Half-yearly report

Starvest plc Half-year report - six months ended 31 March 2010 Chairman's statement I am pleased to provide a portfolio valuation update as at 31 March 2010, the interim financial statements for the six months ended on 31 March 2010 and a commentary on the progress made during the period. Investment performance The Starvest investment performance since 30 September 2009 has been disappointing.  The key facts are as follows: * The Company net asset value has declined by 21% during the six months to 31 March 2010. * The closing share price at 5.75 pence indicates a discount to net asset value of 35%. Against this disappointment, the positives are that: * investment sales have realised £630,605 with a gross profit of £402,330; and * the bank overdraft has been reduced substantially to approximately £240,000. Given the challenging market conditions, especially during the first quarter of 2010, this represents encouraging progress. Starvest uses closing bid prices or the Directors' lower valuation if deemed appropriate. Company statistics   31 March 31 December 2009 30 September 2009 31 March   2010  2009 Trading portfolio £3.53m £4.17m £4.72m £4.25m value Company asset value £3.19m £3.84m £4.02m £3.62m net of debt Net asset value - 8.85 pence 10.59 pence 10.72 pence 10.01 pence fully diluted per share Share price - mid 5.75 pence 7.0 pence 11.75 pence 6.25 pence Share price discount 35% 34% 9% premium 37% to fully diluted net asset value Market capitalisation £2.01m £2.44m £4.1m £2.18m Portfolio comment During the half year, Starvest made a modest addition to its investment in Fundy Minerals Limited.  The small holding in Beowulf Mines plc was sold at profit, although the convertible loan stock has been retained; the holdings in Ariana Resources plc and in Franconia Minerals Corporation were both reduced. A number of our mineral exploration investee companies have experienced difficulty in raising new cash for exploration; where they have been successful, they have been forced to accept a valuation well below the then current market price leading to a fall.  Although some are showing signs of modest improvements, it is likely to be a while before the full recovery we expect manifests itself.  We live in challenging times! It is understandable that UK investors are cautious against the background of world economic challenges and political uncertainty.  However, there is much evidence to show that the demand for minerals such as iron ore, manganese, nickel, platinum, gold, and uranium is as buoyant as ever.  It is not too much of an exaggeration to assert that the demands of China, India, Brazil and many smaller developing countries for raw materials are growing rather than contracting, hence upward movements in raw material prices.  Therefore it must only be a matter of time before this demand flows through to the share prices of our portfolio companies.  Starvest and most of its investee companies are not dependent on the UK economy, rather they stand to benefit from the generally surging economies of developing nations. Within the investment portfolio, we have eight investments, each of which has the potential to transform the Starvest portfolio.  We must be patient! Other points of note during the half year: * The loss on ordinary activities before taxation for the period amounted to £100,276 (2009: loss of £147,841).  The loss includes administrative expenses amounting to £90,162.  There was an investment impairment charge of £468,743 and amounts written back of £62,470 making a net charge of £406,273 (2009: £NIL). * Basic loss of 0.29 pence per share (2009: loss of 4.2 pence per share); fully diluted loss of 0.25 pence per share (2009: loss of 3.6 pence per share) R Bruce Rowan Chairman & Chief Executive 28 April 2010 Profit & loss account   6 months to 31 6 months to 31 Year  ended March 2010 March 2009  30 September 2009   Unaudited Unaudited Audited £ £ £ Operating income 630,605 - - Direct costs (228,275) - - ------------------------------------------------------- Gross profit 402,330 - - Administrative expenses (90,162) (97,863) (189,398) Impairment of trade (468,743) - - investments 62,470 - 295,884 Amounts written back to trade investments ------------------------------------------------------- Operating (loss)/profit (94,105) (97,863) 106,486 on ordinary activities Interest receivable 3,682 15,274 29,933 Interest payable (9,853) (65,253) (91,727) ------------------------------------------------------- (Loss)/profit on ordinary (100,276) (147,842) 44,692 activities before taxation Tax on profit on ordinary - - (8,600) activities ------------------------------------------------------- (Loss)/profit