Final Results
St. Helen's Capital Plc / Epic: SHCP / Market: AIM / Sector: Financial services.
11 August 2008
St. Helen's Capital Plc ('St Helen's' or 'the Company')
Final Results
St Helen's Capital Plc, an independent institutional stockbroker and corporate finance adviser focused on
companies in the small cap sector, announces its audited results for the year ended 31st March 2008.
CHAIRMAN'S STATEMENT
St Helen's Capital ('St Helen's') has made good progress in its stated objective of becoming a leading
small-cap focused institutional stockbroker and financial adviser albeit against a backdrop of
deteriorating markets for smaller companies. In particular, the Company is successfully developing a
full range of institutional broking services to small-cap AIM listed corporate clients and positioning
itself for when the markets recover.
In order to achieve this, St Helen's has made a number of key appointments across the Corporate, Research
and Broking functions and these additional professionals have integrated well with the existing team.
St Helen's had 15 AIM brokerage clients as at the end of July 2008, from a standing start in March 2007,
including Kurawood Plc, the Company's first AIM IPO. St Helen's Capital aims to grow this number of
clients substantially over the coming months, capitalising on the need for quality research and brokerage
services to the small-cap market.
In addition, an encouraging pipeline of business is building up and we anticipate that, whilst the IPO
market is currently closed, in time, confidence and investors will return to the markets, and that St
Helen's strategy to focus on quality businesses will be successful.
St Helen's roots are in the PLUS Market where the Company retains its position as the leading adviser,
acting for 36 companies. St Helen's was recently awarded the Growth Company Investor PLUS Adviser of the
Year for 2008.
Despite the downturn in corporate activity generally, the PLUS advisory side of our business is seeing
increasing levels of enquiries, particularly from overseas companies exploring the possibility of listing
on PLUS, which in turn is leading to an improving pipeline of companies using St Helen's corporate
services.
Having had an excellent first half as reported in September 2007, and although the second half has been
challenging, the full year result is a Profit before tax of £141,000 compared to a Loss of £577,000 in
the year ended 31 March 2007. Furthermore the Company remains well funded with cash in the bank as at 8
August 2008 of circa £1.4m.
We continue to focus on identifying opportunities across a number of sectors that are attractive to our
institutional investor base. Success in identifying these opportunities will increase our profile
further towards our ambition of becoming a leading small-cap stockbroking and advisory business in the
UK.
Mark Warde Norbury
Chairman
8 August 2008
The Company expects to post the Report and Accounts to shareholders by the end of August 2008, and the
Annual General Meeting is scheduled to take place at St Helen's Capital offices at 15 St Helen's Place,
London EC3A 6DE on Tuesday 30th September at 12pm.
DIRECTORS' REPORT
The Directors present their report together with the audited financial statements of the company for the
year ended 31 March 2008.
Principal Activity
The Company's principal activities continue to be the provision of Corporate Finance Advice and Broking
Services to companies.
Review of the Business
St Helen's Capital's ('St Helen's') stated objective is to become a leading small cap focused
institutional stockbroker and financial adviser. In the last year the Company has successfully started to
provide the full range of institutional broking services to small-cap AIM listed corporate clients.
A more comprehensive review may be found in the Chairman's Statement above.
Results, Dividends, and Key Performance Indicators ('KPI's)
There are four financial KPI's: gross margin, administrative expenses, operating profit, and cash.
* gross profit increased by 202% to £2.45m;
* administrative expenses increased by 75% to £2.49m, including the cost of admission to AIM of
c.£200,000;
* resulting in an operating loss of £34,000 (compared to a loss of £606,000 in 2007);
* cash at bank amounted to £1.8m (compared to a small overdraft in 2007)
The Directors do not recommend the payment of a dividend.
Position at 31st March 2008
An investment of £88,000 has been made in leasehold improvements (to additional offices) in order to
house the greater number of staff, and to provide Meeting Rooms appropriate for AIM brokerage clients.
Available for sale investments reduced from £438,000 to £358,000 as a result of realising the investment
in St Helen's Finance Plc, and of participating at the IPO (or pre-IPO) stage of certain clients.
Trading investments reduced from £143,000 to £68,000 through a combination of modest realisations and
depressed market values at year-end.
Trade and other receivables have increased from £152,000 to £282,000 largely as a result of higher levels
of business activity.
Cash at bank stood at £1.8m (compared to a small overdraft in 2007) largely resulting from a £1.5m
Placing in April 2007, supplemented by positive operating cash-flows and investment income.
Trade and other payables reduced by a modest 9% from £248,000 to £219,000 (compared to the 75% increase
in administrative expenses) reflecting that 70% of administrative costs (excluding the cost of admission
to AIM) are people related and paid for in the month that they are incurred, compared to 3rd party
overheads which generally benefit from a period of credit.
The share capital and share premium accounts increased by £1.53m as a result of the £1.5m Placing and
issues of shares to staff.
Net assets at 31 March 2008 were £2.36m compared to £0.47m in 2007.
Future Developments
Market conditions are challenging and this has been particularly demonstrated in the general sell off of
small cap company shares as investors hunt for liquidity and cash. The loss of confidence in the markets
and the investment prospects of companies have made it more difficult to raise equity funding. However,
the Company believes that in time, confidence and investors will return to the markets, and that St
Helen's strategy to focus on quality businesses will be successful.
Principal risks and uncertainties
There is an inherent risk in any business which depends in part on one off transaction fees in order to
generate profits because the earning of such fees can be unpredictable. To overcome this, a successful
£1.5m Placing was closed on 26th April 2007.
