Starvest plc : Half-yearly report
| 18 April 2012 |
Starvest Plc
Half-year report - six months ended 31 March 2012
Chairman's statement
I am pleased to provide a portfolio valuation update as at 31 March 2012, the interim financial statements for the six months ended on 31 March 2012 and a commentary on the progress made during the period.
Investment performance
As I indicated in my annual report last October, 2010 was a year of two parts: from a high valuation point at the end of 2010, the portfolio saw a steady decline in the following nine months to 30 September 2011. This steady decline has continued to date.
The decline has been across our portfolio. Our nine leading stocks have all fallen during the period, some to below cost. This is disappointing, although not entirely unexpected given the challenging conditions in world markets.
We remain encouraged that each of the leading investee companies remain active and continue to develop their projects. We believe that these projects will translate into improved share prices and therefore into improved asset valuations but that it is currently advisable to take a long term view on these developments.
In summary:
- Company net asset value has fallen to £4.98m;
- Starvest's mid share price has fallen to 10.0 pence;
- Closing net asset value of 13.3 pence per share;
- Mid share price on 31 March 2012 had a discount to net asset value of 25%;
- There were no investment sales during the period.
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 £430,000 at 31 March 2012 (2011: £1.08m). Adjusting for this discount, the full value based on bid prices was 14.48 pence per share leading to a share price discount of 31%.
Company statistics
| 31 March 2012 | 31 December 2011 | 30 September 2011 | 31 March 2011 | |
| Trading portfolio value | £4.31m | £4.75m | £5.47m | £10.03m |
| Company asset value net of debt | £4.98m | £5.42m | £6.62m | £10.10m |
| Net asset value - fully diluted per share | 13.33 pence | 14.6 pence | 17.57 pence | 26.16 pence |
| Share price - mid | 10.00 pence | 12.00 pence | 13.00 pence | 11.75 pence |
| Share price discount to fully diluted net asset value | 25% | 17% | 26% | Premium 9% |
| Market capitalisation | £3.71m | £4.1m | £4.77m | £4.1m |
Portfolio comment
During the period, Starvest added to its investment in Ariana Resources plc by exercising an option. Otherwise, there were no purchases during the period.
Starvest's largest investments, comprising 86% of the declared valuation, in order of size were:
- Oracle Coalfields plc
- Ariana Resources plc
- Regency Mines plc
- Kefi Minerals plc
- Centamin plc
- Beowulf Mining plc
- Red Rock Resources plc
- Greatland Gold plc
- Sunrise Resources plc
Since the period end, the Company has supported a fundraising by Alba Mineral Resources plc and agreed to support two new exploration ventures both of which intend to seek admission to PLUS Markets.
Other points of note during the half year
The cautious basis of valuation has resulted in further impairments at the interim stage amounting to £237,000 net. Adding the overheads and taking credit for net interest results in a loss before taxation of £342,651 and a loss after taxation of £253,651 or 0.6 pence per share.
Dividend payments
A year ago, we announced the resumption of a dividend payment. In view of the more challenging conditions which currently prevail, the Board has decided to defer the announcement of a dividend for the current year until conditions improve but most likely until the year end.
In early July, the Company expects to announce an update to the net asset value as at 30 June 2012.
R Bruce Rowan
Chairman & Chief Executive
18 April 2012
Profit & loss account
| 6 months to 31 March 2012 | 6 months to 31 March 2011 | Year ended 30 September 2011 | ||||
| Unaudited £ | Unaudited £ | Audited £ | ||||
| Operating income | - | 1,324,020 | 3,788,942 | |||
| Direct costs | - | (234,241) | (629,896) | |||
| Gross profit | - | 1,089,779 | 3,159,046 | |||
| Administrative expenses | (113,040) | (88,791) | (228,799) | |||
| Amounts written off trade investments Amounts written back to trade investments | (301,523) 64,249 | (35,198) 848,498 | (399,799) 295,075 | |||
| Operating profit/(loss) on ordinary activities | (350,314) | 1,814,288 | 2,825,523 | |||
| Interest receivable Interest payable | 7,663 - | 469 (1,837) | 1,877 (1,837) | |||
| Profit/(loss) on ordinary activities before taxation | (342,651) | 1,812,920 | 2,825,563 | |||
| Tax on profit on ordinary activities | 89,000 | (490,000) | (762,418) | |||
| Profit/(loss) on ordinary activities after taxation | (253,651) | 1,322,920 | 2,063,145 | |||
| Earnings/(loss) per share - see note 3 Basic Fully diluted | (0.6) pence (0.6) pence | 3.6 pence 3.3 pence | 5.6 pence 5.1 pence | |||
Balance sheet
