Mountcashel PLC - Final Results
February 05 1999 - 2:26AM
UK Regulatory
RNS No 1838n
MOUNTCASHEL PLC
5th February 1999
MOUNTCASHEL PLC
Preliminary announcement of audited results for the year ended
31 December 1998
Chairman's Statement
In a rather similar vein to last year, the second half of 1998
proved to be less satisfactory than the first half.
Net assets at 31 December 1998 (including unrealised gains and
losses) were 71.4 pence per share. This figure compares with
112.5 pence at 31 December 1997, a decrease of 36.5%. This
decline in the net asset value is attributable to the general
decline in the smaller quoted company market place and some
very specific problems with some of our stocks.
The general malaise, or perhaps more accurately slump, in the
smaller quoted company sector is well documented and my own
views are that over time this will change.
The specific problems of companies in our portfolio resulted in
further provisions being made totalling #2,111,800. These are
made up as follows:
Rackwood Mineral Holdings plc, a provision of #748,440.
Following a profit warning and change of management in December
the company then announced in January of this year that the
shares were being suspended "pending clarification of the
financial position". We have therefore fully provided against
our cost.
Xenova Group plc, a provision of #411,849. Xenova Group plc in
common with almost all quoted biotechnology companies has
suffered from a lack of investor confidence and/or interest. In
addition Xenova was in the unfortunate situation of running
short of cash. The result was a fundraising that was only
partly successful and a very much larger level of dilution to
existing shareholders than might have otherwise been possible.
It was considered that it would be prudent for us to recognise
all of this and make a provision.
Solvera plc, a provision of #607,073. Solvera is a small group
of businesses in engineering design, software and related
services. The group has consistently under-performed and failed
to achieve market expectations. Following a suspension of
Solvera's shares "pending clarification of the financial
position" in late January we have fully provided against our
cost.
Utility Cable plc, a further provision of #347,961. Utility
Cable was an investment that featured in last year's
provisions. Following the change of management mentioned last
year and additional research undertaken this year we committed
further funds to this company. Shortly thereafter the company
hit a funding crisis and the banks called in the receiver. We
have fully provided for the cost of this investment.
In addition there was another small provision, offset by a
partial write back against our 1997 provision on ERA Group plc.
This follows improved performance and a clear indication of the
beginning of a turnaround.
A number of other stocks in the portfolio have experienced
significant falls in value since 30 June 1998, but in the
opinion of the Board, none of these constitutes a permanent
situation.
Overall 1998 could certainly be considered to be a bad year and
not one we wish to repeat in 1999. The overall investment
strategy remains unchanged but with even greater emphasis on
understanding from management how clearly they can predict
their cash flow movements.
Once again I should like to emphasise that there are
significant risks in investing in smaller companies,
particularly those with a chequered past or a high technology
business yet to be profitable. This is the area in which we
operate and whilst high returns may be achieved, the high risks
may not always generate returns.
Finally, I would like to draw your attention to the date for
the AGM, which is Thursday, 11th March 1999. This is your
opportunity to come along and quiz the Board on all aspects of
the Company. I trust you will make use of this opportunity.
Thomas Vaughan
Chairman
5 February 1999
Consolidated Profit and Loss Account
Year ended 31 December 1998
Year ended Year ended
31 December 31 December
1998 1997
#'000 #'000
Profit on sale of investments 1,034.8 158.0
Investment income 81.1 80.6
________ ________
Total income 1,115.9 238.6
Provision for permanent diminution
in value of fixed asset
investments (2,111.8) (1,034.2)
Management expenses (223.0) (191.0)
________ ________
Loss on ordinary activities before
interest (1,218.9) (986.6)
Interest receivable 37.3 -
Interest payable (5.0) (25.3)
________ ________
Loss profit on ordinary activities
before taxation
Taxation (1,186.6) (1,011.9)
- -
________ ________
Loss for the financial year (1,186.6) (1,011.9)
======= =======
Loss per share - pence (15.67) (13.37)
======= =======
There were no recognised gains or
losses other than the loss for the
year.
