Half-yearly report
11 April 2011
Half-year report - six months ended 31 March 2011
Chairman's statement
I am pleased to provide a portfolio valuation update as at 31 March 2011, the
interim financial statements for the six months ended on 31 March 2011 and a
commentary on the excellent progress made during the period.
Investment performance
At 30 September 2010, there were signs that dampening impact of world economic
events was lifting and that the performance of the Starvest portfolio was
improving after two years of stagnation. Those initial signs have proved to be
a foretaste of an excellent half year. Â The key facts are as follows:
* Company net asset value has increased by £5.9m or 141%;
* Starvest's mid share price has risen by 77% from 7.75 pence on 30 September
2010 to 13.75 pence on 31 March 2011;
* Closing net asset value of 26.16 pence per share up 131% from 11.28 pence;
* Mid share price on 31 March 2011 had a discount to net asset value of 47%;
* Investment sales have realised £1.3m with a gross profit of £1.09m; and
* The bank overdraft has been eliminated.
Basis of valuation
Starvest uses closing bid prices, or the Directors' lower valuation if deemed
appropriate. In addition, a 10% discount is made against those investments
where the Company holds either a large percentage of a given investee or where
the investment constitutes 7% or more of the portfolio. These valuation
discounts totalled £1.08m at 31 March 2011, or 2.66 pence per share. Adjusting
for this discount, the full value based on bid prices was 28.82 pence per share
leading to a share price discount of 52%.
Given the current stock market trading volume in some investee companies, it is
arguable that mid price rather than bid price would be appropriate. Had the
Company adopted such a policy with all options exercised, the value per share
would increase by a further £1.64m or 3.61 pence to 32.43 pence per share with a
share price discount of 57%.
Company statistics
 31 March 30 September 2010 31 March 30 September
 2011  2010 2009
Trading portfolio £10.03m £4.57m £3.53m £4.72m
value
Company asset value £10.10m £4.19m £3.19m £4.02m
net of debt
Net asset value - 26.16 pence 11.28 pence 8.85 pence 10.72 pence
fully diluted per
share
Share price - mid 13.75 pence 7.75 pence 5.75 pence 11.75 pence
Share price discount 47% Premium 31.3% 35% Premium 9%
to fully diluted net
asset value
Market capitalisation £5.05m £2.84m £2.01m £4.1m
Portfolio comment
During the half year, Starvest sold at profit: its remaining holding in
Franconia Minerals Corporation, the subject of a takeover; and a part of its
interest in Beowulf Mining plc. On sales of £1,324,020, the gross profit was
£1,089,779.
During the half year, there has been increased investor interest in mineral
exploration ventures, particularly where they have demonstrated progress in
their search for and development of their projects leading to much improved
valuations. Against this background, previous valuation impairments totalling
£848,498 have been reversed; new impairments total £35,198.
Taking these factors into consideration resulted in an operating profit before
expenses of £1,903,079.
During the period, Starvest added to its investment in Ariana Resources plc.
As a consequence of improved valuations, Starvest's largest investments,
comprising 85% of the declared valuation, in order of size were:
* Oracle Coalfields plc
* Regency Mines plc
* Kefi Minerals plc
* Beowulf Mining plc
* Red Rock Resources plc
* Ariana Resources plc
* Sheba Exploration (UK) plc
* Greatland Gold plc
* Sunrise Resources plc
A year ago we stated that "within the investment portfolio, we have eight
investments, each of which has the potential to transform the Starvest
portfolio. We must be patient!" Our patience is being rewarded, and we
continue to believe that there is considerable growth potential in Starvest's
investment portfolio.
Other points of note during the half year:
* The profit on ordinary activities before taxation for the period amounted to
£1,812,920 (2010 loss £100,276).
* After a corporation tax provision of £490,000, the net profit is reduced to
£1,322,920 (2010: loss £100,276).
* Basic profit of 3.6 pence per share (2010: loss of 0.29 pence per share);
fully diluted profit of 3.3 pence per share (2010: loss 0.25 pence per
share).
Resumption of dividend payments
In the context of the greatly improved results coupled with the outlook for the
future, the Board has resolved to resume dividend distributions commencing with
an interim dividend amounting to 0.25 pence per share for which the record date
will be 27 May 2011 and the payment date 15 June 2011.
The matter will be kept under review, but at the 2011 annual general meeting the
Board expects to recommend to Shareholders that a final dividend of a like
amount be paid during January 2012.
The Board hopes to be able to recommend further dividends to shareholders in
future years.
In early July, the Company expects to announce an update to the net asset value
as at 30 June 2011.
