RNS Number:5788T
MG Capital PLC
22 December 2003
MG CAPITAL PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2003
CHAIRMAN'S STATEMENT
The year to 30 June 2003 was one of mixed fortunes for the Company. As
previously reported, during the first half of the year we were involved in the
establishment of New Opportunities Investment Trust Plc, a self-administered UK
small companies investment trust, which was launched on 25 September 2002. It
was launched in the teeth of a bear market in UK and indeed global equities
which reached its climax in the fierce market sell-off that preceded the
invasion of Iraq. Fees relating to work done on the launch of the trust were
significant for our subsidiary MoneyGuru Limited. Furthermore a new group
subsidiary, N.O.I.T. Services Limited ("NSL"), was appointed by the trust to
provide it with certain management services including personnel, administration,
accounting and company secretarial services subject to the overall control of
the board of the trust, for a fee of 1.5 per cent per annum of the net asset
value of the trust, plus in certain circumstances a fee related to the trust's
performance.
With the benefit of hindsight the selling climax that accompanied the outbreak
of the Iraq War will most likely be seen as having marked the end of the three
year bear market in equities, and as having provided an excellent opportunity to
buy shares cheaply. At the time, however, investors were in the grip of anxiety
and fear. While shunning all equity markets, they showed particular aversion to
shares in small companies and to small investment trusts. This not only resulted
in a fall in the asset value of the New Opportunities share portfolio, but also
a sudden and substantial widening of the discount to net asset value at which
the trust's own shares were trading. This was the trigger for a takeover bid
for the trust which, although in the end it received little actual support from
shareholders, led to further corporate activity relating to the trust including
another attempted bid. By the end of June the markets and the trust's net asset
value had begun a strong recovery, but with uncertainty over the trust's future
continuing the trust's share price lagged behind. The board of the trust has
now addressed the trust's future by putting forward proposals to the trust's
shareholders to convert the trust into a realisation fund and to appoint a new
manager specialising in realisations in place of NSL. While this is of course
disappointing for us, if as expected these proposals are approved by the trust's
shareholders at their meeting on 23 December 2003, NSL will receive material
compensation broadly amounting to 24 times the average monthly fee received to
date.
The Elite MoneyGuru Income with Growth Trust, to which MoneyGuru Limited is
portfolio adviser, has continued to perform strongly. It has been by a
considerable margin the top performer among all UK Equity Income unit trusts
since its launch in February 2002. The uncertaintly over the future of New
Opportunities, however, caused us to defer plans for new products based upon
this track record in the UK market, and that has meant that the additional
revenue streams that we had hoped to begin generating in the second half of the
year were not achieved, with a consequent impact upon our profit and loss
account.
We have nevertheless been working on other new products, with an emphasis on the
renewed potential of selected emerging markets. This is an area where our
considerable background and experience will, we hope, prove to be of
considerable relevance.
It is our intention to raise further equity in the near future to support the
future strategy of the group.
Our Annual General Meeting of Shareholders will be held on 12th February 2004 at
10:30am at Ocean House, 10/12 Little Trinity Lane, London EC4V 2DH.
Charles Fowler
Chairman
Consolidated Profit and Loss Account
For the year ended 30 June 2003
2003 2002
# #
Turnover
Continuing operations 709,635 436,440
Discontinued operations - 359,961
709,635 796,401
Administrative expenses (1,117,304) (2,590,537)
Other operating income 174,526 27,221
Operating loss
Continuing operations (233,143) (1,753,403)
Discontinued operations - (13,512)
(233,143) (1,766,915)
Interest payable and similar charges (175,200) (85,871)
Interest receivable 591 2,004
Loss on ordinary activities before taxation (407,752) (1,850,782)
Tax on loss on ordinary activities - -
Loss on ordinary activities after taxation (407,752) (1,850,782)
Equity minority interest (2,160) -
Non-equity dividends payable (91,318) (91,819)
Loss attributable to the members of the parent company (501,230) (1,942,601)
Basic and diluted earnings per share (0.16p) (0.81p)
Consolidated Balance Sheet
As at 30 June 2003
2003 2002
# #
Fixed assets
Intangible assets - 3,137
Tangible assets 109,707 172,371
109,707 175,508
Current assets
Debtors 177,756 98,230
Cash at bank and in hand 300 2,667
________ ________
178,056 100,897
Creditors: amounts falling due within one year (869,319) (789,039)
________ ________
Net current liabilities (691,263) (688,142)
________ ________
Total assets less current liabilities (581,556) (512,634)
Creditors:
amounts falling due after more than one year 952,530 952,530
Capital and reserves
Called up share capital 2,468,498 2,407,859
Share premium account 2,521,180 2,243,489
Profit and loss account (6,759,098) (6,257,868)
Preference dividend reserve 232,674 141,356
________ ________
Shareholders' funds
(including non-equity interests) (1,536,746) (1,465,164)
Total capital employed (584,216) (512,634)
Minority interest - equity 2,660 -
(581,556) (512,634)
________ ________
Consolidated Cashflow Statement
for the year ended 30 June 2003
2003 2002
# #
Net cash outflow from operating activities (131,784) (1,453,204)
Returns on investments and servicing of finance
Interest paid (229,102) (14,206)
Interest received 591 2,004
_______ _______
Net cash outflow from returns on investments and servicing of finance
(228,511) (12,202)
Taxation - (710)
Capital expenditure and financial investment
Proceeds from sale of tangible fixed assets - 6,353
______ ______
Net cash inflow from capital expenditure and
financial investment - 6,353
Cash outflow before financing (360,295) (1,459,763)
Financing
Issue of share capital 338,330 1,124,411
Conversion/Issue of debt - (30,000)
______ _______
Net cash inflow from financing 338,830 1,094,411
______ _______
(Decrease) in cash (21,965) (365,352)
This information is provided by RNS
The company news service from the London Stock Exchange
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