TIDMVSA
RNS Number : 6572V
VSA Capital Group PLC
15 December 2021
15 December 2021
VSA CAPITAL GROUP PLC
("VSA Capital" "VSA" or the "Company")
UNAUDITED INTERIM REPORT FOR THE SIX MONTHSED 30 SEPTEMBER
2021
VSA Capital Group plc (AQSE: VSA), announces its interim results
for the half year ending 30 September 2021.
Chairman's Interim Report
I am delighted to introduce the first interim report since the
Company floated on the Aquis Growth Market on 9 September 2021.
On 31 March 2021, the Company acquired VSA Capital Limited ("VSA
Capital"), an international investment banking and broking firm
with offices in London and Shanghai, and a joint venture in Kenya.
VSA Capital provides corporate finance, advisory and capital
markets services to growth companies, both private and public,
across multiple sectors with a particular focus on natural
resources, transitional energy, alternative energy, consumer
products and Technology, Media and Telecoms ("TMT"). On that date,
VSA Capital Group plc changed its status from being an investing
company to being an operating group. In practical terms, this means
that reporting is now being made under IFRS reporting standards,
consolidating the results and balance sheets of its 100% owned (and
other future controlled) subsidiaries, rather than as a standalone
company.
This report presents VSA Capital Group plc as a trading group
quoted on the AQSE Growth Market. Its stated objective has been to
generate an attractive rate of return for shareholders,
predominantly through capital appreciation, by taking advantage of
opportunities principally to invest in the TMT and financial
services sectors, including in other investment companies.
We are reporting losses; however, results would have been
significantly better if there had not been delays in closing some
of our deals - for example the IPO of Tungsten West plc, which was
due to close in September but slipped into October, brought in over
GBP1m of revenue. Clearly this income will make a significant
positive impact on the Group's performance in the second half.
Furthermore, VSA Capital's strategy is to hold investments in
its corporate clients. We expect our investments in Tectonic Gold
plc (specialist Intrusion Related Gold System - IRGS - explorer),
Invinity Energy Systems plc (founded to build utility-grade energy
storage - flow battery provider) and Samarkand Global plc
(cross-border eCommerce technology company focused on Western
brands selling into C hina), amongst others, to give us a good
return as they execute further on their business plans.
In the immediate future we will focus on deriving value from our
wholly owned subsidiary, VSA Capital Limited. That focus will be
led by our CEO, Andrew Monk, leveraging the significant increase in
the Group's balance sheet and the Company's absolute determination
to be a strong player advising and raising funds for small and
medium sized public and private companies internationally.
Mark Steeves
Chairman
15 December 2021
CEO Interim report
The last 21 months since the Coronavirus pandemic broke out have
been unprecedented for everyone, and our industry has seen
extraordinary conditions and market activity has picked up
considerably. Larger broking firms with large, retained client
bases have executed unprecedented numbers of secondary fundraises.
At VSA Capital we have a smaller retained client base and so have
not benefitted as much, but there has been no doubt that getting
deals funded has become considerably easier and the IPO market has
been wide open and as a firm we have benefited. We have been very
careful though to ensure that where we have brought a company to
the market, we have priced it correctly to get a good result for
the company, for its existing shareholders and new investors
joining the shareholder list. In our view, this is vital to
maintain our reputation as well as to protect the longer-term
interests of the company concerned. Too many large IPOs have been
badly priced and led to an uncomfortable aftermarket. To quote a
well-known fund manager "everyone needs a party balloon" and we
endorse that.
At first it appears disappointing to report an EBITDA loss of
GBP2,700 and a loss of GBP238,400. Sadly, in today's world
accounting practices don't always reflect a true indication of a
company's performance. If you looked at our internal management
accounts which we use to really understand the performance of the
company, they show a profit of GBP56,000. EBITDA is not my
preferred measure but does eliminate issues such as amortisation of
unused staff holidays and amortisation of property leases which
really are not appropriate. I am not a fan of adjusted profits, but
we did incur a one off cost of our IPO. In my view the best measure
of a company's performance is cash flow but again because we often
take equity instead of cash so this can give a false impression and
growth of net assets is perhaps a better measure for VSA. The fact
that accounting has now got overly complicated does mean that there
are opportunities for good analysis to show when markets have
wrongly priced equities and that can be hugely beneficial to those
such as ourselves who are capable of that sort of analysis.
