RNS Number:6878R
Palmaris Capital PLC
05 November 2003
PALMARIS CAPITAL PLC ("Palmaris" or "the Company")
Results for the year ended 30 June 2003
PALMARIS CAPITAL plc
RESULTS FOR 12 MONTHS ENDED 30 JUNE 2003
41% GROWTH IN NET ASSETS PER SHARE
KEY POINTS
* Net assets per share grown from 8.3p to 11.7p, continuing trend
established over the last 3 years.
* Main driver is growth in the value of Perseverance following a major gold
discovery and a successful fund raising.
* Mining Scotland continues to perform well now that the deep mine is
closed, with profits before tax of some #2.2m attributable to Palmaris.
* Board sees considerable upside potential in both major investments.
* Palmaris Services is now budgeting a profit in the current year.
Commenting, Timothy Noble, Chairman said:
"The board is confident in the direction and performance of our two associated
companies and believes the Palmaris Services business has now been turned
around. Having considerably restored the financial position of the Company over
the last few years, our thoughts are now turning to the next stage of our
development involving expansion. We will continue our focus on the natural
resources sector".
For further information contact:
R Gregory Melgaard
Managing Director
Tel: 020 7553 8510 (London Office)
07799 657553 (Mobile)
CHAIRMAN'S STATEMENT
Results
The highlight of the year has been the significant growth in net assets per
share due to the progress made by our two main associated companies,
particularly Perseverance. We expect this progress to continue over the coming
years, resulting in further increases in net assets per share. At Palmaris
Services, the losses have been stemmed and we are budgeting for a small profit
in the current year.
Net assets rose 41% from #10.35m (8.3p per share) to #14.66m (11.7p per share).
The group's net assets two years ago were only #5.73m. Since the balance
sheet date net assets have increased further by about 4p per share due to a rise
in the Perseverance share price. These substantial increases are a reflection
of the quality of our assets and a validation of our strategy of working closely
with the managements of our associated companies to grow shareholder value.
The net cost of running the Company was maintained at a low level of #175,000
compared to #163,000 the previous year. The loss at Palmaris Services has been
reduced from #680,000 to #73,000, which, despite the improvement, is
disappointing as we had hoped to achieve a small profit. Thus, the overall
result for the year is a loss of #248,000 before tax, as compared with a loss of
#843,000 the previous year.
It is worth noting that our share of Mining Scotland's audited profits before
tax in the year to 29 March 2003 was some #2.2m. Were this figure to be
included in our profit and loss account, overall earnings per share would be
over 1.5p.
Mining Scotland
In its year to 29 March 2003, which was the first without the draining effect of
the deep mine, Mining Scotland made profits before interest and tax of #12.8m on
a turnover of #117m. The comparative figures for the previous year (excluding
the deep mine) were profits of #19.6m on a turnover of #133m. Profits before
tax in the year to 29 March 2003 were #9.5m and net cash inflow was some #5.5m.
The total output of coal was 4.29m tonnes, a decline of 9.4% on the previous
year. The remainder of the decline in profitability was due to lower coal sale
prices. The latter were affected by the strength of sterling which allowed
foreign competitors to quote lower sterling prices.
The decline in coal sale prices will continue to affect the current year's
results. However, the recent energy crisis in Europe has resulted in increased
demand for coal as well as oil. This is helping prices to rise and increased
production will also help boost this year's results, although the rise may have
come too late to allow last year's profits to be equalled.
At the same time, the continuing process of applying for new licences has
resulted in the award of additional coal production rights. We believe current
coal reserves are sufficient to support production for well over 10 years.
Further progress has been made on the property development opportunities
available to Mining Scotland, which could be significant if they are eventually
realised.
We have increased the valuation of our 23% holding in Mining Scotland to #9.7m,
which represents 52% of our total assets.
The management of Perseverance has been working towards exploiting its sulphide
mineable reserves at Fosterville in Victoria (Australia). This target was
brought much closer during the year as a result of drilling bore holes and then
conducting a banking feasibility study.
On 1 September 2003, it was announced that Perseverance had successfully
completed the banking feasibility study and had made a commitment to proceed
with the development of the Fosterville mine, subject to securing the requisite
financing. On 9 October 2003, Perseverance announced the successful
completion of an A$75m placement at 28 cents per share to fund the development
of the Fosterville Gold Project. The first gold pour from the project should
take place in the final quarter of 2004.
The decision is based on 6m tonnes of reserves with an average grade of 4.69g of
gold per tonne, giving mineable reserves of 910,000 ounces of gold (of which
219,000 ounces is open cut). These are initial estimates: they do not include
expected enhancements which may come from further assessment of the potential.
The initial mine life is assessed at 7.5 years, but this is expected to be
increased significantly. Production is expected to average 110,000 ounces per
annum, with cash costs of US$209 per ounce.
The share price of Perseverance on the Australian Stock Exchange increased
during the year to A$0.19, increasing the value of our 25.8% holding in
Perseverance from #3.4m to #5.0m, which represents 27% of our total assets. At
the placement price of 28 cents the value of our investment at 9 October 2003
had increased to #7.5m.
