Final Results
28 May 2009
Oakley Capital Investments Limited
('the Company')
Preliminary results for the twelve months ended 31st December 2008
Oakley Capital Investments Limited (AIM : OCL, 'OCIL'), the AIM-listed company established to provide investors with access to the investment strategy being pursued by Oakley Capital Private Equity L.P. (the 'Limited Partnership') today announces its preliminary results for the twelve months ended 31 December 2008.
Highlights
Peter Dubens, Director, commented:
'I am pleased to report that OCIL had a successful 2008 and that the challenging environment has provided attractive investment opportunities for the Limited Partnership. Following completion of the acquisition of Host Europe, the company has performed positively by focussing on operational improvements and market share gains. Monument Securities performed consistently throughout a period of unprecedented trading conditions. The company's sound performance was due to its range of products which ensured the business was well positioned to take advantage of a variety of market conditions. Our latest acquisition, Headland Media, the business-to-business media content provider, has performed well and provides us with a strong base to establish a leading provider of news, entertainment and training services to the marine, hotel and retail industries.
'The general economic and credit environments have continued to worsen in 2009. Despite this, deal flow has remained strong, with a number of investment opportunities emerging at attractive multiples. Certain sectors, such as Financial Services and Media have suffered more than others, and interesting opportunities have arisen at discounted multiples. Oakley Capital believes that as a buyer with relevant sector knowledge and the ability to invest through the economic cycle it can generate considerable returns given the current compressed valuations in its target sectors. The current financial and economic environment provides opportunities that fit well with our investment strategy and hands-on operational experience.'
For further information please contact:
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Oakley Capital Investments Limited |
+44 20 7766 6900 |
|
Peter Dubens (Director) |
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|
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Financial Dynamics |
+44 20 7831 3113 |
|
Juliet Clarke / Edward Bridges / Erwan Gouraud |
|
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|
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Liberum Capital Limited (Financial Adviser & Broker) |
+44 20 3100 2000 |
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Steven Tredget / Steve Pearce |
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Grant Thornton Capital Markets (Nominated Adviser) |
+44 20 7383 5100 |
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Philip Secrett |
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About Oakley Capital Investments Limited
OCIL was established to provide investors with access to the investment strategy being pursued by the Limited Partnership.
The Company was admitted to trading on the AIM market of the London Stock Exchange in August 2007, having raised £100 million from the issue of 100,000,000 ordinary shares at 100 pence each, together with the issue of 50,000,000 warrants. The company currently holds 1,250,000 warrants and 7,589,000 of its issued ordinary shares acquired for 60p per share, in treasury.
The primary objective of the Limited Partnership is to invest in a diverse portfolio of private mid-market UK and European businesses, aiming to provide investors with significant long-term capital appreciation.
The investment strategy of the Limited Partnership is to focus on companies with the scope for performance improvement operating within industries with growth or consolidation potential. In addition, the Limited Partnership seeks to invest in companies with the potential to achieve scale, thereby commanding a premium on exit.
Chairman's statement
The board is pleased to report a successful 2008 for Oakley Capital Investments Limited in a turbulent financial and economic period.
The Company was established in 2007 to provide investors with access to the investment strategy being pursued by the Limited Partnership. The primary objective of the Limited Partnership is to invest in a diverse portfolio of private midߛmarket UK and European businesses, aiming to provide investors with significant longߛterm capital appreciation.
In March 2008, the Limited Partnership drew down 31.5% of the committed capital, in order to benefit from attractive investment opportunities identified in the web hosting, financial services and media sectors. On 15 December 2008, OCIL committed a further €10 million to the Limited Partnership. The Company's share of the total amount drawn down to 31 December 2008 was €51.75 million, representing 34.5% of the Company's total capital commitment.
During 2008, the Limited Partnership made the following investments:
Web Hosting
In April 2008, the Limited Partnership acquired Host Europe Corporation Limited ('Host Europe') the UK's market leader in domain name registration, the UK's second largest shared hosting provider and the leading provider of standardised managed hosting in Germany. Host Europe also includes Vialtus Solutions, a provider of complex managed hosting services to the UK corporate and SME market. The web hosting market is characterised by strong growth, driven by the rapid proliferation of broadband usage and the increasing sophistication of multimedia content. The Limited Partnership simultaneously acquired Host Europe's data centre in Germany and subsequently Domain Parking International LLP ('Domain Parking') a small bolt-on acquisition. The total transaction value of these investments was £128 million. The consideration was satisfied by a mixture of cash, vendor loan note and bank loans and mezzanine financing from the Company.
