TIDMAPS
RNS Number : 5096T
Alpha Strategic PLC
14 December 2012
14 December 2012
Alpha Strategic PLC ("Alpha Strategic" or "the Company")
Interim results for the period ended 30 September 2012
Alpha Strategic PLC, the specialist investment group, announces
its unaudited interim results for the 6 months ended 30 September
2012
Highlights
-- Revenue GBP247,000 (6 months to 30 September 2011: GBP339,000)
-- Adjusted underlying operating loss of GBP168,000 (6 months to
30 September 2011: loss GBP19,000)
-- The adjusted underlying operating loss is before costs of
GBP1,686,000 comprising GBP1,439,000 of goodwill impairment and
GBP247,000 in respect of management changes
-- Net assets GBP3.4 million (30 September 2011: GBP5.4 million)
- impact of goodwill impairment
-- Cash and debtor balance GBP3.1 million (30 September 2011: GBP3.6 million)
Alistair McKay, Chief Executive, commented:
Alpha has a unique business model and a very exciting
opportunity to become a leading provider of minority investment
capital to fund management businesses. The financial crisis has
opened up the market for minority investing with few established
players remaining, as the large financial institutions refocus on
their core business and retrench from regulatory capital intensive
investing activities.
Our investment strategy is two-fold: to pursue opportunities in
managers with a capital need (primary opportunities) and a focus on
acquiring existing minority investments held by financial
institutions that have a desire to exit (secondary opportunities).
Our financial backing and our market connections ensure that we
have an exciting deal pipeline of both primary and secondary
opportunities. Nonetheless, we are evaluating our targets carefully
with the strategic aim of creating a broadly diversified,
uncorrelated portfolio of minority interests in stable and
well-established fund management businesses.
We will continue to structure our investments as either revenue
shares or fixed margin equity, ensuring our minority position is
safeguarded and our interests are aligned with the fund managers.
The highly cash generative nature of these investments and the
considerable operational leverage in Alpha creates an exciting
opportunity for shareholders to participate in the growth and the
economics of the fund management industry.
Enquiries:
Alpha Strategic PLC +44 (0)20 7222 3005
Alistair McKay, Chief Executive Officer
Kit Malthouse, Finance Director
Westhouse Securities Limited +44 (0)20 7601 6100
Tom Griffiths
Maitland +44 (0)20 7379 5151
Neil Bennett
Rowan Brown
Chairman's statement
For some considerable time, I have been writing of our belief in
the Alpha business model but that, in the teeth of reality, deal
flow is not what we would like. The Company is firmly solvent, with
a very supportive majority shareholder, and the management team has
been systematically removing the obstacles to the achievement of
our ambition for the Company. Firstly, we partnered with a
well-capitalised business, committed to acquisitions in the
investment management field. We ceded majority shareholding to
Northill and are pleased with the support they have shown for the
potential transactions put forward: we can now contemplate
acquisitions for cash, as well as shares. Secondly, we have
attracted Alistair McKay, a well-known investment banker with a
solid track record of acquisitions in this space. Appointed as
Chief Executive in September 2012, replacing Dr Nicola Meaden
Grenham who continues as a non-executive Director, Alistair has
begun to strengthen the deal analysis team and, I am pleased to
say, they are all working at full stretch evaluating
transactions.
At first glance these interim results do not make happy reading.
We are obliged to review the carrying value of our goodwill and
investment in subsidiaries and given the expiry of the guaranteed
income due from IKOS in the next six months, the Board felt it
prudent to clarify our balance sheet. We have, therefore, fully
impaired goodwill relating to this investment as a charge to the
income statement. This underlying loss has been adjusted for this
non-cash adjustment and is no reflection on the undoubted quality
of IKOS as an investment manager. In truth, the nature of the hedge
fund industry is such that returns, and hence earnings, can be
volatile, which in turn makes goodwill accounting a volatile
exercise. The other material factor is the cost associated with the
change of Chief Executive at the Company, with Nicola Meaden
Grenham handing over the reins to Alistair McKay. Further details
on the expenses relating to the resignation of the Chief Executive
and the impairment of goodwill are set out in notes 4 and 5 to the
interim results. While our revenue was down on the interim results
for the six months ended 30 September 2011, resulting in a first
half trading loss, we remain highly solvent with approximately GBP3
million in the bank.
