RNS Number:0184E
Marwyn Value Investors Ltd
18 September 2007
18 September 2007
Marwyn Value Investors Limited
Interim Results for the period 1 January 2007 to 30 June 2007
Marwyn Value Investors Limited (AIM: MNV), the AIM listed company which allows
investors to gain access to the investment strategy pursued by the Marwyn
Neptune Fund, today announces its results for the financial period from 1
January 2007 to 30 June 2007.
Highlights
*Marwyn Value Investors Limited's net asset value per share increased by
18.1% from 1 January 2007 to 30 June 2007 to 170.1 pence per share (undiluted).
*Marwyn Neptune Fund LP net asset value increased by 17.6% from 1 January
2007 to 30 June 2007 to 179.9 pence per share.
David Williams, Executive Chairman said: "As a result of the investment in the
Marwyn Neptune Fund LP, Marwyn Value Investors Limited has achieved 18.1% growth
in net asset value in the six months to 30 June 2007. These results demonstrate
the successful implementation of a strategy of selecting well managed businesses
with the potential for above average growth."
"Due to the low leverage profile in the underlying companies we have experienced
limited impact from the current turmoil in the credit markets and we continue to
have credit offers at a project and portfolio company level in line with
historic pricing. Allied to this and representative of our equity support, our
portfolio companies raised more third party capital for projects in August than
in any other month since the fund's launch. We remain confident that equity
support will remain for high quality investment opportunities and our portfolio
companies will be able to continue their development as planned."
Investment Manager's Report
Our investment strategy is to identify, support, invest in and work alongside
experienced operational managers with strong, demonstrable track records for
building and managing small and mid-cap UK, European and North American
businesses (under #1bn) with the aim of combining private equity and public
market best practice and disciplines to deliver investment returns.
We overlay our requirements for minimum levels of operating profitability and
cash generation, on top of this central theme of strong management and have a
preference for sectors undergoing structural, technical or regulatory change;
this includes conventional regulated industries, such as environmental services,
water and utilities, financial services and insurance, to those sectors
undergoing specific structural and/or technical change including the leisure,
gaming and food and beverages.
We believe that an environment of change within an industry creates real
opportunities for management with the right aptitude and experience to create
significant investment returns as the remainder of the market continues to
overlook the opportunities.
Notable investments during this period include Concateno Plc (AIM: COT) a
drug and alcohol testing business; Entertainment One Limited (AIM: EON) a
leading international independent entertainment business and Inspicio Plc
(AIM: INP) a global testing and inspection business which, among other
things, operates oil, minerals, food and soil testing laboratories
internationally.
We maintain a very positive outlook for the year to come with a strong pipeline
of follow on investment opportunities within the existing companies as well as
excellent management teams to lead the launch of new strategies.
- Ends -
For further information, please call:
Finsbury 020 7251 3801
Don Hunter / Peter Russell
Collins Stewart 020 7523 8350
Seema Paterson/Stewart Wallace
Operational Review
Marwyn Value Investors Limited (the "Company") was admitted to trading on the
AIM market of the London Stock Exchange on 23 February 2006, raising #15,000,000
from the issue of 15,000,000 ordinary shares and 7,500,000 series one warrants
and 7,500,000 series two warrants. The Company was principally established to
provide a listed entity for investors to gain exposure to the investment
strategy being pursued by the Marwyn Neptune Fund LP (the "Master Fund"),
details of which are set out below in the Investment Manager's Report. The
series one warrants were called at the option of the Company on 22 March 2007.
On 23 July 2007 27,749,167 B shares and 27,749,167 B warrants were admitted to
trading on AIM.
Taking into account the exercising of the series one warrants, the net asset
value per share of the Company increased by 18.1% during the six month period
to 30 June 2007 while the Master Fund increased by 17.6%.
As at 30 June 2007 the share price was at a 11.3% discount to the net asset
value per share.
Share price and net asset value per share
Date Share NAV per Share
Price (diluted for
GBp series one
warrants)
GBp
--------- ---------- ----------
31 December 2006 118.5 144.0
31 January 2007 118.5 149.3
28 February 2007 130.0 154.7
31 March 2007 131.0 162.6
30 April 2007 130.0 153.4
31 May 2007 134.0 153.4
30 June 2007 133.0 149.9
Without the accelerated call of the series one warrants, the NAV at 30 June
would have been 170.1 pence.
