for commodities and a gradual improvement in the economies of Europe and North America."

 

 

 

Enquiries

 

 

Ambrian Capital plc


Tom Gaffney, Chief Executive 

+ 44 (0)20 7634 4700



Fox-Pitt Kelton Limited


Simon Law/Marc Milmo

+ 44 (0)20 3037 5237



M: Communications


Charlotte Kirkham / Ben Simons

+ 44 (0)20 7920 2330

 

Notes to Editors:

 

AMBRIAN CAPITAL PLC

Ambrian Capital plc (AIM: AMBR) is a specialist investment bank active in Corporate Finance & Equities, Commodities and Principal Investments.

 

Corporate Finance & Equities

Ambrian Partners Limited is known in the market today for its leading positions in the metals & mining, oil & gas and cleantech sectors.  It provides corporate finance advice, equity research, sales and trading and market making services.  Ambrian Partners is a member of the London Stock Exchange and is authorised and regulated by the Financial Services Authority.

 

Commodities

Ambrian Commodities Limitedis a trader and broker specialising in London Metals Exchange cleared base metals futures and options. Its customers include metals producers, consumers, merchants, traders and financial investors. Ambrian Commodities is an Associate Broker Member of the London Metal Exchange and is authorised and regulated by the Financial Services Authority.

 

Ambrian Metals Limitedis an independent physical metals merchant with a particular strength in refined copper. Through Ambrian Metals' offices in London and Shanghai and agents in New York, Santiago, São Paulo, Seoul and Tokyo, it sources non-ferrous metals from producers for distribution to an international client base of metals consumers and merchants.

 

Principal Investments

Ambrian Principal Investments Limited is an investment company which holds the Group's principal investment portfolio.  It is managed by Ambrian Asset Management Limited, which is authorised and regulated by the Financial Services Authority.

 

Further information on Ambrian Capital is available on the Company's website:

www.ambrian.com

 

 

 

CHAIRMAN'S STATEMENT

 

Ambrian's financial and operating performance in 2009 demonstrated continued progress in meeting our strategic objective.  We are committed to building a business that has intrinsic value substantially in excess of net asset value based on a differentiated business model and an enduring franchise.

 

The growth in revenue and profit in 2009, in both Corporate Finance & Equities and in Commodities, demonstrates the success of our natural resources focused model.  Ambrian continues to emphasise return on capital, cost control and maintenance of a strong financial position.  This year we have taken a charge to Ambrian's consolidated statement of comprehensive income for the fair value of share options granted to staff by the Ambrian Capital Employee Benefit Trust in accordance with IFRS 2.  We have also restated the 2008 accounts to reflect this charge.  Our remuneration policies are designed to retain and incentivise our most talented staff and recruit the best people in the market in order to drive growth in shareholder value.  We are in the process of putting in place a more effective share incentive scheme for our staff.

 

Ambrian Partners continued to strengthen its position in the UK small and mid-cap metals & mining sector.  It took advantage of the fall-out from the credit crisis in the UK investment banking sector to hire talented individuals in corporate finance, equity sales and trading and research.  Ambrian Partners took steps during 2009 to improve the size, quality and sustainability of its equities business by selectively recruiting specialist research analysts in non-cyclical sectors.  Equity market making showed a significant turnaround during the year as a result of the rebound in the junior natural resources sector.

 

Ambrian Commodities remained profitable in 2009 despite a drop in customer trading volumes and lower interest rates.  In the second half of the year we changed to a new clearing bank and we now fund client margins due to the London Metal Exchange (LME) from our own cash resources.

 

Ambrian Metals benefited in the first half of 2009 from the strength in demand for refined copper from China and the Middle East.  We are taking steps to upgrade our office in Shanghai from a representative office to a "Wholly Foreign Owned Enterprise" (WFOE) which will enable Ambrian Metals to trade with a wider range of Chinese customers.  We expect the WFOE to become fully operational in the second half of 2010.