Colin Barrow
Chairman
14 December, 2012
Alpha Strategic PLC
Consolidated statement of comprehensive income
for the six months ended 30 September 2012
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2012 2011 2012
Unaudited Unaudited Audited
Notes GBP000 GBP000 GBP000
Revenue 247 339 611
Other administrative expenses (415) (358) (836)
Expenses relating to the resignation
of the Chief Executive 4 (247) - -
Impairment of goodwill 5 (1,439) - -
------------------------------------- ----- ------------ ------------ --------
Total administrative expenses (2,101) (358) (836)
Operating loss (1,854) (19) (225)
Finance income
Interest receivable and similar
income 3 1 5
Loss before tax (1,851) (18) (220)
Taxation - - -
Loss and total comprehensive
income for the period attributable
to shareholders (1,851) (18) (220)
Basic and diluted loss per
share 6 (20.06) p (0.21) p (2.50) p
Alpha Strategic PLC
Consolidated statement of financial position
as at 30 September 2012
30 September 30 September 31 March
2012 2011 2012
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Assets
Non-current assets
Goodwill 414 1,853 1,853
Plant and equipment 7 9 7
421 1,862 1,860
Current assets
Trade and other receivables 149 234 168
Cash and cash equivalents 2,910 3,385 3,309
3,059 3,619 3,477
Total assets 3,480 5,481 5,337
Equity and liabilities
Capital and reserves attributable
to the equity holders of the
parent
Share capital 127 142 142
Share premium 4,948 4,948 4,948
Share redemption reserve 15 - -
Merger reserve 1,341 1,341 1,341
Accumulated deficit (3,038) (985) (1,187)
3,393 5,446 5,244
Current liabilities
Trade and other payables 87 35 93
87 35 93
Total equity and liabilities 3,480 5,481 5,337
Alpha Strategic PLC
Consolidated statement of changes in equity
for the six months ended 30 September 2012
Attributable to equity holders of the Company
Share Share redemption
Share Capital Share reserve Merger Accumulated Total
Capital 'A' shares premium reserve deficit equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 1 April 2011 45 50 2,649 - 1,341 (967) 3,118
Loss and total
comprehensive
income for the
period attributable
to shareholders - - - - - (18) (18)
Shares issued
in period 47 - 2,446 - - - 2,493
Share issue expenses - - (147) - - - (147)
At 30 September
2011 92 50 4,948 - 1,341 (985) 5,446
Loss and total
comprehensive
income for the
period attributable
to shareholders - - - - - (202) (202)
At 31 March 2012 92 50 4,948 - 1,341 (1,187) 5,244
Purchase of own
shares (note 4) - (15) - 15 - - -
Loss and total
comprehensive
income for the
period attributable
to shareholders - - - - - (1,851) (1,851)
At 30 September
2012 92 35 4,948 15 1,341 (3,038) 3,393
Share Capital is the amount subscribed for ordinary shares at
nominal value. Share Capital 'A' shares is the amount subscribed
for 'A' ordinary shares at nominal value.
Share premium represents the excess of the amount subscribed for
share capital over the nominal value of these shares net of share
issue expenses.
The merger reserve comprises the excess of the amount subscribed
for share capital over the nominal value of ordinary shares issued
in respect of the acquisition of subsidiaries in accordance with
the merger relief provisions of the Companies Act 1985 and the
Companies Act 2006.
The share redemption reserve comprises the nominal value of
share capital cancelled or purchased back by the company.
Accumulated deficit represent cumulative losses of the Group
attributable to equity holders.