Comparative performance
Jan 07 Feb 07 Mar 07 Apr 07 May 07 Jun 07 Total
------- ------- ------- -------- ------- ------- -------
Marwyn Value Investors
NAV (diluted)
month-on-month 3.7% 3.6% 5.1% -5.7% 0.0% -2.3%
cumulative 3.7% 7.4% 12.9% 6.3% 6.3% 4.1% 4.1%
FTSE All Share
index
month-on-month -0.3% -0.4% 2.7% 2.2% 2.5% -1.0%
cumulative -0.3% -0.7% 1.9% 4.2% 6.7% 5.7% 5.7%
AIM All Share
month-on-month 2.3% 2.2% 3.9% 3.0% 2.7% 0.3%
cumulative 2.3% 4.6% 8.7% 12.0% 15.0% 15.3% 15.3%
MARWYN VALUE INVESTORS LIMITED
INCOME STATEMENT
FOR THE PERIOD TO 30 JUNE 2007
For the six month period For the period 20 January 2006 For the year ended
ended 30 June 2007 to 30 June 2006 31 December 2006
(unaudited) (unaudited) (audited)
Note Revenue Capital Total Revenue Capital Total Revenue Capital Total
# # # # # # # # #
---------------------------------------------------------------------------------------------------------------------
INCOME 1
Bank interest 2,307 - 2,307 1,584 - 1,584 10,313 - 10,313
Gains on investments
held at fair value
through profit or loss - 3,575,060 3,575,060 - 3,445,611 3,445,611 - 7,418,764 7,418,764
2,307 3,575,060 3,577,367 1,584 3,445,611 3,447,195 10,313 7,418,764 7,429,077
EXPENSES 1
Directors' fees 30,000 - 30,000 21,534 - 21,534 51,630 - 51,630
Administration fees 10,010 - 10,010 7,178 - 7,178 17,957 - 17,957
Legal and professional
fees 3,575 - 3,575 9,180 - 9,180 9,575 - 9,575
Regulatory expenses 7,045 - 7,045 9,404 - 9,404 9,404 - 9,404
Audit fees 12,750 - 12,750 - - - - - -
Nominated advisors fees 17,500 - 17,500 12,562 - 12,562 30,062 - 30,062
Registrars fees 2,907 - 2,907 6,166 - 6,166 11,184 - 11,184
Exempt fee 2 600 - 600 600 - 600 600 - 600
Other expenses 8,353 - 8,353 15,429 - 15,429 23,975 - 23,975
92,740 - 92,740 82,053 - 82,053 154,387 - 154,387
PROFIT FOR THE PERIOD (90,433)3,575,060 3,484,627 (80,469) 3,445,611 3,365,142 (144,074) 7,418,764 7,274,690
Return per Ordinary Share -
basic and diluted (pence
per share) 4 (0.51) 20.19 19.68 (0.54) 22.97 22.43 (0.96) 49.46 48.50
The total column of this statement represents the Income Statement of the
Company, prepared in accordance with IFRS. The revenue and capital
columns represent supplementary information prepared under guidance published by
the Association of Investment Trust Companies. All items in the above statement
derive from continuing operations.
MARWYN VALUE INVESTORS LIMITED
BALANCE SHEET
30 JUNE 2007
Note 30 June 2007 30 June 2006 31 December 2006
(unaudited) (unaudited) (audited)
-------------------------------------------------------------------------------------------------------------
NON CURRENT ASSETS
Unquoted investments held at
fair value through profit or loss 3 33,393,823 17,445,611 21,418,764
CURRENT ASSETS
Prepayments 7,089 6,465 718
Cash and cash equivalents 342,286 278,585 217,926
349,375 285,050 218,644
TOTAL ASSETS 33,743,198 17,730,661 21,637,408
CURRENT LIABILITIES
Accruals (28,850) (35,488) (32,687)
NET ASSETS # 33,714,348 17,695,173 21,604,721
EQUITY
Called up share capital 8 2,250,000 1,500,000 1,500,000
Share premium 9 8,253,918 - -
Special distributable reserve 12,209,982 12,209,982 12,209,982
Series One Warrant reserve - 378,918 378,918
Series Two Warrant reserve 241,131 241,131 241,131
Capital reserve - Unrealised 10,993,824 3,445,611 7,418,764
Revenue reserve (234,507) (80,469) (144,074)
TOTAL EQUITY # 33,714,348 17,695,173 21,604,721
Net asset value per Ordinary share - basic (pence
per share) 5 149.84 117.97 144.03
Net asset value per Ordinary share - diluted (pence
per share) 5 144.88 117.97 134.35
APPROVED BY THE BOARD OF DIRECTORS
I G Clarke D J Warr
Director Director
14th September 2007
MARWYN VALUE INVESTORS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD TO 30 JUNE 2007
Special Series One Series Two
Called up share Share distributable Warrant Warrant Capital Revenue
capital premium reserve reserve reserve reserve reserve Total
# # # # # # # #
-------------------------------------------------------------------------------------------------------------------
As at 1 January 2007 1,500,000 - 12,209,982 378,918 241,131 7,418,764 (144,074) 21,604,721
Issue of Ordinary
shares and warrants 750,000 8,253,918 - (378,918) - 8,625,000
Profit for the period 3,575,059 (90,432) 3,484,627
2,250,000 8,253,918 12,209,982 - 241,131 10,993,823 (234,506) 33,714,348
MARWYN VALUE INVESTORS LIMITED
CASH FLOW STATEMENT
FOR THE PERIOD TO 30 JUNE 2007