 

In January 2010, we transferred Ambrian's remaining investment portfolio into Ambrian Principal Investments Limited (APIL), a wholly-owned Jersey registered company, which is managed by Ambrian Asset Management Limited.  This will enable the performance of our principal investment portfolio to be clearly identified and provides the basis for an audited track record. 

 

We continue to broaden both the services we offer to clients and our geographical presence.  In February 2010, we formed Ambrian Resources AG in partnership with three ex-Glencore International executives.  Based in Switzerland, Ambrian Resources is focused on arranging and managing strategic investments which offer the opportunity to complement the activities of our other businesses.  We expect to allocate approximately 10% of the Group's shareholders' equity to strategic principal investments.

 

A second interim dividend of 0.75p per share will be paid to shareholders on 30 March 2010.   This takes the total dividend for the year to 1.50p per share, unchanged from 2008.  We are not recommending payment of a final dividend.  Since our first dividend payment in October 2005, Ambrian has paid shareholders a cumulative total of £7.12 million in cash dividends.  A further £1.10 million has been returned to shareholders through share buybacks over the same period.

 

The current year will no doubt provide further challenges in a fragile economic world but there will also be opportunities for Ambrian.  Despite our accomplishments in 2009, we know that there is still much to be done if we are to achieve our objective and build our business in the long term.  We benefit greatly from our Chief Executive, Tom Gaffney, who has shown outstanding leadership in expanding and diversifying our business in a difficult environment.

 

Finally, I would like to thank our clients for entrusting us with their business, all of our staff for their hard work over the past year and my fellow directors for their guidance and support.

 

 

 

 

W L Banks

Chairman

23 March 2010

 

 

CHIEF EXECUTIVE'S REPORT

 

Ambrian's strong performance in 2009 demonstrates the substantial opportunities for growth in our two businesses.   Corporate Finance & Equities revenue increased more than two and a half times and Commodities revenue increased by 34%.  Our growth is reflected in Ambrian's bottom line results.

 

Our activities have grown in size and complexity in recent years which requires an increasing emphasis on risk management throughout the Group. Ambrian's businesses generate recurring revenue by acting as an intermediary on most transactions.  As an intermediary, Ambrian minimises its market risk by matching buyers and sellers.  Our market risk taking, other than in the Investment Portfolio, is for the most part limited to providing our clients with liquidity to facilitate the execution of a transaction.  

 

We are enthusiastic about the strength of our platform and our vision is to build the pre-eminent investment bank to the natural resources sector that draws on our skills in equities, derivatives and physical metals.

 

Financial Review

 

Total income for 2009 was £18.78 million, compared with negative income of £(1.07) million in 2008.

 

Revenue grew by 82% to £17.51 million in 2009 from £9.64 million in 2008 (excluding gains and losses from the Investment Portfolio).

 

Corporate Finance & Equities revenue increased by 175% in 2009 to £8.95 million from £3.25 million in 2008.  Excluding equity market making gains in 2009 of £1.49 million and losses in 2008 of £(2.04) million, Corporate Finance & Equities revenue was up 41% in 2009 reflecting the recovery in equity markets.

 

Commodities saw revenue increase by 34% in 2009 to £8.56 million from £6.39 million in 2008.  The growth in revenue was driven by an increase in physical tonnage traded and a widening of metal premiums, particularly during the first half of 2009.

 

The Investment Portfolio had income of £1.27 million in 2009 compared with negative income of £(10.71) million in 2008.  The recovery in the value of the investment in Minerva Resources plc (now Nyota Minerals Limited) accounted for the majority of the income of the Investment Portfolio in 2009.

 

Administrative expenses were £15.86 million in 2009 (2008: £16.54 million), of which £11.07 million (2008: £11.46 million) were represented by fixed costs (excluding bonuses, share-based payment charges and non-recurring costs).

 

Remuneration expenses, before share-based payment charges, were £9.85 million in 2009 (2008: £6.78 million) of which (i) £6.53 million was represented by salaries, employers' national insurance and benefits (2008: £5.47 million) and (ii) £3.33 million  represented a provision for the year-ended profit-related bonuses (2008:£1.31 million).  The ratio of total remuneration expenses (excluding share-based payment charges) to total income was 52.5% for 2009. Share-based payment charges in 2009 were £1.08 million compared with £1.33 million in 2008 as restated.