Alpha Strategic PLC
Consolidated statements of cash flows
for the six months ended 30 September 2012
Six months Six months Year
ended ended ended
30 September 30 September 31 March
2012 2011 2012
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
Cash flow from operating activities
Loss before taxation (1,851) (18) (220)
Finance income (3) (1) (5)
Depreciation 2 3 5
Goodwill impairment 1,439 - -
Cash flow from operating activities
before changes in working capital (413) (16) (220)
Decrease in trade and other
receivables 19 153 219
Decrease in trade and other
payables (6) (176) (118)
Net cash flow from operations (400) (39) (119)
Investing activities
Purchases of plant and equipment (2) (3) (3)
Interest received 3 1 5
Net cash flow from investing
activities 1 (2) 2
Financing activities
Issue of ordinary shares - 2,493 2,493
Share issue expenses - (147) (147)
Net cash flow from financing
activities - 2,346 2,346
Net (decrease)/increase in cash
and cash equivalents in the
period (399) 2,305 2,229
Cash and cash equivalents at
beginning of the period 3,309 1,080 1,080
Cash and cash equivalents at
end of the period 2,910 3,385 3,309
Cash and cash equivalents comprise:
Cash 2,910 3,385 3,309
Cash and cash equivalents at
end of the period 2,910 3,385 3,309
Alpha Strategic PLC
Notes to the interim results
for the six months ended 30 September 2012
1 The Group
The principal activity of the Group is to acquire shares in, or
enter into joint ventures with, or provide services to, hedge fund
management businesses, so as to acquire high quality diversified
revenue streams. The Company has its listing on the Alternative
Investment Market ("AIM") of the London Stock Exchange.
2 Basis of preparation
These unaudited consolidated interim financial statements are
for the six-month period to 30 September 2012. They do not include
all the information required for full annual financial statements
and should be read in conjunction with the consolidated financial
statements of the Group for the year ended 31 March 2012, which
were prepared under International Financial reporting Standards
("IFRS") as adopted by the European Union ("EU").
These interim consolidated financial statements have been
prepared in accordance with accounting policies consistent with
those set out in the Group's financial statements for the year
ended 31 March 2012 and are consistent with the accounting policies
the Group will use to prepare its financial statements for the year
ending 31 March 2013. This half-yearly report is not prepared under
IAS34.
The financial information for the year ended 31 March 2012 does
not constitute the full statutory accounts for that period. The
Annual Report and Financial Statements for 2012 have been filed
with the Registrar of Companies. The Independent Auditors' Report
on the Annual Report and Financial Statements for 2012 was
unqualified, did not draw attention to any matters by way of
emphasis, and did not contain a statement under S 498(2) or S
498(3) of the Companies act 2006.
3 Segmental analysis
The Group's entire revenue is generated in the UK from a single
business segment; that of providing services to hedge fund
management businesses within Europe.
Management and financial reports received by the Board are
prepared on the basis of the single business unit.
4 Expenses relating to the resignation of the Chief
Executive
On 4 July 2012 Dr Nicola Meaden Grenham resigned from her
position as Chief Executive. In connection therewith, a payment in
lieu of notice of GBP190,000 and compensation for loss of office of
GBP26,000 have been paid to her. In addition, legal fees totalling
GBP31,000 have been incurred. As part of her resignation, Dr Meaden
returned to the Company her holding of 600 'A' Ordinary Shares of
GBP24.75 each in the Company for nil consideration.
5 Impairment of goodwill
The carrying value of goodwill amounting to GBP1,439,000
relating to Acme Advisors Limited has been fully impaired during
the period.
6 Loss per share
The calculation of the basic loss per share is based upon the
loss after tax attributable to ordinary shareholders of
GBP1,851,000 (six months to 30 September 2011: loss of GBP18,000;
year to 31 March 2012: loss of GBP220,000) and a weighted average
number of shares in issue for the period of 9,225,758 (six months
to 30 September 2011: 8,377,291; year to 31 March 2012:
8,800,362).
Diluted earnings per share for the six months to 30 September
2012, the six months to 30 September 2011 and the year to 31 March
2012 is the same as the basic loss per share because the inclusion
of conversion rights and warrants have an anti-dilutive effect on
the calculation.
7 Dividends
The directors have not paid nor do they declare a dividend in
the period (six months to 30 September 2011: nil; year to 31 March
2012: nil).
8 Copies of the financial statements
To obtain a copy of this report, and for information on the
company and its Directors, please visit our website at
www.alphastrategic.com. Alternatively, the report can be obtained
by contacting the Company Secretary at 66 Buckingham Gate, London
SW1E 6AU.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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