TIDMCRV
RNS Number : 9921X
Craven House Capital PLC
28 February 2017
28 February 2017
Craven House Capital Plc ("Craven House" or "the Company")
Interim Report for the period ended 30 November 2016
STATEMENT BY THE BOARD OF DIRECTORS
Dear Shareholder
We are pleased to be able to report on the considerable growth
in the Company's asset base that has delivered in the six-month
period to the end of November 2016.
Following multiple capital raises at a premium to the then
prevailing share price and the acquisition of assets utilising
Craven's shares as acquisition currency, we are able to report a
significant increase in the Net Asset Value of the Company to $21.5
million. An increase of over 120% since May 2016 and 210% since
November 2015.
The Company's results are reported in US Dollars for the first
time; reflecting the fact that the Company's shares began trading
in US Dollars during the period and that the underlying
transactions, events and conditions that are most likely to impact
on Craven's performance are more closely linked to the US Dollar
than the GB Pound.
Despite Craven only undertaking one material investment during
the period, the Investment Manager continues to evaluate a number
or prospective opportunities and we look forward to reporting
further investment activity in the coming weeks and months.
THE BOARD OF DIRECTORS - CRAVEN HOUSE CAPITAL PLC
INVESTMENT MANAGER'S REPORT FOR THE SIX MONTH PERIODED 30
NOVEMBER 2016
As reported at the time of the release of the Company's full
year results in November, the six-month period to 30 November 2016
was a period of transformative activity for Craven House.
Including the placing that occurred just prior to the start of
the period, the Company raised $14.7 million in new equity at an
average of $12.50 per share over a six month period and acquired a
further $2.9 million in assets utilising the Company's shares as
acquisition currency at an average of $12.21 per share.
As a result, the asset base of the company, on an NAV basis,
more than doubled between May and November 2016 and has more than
trebled in the twelve months to November 2016.
The majority of the new equity raised was deployed by the
Company during the period by way of intercompany loans to Craven's
subsidiaries in South Africa ($1.5 million) and Angola ($9.5
million) and, as previously announced, has begun to be invested in
these respective jurisdictions, with further investment activity
expected to be announced shortly.
As was announced in August 2016, the Company successfully
completed the disposal of its investment in the Green Isle Hotel
and Conference Centre for a total ROI of 214%. The value of all
portfolio investments remained materially unchanged at the period
end as there have been no matters of which the board are aware
which would in their opinion impact the carrying value of
investments.
The Company's income statement shows a profit of $1.604 million
for the period. The vast majority of this profit relates to the
timing equity fund raises that occurred in May and June 2016; prior
to the UK's EU referendum. This profit reflects the gain made as a
result the dramatic movement of the GBP vs. USD immediately post
the referendum; hence this profit is reflected as a positive
administrative expense, rather than a portfolio return. This also
accounts for the majority of the $2.153m positive cash flow from
operating activities.
As previously reported in July 2016, the Company was
unsuccessful in its application to join the Specialist Fund Segment
of the London Stock Exchange's Main Market, however successfully
completed a share redenomination and consolidation on the 1(st)
August 2016.
As at the period end, NAV stood at $21.5 million versus a market
capitalisation of $17.9 million. Since this time, selling pressure
from certain shareholders has seen the share price trade an
increased discount to NAV; as of the 24th February 2017 Craven's
market capitalisation stood at $9.9 million - less than half of the
Company's NAV.
As we have stated repeatedly, we remain undeterred by volatility
in Craven's share price; we seek to buy good assets selling below
their intrinsic value and our goal is to continue to grow the asset
base of the Company and to acquire assets that have a long life and
maintain their value in times of trouble. We successfully completed
one such transaction since the detailed update provided in
November; the purchase of a 500-hectare parcel of land in
Canavieiras, Brazil - a property that benefits from 7.5km of direct
ocean-front real estate.
Whilst we continue to evaluate a wide range of prospective
transactions, the only other material event in the three months
since the release of the year-end accounts occurred at the
Company's AGM in January, whereby shareholders approved a
broadening in the scope of the Company's Investing Policy to a
global mandate.