Notes 30 June 2007 30 June 2006 31 December 2006
(unaudited) (unaudited) (audited)
------------------------------------------------------------------------------------------------------------------
Net cash outflow from operating activities 6 (100,640) (51,446) (112,105)
Net cash outflow from investing activities (8,400,000) (14,000,000) (14,000,000)
Net cash outflow before financing (8,500,640) (14,051,446) (14,112,105)
Net cash inflow from financing activities 8,625,000 14,330,031 14,330,031
Increase in cash and cash equivalents 124,360 278,585 217,926
Cash and cash equivalents at beginning of period 217,926 - -
Cash and cash equivalents at end of period 342,286 278,585 217,926
MARWYN VALUE INVESTORS LIMITED
NOTES TO THE INTERIM FINANCIAL STATEMENTS
30 JUNE 2007
1. ACCOUNTING POLICIES
The financial statements have been prepared in accordance with IFRS, which
comprise standards and interpretations approved by the IASB and IAS, and
Standing Interpretations approved by the IASC that remain in effect, together
with the applicable legal and regulatory requirements of The Companies
(Guernsey) Law, 1994 and the AIM rules published by the London Stock Exchange.
(a) Convention
The financial statements have been prepared under the historical cost
convention, except where stated in (c) below, modified to include the
revaluation of financial assets and financial liabilities held at fair value
through the profit or loss.
The preparation of financial statements in conformity with IFRS requires
management to make judgements, estimates and
assumptions that affect the application of policies and the reported amounts of
assets and liabilities, income and expenses. The estimates and associated
assumptions are based on historical experience and various other factors that
are believed to be
reasonable under the circumstances, the results of which form the basis of
making judgements about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period or in the period of
revision and future periods if the revision affects both current and future
periods.
The Company has not made early adoption of the provisions of IFRS 7: "Financial
Instruments: Disclosures" which will enhance
certain requirements of IAS 32 and IAS 39 for the period commencing on 1 July
2007. The Directors anticipate that the adoption of this Standard in future
periods will have no material impact on these financial statements except for
additional disclosures.
(b) Income
Interest receivable on cash deposits is accounted for on an accruals basis.
(c) Unquoted investments held at fair value through profit or loss
Unquoted investments are stated at fair value as determined by the Directors
using appropriate valuation techniques. Changes in the fair value of investments
held at fair value through the profit or loss are recognised in the Income
Statement. On disposal realised gains and losses are also recognised in the
Income Statement. Unrealised gain and losses on the disposal of investments are
taken to the capital reserve - unrealised.
The Company recognises unquoted investments held at fair value through profit
and loss on the date it commits to purchase the instruments.
Derecognition of investments occurs when the rights to receive cash flows from
the investments expire or are transferred and substantially all of the risks and
rewards of ownership have been transferred.
The Company's interest in the Master Fund will be valued by the Directors on the
basis of the NAV of the Master Fund as provided by
the Master Fund Administrator at the period end. The NAV of the Master Fund,
Marwyn Neptune Fund LP, will be determined by the
Master Fund Administrator by deducting the fair value of the liabilities of the
Master Fund from the fair value of the Master Fund's assets.
(d) Expenditure
All expenses are accounted for on an accruals basis and are charged through the
Income Statement.
The Manager will not receive a management or performance fee from the Company in
respect of funds invested by the Company in the Master Fund. The Manager will be
entitled to fees and expenses from the Master Fund.
The Company will pay brokers' commissions (if any) and any issue or transfer
taxes chargeable in connection with its investment transactions. Transaction
costs incurred on the acquisition or disposal of an investment are charged to
capital through the Income Statement in the period in which they are incurred.
