TIDMAVR
RNS Number : 9048Z
Avarae Global Coins PLC
30 September 2009
News Release
30 September 2009
AVARAE GLOBAL COINS PLC
FINAL RESULTS FOR THE YEAR ENDED 31 MARCH 2009
Avarae Global Coins plc ("Avarae" or the "Company"), the UK's only publicly
traded specialist investment company dedicated to investing in rare and high
quality coins, is pleased to announce its final audited results for the year
ended 31 March 2009.
Highlights for the year:
* Carrying value of portfolio of rare and high quality coins increased by more
than GBP1.9 million to GBP9.6 million at 31 March 2009 (2008: GBP7.7 million);
* Coin sales up 7 fold to GBP0.9 million for the year ended 31 March 2009 (2008:
GBP0.1 million);
* Gross margins achieved during the year of almost 15% (2008: 13%);
* Pro-forma NAV per share* up 15% to 12.2p at the year end (2008: 10.7p);
* Important Islamic and English coins and coin collections, amongst others, added
to the portfolio during the year and since the year end;
* Worldwide prices for the top quoted grade coins continue to show growth, with
record prices being paid for the rarest pieces;
* Net cash of GBP1.9 million at year end (2008: GBP4.2 million); and
* Net profit for the year of GBP0.19 million (2008: GBP0.29 million).
* Assuming completion of the two share-buybacks announced in August 2008 and
April 2009 for a total of 22.0 million shares, completion of which is
conditional upon, inter alia, passing certain resolutions at the 2009 AGM,
notice of which will be sent to shareholders in due course. Further details are
set out in this announcement. The pro-forma NAV is based on 110,133,334 shares
as at 31 March 2008 and 88,133,334 shares as at 31 March 2009.
Commenting on the results, Tanya O'Carroll, Executive Director of Avarae, said:
"In spite of the continued difficulties throughout the wider financial market,
Avarae is well positioned as an alternative asset play in the current
environment, as evidenced by it reporting an increase in sales and NAV for the
year. The international nature of the coin market allows the Company to continue
to take advantage of rising prices across a number of sectors and importantly
take advantage of sectors which may be starting to show some short term
weakness. It appears that lower value and more common coins are static or are
experiencing declines in value, whereas values for the rarest and highest
quality coins, the only type in which Avarae is interested, continue to rise,
drawing strong international interest.
"Since the year end, the Company has acquired coins for a value of approximately
GBP0.23 million and has made disposals for a total of almost GBP0.1 million,
returning a realised gain of approximately 20 per cent. The Company has a
strong balance sheet, including a coin portfolio with a current carrying value,
as reported on by independent experts, of more than GBP9.6 million. The
Directors, therefore, remain cautiously optimistic about the Company's future
prospects."
The Company's audited report and accounts have today been posted to
shareholders, and notice of the AGM will be posted to shareholders in due
course. An electronic copy of the audited report and accounts will also shortly
be available on the Company's website: www.avarae.com.
For further information on Avarae Global Coins plc, please contact:
+--------------------------------------------------------+---------------------------+
| Tanya O'Carroll/Matt Wood | +44 (0)16 2461 5614 |
+--------------------------------------------------------+---------------------------+
| Avarae Global Coins plc | |
+--------------------------------------------------------+---------------------------+
| | |
+--------------------------------------------------------+---------------------------+
| Adrian Hadden/Stewart Wallace | +44 (0)20 7523 8350 |
+--------------------------------------------------------+---------------------------+
| Collins Stewart Europe Limited | |
+--------------------------------------------------------+---------------------------+
| | |
+--------------------------------------------------------+---------------------------+
| Gordon Puckey/Sarah Scott | +44 (0)20 7947 2856 |
+--------------------------------------------------------+---------------------------+
| Phoenix Financial PR | |
+--------------------------------------------------------+---------------------------+
AVARAE GLOBAL COINS PLC
Audited results FOR THE YEAR ENDED 31 March 2009
Directors' Report
Introduction
We are pleased to present the final audited results for Avarae Global Coins plc
("Avarae" or "the Company") for the year ended 31 March 2009 to our
shareholders. The following reports show the financial position of the Company
for the year ended 31 March 2009, together with some additional information
since the year end. During the year under review, the Company continued to
increase its portfolio of rare and high quality coins.
Avarae provides access for institutions and individuals wanting to diversify
their investment portfolios away from the traditional asset classes such as
equities, property and bonds without the need to be an expert in the
coin-collecting sector. The Board's strategy, as set out in its AIM Admission
Document, is to invest actively in the rare and highest quality segment of the
coin-collecting sector in various countries around the world. The investing
policy of the Company is set out in more detail below.
Financing
Avarae is registered and incorporated in the Isle of Man. Since its
incorporation, it has raised approximately GBP12.0 million to fund investments
and purchases of rare and antique coins. For a publicly traded Company, Avarae
maintains a low operational cost base of around 3 per cent. of net assets per
annum, which includes the costs associated with all of the Company's numismatic
advisers and ongoing plc costs.