In connection with the acquisition, the Company provided Host Europe with £19.4 million of debt financing, in the form of a secured mezzanine instrument carrying a fixed interest rate of 15.25%. This instrument matures on the earlier of 31 December 2015, or the date of a sale or IPO of Host Europe, the note can be repaid at any time prior to this subject to an early repayment penalty.
Media
In January 2008, the Limited Partnership acquired Headland Media Limited ('Headland Media'), a leading provider of news services to the marine, hotel and retail industries. Headland Media's communication division provides news, e-mail, internet and weather services via satellite to cruise and merchant ships, as well as hotels in remote locations. The entertainment division of Headland Media provides in-store radio and music services to the retail industry.
During 2008, Headland Media completed two follow on investments, the acquisitions of Good Morning News SpA ('GMN') and Walport International Limited ('Walport'). These acquisitions expanded
Headland Media's presence in the marine training and entertainment sectors. The total transaction value was total £6.3 million, which includes a mezzanine loan from the Company of £3.1 million carrying a fixed interest rate of 12%.
Financial Services
In July 2008, the Limited Partnership, together with management, acquired Monument Securities Limited ('Monument Securities') from Insinger de Beaufort Group ('Insinger'). Monument Securities has traded successfully since 1991 and has built a considerable presence in the derivatives, equities and fixed income markets as an experienced and professional brokerage providing services to institutional investors, hedge funds and corporate investors. The total transaction value was £5.5m, with the Limited Partnership investing £2.8 million representing a 51% investment.
Investment outlook
The Board believes that the businesses acquired by the Limited Partnership in the web hosting, financial services and media sectors provide a platform that is well positioned to deliver growth and value creation through active management. Further details of the investment portfolio companies are provided in the Manager's Report.
Since the launch of the Limited Partnership in 2007, Oakley Capital Limited, the investment adviser to the Limited Partnership ('Oakley' or the 'Investment Adviser'), has built a strong pipeline of attractive acquisition opportunities, across a range of industry sectors. As tough economic conditions continue, the Company expects an increasing number of investment opportunities to emerge at attractive valuations. Oakley has established relationships with a number of banks which remain supportive of the Limited Partnership's investment strategies.
Although cautious from a macroeconomic perspective, we expect the next 24 to 36 months to yield a significant number of attractive investment opportunities for the Company, through its exposure to the Limited Partnership's investment strategies.
Post balance sheet events
In response to the investment opportunities identified by Oakley, the Company completed a secondary placing on 9 March 2009, raising proceeds of £18 million from new and existing investors. An additional commitment of €17 million was made into the Limited Partnership on 20 March 2009.
James Keyes
Chairman
The Limited Partnership
The Limited Partnership's primary objective is to invest in a diversified portfolio of private midߛmarket UK and European businesses, aiming to provide investors with significant longߛterm capital appreciation.
The Limited Partnership's investment strategy is to focus on buy out opportunities in industries with the potential for growth, consolidation and performance improvement. In addition, the Limited Partnership seeks to invest in companies with scale in their industry subsectors, thereby creating a sustainable earnings stream which should command an exit premium.
The Limited Partnership will focus on equity investments of between £20 million and £100 million per transaction, which secure a controlling position in the portfolio investment. The Limited Partnership aims to deliver over 25 percent gross internal rate of return (IRR) per annum on investments and a blended gross multiple of three times. The life of the Limited Partnership is expected to be approximately 10 years, including a five year investment period from the date of the Final Closing.
