TIDMAVR
RNS Number : 5543T
Avarae Global Coins PLC
08 December 2011
AVARAE GLOBAL COINS PLC
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER
2011
London (AIM: AVR): 8 December 2011 - Avarae Global Coins plc
("Avarae" or the "Company"), the UK's only publicly traded
specialist company dedicated to investing in rare and high quality
coins, is pleased to announce its unaudited interim results for the
six months to 30 September 2011.
Highlights for the period include:
-- 70% uplift in sales for the six month period to GBP1,580,000 (2010: GBP923,000);
-- Profit for the period of GBP503,000 (2010: loss GBP136,500),
an increase of more than 10% on the whole of last year;
-- Profit per share of 0.62 pence (2010: loss 0.16 pence);
-- Additions totalling GBP230,000 made in the period, including
English, Islamic and Roman coins;
-- Coin inventory valued at approximately GBP9,413,000 at the period end;
-- Net assets as at 30 September 2011 of GBP11,426,000 (31 March 2011: GBP10,923,000); and
-- Net asset value per share as at 30 September 2011 of 14.1
pence (31 March 2011: 13.6 pence), an increase of 48% since 31
March 2007.
Commenting, Matt Wood, Director of Avarae, said:
"As previously announced, trading in the first half was strong
following an impressive return from the Hong Kong auction in
August. Activity in the rare coin market has remained positive, as
the numismatic industry has seen an influx of new buyers in these
challenging economic times. Avarae remains well positioned as an
alternative asset play as the market for the highest quality rare
coins should continue to attract good demand and steady price
growth. Continued strong competition for the very best pieces, such
as those owned by Avarae, should position the Company well in the
coming year."
For further information on Avarae Global Coins plc, please
contact:
Matt Wood/Diane Clarke +44 (0)16 2461 5614
Avarae Global Coins plc
Matt Goode/Emma Gabriel +44 (0)20 7523 8350
Collins Stewart Europe Limited
Toby Hall/Suzanne Johnson Walsh +44(0)20 3103 3900
Gth Media Relations Financial PR
Directors' Report
Introduction
We are pleased to present the unaudited interim results of
Avarae Global Coins plc ("Avarae" or the "Company") for the six
months ended 30 September 2011. During the period under review the
Company made further investments in, and some significant
divestments from' its portfolio of rare and high quality coins. The
value of the Company's coin portfolio was GBP9.41 million at the
period end. In line with the Company's stated strategy, no
revaluation has been undertaken for the Company's interim
results.
Avarae provides access for institutions and individuals wanting
to diversify their investment portfolios away from the traditional
asset classes such as equities, property or bonds without the need
to be an expert in the coin-collecting sector. The Board's strategy
is to invest actively in the rarest and highest quality segment of
the coin-collecting sector in various countries around the world.
We have built up and are continually adding to an impressive
portfolio of extremely high quality, rare coins which we intend to
predominantly hold for the long-term (i.e. 3 to 5 years), with the
aim of achieving long-term capital growth for our shareholders,
while also taking advantage of short-term trading opportunities, as
the market for rare coins continues to grow.
The coin-dealing sector
Activity in the rare coin market has remained positive over the
period. The numismatic industry has seen an influx of new buyers
looking for tangible assets and fresh areas to place their money as
traditional asset classes fail to deliver robust financial gains
and exhibit high volatility. The majority of the funds coming into
the numismatic market are targeting the higher quality coin
rarities and this is adding considerable pressure on availability.
A number of important coins and coin collections have come up for
sale worldwide with auction houses continuing to achieve record
prices, particularly for the highest quality rare pieces.
Historically, if purchased correctly, investments in rare and
high quality coins can reduce the risk of overall investment
portfolios and produce strong returns over a prolonged period.
Coins and coin collections of the highest quality can produce
annual compound returns of around 10% over the medium to long term.
Since 31 March 2007, the end of Avarae's first financial reporting
period, its net asset value per ordinary share has increased by
approximately 48%.
Avarae's investments
In the period to September 2011, the Company acquired
approximately GBP230,000 worth of coins (H1 2010: GBP320,000) and
sold coins for approximately GBP1.58 million (H1 2010: 923,000)
Purchases of high quality English, Islamic, Scottish and Roman
coins during the period were again prevalent. Examples of rare
coins acquired during the period include:
-- A beautifully struck and rare Anglo Gallic gold Leopard from
Edward III (1327-77);
-- An excessively rare Ilkhanid, Uljaytu, gold Multiple Dinar
Medallion struck in Madinat al Salam around AD 1310; and
-- A superb gold Aureus of the Roman Emperor Geta (AD 209-12)
struck in Rome with Roman Emperor Caracalla on the reverse.
Financial Results
During the six month period, the Company generated sales from
the portfolio, totalling GBP1.58 million, an increase of more than
70 per cent. on the same period the previous year (H1 2010:
GBP923,000). Gross profits of GBP695,000 were achieved in the
period (H1 2010: GBP58,000) which was extremely pleasing and
reflects the strong showing of the Company's consignment in the
Hong Kong auction held in August. Traditionally, the Company's
second half of its financial year has historically been its
stronger half, partly as a result of more coin auctions taking
place in that period and also due to higher margins being achieved
over and above the prior year's revaluation. However, whilst the
directors retain confidence in the Company's performance over the
second half the current financial year, it remains to be seen if it
can match the excellent performance achieved in the first half.
