Half Yearly Report

RNS Number : 1054I
Crystal Amber Fund Limited
23 March 2015
 



 

23 March 2015

 

Crystal Amber Fund Limited

(the 'Fund' or the 'Company')

 

Interim Results for the period ended 31 December 2014

 

The Company announces its interim results for the six months ended 31 December 2014.

 

Highlights:

 

·     Net asset value ("NAV") per share fell 5.0 per cent. over the period (or 4.7 per cent. including the dividend paid in August), to an unaudited 152.7p per share at 31 December 2014 (160.8p at 30 June 2014).  Over the 2014 calendar year, NAV per share fell 2.2 per cent. or 1.9 per cent. including the dividend paid. 

·     Significant contributions to NAV performance from Aer Lingus Group PLC, 4imprint Group PLC and Juridica Investments Ltd.

·     Net realised gains over the six months amounted to £6.6 million.

·     A bid approach for Aer Lingus PLC, the Fund's largest holding, from IAG has driven a significant uplift in Aer Lingus' share price.

·     A bid approach for API Group PLC after the period end.

·     Noteworthy active engagement on pensions dispute with Aer Lingus Group PLC, on operations with Thorntons PLC and on board composition with API Group PLC.

·     Continuation of the share buy-back programme contributed to a narrowing of the share price discount to NAV, which at the period end was 0.5 per cent.

·     Since the period end, the Fund successfully completed a £32.3 million fundraising from new and existing shareholders.  This represents an enlargement of approximately 28 per cent. of the Company's previously issued share capital, bringing the total NAV to c. £144 million.

·     Proposed tenfold increase in annual dividend to 5p per share commencing June 2015.

 

William Collins, Chairman, commented:

 

"In the six months to 31 December 2014, we continued to engage with our main investee companies which have made solid progress that we expect to continue in 2015.  Support of the Fund's shareholders and new investors has enabled the Fund to grow its NAV to c. £144 million since the period end. The proceeds of this fundraising are enabling the Fund to pursue a number of new investments. The Fund continues to adopt a relatively cautious approach, with hedging activity as insurance against a significant market sell-off and a focus on asset backed special situations."

 

Enquiries

 

Crystal Amber Fund Limited


William Collins (Chairman)

Tel: 01481 716 000



Sanlam Securities UK Limited - Nominated Adviser


David Worlidge/James Thomas

Tel: 020 7628 2200



Numis Securities Limited - Broker


Nathan Brown/Hugh Jonathan

Tel: 020 7260 1426



Crystal Amber Advisers (UK) LLP - Investment Adviser


Richard Bernstein

Tel: 020 7478 9080

 

Chairman's Statement

 

I hereby present the interim results of Crystal Amber Fund Limited ("the Company" or "the Fund"), for the six month period to 31 December 2014 ("the period").

 

Net asset value ("NAV") per share fell 5.0 per cent. to an unaudited 152.7p per share at 31 December (160.8p at 30 June 2014). Total return over the period, including dividend, was -4.7 per cent. which compares to a total return of -0.5 per cent. for the FTSE Small Cap Index, 3.8 per cent. for the FTSE 250 and -4.1 per cent. for the Numis Smaller Companies Index.

 

Over the period the economic environment was mixed, with positive data coming out of the UK and US but weaker data from the Eurozone. Markets maintained a degree of volatility caused by concerns surrounding interest rate rises, the falling oil price and geopolitical unrest. As a result, the Fund's positioning remained cautious.

 

The Fund continued its pro-active discount management policy of share buybacks: during the period a further 1.2 million shares were acquired at an average cost of 135.84p per share.

 

After the period end, the Fund completed a £32.3 million fundraising at a 1.4 per cent. premium to NAV, at no cost to existing shareholders. The fundraising represents an enlargement of approximately 28 per cent. of the Company's previous NAV. At 31 December 2014, cash amounted to £1.6 million or 1.0 per cent. of total NAV.  With the Fund fully invested at the end of December 2014, the recent fundraising is allowing Crystal Amber to take advantage of new investment opportunities.

 

In December 2014, the Fund announced a new dividend policy, with the objective of distributing income and an element of realised gains from investments. On 10 December 2014, the Board announced its intention to recommend a dividend of 2.5p per share in respect of the six months ending 30 June 2015, which will be payable in or around September 2015 and an interim dividend of 2.5p per share in respect of the six months ending 31 December 2015, making a total of 5p per share for the 2015 calendar year which, on the basis of the NAV at 31 December 2014, would represent a dividend yield of approximately 3.3 per cent.