The Company intends to expand its broking activity and as a result there is a risk that the cost base
will increase more quickly than the revenue: however, monthly management accounts and periodic forecasts
are used to monitor financial progress and highlight any imbalance.
There is also a need as the Company undertakes more complicated activities to develop its compliance and
procedures accordingly. To meet these challenges the Company employs a full-time Compliance Officer and
uses specialist external advisors whenever required.
There is risk that the current adverse market conditions continue into 2009 against which the Company has
adequate cash resources (on the most pessimistic assumption that existing retainer income is the only
source of income).
Supplier payment policy
It is the company's policy to settle all credit transactions in accordance with terms agreed with
suppliers. Creditor days at the year end amounted to 45 days (2007: 18 days), the former being inflated
by unpaid AIM Admission costs and rent due on a recently acquired property lease.
Charitable Donations
The Company made Charitable Donations of £250 during the year (2006: £Nil).
Employee Share Ownership Plan Trust ('ESOP')
The ESOP holds 232,603 shares (2006: 232,603) in the Company, of which at 31st March 2008 none had been
unconditionally granted to any of the Company's employees.
The Trustees are Messrs Howard Flight and Jon Pither, the Company's Non-Executive Directors.
Directors
The Directors who served throughout the year were:
Mark Warde-Norbury (Chairman)
Barry Hocken (PLUS Markets Division)
Howard Flight (Non Executive)
Ruari McGirr (Chief Executive)
Jon Pither (Non Executive)
Sebastian Wykeham (Head of Broking)
Directors' interests
The Directors' interests in the shares and options of the company were as stated below:
Ordinary shares of 5p each At 31 March 2008 At 31 March 2007
M Warde - Norbury 3,254,276 3,254,276
H E Flight 638,060 250,000
B Hocken 402,500 402,500
R McGirr 1,457,636 1,457,636
J Pither 2,589,682 3,189,682
S G M Wykeham 1,457,636 1,457,636
Number of Exercise price Date of grant Exercise date Exercise
options (pence) date
M Warde-Norbury 400,000 10 30/03/07 30/03/07 30/03/12
400,000 20 30/03/07 30/03/07 30/03/12
200,000 30 30/03/07 30/03/07 30/03/12
1,000,000
B Hocken 200,000 10 30/03/07 30/03/07 30/03/12
200,000 20 30/03/07 30/03/07 30/03/12
100,000 30 30/03/07 30/03/07 30/03/12
500,000
R.McGirr 4,342,364 5 02/02/07 02/02/10 02/02/17
J Pither 403,923 10 06/05/04 06/05/05 13/07/09
403,923 15 06/05/04 06/05/05 13/07/09
1,111,111 9 31/03/05 31/03/05 31/06/08
400,000 10 30/03/07 30/03/07 30/03/12
400,000 20 30/03/07 30/03/07 30/03/12
200,000 30 30/03/07 30/03/07 30/03/12
2,918,957
S Wykeham 4,342,364 5 02/02/07 02/02/10 02/02/17
Substantial Shareholders
As at 9 July 2008 (being the last practical date prior to the date of this document) and save as set out
below, the Company was not aware of any person, who, other than the Directors, directly or indirectly,
had an interest representing 3 per cent or more of the issued ordinary share capital in the Company
(being the threshold at or above which, in accordance with the provisions of Section 5 of the Disclosure
and Transparency Directive published by the FSA, any interest must be disclosed by the Company):
3% shareholders No. shares %
Keydata Investment Services 2,110,000 4.95
New Century AIM VCT 2,000,000 4.69
Fort Alice Investments 1,810,000 4.24
New Century AIM VCT2 1,500,000 3.52
Williams de Broe Clients 1,447,512 3.39
JM Finn Nominees Limited 1,405,000 3.29
Starvest PLC 1,350,000 3.16
Ansbacher & Co. 1,287,000 3.02
Directors' Responsibilities
Company law requires the directors to prepare financial statements for each financial year which give a
true and fair view of the state of affairs of the company and of the profit or loss of the company for
that period. In preparing those financial statements, the directors are required to:
* select suitable accounting policies and then apply them consistently; making judgements and
estimates that are reasonable and prudent;
* state whether applicable accounting standards have been followed, subject to any material
departures disclosed and explained in the financial statements;
* prepare the financial statements on the going concern basis unless it is inappropriate to
presume that the company will continue in business.
The Directors are responsible for keeping proper accounting records which disclose with reasonable
accuracy at any time the financial position of the Company and enable them to ensure that the financial
statements comply with the Companies Act 1985 (as amended by the Companies Act 2006). They are also
responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial
information included in the Company's website. Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Directors' and Officers' Insurance
The Company purchases and maintains Liability Insurance for its Directors and Officers as permitted by
the Companies Act 1985.
Statement of Disclosure to Auditor
So far as the Directors are aware, there is no relevant audit information of which the Company's auditors
are unaware. Additionally, the Directors have taken all the necessary steps that they ought to have taken
as directors in order to make themselves aware of all relevant audit information and to establish that
the company's auditors are aware of that information.
Auditors
In accordance with section 385 of the Companies Act 1985, a resolution proposing that UHY Hacker Young
LLP be reappointed as auditors of the company will be put to the Annual General Meeting.
On behalf of the Board
Mark Warde - Norbury
Chairman
8 August 2008
FINANCIALS
The preliminary results do not constitute full statutory accounts within the meaning of Section 240 of
the Companies Act 1985.
The preliminary results have been prepared in accordance with applicable International Financial
Reporting Standards.