Desmond Holdings Ltd
Investment Manager to Craven House Capital Plc
For further information please contact:
Craven House Capital Plc Tel: 020 7002 1027
Mark Pajak
www.Cravenhousecapital.com
SI Capital Tel: 01483 413500
Broker
Nick Emerson
www.sicapital.co.uk
SPARK Advisory Partners Tel: 0203 368 3550
Limited
Nominated Adviser
Matt Davis/Mark Brady
www.Sparkadvisorypartners.com
About Craven House Capital:
Craven House Capital is a frontier and emerging market focused
merchant bank seeking value oriented long term investments. Craven
House invests in all segments of the capital structure in
partnership with local entrepreneurs and the local business
community. Craven House provides long term patient capital and is
often involved in restructuring, expansion and turn around
investments in crisis and transitioning economies.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
CRAVEN HOUSE CAPITAL PLC
INCOME STATEMENT
FOR THE SIX MONTH PERIODED 30 NOVEMBER 2016
Six months ended Year
Ended
30 Nov 30 Nov 31 May
2016 2015 2016
(Unaudited) (Unaudited) (Audited)
$'000 GBP'000 GBP'000
CONTINUING OPERATIONS
Gross Portfolio return 160 (38) (845)
Administrative expenses 1,407 (80) (409)
OPERATING PROFIT/
(LOSS) 1,567 (118) (1,254)
Finance costs 2 (8) (9) (157)
Finance income 45 5 10
------------ ------------ ----------
PROFIT/(LOSS) BEFORE
INCOME TAX 1,604 (122) (1,401)
Income tax - - -
------------ ------------ ----------
PROFIT/(LOSS) FOR
THE PERIOD 1,604 (122) (1,401)
============ ============ ==========
Earnings per share
expressed
In pence per share:
Basic 6 0.39 (0.02) (0.17)
Diluted 6 0.33 (0.02) (0.17)
CRAVEN HOUSE CAPITAL PLC
STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTH PERIODED 30 NOVEMBER 2016
Six months ended Year
Ended
30 Nov 30 Nov 31 May
2016 2015 2016
(Unaudited) (Unaudited) (Audited)
$'000 GBP'000 GBP'000
PROFIT/(LOSS) FOR
THE PERIOD 1,604 (122) (1,401)
OTHER COMPREHENSIVE - - -
INCOME
TOTAL COMPREHENSIVE
INCOME FOR THE PERIOD 1,604 (122) (1,401)
============ ============ ==========
CRAVEN HOUSE CAPITAL PLC
STATEMENT OF FINANCIAL POSITION
AS AT 30 NOVEMBER 2016
Six months ended Year
Ended
30 Nov 30 Nov 31 May
2016 2015 2016
(Unaudited) (Unaudited) (Audited)
$'000 GBP'000 GBP'000
ASSETS
NON-CURRENT ASSETS
Investments at fair
value through
profit or loss 4 19,147 4,635 4,810
------------ ------------ ----------
19,147 4,635 4,810
------------ ------------ ----------
CURRENT ASSETS
Trade and other receivables 3,100 337 2,696
Cash and cash equivalents 36 146 64
------------ ------------ ----------
3,136 483 2,760
------------ ------------ ----------
TOTAL ASSETS 22,283 5,118 7,570
============ ============ ==========
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 5 12,563 8,526 8,806
Share premium 23,054 7,391 10,451
Retained earnings (14,142) (11,332) (12,611)
------------ ------------ ----------
TOTAL EQUITY 21,475 4,585 6,646
------------ ------------ ----------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 677 134 509
Financial liabilities-borrowings
interest bearing
loans and borrowings 7 131 399 415
------------ ------------ ----------
808 553 924
------------ ------------ ----------
TOTAL LIABILITIES 808 553 924
------------ ------------ ----------
TOTAL EQUITY AND
LIABILITIES 22,283 5,118 7,570
============ ============ ==========
CRAVEN HOUSE CAPITAL PLC
STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
FOR THE SIX MONTH PERIODED 30 NOVEMBER 2016
Called Profit
up share and loss Share Total
capital account premium equity
GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 June 2015 8,526 (11,210) 7,391 4,707
Changes in equity
Total comprehensive
income - (122) - (122)
---------- ----------- ---------- ----------
Balance at 30 November
2015 8,526 (11,332) 7,391 4,585
Changes in equity
Issue of share capital 280 - 3,230 3,510
Issue costs - - (170) (170)
Total comprehensive
income - (1,279) - (1,279)
---------- ----------- ---------- ----------
Balance at 31(st) May
2016 8,806 (12,611) 10,451 6,646
---------- ----------- ---------- ----------
Changes in equity
Issue of share costs 267 - 3,069 3,336
Issue costs - - (86) (86)
---------- ----------- ---------- ----------
Balance at 28 July
2016 9,073 (12,611) 13,434 9,896
---------- ----------- ---------- ----------
On 29 July 2016, the company carried out a consolidation
and redenomination of ordinary shares. Shareholders
received 1 new $1 share for every 734 GBP0.001
shares held. On the same date there was a change
in functional currency of the company in United
States dollar.