 

The Fund also announced an amendment to the Performance Hurdle condition in the Management Agreement, which will be increased from 8 per cent. to 10 per cent. with effect from the completion of the recent placing.

 

Overall we believe the global economic outlook remains uncertain with the expectation of tightening monetary policy in the US.  However, we have identified a number of special situations where the Fund will be able to act as a catalyst to release value. The Fund is now well positioned to take advantage of these opportunities with its increased cash position.

 

 

 

 

William Collins

Chairman

20 March 2015

 

Investment Manager's Report

 

Activist investment process

 

The Fund originates ideas mainly from its screening processes and its network of contacts. Companies are valued with focus on their replacement value, cash generation ability and balance sheet strength. In the process, the Fund's goal is to examine the company both 'as it is' and also 'as it could be' to maximise shareholder value.

 

Investments are typically made after an initial engagement, which in some cases may have been preceded by the purchase of a modest position in the company. This position allows us to meet the company as a shareholder. Engagement includes dialogue with the company chairman and management, and normally also several non-executive directors, as we build a network of knowledge around our holdings. Site visits are undertaken to deepen our research and where appropriate, independent research is commissioned. We attend investee company annual general meetings to maintain close contact with the board and other stakeholders.

 

Wherever possible, the Fund strives to develop an activist angle and aims to contribute to the companies' strategy with the goal of maximising shareholder value. Where value is hidden or trapped, the Fund looks for ways to realise it. Since launch, most of the Fund's activism has taken place in private, but the Fund remains willing to make its concerns public when appropriate. The response of management and boards to our suggestions has generally been encouraging. We remain determined to ensure that our investments deliver their full potential for all shareholders, and are committed to engage to the degree required to achieve this.

 

Performance

 

During the period, the Fund continued to engage closely with its major holdings and activist investments.

 

At 31 December 2014, equity holdings represented 96.7 per cent. of net assets. Cash reserves at the period end were approximately £1.6 million. Capital from the recent fundraising is allowing the Fund to take advantage of new investment opportunities.

 

The table below lists the top 10 holdings as at 31 December 2014, with the performance contribution of each during the six month period. In addition to these, a number of smaller investments have made a contribution to NAV, such as Northgate PLC (0.3 per cent. contribution) and Imperial Innovations Group (0.3 per cent. contribution). The main negative contribution over the period has been Hurricane Energy PLC (-3.2 per cent.), a position that the Fund has been adding to, taking advantage of share price weakness.

 

 

 

 

Top ten holdings at 31 December 2014

 

 

 

Pence per share

 

 

Percentage of investee equity held

Total return over the period

 

 

 

Percentage contribution to NAV performance

Aer Lingus Group PLC

34.4

2.8%

50.2%

8.1%

Sutton Harbour Holdings PLC

11.9

29.2%

3.1%

0.2%

Leaf Clean Energy Company

11.1

19.7%

-9.3%

-0.9%

Thorntons PLC

10.6

13.2%

-14.1%

-1.1%

Tribal Group PLC

7.7

3.9%

-12.2%

-0.8%

NBNK Investments PLC

7.5

28.2%

-16.3%

-1.0%

Hurricane Energy PLC

7.2

4.7%

-65.3%

-3.3%

Juridica Investments Ltd

6.9

3.7%

8.4%

0.4%

STV Group PLC

6.9

3.6%

4.2%

0.2%

4imprint Group PLC

6.8

2.3%

24.7%

1.5%

Total of ten largest holdings

111.0




Other investments

37.6




Cash and other net assets

4.1




Total NAV

152.7




 

Investee Companies

 

Aer Lingus Group PLC ("Aer Lingus")

Over the period the Fund continued to build its stake in Aer Lingus, confident in the airline's ability to successfully grow both the long haul and domestic travel businesses and move towards a resolution of its pensions dispute. The Fund also maintained the view that Aer Lingus' 23 pairs of landing slots at Heathrow Airport hold significant value, with the most recent transaction attributing a value of $60 million for each pair. Demonstrating constructive activism, we engaged with Aer Lingus and publicly supported the board's decision to contribute €191m towards the resolution of its pension issues, as recommended by the Expert Panel, but opposing any increase to that amount. Staff voted in favour of the pension proposal and the regulator approved the changes to the scheme in December 2014.