Palmaris Services
Although turnover increased from #4.3m to #4.9m and the loss of #73,000 compares
favourably with the result for the previous year, Palmaris Services has been a
disappointment. The steps taken throughout 2002 to improve the quality of the
business and its equipment, including the decision to use equipment requiring
lower manning levels, have helped to turn the business round. A new line of
portacabins has proved a successful innovation. At this stage it is only a
very small part of the business, but it has the potential to grow. Palmaris
Services is expected to trade profitably during the current year.
Conclusion
The board is confident in the direction and performance of our two associated
companies and believes the Palmaris Services business has now been turned
around. Having considerably restored the financial position of the Company over
the last few years, our thoughts are now turning to the next stage of our
development involving expansion. We will continue our focus on the natural
resources sector.
The efforts involved in turning round Palmaris Services and in providing active
support to our associated companies are still being provided by Greg Melgaard,
Willie Paterson and Jim Richardson at sub-commercial levels of remuneration.
On behalf of all shareholders, I would like to thank them for their efforts.
Timothy Noble
Chairman
4 November 2003
CONSOLIDATED PROFIT AND LOSS Account
for the year ended 30 June 2003
2003 2002
# #
Turnover 4,877,181 4,280,886
Cost of Sales (3,987,302) (3,723,975)
Gross Profit 889,879 556,911
Administrative expenses (931,787) (1,021,309)
Operating loss (41,908) (464,398)
Investment and other income 15,390 21,444
(Loss) on ordinary activities before
exceptional item and interest payable (26,518) (442,954)
Exceptional item - Goodwill written off - (239,772)
Interest payable (221,548) (159,804)
(Loss) on ordinary activities before taxation (248,066) (842,530)
Taxation on (loss) on ordinary activities - -
(Loss) on ordinary activities after taxation (248,066) (842,530)
(Loss) for the financial year (248,066) (842,530)
(Loss) per ordinary share (0.20)p (0.68)p
(Loss) per ordinary share before exceptional item (0.20)p (0.49)p
Diluted (loss) per ordinary share (0.15)p (0.53)p
The reported (loss) on ordinary activities before taxation equates to the
historical cost (loss) on ordinary activities before taxation.
CONSOLIDATED BALANCE SHEET
As at 30 June 2003
2003 2002
# #
Fixed assets
Tangible assets 2,605,993 2,435,868
Investments 14,769,602 10,000,984
17,375,595 12,436,852
Current assets
Stocks 38,070 9,230
Debtors 1,104,972 1,096,807
Cash 1,754 2,197
1,144,796 1,108,234
Creditors
Amounts falling due within one year
Borrowings (2,279,175) (1,471,422)
Other (707,311) (619,626)
(2,986,486) (2,091,048)
Net current (liabilities) assets (1,841,690) (982,814)
Total assets less current liabilities 15,533,905 11,454,038
Creditors
Amounts falling due after more than one year
Borrowings (870,167) (1,099,643)
Net assets 14,663,738 10,354,395
Capital and reserves
Called up equity share capital 6,242,225 6,242,225
Unrealised appreciation reserve 5,436,503 879,094
Capital reserve 1,285,569 1,285,569
Profit and loss account 1,699,441 1,947,507
Shareholders' funds 14,663,738 10,354,395
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 30 June 2003
2003 2002
# #
Net cash inflow (outflow) from operating 595,589 (508,721)
activities
Returns on investments and servicing of finance (206,158) (138,360)
Capital expenditure and financial investment (212,997) (48,588)
Acquisitions and disposals - (555,566)
Cash inflow (outflow) before financing 176,434 (1,251,235)
Financing (483,705) (322,331)
(Decrease) in cash in the year (307,271) (1,573,566)
T. P. Noble (Director)
Approved by the board on 4th November 2003
Notes:
1. The above results have been extracted from the audited
accounts of Palmaris Capital Plc for the year to 30 June 2003 which received an
unqualified auditor's report and will be filed with the Registrars of Companies.
The above extract does not represent statutory accounts as defined by section
240 of the Companies Act 1985 (as amended). The statutory accounts were adopted
by the Board of Directors on 4 November 2003.
The announcement is prepared on the basis of accounting policies as stated in
the audited results.
2. (Loss) per ordinary 5p share is based on the weighted
average number of shares in issue during the year as follows:
Loss Number of Shares (Loss) Diluted (loss)
per share per share
#
(Loss) per share (248,066) 124,844,504 (0.20)p (0.15)p
The diluted (loss) per share is calculated after allowing for the 35,540,000
warrants issued on 8 May 2001 and not converted at 30 June 2003.
3. A copy of the audited Report and Accounts will be sent to the
Shareholders on or about 6 November 2003 and additional copies will be
available free of charge for a period of one month from the offices of the
Company's nominated adviser, Noble & Company Limited, 76 George Street,
Edinburgh, EH2 3BU.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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