TIDMMAP
RNS Number : 2373P
MG Capital PLC
20 March 2009
MG CAPITAL PLC
Interim Results
For the six months ended 31 December 2008
Statement by Chairman
The very sharp deterioration of global financial conditions following the
Lehman's collapse in mid September came at an extremely unhelpful time for the
Company. We have been active and successful investment advisers in the
farming/agriculture sector for a number of years and have identified it as a key
area for us to expand our business. We were poised to close at least one
significant transaction in the sector at the time of the collapse, but the
timing of our plans has now been delayed, for how long we are still not sure.
Investors' confidence, as we are all aware, remains very fragile and looks as
though it will inevitably take time to recover. Nevertheless, as we test market
our specialist farming investment vehicle we have been encouraged to find that
interest in agriculture is still very much alive among international
institutional investors with many of them looking to build up exposure to this
new asset class.
The Lehman's crisis and its aftermath has also had an unfortunate impact upon
the capital raising that we were working on for an Australian company involved
in fibre optics in China, as mentioned in my Statement in the last Annual Report
and Accounts. At the time of my Statement, this transaction was still subject
to approval by the client company's shareholders. Subsequently this approval was
received and the deal went unconditional and we should have then been in receipt
of a 5% fee. However the investor was badly affected by the crisis and
subsequently defaulted on its commitment. We are still working on this mandate
with other potential investors but it is likely that it will take several months
work to have a chance to bring it to a successful conclusion.
The re-financing of Sky Express, the Russian low cost airline, is still not
completed, with a re-financing agreement still being worked on with a new
investor. The airline has benefited from the fall back in aviation fuel prices
but conditions are still very tough in the Russian aviation market.
As a result of anticipated fee revenues not being received during the period
under review, there was an after tax loss attributable to equity holders of the
Company of GBP289,132 for the period, compared to a loss of GBP123,372 for the
first six months of the previous year. We are taking action to address our cost
base and with our advisers are examining all options with an aim to bring our
costs and revenues into balance by the end of the Company's current financial
year, with measures that include the closure of our office in Beijing and a
reduction in personnel and other expenses, but we will ensure that these steps
will not affect our ability to launch our planned new products.
Peter Hannen
Chairman
19 March 2009
Unaudited Income Statement
For the six months ended 31 December 2008
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+
| | | Unaudited | | Unaudited | | Audited |
| | Notes | 6 months | | 6 months | | 12 months to |
| | | to 31 Dec | | to 31 Dec | | 30 Jun |
| | | 2008 | | 2007 | | 2008 |
| | | GBP | | GBP | | GBP |
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+
| Revenue - continuing operations | | 113,210 | | 114,185 | | 186,667 |
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+
| | | 113,210 | | 114,185 | | 186,667 |
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+
| | | | | | | |
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+
| Administrative expenses | | (388,743) | | (299,406) | | (1,053,905) |
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+
| Other net gains | | - | | - | | 91,627 |
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+
| Operating (loss) | | (275,533) | | (185,221) | | (775,611) |
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+
| | | | | | | |
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+
| | | | | | | |
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+
| Finance income | | 664 | | 1,862 | | 4,901 |
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+
| Finance costs | | (11,757) | | (5,619) | | (11,178) |
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+
| (Loss) on continuing operations | (286,626) | | (188,978) | | (781,888) |
| before taxation | | | | | |
+-------------------------------------------------------+-----------------+---+-------------------+---+---------------+
| | | | | | | |
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+
| Tax on loss on ordinary activities | | (2,506) | | (4,868) | | (8,498) |
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+
| (Loss) on ordinary activities after | | (289,132) | | (193,846) | | (790,386) |
| taxation - continuing operations | | | | | | |
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+
| Profit for the Financial Year on | | - | | 68,425 | | 214,329 |
| discontinued operations | | | | | | |
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+
| | | | | | | |
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+
| Equity minority interest | | - | | 2,049 | | - |
