Audited results for the year ended 31 March 2024

VSA Capital Group PLC

08 July 2024

 

DATE: 8 July 2024

VSA Capital Group plc

("VSA", the "Company" or together with its subsidiaries the "Group")

Audited results for the year ended 31 March 2024

VSA Capital Group plc (Aquis: VSA), the international investment banking and broking firm announces its audited results for the year ended 31 March 2024.

Highlights

·      Turnover of £1.89m (previous year £4.36m), underlying loss of £2.40m (previous year profit £0.61m)

·      Cash at year end £229k (previous year £1.27m)

·      Retained Corporate Clients of VSA Capital Limited 27 (2023: 24)

A year of difficult market conditions.      

No one in our industry found 2023 a good year and VSA was no exception; and combined with certain other factors which were specific to VSA our results are very disappointing. The good news is market conditions in 2024 have improved significantly, and VSA has started its financial year very successfully. 

Andrew Monk, CEO of VSA Capital Group plc said:

"These results are extremely disappointing, but they are also now in the past and we are on a much stronger footing. We have shown our capabilities with flying colours in the £56mn capital raise for Invinity Energy Systems in May. Backing smaller Companies and helping them grow is what VSA is all about. We also believe that we are at the start of a huge bull market in commodities for the next 3-5 years and this will give us a fantastic macro environment for us to deliver significantly better results in 2024, although the World is still a very uncertain place with changing politics globally, wars that never seem to end and a brewing East / West cold war."

For more information, please contact:

VSA Capital Group plc	[phone]
Andrew Monk, CEO Andrew Raca, Head of Corporate Finance Marcia Manarin, Finance Director
Alfred Henry - AQSE Corporate Adviser	[phone]
Nick Michaels Maya K. Wassink	www.alfredhenry.com

Chairman's Statement

Following what has been a very challenging year, I present the audited Annual Report and Accounts for VSA Capital Group plc, which is the holding company of the regulated investment banking and broking firm, VSA Capital Limited. 

In his report, our CEO Andrew Monk details the environment in which our company and our competitors have been working during this last year.  The consequence has been that a number of well-known names have disappeared.  It is to the credit of Andrew Monk and his team that VSA is not one of them.

The loss for the year is obviously very disappointing.  But it reflects the state of the market in which we operate.  None of this should come as a surprise to our shareholders.  Our results include a very significant non-cash item, being the reversal of the Silverwood Brands Plc transaction which resulted in the value attributed to the Silverwood shares being reversed.  Furthermore, as for 2022/23, the results include another tranche of amortisation of £330,770 resulting from a simple restructuring that we undertook on 31 March 2021, and this is expected to repeat for another two years. Once the intangible assets are fully amortised, which we currently anticipate will be in March 2026, our accounts will no longer be affected by the amortisation charge on this asset.

On the plus side, our CEO is able to highlight the very significant £56m fundraising transaction for Invinity Energy Systems that VSA advised on following the year end.  I hope that this significant achievement will mark a positive step forward for VSA in the months and years ahead.

I pay tribute to the very significant efforts during the year of my fellow directors and all our staff.  And I would also like to thank our corporate clients who trust us as their advisers.   During these difficult times we remain committed to them as we work together to help them build shareholder value.

Mark Steeves

Chairman

CEO'S Report

Principal Activity

The principal activities of the Group are the provision of corporate finance advisory, stockbroking, fundraising and research services to both private and public companies.

Review of the Business

On 31 March 2021, in preparation for the IPO of the Company on the Aquis Growth Market, VSA Capital Group Plc acquired VSA Capital Limited in a reverse takeover and its results are therefore consolidated into these Group accounts for the third time in the financial statements for the year ended 31 March 2024.

Review of the Year

There is no other way to say it, this year was horrendous. Our loss of £2.7m for the year was very disappointing and the working environment also became very unpleasant. Market conditions are the worst I have known in my 40 years working in the Financial Industry and, sadly, when times are tough some people show less honesty and integrity, which simply makes it harder for everyone, as it creates a lasting negativity even though they do not appreciate it at the time.

Turnover for the year was very distorted due to the write down of investments being negative, and so underlying turnover was £1.9mn and the underlying loss was £2.4m (also adding back amortisation) and cash fell to a year end level of £229,000. This was also lower than we had hoped due to an increase in our Debtor book to £589,157. Debtors have become an issue across the City, as many small companies struggle for cash as they cannot raise new equity; but in general payment is nearly always eventually recovered. 

The decision by Silverwood Brands plc to reverse their successful transaction with the Lush stake took us completely by surprise and became a very difficult situation for VSA with legal action taken against us, which has subsequently been settled and closed. It has also had a massive negative impact on all shareholders who have seen the value collapse. Clearly this is highly disappointing for everyone, but also something we have moved on from and simply learnt a few lessons about the sort of business we want to be involved in for the future. This had a huge impact on our NAV which has fallen by 300% to £1.68m. 