Called Profit
up share and loss Share Total
capital account premium equity
$'000 $'000 $'000 $'000
Balance at 29 July
2016 (restated for
redenomination) 11,938 (15,746) 17,675 13,867
Issue of share costs 625 - 5,379 6,004
Total comprehensive
income - 1,604 - 1,604
---------- ----------- ---------- ----------
Balance at 30 November
2016 12,563 (14,142) 23,054 21,475
---------- ----------- ---------- ----------
CRAVEN HOUSE CAPITAL PLC
STATEMENT OF CASH FLOWS
FOR THE SIX MONTH PERIODED 30 NOVEMBER 2016
Six months ended Year
Ended
30 Nov 30 Nov 31 May
2016 2015 2016
(Unaudited) (Unaudited) (Audited)
$'000 GBP'000 GBP'000
Cash flows from operating
activities
Cash (used in)/generated
from operations 2,153 (79) (109)
Interest paid - - -
Net cash (used in)/generated
from operating activities 2,153 (79) (109)
Cash flows from investing
activities
Sale of fixed asset 538 - -
investments
Issue of shares 10,485 - 1,073
Repayment of loans (471) - -
Interest received 45 - (44)
------------ ------------ ----------
Net cash generated from
investing activities 10,597 - 1,029
Cash flows used in financing
Advance of loans (13,531) 8 (1,073)
Repayment of loans 724 - -
------------ ------------ ----------
Net cash (used in)/generated
from financing activities (12,807) 8 (1,073)
(Decrease)/increase
in cash and cash equivalents (57) (71) (153)
Cash and cash equivalents
at the beginning 93 217 217
of period as restated
in $
Cash and cash equivalents
at the end of the 36 146 64
============ ============ ==========
period
Cash and cash equivalents
consist of: 36 146 64
Cash and cash equivalents
included in current
Assets
During the period share capital called up, allotted
but not fully paid amounted to $3,000,000. This amount
was received post period end.
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTH PERIODED 30 NOVEMBER 2016
1. ACCOUNTING POLICIES
General Information
Craven House Capital plc is a company incorporated in the United
Kingdom under the Companies Act. The address of the registered
office is given on the company information page. The Company is
listed on the AIM Market of the London Stock Exchange (code:
CRV).
The next annual financial statements of Craven House Capital plc
will be prepared in accordance with applicable International
Financial Reporting Standards (IFRS) as adopted for use by the
European Union. Accordingly, the interim financial information in
this report has been prepared using accounting policies consistent
with IFRS. IFRS are subject to amendment and interpretation by the
International Accounting Standards Board (IASB) and the
International Financial Reporting Interpretations Committee (IFRIC)
and there is an on-going process of review and endorsement by the
European Commission. The financial information has been prepared on
the basis of the IFRS that the directors expect to be applicable as
at 31(st) May 2017.
The financial information has been prepared under the historical
cost convention except in relation to the fair value adjustments
required by accounting standards. The principal accounting policies
have been applied to all periods presented.
This financial information is unaudited and does not constitute
statutory financial statements within the meaning of Section 434 of
the Companies Act 2006. The financial statements of the Company for
the year ended 31 May 2016, which were prepared in accordance with
IFRS as adopted for use by the European Union, have been reported
on by the Company's auditors and delivered to the Registrar of
Companies. The report of the auditors was unqualified and did not
include any statement under Section 498 of the Companies Act
2006.
