RNS Number:3164E
Principle Capital Holdings S.A.
09 June 2006
PRINCIPLE CAPITAL HOLDINGS S.A.
Preliminary Results for the year ended 31 December 2005
Principle Capital Holdings S.A. ("Principle Capital" or "the Company"), the
Luxembourg holding company of a fund management and investment group established
to raise and manage funds for activist investment in the UK and Continental
Europe, today announces its preliminary results for the year ended 31 December
2005.
Chief Executive's Statement
Introduction
In 2005, our operational businesses, Principle Capital Partners Limited,
Principle Capital Fund Managers Limited and Principle Capital Advisors Limited
(together "Principle Capital") have focused on the business strategy outlined in
the AIM prospectus issued on our launch in November 2004.
Investments and Investment Management
Principle Capital has established three core activities, namely fund management,
consortium investments and direct investments. In total, as at 31 December
2005, direct investments and funds under management totalled #60 million
($104m).
Investment Management
October 2005 saw the launch of Principle Capital's first dedicated activist
investment fund, Principle Capital Investment Trust plc ("PCIT"). The issue was
well received and we attracted funding from a broad range of investors,
including a number of hedge funds and activists with whom we are already working
on certain transactions. PCIT has built a number of interesting positions and
is now well on the road to being fully invested. The positions have shown
encouraging resilience in the face of recent market turbulence and a number have
also already been the subject of corporate activity, which demonstrates that we
are both continuing to find the type of investments which fulfil our demanding
criteria which should enable us to accelerate returns to investors.
PCIT is an excellent product for Principle Capital. Not only does it enable us
to forge closer relationships with other investors in our marketplace, but also,
its closed end nature means that it should give long term visibility on revenues
for Principle Capital, through the management and performance fees charged to
PCIT by Principle Capital Fund Managers Limited. We intend to increase the
scale of this on an ongoing basis with further fund raising and believe that it
will become a showcase for our investment strategy when marketing our other
products.
Since the end of the year, we have commenced a marketing exercise with a view to
launching an offshore fund, which will invest alongside PCIT. This fund is
targeted at non-UK based pension and endowment funds, high net worth and fund of
fund investors. It will not be listed, but will have redemption features to
give investors liquidity. Whilst launching a product of this nature is a
lengthy process, we have received encouraging feedback from a number of
prospective investors and we hope to have a first closing in the near future.
We are also in discussions regarding the launch of a number of other investment
products, one of which is at an advanced stage.
We will keep shareholders informed of our progress in respect of the offshore
fund and the launches of other potential products at the appropriate time.
Consortium Investments
In April 2005, we launched our first consortium vehicle, Bulldog Financial
Limited, which is now the largest shareholder in Nord Anglia Education plc.
Nord Anglia is a leading provider of education, training and childcare and which
is listed on the London Stock Exchange. We have been working very closely with
management and other shareholders to realise the inherent value in Nord Anglia.
In March 2006, we also entered into a co-investment arrangement with a hedge
fund regarding Luminar plc, an investment owned by PCIT and we look forward to
working together with them on that position. We are working on a number of
other consortium and co-investment arrangements, which should generate both fees
for Principle Capital and enhance opportunities for Principle Capital's managed
funds.
Direct Investments
In October 2005, the Company invested #6.7m in the ordinary shares of PCIT,
although we have subsequently sold 1.5 million shares at cost in order to help
meet institutional demand for the stock and bring in new investors. In
addition, in April 2005, the Company had at the year end invested #975,000 in
Bulldog Financial Limited in respect of its 18.75% interest.
Our investment in 1.27m ordinary shares of Liberty plc, the London based luxury
retailer, remains an attractive investment in our view and the share price
increased 22% over the year, ending at #2.625 per share. Liberty has produced
encouraging results for the six months ending 31 December 2005 and we are
confident of its future growth prospects.
New Director
We are pleased to announce that Richard Bolton, Managing Director of Anglo Irish
Fund Services Limited, has agreed to join the Board of Directors with effect
from 1 July 2006. He replaces Marco Felder, who will leave the Board after the
AGM to be held on 30 June 2006. We would like to extend our thanks to Marco for
his contribution to the Company since its launch. Formal announcement of this
appointment will take place on 1 July 2006.