Income Statement
Year ended 31 March 2008
Continuing operations Notes 31-Mar 31-Mar
2008 2007
(£) Restated
(£)
Revenue 4 2,718,529 871,360
Cost of sales (262,239) (61,212)
----------------------------------
Gross profit 2,456,290 810,148
Administrative expenses (2,490,510) (1,415,705)
----------------------------------
Operating loss 5 (34,220) (605,557)
Investment revenues 6 96,514 147
Other gains and losses 7 79,067 38,932
Finance costs 8 (100) (10,657)
----------------------------------
Profit before tax 141,261 (577,135)
Corporation tax charge (19,283) 0
----------------------------------
Profit/ (loss) for the period 121,978 (577,135)
----------------------------------
Earnings per share (Pence) (Pence)
Basic 0.30 (2.74p)
----------------------------------
Diluted 0.29 (2.74p)
----------------------------------
Balance Sheet
As at 31 March 2008
Notes Year ended Year ended
31-Mar 31-Mar
2008 2007
(£) Restated
(£)
Non current assets
Property, plant and equipment 13 77,844 0
--------------------------------
Current assets
Available for sale investments 14 357,709 437,669
Trading investments 15 67,629 142,983
Trade and other receivables 16 282,310 152,613
Cash and cash equivalents 17 1,816,395 206
------------------------------
2,524,044 733,471
------------------------------
Total assets 2,601,888 733,471
------------------------------
Current liabilities
Bank overdrafts 0 (14,975)
Trade and other payables 18 (219,121) (247,946)
Corporation tax (19,283) 0
------------------------------
Total current liabilities (238,404) (262,921)
------------------------------
Net assets 2,363,484 470,550
------------------------------
Equity
Capital and reserves attributable to equity
shareholders
Share capital 19 2,132,800 1,366,085
Share premium account 19 1,171,708 408,432
Revaluation reserves 133,712 150,247
Other reserves 363,316 105,816
Retained earnings (1,438,052) (1,560,030)
----------------------------------
2,363,484 470,550
----------------------------------
Statement of Changes in Equity
Year ended 31 March 2008
Share Share premium Revaluation Other Retained
capital (£) reserve reserves earnings
(£) (£) (£) (£)
Restated balance at 31 March 957,447 326,307 277,943 4,909 (982,895)
2006
Loss for the year (577,135)
Issue of ordinary share
capital 408,638 82,125
Revaluation during the year (127,696)
Provision for share-based
payments 100,907
----------------------------------------------------------------------------
Balance at 31 March 2007 1,366,085 408,432 150,247 105,816 (1,560,030)
Profit for the period 121,978
Issue of ordinary share
capital 766,715 763,276
Revaluation during the period (16,535)
Provision for share-based
payments 257,500
---------------------------------------------------------------------------
Balance at 31 March 2008 2,132,800 1,171,708 133,712 363,316 (1,438,052)
---------------------------------------------------------------------------
Movements of the Revaluation 2008 2007
reserve consist of:
Unrealised gains / (losses) 46,435 (116,386)
Release of unrealised gains to Profit and (62,970) (11,310)
(Loss)
(16,535) (127,696)
Other reserves consist of: 2008 2007
Reserve for employee share ownership plan (50,254) (50,254)
('ESOP')
Reserve for share based payments 413,570 156,070
363,316 105,816
The Reserve for ESOP comprises 232,603 shares in the Company held in an ESOP Trust. As at 31 March 2008 and 31
March 2007, none of the shares had been unconditionally granted to any of the Company's employees and had an
aggregate market value of £30,820 (2007: £24,423).
Cash Flow Statement
Year ended 31 March 2008
Notes 31-Mar 31-Mar
2008 2007
(£) Restated
(£)
Net cash from operating activities
Operating loss (34,220) (605,557)
Depreciation 10,000 0
Share based payments 257,500 100,907
------------------------------
Operating cash flows before movements in working capital 233,280 (504,650)
------------------------------
Movement in working capital
Decrease / (increase) in receivables (129,697) 52,511
Increase / (decrease) in payables (28,825) 110,526
------------------------------
(158,523) 163,037
------------------------------
Operating cash flow 74,758 (341,613)
------------------------------
Investment activities
Interest receivable 96,514 147
Proceeds from disposal of tangible fixed assets 0 0
Proceeds on disposal of trading investments 93,274 0
Proceeds on disposal of available for sale investments 228,935 207,667
Expenditure on tangible fixed assets (87,844) 0
Expenditure on available for sale investments (104,362) (229,359)
Placing of funds on fixed term deposits 17 (1,500,000) 0
------------------------------
Cash flow from investing activities (1,273,483) (21,545)
------------------------------
Financing
Issue of share capital 1,529,990 490,763
Interest payable (100) (10,657)
-----------------------------
Cash flow from financing activities 1,529,890 480,106
-----------------------------
Net increase / (decrease) in cash -----------------------------
and cash equivalents 17 331,164 116,948
-----------------------------
Cash and cash equivalents at start of period (14,769) (131,717)
Cash and cash equivalents at end of period 316,395 (14,769)
-----------------------------
Increase / (decrease) in cash and cash equivalents 331,164 116,948
-----------------------------
Notes to the financial statements
For the year ended 31 March 2008
1. General information
St Helen's Capital Plc is a company registered in England and Wales under the Companies Act 1985. The
Company's principal activities are the provision of advice and broking services to companies listed on
the the AIM Market (operated by the London Stock Exchange) and PLUS, the primary market (formerly known
as Ofex) operated by PLUS Markets Plc.