This financial information is presented in United States dollar,
rounded to the nearest $'000. United States dollar is now
considered to be the currency of the primary economic environment
in which the company operates following a significant change in the
operation of the company and share redenomination on 29(th) July
2016. Previously the information was presented in pounds
sterling.
The directors do not propose the issuance of a dividend.
The interim financial information for the six months ended 30
November 2016 was approved by the directors on 27(th) February
2017.
Going concern
The Company has considerable financial resources. As a
consequence, the Directors believe that the Company is well placed
to manage its business risks successfully despite the current
uncertain economic outlook. The Directors have a reasonable
expectation that the Company has adequate resources to continue in
operational existence for the foreseeable future. Thus they
continue to adopt the going concern basis of accounting in
preparing financial information.
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL INFORMATION - continued
FOR THE SIX MONTH PERIODED 30 NOVEMBER 2016
2. Finance expense
Six months ended Year
Ended
30 Nov 30 Nov 31 May
2016 2015 2016
(Unaudited) (Unaudited) (Audited)
$'000 GBP'000 GBP'000
Loan interest 8 9 157
8 9 157
--------------- ------------ ----------
3. Taxation
No tax charges arose in the period or in comparative periods as
a result of losses incurred.
4. Investments at fair value through profit or loss
Quoted Unquoted
Investments Investment Total
$'000 $'000 $'000
At 1 June 2016 (restated
for redenomination) - 6,718 6,718
Additions - 13,531 13,531
Disposals - (1,262) (1,262)
Revaluations - 160 160
At 30(th) November
2016 (unaudited) - 19,147 19,147
================ ============= ========
The revaluation outlined above represents the valuation applied
to the resulting investments held by Craven Industrial Holdings Plc
or its subsidiaries as at the 30 November 2016 and described in
further detail below.
Unquoted investments at 30 November 2016 have been measured on a
Level 3 basis as no observable market data was available. These
investments are as follows:
Shares in Craven Industrial Holdings Plc are valued at
$19,147,218 representing a 100% holding. These have been valued
based on the underlying investments within Craven Industrial
Holdings plc at the 30 November 2016. The value of Craven
Industrial Holdings plc is segmented across its principal
investments as follows:
Shares in Craven House Industries Limited are valued at
$300,000, representing a 95% holding. Craven House Industries
Limited is the 50.1% shareholder of Finishtec Acabamento Tecnicos
em Matais Ltd ("Finishtec"). This shareholding has been valued on a
net assets basis which the Directors believe represents the best
indication of the fair value at the period end. Previously this
investment was valued at the price of the recent investment and the
change in valuation method was made to reflect current market
conditions.
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL INFORMATION - continued
FOR THE SIX MONTH PERIODED 30 NOVEMBER 2016
4. Investments at fair value through profit or
loss (continued)
Shares in Ceniako Limited valued at $1,293,020
representing a 49% holding. This has been valued
at the price originally paid by Craven House Capital
as the Directors believe that the price of recent
investment continues to represent the best indication
of the fair value at the period end based on the
information available to them regarding net assets.
There have been no changes or events subsequent
to the original investment that would imply a change
in the investment's fair value.
Shares in Kwikbuild Corporation Ltd valued at $3,307,423
representing a 97% shareholding. This valuation
is based on the value of the net assets of KwikBuild
Corporation Ltd, which the Directors believe represent
the best indication of the fair value at the period-end.
The majority of these net assets comprise of investment
in; a portfolio of agricultural and industrial
investments, the valuation of which is supported
by substantial land and real estate investments;
and import and distribution businesses, the valuation
of which is supported by a multiple of future earnings
of the businesses. Previously the investment was
valued at the transaction price and the change
in valuation method was made to reflect current
market conditions.
Shares in Pressfit Holdings Plc valued at zero,
representing a 22.6% holding. The value of the
shares have been written down to zero as the Directors
believe that this is the best indication of the
value at the period end.
Loans to Craven House Angola LDA valued at $9,485,000
being the actual amount loaned during the period.
Loans To e-Kwikbuild Housing Co. (Pty) Ltd valued
at $1,476,200 being the actual amount loaned during
the period and the preceding period, after repayments.