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+
| Retained (loss) for the period | | (289,132) | | (123,372) | | (576,057) |
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+
| | | | | | | |
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+
| Loss per share - basic and diluted from | 2 | (6.02p) | | (0.03p) | | (16.45p) |
| continuing operations | | | | | | |
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+
| | | | | | | |
+--------------------------------------------+----------+-----------------+---+-------------------+---+---------------+
Consolidated Unaudited Balance Sheet
As at 31 December 2008
+-----------------------------------+--------+-------------+--+-------------+--+---------------+
| | Notes | Unaudited | | Unaudited | | Audited |
| | | As at | | As at | | As at |
| | | 31 Dec | | 31 Dec | | 30 Jun |
| | | 2008 | | 2007 | | 2008 |
| | | GBP | | GBP | | GBP |
+-----------------------------------+--------+-------------+--+-------------+--+---------------+
| NON-CURRENT ASSETS | | | | | | |
+-----------------------------------+--------+-------------+--+-------------+--+---------------+
| Property, plant and equipment | | 6,721 | | 12,679 | | 9,130 |
+-----------------------------------+--------+-------------+--+-------------+--+---------------+
| Investments | | 196,418 | | 195,918 | | 195,918 |
+-----------------------------------+--------+-------------+--+-------------+--+---------------+
| Purchased Goodwill less impairment | 115,585 | | 115,585 | | 115,585 |
+--------------------------------------------+-------------+--+-------------+--+---------------+
| | | 318,724 | | 324,182 | | 320,633 |
+-----------------------------------+--------+-------------+--+-------------+--+---------------+
| CURRENT ASSETS | | | | | | |
+-----------------------------------+--------+-------------+--+-------------+--+---------------+
| Debtors | | 224,737 | | 691,589 | | 219,959 |
+-----------------------------------+--------+-------------+--+-------------+--+---------------+
| Cash at bank and in hand | | 33,022 | | 113,231 | | 84,008 |
+-----------------------------------+--------+-------------+--+-------------+--+---------------+
| | | 257,759 | | 804,820 | | 303,967 |
+-----------------------------------+--------+-------------+--+-------------+--+---------------+
| Disposal group held for sale | | - | | - | | 2,050 |
+-----------------------------------+--------+-------------+--+-------------+--+---------------+
| TOTAL ASSETS | | 576,483 | | 1,129,002 | | 626,650 |
+-----------------------------------+--------+-------------+--+-------------+--+---------------+
| LIABILITIES: | | | | | | |
+-----------------------------------+--------+-------------+--+-------------+--+---------------+
| Current liabilities | | (519,752) | | (521,126) | | (351,459) |
+-----------------------------------+--------+-------------+--+-------------+--+---------------+
| Long term borrowings | | (190,672) | | - | | (120,000) |
+-----------------------------------+--------+-------------+--+-------------+--+---------------+
| Total Liabilities | | (710,424) | | (521,126) | | (471,459) |
+-----------------------------------+--------+-------------+--+-------------+--+---------------+
| | | | | | | |
+-----------------------------------+--------+-------------+--+-------------+--+---------------+
| NET (LIABILITIES) / ASSETS | | (133,941) | | 607,876 | | 155,191 |
+-----------------------------------+--------+-------------+--+-------------+--+---------------+
| EQUITY | | | | | | |
+-----------------------------------+--------+-------------+--+-------------+--+---------------+
| Called up share capital | | 2,402,255 | | 2,402,255 | | 2,402,255 |
+-----------------------------------+--------+-------------+--+-------------+--+---------------+
| Retained Earnings | | (2,536,196) | | (1,794,379) | | (2,247,064) |
+-----------------------------------+--------+-------------+--+-------------+--+---------------+
| Equity attributable to the | | (133,941) | | 607,876 | | 155,191 |
| shareholders of the parent | | | | | | |
| company | | | | | | |
+-----------------------------------+--------+-------------+--+-------------+--+---------------+
| Minority Interests | | - | | - | | - |
+-----------------------------------+--------+-------------+--+-------------+--+---------------+
| TOTAL EQUITY | | (133,941) | | 607,876 | | 155,191 |
+-----------------------------------+--------+-------------+--+-------------+--+---------------+
| | | | | | | |
+-----------------------------------+--------+-------------+--+-------------+--+---------------+
Consolidated Unaudited Cash flow Statement
For the six months ended 31 December 2008
+-------------------------------------+--------+---------------------+--+-----------+--+---------------------------+
| Notes | Unaudited | | Unaudited | | Audited |
| | 6 months | | 6 months | | 12 |
| | to 31 Dec | | to 31 Dec | | months |
| | 2008 | | 2007 | | to 30 |
| | GBP | | GBP | | Jun |
| | | | | | 2008 |
| | | | | | GBP |
+----------------------------------------------+---------------------+--+-----------+--+---------------------------+
| | | | | | | |