The financial statements are presented in pounds sterling because that is the currency of the primary
economic environment in which the company operates.
The company's registered office and principal place of business is 15 St Helen's Place, London, EC3A 6DE.
The company's registered number is 3515836.
2. Significant accounting policies
a. Basis of accounting
The financial statements have been prepared for use in the European Union. Up until 31 March 2007 the
company prepared its financial statements under UK Generally Accepted Accounting Principles (' UK GAAP').
From 1 April 2007 the company's financial statements have been prepared in accordance with IFRS and
International Financial Reporting Interpretations Committee ('IFRIC') interpretations adopted by the
European Union, and with those parts of the Companies Act 1985 applicable to companies reporting under
IFRS, with the prior periods being reported on the same basis.
The disclosures under IFRS 1 concerning the transition from UK GAAP to IFRS's are given in Note 24.
The financial statements have been prepared on the historical cost basis as modified by the valuation of
certain financial instruments, as described below.
The Company has one wholly owned subsidiary undertaking, St Helen's Capital Group Limited, a dormant
company, registered in England and Wales, Registered No. 5814084, with a Share Capital of £1. As the
group accounts are virtually identical to those of the Company, the Directors have determined not to
present separate accounts for the Group on the grounds of materiality.
The principal accounting policies are set out below.
b. Financial risk management objectives and policies
The Company's principal financial assets are cash and cash equivalents, trade and other receivables and
investments. The Company's credit risk is primarily attributable to its trade receivables and its market
risk is primarily attributable to its investments. The amounts presented in the Balance Sheet are net of
allowances for impairment of receivables.
c. Financial instruments
Available for sale investments
Available for sale investments are initially measured at cost, including transaction costs. At each
reporting date these instruments are measured at their fair values and resultant gains and losses, after
adjusting for taxation, are recognised directly in equity via the revaluation reserve, until the security
is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously
recognised in equity is included in the net profit or loss for the period.
Trading investments
Investments held for trading consist of options held in quoted companies, which are held at fair value.
At each reporting date fair value is re-assessed and resultant gains and losses are included directly in
net profit and loss for the period.
Trade and other receivables
Trade and other debtors are measured at fair value.
Appropriate allowance for estimated irrecoverable amounts is recognised in the Income Statement where
there is objective evidence that the asset is impaired. The allowance recognised is measured as the
difference between the carrying amount and the present value of estimated future cash flows discounted at
the effective interest rate computed at initial recognition.
Trade and other payables
Trade and other payables are measured at fair value.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual
arrangements entered into. An equity instrument is any contract that evidences a residual interest in the
assets of the company after deducting all of the liabilities.
d. Foreign currencies
Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are reported
at the rates of exchange prevailing at that date. Gains and losses arising during the period on
transactions denominated in foreign currencies are treated as normal items of income and expenditure in
the Income Statement.
e. Operating leases
Rentals payable under operating leases are charged to income on a straight-line basis over the term of
the relevant lease.
f. Property, plant and equipment
Property, plant and equipment are stated at cost, net of depreciation and any provision for impairment.
Depreciation is provided at rates calculated to write off the cost, less estimated residual value, of
each asset evenly over its estimated useful life as follows:
Leasehold improvements are depreciated over the term of the lease.
Computer equipment and software is written off in the period of purchase.
At each reporting date the net book value of these assets is compared against their economic value, and
resulting impairments in value are written off in the Income Statement for the period.
g. Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, demand deposits and fixed term deposits of less than one
year (see note 17).
h. Taxation
The company has not achieved taxable profits during the period under review, accordingly there is no tax
liability.
The company had trading losses available to carry forward at 31 March 2008 of approximately £1.1m (2007:
£1.5m). No deferred tax has been recognised in respect of trading profit as there was insufficient
evidence available as to the timing of any future recovery.
In future years mainstream corporation tax is likely to be payable, which will be based on taxable profit
for the year. Taxable profit differs from net profits as reported in the Income Statement because it
excludes items of income or expense which are taxable or deductible in other years and it further
excludes items which are never taxable or deductible. The Company's liability for current tax will be
calculated using tax rates which have been enacted or substantively enacted by the Balance Sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts
of assets and liabilities in the Financial Statements and the corresponding tax bases in the computation
of taxable profit, and is accounted for using the Balance Sheet Liability Method. Deferred tax
liabilities are generally recognised for all temporary differences and deferred tax assets are recognised
to the extent that it is probable that taxable profits will be available against which deductible
temporary differences can be used. Such assets and liabilities are not recognised if the temporary
difference arises from the initial recognition of goodwill or from the initial recognition (other than in
a business combination) of other assets and liabilities in a transaction that effects neither the tax
profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each Balance Sheet date and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or
part of the asset to be recovered.
Deferred tax is calculated at the rates that are expected to apply in the period when the liability is
settled or the asset realised. Deferred tax is charged or credited to the Income Statement, except when
it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt
with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off
current tax assets against current tax liabilities and when they relate to income taxes levied by the
same taxauthority and the Company intends to settle its current tax assets and liabilities on a net
basis.
i. Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents amounts
receivable for services provided in the normal course of business, net of discounts, VAT, and other sales
related taxes.
Revenue comprises broking commissions, and retainer fees for corporate finance advisory services.
Where the revenue is success-fee based, it is taken to the Income Statement on the successful completion
of the transaction. Retainer fees are taken to the Income Statement pro-rata to the period invoiced.