 

On 14 December 2014, Aer Lingus received a conditional bid offer of €2.30 per share from IAG, which was rejected by Aer Lingus' board as undervaluing the company. This was followed by a second bid approach from IAG, for €2.40, which was also rejected on grounds of undervaluation. IAG subsequently increased its conditional offer to €2.55 per share. The Fund is minded to follow the Board's recommendation.

 

Sutton Harbour Holdings PLC ("Sutton Harbour")

The Fund has continued to engage with Sutton Harbour's management over the period, and remains confident in the leadership of the chairman, Graham Miller, who is addressing the key issue of asset efficiency. At its AGM in September, Sutton Harbour indicated that the board was focused on realising value from the former airport site. We feel the core business is showing increased strength, with trading in line with market expectations and improved property occupancy, and the Fund has continued to engage with Sutton Harbour with regards to a sale of the airport site which we believe will generate further value. We remain Sutton Harbour's largest shareholder.

 

Leaf Clean Energy Company ("Leaf")

Over the period, the Fund has continued its constructive engagement with Leaf's management to accelerate the realisation of investments, reduce annual running costs and increase visibility of underlying values.  We remain confident that despite recent price falls in the energy sector, the new board is making solid progress across these areas.

 

Thorntons PLC ("Thorntons")

Thorntons is making progress in reducing the number of unprofitable retail outlets and developing its presence in supermarkets, which have much greater operating margins, as well as exploring international markets. However, on 23 December 2014, Thorntons announced that despite like-for-like sales growth in its retail division, a decline in sales in its UK commercial channel would result in reduced earnings for the year to 30 June 2015. This decline can be attributed to the well-publicised issues within supermarkets and their changing ordering patterns. Despite these operational issues, we remain confident in Thorntons' brand value, growth prospects and strategic value and continue to engage with the company on these matters.

 

The Fund remains the largest shareholder in Thorntons.

 

NBNK Investments PLC ("NBNK")

We continued to engage constructively with NBNK's main shareholder, Wilbur Ross, and director, Lord Brennan, as well as former board members of the company. The Fund maintains the view that NBNK has scope for a legal case against Lloyds Bank over the failed sale of the 631 Lloyds TSB and Cheltenham & Gloucester branches, in 2011. NBNK's operations have been scaled back and costs reduced to a minimum. The Fund remains fully supportive of the board. 

 

4imprint Group PLC ("4imprint")

4imprint's core business continues to perform well with a solid half year result and interim management statement reported, delivering strong organic growth and revenue and profit ahead of expectations. We maintain the view that there is significant further potential upside in 4imprint.

Hurricane Energy PLC ("Hurricane")

Hurricane's share price was severely impacted by the falling oil price. However, we believe that the share price has disconnected from the underlying value of Hurricane's assets. Having banked some profits in July, we took advantage of share price weakness to increase the Fund's stake. Operationally, Hurricane is making solid progress.

 

Other holdings

 

API Group PLC ("API")

The company announced a further deterioration of trading in its metallic pigment product. Following the Fund's engagement with the company, API announced in September 2014 that Richard Wright, chairman of the board, would be stepping down in short order, with the CEO assuming his role temporarily.

 

After the period end, a 60p per share bid was made for the company by its largest shareholder, Steel Partners. On 17 March, at the request of Steel Partners, API's Board applied to cancel the company's listing on AIM with effect from 17 April 2015. Sufficient acceptances were received for the Steel Partners bid and the offer was formally accepted on 19 March 2015.

 

Plus500 Ltd ("Plus500")

Plus500's share price fell sharply on the back of comments made by a bear raider, questioning the performance of the company. The Fund felt these claims were unfounded and took advantage of share price weakness to increase the Fund's stake. The share price rebounded following a positive trading update.

 

We see further upside from continued organic growth in the business and remain engaged with the board on complementary product offerings.

 

Realisations

Over the period, the Fund reduced its holding in 4imprint, Plus500 and Imperial Innovations realising profits of £1.9million, £1.7 million and £1.7 million respectively. It also reduced holdings in Cenkos and Tribal Group, realising gains of £0.8 million and £0.7 million respectively.  The Fund realised a loss of £0.6 million in reducing its position in TT Electronics.