(e) Cash and cash equivalents
Cash and cash equivalents comprise bank balances and cash held by the Company
including short-term bank deposits with an original maturity of three months or
less. The carrying value of these assets approximates to their fair value.
(f) Share and warrant issue costs
The preliminary expenses of the Company directly attributable to the equity
transaction, and costs associated with the establishment of the Company that
would otherwise have been avoided, are taken to the Share Premium and Warrant
Reserves accounts.
(g) Functional and presentation currency
Items included in the financial statements of the Company are measured using the
currency of the primary economic environment in which the entity operates (the
functional currency). The financial statements are presented in pounds sterling,
which is the
Company's functional and presentation currency.
(h) Liabilities
Financial liabilities are recognised when the Company becomes a party to the
contractual agreements of the instrument.
Financial liabilities are derecognised from the balance sheet only when the
obligations are extinguished either through discharge, cancellation or
expiration.
(i) Equity
Called up share capital is determined using the nominal value of shares that
have been issued.
Special distributable reserve is a reserve to allow, amongst other things, the
buy-back and cancellation of up to 14.99% of ordinary
shares.
Capital reserve comprises gains and losses due to the revaluation of unquoted
investments held at fair value through profit or loss. Revenue reserve includes
all current and prior period results of operations as disclosed in the income
statement.
(j) Segment reporting
The Directors are of the opinion that the Company is engaged in a single
geographic and economic business segment. The Company holds one investment in a
Cayman Island Fund.
(k) Presentation of information
In order to better reflect the activities of an investment company in accordance
with the guidance issued by the Association of
Investment Companies ("AIC"), supplementary information which analyses the
Income Statement between items of a revenue and capital nature has been
presented alongside the Income Statement.
2. TAXATION
The company has been granted exempt status under the Income Tax (Exempt Bodies)
(Guernsey) Ordinance 1989, and is therefore subject to the payment of an annual
fee which is currently #600.
3. UNQUOTED INVESTMENTS 30 June 2007 30 June 2006 31 December 2006
At cost
Marwyn Neptune Fund L.P.
Class A GBP 22,400,000 # 14,000,000 # 14,000,000
Unrealised gain 10,993,823 # 3,445,611 # 7,418,764
At fair value 33,393,823 # 17,445,611 # 21,418,764
The Company's investment in Class A of the Marwyn Neptune Fund L.P. ("Master
Fund") represents 38.6% of the Class A net assets and 35.3% of the Master Fund.
MARWYN VALUE INVESTORS LIMITED
NOTES TO THE INTERIM FINANCIAL STATEMENTS
30 JUNE 2007 (continued)
4. EARNINGS PER SHARE
The calculation of basic earnings per share is based on the net revenue deficit,
and net capital gain, on ordinary activities for the period and on the weighted
average of 17,708,333 Ordinary Shares in issue throughout the period.
As at 30 June 2007 the price of ordinary shares was 133 pence which is in excess
of the exercise price of the Series Two Warrants (130
pence). However as the average price of the ordinary shares during the period
was less than the exercise price of the Series Two Warrants there was no
dilution in the earnings per ordinary share in respect of the Series Two
Warrants.
5. NET ASSET VALUE
The calculation of net asset value is based on the net assets of #33,714,348 and
on the ordinary shares in issue of 22,500,000 at the balance sheet date.
As the price of the ordinary shares (133 pence) was above the exercise price of
the Series Two Warrants (130 pence) there was a dilution in the NAV per ordinary
share in respect to the Series Two Warrants. The diluted NAV is based on net
assets of #43,464,348 and on ordinary shares in issue of 30,000,000.
6. RECONCILIATION OF NET PROFIT FOR THE PERIOD TO NET CASH OUTFLOW FROM
OPERATING ACTIVITIES
Net profit for the period 3,484,627
Gains on investments held at fair value through profit or loss (3,575,060)
Decrease/(increase) in Debtors (6,370)
Increase/(decrease) in creditors (3,837)
Net cash outflow from operating activities # (100,640)
7. WARRANTS
At the placing on 23 February 2006, for each Ordinary Share the subscriber also
received one half Series One Warrant and one half Series
Two Warrant. The Series One Warrants were called at the option of the Company on
22 March 2007.
Exercise End of
price subscription
pence period Allotted
Series Two Warrants 130 22 February 2009 7,500,000
Accelerated Call Feature
If the mid-market closing price on AIM as shown by Bloomberg shall be 150p or
more in the case of the Series Two Warrants for any twenty or more trading days
out of a period of thirty consecutive trading days the Company shall become
entitled at the close of AIM on the thirtieth consecutive trading day to give
notice to the relevant holders of Series Two warrants.