Investing Policy
The Company's investment policy is to invest in rare, high quality antique coins
and coin collections from across the world. We are currently building up an
impressive portfolio of extremely high quality, rare coins which we intend to
hold both for the long-term (i.e. 3 to 5 years), in order to achieve long-term
capital growth for our shareholders, and also the short-term, in order to take
advantage of short-term trading opportunities, as the market for rare coins
continues to grow. The value of each investment is expected to range from a few
hundred pounds up to GBP750,000. The most expensive coin acquired by Avarae to
date is the Edward III Double Florin which was acquired for GBP0.4 million.
The Board's decision on whether to acquire or dispose of an investment is made
on the recommendation of its industry expert independent Advisory Panel
("Panel") that assesses and approves all coin trading related activities. The
Panel members are Sir John Wheeler and David Pinckney. Neither member has any
connection to Avarae or any of its numismatic advisers except as a member of the
Panel. The Board is independent of the Panel, the Company's numismatic advisers
and the Company's substantial Shareholders.
The Company's objective is to achieve long term capital growth through the
appreciation in the value of the coins acquired. Compound annual returns
achievable over the medium to long term for the highest quality and rarest coins
are expected to be around 10 per cent., in line with historical averages. As at
the date of this report, and since its formation in 2006, the Company has no
borrowings and has no present intention of securing any borrowings.
The coin-dealing sector
The market for trading coins is international in nature and significant in size.
For a number of years now, there has been an increasing interest in the coin
sector and its prominence as an alternative investment class is illustrated by
continued increases in activity around the world, where record prices have been
paid for certain rare pieces. The number of interested parties in coins and coin
collections appears to be continuing to grow, with auction houses
reporting significant growth in the numbers of interested bidders compared to
the corresponding auctions in previous years.
The coin market has proved to be extremely resilient over recent months in spite
of the backdrop of tough global economic conditions. Important coin collections
have frequently come up for sale worldwide (including in the world's largest
market, the US) with auction houses achieving record prices, particularly for
the highest quality, rare pieces.
Rare English, Islamic and Indian coins remain the strong sectors within the
industry although record prices continue to be paid for rare high quality pieces
from all over the world. Recent examples of the strong interest in the rare
coin market include an 1804 Adams-Carter $1 setting a record price for its class
in May 2009, when it was sold for $2.3 million (including buyer's premium). The
same coin had previously sold for just over $1.2 million (including buyer's
premium) in 2003, therefore returning a compound annual growth rate during those
six years of more than 11 per cent. Other examples of the high levels of
interest in the sector include a Russian Elizabeth 20 Roubles of 1755, which
sold for GBP1.82 million in November 2008, a world record for a non-US coin.
English coins fared well last year, with market commentators stating that on
average, the value of top quoted grade of hammered English coins experienced
double digit growth and extremely fine examples of early milled English coins
also enjoyed gains. These statistics bode well for the future of the Company as
its portfolio has a large concentration of rare and extremely high quality
English coins.
Historically, if purchased correctly, investments in coins can not only reduce
the risk of overall investment portfolios, but can also produce significantly
better returns than investments in equities, bonds or property. Coins and coin
collections of the highest quality can produce annual compound returns in excess
of 10 per cent., if held for the medium to long term.
Avarae's investments
In the year to March 2009, the Company acquired almost GBP2.39 million worth of
coins, taking the value of the coin portfolio as at 31 March 2009 to GBP9.64
million (2008: GBP7.72 million). As in previous years, the Company has focused
on the purchase of extremely high quality English coins, but also this year we
have focussed on increasing the Company's exposure to Islamic coins, through the
outright purchase of certain coin and coin collections and also through
acquiring a share in an important set of Islamic coins. A feature of last year
was the concentration on building up collections of particular sectors of rare
coins that our Advisory Panel believes will be of significant value in the years
to come. Furthermore, a focus was also made on picking up extremely rare coins,
where there are only a few examples known to exist worldwide. Examples of rare
coins acquired during the year and since the year end include:
· Philip IV of Spain, 50 Reales, 1635-R: only 12 examples known of which 6 are
in public collections. There is perhaps no finer emblems in silver of the
Spanish main than this magnificent, huge coin;
· George III, Pattern Five Guinea 1770, by John Tanner: only three examples of
the extremely rare 1770 Five Guinea have appeared on the market over the past 45
years;
· Charles II, Pattern Crown, 1663, the "Petition Crown": extremely fine with a
superb pedigree and one of the most desirable British silver coins struck;
· Elizabeth 1 Ship Ryal; extremely fine showing queen with orb and sceptre; and
· Umayyad Dirham Al-Zawabi 79h; extremely fine and the only one recorded.
Avarae's current intention is to hold the vast majority of its current portfolio
for the foreseeable future and only make disposals of coins or collections when
the Board believes it to be in the best interests of the Company and its
shareholders.
Financial Results
During the year under review, the Company made a significantly higher number of
disposals of coins from within the portfolio, than in previous years. Sales for
the year ended 31 March 2009, totalled GBP906,000, an increase of more than
seven-fold on the previous year's sales of GBP119,000. The Company achieved an
average gross return (before year-end revaluation) of almost 15 per cent., in
line with the prior year. As in prior years, a large proportion of the coins
sold were examples of duplicates within the Company which had only been recently
acquired as part of other collections, and also taking advantage of
opportunistic sales, particularly of Middle Eastern coins. However, for the
first time, the Company has now started to dispose examples of high quality
coins which have been held for more than 2 years. In each case, the Company made
double digit gross returns.