Oakley Capital (Bermuda) Limited (the 'Manager'), a Bermudian company, has been appointed as manager to the Company and the Limited Partnership. The Manager has appointed Oakley as Investment Adviser to the Manager. The Investment Adviser is primarily responsible for advising the Manager on the investment of the assets of the Limited Partnership and the Company.
oakley capital investments limited
NOTES TO THE FINANCIAL STATEMENTS (continued)
Year ended 31 December 2008 and Period from 28 June 2007 (commencement of operations) to 31 December 2007
(Expressed in British Pounds)
The Manager's report
Market background
The impact of the economic downturn has been severe and further economic contraction is anticipated. The availability of credit for leveraged acquisitions has been materially impaired and the cost of financing has increased. At the same time, valuation expectations are being suppressed by economic uncertainty. This environment should enable the Limited Partnership to acquire targets at attractive valuations.
When considering acquisitions, the manager through Oakley works closely with its lenders to determine an acquisition structure appropriate for the target and the sector in which it operates. Oakley has a strong relationship with a number of major banks, all of whom remain supportive of the Limited Partnership's investment strategy.
Risk management
Oakley has implemented a rigorous investment analysis and selection methodology which includes the following stages:
-
Identification - Upon identification, an investment opportunity is recorded on the deal register which records key details of the opportunity, this acts as a basis for discussion at weekly meetings.
-
Selection - Where an investment opportunity progresses, an overview document is generated to assess the proposed investment and to determine if it satisfies the Limited Partnership's investment profile.
-
Analysis - In advance of committing to due diligence, further analysis is undertaken and a 'Concept Paper' is prepared to analyse the investment rationale, the industry, competitive positioning, pricing, structure, funding and transaction risk.
-
Approval - Following due diligence, an approval paper is submitted to the investment committee summarising key due diligence findings and identifying any material issues.
-
Confirmation - Immediately prior to funding, an 'Investment Certificate' is compiled to identify any changes which have occurred between final approval and funding.
Investment and portfolio monitoring
Oakley considers portfolio monitoring and investment plan implementation to be critical to value creation. As such, Oakley commits significant resources to ensuring portfolio companies meet or exceed their investment plan and that any unforeseen issues are resolved.
-
100 day plan - Where necessary Oakley executives will be onsite for an interim period to assist management teams. In the case of Host Europe, two senior Oakley executives were onsite for the first 100 days of ownership to ensure that restructuring measures identified during due diligence were implemented.
-
Directorships - In addition to attending monthly senior management meetings, Oakley executives are appointed to portfolio company boards to ensure that strict corporate governance and reporting procedures are adhered to. In addition, Oakley appoints non executive directors to bring in industry expertise and to provide support to the management team.
-
Strategic guidance - Oakley will hold strategic planning sessions with management teams to review progress and to ensure key milestones are met.
-
Financial discipline - Oakley maintains strict control over the capital budgeting process to ensure capital expenditure is justified. Oakley believes that detailed financial planning and analysis play a significant role in the process of value creation.
Investments
The Limited Partnership primarily invests in unquoted securities of private companies ('Portfolio Investments'). Investments portfolio investments are valued by the Manager in compliance with the International Private Equity and Venture Capital Guidelines with particular consideration of the following factors:
-
Fair value is the amount at which an asset could be exchanged between knowledgeable, willing parties in an arm's length transaction.
-
In estimating fair value, the Manager uses a methodology which is appropriate in light of the nature, facts and circumstances of the investment and its materiality in the context of the total investment portfolio and will use reasonable assumptions and estimations.
-
An appropriate methodology incorporates available information about all factors that are likely to materially effect the fair value of the investment. The valuation methodologies are applied consistently from period to period, except where a change would result in a better estimate of fair value. Any changes in valuation methodologies will be clearly disclosed in the financial statements.
The most widely used methodologies are listed below. In assessing which methodology is appropriate, the Manager is predisposed towards those methodologies that draw upon market-based measures of risk and return.
-
Cost of recent investment
-
Earnings multiples
-
Discounted cashflow
-
Net assets
-
Available market prices
Gains or losses arising from changes in fair value are presented through the income statement in the period in which they arise. As a result of the above basis of valuation, there is significant judgment associated with the valuation of Portfolio Investments. The Limited Partnership's Portfolio Investments are currently held at cost as they were all acquired within 12 months of 31 December 2008. The Manager completed a fair value analysis at the year end and appointed a third party to review the fair value analysis. The results of this process confirmed that there had been no deterioration in value.
