CAP.MAN.& INV Interim Results
30 10월 2015 - 4:00PM
UK Regulatory
TIDMCMIP
Capital Management and Investment PLC
("CMI" or the "Company")
Interim Results for the six month period ended 31 July 2015
Chairman's Statement
Introduction
As at 31 July 2015 the Company had two investments: a 2.8% (2013 - 2.8%)
shareholding in Algeco Scotsman Holdings ("ASH") and a 7% (2013 - 7%)
shareholding in Magticom.
The fair value of the Company's investment in ASH was reduced as at
31(st) January 2014 to GBP13m to reflect current performance. Your board
has reduced the fair value of its investment further to GBP3.24m for the
reasons set out below.
The fair value of the Company's investment in Magticom remains unchanged
at GBPNil.
Results for the period
As at 31 July 2015, the Consolidated Income Statement shows a loss
before tax of GBP9.286m (31 July 2014 - Loss GBP0.214m). The loss before
the reduction in fair value of the investment in ASH was GBP0.284m
Other income of GBP0.057m (31 July 2014 - GBP0.118m) consists entirely
of fees paid by ASH in relation to the monitoring of the Company's
investment. CMI no longer receives fees (31 July 2014 - GBP0.060m) from
Yola Investments SARL ("Yola") in relation to monitoring fees for its
investment in Magticom.
Administrative expenses for the six month period to 31 July 2015 of
GBP0.346m (31 July 2014 - GBP0.337m) include GBP0.125m (31 July 2014 -
GBP0.125m) payable for office services.
As at 31 July 2015, Net asset value ("NAV") per share was GBP1.32 (31
July 2014 - GBP3.63) and the Company had net cash balances of GBP6.331m
(31 July 2014 - GBP6.808m, 31 January 2015 - GBP6.534m) at the period
end.
Investment in Algeco Scotsman Holdings ("ASH")
For the year to 31 December 2014, ASH reported adjusted EBITDA of
US$441m (2013 - US$487m). The decline in EBITDA was primarily due to
continued market weakness in Asia Pacific, where sales suffered from the
slowdown in the Mining and Resources sector, coupled with a negative
impact on the results from unfavourable currency movements.
For the six months ended 30 June 2015, ASH reported adjusted EBITDA of
US$187m (30 June 2014 - US$211m). This reduction has been primarily due
to unfavourable foreign currency movements against the US dollar.
Your board historically valued the Company's shareholding using peer
group adjusted EBITDA multiples (discounted to reflect the lack of
marketability of the shareholding) and adjusted for ASH's debt of
US$3,534 million (including a US$514m PIK loan) in line with
International Private Equity Valuation Guidelines. Adopting these
principles, for the year to 31(st) January 2015 the Board reduced the
total carrying value of its 2.8% equity holding to GBP13.0m in the
statutory accounts.
Your board has now reduced the fair value of its investment further to
GBP3.24m following receipt of notification that a minority shareholder
has sold its shareholding in ASH to existing ASH shareholders. Your
board declined to take up its pre-emption right over this sale but
reduced the fair value of its investment in ASH to be in line with the
sale price of the shares.
Investment in Yola Investments Sarl
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 31 December
2014 increased from $74m (2013) to $79m.
On 30 June 2014, MIG, LLC and ITC Cellular, LLC (MIG LLC's wholly owned
subsidiary) (collectively, the "Debtors") each filed a voluntary
petition for relief under Chapter 11 of the United States Bankruptcy
Code in the United States Bankruptcy Court for the District of Delaware.
The cases are pending before the Honorable Kevin Gross and are jointly
administered under Case No. 14-11605.
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.US
$252m is higher than a likely exit value based on a multiple of
Magticom's adjusted 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 investment in ASH through regular
meetings with the management team, receipt of monthly financial reports,
and attendance at board meetings.
Your 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 together with the Company's cash balances.
Your Board believes that the current illiquidity of the investments that
the Company holds and the ongoing corporate and administrative costs to
the Company of maintaining a quotation on AIM are not benefiting
shareholders. Accordingly, the Board intends to announce proposals which
will involve the cancellation of the Company's admission on AIM and to
return to shareholders the majority of the Company's cash, with a
residual amount set aside to cover ongoing corporate and administrative
costs of an unlisted company.
Under the AIM Rules, the cancellation of an AIM company's ordinary
shares to trading on AIM is subject to the consent of not less than 75%
of votes cast by its shareholders at general meeting. In addition, the
return of capital to shareholders is dependent on shareholders approving
a change to the Company's legal form through a capital reorganisation in
order to create sufficient distributable reserves to allow a
distribution to be made. Further details of these proposals are
expected to be announced shortly.
Dividends
The Board is not recommending payment of a dividend for the period under
review (2014 - GBPNil).
Giles Davies
Chairman
30th October 2015
Consolidated Income Statement
for the six month period ended 31 July 2015
Unaudited Unaudited Audited
Six months Six months Twelve months
Ended Ended Ended
31 July 31 July
2015 2014 31 January 2015
GBP'000 GBP'000 GBP'000
Fair value loss on
investments (9,002) - (5,168)
Other income 57 118 162
(8,945) 118 (5,006)
Administrative
expenses (346) (337) (588)
Operating loss (9,291) (219) (5,594)
Finance income 5 5 10
Loss before tax (9,286) (214) (5,584)
Taxation - 1 (10)
Loss for the period (9,286) (213) (5,594)
Basic loss per 2 GBP(1.30) GBP(0.03) GBP(0.78)
share
Fully diluted loss GBP(1.30) GBP(0.03) GBP(0.78)
per share
Consolidated Statement of Changes in Equity
As at 31 July 2015
Foreign
Currency
Share Share Premium Merger Translation Retained Total
Capital Account Reserve Reserve Earnings Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 31 January 2014 7,162 40,305 1,693 36,873 (59,129) 26,904
Total comprehensive expense for
the period - - - (681) (213) (894)
Balance as at 31 July 2014 7,162 40,305 1,693 36,192 (59,342) 26,010
Total comprehensive expense for
the period - - - (1,060) (5,381) (6,441)
Balance as at 31 January 2015 7,162 40,305 1,693 35,132 (64,723) 19,569
Total comprehensive expense for
the period - - - (774) (9,286) (10,060)
Balance as at 31 July 2015 7,162 40,305 1,693 34,358 (74,009) 9,509
Consolidated Balance Sheet
As at 31 July 2015
Audited
Twelve months
Ended
Unaudited Six months Ended Unaudited Six months Ended 31 January
31 July 2015 31 July 2014 2015
GBP'000 GBP'000 GBP'000
ASSETS
Non Current
assets
Investments 3,240 19,224 13,000
3,240 19,224 13,000
Current
assets
Trade and
other
receivables 130 262 222
Cash and
cash
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