As at 31 March 2009, in line with the strategy outlined in our AIM admission
document and in previous reports, the Company instructed industry experts to
undertake a detailed revaluation of its coin portfolio. As has been documented,
there are numerous examples of rare, high quality coins and collections being
sold which result in an approximate 10 per cent. annual compound return and
therefore the Directors believed that an annual revaluation of the coin
portfolio is a necessity.
The Directors again took an extremely prudent approach to the revaluation
exercise instructing experts in the various sectors in which the Company held
coins. These experts considered the open market resale value of only those coins
that had been held within the portfolio for more than 12 months, i.e. only those
coins acquired and held by Avarae on or before 31 March 2008 and excluding those
purchased during the financial year under review.
The result of the extensive revaluation exercise, carried out on items as
described in the accounting policies, was that the overall carrying value of the
portfolio as at 31 March 2009 has increased by GBP0.30 million to GBP9.64
million. The Directors consider this uplift in value to be particularly
conservative and would expect coins from the portfolio to achieve appreciably
higher returns if sold at auction, as has been proved by the sales and gross
sales margins achieved to date. The effect of the 2008/9 revaluation exercise is
that, as at 31 March 2009, the Company's coin portfolio comprised of coins
purchased at cost for an aggregate GBP8.96 million and a revaluation amount of
GBP0.68 million (net of VAT payable on sale).
The effect of the revaluation, together with the profits from the coin sales,
resulted in the Company achieving an increased gross profit of GBP0.43 million
for the year ended 31 March 2009 (2008: GBP0.42 million). Administrative
expenses during the year were in line with the previous year at GBP0.38 million
(2008: GBP0.35 million), and still represent approximately 3 per cent. of the
Company's net assets (2008: 3.0 per cent.). Interest receivable of GBP0.14
million was materially lower than last year (2008: GBP0.22 million) and is
directly attributable to the lower levels of cash balances held during the year
and the lower levels of interest rates available for our cash deposits. Net
profit for the year was GBP0.19 million (2008: GBP0.29 million).
The Company ended the year with approximately GBP1.9 million of net cash, down
from GBP4.2 million at the end of March 2008. During the year, investments of
GBP2.3 million (2008: GBP3.2 million) were made in coins and coin collections
and the buyback of company shares. As at the year end, the Company had net
assets of GBP12.0 million (2008: GBP11.8 million) and no borrowings.
In line with our stated strategy as set out in our AIM Admission Document and as
the Company remains in its investment phase, no dividend has been recommended in
respect of the year ended 31 March 2009.
Purchases of own shares for cancellation
In August 2008, the Directors, having been notified that a significant number of
the Company's ordinary shares of 1 pence each ("Ordinary Shares") were for
sale, and having canvassed the views of some of the Company's significant
shareholders at the time, took the decision to make market purchases for cash of
its own Ordinary Shares for cancellation. Accordingly, on 28 August 2008, the
Company acquired 7.0 million Ordinary Shares at 7.0 pence each for a total of
GBP0.49 million for cancellation ("August '08 Buyback"). The closing mid-market
price per Ordinary Share at the time of the purchase was 9.0 pence.
Furthermore, following the collapse of certain Icelandic banks towards the end
of 2008, the Company learnt that its then largest shareholder wanted to dispose
of its holding of 24.09 million Ordinary Shares. The Directors, having consulted
with a number of shareholders, took the decision to purchase some of those
Ordinary Shares for cancellation. The Directors' reasoning being that, by
purchasing Ordinary Shares for cancellation at a price less than the Company's
net asset value per Ordinary Share (NAV), the effect will be to increase the NAV
for all remaining shareholders. Accordingly, the Company convened an
extraordinary general meeting of shareholders on 23 March 2009 ("EGM") and the
Directors obtained authority at the EGM to make market purchases of up to 25 per
cent. of the Company's issued share capital for cancellation.
Consequently, on 29 April 2009, the Company duly made market purchases of 15.0
million Ordinary Shares at 5.0 pence per Ordinary Share for cancellation for a
total consideration of GBP0.75 million ("April '09 Buyback").
It has since transpired that, at the time of the August '08 Buyback and April
'09 Buyback (together the "Buybacks"), the Company did not have, for such a
company incorporated under the Isle of Man Companies Act 1931, the required
levels of distributable reserves available to undertake the Buybacks. As a
result, the Buybacks have not yet completed. The Company has subsequently
received legal advice that the Company should re-register under the Isle of Man
Companies Act 2006 (the "2006 Act") in order to, inter alia, complete the
Buybacks.
Accordingly, at the 2009 annual general meeting of the Company ("AGM"), notice
of which is expected to sent to shareholders in due course ("Notice"), the
directors will be seeking to, inter alia, re-register the Company as a company
incorporated under the 2006 Act which will, subject to the agreement of the
relevant selling shareholders, enable the Company to complete the Buybacks out
of existing reserves, albeit at a later date than previously envisaged.