Whatever measure of profit or loss you take it is already
totally out of date. VSA Capital has always been second half biased
and our expectation for the full year are unchanged. September
30(th) is just a date and doesn't give a full picture. In the two
and a half months since our interim period end the business has
performed very strongly. Our pipeline for the final quarter is also
healthy. Having said that one should never take these market
conditions for granted and so we constantly aim to build on our
corporate client list and be creative with new deals and use clever
thinking to solve issues faced by companies. We also, alongside
that, maintain a tight control on our cost base.
The last 21 months has been a challenging time for managing a
business when lockdowns are imposed by our government. Since
lockdown ended on July 19(th) there has been a lot of debate about
the pros and cons of working from home ("WFH"). At VSA we believe
that the office environment is very important for a variety of
reasons, but also recognise that in other industries these may not
apply. The office encourages good regular communication and idea
generation, which is at the heart of our industry. It allows junior
staff to learn and so needs senior staff to pass on knowledge.
Furthermore, it creates a much healthier social life, interacting
with other people and not being stuck in maybe a one-bedroom flat
all day and night. We have also seen from experience that when
doing deals, investing clients who had a physical 1:1 meeting have
always invested significantly more than those who attended meetings
via a video call. For that reason, we have actively encouraged
staff to return to the office within Government guidelines and
ensuring we have a safe environment with weekly COVID testing. What
this has also allowed us is to take a pragmatic approach to give
employees flexible working arrangements when it is appropriate, and
I believe the team spirit at VSA is currently as strong, if not
better, than ever. Having everyone in the office means that we were
not in a position to downsize when we moved office at the end of
November to Park House on Finsbury Circus.
I am delighted that we achieved a successful IPO on the Aquis
Growth Market. As well as ensuring we have a strong core business,
we stated in our Admission Document three pillars of growth. We are
firm supporters of Aquis as an alternative market to the LSE. In
the last six months we have continued to grow our client list on
Aquis and I believe we can regard ourselves as the leading adviser
for this market. London needs a competitive environment to grow
post Brexit and a serious competitor to the LSE will stimulate
demand and activity and we believe it is inevitable that Aquis will
become the "Nasdaq of London". That was a major reason we listed
VSA on Aquis. We have an unprecedented strength and knowledge
across the whole value chain of the Transitional Energy revolution
from mine to battery and grid services, across solar, wind and
hydrogen through to energy storage and then also to EV charging and
e-mobility. The world is going through an unprecedented change and
smart cities are the future; at VSA we understand the whole process
and value chain. Our Third pillar is our international capability
with our office in Shanghai and joint ventures in Africa. This has
not been easy due to the pandemic and the inability to travel and
until travel resumes, especially to China, cross border activity is
likely to stay subdued; however, in the longer term this capability
can become very valuable, and it is not easy to build.
We have also in the interim period being reported on had other
useful areas of growth for the business. The most notable being the
growing of a 'qualified investor base' of High Net Worth ('HNW']
investors. We have added over 200 HNWs and this additional pool of
capital has proved very valuable for our transactions, and we will
continue to grow it. The deal size of these investors has surprised
us and ranges between GBP10,000 and GBP2mn, with many quite happy
to commit around GBP100,000 per deal. We believe this is an area
that is undergoing major change as institutional brokers look to
get access to retail investors who are very active in the market.
The Retail Distribution Review had the unintended consequences of
pushing retail investors away from institutional brokers and yet
they are a key part of any listed company's shareholder base. At
VSA we are pro retail activity but also know we must stick within
FCA rules. This is why we pre-qualify our investor base and also
reach out to all investors through regular podcasts and video blogs
and have also taken the stance of being "Broker Exempt" under MIFID
2 so that we can distribute our research openly and not just to
institutions that pay us. We believe this puts us at an advantage
to our peer group
who have not taken that approach.