on ordinary (100,276) (147,842) 36,092 activities after taxation ------------------------------------------------------- (Loss)/earnings per share - see note 3 (0.29) pence (0.42) pence 0.1 pence Basic (0.25) pence (0.36) pence 0.1 pence Fully diluted ------------------------------------------------------- Balance sheet     6 months ended 6 months ended 31 Year  ended 31 March 2010 March 2009  30 September 2009     Unaudited Unaudited Audited £ £ £ Current assets Debtors   19,081 1,147,178 34,720 Trading investments -   2,619,453 2,809,786 3,215,671 see note 2 - - - Cash at bank and in hand --------------------------------------------------------     2,638,534 3,956,964 3,250,391 Creditors - amounts falling due within one year (340,188) (1,742,276) (851,769) Other creditors -------------------------------------------------------- Net current assets   2,298,346 2,214,688 2,398,622 -------------------------------------------------------- Total assets less   2,298,346 2,214,688 2,398,622 current liabilities -------------------------------------------------------- Capital and reserves Called up share 372,173 372,173 372,173 capital 2,026,396 2,026,396 2,026,396 Share premium account (100,223) (183,881) 53 Profit and loss account -------------------------------------------------------- Equity shareholders'   2,298,346 2,214,688 2,398,622 funds -------------------------------------------------------- Cash flow statement     6 months ended 6 months ended Year ended 31 March 2010 31 March 2009  30 September 2009     Unaudited Unaudited Audited £ £ £ Net cash inflow/(outflow)   513,713 (58,482) (244,420) from operating activities Returns on investment and servicing of finance: Interest receivable   3,682 15,274 29,933 Interest payable (9,853) (65,253) (91,727) ---------------------------------------------------     (6,171) (49,979) (61,794) --------------------------------------------------- Taxation recovered - - 1,118,401 ---------------------------------------------------     - - 1,118,401 --------------------------------------------------- Increase/(decrease) in cash 507,542 (108,461) 812,187 in the period Opening cash balance - - - brought forward (747,890) (1,560,077) (1,560,077 Net debt brought forward --------------------------------------------------- Closing net debt   (240,348) (1,668,538) (747,890) --------------------------------------------------- Movement on equity shareholders' funds     6 months ended 6 months ended Year  ended 31 March 2010 31 March 2009  30 September 2009     Unaudited Unaudited Audited £ £ £ Total recognised   (100,276) (147,842) 36,092 (loss)/profits relating to the period --------------------------------------------------- (Decrease)/increase in   (100,276) (147,842) 36,092 shareholders' funds Opening shareholders' 2,398,622 2,362,530 2,362,530  funds --------------------------------------------------- Closing shareholders' funds   2,298,346 2,214,688 2,398,622 --------------------------------------------------- Interim report notes 1. Interim report The information relating to the six month periods to 31 March 2009 and 31 March 2010 is unaudited. The information relating to the year ended 30 September 2009 is extracted from the audited accounts of the Company which have been filed at Companies House and on which the auditors issued an unqualified audit report. 2. Basis of accounting The report has been prepared using accounting policies that are consistent with those adopted by the Company in accordance with UK GAAP for the statutory accounts for the year ended 30 September 2009, although the information does not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006. The Company will report again for the full year to 30 September 2010. The Company's investments at 31 March 2010 are valued at the lower of cost or the valuation adopted at 30 September 2009 or the current market value based on bid prices at the close of business.  The Chairman's statement includes a valuation based on bid prices at 31 March 2010. 