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Ocean Res Cap Hldgs (OCE)

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Friday 10 September, 2004

Ocean Res Cap Hldgs

Interim Results

Ocean Resources Capital HoldingsPLC
10 September 2004


                                OCEAN RESOURCES
                              CAPITAL HOLDINGS PLC


               Interim report for the six months to 30 June 2004

The Directors of Ocean Resources Capital Holdings Plc announce the interim
results for the six months to 30 June 2004.

Chairman's statement

Against the background of a relatively volatile market in the natural resource
sector, it has been a disappointing start to the financial year, which has seen
the net asset value of the investment portfolio fall from 35.8p per share
(audited) to 33.2p per share (unaudited). While this performance has been
disappointing, your Board is pleased to report that Ocean Resources Capital
Holdings Plc ('Ocean Resources') is now starting to achieve its objective of
helping to finance junior development companies into production.
Bralorne-Pioneer Gold Mines, Canada, has now poured its first gold, while in
Indonesia, BM Diamond Corporation expects to be in production at its Cempaka
alluvial diamond project in the third calendar quarter of this year.
Additionally, Rheochem Limited has won a major new contract and announced its
intention to upgrade its listing from the junior OFEX market, to the AIM market.
  This is an exciting development for Rheochem Limited and one which Ocean
Resources is happy to support.



We have also worked closely with Archipelago Resources Plc ('Archipelago') over
the past few months and provided them with a financial guarantee which has
allowed them to acquire an excellent second-hand processing plant in Chile,
which has since been dismantled and will be transported to their mine site in
Indonesia.  By us providing the guarantee, Archipelago was able to act swiftly
and decisively in bidding for this plant under strong competition and, in
addition, it has helped the company save both time and money against purchasing
a new plant.



A recent disappointment has been OreVest Plc ('OreVest'), which has been
suspended from OFEX following clarification of a contractual dispute with the
Bulgarian government in respect of its manganese mine in northwest Bulgaria.
While this is an unwelcome development, OreVest are hopeful that they will be
able to achieve an acceptable outcome to the dispute.



As the portfolio companies move from the development stage to production,
becoming cash flow positive, we expect they will be significantly re-rated by
the market.



While the FTSE listed 'blue-chip' mining companies have recently been reporting
record earnings and their share prices are at or near their all time highs, the
environment within the small-cap sector is markedly different.  After a
particularly buoyant and strong first quarter of 2004, the junior sector has now
lost significant investor momentum, and many small-cap resource stocks have
fallen dramatically in value, with falls of over 50% not being uncommon.



Along with many commentators, the Board of Ocean Resources continues to believe
that the outlook for the global natural resource markets remains positive.  This
is due in part to the lack of investment in new capacity and an almost seemingly
insatiable appetite for raw materials to feed China's economic growth profile.
However, one must not underestimate the volatility of operating within the
small-cap sector of the natural resource market.



With the opportunities that lie ahead for the Company, I look forward to
reporting on our performance early next year.



Peter Seabrook

10 September 2004


Consolidated Profit and Loss Account



For the six months ended 30 June 2004


                                             Notes           Unaudited       Unaudited            Audited
                                                               30 June       Period to          Period to
                                                                  2004         30 June        31 December
                                                                                  2003               2003
                                                                £ '000          £ '000             £ '000
Income from investments
Listed securities                                                    -               -                 49
Unlisted securities                                                727             629              1,705

                                                                   727             629              1,754

Surplus on disposal of investments
Unlisted securities                                                220             126                500

Interest receivable and similar income                               4             129                 95

Administrative expenses                                          (774)           (301)              (370)

Operating profit - pre exceptional items                           177             583              1,979

Net write down of investments                  3               (3,870)        (10,366)           (14,000)

Operating loss                                                 (3,693)         (9,783)           (12,021)

Interest payable                                                 (197)            (97)              (283)

Loss on ordinary activities before                             (3,890)         (9,880)           (12,304)
taxation

Tax on profit on ordinary activities                                 -           (118)                  -

Loss for the financial period                                  (3,890)         (9,998)           (12,304)

Basic loss per share                           4               (4.56p)         (11.7p)           (14.43p)

Diluted loss per share                                         (4.56p)         (11.7p)           (14.43p)

(Loss)/earnings per share before                               (0.02p)           0.43p              1.99p
exceptional items









The Group's current period results shown above are derived entirely from
continuing activities





Balance Sheets of the Group and Company



As at 30 June 2004




                                  Notes           Unaudited              Unaudited                   Audited
                                               Group     Company       Group    Company      Group     Company
                                                 30 June 2004              30 June 2003    31 December 2003
                                              £ '000      £ '000      £ '000     £ '000     £ '000      £ '000
Fixed asset investments
Group undertakings                                 -           -           -          -          -           -
Other investments                   2         32,090      32,090      31,566     31,566     34,091      34,091

                                              32,090      32,090      31,566     31,566     34,091      34,091

Current assets
Debtors                                        2,738       2,738       5,097      5,097      2,528       2,528
Cash at bank and in hand                          42          42          39         39        209         209

                                               2,780       2,780       5,136      5,136      2,737       2,737

Creditors: amounts falling due               (5,611)     (5,611)     (5,549)    (5,549)    (5,303)     (5,303)
within one year

Net current liabilities                      (2,831)     (2,831)       (413)      (413)    (2,566)     (2,566)