Mezzanine loans
Mezzanine loans are initially valued at the price the loan was granted. Following initial recognition, the loans are valued on a fair value basis taking into account market conditions and any appreciation or deterioration in value pending a valuation review.
Rolled up loan interest
A portion of the financial instruments held by the Company accumulates interest which is only realised in cash on redemption of the instrument including payment in kind notes.
Business review
In valuing these instruments, the Manager assesses the expected amount to be recovered from these instruments. If deterioration indicators exist, a provision against the cost of the loan will be made to reflect this. The consideration or recoverable amount will also include the existence of any reasonably anticipated enhancements such as interest rate step increases.
During 2008, Oakley, as Investment Adviser to the Manager, considered over 45 investment opportunities leading to the Limited Partnership completing six transactions and investing capital in three enterprises. These three opportunities were directly sourced by Oakley.
1. Host Europe Group
Business overview
Host Europe is made up of three divisions operating in three distinct markets within the web hosting industry. In the UK, Host Europe operates two divisions: (i) Webfusion, the market leader for domain name registration and the second largest shared hosting provider; and (ii) Vialtus Solutions, a provider of complex managed hosting services to the corporate and SME market. Host Europe also operates a division in Germany, Host Europe GmbH, which is the German market leader in the standardised managed hosting market.
The web hosting market is characterised by strong growth which is driven by the rapid proliferation of broadband usage and the increasing sophistication of multimedia content. As internet users become more sophisticated, website owners require increasing amounts of capacity in order to host, store and process complex and secure content. For the majority of companies, hosting, security and traffic balancing are not core business activities and these functions are increasingly being outsourced to specialist providers such as Host Europe.
Investment rationale
-
Market leader in shared hosting (second largest provider in the UK and third largest in Germany)
-
Largest provider of UK domain names with over two million registered domains
-
Significant opportunities for restructuring the cost base
-
Strategically well placed for exit - the European webhosting market is fragmented and a limited number of companies have scale to be attractive to overseas purchasers
2. Monument Securities
Business overview
Monument Securities is a global equity, derivatives and fixed income broker with an 18 year history. The company provides services to institutions, fund managers, market professionals, corporates and hedge funds. Monument Securities is a member of the NYSE, Euronext LIFFE, Eurex, the London Stock Exchange, the International Capital Markets Association, and is authorised and regulated by the Financial Services Authority.
One of the primary strengths of the business is the management team who have worked together for 18 years. Prior to founding Monument Securities, members of the management team held senior positions at Citicorp, Credit Lyonnais, and MeesPierson. They have also worked for the London Clearing House and the Chicago Board of Trade as well as being involved in the establishment of the LIFFE market. Management are highly motivated to grow the business both organically and through acquisition.
Investment rationale
-
An established and profitable platform well positioned for growth and sector consolidation
-
Attractive entry price as a result of the vendor's decision to exit the UK market for strategic reasons at a depressed time in the financial services business cycle
-
Proven business model which performs well in periods of economic uncertainty and high volatility (which typically coincide with economic downturns) as clients look to contain risk through the increased use of derivatives
3. Headland Media, Walport and GMN
Business overview
Headland Media is a business-to-business media content provider based in Liverpool with offices in the US and Europe. The company is the leading provider of news digest services to the hotel and shipping sectors as well as a leading provider of entertainment and training services to offshore industries, businesses in remote locations or with specialist communication needs. Headland Media distributes media content daily to an estimated 6,500 destinations using proprietary distribution channels (e.g. satellite broadcast) and has an audience of approximately 20 million listeners and over 250,000 readers.
Headland's media products include:
-
News digest - Headland Media provides daily electronic newspapers, 24 hours a day, seven days a week, direct to cruise liners, merchant ships, yachts and hotels. More than 55 editions are produced daily in 15 different languages and are delivered ready to print to remote locations. It has a portfolio of two, four and eight page own brand newspapers
-
Internet on Board - an Internet café system specifically designed for the cruise line market
-
Weather - Headland Media offers a daily maritime weather information package from Applied Weather Technology. This system allows users to obtain advanced weather forecasts as a data file, giving a clear and accurate forecast every time for all ocean zones
-
Health and Safety Videos - Headland Media is a leading provider of training videos for the maritime industry providing crews with essential information for compliance and training purposes
-
Entertainment - Headland Media has the rights to distribute a comprehensive movie catalogue to the maritime industry. By purchasing licensed products fleet owners ensure copyright laws are not breached when movies are shown on board
Revenue is derived from recurring (subscription) revenue and some non-recurring (one off installation charges). Headland Media has a loyal customer base and has provided services to most of its customers for over a decade and for many in excess of 20 years. Annual customer churn is less than 10% and the company currently provides services to over 1,000 hotels and 3,600 cruise and merchant ships.
