Golden Prospect PLC
19 September 2006
GOLDEN PROSPECT PLC
Golden Prospect plc (AIM:GOL), the investment bank, today announced record
interim results for the six months ended 30 June 2006.
• Basic earnings per share up 53% to 5.01p (2005: 3.26p)
• Net profit up 53% to £5.38 million (2005: £3.50 million)
• Profit before tax up 52% to £7.74 million (2005: £5.07 million)
• Gross profits up 74.5% to £11.26 million (2005: £6.45 million)
• Trading activities and realisations of portfolio investments produced
gross profits of £7.18 million (2005: £5.14 million) which were up 40%
• Investment Banking activities produced gross profits of £4.08 million,
more than triple the prior year (2005: £1.32 million) and represented 37% of
the Group's total gross profits
• Shareholders' equity plus unrealised gains on listed investments of £52.32
million, or 48.4p per share, up 9% since 31 December 2005 which comprised
£47.01 million net current assets at market value (cost: £29.08 million) and
£5.31 million represented unquoted assets and goodwill
• Cash at bank and in hand £14.17 million (2005: £6.27 million)
• Annualised return on shareholders' equity of 32.7%
• Interim dividend of 0.75p (2005: 0.5p)
• Proposed name change to Ambrian Capital plc
Commenting on the results, Malcolm Burne, Chairman of Golden Prospect plc, said:
'We are pleased to report our record performance for the first half of the year.
Our Investment Banking activities have grown rapidly and now represent
approximately 37% of the Group's gross profits. We have at the same time
continued to successfully realise gains from our Trading and Investment
Portfolios. We remain confident that our highly talented team of dedicated
professionals can deliver even greater returns from the Group's growing range of
activities and services.'
- Ends -
Malcolm Burne, Chairman Tel: +44 (0)20 7395 1933
Golden Prospect plc
Tom Gaffney, Chief Executive Officer Tel: +44(0)20 7776 6411
Golden Prospect plc
Cathy Malins Tel: +4(0)20 7493 3713
Parkgreen Communications Limited
Further information on the Group and its activities is available on the Group's
The Directors are pleased to report that the Group's profit before tax for the
six months ended 30 June 2006 increased by more than 52% to a record £7,736,151
(2005: £5,071,532). Basic earnings per share increased by 53% to 5.01p from
The Group's gross profits increased 74% to £11,260,531 from £6,449,815.
Investment Banking activities accounted for approximately 37% of gross profits
while realised profits arising from our trading and investment activities
accounted for approximately 63%.
The Group's shareholders' equity at 30 June 2006 was £34,394,803, 30 June 2005
(£28,335,878). The market value of listed investments at 30 June 2006 was
approximately £39 million including unrealised gains of £18 million.
The Group's cash resources increased to £14,166,055 compared with £6,267,222 at
30 June 2005.
The Board declares payment of an interim dividend of 0.75p per share (2005:
0.5p). The dividend will be payable on 17 November 2006 to all shareholders on
the register on 27 October 2006.
Ambrian - Investment Banking
Investment Banking gross profits for the first half of 2006 were £4.08 million,
up 210% from £1.31 million for the six months to 30 June 2005 reflecting the
rapid growth of our Investment Banking activities and favourable market
Ambrian Partners Limited
Ambrian Partners Limited ('APL'), the wholly owned corporate finance and
stockbroking subsidiary, was involved in ten capital raising transactions with a
total value of approximately £100 million, including three Initial Public
Offerings on AIM. At 30 June 2006 APL had 29 retained corporate clients compared
with 13 at the same time last year.
APL has made significant progress in broadening the industry sectors in which it
is active and has recruited additional talented staff. APL will replicate the
industry specialist business model, which has been successfully implemented in
the natural resources sector. Broadening sectoral expertise provides new growth
opportunities and ensures the development of a corporate finance and
stockbroking business that is sustainable over the long term. APL is now active
in six industry sectors - mining, oil & gas, soft commodities, renewable energy,
telecommunications and technology - where the quality of APL's research and the
expertise of its sector teams have given APL a competitive edge. Over time, APL
will consider entry into additional industry sectors but these must offer APL
the potential to become a sector leader.
The transaction 'pipeline' for the second half of 2006 is healthy with mandated
transactions in various industry sectors.
Ambrian Commodities Limited
In April 2006 Golden Prospect launched Ambrian Commodities Limited ('ACL'), an
Associate Broker Member of The London Metal Exchange. ACL offers its clients a
full range of commodities dealing services and is a broker/dealer of aluminium,
copper, lead, nickel and zinc. It is also active in physical metals dealing. In
August 2006 ACL announced that it would commence quoting and trading in precious
metals (gold, silver, platinum and palladium). Its business is client-driven and
its clients are located throughout the world and run through the entire metals
supply chain, from miners to final industrial users.
ACL made an immediate profit contribution in its first three months of trading
after start-up costs and is rapidly becoming a significant arm of the Golden
Prospect business. ACL business benefited from robust customer activity levels
and high volatility in metals prices.