Interest income is based on the effective rate applicable for the period during which demand deposits are
held.
j. Employee Share Ownership Plans Trust ('ESOP')
The ESOP trust is accounted for in line with IAS 32, 'Financial Instruments - Presentation', re: treasury
shares whereby shares have been shown at cost in a separate Reserve as a deduction from Shareholders'
Funds.
k. Share based payments
The company has made share-based payments to certain directors and employees through the issue of
options. The fair value of these payments is calculated at the date of grant through the use of a
binomial pricing model. The expense is recognised on a straight-line basis over the vesting period, based
on the Company's estimate of shares that will eventually vest.
l. General information
At the date of authorisation of the financial statements, the following Standards and Interpretations
(relevant to the company's activities) which have not been applied in the financial statements were in
issue but not yet effective.
IFRS 8 - Operating Segments and the revised IAS 1, Presentation of Financial Statements.
It is not anticipated that the adoption of these accounting standards will have a significant effect on
the Financial Standards.
3. Critical accounting judgement and key sources of estimation uncertainty.
Equity-settled share-based payments
The fair value of share based payments is calculated by reference to a simulation model. Inputs into the
model are based on the Directors' best estimates of appropriate volatility, discount rate and share price
growth.
Valuation of investments
Trading investments include options over securities which have been received as consideration for
corporate finance services rendered. These assets have been valued according to the mid market price,
where the share prices of the companies concerned are quoted on a recognised stock exchange, less the
exercise price of the options.
Bad debt policy
The Company regularly reviews all outstanding balances and provides for amounts it considers
irrecoverable.
4. Business and geographical segments
The directors consider that there is only one activity undertaken by the company, that of corporate
finance advisory. All of this activity was undertaken in the United Kingdom.
2008 2007
(£) (£)
Fees earned from corporate finance 2,718,529 871,360
----------------------------------
5. Profit for the year
2008 2007
(£) (£)
The Operating Loss for the year has been arrived at after
charging:
Depreciation of property, plant and equipment 10,000 0
Operating lease rentals 137,297 61,197
Share based payments 257,500 116,376
Staff costs (Note 9) 1,589,800 677,213
Auditors' remuneration for audit services 0 7,000
Amounts payable to UHY Hacker Young by the company in respect of
non-audit services were:
Auditors' remuneration: - for non audit taxation 10,825 11,000
- for non audit other 34,113 13,245
----------------------------------
6. Investment revenues
2008 2007
(£) (£)
Bank interest receivable 96,514 147
----------------------------------
7. Other gains and losses
2008 2007
(£) (£)
Profit on disposal of available for sale investments 69,397 4,680
Profit on disposal of trading investments 57,237 20,668
Increase / (decrease) in the fair value of trading
investments (43,067) 53,681
Impairment of available for sale investments (4,500) (40,097)
----------------------------------
79,067 38,932
----------------------------------
8. Finance Costs
2008 2007
(£) (£)
Interest payable on bank overdraft 100 10,657
----------------------------------
9.1. Staff Costs
2008 2007
(£) (£)
Wages and salaries 1,216,565 501,926
Social security costs 115,735 55,911
Pension costs 0 3,000
Share based payments 257,500 116,376
----------------------------------
1,589,800 677,213
----------------------------------
The company does not operate any form of pension scheme. Payments, as outlined below, have been made during the
comparative period are to a director's personal pension plan.
9.2. Directors' emoluments
2008 2007
(£) (£)
The emoluments of the highest paid Director were: 162,000 83,667
The aggregate Directors' remuneration was: 550,357 315,800
Pension contributions - total 0 3,000
Pension contributions - highest paid Director 0 3,000
The total benefit of options to employees relating to
Directors was: 180,824 0
10. Tax
2008 2007
The tax charge comprises: (£) (£)
Mainstream UK corporation tax deriving from profits 19,283 0
for the periods
----------------------------------
Total current tax 19,283 0
----------------------------------
Deferred tax
Charge in respect of timing differences 0 0
---------------------------------
Total deferred tax 0 0
---------------------------------
Total tax on profit / (loss) from ordinary activities 19,283 0
---------------------------------
The tax charge for the period differs from that resulting from applying the standard rate of UK Corporation
Tax of 20% (2007:19%) to the profit before tax for the reasons set out in the reconciliation below.
Profit / (loss) per financial information 121,978 (577,135)
Unrealised (gains) / losses on trading investments 43,067 1,319
Disallowed items 512,319 159,810
Capital allowances 0 0
Losses carried forward / (used) (580,949) 416,006
--------------------------------
Taxable profit / (loss) 96,415 0
--------------------------------
Tax at 20% (2007:19%) 19,283 0
--------------------------------
Tax expense for the year 19,283 0
--------------------------------
11. Earnings per share
2008 2007
Earnings Earnings
Based on profit / (loss) of 121,978 (577,135)
--------------------------------
Where losses are incurred, the diluted earnings per share calculation is showing a lower loss per share, making
the options anti-dilutive. Accordingly the diluted earnings per share and basic earnings per share are the same.
No. shares No. shares
Weighted average number of Ordinary Shares in issue 41,218,795 21,025,290
for the purpose of basic earnings per share
Effect of dilutive potential Ordinary Shares:
Share options 442,687 197,329
--------------------------------
Weighted average number of Ordinary Shares in issue 41,661,482 21,222,619
for the purpose of diluted earnings per share
--------------------------------
12. Property, plant and equipment
13. Property, plant and equipment Leasehold improvements
2008 2007
Cost (£) (£)
At 1 April 2007 0 0
Additions 87,844 0
Disposals 0 0
--------------------------------
At 31 March 2008 87,844 0
--------------------------------
Accumulated depreciation
At 1 April 2007 0 0
Provision for the year 10,000 0
On disposals 0 0
--------------------------------
At 31 March 2008 10,000 0
--------------------------------
Net book value
At 31 March 2008 77,844 0
--------------------------------
At 31 March 2007 0 0
--------------------------------
13. Available for sale investments
2008 2007
(£) (£)
Quoted investments 331,595 408,055
Unquoted investments 26,114 29,614
--------------------------------
357,709 437,669
--------------------------------
Unquoted investments are initially based on cost. At each reporting date these investments are measured
at their fair values which if below cost, result in a specific provision for impairment in value.