3. Earnings per share     6 months ended 31 6 months ended 31 Year  ended March 2010 March 2009  30 September 2009       Unaudited Unaudited Audited £ £ £   These have been (100,276) (147,842) 36,092 calculated on a (loss)/profit of: --------------------------------------------------------- The weighted average 34,917,259 34,917,259 34,917,259 number of shares used was: --------------------------------------------------------- Basic (loss)/profit (0.29) pence (4.2) pence 0.1 pence per share: --------------------------------------------------------- The weighted average 40,492,259 40,492,259 40,492,259 number of shares and outstanding options used was: --------------------------------------------------------- Fully diluted (0.25) pence (0.36) pence 0.1 pence (loss)/profit per share: --------------------------------------------------------- Investment portfolio Starvest now holds trade investments in the following companies: * Alba Mineral Resources plc  Nickel, uranium & gold in Scotland, Mauritania, Sweden and Ireland www.albamineralresources.com < http://www.albamineralresources.com/ > * Agricola Resources plc  Gold exploration in Morocca www.agricolaresources.com < http://www.agricolaresources.com/> * Ariana Resources plc  Gold exploration in Turkey www.arianaresources.com < http://www.arianaresources.com/> * Belmore Resources (Holdings) plc  Zinc exploration in Ireland www.belmoreresources.com < http://www.belmoreresources.com/> * Beowulf Mining plc  Iron ore, gold, copper and uranium exploration in Sweden www.beowulfmining.com < http://www.beowulfmining.com/> * Brazilian Diamonds Limited  Diamond exploration in Brazil www.braziliandiamonds.com < http://www.braziliandiamonds.com/> * CAP Energy plc  Oil & gas production in North America www.capenergy.co.uk < http://www.capenergy.co.uk/> * Carpathian Resources Limited  Oil and gas exploration in Central Europe www.carpathian.com.au < http://www.carpathian.com.au/> * Concorde Oil & Gas plc  Operational oil and gas projects in the Russian Federation * Chalkwell Investments plc, formerly Investment holding company The Core Business plc www.chalkwellinvestmentsplc.co.uk < http://www.chalkwellinvestmentsplc.c o.uk/> * Equity Resources plc  Investment holding company * Franconia Minerals Corporation  North American minerals www.franconiaminerals.com < http://www.franconiaminerals.com/> * Fundy Minerals Limited  Base metal exploration in Canada www.fundyminerals.com < http://www.fundyminerals.com/> * Gippsland Limited  Tantulum exploration in Egypt www.gippslandltd.com.au < http://www.gippslandltd.com.au/> * Goliath Resources Inc.  Copper, gold & molybdenum in Canada and Zambia www.goliathresources.com < http://www.goliathresources.com/> * Greatland Gold plc  Gold exploration in Western Australia and Tasmania www.greatlandgold.com < http://www.greatlandgold.com/> * Guild Acquisitions plc  Investment holding company * India Star Energy plc  Investment holding company www.indiastarenergy.co.uk < http://www.indiastarenergy.co.uk/> * Kefi Minerals plc  Mineral exploration in Turkey www.kefi-minerals.com < http://www.kefi-minerals.com/> * Lisungwe plc  Pyrite and other minerals in Malawi www.lisungwe.com < http://www.lisungwe.com/> * Lotus Resources plc  Fluorspar and other mineral exploration in Mongolia www.lotus-resources.com < http://www.lotus-resources.com/> * Marechale Capital plc, formerly St Investment banking Helen's Capital plc www.marechalecapital.com < http://www.marechalecapital.com/> * Minera IRL Limited, formerly Hidefield Gold exploration in North and South Gold plc  America www.hidefield.co.uk < http://www.hidefield.co.uk/> * Oracle Coalfields plc  Coal mining in Pakistan www.oraclecoalfields.com < http://www.oraclecoalfields.com/> * Red Rock Resources plc  Iron ore and manganese exploration in Australia and Zambia; uranium exploration in Malawi www.rrrplc.com < http://www.rrrplc.com/> * Regency Mines plc  Copper & nickel exploration in Australia and Papua New Guinea www.regency-mines.com < http://www.regency-mines.com/> * Sheba Exploration (UK) plc  Gold exploration in Ethiopia www.shebagold.com < http://www.shebagold.com/> * Sunrise Diamonds plc  Diamond exploration in Finland www.sunrisediamonds.com < http://www.sunrisediamonds.com/> * Treslow Limited  Copper & nickel in Ontario, Canada * Woburn Energy plc, formerly Black Rock Oil & gas in the North Sea and Oil & Gas plc  Columbia www.woburnenergy.com < http://www.woburnenergy.com/> Shareholders and others who wish to receive electronic copies of announcements are invited to register their email address on the home page of the Company website: www.starvest.co.uk < http://www.starvest.co.uk/>. Copies of this interim report are available free of charge by application in writing to the Company Secretary at the Company's registered office, 123 Goldsworth Road, Woking, GU21 6LR,  by email to email@starvest.co.uk <mailto:email@starvest.co.uk> or from the Company's website at www.starvest.co.uk < http://www.starvest.co.uk/>. Enquiries to: * Bruce Rowan, telephone 020 7486 3997 * John Watkins, telephone 01483 771992, or to john@starvest.co.uk <mailto:john@starvest.co.uk> * Gerry Beaney or Colin Aaronson, Grant Thornton Corporate Finance, telephone 020 7383 5100 End [HUG#1408664]

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