ACL is actively exploring the possibility of becoming a broker/dealer in other
commodities traded on regulated exchanges.
Ambrian Asset Management
Ambrian Asset Management Limited ('AAM') obtained approval from the Financial
Services Authority in February 2006 to manage and advise on investments for
third parties. It plans to launch a series of funds focusing on specialist
sectors, which complement the expertise of APL. In due course, we expect AAM to
become a significant contributor of earnings generated from investment
management fees and performance fees.
Gross profits from realisations from the Managed and Strategic Portfolios for
the first half of 2006 were £7.18 million, up 40% from £5.14 million for the
half-year ended 30 June 2005.
During the first half of 2006 further partial disposals were made within the
Strategic Portfolio while, at the same time, certain holdings in the Managed
Portfolio were realised as and when liquidity permitted.
The Group continues to be committed to its shareholdings in Jubilee Platinum,
Samson Oil & Gas, Mano River Resources, Uruguay Minerals, Anglesey Mining and
Centamin Egypt. These companies are performing strongly with excellent news on
their various exploration or development programmes. Each of these companies
can be expected to make important contributions to the principal investment
returns in the future.
The principal investment policy continues to favour the highest portfolio
weighting in gold and precious metal shares (gold, silver, platinum). Energy
(oil and gas, coal and particularly uranium) are also still attractively priced.
As always, the investment policy has been focused on companies that complement
our investment banking activities, have geographical spread and the capability
of either going into production in the medium term or being absorbed by a major
competitor in an intensifying merger and acquisitions marketplace.
The rationalisation leg of the current cycle continues apace and the next stage
should be the discovery phase of new deposits (reflecting considerable financing
of exploration), which will keep strong focus on the resource sector in terms of
The Group remains at the centre of financing the natural resources/commodity
sector. The rapidly expanding BRIC economies (Brazil, Russia, India and China)
continue to provide very robust conditions in most commodity markets. As supply
and demand is substantially out of balance for nearly all commodities, the
Directors believe that the bull market in this sector although volatile from
time to time, is still in an upward cycle. The shortest commodities bull market
lasted 15 years, the longest 23 years so, in theory, the current cycle still has
a long way to go with the US commodity price index adjusted for CPI still
indicating that commodity price levels are yet to reach previous peaks.
Investment funds, both large and small, are demonstrating a greater appetite for
measured risk where the case for investment can be reasoned by virtue of
fundamental analysis and not by momentum trading, i.e. short term volatility as
witnessed recently in nickel and copper. Certainly the base metals have
provided investors with substantial returns in the recent past but must now be
deemed risky at these higher levels as speculation is beginning to distort
fundamentals. The Directors therefore favour increasing exposure to precious
metals. Demand from vast liquidity pools such as pension funds, insurance
companies, trusts and other financial institutions is being satisfied by the
introduction of ETF's (Exchange Traded Funds), logically sensible investment
vehicles with their underlying assets being physical metal and bullion, as in
the case of gold, silver and platinum, for example. It is this supporting
investment argument that attracts management to precious metals as opposed to
other base metals and minerals at this time.
Shareholders' equity plus unrealised gains on listed investments as of 30 June
2006 was £52.32 million, or 48.4p per share based on 108.1 million shares
outstanding. £47.01 million comprised net current assets at market value (cost:
£29.08 million) and the balance of £5.31 million represented Minesite,
Exploration Assets and Goodwill, at cost.
Golden Prospect repurchased 325,000 ordinary shares at an average price of
49.85p per share, for a total cost of £162,000 in July of 2006. Further share
repurchases will be dependent on the capital needs of the Group and prevailing
The Golden Prospect Employee Benefit Trust (the 'GP EBT') holds 3,300,000 Golden
Prospect ordinary shares, which represents 3% of the Group's issued share
capital. The Group is committed to aligning the interests of its employees with
its shareholders. The GP EBT may make further purchases of Golden Prospect
shares to continue this process.
We have made significant strides over the past two years to transform the Group
from a resources focused investment company into a broadly based investment bank
operating in four related business areas: principal investing; corporate finance
and stock broking; commodities dealing; and investment management.
Our objective is to build a highly profitable investment bank capable of
generating recurring income from its various business units over the long-term.
Over the years the Group has built a strong track record as a principal investor
in the resources sector. The Group's shareholders equity plus unrealised gains
on its listed investment portfolio has grown by 248% since January 2002
(compound annual growth of 31.7%).
We have not only been able to identify undervalued investment opportunities but
we have also been successful in realising investment gains for cash. However,
gains on our investment portfolio are taxed at the Corporation Tax Rate of 30%.
To make our future investment process more tax effective we intend to establish
a range of investment funds open to outside investors focused on sectors in
which the Group has expertise. The first fund that we intend to launch and
invest in will be a Precious Metals investment fund which will be registered in
Guernsey and listed on the AIM market of the London Stock Exchange.