+-------------------------------------+--------+---------------------+--+-----------+--+---------------------------+
| Net cash (outflow) from operating | (109,609) | | (420,286) | | (311,768) |
| activities3 | | | | | |
+----------------------------------------------+---------------------+--+-----------+--+---------------------------+
| Returns of investments and servicing of | | | | | |
| finance | | | | | |
+----------------------------------------------+---------------------+--+-----------+--+---------------------------+
| Interest paid | (11,757) | | (5,619) | | (11,178) |
+----------------------------------------------+---------------------+--+-----------+--+---------------------------+
| Interest received | 664 | | 5,527 | | 8,612 |
+----------------------------------------------+---------------------+--+-----------+--+---------------------------+
| | | | | | |
+----------------------------------------------+---------------------+--+-----------+--+---------------------------+
| Net cash (outflow) from returns on | (11,093) | | (92) | | (2,566) |
| investments and servicing of finance | | | | | |
+----------------------------------------------+---------------------+--+-----------+--+---------------------------+
| Taxation | | (2,506) | | (4,868) | | (8,498) |
+-------------------------------------+--------+---------------------+--+-----------+--+---------------------------+
| Capital expenditure and financial investment | | | | | |
+----------------------------------------------+---------------------+--+-----------+--+---------------------------+
| Payments to acquire fixed assets | | - | | (1,499) | | (33,881) |
+-------------------------------------+--------+---------------------+--+-----------+--+---------------------------+
| Payments to acquire investments | | (500) | | (64,000) | | - |
+-------------------------------------+--------+---------------------+--+-----------+--+---------------------------+
| Receipts from sale of investments | | | | 281,205 | | - |
| | | - | | | | |
+-------------------------------------+--------+---------------------+--+-----------+--+---------------------------+
| | | | | | | |
+-------------------------------------+--------+---------------------+--+-----------+--+---------------------------+
| Net cash inflow from capital | | (500) | | 215,706 | | (33,881) |
| expenditure and financial | | | | | | |
| investment | | | | | | |
+-------------------------------------+--------+---------------------+--+-----------+--+---------------------------+
| Financing | | | | | | |
+-------------------------------------+--------+---------------------+--+-----------+--+---------------------------+
| Proceeds from long term borrowings | | 70,672 | | - | | 120,000 |
+-------------------------------------+--------+---------------------+--+-----------+--+---------------------------+
| Net cash inflow from financing | | 70,672 | | - | | 120,000 |
| activities | | | | | | |
+-------------------------------------+--------+---------------------+--+-----------+--+---------------------------+
| (Decrease) in cash | | (53,036) | | (209,540) | | (236,713) |
+-------------------------------------+--------+---------------------+--+-----------+--+---------------------------+
| | | | | | | |
+-------------------------------------+--------+---------------------+--+-----------+--+---------------------------+
Statement of Changes in Equity
For the six months ended 31 December 2008
+--------------------+------------+-------------+----------+------------+
| | Share | Retained | Minority | Total |
| | Capital | Earnings | Interest | GBP |
| | GBP | GBP | GBP | |
+--------------------+------------+-------------+----------+------------+
| As at 30/06/07 | 2,402,255 | (1,671,007) | 73,877 | 805,125 |
+--------------------+------------+-------------+----------+------------+
| Loss in period | - | (123,372) | (73,877) | (123,372) |
| | - | - | | (73,877) |
+--------------------+ + + + +
| Acquisition of | | | | |
| minority interest | | | | |
+--------------------+------------+-------------+----------+------------+
| As at 31/12/07 | 2,402,255 | (1,794,379) | - | 607,876 |
+--------------------+------------+-------------+----------+------------+
| Loss in period | - | (452,685) | - | (452,685) |
+--------------------+------------+-------------+----------+------------+
| As at 30/06/08 | 2,402,255 | (2,247,064) | - | 155,191 |
+--------------------+------------+-------------+----------+------------+
| Loss in period | - | (289,132) | - | (289,132) |
+--------------------+------------+-------------+----------+------------+
| As at 31/12/08 | 2,402,255 | (2,536,196) | - | (133,941) |
+--------------------+------------+-------------+----------+------------+
Notes to Financial Statements
For the six months ended 31 December 2008
1. Basis of preparation
This Interim Statement, which has not been audited and does not constitute
statutory accounts within the meaning of section 434 of the Companies Act 2006,
was approved by the Board on the 19th March 2009. It has been prepared on the
basis of the accounting policies set out in the Group's 2008 statutory accounts.