The available for sale investments included an investment in St Helen's Finance PLC, which represented at
31 March 2007 more than 20% of the net assets of the Company. This investment was realised for cash in
June 2007.
14. Trading investments
2008 2007
(£) (£)
Quoted Options 67,629 142,983
--------------------------------
Quoted options are in listed securities which present the Company with opportunity for return through trading
gains. The fair value of these securities is based on quoted market prices.
15. Trade and other receivables
2008 2007
(£) (£)
Trade debtors 105,136 51,433
Other debtors 62,829 22,016
Prepayments and accrued income 114,345 79,164
--------------------------------
282,310 152,613
--------------------------------
All debtors are receivable within one year of the Balance Sheet date.
The Directors consider that the carrying amounts of trade and other receivables approximates their fair
values.
The Company does not normally have any significant concentration of credit risk, with exposure spread
over a large number of counterparties and customers. Significant risk does occur at the conclusion of a
large corporate finance and broking transaction, normally measured in a few days, in anticipation of the
payment of the Company's fees and commissions. No such risk existed at the reporting date.
16. Cash and cash equivalents
2008 2007
(£) (£)
Cash held directly at UK Clearing Banks 316,395 206
Funds held on fixed term deposits 1,500,000 0
--------------------------------
1,816,395 206
--------------------------------
As the balances mature over a period greater than three months for the purpose of the cash flow statement
they do not meet the definition of cash or a cash equivalent and have therefore been shown as an
investment. In all other respects, the deposit meets the definition of a cash balance and has therefore
been disclosed as such on the face of the Balance Sheet.
17. Trade and other payables
2008 2007
(£) (£)
Trade payables 111,706 37,346
Other payables and accruals 71,255 172,520
Taxes and social security 36,160 38,080
--------------------------------
219,121 247,946
--------------------------------
18. Share capital
Authorised
Ordinary shares of 5p (number) 80,000,000 40,000,000
Value of Ordinary shares 4,000,000 2,000,000
Issued Issued Share
Ordinary share premium
Ordinary shares of 5p Date Premium shares capital account
(number)
Issued at 31 March 2006 19,148,930 957,447 326,307
Issue of shares 31-Aug-06 3p 2,737,500 136,875 82,125
Issue of shares 31-Mar-07 0 5,435,272 271,764 0
Issued at 31 March 2007 27,321,702 1,366,085 408,432
Issue of shares 26-Apr-07 5.05p 14,925,374 746,269 753,731
Issue of shares 30-Jun-07 1p 166,500 8,325 1,665
Issue of shares 22-Oct-07 3.25p 121,212 6,061 3,939
Issue of shares 07-Nov-07 3.25p 121,212 6,061 3,939
Issued at 31 March 2008 42,656,000 2,132,800 1,171,708
19. Operating leases
At the reporting dates, the Company had outstanding commitments for future minimum lease payments under
non-cancellable operating leases in relation to Leasehold Property, and Other Assets, which fall due as
follows:
2008 2007
(£) (£)
Leasehold Property
Within one year 106,620 44,250
In the second to fifth year (inclusive) 382,230 382,230
-------------------------------
488,850 221,250
-------------------------------
Other Assets
Within one year 2,149 2,538
In the second to fifth year (inclusive) 6,447 6,447
-------------------------------
8,596 6,255
-------------------------------
20. Share based payments
The company has two share option schemes for all employees. Options are exercisable at a price agreed
upon in the share option agreement on the date of grant. The vesting period lies between immediate and
ten years. Each option will lapse if it remains unexercised after a period of ten years from the date of
grant, or the option holder ceases to be an employee of the Company.
Granted/ (lapsed - date) Date of Latest Restrictions Exercise Number
grant exercise Price of shares
date
Unapproved 06-May-04 13-Jul-09 Note 4, 6 10p 403,923
Unapproved 06-May-04 13-Jul-09 Note 4, 6 10p 403,923
Unapproved 06-May-04 13-Jul-09 Note 4, 6 15p 403,923
Unapproved 06-May-04 13-Jul-09 Note 4, 6 15p 403,923
Unapproved 31-Mar-05 30-Jun-08 Note 4, 6 9p 1,111,111
Granted and not lapsed at 31 March 2006 2,726,803
Approved 02-Feb-07 02-Feb-17 Note 1, 3, 4 5p 2,608,500
Unapproved 02-Feb-07 02-Feb-17 Note 1, 3, 4 5p 8,108,952
Unapproved - lapsed 12 Feb 07 06-May-04 13-Jul-09 Note 4, 6 10p -403,923
Unapproved - lapsed 12 Feb 07 06-May-04 13-Jul-09 Note 4, 6 15p -403,923
Approved 05-Mar-07 05-Mar-17 Note 1, 4 10p 500,000
Approved 30-Mar-07 30-Mar-12 Note 5 10p 600,000
Unapproved 30-Mar-07 30-Mar-12 Note 5 10p 400,000
Approved 30-Mar-07 30-Mar-12 Note 5 20p 600,000
Unapproved 30-Mar-07 30-Mar-12 Note 5 20p 400,000
Approved 30-Mar-07 30-Mar-12 Note 5 30p 169,500
Unapproved 30-Mar-07 30-Mar-12 Note 5 30p 330,500
Granted and not lapsed at 31 March 2007 15,636,409
Approved 17-May-07 17-May-17 Note 1, 4 11.5p 500,000
Approved 15-Jun-07 15-Jun-17 Note 1, 4 11.5p 525,000
Approved 24-Sep-07 24-Sep-17 Note 1, 4 11p 250,000
Approved 24-Sep-07 24-Sep-17 Note1, 2, 4 11p 250,000
Approved 08-Oct-07 08-Oct-17 Note 1, 4 16.5p 250,000
Approved 05-Nov-07 05-Nov-17 Note 1, 4 16.5p 250,000
Approved 05-Nov-07 05-Nov-17 Note 1, 4 16.5p 100,000
Granted and not lapsed at 31 March 2008 17,761,409
Note 1 Options may be exercised at any time. However, if the option holder ceases to be an employee of
the Company within 3 years of the date of grant, any gain on options exercised will be forfeited.