The re-registration to a 2006 Act company is, in the opinion of the directors,
in the best interests of the Company and its shareholders. The Company was
formed prior to the 2006 Act coming into force and the 2006 Act updates and
modernises Isle of Man company law from the existing Isle of Man Companies Act
1931. By way of example, a 2006 Act company is able to reclassify its share
premium account as distributable reserves thereby enabling the Company to return
cash to shareholders more easily (either by additional share buybacks or
dividends), should shareholders decide to do so. Further details of the changes
to the Company's articles are set out in the Notice, which will be posted to
shareholders in due course.
The unfortunate consequence of not having completed the Buybacks is that, in the
accounts for the year ended 31 March 2009, the Company's balance sheet includes
an amount owing to Company from the single August '08 Buyback shareholder
being equal to the amount paid by the Company for the 7.0 million Ordinary
Shares pursuant to the August '08 Buyback of GBP0.49 million ("Shareholder
Debtor"). The April '09 Buyback was undertaken after the year end and is
therefore not shown in the accounts for the year ended 31 March 2009.
Furthermore, the Company intends to apply to the Isle of Man Courts in respect
of the re-instatement of the, in aggregate, 22.0 million Ordinary Shares the
subject of the Buybacks onto the Company's register of members and is expected
to be applying to the London Stock Exchange for the re-admission of these
Ordinary Shares to begin trading on AIM ("Admission"). A further announcement
will be made in this regard in due course.
The effect on the Company of completing the Buybacks will be to reduce the
number of Ordinary Shares in issue by 22,000,000 from 110,133,334 to 88,133,334
and removing the Shareholder Debtor. There is no effect on the Company's cash
balances of completing the Buybacks.
As at 31 March 2009, and therefore prior to the completion of the Buybacks, the
Company's audited net asset value per Ordinary Share ("NAV") stood at
10.9 pence, up from 10.7 pence at the corresponding point last year. However,
the Company's pro-forma NAV as at 31 March 2009, assuming the resolutions are
passed at the AGM and completion of the Buybacks, was 12.2 pence, an increase of
almost 15 per cent. from 31 March 2008.
Change of Director
Neil Orders, an executive director of the Company left on 30 June 2009 to pursue
other interests. We are grateful to Neil for his input into the Company and
particularly for his assistance at the time of our admission to AIM. As
previously announced, Neil was replaced by Tanya O'Carroll on 14 July 2009.
Tanya is an experienced company director currently working for Hillberry Trust
Company Limited, Avarae's administrator in the Isle of Man. We look forward to
gaining from her input over the coming months.
Outlook
The Directors consider that, in spite of the continued difficulties throughout
the wider financial market, Avarae is well positioned as an alternative asset
play in the current environment, as evidenced by it reporting an increase in
sales and NAV for the year. The international nature of the coin market allows
the Company to continue to take advantage of rising prices across a number of
sectors and importantly take advantage of sectors which may be starting to show
some short term weakness. It appears that lower value and more common coins are
static or are experiencing declines in value, whereas values for the rarest and
highest quality coins, the only type in which Avarae is interested, continue to
rise, drawing strong international interest.
Since the year end, the Company has acquired coins for a value of approximately
GBP0.23 million and has made disposals for a total of almost GBP0.1 million,
returning a realised gain of approximately 20 per cent. The Company has a strong
balance sheet, including a coin portfolio with a current carrying value, as
reported on by independent experts, of more than GBP9.8 million. The Directors,
therefore, remain cautiously optimistic about the Company's future prospects.
APPROVED BY THE BOARD OF DIRECTORS
30 September 2009
RESULTS FOR THE YEAR ENDED 31 MARCH 2009
Profit and Loss Account
+-----------------------------------+--------+------------+-----------+
| | | | |
+-----------------------------------+--------+------------+-----------+
| | | Year ended | Year |
| | | | ended |
+-----------------------------------+--------+------------+-----------+
| | | 31-Mar-09 | 31-Mar-08 |
+-----------------------------------+--------+------------+-----------+
| | Note | GBP'000 | GBP'000 |
+-----------------------------------+--------+------------+-----------+
| Revenue | | | |
+-----------------------------------+--------+------------+-----------+
| Sales | 1 | 906 | 119 |
+-----------------------------------+--------+------------+-----------+
| Cost of Sales | | (775) | (103) |
| | | | |
+-----------------------------------+--------+------------+-----------+
| Coin revaluation | 6 | 300 | 406 |
+-----------------------------------+--------+------------+-----------+
| | | ---- | ---- |
+-----------------------------------+--------+------------+-----------+
| Gross profit | | 431 | 422 |
+-----------------------------------+--------+------------+-----------+
| | | ---- | ---- |
+-----------------------------------+--------+------------+-----------+
| Administrative expenses | | (381) | (353) |
+-----------------------------------+--------+------------+-----------+
| | | ---- | ---- |
+-----------------------------------+--------+------------+-----------+
| Profit on ordinary activities | | 50 | 69 |
| before: | | | |
+-----------------------------------+--------+------------+-----------+
| Finance income | 3 | 140 | 216 |
+-----------------------------------+--------+------------+-----------+
| Finance expenses | 3 | - | - |
+-----------------------------------+--------+------------+-----------+
| | | ---- | ---- |
+-----------------------------------+--------+------------+-----------+
| Profit on ordinary activities | | 190 | 285 |
| before tax | | | |
+-----------------------------------+--------+------------+-----------+
| Tax on profit on ordinary | 4 | - | - |
| activities | | | |
+-----------------------------------+--------+------------+-----------+
| | | ---- | ---- |
+-----------------------------------+--------+------------+-----------+
| Profit on ordinary activities | | 190 | 285 |
| after taxation | | | |
+-----------------------------------+--------+------------+-----------+
| | | ---- | ---- |
+-----------------------------------+--------+------------+-----------+
| Earnings per share (basic and | 5 | 0.17p | 0.31p |
| diluted) | | | |
+-----------------------------------+--------+------------+-----------+
There were no recognised gains or losses other than the profit for the year.