 

Over the period, the Fund realised net accumulated net gains of £6.6 million.

 

Hedging Activity

The Fund continues to purchase FTSE Put options as insurance against a significant market sell-off. We realised profits of £1.8 million from Put sales, following the market dip in October.

 

Outlook

We believe that the underlying causes of the global financial crisis, including excessive debt, have not been addressed. The key driver of asset prices has been unprecedented loose monetary policy. In our view, markets remain vulnerable to significantly reduced liquidity when monetary policies normalise.

 

We believe that the Fund is defensively positioned, with its focus on special situation holdings, which are less dependent upon macroeconomic recovery and more upon a combination of self-help and our active engagement. The Fund's hedging activity, as insurance against a significant market sell-off, provides additional protection.

 

Crystal Amber Asset Management (Guernsey) Limited

Investment Manager

 

Condensed Statement of Comprehensive Income (Unaudited)

For the six months ended 31 December 2014

 



Six months ended 31 December

Six months ended 31 December



2014

2013



(Unaudited)

(Unaudited)



Revenue

Capital

Total

Revenue

Capital

Total


Notes

£

£

£

£

£

£

Income








Dividend income from listed investments


1,573,199

-

1,573,199

740,726

-

740,726

Other income


2,226

-

2,226

41,474

-

41,474

Bank interest


2,117

-

2,117

3,375

-

3,375



1,577,542

-

1,577,542

785,575

-

785,575

Net gains on financial assets at fair value through profit or loss








Equities








Realised gain

4

-

6,645,943

6,645,943

-

4,484,848

4,484,848

Movement in unrealised (losses)/gains

4

-

(12,822,335)

(12,822,335)

-

16,554,017

16,554,017

Debt Instruments








Movement in unrealised gains

4

-

-

-

-

76,427

76,427

Money Market Investments








Realised gain

4

-

4,217

4,217

-

11,445

11,445

Movement in unrealised (losses)/gains

4

-

(4,190)

(4,190)

-

10,467

10,467

Derivative Financial Instruments








Realised gain/(loss)

4

-

992,190

992,190

-

(1,319,040)

(1,319,040)

Movement in unrealised losses

4

-

(131,995)

(131,995)

-

(1,361,720)

(1,361,720)

Total income/(loss)


1,577,542

(5,316,170)

(3,738,628)

785,575

18,456,444

19,242,019

Expenses








Transaction costs


-

328,170

328,170

-

357,907

357,907

Exchange movements on revaluation of investments


-

636,460

636,460

-

59,910

59,910

Management fees

8

1,080,166

-

1,080,166

882,162

-

882,162

Performance fees

8

-

-

-

-

1,926,687

1,926,687

Directors' remuneration


57,408

-

57,408

47,500

-

47,500

Administration fees


70,156

-

70,156

68,618

-

68,618

Custodian fees


29,307

-

29,307

28,397

-

28,397

Audit fees


9,911

-

9,911

9,315

-

9,315

Other expenses


66,301

-

66,301

78,348

-

78,348



1,313,249

964,630

2,277,879

1,114,340

2,344,504

3,458,844

(Loss)/Return for the period


264,293

(6,280,800)

(6,016,507)

(328,765)

16,111,940

15,783,175

Basic and diluted (loss)/earnings per share (pence)

2

0.35

(8.27)

(7.93)

(0.47)

23.10

22.63

 

All items in the above statement derive from continuing operations.

 

The total column of this statement represents the Company's Statement of Comprehensive Income prepared in accordance with International Financial Reporting Standards. The supplementary income return and capital return columns are presented under guidance published by the Association of Investment Companies ("AIC").

 

The Notes to the Unaudited Condensed Financial Statements form an integral part of these financial statements.

 

Condensed Statement of Financial Position (Unaudited)

As at 31 December 2014

 



As at


As at


As at



31 December


30 June


31 December



2014


2014


2013



(Unaudited)


(Audited)


(Unaudited)

ASSETS

Notes

£


£


£


1,565,319


5,222,171


4,409,758


932,733


270,795


292,905

Financial assets designated at fair value through profit or loss

4

112,682,338


123,527,746


117,868,920


115,180,390


129,020,712


122,571,583














156,057


5,962,932


2,078,140


156,057


5,962,932


2,078,140













Capital and reserves attributable to the Company's equity shareholders







5

782,297


782,297


782,297

6

(4,117,527)


(2,483,196)


(1,279,252)


82,543,503


82,926,112


81,117,538

Retained earnings


35,816,060


41,832,567


39,872,860


115,024,333


123,057,780


120,493,443








115,180,390


129,020,712


122,571,583







3

                     152.72


               160.81


                     156.14

 

The financial statements were approved by the Board of Directors and authorised for issue on 20 March 2015.