| 6 months ended 31 March 2012 | 6 months ended 31 March 2011 | Year ended 30 September 2011 | ||
| Unaudited £ | Unaudited £ | Audited £ | ||
| Current assets Debtors Trading investments Cash at bank and in hand | 102,614 3,231,485 1,488,275 | 208,822 3,681,164 407,539 | 27,710 3,368,759 1,893,536 | |
| 4,822,374 | 4,297,525 | 5,290,005 | ||
| Creditors - amounts falling due within one year Other creditors | (814,614) | (522,960) | (867,008) | |
| Net current assets | 4,007,760 | 3,774,565 | 4,422,997 | |
| Share capital and reserves Called up share capital Share premium account Profit and loss account | 394,173 2,118,396 1,495,191 | 390,173 2,100,396 1,283,996 | 390,173 2,100,396 1,932,428 | |
| Equity shareholders' funds | 4,007,760 | 3,774,565 | 4,422,997 |
Cash flow statement
| 6 months ended 31 March 2012 | 6 months ended 31 March 2011 | Year ended 30 September 2011 | |||
| Unaudited £ | Unaudited £ | Audited £ | |||
| Net cash (outflow)/inflow from operating activities | (251,338) | 740,926 | 2,317,308 | ||
| Returns on investment and servicing of finance: | |||||
| Interest receivable Interest payable | 7,663 - | 469 (1,837) | 1,877 (1,837) | ||
| 7,663 | (1,368) | 40 | |||
| Taxation recovered | - | 9,490 | 9,490 | ||
| Dividend paid | (183,586) | - | (91,793) | ||
| Financing: Issue of new shares | 22,000 | - | - | ||
| 22,000 | - | - | |||
| Increase/(decrease) in cash in the period | (405,261) | 749,048 | 2,235,045 | ||
| Opening cash balance brought forward Net debt brought forward | 1,893,536 - | - (341,509) | - (341,509) | ||
| Closing cash balance | 1,488,275 | 407,539 | 1,893,536 | ||
Movement on equity shareholders' funds
| 6 months ended 31 March 2012 | 6 months ended 31 March 2011 | Year ended 30 September 2011 | |||
| Unaudited £ | Unaudited £ | Audited £ | |||
| Total recognised (loss)/profits relating to the period Shares issued Dividends paid | (253,651) 22,000 (183,586) | 1,322,920 - - | 2,063,145 92,000 (91,793) | ||
| (Decrease)/increase in shareholders' funds Opening shareholders' funds | (415,237) 4,422,997 | 1,322,920 2,451,645 | 1,971,352 2,451,645 | ||
| Closing shareholders' funds | 4,007,760 | 3,774,565 | 4,422,997 | ||
Interim report notes
1. Interim report
The information relating to the six month periods to 31 March 2012 and 31 March 2011 is unaudited.
The information relating to the year ended 30 September 2011 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 2011, 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 2012.
The Company's investments at 31 March 2012 are valued at the lower of cost or the valuation adopted at 30 September 2011 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 2012.
3. Earnings per share
| 6 months ended 31 March 2012 | 6 months ended 31 March 2011 | Year ended 30 September 2011 | |||
| Unaudited £ | Unaudited £ | Audited £ | |||
| These have been calculated on a profit/(loss) of: | (253,651) | 1,322,920 | 2,063,145 | ||
| The weighted average number of shares used was: | 36,818,358 | 36,717,259 | 36,717,259 | ||
| Basic profit/(loss) per share: | (0.69) pence | 3.6 pence | 5.6 pence | ||
| The weighted average number of shares and outstanding options used was: | 40,492,259 | 40,492,259 | 40,492,259 | ||
| Fully diluted profit/(loss) per share: | (0.63) pence | 3.3 pence | 5.1 pence | ||
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 2012:
| Coal mining in Pakistan www.oraclecoalfields.com |
| Copper & nickel exploration in Australia and Papua New Guinea and investments in Red Rock Resources plc and Oracle Coalfields plc www.regency-mines.com |
| Gold and copper exploration in Turkey and Saudi Arabia www.kefi-minerals.com |
| Iron ore, gold, copper and uranium exploration in Sweden www.beowulfmining.com |
| Iron ore and manganese exploration in Australia, Greenland and Zambia; gold exploration in Kenya and Columbia with investments in other companies www.rrrplc.com |
| Gold exploration in Turkey www.arianaresources.com |
| Gold exploration and mining in Egypt www.centamin.com |
| Gold exploration in Western Australia and Tasmania www.greatlandgold.com |
| Mineral exploration in Finland, Australia and Ireland www.sunriseresourcesplc.com |
Other direct and indirect mineral exploration companies:
| Investment holding company with interests in Regency Mines plc and Red Rock Resources plc |
| Nickel, uranium & gold in Scotland, Mauritania, Sweden and Ireland www.albamineralresources.com |
| Gold exploration in South America www.minera-irl.com |
| Tantulum exploration in Egypt www.gippslandltd.com.au |
| Investment holding company www.imicplc.com |
Other investee companies are listed in the Company's 2011 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
The owner of this announcement warrants that:
(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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