Balance sheet
+----------------------------+------+--------------+--------------+
| | | As at | As at |
+----------------------------+------+--------------+--------------+
| | | 31-Mar-09 | 31-Mar-08 |
+----------------------------+------+--------------+--------------+
| | Note | GBP'000 | GBP'000 |
+----------------------------+------+--------------+--------------+
| Assets | | | |
+----------------------------+------+--------------+--------------+
| Current Assets | | | |
+----------------------------+------+--------------+--------------+
| Coin inventory | 6 | 9,638 | 7,724 |
+----------------------------+------+--------------+--------------+
| Trade and other | 7 | 543 | 74 |
| receivables | | | |
+----------------------------+------+--------------+--------------+
| Cash at bank | | 1,898 | 4,221 |
+----------------------------+------+--------------+--------------+
| | | ---- | ---- |
+----------------------------+------+--------------+--------------+
| Total assets | | 12,079 | 12,019 |
+----------------------------+------+--------------+--------------+
| | | ---- | ---- |
+----------------------------+------+--------------+--------------+
| | | | |
+----------------------------+------+--------------+--------------+
| Liabilities and equity | | | |
+----------------------------+------+--------------+--------------+
| Creditors: amounts falling | 8 | 113 | 243 |
| due within one year | | | |
+----------------------------+------+--------------+--------------+
| | | ---- | ---- |
+----------------------------+------+--------------+--------------+
| Total Liabilities | | 113 | 243 |
+----------------------------+------+--------------+--------------+
| | | ---- | ---- |
+----------------------------+------+--------------+--------------+
| Equity | | | |
+----------------------------+------+--------------+--------------+
| Called up equity share | 10 | 1,101 | 1,101 |
| capital | | | |
+----------------------------+------+--------------+--------------+
| Share premium | | 10,460 | 10,460 |
+----------------------------+------+--------------+--------------+
| Profit and loss account | | 405 | 215 |
+----------------------------+------+--------------+--------------+
| | | ---- | ---- |
+----------------------------+------+--------------+--------------+
| Total Equity Shareholders' | | 11,966 | 11,776 |
| Funds | | | |
+----------------------------+------+--------------+--------------+
| | | ---- | ---- |
+----------------------------+------+--------------+--------------+
| Total Liabilities and | | 12,079 | 12,019 |
| equity | | | |
+----------------------------+------+--------------+--------------+
| | | ---- | ---- |
+----------------------------+------+--------------+--------------+
Cash Flow Statement
+-------------------------------+------+-----------+-----+-----------+
| |Note | Year | | Year |
| | | ended | | ended |
+-------------------------------+------+-----------+-----+-----------+
| | | 31-Mar-09 | | 31-Mar-08 |
+-------------------------------+------+-----------+-----+-----------+
| | | GBP'000 | | GBP'000 |
+-------------------------------+------+-----------+-----+-----------+
| | | | | |
+-------------------------------+------+-----------+-----+-----------+
| Cash flows from operating | | | | |
| activities: | | | | |
+-------------------------------+------+-----------+-----+-----------+
| Profit for the year | | 50 | | 69 |
+-------------------------------+------+-----------+-----+-----------+
| | | | | |
+-------------------------------+------+-----------+-----+-----------+
| Adjustments for: | | | | |
+-------------------------------+------+-----------+-----+-----------+
| (Decrease) in payables | | (130) | | (51) |
+-------------------------------+------+-----------+-----+-----------+
| (Increase)/decrease in | | (469) | | 12 |
| receivables | | | | |
+-------------------------------+------+-----------+-----+-----------+
| (Increase) in inventory | | (1,914) | | (3,657) |
+-------------------------------+------+-----------+-----+-----------+
| | | ---- | | ---- |
+-------------------------------+------+-----------+-----+-----------+
| Net cash flow from operations | | (2,463) | | (3,627) |
+-------------------------------+------+-----------+-----+-----------+
| | | ---- | | ---- |
+-------------------------------+------+-----------+-----+-----------+
| Interest received | | 140 | | 216 |
+-------------------------------+------+-----------+-----+-----------+
| | | ---- | | ---- |
+-------------------------------+------+-----------+-----+-----------+
| Net cash used in investing | | 140 | | 216 |
| activities | | | | |
+-------------------------------+------+-----------+-----+-----------+
| | | ---- | | ---- |
+-------------------------------+------+-----------+-----+-----------+
| Proceeds from the issue of | | - | | 5,615 |
| shares | | | | |
+-------------------------------+------+-----------+-----+-----------+
| | | ---- | | ---- |
+-------------------------------+------+-----------+-----+-----------+
| Net cash from financing | | - | | 5,615 |
| activities | | | | |
+-------------------------------+------+-----------+-----+-----------+
| | | ---- | | ---- |
+-------------------------------+------+-----------+-----+-----------+
| Net increase in cash and cash | | (2,323) | | 2,204 |
| equivalents | | | | |
+-------------------------------+------+-----------+-----+-----------+
| Opening cash position | 11 | 4,221 | | 2,017 |
+-------------------------------+------+-----------+-----+-----------+
| | | ---- | | ---- |