 

 

 

 

William Collins                                                                                   Nigel Ward          

Chairman                                                                                 Director

20 March 2015                                                                                         20 March 2015

 

The Notes to the Unaudited Condensed Financial Statements form an integral part of these financial statements.

 

Condensed Statement of Changes in Equity (Unaudited)

For the six months ended 31 December 2014

 



Share

Treasury

Distributable

Retained earnings


Total


Notes

Capital

Shares

Reserve

Capital

Revenue

Total

Equity



£

£

£

£

£

£

£

Opening balance at 1 July 2014


782,297

(2,483,196)

82,926,112

41,249,276

583,291

41,832,567

123,057,780

Purchase of Company shares into Treasury

6

-

(1,634,331)

-

-

-

-

(1,634,331)

Dividends paid in the period

7

-

-

(382,609)

-

-

-

(382,609)

(Loss)/Return for the period


-

-

-

264,293

(6,280,800)

(6,016,507)

(6,016,507)

Balance at 31 December 2014


782,297

(4,117,527)

82,543,503

41,513,569

(5,697,509)

35,816,060

115,024,333












Share

Treasury

Distributable

Retained earnings


Total


Notes

Capital

Shares

Reserve

Capital

Revenue

Total

Equity



£

£

£

£

£

£

£

Opening balance at 1 July 2013


600,000

(5,186,651)

55,847,261

21,511,791

1,080,810

22,592,601

73,853,211

Issue of Company shares

5

182,297

-

26,232,486

-

-

-

26,414,783

Share issue costs

5

-

-

(685,044)

-

-

-

(685,044)

Purchase of Company shares into Treasury

6

-

(1,335,726)

-

-

-

-

(1,335,726)

Sale of Company shares from Treasury

6

-

6,740,209

-

-

-

-

6,740,209

Realised gain on sale of Company shares from Treasury


-

(1,497,084)

-

1,497,084

-

1,497,084

-

Dividends paid in the period

7

-

-

(277,165)

-

-

-

(277,165)

Return for the period


-

-

-

16,111,940

(328,765)

15,783,175

15,783,175

Balance at 31 December 2013


782,297

(1,279,252)

81,117,538

39,120,815

752,045

39,872,860

120,493,443

  

 

The Notes to the Unaudited Condensed Financial Statements form an integral part of these financial statements.

 

Condensed Statement of Cash Flows (Unaudited)

For the six months ended 31 December 2014

 



Six months


Six months



ended


ended



31 December


31 December



2014


2013



(Unaudited)


(Unaudited)



£


£

Cashflows from operating activities





Dividend income received from listed investments


745,983


747,674

Bank interest received


6,103


2,718

Other income received


2,226


41,474

Management fees paid


(1,080,168)


(882,162)

Performance fee paid


(1,747,285)


-

Directors' fees paid


(48,271)


(47,500)

Other expenses paid


(201,469)


(184,557)

Net cash outflow from operating activities


(2,322,881)


(322,353)






Cashflows from financing activities





Proceeds from issue of Company shares


-


26,414,783

Placing fees and issue costs


-


(685,044)

Purchase of Company shares into Treasury


(1,634,331)


(1,335,726)

Sale of Company shares from Treasury


-


6,740,209

Dividends paid


(382,609)


(277,165)

Net cash (outflow)/inflow from financing activities


(2,016,940)


30,857,057






Cashflows from investing activities





Purchase of investments


(41,878,459)


(54,733,430)

Sale of investments


42,442,053


29,125,217

Purchase of derivative financial instruments


(3,453,005)


(1,522,310)

Sale of derivative financial instruments


3,900,550


-

Transaction charges on purchase and sale of investments


(328,170)


(357,907)

Net cash inflow/(outflow) from investing activities


682,969


(27,488,430)






Net (decrease)/increase in cash and cash equivalents during the period


(3,656,852)


3,046,274

Cash and cash equivalents at beginning of period


5,222,171


1,363,484

Cash and cash equivalents at end of period


1,565,319


4,409,758

 

The Notes to the Unaudited Condensed Financial Statements form an integral part of these financial statements.