Balance Sheets
Year ended 31 December 1998
Group Company
31 31 31 31
December December December December
1998 1997 1998 1997
Fixed assets
Tangible assets 1.0 2.5 1.0 2.5
Investments 4,668.8 6,512.6 7,182.4 9,026.2
_______ ________ _______ _______
4,669.8 6,515.1 7,183.4 9,028.7
_______ ________ _______ _______
Current assets
Debtors 103.6 98.3 103.6 98.3
Cash at bank and in 392.9 - 392.9 -
hand _______ _______ _______ _______
496.5 98.3 496.5 98.3
Creditors: Amounts
falling due within (65.2) (325.8) (2,576.8)(2,837.4)
one year _______ ________ _______ _______
Net current assets 431.3 (227.5) (2,080.3)(2,739.1)
/(liabilities) _______ ________ _______ _______
5,101.1 6,287.6 5,103.1 6,289.6
======= ======= ======= =======
Capital and
reserves (equity
and non-equity)
Called up share 3,785.6 3,785.5 3,785.6 3,785.5
capital
Share premium 757.8 757.8 757.8 757.8
Other reserves 2,743.5 2,743.5 2,743.5 2,743.5
Profit and loss
account (2,185.8) (999.2)(2,183.8) (997.2)
-------- ------- --------- --------
Shareholders' funds 5,101.1 6,287.6 5,103.1 6,289.6
======= ======= ======= =======
Net assets per 67.4 83.1
share - pence ======= =======
Shareholders funds - as
above 5,101.1 6,287.6
Net unrealised gains on
investments 306.1 2,230.7
------- -------
5,407.2 8,518.3
======= =======
Net assets per share -
pence 71.4 112.5
(incorporating net ======= =======
unrealised gains)
Consolidated Cash Flow Statement
Year ended 31 December 1998
Year ended Year ended
31 December 31 December
1998 1997
#'000 #'000
Net cash outflow from operating (225.7) (193.1)
activities ________ ________
Returns on investment and servicing finance
Interest received 37.3 -
Interest paid (8.9) (23.9)
Dividends received from fixed 81.1 75.5
asset investments _______ _______
109.5 51.6
________ ________
Capital expenditure and financial investments
Purchase of tangible fixed assets - (1.9)
Purchase of fixed asset investments (2,584.4) (2,195.8)
Sale of fixed asset investments 3,351.2 2,442.4
________ ________
766.8 244.7
________ ________
Cash inflow before management
of liquid resources and financing 650.6 103.2
________ ________
Management of liquid resources
Increase in short term deposits (350.0) -
________ ________
(350.0) -
________ ________
Financing
Issue of shares 0.1 -
________ ________
0.1 -
________ ________
Increase in cash in the year 300.7 103.2
======== ========
Notes:
1. The financial information set out in the preliminary
results for the year ended 31 December 1998 does not
constitute statutory accounts within the meaning of
Section 240 of the Companies Act 1985.
The statutory accounts for the year ended 31 December
1998 have not yet been delivered to the Registrar of
Companies. The auditors have made a report under
Section 235 of the Companies Act 1985, as amended, in
respect of such accounts, which was unqualified and
did not contain a statement under Sections 237(2) or
(3) of the Act.
2. The earnings per share is based on the loss which
amounted to #1,186,600 (31 December 1997: loss
#1,011,900) and on the average number of 7,570,800
shares in issue (31 December 1997: 7,570,700). Net
assets per share is based on the consolidated net
assets of #5,101,100 (31 December 1997: #6,287,600)
and the average number of shares in issue, as stated
above.
3. Copies of the audited financial statements are being
posted to shareholders today and may be obtained from
the Company Secretary at the Company's registered
office: 223a Kensington High Street, London W8 6SG.
END
FR UBUAAPBGBGMC
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