+-------------------------------+------+-----------+-----+-----------+
| Cash and cash equivalents at | 11 | 1,898 | | 4,221 |
| 31 March | | | | |
+-------------------------------+------+-----------+-----+-----------+
| | | ---- | | ---- |
+-------------------------------+------+-----------+-----+-----------+
Statement of changes in equity
+-----------------------------+---------+---------+----------+---------+
| Company | Share | Share | Retained | Total |
| | capital | premium | earnings | |
+-----------------------------+---------+---------+----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------+---------+---------+----------+---------+
| | | | | |
+-----------------------------+---------+---------+----------+---------+
| | | | | |
+-----------------------------+---------+---------+----------+---------+
| At incorporation on 6 | - | - | - | - |
| February 2006 | | | | |
+-----------------------------+---------+---------+----------+---------+
| Issue of shares (net) | 621 | 5,325 | - | 5,946 |
+-----------------------------+---------+---------+----------+---------+
| Loss for the period | - | - | (70) | (70) |
+-----------------------------+---------+---------+----------+---------+
| | --- | --- | --- | --- |
+-----------------------------+---------+---------+----------+---------+
| At 31 March 2007 | 621 | 5,325 | (70) | 5,876 |
+-----------------------------+---------+---------+----------+---------+
| | | | | |
+-----------------------------+---------+---------+----------+---------+
| Issue of shares (net) | 480 | 5,135 | - | 5,615 |
+-----------------------------+---------+---------+----------+---------+
| Profit for the year | - | - | 285 | 285 |
+-----------------------------+---------+---------+----------+---------+
| | --- | --- | --- | --- |
+-----------------------------+---------+---------+----------+---------+
| At 31 March 2008 | 1,101 | 10,460 | 215 | 11,776 |
+-----------------------------+---------+---------+----------+---------+
| | | | | |
+-----------------------------+---------+---------+----------+---------+
| Profit for year | - | - | 190 | 190 |
+-----------------------------+---------+---------+----------+---------+
| | --- | --- | --- | --- |
+-----------------------------+---------+---------+----------+---------+
| At 31 March 2009 | 1,101 | 10,460 | 405 | 11,966 |
+-----------------------------+---------+---------+----------+---------+
| | --- | --- | --- | --- |
+-----------------------------+---------+---------+----------+---------+
Notes to the financial statements:
(1) Accounting policies
Basis of accounting
The financial statements have been prepared under the historical cost convention
and in accordance with International Financial Reporting Standards (IFRS). This
is the second year that the Company has prepared its financial statements in
accordance with IFRSs, having previously prepared its financial statements in
accordance with previous accounting standards. The functional currency is
GBP-Sterling. The following relevant standards have been applied:
IFRS 1 - First time adoption of International Financial Reporting Standards
IFRS 7 - Financial Instruments - Disclosures
IAS 1 - Presentation of Financial Statements
IAS 2 - Inventories
IAS 7 - Cash Flow Statements
IAS 8 - Accounting Policies, Changes in Accounting Estimates, Errors
IAS 10 - Events after Balance Sheet Date
IAS 12 - Income Taxes
IAS 14 - Segment Reporting
IAS 18 - Revenue
IAS 21 - The Effects of Changes in Foreign Exchange Rates
IAS 24 - Related Party Disclosures
IAS 32 - Financial Instruments - Presentation
IAS 33 - Earnings per share
IAS 39 - Financial Instruments - Recognition and Measurement
New standards, amendments to published standards and interpretations to existing
standards effective in 2007 adopted by the Company
IFRS 7, Financial Instruments: disclosures and a complementary amendment to IAS
1, Presentation of Financial Statements - capital disclosures. IFRS 7 introduces
new requirements aimed at expanding the disclosure of information about the
Company's financial instruments. It requires disclosure of qualitative and
quantitative information about exposure to risks arising from financial
instruments. The amendment to IAS 1 introduces disclosures about the level and
management of an entity's capital. The Company has applied IFRS 7 and the
amendment to IAS 1 in these financial statements, with the relevant disclosures
included under "Financial risk management".
The IASB also issued various interpretations that are effective for this
accounting period. None of these interpretations were effective for the Company
and had no impact on the financial statements.
Standards, amendments and interpretations to published standards not yet
effective
Certain new standards, amendments and interpretations to existing standards have
been published that are mandatory for later accounting periods and which have
not been adopted early. No interpretations were relevant to the Company The
relevant standards are:
International Accounting Standards ("IAS"/"IFRS") Effective date
IFRS 8 Operating segments 1 January 2009
IAS 1 Presentation of Financial Statements (revised)1 January 2009
IAS 32 Financial Instruments: Presentation (revised)1 January 2009
IAS 39Financial Instruments: Recognition and Measurement (revised)1 January 2009
(2) Segmental information
The Company has one class of business, that of the sale of antiquarian and
collectable coins. All sales have been through dealers based in the single
geographic segment of the United Kingdom. Accordingly no further segmental
information is presented.
