TIDMCMIP
Capital Management and Investment Plc
("CMI" or the "Company")
Final Results for the Year Ended 31 January 2015
The Company announces its final results for the year ended 31 January
2015.
Extracts of the audited final results appear below and the Company's
Annual Report and Notice of AGM will be posted to shareholders and made
available on the Company's website, www.cmi-plc.co.uk, shortly.
For further information, please contact:
Capital Management and Investment plc
Tim Woodcock +44 20 7725 0800
N+1 Singer (Nominated Adviser and Broker)
Jonny Franklin-Adams
Alex Wright +44 20 7496 3000
Chairman's statement
Introduction
As at 31 January 2015 the Company had 2 investments: a 2.8% (2014 -
2.8%) shareholding in Algeco Scotsman Holdings ("ASH") and a 7% (2014 -
7%) shareholding in Magticom. The fair value of the Company's investment
in ASH has been reduced as at 31 January 2015 to reflect recent
performance whilst the fair value of the Company's investment in
Magticom remains unchanged at GBPnil.
Results for the year
The consolidated income statement shows a loss before tax of GBP5.584m
(2014 - Profit of GBP2.986m). This is primarily due to the fair value
adjustment in the carrying value of the Company's shareholding in ASH of
GBP(5.168)m.
Other income of GBP0.162m (2014 - GBP0.244m) comprises GBP0.102m (2014 -
GBP0.120m) fees paid by ASH in relation to the monitoring of our
investment and GBP0.06m (2014 - GBP0.124m) from Yola Investments SARL in
relation to the monitoring of our investment in Magticom. CMI ceased
receiving monitoring fees from Yola during the year.
Administrative expenses of GBP0.588m (2014 - GBP0.744m) include GBP0.25m
(2014 - GBP0.25m) payable for office services. Your board continues to
take steps to minimise administrative expenses where possible.
Net asset value ("NAV") per share is GBP2.73 (2014 - GBP3.76) and the
Company had net cash balances of GBP6.534m (2014 - GBP7.088m) at the
year end.
Investment in Algeco Scotsman Holdings ("ASH")
Reported EBITDA for ASH was $441m for the year to December 2014 (FY2013
of $496m, which is adjusted on a pro-forma basis for acquisitions).The
decline in EBITDA was primarily due to continued market weakness in Asia
Pacific, where sales continue to suffer from the slowdown in the Mining
and Resources sector, and there was also some negative impact on the
results from unfavourable currency movements.
The directors continue to value the shareholding using peer group EBITDA
multiples (discounted to reflect the lack of marketability of the
shareholding) and adjusted for debt of $3,534 million (including a $514m
PIK loan) in line with International Private Equity Valuation
Guidelines. Adopting these principles, the board reduced the total
carrying value of its 2.8% equity holding to GBP13.0m (2014 - GBP19.9m)
in the statutory accounts for the year to 31 January 2015.
Investment in Yola Investments Sarl ("Yola")
The Company holds an indirect investment of 7% in Magticom, the largest
mobile telephone operator in The Republic of Georgia via its 33%
shareholding in Yola Investments Sarl. Yola owns 43% of Metromedia
International Group ("MIG") which in turn owns 46% of Magticom.
Trading at Magticom during 2014 was difficult in a challenging economic
and competitive environment, however EBITDA for the year to December
2014 increased from $74m to $79m.
On 1 July 2014 MIG went into Chapter 11 as a result of its inability to
make the payments of interest due on the loan notes. MIG currently
remains in Chapter 11 and is exploring various restructuring options.
The board believes that the 46% shareholding that MIG holds in Magticom
is worth less than the value of the loan notes to third parties,
outstanding in MIG, as the value of the outstanding loan notes of
approximately $252m is higher than a likely exit value based on a
multiple of EBITDA. Consequently the Board continue to show the
carrying value of its shareholding in Yola in the Financial Statements
at GBPNil.
Strategy going forward
CMI continues to actively monitor its investments in Yola and ASH
through regular meetings with the management teams of ASH and Magticom,
receipt of monthly financial reports, and attendance at board meetings.
The board takes the view that the market capitalisation of CMI should
move broadly in line with the value of the underlying investments in ASH
and Yola. The market price of CMI shares is at a significant discount to
NAV at the balance sheet date. The board believes that part of the
reason is both the illiquidity of the shares and the current illiquidity
of the investments that it holds. However, your board believes that if
its investment in Algeco Scotsman were to become more liquid then there
could be a significant rerating of your company.