Total assets less current                     29,259      29,259      31,153     31,153     31,525      31,525
liabilities

Creditors: amounts falling due
after more than one year
8% Convertible Unsecured Loan                  (995)       (995)       (988)      (988)      (992)       (992)
Stock 2006

Net assets                                    28,264      28,264      30,165     30,165     30,533      30,533



Capital and reserves
Called up share capital                          852         852        8522        852        852         852
Share premium account                         38,202      38,202      39,311     39,311     38,202      38,202
Warrant reserve                                1,109       1,109           -          -      1,109       1,109
Revaluation reserve                            4,252       4,252           -          -      2,674       2,674
Profit and loss account                     (16,151)    (16,151)     (9,998)    (9,998)   (12,304)    (12,304)

Equity shareholders' funds                    28,264      28,264      30,165     30,165     30,533      30,533


Net asset value per share           5         33.16p                   35.4p                35.82p





Consolidated Cash Flow Statement

For the six months ended 30 June 2004


                                                                                 Unaudited    Unaudited         Audited
                                                                              30 June 2004      30 June     31 December
                                                                                                   2003            2003
                                                                                    £ '000       £ '000          £ '000

Net cash outflow from operating activities                                           (105)         (33)           (435)

Interest paid on loan                                                                (141)          (4)           (153)
Interest paid on 8% Convertible Unsecured Loan Stock 2006                             (50)            -            (38)

Net cash outflow from servicing of finance                                           (191)          (4)           (191)


Investing activities
Purchase of fixed asset investments                                                   (50)        (812)         (1,755)
Proceeds of disposal of fixed asset investments                                        180            -             334

Net cash inflow/(outflow) from capital expenditure and financial investment            130        (812)         (1,421)

Net cash outflow before financing                                                    (166)        (849)         (2,047)

Share issue expenses paid                                                                -      (2,383)         (2,457)
Loan drawn down                                                                          -        5,000           5,000
Loans granted to investee companies                                                      -      (2,714)         (1,272)
Proceeds from issue of 8% Convertible Unsecured Loan Stock 2006                          -          985             985

Net cash inflow from financing                                                           -          888           2,256

(Decrease)/increase in cash                                                          (166)           39             209


Reconciliation of net cash inflow to movement in net debt

(Decrease)/increase in cash                                                          (166)           39             209
Net drawdown of loan facility                                                            -      (5,000)         (5,000)
Debt due on 8% Convertible Unsecured Loan Stock 2006                                   (4)        (988)           (992)

Movement in net debt during six months                                               (170)      (5,949)         (5,783)
Net debt at 1 January 2004                                                         (5,783)            -               -

Net debt at 30 June 2004                                                           (5,953)      (5,949)         (5,783)

Major non-cash transactions

Equity and non-equity assets received in return for company shares at launch             -       42,621          42,621
Interest received in the form of shares                                                  -            -             551

                                                                                         -       42,621          43,172





Notes to the Interim Accounts



1.               Basis of preparation



The interim accounts have been prepared in accordance with applicable accounting
standards in the United Kingdom and the Company's established accounting
policies.  The interim accounts do not constitute statutory accounts within the
meaning of S.240 of the Companies Act 1985.



2.               Fixed asset investments



Investments are treated as fixed assets and are shown in the balance sheet at
valuation. Increases against book cost attributable to share price changes are
taken to the revaluation reserve.  Write-downs and foreign exchange movements
are taken to the profit and loss account.



Investments quoted in the United Kingdom are valued at middle market prices at
the close of business at the balance sheet date. Unquoted investments are valued
at market prices at the close of business at the balance sheet date where an
organised market exists; otherwise, unquoted investments have been valued by the
directors based upon dealing prices or stockbrokers' valuations where available,
net asset values or other relevant information. Where an event occurs during the
period that requires the valuation of an unquoted investment to be revised, that
revision is reflected in the next announced net asset value. All valuations are
based upon the guidelines set out by the British Venture Capital Association.



3.               Net write down of investments
                                                                        30 June          30 June     31 December
                                                                           2004             2003            2003
                                                                          £'000            £'000           £'000

Write down of investments                                               (4,434)         (10,366)        (14,000)
Adjustment to previously impaired investments                               564                -               -

                                                                        (3,870)         (10,366)        (14,000)



4.               Earnings per ordinary share
                                                                        30 June          30 June     31 December
                                                                           2004             2003            2003

Loss attributable to ordinary shareholders                         £(3,890,000)     £(9,998,000)   £(12,304,000)
Number of ordinary shares in issue                                   85,241,078       85,241,078      85,241,078

Loss per ordinary share (pence)                                          (4.6p)          (11.7p)        (14.43p)



*At 30 June 2004 the warrants in issue were not dilutive.



5.               Net asset value per ordinary share
                                                                        30 June          30 June     31 December
                                                                           2004             2003            2003

Net asset value attributable to ordinary shareholders               £28,264,000      £30,165,000     £30,533,000
Number of ordinary shares in issue                                   85,241,078       85,241,078      85,241,078

Net asset value per ordinary share (pence)                                33.2p            35.4p           35.8p





The Interim Report will be posted to shareholders. Copies may be obtained during
normal business hours from the Company's registered office, The Registry, 34
Beckenham Road, Beckenham, Kent, BR3 4TU.



By order of the Board





Capita IRG Trustees Limited

Secretary

10 September 2004


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