Headland Media's Entertainment division focuses on the design, production and distribution of audio and visual services for retailers. These services are used to build brands and generate in-store sales in over 1,900 retail outlets. Headland Media's Entertainment services include:
-
Live radio services - Commercial radio stations played in store which include live presenters, audience interaction by text and email, dedications, news, sport, features, jingles, promotions, advertising, out-of-hours staff training and announcements and profiled music
-
'As-live' radio services - A very popular radio format with live delivery using pre-recorded presenter links
-
Hard disk music services - Primarily pre-recorded music, advertising and jingles. These systems are either updated each night or each month
Investment rationale
-
Headland Media is the market leading provider of news digest services to the hotels and shipping sectors with opportunities to expand into other market segments
-
Headland Media will serve as the platform for the consolidation of niche providers of media content
-
Barriers to entry include proprietary distribution channels, content licensing, editorial and production expertise act as barriers to entry to potential competitors
STATEMENTS OF ASSETS AND LIABILITIES
31 December 2008 and 2007
(Expressed in British Pounds)
|
|
|
31 December 2008 |
|
31 December 2007 |
|
|
Notes |
£ |
|
£ |
|
Assets |
|
|
|
|
|
Investments (Cost 2008: £65,387,060; 2007: £2,925,726) |
2c, 5, 7 |
64,447,295 |
|
2,378,310 |
|
Cash and cash equivalents |
3 |
32,893,846 |
|
97,154,262 |
|
Accrued interest receivable |
|
2,630,494 |
|
- |
|
Other receivables |
|
20,280 |
|
303,475 |
|
Total assets |
|
99,991,915 |
|
99,836,047 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Accounts payable and accrued expenses |
|
52,598 |
|
395,548 |
|
Bank overdraft |
|
- |
|
12,632 |
|
Total liabilities |
|
52,598 |
|
408,180 |
|
Net assets attributable to shares |
|
99,939,317 |
|
99,427,867 |
|
Number of shares outstanding |
9 |
92,411,000 |
|
100,000,000 |
|
Net asset value per share |
13 |
1.08 |
|
0.99 |
Signed on behalf of the Board on 26 May 2009
James Keyes Ian Pilgrim
Director Director
SCHEDULES OF INVESTMENTS
31 December 2008 and 2007
(Expressed in British Pounds)
|
2008 |
Fair value as a % of net assets |
Percentage |
Principal amount/ Quantity £ |
Cost £ |
|
Fair value £ |
|
Investments in Limited Partnerships |
|
|
|
|
|
|
|
Bermuda |
|
|
|
|
|
|
|
Oakley Capital Private Equity LP |
39% |
65.2% |
|
40,265,724 |
|
39,325,959 |
|
Unquoted debt securities |
|
|
|
|
|
|
|
Investment in mezzanine loans |
|
|
|
|
|
|
|
United Kingdom |
|
|
|
|
|
|
|
Host Europe. Interest at 15.25% p.a. Maturity date Dec 2015 |
19% |
|
19,400,000 |
19,400,000 |
|
19,400,000 |
|
Headland Media Limited. Interest rate at 12% p.a. Maturity date Dec 2008 |
3% |
|
3,100,000 |
3,100,000 |
|
3,100,000 |
|
Bermuda |
|
|
|
|
|
|
|
Cologne Data Centre (Bermuda) Ltd. Interest rate at 15.25% p.a. Maturity April 2015 |
3% |
|
2,621,336 |
2,621,336 |
|
2,621,336 |
|
Total mezzanine loans |
25% |
|
|
25,121,336 |
|
25,121,336 |
|
Total Investments 2008 |
64% |
|
|
65,387,060 |
|