The financial information has been prepared under the historical cost
convention. This report is not prepared in accordance with IAS34 which is
currently not mandatory.
The Group's Interim Statement consolidates the financial statements of MG
Capital plc and its subsidiaries MG Global Investment Limited, MG Research
Limited, Hannen & Company Limited and MG Maple Capital Ltd all of which have
been made up to 31 December 2008.
The results for the year ended 30 June 2008 have been extracted from the Group's
published accounts for that period which have been filed with the Registrar of
Companies. The auditors' report on the full statutory accounts of the Group for
the year ended 30 June 2008 was unqualified.
At 31 December the group had net liabilities of GBP133,941. Within long term
liabilities there are loans (convertible loan stock) from Peter Hannen amounting
to GBP190,672. Peter Hannen has confirmed that he will not seek repayment of
these loans and accrued interest until such time as the company can afford to
pay them. In addition Peter Hannen has agreed to provide sufficient funding for
the company to meet its day to day liabilities until such time as the company
has matched revenue and costs. On that basis the directors are satisfied that
the interim financial statements can be prepared on a going concern basis.
2. Earnings per share
The basic earnings per share for the six months to 31 December 2008 is
calculated by dividing the Group's loss on continuing operations after taxation
of GBP289,132 (six months to 31 December 2007: GBP193,846, year to 30 June 2008:
GBP790,386) by the weighted average number of shares in issue during the period
of 4,804,510 (six months to 31 December 2008: 4,804,510, year to 30 June 2008:
4,804,510).
3. Reconciliation of operating (loss) to net cash inflow from operating
activities
+--------------------------------------+---------------+---+--------------+---+----------------+
| | Unaudited | | Unaudited | | Audited |
| | 6 months | | 6 months | | 12 months to |
| | to 31 Dec | | to 31 Dec | | 30 Jun |
| | 2008 | | 2007 | | 2008 |
| | GBP | | GBP | | GBP |
+--------------------------------------+---------------+---+--------------+---+----------------+
| | | | | | |
+--------------------------------------+---------------+---+--------------+---+----------------+
| (Loss) on ordinary activities before | (286,626) | | (120,553) | | (567,559) |
| taxation | | | | | |
+--------------------------------------+---------------+---+--------------+---+----------------+
| Interest received | (664) | | (5,527) | | (8,612) |
+--------------------------------------+---------------+---+--------------+---+----------------+
| Interest paid | 11,757 | | 5,619 | | 11,178 |
+--------------------------------------+---------------+---+--------------+---+----------------+
| Depreciation and impairment | 2,409 | | 3,897 | | 39,828 |
+--------------------------------------+---------------+---+--------------+---+----------------+
| (Profit) on disposal of investments | - | | (92,627) | | - |
+--------------------------------------+---------------+---+--------------+---+----------------+
| (Increase) / decrease in debtors | (4,778) | | (383,062) | | 277,146 |
+--------------------------------------+---------------+---+--------------+---+----------------+
| Increase in creditors | 168,293 | | 179,795 | | 10,128 |
+--------------------------------------+---------------+---+--------------+---+----------------+
| Minority interest movement | | | (7,828) | | (73,877) |
| | - | | | | |
+--------------------------------------+---------------+---+--------------+---+----------------+
| Net cash (outflow) from Operating | (109,609) | | (420,286) | | (311,768) |
| Activities | | | | | |
+--------------------------------------+---------------+---+--------------+---+----------------+
This information is provided by RNS
The company news service from the London Stock Exchange
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