The notice referred to in the paragraph above must be sent in writing by the
Company to the relevant holders within two trading days of the thirtieth
consecutive Trading Day, stating that the Company will treat the Series Two
Warrants as exercised at the relevant subscription price on the date falling 21
days from the date of the notice.
On exercise of the Warrants, the Company will sell any shares that would have
been issued on exercise and (after deducting the costs of exercise), remit the
proceeds to the holder and after this time all rights under those Warrants will
cease.
For full details of the rights of the Warrants, please see the Admission
document or contact the administrator.
8. CALLED UP SHARE CAPITAL
Authorised
200,000,000 ordinary shares of #0.10 each # 20,000,000
Allotted and fully paid
22,500,000 ordinary shares of #0.10 each # 1,500,000
MARWYN VALUE INVESTORS LIMITED
NOTES TO THE INTERIM FINANCIAL STATEMENTS
30 JUNE 2007 (continued)
9. SHARE PREMIUM ACCOUNT
A special distributable reserve was created when, as stated in the Admission
Document, the company cancelled all of its share premium account (as approved in
the Royal Court of Guernsey on 31 March 2006), transferring it to a
distributable reserve to allow, amongst other things, the buy-back and
cancellation of up to 14.99% of the Ordinary Shares.
10. WARRANT RESERVES
The proceed from the issue of the placing were split between the Ordinary Shares
(share capital and share premium account), the Series
One Warrant reserve and the Series Two Warrant reserve based on the weighted
average value of the Ordinary Shares and Warrants in issue at the close of
business on the first day of trading. The weighted average value was calculated
using the mid prices of the Ordinary Shares and Warrants as quoted on AIM.
11. RISK PROFILE OF FINANCIAL ASSETS AND LIABILITIES
The main risks arising from the Company's financial instruments are market price
risk, interest rate risk and liquidity risk.
Market price risk
The Company's exposure to market price risk consists mainly of movements in the
value of the investment in the Master Fund. The
Company's investment portfolio complies with the investment parameters as
disclosed in its Admission document. The board manages the
market price risks inherent in the investment portfolio by ensuring full and
timely access to relevant information from the Investment Manager. The board
meets regularly and at each meeting review investment performance.
A 10% increase/decrease in the market price of the Master Fund would result in a
9.9 % increase/decrease in the basic net asset value per Ordinary Share as at
the balance sheet date.
Interest rate risk
The Company finances its operations through a mixture of shareholders' capital
and retained returns. With the exception of cash at bank, which receives
interest at a floating rate, all assets and liabilities of the Company are
non-interest bearing. No further interest rate risk disclosure has been provided
as all material amounts, with the exception of cash at bank, are non-interest
bearing.
Liquidity risk
The Company's investment in the Master Fund is relatively illiquid as it invests
a significant part of its assets in illiquid investments. The Master Fund and/or
Company may not be able to readily dispose of such illiquid investments and, in
some cases, may be contractually prohibited from disposing of such investments
for a specified period of time.
12. MATERIAL CONTRACTS
Manager
The Manager does not receive a management or performance fee from the Company in
respect of funds invested by the Company in the Master Fund.
Investment Manager
The Investment Manager does not receive a management or performance fee from the
Company or Manager in respect of funds invested by the Company in the Master
Fund.
Collins Stewart Europe Limited ("Collins Stewart")
Under an engagement letter dated 12 January 2006 from Collins Stewart to the
Company, Collins Stewart has agreed to act as nominated
adviser and broker to the Company for the purposes of the AIM Rules for an
annual fee of #35,000. The appointment may be terminated at
any time by either party immediately on written notice being received and the
letter contains indemnities given by the Company in favour of
Collins Stewart.
Directors
Each Director will be paid a fee of #15,000 per annum.
Administrator
The Administrator performs the necessary secretarial and administrative services
for the Company under the Administration Agreement. The Administrator is paid an
annual fee of #20,000. The Administrator is also entitled to reimbursement of
certain expenses incurred by it in
connection with its duties.
13. RELATED PARTIES
During the period fees of #10,010 were payable to the Administrator, Fortis Fund
Services (Guernsey) Limited, with #5,000 outstanding at the period end. Ian
Clarke is a Director of both the Company and the Administrator.
All Directors are entitled to receive an annual fee of #15,000 and to be
reimbursed for all travel and other costs incurred as a direct result of
carrying out their duties as Directors.
This information is provided by RNS
The company news service from the London Stock Exchange
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