Dividends
The board is not recommending payment of a dividend for the year under
review (2014 - GBPNil).
Giles Davies
Chairman
5 June 2015
Capital Management and Investment Plc
Consolidated income statement
and consolidated statement of comprehensive income
for the year ended 31 January 2015
Consolidated income statement
Note 2015 2014
GBP'000 GBP'000
Fair value (loss)/gain on investments (5,168) 3,486
Other income 162 244
_______ _______
Total income (5,006) 3,730
Administrative expenses (588) (744)
_______ _______
Operating (loss)/profit (5,594) 2,986
Finance income 10 -
_______ _______
(Loss)/profit before taxation (5,584) 2,986
Taxation (10) (9)
_______ _______
(Loss)/profit for the year attributable to the owners
of the parent (5,594) 2,977
_______ _______
Basic (loss)/earnings per share 2 GBP(0.78) GBP0.42
_______ _______
Diluted (loss)/earnings per share 2 GBP(0.78) GBP0.41
_______ _______
Consolidated statement of comprehensive income
2015 2014
GBP'000 GBP'000
(Loss)/profit for the year (5,594) 2,977
Exchange differences arising on translation of foreign
operations* (1,741) (863)
_______ _______
Total comprehensive (expense)/income for the year (7,335) 2,114
_______ _______
* Exchange differences arising on translation will or may be
reclassified to profit and loss.
Capital Management and Investment Plc
Consolidated statement of changes in equity
at 31 January 2015
Foreign
currency
Share Share Merger translation Retained Total
capital premium reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 January 2013 7,162 40,305 1,693 37,736 (62,120) 24,776
Exchange differences arising on translation of foreign
operations - - - (863) - (863)
Profit for the year - - - - 2,977 2,977
_______ _______ _______ _______ _______ _______
Total comprehensive income for the year - - - (863) 2,977 2,114
Share options charge - - - - 14 14
_______ _______ _______ _______ _______ _______
Balance at 31 January 2014 7,162 40,305 1,693 36,873 (59,129) 26,904
Exchange differences arising on translation of foreign
operations - - - (1,741) - (1,741)
Loss for the year - - - - (5,594) (5,594)
_______ _______ _______ _______ _______ _______
Total comprehensive income for the year - - - (1,741) (5,594) (7,335)
Share options charge - - - - - -
_______ _______ _______ _______ _______ _______
Balance at 31 January 2015 7,162 40,305 1,693 35,132 (64,723) 19,569
_______ _______ _______ _______ _______ _______
Capital Management and Investment Plc
Consolidated balance sheet
at 31 January 2015
Company number 3214950 Note 2015 2015 2014 2014
GBP'000 GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 3 - -
Investments 13,000 19,905
_______ _______
Total non-current assets 13,000 19,905
Current assets
Other receivables 222 127
Cash and cash equivalents 6,534 7,088
_______ _______
Total current assets 6,756 7,215
_______ _______
Total assets 19,756 27,120
Liabilities
Current liabilities
Trade and other payables (156) (181)
Corporation tax (31) (35)
_______ _______
Total current liabilities (187) (216)
_______ _______
Total net assets 19,569 26,904
_______ _______
Capital and reserves attributable to owners of the
parent
Share capital 7,162 7,162
Merger reserve 1,693 1,693
Share premium account 40,305 40,305
Foreign currency translation reserve 35,132 36,873
Retained earnings (64,723) (59,129)
_______ _______
Total equity 19,569 26,904
_______ _______
The financial statements were approved by the Board of directors and
authorised for issue on 5 June 2015.