Our retained clients stood at 27, but our retained income will drop as we now have a new product which includes retained clients called VSA Lite and we charge less to support these companies (without research). The Lite service creates a useful bond with corporate clients which we hope will be followed by conversion to full retained clients in the future.

Sector Focus

In the last year we continued with our core sector expertise of Natural Resources, Transitional Energy, Technology and Consumer/Leisure. However, going forward it is our intention to focus more on Natural Resources and Transitional Energy as it is in these sectors that we have the best reputation and also where there is less competition. We will continue to look after our clients in other sectors and do transactions that come our way, and where we feel we can execute, but we will give less emphasis.

Mining is a sector of great interest going forward. Last year I wrote "Mining as a sector has seen a lack of investment now for about 15 to 20 years." Production across the industry is slowing as demand picks up and so this will result in many commodities facing a 'squeeze' at some stage in the future. Pretty much all experts agree on this, but stock markets are not responding - although inevitably, they must. Well, it did not happen last year but every year that goes by means the squeeze will be bigger, and I believe we are now at the start of a commodities bull market that will be very strong for 3-5 years, and we must take full advantage of that.

Transitional Energy is, I believe, a sector of huge potential; but again, last year was tough, although after our year-end, we did raise £56mn for Invinity Energy Systems, a Vanadium Flow Battery company we have looked after for many years. This was an exceptional deal and one of the largest fundraises in London for 2024 when we did it. We also introduced the UK Infrastructure Bank as a shareholder in their first ever quoted investment. This was a transaction to be very proud of and shows the capability of VSA.

Equity Capital Markets

A year ago, I worried that the equity market was in terminal decline, and I was right to be worried, as it has simply got worse over the last 12 months. It is incredible how London has been allowed to lose its international status as a premier stock market. The UK Government has shown absolutely no understanding of its importance, and the relationship between strong stock markets and strong economies, which generate more tax receipts and thus better-quality services such as the NHS can be provided. Luckily the current government, which must surely rank as one of the worst ever Conservative governments, is inevitably going to be decimated in the upcoming general election. Labour is not known for supporting the City, but it could not do less and may even realise that it needs to in order to revive the economy.

We will take nothing for granted and keep a low-cost base as well as look to win deals that can be achieved even in a poor capital markets environment.

International Reach

We continue to have a very international reach and mindset. In the last year, we have not really broadened this, as we have been very focussed on sorting issues "back at home". It is something we believe can add value and, later in the year, I hope we can start to give more of a push to this part of our business. In the meantime, it is a capability we have and one that cost us very little.

Outlook

I am pleased to say that after a disastrous year last year, we have already started this year significantly better.  The £56mn fundraise for Invinity Energy Systems has given us a very healthy start, and also has been a positive beacon for other companies to engage with us as very few firms in the City are capable of such a large fundraise. We had expected to land this deal in the last financial year, and in fact, we are also working on another large deal that we also expected to land last year, which we now expect will land towards the end of the current financial year. Everything is taking much longer than usual.

This does allow us to be cautiously optimistic, but it still will not be easy in these horrific market conditions. We have also been exploring all sorts of ideas for VSA, and discussing with numerous groups, ways that could put the Company and its shareholders in a stronger position.

It is also a fact that, although I feel exceptionally young still, and believe I remain fit due to cycling to work daily, and playing a lot of sport, I am 63. It is only sensible to plan for some sort of succession that allows me to set a possible 3-5-year target for retirement. Not that I think retirement is in my vocabulary! There are numerous ways this could happen, and if I am right about a very strong bull market starting in commodities, then we could be a very valuable asset, and I believe, as the year unfolds, so will the strategic direction of VSA.

Andrew Monk

CEO

Key performance indicators

Reported (accounting) Loss              

Year ended 31 March 2024 Underlying Loss

£2.4m (2023 profit: £0.61m)

Cash at 31 March 2024

£229k (2023: £1.27m)

Retained Corporate Clients at 31 March 2024

27 clients of VSA Capital Limited (2023: 24)

GROUP STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 MARCH 2024

	Notes	2024	2023 as restated
		£	£
Turnover	2	1,887,528	4,358,875
Cost of sales		(180,146)	(166,179)
Gross profit		1,707,382	4,192,696
Other operating income		54,000	39,000
Administrative expenses		(2,828,018)	(3,090,564)
Operating (Loss) / Profit		(1,066,636)	1,141,132
Finance (expenses)/income	4	5,560	(721)
(Losses) on investments	4	(1,669,892)	(859,650)
(Loss) / Profit on ordinary activities before tax		(2,730,968)	280,761
Tax on Profit on ordinary activities	5	36,511	(29,558)
(Loss) / Profit for the year		(2,694,457)	251,203
Other Comprehensive Income		-	-
Total Comprehensive Income		(2,694,457)	251,203

EARNINGS PER SHARE - PROFIT AFTER TAX	Notes	pence	pence
Basic	7	(7.2)	0.7
Diluted	7	(7.2)	0.5

The statement of comprehensive income has been prepared on the basis that all operations in the year ended 31 March 2024 are continuing operations.