(3) Finance revenue
The finance revenue consists of bank deposit interest received. There were no
finance costs in the year.
(4) Taxation
The Company is resident for tax purposes in the Isle of Man.
The Company is chargeable to Isle of Man corporate income tax at the standard
rate of 0%, which took effect from 6 April 2006.
+--------------------------+----------+-----------+-----------+
| | | Year | Year |
| | | ended | ended |
+--------------------------+----------+-----------+-----------+
| | | 31-Mar-09 | 31-Mar-08 |
+--------------------------+----------+-----------+-----------+
| | | GBP'000 | GBP'000 |
+--------------------------+----------+-----------+-----------+
| Profit before tax | | 190 | 285 |
+--------------------------+----------+-----------+-----------+
| | | ---- | ---- |
+--------------------------+----------+-----------+-----------+
| Isle of Man tax at 0% | | - | - |
+--------------------------+----------+-----------+-----------+
| | | ---- | ---- |
+--------------------------+----------+-----------+-----------+
| Tax expense for the year | | nil | nil |
+--------------------------+----------+-----------+-----------+
| | | ---- | ---- |
+--------------------------+----------+-----------+-----------+
(5) Earnings per share
The earnings per share (basic and diluted) for the year ended 31 March 2009 was
0.17p (2008: 0.31p). The calculation of earnings per share is based on the
profit of GBP190,000 (2008: profit GBP285,000) for the year and the weighted
average number of shares in issue being 110,133,334 (2008: 93,168,950).
(6) Coin inventory
At the year end, only those coins that had been acquired by the Company before
31 March 2008, were revalued by industry experts to their expected current
market value less the VAT payable on sale as opposed to being carried at the
lower of cost and net realisable value, as required by International Accounting
Standard 2 'Inventories'. Inventory purchased during the year ended 31 March
2009 has been carried at cost. This is considered by the directors to give a
fair value for the inventory. Inventory of GBP9,638,000 (2008: GBP7,724,000) is
carried as 'Inventory carried at fair value less costs to sell'. The purchase
cost of inventory held at 31 March 2009 was GBP8,964,000 (2008: GBP7,318,000)
(7) Trade and other receivables
+---------------------------------+--+------------+-----------+
| | | As at | As at |
+---------------------------------+--+------------+-----------+
| | | 31-Mar-09 | 31-Mar-08 |
+---------------------------------+--+------------+-----------+
| | | GBP'000 | GBP'000 |
+---------------------------------+--+------------+-----------+
| Trade debtors | | 31 | 13 |
+---------------------------------+--+------------+-----------+
| Prepaid expenses | | 22 | 61 |
+---------------------------------+--+------------+-----------+
| Other debtors | | 490 | - |
+---------------------------------+--+------------+-----------+
| | | ---- | ---- |
+---------------------------------+--+------------+-----------+
| Total | | 543 | 74 |
+---------------------------------+--+------------+-----------+
| | | ---- | ---- |
+---------------------------------+--+------------+-----------+
Other debtors of GBP0.49 million represents the amount which, subject, inter
alia, to the approval by shareholders of the resolution to be proposed at the
upcoming annual general meeting relating to the re-registration
("Re-registration") of the Company to a company incorporated under the Isle of
Man Companies Act 2006 ("2006 Act"), remains due from the shareholder that
agreed to sell 7.0 million Ordinary Shares to the Company for cancellation, as
announced by the Company on 21 August 2008. Following Re-registration, the
Company will complete the purchase of 7.0 million Ordinary Shares for a
consideration of GBP0.49 million. The resultant effect will be to reduce other
debtors by GBP0.49 million and reduce the number of Ordinary Shares in issue by
7.0 million. For further information see note 10 to these financial statements.
The re-purchase of Ordinary Shares is subject to buy-back agreements with the
relevant shareholders which have not been completed at the date of these
results. In the opinion of the Directors, the debt due of GBP0.49 million at the
balance sheet date in relation to the above is recoverable in full.
Trade receivables do not carry any interest and are stated at their nominal
value as reduced by appropriate allowances for estimated irrecoverable amounts.
(8) Payables
+------------------+----------------+------------+-----------+
| | | As at | As at |
+------------------+----------------+------------+-----------+
| | | 31-Mar-09 | 31-Mar-08 |
+------------------+----------------+------------+-----------+
| | | GBP'000 | GBP'000 |
+------------------+----------------+------------+-----------+
| Trade creditors | | 40 | 171 |
+------------------+----------------+------------+-----------+
| Accrued expenses | | 73 | 72 |
+------------------+----------------+------------+-----------+
| | | ---- | ---- |
+------------------+----------------+------------+-----------+
| | | 113 | 243 |
+------------------+----------------+------------+-----------+
| | | ---- | ---- |
+------------------+----------------+------------+-----------+
All creditors are due within one year.
(9) Financial instruments and risk
An explanation of the Company's financial instrument risk management objectives,
policies and strategies are set out in note 1.