 

Notes to the Unaudited Condensed Financial Statements

For the six months ended 31 December 2014

 

General Information

Crystal Amber Fund Limited is a company incorporated and registered in Guernsey on 22 June 2007 and is governed under the provisions of the Companies (Guernsey) Law, 2008 as amended.  The registered office address is given below. The Company has been established to provide shareholders with an attractive total return which is expected to comprise primarily capital growth but with the potential for distributions. The Company will achieve this through the investment in a concentrated portfolio of undervalued companies which are expected to be predominantly, but not exclusively, listed or quoted on UK markets and which have a typical market capitalisation of between £100 million and £1,000 million.

 

The Company was listed and admitted to trading on the Alternative Investment Market ('AIM'), operated by the London Stock Exchange, on 17 June 2008. The Company is also a member of the Association of Investment Companies ('AIC'). The Company delisted from the Channel Islands Securities Exchange (CISE) with effect from 1 July 2014 in order to both reduce costs and simplify the Company's listing structure.

 

1.      SIGNIFICANT ACCOUNTING POLICIES

 

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied throughout the current period, unless otherwise stated.

 

Basis of preparation

The interim financial statements have been prepared in accordance with the International Accounting Standard ("IAS") 34, Interim Financial Reporting. 

 

The interim financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Company's annual financial statements for the year to 30 June 2014. The annual financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS").

 

The same accounting policies and methods of computation are followed in the interim financial statements as in the annual financial statements for the year ended 30 June 2014.

 

The presentation of the interim financial statements is consistent with the annual financial statements. Where presentational guidance set out in the Statement of Recommended Practice ("SORP") for Investment Trusts issued by the AIC in January 2003 (revised November 2014) is consistent with the requirements of IFRS, the Directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP. In particular, supplementary information which analyses the Statement of Comprehensive Income between items of a revenue and capital nature has been presented alongside the total Statement of Comprehensive Income.

 

The Company does not operate in an industry where significant or cyclical variations as a result of seasonal activity are experienced during the financial year. Income and dividends from investments will vary according to the construction of the portfolio from time to time.

 

Going concern

The Directors are confident that the Company has adequate resources to continue in operational existence for the foreseeable future and do not consider there to be any threat to the going concern status of the Company.

 

The Directors have specifically considered the implications of the continuation vote on the application of the going concern basis. At the AGM in June 2015, an Extraordinary Resolution will be proposed that the Company cease to continue as constituted. Should the resolution be passed, the Directors are required to formulate proposals to put to the shareholders to re-organise, reconstruct, or wind up the Company. The Directors consider that it is unlikely that such a resolution would be passed, given the past performance of the Company and its successful fundraising and therefore conclude that there is no material uncertainty which may cast significant doubt on the ability of the Company to continue as a going concern. For this reason, they continue to adopt the going concern basis in preparing the financial statements.

 

Segmental reporting

The Board has considered the requirements of IFRS 8 'Operating Segments', and is of the view that the Company is domiciled in Guernsey and is engaged in a single segment of business, being investment mainly in UK equity instruments, and mainly in one geographical area, the UK, and therefore the Company has only one operating segment. The Board, as a whole, has been determined as constituting the chief operating decision maker of the Company. The key measure of performance used by the Board to assess the Company's performance and to allocate resources is the total return on the Company's Net Asset Value ("NAV"), as calculated under IFRS, and therefore no reconciliation is required between the measure of profit or loss used by the Board and that contained in these financial statements.