Financial Results and Outlook
Naturally the 2005 results reflect considerable activity on our part in the
development and marketing of our products, without a major income stream or
investment realisations. The Company retains a strong balance sheet and the
launch of the investment trust, together with the pipeline of new products
scheduled for this year should generate significant uplift in our income stream,
even without allowing for potential performance fee payments. We also expect to
see increases in the value of the Company's direct investments.
I would like to thank everybody involved with Principle Capital for all their
work to date in continuing to establish and promote our exciting business.
Brian Myerson
Chief Executive
Press enquiries
Brian Myerson, Chief Executive Tel: +44 (0)20 7240 3222
Biddicks - Financial Public Relations Tel: +44 (0)20 7448 1000
Zoe Biddick
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2005
Group Group
2005 2004
# #
TURNOVER
Advisory fees 183,652 -
OTHER INCOME
Unrealised gains on investments 558,511 -
Realised loss on sale investments (438,238) -
GROSS PROFIT 303,925 -
Administrative expenses (1,960,298) (1,983,053)
OPERATING LOSS (1,656,373) (1,983,053)
Interest recievable and similar income 340,319 85,437
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (1,316,054) (1,897,616)
Tax on loss on ordinary activities (15,138) (935)
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION (1,331,192) (1,898,551)
Minority interst 378,344 50,308
RETAINED LOSS FOR THE FINANCIAL YEAR/PERIOD (952,848) (1,848,243)
The turnover and operating loss of the Group are derived entirely from
continuing operations.
The Group made no recognised gains or losses other than those reported in the
profit and loss account.
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2005
Group Company Group Company
2005 2005 2004 2004
# # # #
FIXED ASSETS
Tangible Assets 33,237 - - -
Shares in Group undertakings - 17,053 - 17,053
Other investments 10,968,415 10,968,415 2,731,521 2,731,521
11,001,652 10,985,468 2,731,521 2,748,574
CURRENT ASSETS
Debtors 230,486 1,574,326 48,605 209,440
Cash at bank and in hand 1,017,139 943,631 10,698,764 10,650,369
1,247,625 2,517,957 10,747,369 10,859,809
CREDITORS: amounts falling due within one (226,214) (120,885) (124,635) (97,434)
year
NET CURRENT ASSETS 1,021,411 2,397,072 10,622,734 10,762,375
NET ASSETS 12,023,063 13,382,540 13,354,255 13,510,949
CAPITAL AND RESERVES
Called up share capital 8,999,806 8,999,806 8,999,806 8,999,806
Share premium account 6,250,000 6,250,000 6,250,000 6,250,000
Profit and loss account (2,801,091) (1,867,266) (1,848,243) (1,738,857)
TOTAL EQUITY SHAREHOLDERS' FUNDS 12,448,715 13,382,540 13,401,563 13,510,949
Minority interest (425,652) - (47,308) -
12,023,063 13,382,540 13,354,255 13,510,949
As permitted under section 230 of the United Kingdom Companies Act 1985, the
Company has not presented its profit and loss account.
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2005
Group Group
2005 2004
# #
Operating activities
Net cash outflow from operating activities (1,520,533) (1,819,521)
Capital expenditure
Payments to acquire tangible assets (44,991) -
Acquisitions and disposals
Payments to acquire investments (9,148,620) -
Receipt from sale of investments 1,032,000 -
Financing activities
Increase of shares - 12,518,285
(Decrease)/Increase in cash in the year/period (9,682,144) 10,698,764
Reconciliation of net cash flow to movement in net debt
(Decrease)/increase in cash in the year/period (9,682,144) 10,698,764
Movement in net debt in the year/period (9,682,144) 10,698,764
Net funds at the beginning of the year/period 10,698,764 -
Net funds at the end of the year/period* 1,016,620 10,698,764
*Net funds as at 31 December 2005 are made up of cash at bank and in hand for
#1,017,139 and bank overdraft for #519.
RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
FOR THE YEAR ENDED 31 DECEMBER 2005
Group Company Group Company
2005 2005 2004 2004
# # # #
Loss for the financial year/period (952,848) (128,409) (1,848,243) (1,738,857)
(952,848) (128,409) (1,848,243) (1,738,857)
New share capital subscribed - - 8,999,806 8,999,806
Share premium account - - 6,250,000 6,250,000
(Decrease in)/Net addition to shareholders' funds (952,848) (128,409) 13,401,563 13,510,949
Minority interest (378,344) - (47,308) -
Opening shareholders' funds 13,354,255 13,510,949 -
Closing shareholders' funds 12,023,063 13,382,540 13,354,255 13,510,949
Notes to the accounts
1. INVESTMENTS
Cost Fair Value Cost Fair Value
a) Group Investments 31 December 31 December 31 December 31 December
2005 2005 2005 2004
# # # #
Liberty Plc (formerly Retail Stores Plc) 2,731,521 3,366,759 2,731,521 2,731,521
Bulldog Financial Limited 975,000 864,757 - -
Principle Capital Investment Trust Plc 6,703,382 6,736,899 - -
Total Group investments 10,409,903 10,968,415 2,731,521 2,731,521
The investments in Bulldog Financial Limited and Principle Capital Investment Trust Plc were made during the
year.
Principal Incorporated Share type % of shares % of shares
activity held as at held as at
31/12/2005 31/12/2004
Liberty Plc (formerly Holding United Kingdom Ordinary 5.60% 5.60%
Retail Stores Plc) company
Bulldog Financial Limited Investment British Virgin Ordinary 18.75% 0.00%
trust Islands
Principle Capital Investment United Kingdom Ordinary 13.40% 0.00%
Investment Trust Plc trust
b) Company shares in Group Principal Incorporated Share type % of shares % of shares
undertakings activity held as at held as at
31/12/2005 31/12/2004
Principle Capital Advisors Advisory United Kingdom Ordinary 100.00% 100.00%
Limited company
100 ordinary shares valued
at cost #10,000
Principle Capital Partners Management British Virgin Ordinary 70.16% 70.16%
Limited company Islands
7,100 ordinary shares
valued at cost #7,053
During the year, Principle Capital Partners Limited acquired 100% of a subsidiary named Principle Capital
Fund Managers Limited, a fund management company incorporated in Cayman Islands. This investment is
eliminated in the consolidated financial statements of the Company.
2. CALLED UP SHARE CAPITAL
2005 2004
# #
Authorised:
12,500,000 Ordinary shares of #1 each 12,500,000 12,500,000
Issued and fully paid:
8,999,806 shares of #1 each 8,999,806 8,999,806
3. RESERVES
Group Share Group Proft & Company Share Company Profit &
Premium Loss Account Premium Loss Account
Account Account
# # # #
At January 1 2005 6,250,000 (1,848,243) 6,250,000 (1,738,857)
Loss for the year - (952,848) - (128,409)
At 31 December 2005 6,250,000 (2,801,091) 6,250,000 (1,867,266)
Share premium of #6,250,000 relates to 6,250,000 shares issued at a premium of
#1 each through a contribution in kind in 2004.
4. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING
ACTIVITIES
2005
#
Operating loss (1,656,373)
Interest recievable and similar income 340,319
Depreciation 11,754
Unrealised gains on investments (558,511)
Realised losses on investments 438,238
Increase in debtors (148,249)
Increase in creditors 53,693
Taxation (1,404)
Net cash outflow from operating activities (1,520,533)
5. ULTIMATE PARENT COMPANY
PRINCIPLE CAPITAL HOLDINGS S.A. is the ultimate parent Company of the Group.
The statutory annual accounts of the Company are prepared in accordance with
legal and regulatory requirements and generally accepted accounting principles
in the Grand Duchy of Luxembourg. The last audited version of these annual
accounts are available at the registered office of the Company.
6. ANNUAL GENERAL MEETING
The annual general meeting of the Company will be held at 12 noon on 30 June
2006. Notice of the meeting will be circulated to shareholders with the audited
accounts.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SSMFAASMSELM
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