Interest rate risk
The company's exposure to interest rate risk is limited to its interest income
on bank balances in the company's functional currency of sterling. Non-current
account balances receive interest at floating rates.
Liquidity risk
Liquidity risk is the risk that the company will not be able to meet its
financial obligations as they fall due. The company's approach to managing
liquidity is to ensure, as far as possible, that it will always maintain
sufficient cash to meet the next three years operating costs.
Credit risk
Credit risk is the risk of financial loss to the company if a customer or
counterparty fails to meet its contractual obligations and is primarily
attributable to its trade receivables.
The carrying amount of financial assets represents the maximum credit exposure.
The maximum exposure to credit risk at the reporting date was:
+----------------------------+---------------------+----------------------+
| | Carrying amount | Carrying amount 2008 |
| | 2009 | |
+----------------------------+---------------------+----------------------+
| | GBP000 | GBP000 |
+----------------------------+---------------------+----------------------+
| | | |
+----------------------------+---------------------+----------------------+
| Trade and other | 543 | 74 |
| receivables | | |
+----------------------------+---------------------+----------------------+
| | ==== | ==== |
+----------------------------+---------------------+----------------------+
| Cash at bank | 1,898 | 4,221 |
+----------------------------+---------------------+----------------------+
| | ==== | ==== |
+----------------------------+---------------------+----------------------+
The credit risk on liquid funds is limited because the counterparties are banks
with high credit ratings assigned by international credit rating agencies.
(10) Share capital and premium
+------------------------------------------------+-----------+-----------+
| | As at | As at |
+------------------------------------------------+-----------+-----------+
| | 31-Mar-09 | 31-Mar-08 |
+------------------------------------------------+-----------+-----------+
| | GBP'000 | GBP'000 |
+------------------------------------------------+-----------+-----------+
| Authorised | | |
+------------------------------------------------+-----------+-----------+
| Ordinary shares of GBP0.01 each | 2,000 | 2,000 |
+------------------------------------------------+-----------+-----------+
| | ---- | ---- |
+------------------------------------------------+-----------+-----------+
| Allotted, called up and fully paid | | |
+------------------------------------------------+-----------+-----------+
| 110,133,334 ordinary shares of GBP0.01 each | 1,101 | 1,101 |
| (2008: 110,133,334) | | |
+------------------------------------------------+-----------+-----------+
| | ---- | ---- |
+------------------------------------------------+-----------+-----------+
On 21 August 2008, the Company announced that it had agreed to make market
purchases for cash of 7,000,000 Ordinary Shares from a single shareholder at a
price of 7.0 pence each for an aggregate consideration of GBP0.49 million
("August '08 Buyback"). As detailed in the Directors' report, the August '08
Buyback is conditional upon, inter alia, shareholders passing the resolution to
be proposed at the upcoming annual general meeting to re-register the Company as
a 2006 Act company. See note 7 to these preliminary results.
On 30 April 2009, the Company announced that it had agreed to make market
purchases for cash of 15,000,000 Ordinary Shares from KSF for cancellation at a
price of 5.0 pence each for an aggregate consideration of GBP0.75 million
("April '09 Buyback"). As detailed in the Directors' report, the April '09
Buyback is conditional upon, inter alia, shareholders passing the resolution to
be proposed at the upcoming annual general meeting to re-register the Company as
a 2006 Act company.
Assuming that both the August '08 Buyback and the April '09 Buyback complete
after the 2009 AGM, the Company's issued share capital will be reduced to
88,133,334 Ordinary Shares. In the intervening period between the completion of
the above market purchases and re-registration of the Company as a 2006 Act
company, to the Company intends to apply to the Isle of Man Courts in respect of
the re-instatement of the, in aggregate, 22.0 million Ordinary Shares onto the
register. This re-instatement is also subject to the re-admission of the
Ordinary Shares to trading on AIM.
(11) Cash and cash equivalents
+----------------------------------------------------------------------+
| Cash and cash equivalents included in the statement of cash flows |
| comprise the following amounts in the statement of financial |
| position: |
+----------------------------------------------------------------------+
+------------------------------------------------+-----------+-----------+
| | As at | As at |
+------------------------------------------------+-----------+-----------+
| | 31-Mar-09 | 31-Mar-08 |
+------------------------------------------------+-----------+-----------+
| | GBP'000 | GBP'000 |
+------------------------------------------------+-----------+-----------+
| | | |
+------------------------------------------------+-----------+-----------+
| Cash on hand and balances with banks | 1,898 | 4,221 |
+------------------------------------------------+-----------+-----------+
| Short-term investments | - | - |
+------------------------------------------------+-----------+-----------+
| | ---- | ---- |
+------------------------------------------------+-----------+-----------+
| Cash and cash equivalents as previously | 1,898 | 4,221 |
| reported | | |
+------------------------------------------------+-----------+-----------+
| Effect of exchange rate changes | - | - |
+------------------------------------------------+-----------+-----------+
| | ---- | ---- |
+------------------------------------------------+-----------+-----------+
| Cash and cash equivalents as restated | 1,898 | 4,221 |
+------------------------------------------------+-----------+-----------+
| | ---- | ---- |
+------------------------------------------------+-----------+-----------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR CKCKKOBKDNCB
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