A G P Davies )
) Directors
T D Woodcock )
Capital Management and Investment Plc
Consolidated cash flow statement
for the year ended 31 January 2015
2015 2014
GBP'000 GBP'000
Cash flow from operating activities
(Loss)/profit for the year (5,594) 2,977
Adjustments for:
Fair value loss/(gain) on investment 5,168 (3,486)
Finance income (10) -
Foreign exchange (gain)/loss (3) 23
Equity settled share based payment expense - 14
Income tax 10 9
_______ _______
Cash flows from operating activities
before changes in working capital (429) (463)
Decrease in trade and other payables (25) (101)
(Increase)/decrease in other receivables (95) 60
_______ _______
(120) (41)
_______ _______
Cash outflow from operations (549) (504)
Income taxes paid - -
_______ _______
Net cash outflows from operating activities (549) (504)
Investing activities
Share capital redemption by ASH - 6,351
_______ _______
Net cash generated in investing activities (549) 6,351
Net (decrease)/increase in cash and cash equivalents (549) 5,847
Cash and cash equivalents at beginning of year 7,088 1,111
Exchange differences on cash and cash equivalents (5) 130
_______ _______
Cash and cash equivalents at end of the year 6,534 7,088
_______ _______
Capital Management and Investment Plc
Notes forming part of the consolidated financial statements
for the year ended 31 January 2015
1 Accounting policies
Basis of preparation
The financial information set out in these preliminary results does not
constitute the company's statutory accounts for the periods ended 31
January 2015 or 31 January 2014.
Statutory accounts for the period ended 31 January 2014 have been filed
with the Registrar of Companies and those for the period ended 31
January 2015 will be delivered to the Registrar in due course; both have
been reported on by the Independent Auditors. The independent auditors'
reports on the Report and Financial Statements for the periods ended 31
January 2015 and 31 January 2014 were unqualified, did not draw
attention to any matters by way of emphasis, and did not contain a
statement under 498(2) or 498(3) of the Companies Act 2006.
The financial information in these preliminary results has been prepared
using the recognition and measurement principles of International
Accounting Standards, International Financial Reporting Standards and
Interpretations adopted for use in the European Union (collectively
Adopted IFRSs). The accounting policies adopted in these preliminary
results have been consistently applied to all the years presented and
are consistent with the policies used in the preparation of the
statutory accounts for the period ended 31 January 2014.
2 Loss per share
The basic loss per share is GBP0.78 (2014 - GBP0.42 earnings per share)
is calculated by reference to the loss after taxation of GBP5,596,000
(2014 profit - GBP2,977,000) and the weighted average number of ordinary
shares in issue during the year of 7,162,133 (2014 - 7,162,133).
The approved and unapproved options are not dilutive in the current
year. Consequently they have been omitted from the EPS calculation. In
the prior year the diluted loss per share was GBP0.41, calculated by
reference to the 2014 loss after taxation of GBP2,977,000 and the fully
diluted weighted average number of ordinary shares in issue during 2014
of 7,312,134.
2015 2014
Number Number
Basic number of shares 7,162,133 7,162,133
Unexercised options 150,001 150,001
__________ __________
The number of options outstanding at 31 January 2015 was 150,001.
3 Investments
Algeco Scotsman Yola Investments Total
GBP'000 GBP'000 GBP'000
Opening value 19,905 - 19,905
Fair value adjustment (5,168) - (5,168)
Foreign exchange gain (1,737) - (1,737)
_______ _______ _______
At 31 January 2015 13,000 - 13,000
_______ _______ _______
The fair value of the investments in Algeco Scotsman SARL and Yola
Management SARL have been assessed by the directors in line with the
accounting policies adopted by the company.
Investment in Algeco Scotsman
Algeco Scotsman Holding SARL ("ASH") was formed in October 2007
following the merger of Algeco, Europe's leading modular construction
and mobile storage business, with Williams Scotsman, the dominant
modular storage rental business in North America.
In December 2009 ASH successfully completed a financial restructuring
that resulted in a significant reduction in debt held by third parties
and an agreement by the shareholders to invest an additional EUR125
million into the capital of the company.
Following the restructuring, CMI's existing equity shareholding in ASH
reduced from approximately 28% to around 1% which was the position as at
31 January 2010.
CMI entered into an option agreement with the principal shareholder of
ASH, TDR Capital, to invest up to EUR10 million of new equity into ASH
on broadly the same terms as the TDR investment on or before 30 April
2010.
Following the Placing and Open Offer of Ordinary shares, CMI exercised
this option on 23 April 2010 and paid the first instalment of EUR6.227m
(GBP5.331m) on 30 April 2010. The balance of EUR4.08m (GBP3.470m) was
paid on 21 September 2010. Following this, CMI owned 6.58% of the
ordinary share capital of ASH.
On 12 October 2013 ASH completed the acquisition of Ausco Modular
Holdings Ltd and a refinancing that involved the repayment or
capitalisation of all existing bank lending facilities and issue of
EUR2,195m of new secured and unsecured bonds.