64,447,295 |
|
2007 |
Fair value as a % of net assets |
Percentage interest |
Principal amount/ Quantity £ |
Cost £ |
|
Fair value £ |
|
Investments in Limited Partnerships |
|
|
|
|
|
|
|
Bermuda |
|
|
|
|
|
|
|
Oakley Capital Private Equity LP |
2.4% |
66.3% |
|
2,925,726 |
|
2,378,310 |
|
Total Investments 2007 |
2.4% |
66.3% |
|
2,925,726 |
|
2,378,310 |
STATEMENTS OF OPERATIONS
Year ended 31 December 2008 and Period from 28 June 2007 (date of incorporation)
to 31 December 2007
(Expressed in British Pounds)
|
|
|
2008 |
|
2007 |
|
|
Notes |
£ |
|
£ |
|
Investment income |
|
|
|
|
|
Interest |
|
5,429,842 |
|
2,117,617 |
|
Total income |
|
5,429,842 |
|
2,117,617 |
|
|
|
|
|
|
|
Expenses |
|
|
|
|
|
Organisation expenses |
|
- |
|
4,593,684 |
|
Management fee |
4(a) |
- |
|
156,318 |
|
Other |
|
216,189 |
|
83,041 |
|
Professional fees |
6 |
198,852 |
|
65,395 |
|
Interest |
|
19,875 |
|
141 |
|
Total expenses |
|
434,916 |
|
4,898,579 |
|
Net investment income/(loss) |
|
4,994,926 |
|
(2,780,962) |
|
Realised and unrealised gains and losses on foreign exchange and investments |
|
|
|
|
|
Net realised gain/(loss) on foreign exchange |
|
491,648 |
|
(681) |
|
Net change in unrealised (loss)/gain on foreign exchange |
|
(6,459) |
|
2,756,926 |
|
Net change in unrealised losses on investments |
|
(392,349) |
|
(547,416) |
|
Net realised and unrealised gains on foreign exchange and investments |
|
92,840 |
|
2,208,829 |
|
Net increase/(decrease) in net assets resulting from operations |
|
5,087,766 |
|
(572,133) |
|
Net gain/(loss) per share |
13 |
0.06 |
|
(0.01) |
STATEMENTS OF CHANGES IN NET ASSETS
Year ended 31 December 2008 and Period from 28 June 2007 (date of incorporation) to 31 December 2007
(Expressed in British Pounds)
|
|
|
2008 |
|
2007 |
|
|
|
£ |
|
£ |
|
Net increase/(decrease) in net assets resulting from operations |
|
|
|
|
|
Net investment gain/(loss) |
|
4,994,926 |
|
(2,780,962) |
|
Net realised gain/(loss) on foreign exchange |
|
491,648 |
|
(681) |
|
Net change in unrealised (loss)/gain on foreign exchange |
|
(6,459) |
|
2,756,926 |
|
Net change in unrealised losses on investments |
|
(392,349) |
|
(547,416) |
|
Net increase/(decrease) in net assets resulting from operations |
|
5,087,766 |
|
(572,133) |
|
Capital share transactions |
|
|
|
|
|
Proceeds on issue of shares |
|
- |
|
100,000,000 |
|
Repurchase of shares |
|
(4,576,316) |
|
- |
|
Net (decrease) increase in net assets from capital share transaction |
|
(4,576,316) |
|
100,000,000 |
|
Net increase in net assets |
|
511,450 |
|
99,427,867 |
|
Net assets at beginning of year/period |
|
99,427,867 |
|
- |
|
Net assets at end of year/period |
|
99,939,317 |
|
99,427,867 |
STATEMENTS OF CASH FLOWS
Year ended 31 December 2008 and Period from 28 June 2007 (date of incorporation) to 31 December 2007
(Expressed in British Pounds)
|
|
|
2008 |
|
2007 |
|
|
|
£ |
|
£ |
|
Cash flows from operating activities |
|
|
|
|
|
Net increase/(decrease) in net assets resulting from operations |
|
5,087,766 |
|
(572,133) |
|
Adjustments to reconcile net increase/(decrease) in net assets resulting from operations to net cash used in operating activities: |
|
|
|
|
|