 

2.      BASIC AND DILUTED EARNINGS PER SHARE

 

Basic and diluted earnings per share is based on the following data:

 

 



Six months


Six months



ended


ended



31 December


31 December



2014


2013



(Unaudited)


(Unaudited)

(Loss)/Return for the period


£(6,016,507)


£15,783,175

Weighted average number of issued Ordinary Shares


75,916,930


69,740,908

Basic and diluted earnings per share (pence)


(7.93)


22.63

 

3.      NET ASSET VALUE PER SHARE

 

Net asset value per share is based on the following data:

 



As at


As at


As at



31 December


30 June


31 December



2014


2014


2013



(Unaudited)


(Audited)


(Unaudited)

Net asset value per statement of financial position


£115,024,333


£123,057,780


£120,493,443

Total number of issued Ordinary shares (excluding Treasury shares)


75,318,703


76,521,809


77,170,153

Net asset value per share (pence)


              152.72


            160.81


            156.14

 

4.      FINANCIAL ASSETS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS

 


1 July


1 July


1 July


2014 to


2013 to


2013 to


31 December


30 June


31 December


2014


2014


2013


(Unaudited)


(Audited)


(Unaudited)


£


£


£

Equity investments

111,979,688


121,690,117


100,059,211

Debt instruments

                           -  


-


2,096,773

Money Market investments

                           -  


1,547,628


15,534,186

Derivative financial instruments

                  702,650


290,001


178,750


112,682,338


123,527,746


117,868,920

Equity investments






Cost brought forward

125,439,328


78,457,686


78,457,686

Purchases

37,822,732


85,217,295


29,636,779

Sales

(40,720,310)


(55,362,228)


(15,625,217)

Realised gain

6,645,943


17,126,575


4,484,848

Cost carried forward

129,187,693


125,439,328


96,954,096

Unrealised losses brought forward

(3,271,624)


(13,366,811)


(13,366,811)

Movement in unrealised losses

(12,822,335)


10,095,187


16,554,017

Unrealised (losses)/gains carried forward

(16,093,959)


(3,271,624)


3,187,206

Effect of exchange rate movements

(1,114,046)


(477,587)


(82,091)

Fair value of equity investments

111,979,688


121,690,117


100,059,211

Debt instruments






Cost brought forward

-


2,000,000


2,000,000

Purchases

-


-


-

Cost carried forward

-


2,000,000


2,000,000

Unrealised gains brought forward

                        -


20,346


20,346

Movement in unrealised gains

-


105,429


76,427

Unrealised gains carried forward

-


125,775


96,773

Conversion of loan notes into shares

                        -


(2,125,775)


-

Fair value of debt instruments

-


-


2,096,773

Money Market investments






Cost brought forward

1,543,438


4,004,346


4,004,346

Purchases

-


25,000,000


25,000,000

Sales

(1,547,655)


(27,500,000)


(13,500,000)

Realised gain

4,217


39,092


11,445

Cost carried forward

-


1,543,438


15,515,791

Unrealised gains brought forward

4,190


7,928


7,928

Movement in unrealised gains

(4,190)


(3,738)


10,467

Unrealised gains carried forward

-


4,190


18,395

Fair value of money market investments

-


1,547,628


15,534,186

Derivative financial instruments






Cost brought forward

582,051


460,400


460,400

Purchases

3,453,005


3,670,111


1,522,310

Sales

(3,900,551)


-


-

Realised gains/(losses)

992,190


(3,548,460)


(1,319,040)

Cost carried forward

1,126,695


582,051


663,670

Unrealised (losses)/gains brought forward

(292,050)


876,800


876,800

Movement in unrealised losses

(131,995)


(1,168,850)


(1,361,720)

Unrealised losses carried forward

(424,045)


(292,050)


(484,920)

Fair value of derivative financial instruments

702,650


290,001


178,750

Total financial assets designated at fair value through profit or loss

112,682,338


123,527,746


117,868,920

 

At the reporting date the Company's financial assets portfolio consisted of a number of share options in the form of both put and call options. The put options were purchased as a protection against a significant market sell-off, while the call options held were purchased by the Company to take advantage of a potential strategic investment opportunity. Further details on these derivative financial instruments are included within the Investment Manager's report above.

 

4.      SHARE CAPITAL AND RESERVES

 

The authorised share capital of Company is 300 million Ordinary shares of £0.01 each.