 

Non-personnel costs were £4.92 million in 2009, 42% lower than 2008.  The decrease compared with 2008 is principally attributable to a rigorous focus on cost control in 2009 and the non-recurring costs incurred in 2008.

 

Total headcount as at 31 December 2009 stood at 73, up 2 during 2009.

 

Profit before share-based payment charges and tax for 2009 was £4.01 million compared to a loss of £(16.30) million in 2008.

 

Profit before tax for 2009 was £2.93 million compared to a loss of (£17.63) million in 2008.

 

Basic earnings per share were 2.76p compared to a basic loss per share of (12.92)p in 2008. 

 

The tax charge for 2009 was £0.28 million (2008: tax credit £4.77 million) which is equivalent to a tax rate of 9.5%.  The reduced tax is primarily due to a deferred tax credit of £0.54 million arising from the share-based payment charge.

 

Consolidated statement of financial position

 

Total assets increased to £281.55 million at 31 December 2009 from £94.35 million at 31 December 2008 primarily due to increased volumes of physical metals contracted for sale and for purchase by Ambrian Metals.

 

Cash, trade and other receivables and inventory accounted for 49% of total assets at the year end.  Trade and other receivables are short-dated and almost all are either backed by a letter of credit from a major financial institution or we have obtained credit insurance for substantially all of the credit exposure.  Our inventory position reflects metals that we hold in conjunction with future contractual sales.  The metals we trade in are readily convertible for cash.

 

Contractual obligations from a diverse group of major metals consumers to purchase tonnages of physical metals for periods of up to 12 months represents a further 48% of the Group's assets.   These assets are valued at the LME closing valuation prices at the year end.

 

The Group's own cash resources, net of amounts due to clients, totalled £23.97 million at 31 December 2009 compared with £22.56 million at 31 December 2008.  The Group's own cash resources at the year end included £9.02 million (2008: £ nil) of own cash held with Fortis Bank Global Clearing NV (100% owned by the Dutch State), our LME clearer, in respect of margin credit granted to clients of Ambrian Commodities.  Cash is also held on deposit principally with Barclays Bank plc and Royal Bank of Scotland plc.

 

The Investment Portfolio was valued at £2.53 million at 31 December 2009 compared with £1.50 million at 31 December 2008.

 

It has always been the Group's policy to provide a reserve in the consolidated statement of financial position for the full cost of the potential exercise of share options granted by the Ambrian Capital Employee Benefit Trust (EBT).  At 31 December 2009 the EBT reserve was £5.34 million (2008: £5.88 million).

 

Shareholders' equity was £32.43 million at 31 December 2009 (31 December 2008: £30.35 million).

 

Net asset value per share was 33.55p and tangible net asset value per share was 31.18p, increases of 6.14% and 7.23%, respectively during 2009.  Net asset value per share and tangible net asset value per share are based on 96,652,953 ordinary shares outstanding at 31 December 2009 (excluding Treasury shares and shares held by the EBT).

 

The aggregate regulatory capital requirement for the Group's regulated subsidiaries was £4.05 million at 31 December 2009 which was substantially exceeded by the aggregate regulatory capital resources of the regulated subsidiaries of £16.14 million.

 

Corporate Finance & Equities

 

Corporate Finance

 

Ambrian Partners has built a strong franchise in providing high value-added corporate finance advisory services with a particular focus on the metals & mining sector.  Our corporate clients recognise Ambrian Partners' industry expertise, ability to handle complex multi-jurisdictional transactions and Nominated Adviser ("Nomad") services.