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL INFORMATION - continued
FOR THE SIX MONTH PERIODED 30 NOVEMBER 2016
5. CALLED UP SHARE CAPITAL
Authorised, issued and fully paid share capital as at 30
November 2016 are as follows:
Number Class: Nominal 30 Nov 31May
Value 2016 2016
(Unaudited) (Audited)
$'000 GBP'000
$1 (to 28.07.16
2,469,131 (2015: Ordinary GBP0.001) 2,406 1,086
805,540,872)
77,979,412 Deferred GBP0.09 9,234 7,018
77,979,412 Deferred GBP0.009 923 702
------------ ----------
12,563 8,806
============ ==========
The deferred shares carry no entitlement to receive notice of
any general meeting, to attend, speak or vote at such general
meeting. Holders are not entitled to receive dividends, and on a
winding up of the Company holders of deferred shares are entitled
to a return of capital only after the holder of each Ordinary share
has received a return of capital together with a payment of GBP1
million per share. The deferred shares may be cancelled at any time
for no consideration by way of a reduction in capital.
On 16 June 2016, the Company allotted 266,828,899 new ordinary
shares to various shareholders as a new issue of shares.
On 29 July 2016, the company carried out a consolidation and
redenomination of ordinary shares. Shareholders received 1 new $1
share for every 734 GBP0.001 shares held.
On 30 August 2016, the Company allotted 205,423 new ordinary
shares to Xenod Tour Oikod Epeix Afon Daktylidi AE in exchange for
a convertible loan of $2,500,000.
On 5 September 2016, the Company allotted 29,200 new ordinary
shares to facilitate the purchase of a plot of residential land
with a value of $365,000.
On 12 September 2016, the Company allotted 150,800 new ordinary
shares to various shareholders as a new issue of shares.
On 21 November 2016, the Company allotted 240,000 new ordinary
shares to various shareholders as a new issue of shares. At the 30
November 2016 unpaid share capital, included in other receivables
totalled $3,000,000.
In the period, the Company extended the time scale of 112,024
fully transferable exercisable warrants issued in the year ended
31st May 2012. At the date of issue the warrants could be exercised
on or before 30th June 2014, this period has now been extended to
30th June 2018.
CRAVEN HOUSE CAPITAL PLC
NOTES TO THE FINANCIAL INFORMATION - continued
FOR THE SIX MONTH PERIODED 30 NOVEMBER 2016
6. EARNINGS PER SHARE
The calculation of basic earnings per share is based on the
profit/ (loss) attributable to the equity holders for the period of
$1,604,000 and on weighted average number of shares in issue of
408,494,354 (Six months ended 30 November 2015: loss of GBP122,000
and 805,540,872 shares; Year ended 31 May 2016 loss of GBP1,401,000
and 818,029,058 shares) being the weighted average number of
shares, in issue during the period.
7. LOANS
Other loans of $131,000 comprises loans made by Wise Star
Capital Investment Limited, a Hong Kong investment company. The
loans were provided to enable the Company to make qualifying
investments under its Investing Policy and to provide working
capital for the Company.
The loan provided by Wise Star Capital Investment Limited
includes interest payable at a rate of 6% per annum. The loan was
provided for 12 months dated 1st September 2011; however this loan
has since been extended to at least 31(st) May 2017.
8. RELATED PARTY DISCLOSURES
During the period, the Company entered into the following
transactions with related parties and connected parties:
Loans from Wise Star Capital Investment Limited
At the year end the Company owed $131,000 to Wise Star Capital
Investment Limited, Mr M J Pajak was Director of Wise Star Capital
Investment Limited during the year. Details of the loan are set out
in note 7.
Management fees payable to Desmond Holdings Limited
During the period the Company incurred management fees of
$99,742 from Desmond Holdings Limited. At the year end, included in
trade creditors, is an amount of $97,255 payable to Desmond
Holdings Limited in respect of unpaid invoices.
9. EVENTS AFTER THE REPORTING PERIOD
On 5 December 2016, the Company acquired the entire share
capital of Universal Properties Brasil Administracao de Imoveis
Ltda ("UPBAI") for a total cash consideration of USD $3,100,000.
UPBAI is a holding company and as such has no trading activity. Its
sole asset is a 500 hectare parcel of land in Canavieiras in the
Bahia region of Brazil. The property comprises of four neighbouring
land parcels and benefits from 7.5km of direct ocean-front real
estate.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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