There were no discontinued operations during the current financial year.

GROUP AND COMPANY BALANCE SHEET

FOR THE YEAR ENDED 31 MARCH 2024

		2024	2023	2024	2023
	Notes	Group	Group as restated	Company	Company as restated
ASSETS		£	£	£	£
Non-current assets
Property, plant & equipment - owned		51,527	77,515	-	-
Property, plant & equipment - right of use		292,546	468,900	-	-
Intangible assets		661,540	992,311	-	-
Deferred tax asset		54,209	108,349	-	-
Investment in subsidiaries		-	-	3,873,996	3,873,996
Total non-current assets		1,059,822	1,647,075	3,873,996	3,873,996
Current assets
Investments		374,970	2,141,416	2,684	6,322
Trade and other receivables		797,558	381,464	233,057	49,041
Cash and cash equivalents	6	229,264	1,273,122	24,560	267,292
Total current assets		1,401,792	3,796,002	260,301	322,655
TOTAL ASSETS		2,461,614	5,443,077	4,134,297	4,196,651
EQUITY AND LIABILITIES
Share capital		3,523,547	3,523,547	3,523,547	3,523,547
Share premium		418,057	418,057	418,057	418,057
Share-based payments reserve		4,731	13,892	4,731	13,892
Accumulated profits/(losses)		(2,286,696)	407,761	175,216	214,159
Total equity		1,659,639	4,363,257	4,121,551	4,169,655
LIABILITIES
Current liabilities
Trade and other payables		512,002	529,199	12,746	26,996
Finance liabilities - borrowings		216,836	216,566	-	-
Total current liabilities		728,838	745,765	12,746	26,996
Non-current liabilities
Finance liabilities - borrowings		-	216,830	-	-
Deferred tax liabilities		73,137	117,225	-	-
Total non-current liabilities		73,137	334,055	-	-
TOTAL EQUITY AND LIABILITIES		2,461,614	5,443,077	4,134,297	4,196,651

The financial statements were approved by the Board of Directors on 5^th July 2024 and were signed on its behalf by:

Andrew Monk                                      Andrew Raca

Director                                                 Director

GROUP STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 MARCH 2024

	Share Capital	Share Premium	Share based payments reserve	Retained Earnings	Total
	£	£	£	£	£
As 1 April 2022	3,523,547	418,057	51,585	169,094	4,162,283
Effect of change in accounting standard	-	-	-	(12,536)	(12,536)
As restated at 1 April 2022	3,523,547	418,057	51,585	156,558	4,149,747
Total comprehensive income as restated	-	-	-	251,203	251,203
Movement in share based premium reserve	-	-	(37,693)	-	(37,693)
As restated at 1 April 2023	3,523,547	418,057	13,892	407,761	4,363,257
Total Comprehensive Income	-	-	-	(2,694,457)	(2,694,457)
Movement in share based premium reserve	-	-	(9,161)	-	(9,161)
At 31 March 2024	3,523,547	418,057	4,731	(2,286,696)	1,659,639

GROUP AND COMPANY CASHFLOW STATEMENT

FOR THE YEAR ENDED 31 MARCH 2024

		2024	2023	2024	2023
		Group	Group	Company	Company
	Notes	£	£	£	£
Net cash generated/(used) in operating activities
Profit / (loss) before income tax		(2,730,968)	280,761	(38,943)	(4,831)
Tax paid		(46,563)	-	-	-
Depreciation and amortisation		536,458	540,043	-	-
Loss / (gain) on current asset investments		1,669,892	859,650	3,638	6,394
Sales settled by shares		-	(2,277,074)	-	-
(Increase)/decrease in trade / other receivables		(275,529)	107,468	(184,016)	(47,509)
Increase / (decrease) in trade / other payables		29,365	(13,427)	(14,250)	11,306
Change in share based payments reserve		(9,161)	(37,693)	(9,161)	(37,693)
NET CASH (GENERATED)/USED IN OPERATING ACTIVITIES		(826,506)	(540,272)	(242,732)	(72,333)
Net cash generated from/(used in) investing activities
Proceeds from disposal of plant, property and equipment		-	-	-	-
Purchases of plant, property and equipment		(3,346)	(2,671)	-	-
Proceeds from other investing activities		101,834	280,215	-	-
Other investments - additions		(99,280)	(312,437)	-	-
Dividends received		-	-	-	-
NET CASH (GENERATED)/USED IN INVESTING ACTIVITIES		(792)	(34,893)	-	-
Cash flows from financing activities
Share capital issue		-	-	-	-
Purchase of shares into treasury		-	-	-	-
Finance lease repayments		(216,560)	(161,716)	-	-
NET CASH GENERATED/(USED) FROM FINANCING ACTIVITIES		(216,560)	(161,716)	-	-
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS		(1,043,858)	(736,881)	(242,732)	(72,333)
Cash and cash equivalents at beginning of period		1,273,122	2,010,003	267,292	339,625
CASH AND CASH EQUIVALENTS AT END OF PERIOD	6	229,264	1,273,122	24,560	267,292