 

Among the transactions on which Ambrian Partners advised during 2009 were the following:

 

·           Avocet Mining plc's US$145 million acquisition of Wega Mining ASA

 

·           Centamin Egypt plc's £1.40 billion move to the Official List of the London Stock Exchange from AIM

 

·           Weatherly International plc's US$33 million sale of its smelter assets

 

Ambrian Partners is the recognised leader in the AIM Basic Materials Sector and was ranked first by number of retained corporate clients in the Hemscott Fourth Quarter 2009 AIM Advisers Rankings Guide.

 

Ambrian Partners' strategy is to focus its resources on a select group of retained Nomad and/or Corporate Broking clients which are of high quality, have high growth potential and offer Ambrian Partners the potential to generate significant fees on a recurring basis.  At 31 December 2009, Ambrian Partners Limited had 32 retained corporate clients compared with 42 at 31 December 2008.  Ambrian Partners' retained quoted clients had an average market capitalisation of £104 million at 31 December 2009 compared with the average market capitalisation of an AIM listed company at that date of £44 million.

 

Capital Markets

 

Based on a reputation for bringing attractive companies to the market, Ambrian Partners has become a key market intermediary for natural resources companies seeking to raise capital in the London market.

 

In 2009, Ambrian Partners was involved in 20 transactions that provided £292 million in financing for growing companies.

 

Among the fund raisings announced in 2009 in which Ambrian Partners played a role were the following:

 

·           African Consolidated plc's £10 million equity offering

 

·           Centamin Egypt plc's C$69 million equity offering

 

·           Kalahari Minerals plc's £17.9 million and £20.0 million equity offerings

 

·           SeaEnergy plc's £7.5 million equity offering

 

·           Sylvania Resources plc's £10 million equity offering

 

Equities

 

Ambrian Partners' equities business performed well in 2009 as a result of the rebound in equity markets and, in particular, the sharp recovery in the junior natural resources sector.  The FTSE AIM Basic Resources Index rose by 153% in 2009 after dropping by 73% in 2008.

 

Ambrian Partners made significant progress in further strengthening its institutional client base and improving the consistency of its research-driven brokerage revenue.  In 2009, revenue from institutional brokerage commissions and commission sharing arrangements (CSAs) increased by 24%.

 

Ambrian Partners' equities team was ranked first overall in the UK small cap metals & mining sector in the 2009 Thomson Reuters Extel Survey.

 

During the year, Ambrian Partners expanded its mining research coverage from the small and mid-cap sector to include the major London-listed mining companies.

 

The decision was taken during 2009 to take advantage of the dislocation in the UK stockbroking sector to recruit a limited number of top quality research analysts and equity salesmen to broaden Ambrian Partners' product offering beyond the mining sector and AIM.

 

The plan is to build a larger, more profitable equities business to enable our fixed cost base to be shared among a greater number of income generators and build on Ambrian Partners' first-rate reputation in the natural resources sector.

 

Our strategy is to build our brokerage presence in equities bought largely for their defensive qualities as a counter-balance to the highly cyclical and volatile natural resources sector in which Ambrian Partners already has a strong presence.  Since the beginning of 2010, Ambrian Partners has hired "thought leading" equity research analysts specialising in defensive sectors such as utilities, pharmaceutical companies and food retailers.

 

Ambrian Partners is committed to being a specialist securities firm with recognised industry expertise.  Increasingly, Ambrian Partners' skills in natural resources will be complemented by expertise in new sectors which will provide diverse and sustainable sources of revenue.

 

Ambrian Partners makes markets in the shares of 55 companies and had £2.00 million of capital allocated to the activity at 31 December 2009.

 

Equity market making was profitable in all but one month in 2009 and generated revenue of £1.49 million in 2009 compared to a loss of £(2.04) million in 2008.  Equity market making plays a vital role providing liquidity to our "house stocks" and thereby facilitating client activity.  Over 75% of the revenue generated by equity market making was in the shares of Ambrian Partners' corporate clients.

 

Commodities

 

Commodities comprises Ambrian Commodities Limited, the LME broker-dealer and Ambrian Metals Limited, the physical metals merchant.

 

Ambrian Commodities Limited

 

Ambrian Commodities had a more difficult year in 2009 than in 2008 as a result of a 19% reduction in customer activity levels, lower average metals prices and lower interest rates.  Nevertheless, Ambrian Commodities remained profitable.