Note 2 These options are only exercisable if the Company's share price reaches 30p/share, subject also
to the restrictions described in Note 1.
Note 3 Dependant on the company achieving four objectives; gaining admission to AIM and the company's
share price reaching 20p, 30p and 50p respectively.
Note 4 If the options remain unexercised after a period of ten years from the date of grant, the
options expire.
Note 5 Based on the share price reaching 10p, 20p and 30p respectively. The shares have no further
restrictions and will expire if unexercised five years after the date of grant.
Note 6 If the option holder ceases to be an employee, his right to exercise automatically lapses
(subject to a 12 month extension for compassionate reasons).
To the extent that the options at the exercise price(s) for each individual falls within the EMI limit of
£100,000, EMI schemes have been written to reflect the above arrangements. To the extent that the value
exceeds £100,000, the options will be subject to an 'Unapproved Scheme'. These limits were revised
upwards In April 2008 to £120,000 to reflect the provisions of the 2008 Budget.
Summary share options outstanding during the year
2008 2008 2007 2007
Weighted Weighted
average average
exercise exercise
No. share price No. share price
options in pence options in pence
Outstanding at beginning of the year 15,636,409 7.9 2,726,803 11.1
Granted during the year 2,125,000 12.8 13.717.452 7.6
Lapsed during the year 0 0.0 (807,846) 12.5
Exercised during the year 0 0.0 0 0.0
Expired during the year 0 0.0 0 0.0
Outstanding at the end of the year 17,761,409 8.5 15,636,409 7.9
Exerciseable at the end of the year 4,418,957 15.2 4,418,957 15.2
The Company recognised £257,500 (2006: £116,376) share based payments in relation to the above.
The weighted average estimated fair value for the share options was calculated using a binomial pricing
model. The expected volatility was calculated at 40% based on industry averages for the sector as
adjusted to account for the high growth anticipated for the Company during the next five years and the
risk free interest rate has been taken at 5%. Using these parameters, the calculation of the cost of
share based payments compares the exercise price with the market price on the day of grant.
21. Capital Risk Management
The Company is not reliant on debt finance, its operations currently being funded by equity finance
(comprising share capital, share premium, and retained earnings) which totalled £1.9m at the year end.
The Company regularly monitors its capital needs to ensure that sufficient funding is available for its
operational needs.
As an FSA regulated business [which does not hold client funds], the Company has to ensure that it
maintains a minimum net asset position of €50,000 (equivalent to £40,000), which it met with ease at 31
March 2008.
22. Related party transactions
Companies in whom the Company holds (or held) an investment which have paid fees to, or charged the
Company for services.
St Helen's Finance PLC ('SHF')
The Company owned no shares in SHF at 31 March 2008: however, at 31 March 2007 the Company owned
2,181,662 shares (15.1%). The Company's entire shareholding was realised for cash in June 2007.
SHF was a related party through the common directorship of Tony Drury, who was a director of the Company
until his resignation on 30 June 2006.
The Company had operating leases for its IT and telephone equipment with SHF and paid £1,950 during the
year ended 31 March 2008, and paid £10,890 during year ended 31 March 2007.
On 12 June 2007, the assets which were the subject of the operating leases were bought by the Company for
£7,600.
SHF rented certain office space from the Company during year ended 31 March 2008 and paid £2,280.
SHF also rented certain office space from the Company during year ended 31 March 2007 and paid £15,494.
On 29 May 2007 SHF moved to separate offices.
The Company charged SHF £12,000 commission in respect of fundraising during the year ended 31 March 2008,
and £2,530 during year ended 31 March 2007.
St Helen's Private Equity PLC ('SHPE')
The Company owned 47,311 shares (3.4%) in SHPE 31 March 2008 and 2007.
SHPE is a related party through common directorship of Jon Pither and Mark Warde-Norbury who are both
directors of the Company.
During the year ended 31 March 2008, SHPE paid management fees to the Company of £23,479, and £10,133
during year ended 31 March 2007. This arrangement ceased on 29 February 2008.
With effect from 1 March 2008, SHPE paid an accommodation charge of £1,667.
During the year ended 31 March 08 the Company received £25,000 commission on sale of certain available
for sale investments (2007: £nil).
During the year ended 31 March 2008 the Company acquired no options over the ordinary shares in SHPE as
payment of fees in respect of fundraising, and it acquired 20,619 options during year ended 31 March
2007. The options have an exercise price of 100pence and at 31 March 2008 the quoted price of SHPE's
shares was 70pence per share.