The JV with the Shanghai Mining Club and Investing in African
Mining Indaba had a successful hybrid conference in October in
Beijing. In the last few years, it has grown from five companies at
the beginning to 12 last year, and this year to 22; we hope next
year to get to 35/40 companies, and we will then be the established
western broker holding an annual mining conference in Beijing. We
have found that companies involved in this conference are then very
receptive to becoming corporate clients of VSA directly.
I have also been pleased in general with the other joint
ventures we have in bond trading, asset management and our
crypto/blockchain business Benjiami.
In summary it has been a great six months although very hard
work, and we expect that to continue for the next six months and
hopefully much longer, but we have a good growth plan at VSA that
is not competing with others and so regardless of market conditions
we can grow and be confident of the outlook. Our staff are our most
important asset, and so I am pleased to see a strong team spirit
and thank them for their support also of VSA.
Andrew Monk
CEO
15 December 2021
The directors of the Company take responsibility for this
announcement.
For further information, please contact:
VSA Capital Group plc +44 20 3005 5000
Andrew Monk - Chief Executive Officer amonk@vsacapital.com
Andrew Raca - Head of Corporate Finance araca@vsacapital.com
Marcia Manarin - Finance Director mmanarin@vsacapital.com
& COO
AQSE Exchange Growth Market Corporate
Adviser
Alfred Henry Corporate
Finance Limited +44 20 3772 0021
Jon Isaacs / Jesse Stellato enquiries@alfredhenry.com
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX-MONTH PERIOD TO 30 SEPTEMBER 2021
Six months Six months Year ended
ended ended 31 March 2021
30 September 30 September Audited
2021 2020 GBP'000
Unaudited Unaudited
GBP'000 GBP'000
GBP GBP GBP
Turnover 1,163 - -
Cost of sales - - -
--------------------------- ---------------------------- --------------------------
Gross profit 1,163 - -
Administrative
expenses (1,398) (10) (20)
--------------------------- ---------------------------- --------------------------
Operating (loss)
/ profit (235) (10) (20)
Finance income - 11 214
Interest -
receivable - -
Finance costs -
and similar
charges - -
--------------------------- ---------------------------- --------------------------
(Loss) / profit
on ordinary
activities
before taxation (235) 1 194
Tax on -
profit/loss on
ordinary
activities 3 -
--------------------------- ---------------------------- --------------------------
(Loss) / profit
for the year (238) 1 194
Other -
Comprehensive
income - -
--------------------------- ---------------------------- --------------------------
Total
Comprehensive
income (238) 1 194
=========================== ============================ ==========================
Earnings per share - profit after
tax
pence pence pence
Basic (1.2) 11.3 106.5
Diluted (0.8) 10.3 66.4
GROUP STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2021
As at As at As at
30 September 30 September 31 March
2021 Unaudited 2020 Unaudited 2021
GBP'000 GBP'000 Audited
GBP'000
Non-current assets
Property, plant and equipment
- right of use
Property, plant and equipment
- owned 234 0 297
Intangible Assets 11 0 12
Total non-current assets 1,488 0 1,654
1,733 0 1,963
Current assets
-------------- ---------------- ----------
Trade and other receivables 876 1 235
Investments 1,152 72 1,164
Cash and cash equivalents 814 25 1,864
Total current assets 2,842 98 3,263
-------------- ---------------- ----------
Total assets 4,575 98 5,226
-------------- ---------------- ----------
Current liabilities
Trade and other payables 565 1 1,055
Finance liabilities - borrowings 104 0 136
Total current liabilities 669 1 1,191
-------------- ---------------- ----------
Non-current liabilities
Finance liabilities - borrowings 23 0 59
Total non-current liabilities 23 0 59
-------------- ---------------- ----------
Total liabilities 692 1 1,250
-------------- ---------------- ----------
Equity
Share Capital 3,524 136 3,645