Net realised and unrealised gains on foreign exchange |
|
(92,840) |
|
(2,208,829) |
|
Payments for purchases of investments |
|
(62,461,334) |
|
(2,925,726) |
|
Change in accrued interest receivable |
|
(2,630,494) |
|
- |
|
Change in other receivables |
|
283,195 |
|
(303,475) |
|
Change in accounts payable and accrued expenses |
|
(342,950) |
|
395,548 |
|
Net cash used in operating activities |
|
(60,156,657) |
|
(5,614,615) |
|
Cash flows from capital transactions (Repayment of) cash provided by short term borrowing |
|
(12,632) |
|
12,632 |
|
Proceeds on issuance of shares |
|
- |
|
100,000,000 |
|
Paid on repurchase of shares |
|
(4,576,316) |
|
- |
|
Net cash provided by capital transactions |
|
(4,588,948) |
|
100,012,632 |
|
Net effect of foreign exchange gain |
|
485,189 |
|
2,756,245 |
|
Net (decrease) increase in cash and cash equivalents |
|
(64,260,416) |
|
97,154,262 |
|
Cash and cash equivalents at the beginning of year/period |
|
97,154,262 |
|
- |
|
Cash and cash equivalents at the end of year/period |
|
32,893,846 |
|
97,154,262 |
|
|
|
|
|
|
|
Interest paid during the year/period |
|
19,875 |
|
141 |
The notes on pages 26 to 37 form an integral part of these financial statements
Year ended 31 December 2008 and Period from 28 June 2007 (date of incorporation)
to 31 December 2007
(Expressed in British Pounds)
|
|
|
2008
|
|
2007
|
|
Cash
|
|
£ 168,291
|
|
£ 3,743
|
|
Short-term deposits
|
|
32,725,555
|
|
97,150,519
|
|
|
|
£ 32,893,846
|
|
£ 97,154,262
|
|
|
Quoted prices
(Level 1)
|
|
Other significant observable inputs (Level 2)
|
|
Significant unobservable inputs (Level 3)
|
|
Investments in Securities
|
£ -
|
|
£ -
|
|
£ 64,447,295
|
|
|
Investment in Securities
|
|
|
|
Balance at 1 January 2008
|
£ 2,378,310
|
|
|
|
Change in unrealized depreciation
|
(392,349)
|
|
|
|
Net purchases
|
62,461,334
|
|
|
|
Balance at 31 December 2008
|
£ 64,447,295
|
|
|
|
|
Common stock
|
|
Warrants
|
|
|
|
|
|
|
Balance as at 1 January 2008
|
100,000,000
|
|
50,000,000
|
|
Issued
|
-
|
|
-
|
|
Repurchased
|
7,589,000
|
|
1,250,000
|
|
Balance as at 31 December 2008
|
92,411,000
|
|
48,750,000
|
|
|
|
|
|
|
|
2008
|
|
2007
|
|
|
£
|
|
£
|
|
Per share operating performance
|
|
|
|
|
Net asset value per share, at start of year/date of subscription
|
0.99
|
|
1.00
|
|
Gain/(loss) from investment operations
|
|
|
|
|
Net investment income
|
0.06
|
|
(0.03)
|
|
Net realised and unrealised gain on investments and foreign exchange
|
-
|
|
0.02
|
|
Total from investment operations
|
0.06
|
|
(0.01)
|
|
Repurchase of shares
|
0.03
|
|
-
|
|
Net asset value per share, end of year/period
|
1.08
|
|
0.99
|
|
|
|
|
|
|
Total return for year/period1
|
Percentage
|
|
Percentage
|
|
Total return
|
5.01
|
|
(0.57)
|
|
|
|
|
|
|
Ratio of expenses to average net assets1,2
|
|
|
|
|
Operating expenses
|
0.44
|
|
4.91
|
|
Ratio of net investment income to average net assets1,2
|
|
|
|
|
Net investment income (loss)
|
5.01
|
|
(2.79)
|
|
1 Not annualised for periods less than or greater than a year
2 Expenses include interest expenses of: 2008 £19,875; 2007 £141
|
|
|
|
This information is provided by RNS
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