By operating within the fund structure, the gains on investment disposals will
not be subject to tax within the fund so enabling enhanced investment
Ambrian Asset Management Limited, our FSA regulated investment management
subsidiary, will with the benefit of the Group's expertise in the sector manage
the investments made by the Precious Metals investment fund. Ambrian Asset
Management will receive an annual fee for managing the fund and may receive an
additional performance fee based on the performance of the fund.
To reflect the broadening of the Group's activities, it is intended to call an
Extraordinary General Meeting to change the Group's name to Ambrian Capital plc
in the near future.
A name change from Golden Prospect to Ambrian Capital will more readily identify
the group's position amongst its peers in the quoted investment banking sector
of the market.
With regard to the non-quoted assets, i.e. our joint venture exploration
properties and our 25% shareholding in Minesite.com, it is expected that these
will be separately floated in the next six months.
In summary, we remain confident that the excellent returns obtained over many
years can be sustained, if not improved, as a result of the transformation of
the Group, we are currently undertaking.
M A Burne
GOLDEN PROSPECT PLC
UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT
Six Months ended 30 June 2006
Operating income 11,260,531 6,449,815
Gross profit 11,260,531 6,449,815
Other operating income - dividends received 5,093 40,184
Administrative expenses (3,641,632) (1,416,379)
Operating profit - continuing operations 7,623,992 5,073,620
Interest receivable 148,532 54,640
Interest payable and similar charges (36,373) (56,728)
Profit on ordinary activities before taxation 7,736,151 5,071,532
Tax on profit on ordinary activities (2,351,704) (1,571,121)
Profit on ordinary activities after taxation 5,384,447 3,500,411
Profit per ordinary share - basic 5.01p 3.26p
GOLDEN PROSPECT PLC
UNAUDITED CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2006
£ £ £ £
Tangible fixed assets 203,728 106,367
Intangible assets 4,414,611 4,300,614
Investments 695,418 465,560
Investments 21,401,402 22,525,028
Debtors 6,986,820 676,947
Cash at bank and in hand 14,166,055 6,267,222
CREDITORS: Amounts falling due
within one year 13,473,231 5,469,554
NET CURRENT ASSETS 29,081,046 23,999,643
TOTAL ASSETS LESS
CURRENT LIABILITIES 34,394,803 28,872,184
CAPITAL AND RESERVES
Called up share capital 10,806,121 10,726,121
Share premium account 10,849,383 10,803,383
Merger reserve 1,245,256 1,245,256
Profit and loss account 13,307,600 6,097,424
Employee benefit trust (1,813,557) -
EQUITY SHAREHOLDERS' FUNDS 34,394,803 28,872,184
GOLDEN PROSPECT PLC
UNAUDITED CONSOLIDATD CASH FLOW STATEMENT
Six months ended 30 June 2006
Six months to Six months to
Net cash inflow/(outflow) from operating activities 11,612,276 2,607,691
Interest receivable 148,532 54,640
Interest payable (36,373) (56,728)
Net cash inflow/(outflow) from returns on investment and
servicing of finance 112,159 (2,088)
Taxation (505,794) -
Capital expenditure and financial investment
Payments to acquire intangible fixed assets (29,895) (98,983)
Payments to acquire tangible fixed assets (87,943) (81,855)
Payments to acquire fixed asset investment (105,736) -
Net cash inflow/(outflow) from capital expenditure and
financial investment (223,574) (180,838)
Equity dividend paid (802,959) -
Net cash inflow/(outflow) before financing 10,192,108 2,424,765
Issue of ordinary share capital 126,000 -
Bank loan repaid (1,500,000) -
Net cash inflow/(outflow) from financing (1,374,000) -
Increase in cash 8,818,108 2,424,765
GOLDEN PROSPECT PLC
NOTES TO THE UNAUDITED INTERIM ACCOUNTS
Six months ended 30 June 2006
1 The calculation of earnings per share is based on the profit after tax of
£5,384,447 (Period ended 30 June 2005 - £3,500,411) and on the number of
shares in issue being the adjusted weighted average number of shares in issue
during the period of 107,544,081 (Period ended 30 June 2005 - 107,261,208).
2 The interim statement for the six months ended 30 June 2006 is unaudited and
was approved by the Directors on 18 September 2006. The financial
information set out above does not constitute statutory accounts within the
meaning of s.240 of the Companies Act 1985.
3 The accounting policies remain as stated in the Annual Report for the year
ended 31 December 2005 apart from the definition of turnover.
For the current year, operating income is used to describe revenue rather
than turnover as required by the Companies Act 1985, as the directors
consider it better reflects the nature of the business.
Operating income comprises institutional brokerage commission and net trading
profit or loss on trading positions, corporate broking retainers, commodity
commissions, deal fees (comprising cash based on advisory fees and the
award of options to the Group) and placing commissions. The comparatives
reflect this change in policy.
4 Copies of the Interim Report are available to the public free of charge from
the company at Manfield House, 5th Floor, 1 Southampton Street, London
WC2R 0LR during normal office hours, Saturdays, Sundays and bank holidays
excepted, for 14 days from today.
This information is provided by RNS
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