Share premium account 418 2 178
Share-based payments reserve 52 26 26
Accumulated profits/(losses) (111) (66) 127
Total equity 3,883 98 3,976
-------------- ---------------- ----------
Total Equity and Liabilities 4,575 99 5,226
-------------- ---------------- ----------
CONSOLIDATED GROUP CASHFLOW STATEMENT
FOR THE SIX-MONTH PERIOD ENDED 30 SEPTEMBER 2021
Six months Six months
ended 30 ended Year ended
September 30 September 31 March
2021 2020 2021
Unaudited Unaudited Unaudited
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Profit / (loss) before
income tax (238) 1 194
Tax paid - - -
Depreciation and amortisation 232 - -
Gains on current asset investments (110) (12) (214)
(Increase)/decrease in trade
/ other receivables (641) 8 7
Increase/(decrease) in trade
/ other payables (490) - -
Change in share based
payments reserve 25 - -
NET CASH USED IN OPERATING
ACTIVITIES (1,222) (3) (13)
----------- -------------- -----------
Cash flows from investing
activities
Purchase of subsidiary
undertaking - - (3,874)
Purchase of plant, property
and equipment (2) - -
Proceeds from other investing
activities 124 - 199
NET CASH GENERATED FROM
INVESTING ACTIVITIES 122 - (3,675)
----------- -------------- -----------
Cash flows from financing
activities
Share capital issue 118 - 3,685
Finance repayments (68) -
----------- -------------- -----------
NET CASH GENERATED FROM
FINANCING ACTIVITIES 50 - 3,685
----------- -------------- -----------
NET (DECREASE)/INCREASE
IN CASH AND CASH EQUIVALENTS (1,050) (3) (3)
Cash and cash equivalents
at beginning of period 1,864 28 28
Cash acquired with subsidiary
undertaking - - 1,839
CASH AND CASH EQUIVALENTS
AT END OF PERIOD 814 25 1,864
=========== ============== ===========
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX-MONTH PERIOD TO 30 SEPTEMBER 2021
1 General Information
VSA Capital Group plc is a listed public limited company (Aquis:
VSA) incorporated in the UK and registered in England and Wales
(Company Number 04918684). The Company's registered office is at
Park House, 16-18 Finsbury Circus, London, EC2M 7EB.
These interim financial statements do not include all of the
information required for full annual financial statements and
should be read in conjunction with the consolidated financial
statements of the Group as at and for the year ended 31 March 2021
which have been prepared in accordance with International Financial
Reporting Standards ("IFRS") as adopted by the European Union.
The interim financial statements for the six months ended 30
September 2021 are unaudited and have not been reviewed by the
Company's auditors Hilden Park Accountants Limited. The comparative
interim figures for the six months ended 30 September 2020 are also
unaudited.
2 Basis of preparation
The accounting policies applied by the Group in the preparation
of these condensed consolidated interim financial statements are
the same as those applied by the Group in its consolidated
financial statements for the year ended 31 March 2021.
3 Profit or loss per share
Six months Six months
ended 30 ended 30 Year ended
September September 31 March
2021 2020 2021
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
----------- ----------- -----------
Basic
Profit/ (Loss) for the period
attributable to owners of
the Company (238) 1 194
Weighted average number of
shares: 19,428,966 6,787 182,263
Basic earnings/(loss) per
share (pence): (1.2) 11.3 106.5
Diluted
Profit/ (Loss) for the period
attributable to owners of
the Company (238) 1 194
Weighted average number of
shares: 30,408,166 7,457 292,484
Diluted earnings/(loss) per
share (pence): (0.8) 10.3 66.4
----------- ----------- -----------
The basic and diluted earnings per share were determined by
dividing the profit or loss attributable to the equity holders of
the Company by the weighted average number of shares outstanding
during the periods.
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END
NEXFLFLTFLLSLIL
(END) Dow Jones Newswires
December 15, 2021 02:00 ET (07:00 GMT)
VSA Capital (AQSE:VSA)
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