 

The issued share capital of the Company is comprised as follows:

 


31 December 2014

30 June 2014


(Unaudited)

(Audited)


Number

£

Number

£






Opening balance

 78,229,665

782,297

  60,000,000

600,000

Ordinary shares issued during the period/year

                -  

-

  18,229,665

            182,297

Allotted, called up and fully paid Ordinary shares at £0.01 each

 78,229,665

 782,297

  78,229,665

            782,297

 

5.      TREASURY SHARES

 


Six months ended

Year ended


31 December 2014

30 June 2014


(Unaudited)

(Audited)


Number

£

Number

£

Opening balance

   1,707,856

        2,483,196

    4,492,000

         5,186,651

Treasury shares purchased during the period/year

   1,203,106

        1,634,331

       2,770,000

         4,047,797

Treasury shares sold during the period/year

                -  

                    -  

  (5,554,144)

       (8,559,826)

Realised gain transferred to retained earnings

                -  

                    -  

                 -  

         1,808,574

Closing balance

   2,910,962

        4,117,527

    1,707,856

         2,483,196

 

During the period ended 31 December 2014, 1,203,106 (2013: 970,000) Treasury shares were purchased at an average cost of 135.84p per share. Since the period end, a further 267,000 shares have been repurchased at an average cost of 150p per share and transferred to Treasury.

 

6.      DIVIDENDS

 

On 16 July 2014, the Company declared an interim dividend of £382,609, equating to 0.5p per Ordinary share, which was paid on 15 August 2014 to shareholders on record on the register on 18 July 2014.

 

7.      RELATED PARTIES

 

Richard Bernstein is a Director and a member of the Investment Manager, a member of the Investment Adviser and a holder of 10,000 (2013: 10,000) Ordinary Shares, representing 0.01 per cent. (2013: 0.01 per cent.) of the voting share capital of the Company at the period end. 

 

During the period the Company incurred management fees of £1,080,166 (2013: £882,162) none of which was outstanding at the period end (2013: £Nil). The Company did not accrue any performance fees during the period (2013: £1,926,687). Under the terms of the Investment Management Agreement between the Company and the Investment Manager, if the NAV per share at 30 June 2015 exceeds the 2015 Performance Hurdle, a performance fee will be payable to the Investment Manager. The performance hurdle represents an expected return on share capital since placing compounded at a rate of 7 per cent. up to 20 August 2013, 8 per cent. up to 27 January 2015 and 10 per cent. after that date.

 

As the NAV per share at 31 December 2014 did not exceed the Performance Hurdle at that date, a performance fee has not been accrued in the interim results. In the event that, on 30 June 2015, NAV per share exceeds the 2015 Performance Hurdle, the performance fee will be an amount equal to 20 per cent. of the excess of the NAV per share at such date over the 2014 Performance Hurdle multiplied by the time weighted average number of Ordinary Shares in issue during the year ending 30 June 2015. Depending on whether the Ordinary Shares are trading at a discount or a premium to the Company's NAV per share at 30 June 2015, the performance fee will be either payable in cash (subject to the Investment Manager being required to use the cash payment to purchase Ordinary Shares in the market) or satisfied by the sale of Ordinary Shares out of Treasury or by the issue of new fully paid Ordinary Shares at the closing mid-market closing price on 30 June 2015, respectively. 

 

As at 31 December 2014, the Investment Manager held 3,600,000 Ordinary Shares (2013: 2,230,000) of the Company, representing 4.60 per cent. (2013: 2.89 per cent.) of the voting share capital.

 

All related party transactions are carried out on an arm's length basis.

 

8.      POST BALANCE SHEET EVENTS

 

The Company purchased 267,000 of their own Ordinary shares between the period 1 January 2015 and 16 March 2015. These shares are held as Treasury shares.

 

On 23 January 2015, the shareholders approved at an Extraordinary General Meeting ('EGM') of the Company amendment to the conditions for the payment of the performance fee as part of the proposed placing. The hurdle condition has now increased from 8 per cent. to 10 per cent. for the period after issue to the end of the relevant performance period.

 

At the aforementioned EGM, shareholders also approved amendments to the Company's dividend policy to increase the level of dividends paid to shareholders. With effect from 1 January 2015, the Company intends to pay dividends of up to 5 pence per share annually.

 

On 27 January 2015 the Company issued 20,770,097 new Ordinary shares on AIM. Through this issue of shares, the Company raised gross funds of £32,297,499 (net £31,832,289 after payment of issue costs).

 

On 6 February 2015 the Company reported that its unaudited NAV at 31 January 2015 was 148.29p per share. On 6 March 2015 the Company reported that its unaudited NAV at 28 February 2015 was 150.30p per share.

 

9.      AVAILABILITY OF INTERIM REPORT

 

Copies of the Interim Report will be available to download from the Company's website www.crystalamber.com.          

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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