 

Total LME trading volume was almost unchanged with 112 million lots traded in 2009 compared with 113 million lots in 2008.   However, in 2009 the US dollar notional value of lots traded on the LME declined by 28% to US$7.41 trillion due to lower metals prices.  LME volumes were maintained by the activity of financial investors despite a decline in end user demand.

 

Ambrian Commodities' client base primarily consists of industrial metals fabricators, of which approximately two-thirds are located in Continental Europe.

 

These industrial customers have a regular need for the metals price hedging services provided by Ambrian Commodities regardless of the actual level of metals prices. However, their volume of LME activity is directly related to their manufacturing production.  Given the weak European economic recovery in 2009, output was reduced and this depressed Ambrian Commodities' volume of activity.

 

In addition, in the low interest rate environment prevailing in 2009, Ambrian Commodities was unable to maintain interest income on cash balances held at the same level as in 2008.  During 2009, overnight US$ LIBOR averaged only 0.23% compared with 2.33% in 2008.

 

The allocation of capital to support the granting of margin credit represents the largest single constraint to the future growth of Ambrian Commodities and we are actively pursuing initiatives to resolve this issue.

 

 

Ambrian Metals Limited

 

Ambrian Metals globally sources non-ferrous metals, with a particular focus on LME-grade copper cathode and copper wire-rod, from producers for distribution primarily on a matched and hedged basis to an international client base.  Headquartered in London, and with an office in Shanghai, Ambrian Metals has agents in New York, Santiago, São Paulo, Seoul and Tokyo.

 

Ambrian Metals does not speculate on movements in metals prices but generates revenue by charging its clients a market-based "premium" over the metal price for providing them with a consistently high quality product and logistics services.

 

Ambrian Metals manages all facets of marketing and distribution.  The growth in tonnage handled by Ambrian Metals has been supported by major international banks that have been prepared to provide growing amounts of trade finance.  These banks include BNP Paribas, ING, Standard Chartered, Credit Suisse and Banque Cantonale Vaudoise.  At the year end, Ambrian Metals had US$200 million in uncommitted trade financing facilities compared with US$120 million at the end of 2008.

 

Ambrian Metals benefited during 2009 from record flows of refined copper into China.  The total volume of refined copper imported into China in 2009 rose by 29% to 3.1 million tonnes from 2.4 million tonnes in 2008.

 

Chinese demand for copper was particularly strong during the first half of 2009 and was fuelled by strategic stockpiling but also, in large part, by the RMB 4 trillion (US$585 billion) stimulus package announced by China in November 2008.  Approximately US$450 billion was targeted for investment in infrastructure, rural development and other fixed asset investments which are large consumers of raw materials.  Refined copper, for example, is converted into a range of products within the building, construction and electrical sectors.

 

The effect of increased Chinese demand for refined copper was to push up worldwide market premiums per tonne.  Premiums per tonne "CIF Shanghai" rose sharply from approximately US$38/tonne at the start of 2009 to a high of approximately US$170/tonne in April.  Premiums fell back to around US$40/tonne in the second half of the year but rebounded at the year end to approximately US$100/tonne in anticipation of further Chinese demand and a recovery in global economies in 2010.

 

In 2009, Ambrian Metals handled 246,296 tonnes of physical metals.  This included 213,382 tonnes of refined copper which was equivalent to approximately 6.9% of China's total imports of refined copper in that year.  In 2008, Ambrian Metals handled 79,573 tonnes of physical metals.  Total sales of physical metals in 2009 were $1,238 million compared to $630 million in 2008.

 

Approximately 39% of Ambrian Metals' tonnage volume in 2009 was to customers located in the Middle East and 37% was sold to Chinese customers through Ambrian Metals' office in Shanghai.  The balance was primarily taken up by customers in Europe and North America.

 

Financial events in Dubai in the second half of 2009 had only a limited impact on the tonnages sold by Ambrian Metals into the Middle East. 