R Bruce Rowan
Chairman & Chief Executive
11 April 2011
Profit & loss account
 6 months to 31 6 months to 31 Year ended
March 2011 March  30 September
2010 2010
 Unaudited Unaudited Audited
£ £ £
Operating income 1,324,020 630,605 640,044
Direct costs (234,241) (228,275) (237,713)
-------------------------------------------------------
Gross profit 1,089,779 402,330 402,331
Administrative expenses (88,791) (90,162) (182,760)
Impairment of trade (35,198) (468,743) (546,062)
investments 848,498 62,470 288,109
Amounts written back to
trade investments
-------------------------------------------------------
Operating profit/(loss) 1,814,288 (94,105) (38,382)
on ordinary activities
Interest receivable 469 3,682 8,083
Interest payable (1,837) (9,853) (18,063)
-------------------------------------------------------
Profit/(loss) on ordinary 1,812,920 (100,276) (48,362)
activities before
taxation
Tax on profit on ordinary (490,000) - 9,385
activities
-------------------------------------------------------
Profit/(loss) on ordinary 1,322,920 (100,276) (38,977)
activities after taxation
-------------------------------------------------------
Earnings/(loss) per share
- see note 3 3.6 pence (0.29) pence (0.1) pence
Basic 3.3 pence (0.25) pence (0.1) pence
Fully diluted
-------------------------------------------------------
Balance sheet
 | | 6 months ended| 6 months ended| Year ended
| | 31 March 2011| 31 March 2010| Â 30 September
| | | | 2010
-----------------------+-+-----------------+-----------------+-----------------
 | | Unaudited| Unaudited| Audited
| | £| £| £
-----------------------+-+-----------------+-----------------+-----------------
Current assets |Â | Â | Â |
Debtors |Â | 208,822| 19,081| 33,514
Trading investments |Â | 3,681,164| 2,619,453| 2,795,770
Cash at bank and in| | 407,539| -| -
hand | | | Â |
 | | | |
-----------------------+-+-----------------+-----------------+-----------------
 | | 4,297,525| 2,638,534| 2,829,284
 | | | |
-----------------------+-+-----------------+-----------------+-----------------
Creditors - amounts|Â | Â | Â |
falling due within one| | Â | Â |
year | | (550,960)| (340,188)| (377,639)
Other creditors | | | |
 | | | |
-----------------------+-+-----------------+-----------------+-----------------
Net current assets |Â | 3,746,565| 2,298,346| 2,451,645
 | | | |
-----------------------+-+-----------------+-----------------+-----------------
Total assets less |Â | 3,746,565| 2,298,346| 2,451,645
current liabilities | | | |
 | | | |
-----------------------+-+-----------------+-----------------+-----------------
Capital and reserves |Â | Â | Â |
Called up share| | 390,173| 372,173| 390,173
capital | | 2,100,396| 2,026,396| 2,100,396
Share premium account | | 1,283,996| (100,223)| (38,924)
Profit and loss| | | |
account | | | |
 | | | |
-----------------------+-+-----------------+-----------------+-----------------
Equity shareholders'|Â | 3,774,565| 2,298,346| 2,451,645
funds | | | |
 | | | |
| +-----------------+-----------------+-----------------
Cash flow statement
 | | 6 months ended| 6 months ended| Year ended
| | 31 March 2011| 31 March 2010| Â 30 September
| | | | 2010
--+------------------------+-+----------------+----------------+---------------
 | | Unaudited| Unaudited| Audited
| | £| £| £
---------------------------+-+----------------+----------------+---------------
 | | | |
---------------------------+-+----------------+----------------+---------------
Net cash inflow/(outflow) |Â | 740,926| 513,713| 333,851
from operating activities | | | |
---------------------------+-+----------------+----------------+---------------
Returns on investment and |Â | Â | Â |
servicing of finance: | | | |
---------------------------+-+----------------+----------------+---------------
Interest receivable |Â | 469| 3,682| 8,083
Interest payable | | (1,837)| (9,853)| (18,063)
 | | | |
---------------------------+-+----------------+----------------+---------------
 | | (1,368)| (6,171)| (9,980)
---------------------------+-+----------------+----------------+---------------
 | |  |  |
Taxation recovered/(paid) | | 9,490| -| (9,490)
 | | | |
---------------------------+-+----------------+----------------+---------------
 | | 9,490| -| (9,490)
---------------------------+-+----------------+----------------+---------------
 | |  |  |
---------------------------+-+----------------+----------------+---------------
Financing: |Â | Â | Â |
Issue of new shares | | -| -| 92,000
Short term loan repaid | | -| -| (100,000)
| | | |
---------------------------+-+----------------+----------------+---------------
 | | -| -| (8,000)
---------------------------+-+----------------+----------------+---------------
 | |  |  |
Increase/(decrease) in | | 749,048| 507,542| 306,381
cash in the period | | | |
---------------------------+-+----------------+----------------+---------------
 | |  |  |
Opening cash balance | | Â | -| -
brought forward | | (341,509)| (747,890)| (647,890)
Net debt brought forward | | | |
 | | | |
---------------------------+-+----------------+----------------+---------------
Closing cash balance/( net|Â | 407,539| (240,348)| (341,509)
debt) | | | |
 | | | |
| +----------------+----------------+---------------
Movement on equity shareholders' funds
 | | 6 months ended| 6 months ended| Year ended
| | 31 March 2011| 31 March 2010| Â 30 September
| | | | 2010
--+------------------------+-+----------------+----------------+---------------
 | | Unaudited| Unaudited| Audited
| | £| £| £
---------------------------+-+----------------+----------------+---------------
 | | | |
---------------------------+-+----------------+----------------+---------------
Total recognised |Â | 1,322,920| (100,276)| (38,977)
(loss)/profits relating to| | Â | Â |
the period | | -| -| 92,000
Shares issued | | Â | |
 | | | |
---------------------------+-+----------------+----------------+---------------
(Decrease)/increase in |Â | 1,322,920| (100,276)| 53,023
shareholders' funds | | Â |Â |
 | | 2,451,645| 2,398,622| 2,398,622
Opening shareholders'Â | | | |
funds | | | |
 | | | |
---------------------------+-+----------------+----------------+---------------
Closing shareholders'|Â | 3,774,565| 2,298,346| 2,451,645
funds | | Â | |
 | | | |
| +----------------+----------------+---------------
Interim report notes
1.      Interim report
The information relating to the six month periods to 31 March 2010 and 31 March
2011 is unaudited.