At 31 March 2008 the Company owed SHPE £912 (2007 £nil).
Equity Resources PLC ('ER') (formerly Franchise Investment Strategies PLC)
The Company owned 280,000 shares (0.6%) in ER at 31 March 2008 and 31 March 2007.
ER is a related party through common directorship of Jon Pither who is a director of the
Company.
The Company charged ER £10,000 for other services rendered during the years ended 31 March 2008 and 31
March 2007.
Creative Entertainment PLC ('CE')
The Company owned 120,000 shares (0.1%) in CE at 31 March 2008 and 2007.
CE is a related party through common directorship of Jon Pither who is a director of the Company.
The Company charged CE £5,087 for other services during theyear ended 31 March 2008 (2007:£5,000).
CE owed the Company £3,231 at 31 March 2008 (2007: £nil).
The Company disposed of 550,000 Share Options in CE during the year for a consideration of £2,063 (2007:
£nil).
Companies in whom the Company holds no investment which have paid fees to, or charged the Company for,
services.
Bonhote Foster Agencies Ltd ('BFA')
BFA is a related party through common directorship of Mark Warde-Norbury who is a director of the
Company.
The Company charged BFA £5,000 for commission in respect of fundraising during the year ended 31 March
2008, and £17,250 during the year ended 31 March 2007.
The Company charged BFA for transaction fees during the year ended 31 March 2008 of £nil (2007 -
£10,000).
At 31 March 2008 BFA owed the Company £nil (2007: £4,000).
Surrey Management Services Ltd ('Surrey')
Surrey is a related party through common directorship of Jon Pither who is a Director of the Company.
Surrey charged the Company £6,100 for the services of Mr Pither (2007: £6,000)
The Company owed Surrey £1,762 at 31 March 2008 (2007: £nil)
Flight and Partners Ltd ('Flight')
Flight is a related party through the common directorships of Howard Flight and Mark Warde-Norbury.
The Company charged Flight £3,689 for other services rendered during the year (2007: £nil).
At 31st March 2008 Flight owed the Company £3,750 (2007: £nil).
23. Reconciliation of previously stated financial statements to IFRS accounting policies
Up until 31 March 2007 the Company's Financial Statements were prepared under UK Generally Accepted
Accounting Principles ('UK GAAP'). Following admission onto AIM, the accounts to 31 March 2008 are being
prepared in accordance with IFRS and International Financial Reporting Interpretations Committee
interpretations adopted by the European Union, and with those parts of the Companies Act 1985 applicable
to companies reporting under IFRS for the first time. The date of transition to IFRS therefore was 1
April 2006.
Capital and reserves attributable to equity shareholders at 1 April 2007
Previously Cumulative Restated
stated adjustment
(£) (£) (£)
Share capital 957,447 0 957,447
Share premium account 326,307 0 326,307
Revaluation reserves 422,245 (144,302) 277,943
Other reserves (50,254) 55,163 4,909
Retained earnings (1,072,034) 89,139 (982,895)
--------------------------------------------------
583,711 0 583,711
--------------------------------------------------
The £144,302 adjustment reflects the change in accounting policy for 'Trading Investments' for the period
to 31 March 2006, as more fully described in Note 2c compared to the previous policy of recognising
unrealised gains to the Revaluation Reserve. The £55,163 adjustment reflects the change in accounting
policy for 'Share based payments' for new options granted in the year ended 31 March 2005, as more fully
described in Note 2k above.
Income statement year ended 31st March 2007
Previously Adjustment Restated
stated in period
(£) (£) (£)
Revenue 871,360 0 871,360
Cost of sales (61,212) 0 (61,212)
-------------------------------------------------------
Gross Profit 810,148 0 810,148
Administrative expenses (1,431,174) 15,469 (1,415,705)
-------------------------------------------------------
Operating profit (621,026) 15,469 (605,557)
Investment revenues 147 0 147
Other gains and losses (26,059) 64,991 38,932
Finance costs (10,657) 0 (10,657)
-------------------------------------------------------
Profit before tax (657,595) 80,460 (577,135)
Taxation 0 0 0
-------------------------------------------------------
Profit/ (loss) for the period (657,595) 80,460 (577,135)
-------------------------------------------------------
Earnings per share
Basic (3.13p) 0.39p (2.74p)
-------------------------------------------------------
Diluted (3.13)p 0.39p (2.74p)
-------------------------------------------------------
The £15,469 adjustment reflects the change in accounting policy for 'Share based payments', re options
now lapsed, as more fully described in Note 2k above.
The £64,991 adjustment reflects the change in accounting policy for 'Financial Instruments', more fully
described in Note 2c above. £66,310 relates to 'Available for Sale Investments, and a loss of £1,319 to
'Trading Investments'.
Previously Adjustment Prior period Restated
stated in period adjustment (£)
(£) (£)
Share capital 1,366,085 0 0 1,366,085
Share premium account 408,432 0 0 408,432
Revaluation reserves 293,230 1,319 (144,302) 150,247
Other reserves 66,122 (15,469) 55,163 105,816
Retained earnings (1,663,319) 14,150 89,139 (1,560,030)
----------------------------------------------------------------------- 470,550 0 0 470,550
-----------------------------------------------------------------------
Adjustments in the period comprise the adjustments referred to above for the 2007 Income Statement. Prior
period adjustments relate to the adjustments as at 1 April 2007 which are also summarised above.
The changes in accounting policies described above (following the conversion to IFRS) have had no cash-
flow impact.
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