 

During 2009, Ambrian Metals sourced refined copper from producers located around the world including Russia, Kazakhstan, Japan, Zambia, Brazil, India and Chile.

 

Principal Investments

 

The Investment Portfolio generated income of £1.27 million in 2009 compared with negative income of £(10.71) million in 2008.  The most significant gain of £0.80 million was attributable to the investment in Minerva Resources plc which was acquired in an all share transaction by Nyota Minerals Limited in August 2009. 

 

The total value of the Investment Portfolio at 31 December 2009 was £2.53 million compared with £1.50 million at 31 December 2008.

At 31 December 2009, the largest publicly listed holdings in the Investment Portfolio were Nyota (valued at £0.80 million) and Rivington Street Holdings plc (valued at £0.32 million).  The unlisted investments had an aggregate value of £0.16 million (2008: £0.28 million).

 

On 4 January 2010, the holdings in the Investment Portfolio were transferred from Ambrian Capital and Ambrian Partners to Ambrian Principal Investments Limited (APIL), a new wholly-owned Jersey registered limited company.  The assets of APIL are now managed by Ambrian Asset Management Limited, an FSA regulated investment management company, which is wholly owned by Ambrian Capital.

 

APIL's investment objective is to produce superior investment returns by investing in a portfolio of equities and derivatives in the metals & mining and energy sectors. 

 

In due course, Ambrian Asset Management intends to widen its activities from managing Ambrian Capital's proprietary investments to managing funds on behalf of third parties.

 

Outlook

 

China remains the largest single factor driving demand for raw materials. Despite near term concerns about financial overheating, China remains underdeveloped.  China's GDP per capita is estimated by the IMF to be $3,566.  According to analysts, in real terms, this is the same as the US in 1934 and Japan in 1960.  China's 2009 GDP per capita is 23% of Taiwan's, 22% of South Korea's and less than one-tenth that of the United States.

 

2010 has started well with Ambrian's total income in the first two months of the year exceeding total income in the same period last year.  Ambrian Partners and Ambrian Metals have again been the drivers of growth.

 

The range of Ambrian's activities in the natural resources sector and London's position at the world's centre of equity capital raising and metals trading, positions us well to benefit from continuing Chinese demand for commodities and a gradual improvement in the economies of Europe and North America.

 

 

 

 

Tom Gaffney

Chief Executive

23 March 2010

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Year ended 31 December 2009

 

 





2009

2008

Restated





£

£







Revenue




17,512,917

9,642,656

Investment portfolio gains and losses




1,270,636

(10,711,147)





----------------

----------------

Total income




18,783,553

(1,068,491)







Administrative expenses




(15,857,033)

(16,537,853)

Finance costs




-

(20,928)





----------------

----------------

Profit/(loss) before tax




2,926,520

(17,627,272)







Taxation




(276,759)

4,765,777





----------------

--------------







Profit/(loss) for the year attributable to owners of the parent




 

 

2,649,761

 

 

(12,861,495)





==========

==========







Other comprehensive income












Exchange loss arising on translation of foreign operations




(117,807)

(499,045)





----------------

--------------

Total comprehensive income attributable to owners of the parent




2,531,954

(13,360,540)





==========

==========













Earnings/(loss) per ordinary share






- basic




2.76p

(12.92)p

- diluted




2.74p

(12.92)p

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

at 31 December 2009

 

 

 

 

2009

2008

Restated

2007

Restated

 

 

£

£

£

ASSETS

 




Non-current assets

 




Property, plant and equipment

 

317,511

352,317

126,852

Intangible assets

 

2,290,109

2,430,109

1,836,828

Deferred tax asset

 

1,254,128

1,051,417

-



------------

------------

------------


 

3,861,748

3,833,843

1,963,860

Current Assets

 




Financial assets at fair value through profit or loss

 

4,698,734

2,636,135

23,888,023

Inventory

Trade and other receivables

 

 

58,551,732

175,898,683

9,008,759

30,578,089

-

5,989,445

Current tax recoverable

 