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2024

1           Statutory Information,

VSA Capital Group plc is a public limited company limited by shares, is listed on the Aquis Stock Exchange, is incorporated in the UK and registered in England and Wales (Company Number 04918684). The Company's registered and head office is at Park House, 16-18 Finsbury Circus, London, United Kingdom, EC2M 7EB.

2           Revenue

Segmental reporting                                             

Group Revenue of £1,887,528 (2023: £4,358,875) comprises:

Corporate Finance fees of £972,906 (2023: £3,455,272);

Broking fees of £734,574 (2023: £711,950);

Bond trading of £78,306 (2023: £85,212),

Research fees of £88,000 (2023: £102,083); and,

Other income of £13,742 (2023: £4,358).

3           Employees and Directors (Group)

	31/3/24	31/3/23
	£	£
Wages and salaries	1,527,505	1,738,138
Social security costs	174,004	223,792
Other pension costs	35,139	32,526
	1,736,648	1,994,456

The average number of employees during the year was as follows:

	31/3/24	31/3/23
Directors	4	5
Corporate finance	7	6
Research and sales	7	7
Account and administration	1	3
	19	21

4           Net finance income

Finance income: deposit account interest	2024: £6,977	2023: £1,936
Financial Income	2024: £6,977	2023: £1,936
Finance costs: finance lease interest	2024: (£1,417)	2023: (£1,035)
Finance costs: other interest	2024: Nil	2023: (£1,622)
Financial Expenses	2024: (£1,417)	2023: (£2,657)
Total	2024: £5,560	2023: (£721)

5           Taxation

Analysis of the tax charge

Corporation tax is payable on investment income.

Factors affecting the tax charge

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

	2024	2023 as restated
	£	£
Profit / (loss) on ordinary activities before tax	(2,730,967)	280,761
Profit on ordinary activities multiplied by the
standard rate of corporation tax in the UK of 25% (2023: 19%)	(682,742)	53,345
Effects of:
Tax losses utilised	(46,563)	(75,768)
Unutilised tax losses carried forward	524,164	-
Tax paid on Investment Income	-	8,338
Other adjustments	97,311	47,303
Tax losses carried back	61,267	-
Deferred tax adjustments	10,052	(3,660)
Tax (Credit) / Charge	(36,511)	29,558

Due to the uncertainty of the timing of taxable profits for the Company in the future, a deferred tax asset in respect of the tax losses has not been included in the accounts. Tax losses of £4.8m (2023: £2.7m) have been carried forward as at 31 March 2024.  The rate of corporation tax rose to 25% in 2024 from 19% in 2023. 

6           Cash

	Group       2024	Group 2023	Company 2024	Company 2023
	£	£	£	£
Cash at bank	229,264	1,273,122	24,560	267,292

7           Profit & Loss Per Share

	As at 31 March 2024	As at 31 March 2023 as restated
	Audited	Audited
Basic
Profit/ (Loss) for the period attributable to owners of the Company (£)	(2,694,457)	251,203
Weighted average number of shares:	37,655,266	37,655,266
Basic earnings/(loss) per share (pence):	(7.2)	0.7
Diluted
Profit/ (Loss) for the period attributable to owners of the Company (£)	(2,694,457)	251,203
Weighted average number of shares:	37,655,266	48,720,866
Diluted earnings/(loss) per share (pence):	(7.2)	0.5

Share options granted to employees could potentially dilute basic earnings per share in the future but were not included in the calculation of diluted earnings per share as they are antidilutive for the period presented. The weighted number of shares used in the calculation of basic and diluted earnings per share is the same for continuing and total earnings per share calculations.

8           Annual Report and Accounts

Copies of the 2024 Report and Accounts will be posted to shareholders shortly.  Copies will also be available from the Company's registered office and from the Company's website  www.vsacapital.com

The statutory accounts for the year ended 31 March 2024 will be delivered to the Registrar of Companies in due course.

 

END