The Ausco acquisition gives ASH a significant market presence in the
Asia-Pacific region, substantial exposure to high growth markets, and
expansion of the company's current geographic footprint.
ASH also completed a refinancing of its debt facilities during 2013. ASH
issued $1,075 million principal amount of 8.50% Senior Secured Notes due
for repayment in 2018 and EUR275 million aggregate principal amount of
9.00% Senior Secured Notes due for repayment in 2018 (collectively, the
"Senior Secured Notes") and $745 million aggregate principal amount of
10.75% Senior Unsecured Notes due for repayment in 2019 (the "Senior
Unsecured Notes" and, together with the Senior Secured Notes, the
"Notes"), and secured an additional asset backed facility of up to $1.2
billion. All existing debt facilities were either capitalised or repaid.
As a result of this acquisition and restructuring, CMI's shareholding in
the enlarged group decreased from 6.57% to 2.78%.
On 14 May 2013 ASH announced a $400m 5 year PIK loan placement. The
proceeds of the issue were used to return funds to shareholders via
capital redemption of ordinary shares. CMI received GBP6.351m on 2
October 2013.
Reported EBITDA for ASH was $441m for the year to December 2014 (FY2013
$496m, which is adjusted on a pro-forma basis for acquisitions). The
decline in EBITDA was primarily due to continued market weakness in Asia
Pacific, where sales continue to suffer from the slowdown in the Mining
and Resources sector, and there was also some negative impact on the
results from unfavourable currency movements.
The directors continue to value the shareholding using a peer group
EBITDA multiple of 9.17 (discounted by 20% to reflect the lack of
marketability of the shareholding) and adjusted for debt of $3,534
million (including $514m PIK loan) in line with International Private
Equity Valuation Guidelines. Adopting these principles, the board
reduced the total carrying value of its 2.8% equity holding to GBP13.0m
(2014 - GBP19.9m) in the statutory accounts for the year to 31 January
2015.
Investment in Yola Investments Sarl ("Yola")
The Company holds an indirect investment of 7% in Magticom, the largest
mobile telephone operator in The Republic of Georgia via its 33%
shareholding in Yola Investments Sarl. Yola owns 43% of Metromedia
International Group ("MIG") which in turn owns 46% of Magticom.
Trading at Magticom during 2014 was difficult in a challenging economic
and competitive environment, however EBITDA for the year to December
2014 increased from $74m to $79m. The directors believe that an EBITDA
multiple of 5 represents their best estimate of the multiple to value
the investment.
On 1 July 2014 MIG went into Chapter 11 as a result of its inability to
make the payments of interest due on the loan notes. MIG currently
remains in Chapter 11 and is exploring various restructuring options.
The board believes that the 46% shareholding that MIG holds in Magticom
is worth less than the value of the loan notes to third parties,
outstanding in MIG, as the value of the outstanding loan notes of c$252m
is higher than a likely exit value based on a multiple of EBITDA.
Consequently the Board continue to show the carrying value of its
shareholding in Yola in the Financial Statements at GBPNil.
4 Financial instruments
Equity Investments
These investments are carried at fair value and any adjustments to this
fair value are recognised in the income statement, giving rise to fair
value risk.
Where investments are held in unquoted equity instruments the fair value
of these investments is determined:
- initially at cost (which is the fair value of the consideration
given), less any required provision; and
- subsequently using an earnings multiple model.
The process of estimating the Fair Value of an investment involves
selecting one of the above methodologies and using that to derive an
Enterprise Value for the investee company. The process is then to:
-- deduct from the Enterprise Value all financial instruments ranking ahead
of CMI
-- apply an appropriate marketability discount
-- apportion the remaining value over the equity shares.
The Marketability Discount will generally be between 10% - 30% with the
level set to reflect CMI's influence over the exit prospects and timing
for the investee company.
When using the earnings multiple methodology, earnings before interest,
tax, depreciation, and amortisation ("EBITDA") are used - generally from
the last full year historical statutory or management accounts. An
appropriate multiple is applied to these earnings to derive an
Enterprise Value.
In the current year a fair value adjustment of GBP5.168m (2014 -
GBP3.486m) was recognised within the income statement. Both investments
are classified under the fair value measurement hierarchy as level 3
financial assets.
This announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Capital Management & Investment Plc via Globenewswire
HUG#1926680
http://www.cmi-plc.co.uk/
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