1,107,775

1,169,155

-

Cash and cash equivalents

 

37,432,137

47,123,092

27,080,761



------------

-------------

-------------


 

277,689,061

90,515,230

56,958,229



------------

-------------

-------------

Total Assets

 

281,550,809

94,349,073

58,921,909



------------

-------------

-------------

 

 




LIABILITIES

 




Current liabilities

 




Financial liabilities at fair value through profit or loss

 

(7,709,922)

(19,981,091)

-

Trade and other payables

 

(240,956,741)

(43,633,216)

(10,311,594)

Current tax payable

 

(453,535)

(381,539)

(1,482,563)



------------

-------------

-------------


 

(249,120,198)

(63,995,846)

(11,794,157)


 




Non current liabilities

 




Deferred  tax liabilities

 

-

-

(2,090,110)


 

------------

-------------

-------------


 




Total liabilities

 

(249,120,198)

(63,995,846)

(13,884,267)



------------

-------------

-------------


 




Total net assets

 

32,430,611

30,353,227

45,037,642



=======

=======

=======






CAPITAL AND RESERVES

 




Share capital

 

11,136,121

11,136,121

11,136,121

Share premium account

 

11,105,383

11,105,383

11,105,383

Merger reserve

 

1,245,256

1,245,256

1,245,256

Treasury shares

 

(1,093,889)

(1,092,831)

(163,217)

Retained earnings

 

12,357,624

11,783,542

26,364,590

Share-based payment reserve

 

3,639,675

2,555,461

1,229,328

Employee benefit trust

 

(5,342,707)

(5,880,660)

(5,879,819)

Exchange reserve

 

(616,852)

(499,045)

-



------------

-------------

-------------

Total equity attributable to owner of the parent

 

32,430,611

30,353,227

45,037,642



=======

=======

=======

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

for the year ended 31 December 2009

 


2009

2008

Restated


£

£

Cash flows from operating activities






Profit/(loss) for the year

2,649,761

(12,861,495)

Adjustments for :



Depreciation of property, plant and equipment

192,574

174,691

Impairment of property, plant and equipment

Amortisation of intangible assets

Foreign exchange gains

-

140,000

(84,552)

118,571

140,000

(2,979)

Taxation expense/(credit)

276,759

(4,765,777)

Unrealised (gains)/losses on financial assets designated at fair value

 

(550,268)

 

9,606,263

Realised (gains)/losses on financial assets designated at fair value

 

(1,244,789)

 

1,148,420

Net (cost on acquisitions)/proceeds on disposals of financial assets designated at fair value

 

(267,542)

 

10,571,205

Increase in inventories

Increase in trade and other receivables

(49,542,973)

(145,320,594)

(9,008,759)

(23,834,652)

Unrealised (gains)/losses on financial liabilities at fair value

(12,271,169)

19,981,091

Increase in trade and other payables

197,323,525

32,200,320

Share-based payment charge

1,084,214

1,326,133


-------------

-------------

Cash generated from operations

(7,615,054)

24,793,032

Taxation paid

(346,094)

(693,635)


-------------

-------------

Net cash flow (used in)/from operating activities

(7,961,148)

24,099,397


-------------

-------------




Investing activities



Purchase of property, plant and equipment

(157,768)

(424,172)

Disposal of property, plant and equipment

-

58,832

Acquisition of subsidiary (net of

cash acquired)

 

-

 

(545,652)


-------------

-------------

Net cash used in investing activities

(157,768)

(910,992)


-------------

-------------

Financing activities



Purchase of shares by employee benefit trust

(232,960)

(841)

Sale of shares by employee benefit trust

138,565

-

Purchase of treasury shares

(1,058)

(929,614)

Dividend paid to owners of the parent

(1,443,331)

(1,719,553)


-------------

-------------

Net cash used in financing activities

(1,538,784)

(2,650,008)


-------------

-------------




Net (decrease)/increase in cash and cash equivalents

(9,657,700)

20,538,397

Cash and cash equivalents at the beginning of the year

47,123,092

27,080,761

Foreign exchange gains/(losses)