The information relating to the year ended 30 September 2010 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 2010, 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 2011.
The Company's investments at 31 March 2011 are valued at the lower of cost or
the valuation adopted at 30 September 2010 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 2011.
3.      Earnings per share
 | |6 months ended 31 |6 months ended 31 | Year ended
| | March 2010| March 2010|Â 30 September 2010
--++------------------+------------------+------------------+------------------
 | | Unaudited| Unaudited| Audited
| | £| £| £
--+-------------------+------------------+------------------+------------------
 | | | |
--+-------------------+------------------+------------------+------------------
These have been | 1,322,920| (100,276)| (38,977)
calculated on a | | |
profit/(loss) of: | | |
----------------------+------------------+------------------+------------------
 | | |
The weighted average | 36,717,259| 34,917,259| 35,193,423
number of shares used| | |
was: | | |
----------------------+------------------+------------------+------------------
 |  |  |
Basic profit/(loss) | 3.6 pence| (0.29) pence| (0.11) 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 | 3.3 pence| (0.25) pence| (0.11) pence
profit/(loss) per | | |
share: | | |
 | | |
+------------------+------------------+------------------
Investment portfolio
Starvest now holds trade investments in the companies listed below; of these the
following nine companies comprised 85% of the portfolio value as at 31 March
2011:
* Oracle Coalfields plc Coal mining in Pakistan
www.oraclecoalfields.com
* Regency Mines plc Copper & nickel exploration in Australia and
Papua New Guinea and investments in Red Rock
Resources plc and Oracle Coalfields plc
www.regency-mines.com
* Kefi Minerals plc Gold and copper exploration in Turkey and Saudi
Arabia
www.kefi-minerals.com
* Beowulf Mining plc Iron ore, gold, copper and uranium exploration in
Sweden
www.beowulfmining.com
* Red Rock Resources plc Iron ore and manganese exploration in Australia,
Greenland and Zambia; gold exploration in Kenya
and Columbia with investments in other companies
www.rrrplc.com
* Ariana Resources plc Gold exploration in Turkey
www.arianaresources.com
* Sheba Exploration (UK) plc Gold exploration in Ethiopia
www.shebagold.com
* Greatland Gold plc Gold exploration in Western Australia and
Tasmania
www.greatlandgold.com
* Sunrise Resources plc Mineral exploration in Finland, Australia and
Ireland
www.sunriseresourcesplc.com
Other direct and indirect mineral exploration companies:
* Equity Resources plc Investment holding company with interests in
Regency Mines plc and Red Rock Resources plc
* Belmore Resources (Holdings) Zinc exploration in Ireland
plc
www.belmoreresources.com
* Alba Mineral Resources plc Nickel, uranium & gold in Scotland,
Mauritania, Sweden and Ireland
www.albamineralresources.com
* Minera IRL Limited, formerly Gold exploration in South America
Hidefield Gold plc
www.minera-irl.com
* Gippsland Limited Tantulum exploration in Egypt
www.gippslandltd.com.au
* International Mining & Investment holding company
Infrastructure Corporation plc,
formerly India Star Energy plc www.imicplc.com
Other investee companies are listed in the Company's 2010 annual report
available on request as below.
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.
Copies of this interim report are available free of charge by application in
writing to the Company Secretary at the Company's registered office, 55 Gower
Street, London WC1E 6HQ, by email to email@starvest.co.uk or from the Company's
website at www.starvest.co.uk.
Enquiries to:
* Bruce Rowan, telephone 020 7486 3997
* John Watkins, telephone 01483 771992, or to john@starvest.co.uk
* Gerry Beaney, Colin Aaronson or David Hignell, Grant Thornton Corporate
Finance, telephone 020 7383 5100
End
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(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Starvest plc via Thomson Reuters ONE
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