 

(33,255)

(496,066)


-------------

------------

Cash and cash equivalents at the end of the year

37,432,137

47,123,092


=======

=======

 

 

NOTES TO THE ACCOUNTS

Year ended 31 December 2009

 

 

1          The financial information set out in this announcement does not constitute the Group's statutory accounts for the years ended 31 December 2009 or 2008 but is derived from those accounts. Statutory accounts for 2008 have been delivered to the Registrar of Companies, and those for 2009 will be delivered in due course. The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 237 (2) or (3) of the Companies Act 1985 in respect of the accounts for 2008 nor a statement under section 498 (2) or (3) of the Companies Act 2006 in respect of the accounts for 2009. The results for the year ended 31 December 2009 were approved by the Board of Directors on 22 March 2010 and are audited.

While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs. The Group expects to publish full financial statements that comply with IFRSs in May 2010.

2          Prior Year Adjustment

The Group has restated its prior year consolidated statement of comprehensive income and consolidated statement of financial position to reflect the share-based payments charge on options granted by the Employee Benefit Trust. This charge in relation to 2008 amounted to £1,127,194 and has been included within administrative expenses. This increased the loss for the year by £1,127,194 with a corresponding adjustment to share based payment reserve and this has £nil impact on total equity.

The charge for previous years amounted to £592,986 and has been treated as an adjustment between the opening balances on retained earnings and the share-based payments reserve in 2008.

3          Financial Reporting Review Panel

The Group has recently concluded discussions about its 2008 Annual Report and Financial Statements with the Financial Reporting Review Panel.  Certain additional disclosures have been included in our 2009 Financial Statements as a consequence of these discussions, particularly in relation to the 2008 Consolidated Statement of Cash Flows which has been restated and the classification of intangible assets between goodwill on consolidation and customer relationships.

 

4          Earnings per Ordinary Share

 

The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the year, excluding shares held in the Employee Benefit Trust and treasury shares.

 

The calculation of diluted earnings per share is based on the basic earnings per share adjusted to allow for the issue of shares through the share option schemes on the assumed conversion of all dilutive options.

 

Reconciliations of the earnings and weighted average number of shares in the calculations are set out below :

 

 

 

 



2009


2008



Earnings

£

Weighted average number of shares

Per share amount (pence)

Restated

 

Earnings

£

Weighted average number of shares

Restated

Per share amount (pence)

Basic earnings/(loss) per share

 

 

2,646,761

 

 

96,169,277

 

 

2.76

 

 

(12,861,495)

 

 

99,579,821

 

 

(12.92)p


=======

=======

=======

=======

=======

=======

Dilutive effect of share options


 

 

551,985



 

 

-



------------

------------

-----------

------------

------------

------------

Diluted earnings/(loss) per share

 

 

2,649,761

 

 

96,721,262

 

 

2.74

 

 

(12,861,495)

 

 

99,579,821

 

 

(12.92)p


=======

=======

=======

=======

=======

=======

 

No dilutive effect of the share options is shown for the year ended 31 December 2008 as their effect is anti-dilutive. Had there been a dilutive effect for the year ended 31 December 2008, the calculation would have been based on a weighted average number of shares of 99,733,870.

 

5          Cash and Cash Equivalents

 

Cash and cash equivalents includes amounts of £13,463,398 (2008: £24,561,062) held as deposits on trading positions and on behalf of third parties.

 

            Within the above amounts held as deposits in trading positions, there is a potential restriction in the use of £4,203,770 (2008: £11,993,088) cash to the extent that contracts for the future physical delivery of metals move to a liability position due to adverse market price movements.  Where the bank has an exposure in connection with that liability it has the right to withhold repayment of these cash deposits.  This relates to the business of Ambrian Metals Limited.

 

Copies of the 2009 Report and Financial Statements will be posted to shareholders in due course.  Copies of this announcement are available from the Company at Old Change House, 128 Queen Victoria Street, London EC4V 4BJ.


This information is provided by RNS
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