Administrative expenses during the period of GBP193,000 were
marginally down on the same period in 2010 (H1 2010: GBP198,000),
reflecting the Directors' continued efforts to keep a tight control
on costs. Interest receivable during the period was minimal
reflecting the lower average cash balances and low interest rates
prevailing during the period.
The result of the strong sales and tight control of costs was
that profit for the period was significantly higher than the
previous year at GBP503,000 (H1 2010: loss GBP136,000), resulting
in a profit per share of 0.62 pence (H1 2010: loss per share of
0.16 pence).
In line with our stated strategy, the Company only undertakes
its portfolio revaluation exercise at the end of each financial
year (31 March), rather than mid-year and, only then, revaluing
coins that have been held by the Company for more than 12 months.
Accordingly, the GBP230,000 of coins acquired in the period under
review, together with the GBP1.1 million of coins acquired during
the year ended 31 March 2011, remain valued at cost. The total
value of the coin portfolio at the period end was GBP9.41 million
(31 March 2011: GBP10.07 million), reflecting the high level of
realisations achieved in the period, specifically Hong Kong.
The Company ended the period with GBP608,000 of net cash (31
March 2011: GBP435,000) and no borrowings (2010: GBPnil).
Trade and other receivables at the period end totalled GBP1.51
million (31 March 2011: GBP461,000), made up almost entirely from
the proceeds of the Hong Kong auction in late August. Trade
creditors and accruals were GBP109,000 at 30 September 2011 (31
March 2011: GBP40,000).
Unlike previous periods, the Company did not purchase any of its
own ordinary shares of 1 pence each ("Ordinary Shares") for
cancellation. However, the Directors remain of the view that it is
in the best interests of all shareholders for the Company, under
certain circumstances and provided it has sufficient cash
resources, to acquire its own shares for cancellation in the event
that the purchase price per Ordinary Share is materially below the
Company's own net asset value per Ordinary Share ("NAV"). At the
period end, the Company had net assets of GBP11.43 million (31
March 2011: GBP10.92 million), resulting in a NAV of 14.1 pence (31
March 2011: 13.6 pence).
No dividend has been declared in respect of the interim
period.
Outlook
Trading in the first half was strong following an impressive
return from the Hong Kong auction in August. The Directors believe
that Avarae remains well positioned as an alternative asset play as
the market for the highest quality rare coins should continue to
attract good demand and steady, predictable price growth. In these
times of volatile equity markets, low interest rates and high
inflation, investments in rare coins can often outperform more
traditional investments over a sustained period, as proven by
Avarae's ability to achieve a compound annual increase in its net
asset value over the last four and half years of approximately
9.5%.
Continued strong competition for the very best pieces, such as
those owned by Avarae, should position the Company well in the
coming year.
7 December 2011
Directors
Avarae Global Coins plc
Unaudited Income Statement
from 1 April 2011 to 30 September 2011
1 April 1 April 1 April 10
11 10 to 31 Mar
to 30 Sept to 30 Sept 11
11 10
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
Revenue
Sales 1,580 923 2,188
Cost of Sales (885) (865) (2,037)
Coin revaluation - - 664
---- ---- ----
Gross profit 695 58 815
Administrative expenses (193) (198) (369)
---- ---- ----
Profit/(Loss) on ordinary
activities before: 502 (140) 446
Finance income 1 4 4
---- ---- ----
Profit/(Loss) on ordinary
activities before tax 503 (136) 450
Tax on profit/(loss) on ordinary - - -
activities
---- ---- ----
Profit/(Loss) on ordinary
activities after taxation 503 (136) 450
---- ---- ----
Earnings/(Loss) per share 2 0.62p (0.16p) 0.52p
There were no recognised gains or losses other than the loss for
the period.
Unaudited Balance Sheet
as at 30 September 2011
As at As at As at
30 Sept 30 Sept 31 Mar 11
11 10
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
Assets
Current Assets
Coin inventory 3 9,413 9,795 10,067
Trade and other receivables 4 1,514 516 461
Cash at bank 608 968 435
---- ---- ----
Total Assets 11,535 11,279 10,963
---- ---- ----
Liabilities and Equity
Creditors: amounts falling
due within one year 5 109 415 40
---- ---- ----
Total Liabilities 109 415 40
---- ---- ----
Equity
Called up equity share
capital 6 808 868 808
Share premium 8,880 9,347 8,880
Profit and loss account 1,738 649 1,235
---- ---- ----
Total Equity Shareholders'
Funds 11,426 10,864 10,923
---- ---- ----
Total Liabilities and Equity 11,535 11,279 10,963
---- ---- ----
Unaudited Cash Flow Statement
as at 30 September 2011
1 April 1 April 1 April 10
11 10 to 31 Mar
to 30 Sept to 30 Sept 11
11 10
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP' 000
Cash flows from operating activities:
Profit for the period 502 (140) 446
Adjustments for:
Increase/(decrease) in payables 69 337 (39)
(Increase)/decrease in receivables (1,053) (496) (440)
Decrease in inventory 654 545 273
---- ---- ----
Net cash flow from operations 172 246 240
Interest received 1 4 4
---- ---- ----
Net cash received from investing
activities 1 4 4
Purchase of own shares for
cancellation - (104) (631)
---- ---- ----
Net cash from financing activities - (104) (631)
---- ---- ----
Net increase in cash and cash
equivalents 173 146 (387)
---- ---- ----
Opening cash position 435 822 822
---- ---- ----
Closing cash and cash equivalents 608 968 435
---- ---- ----
Notes to the Unaudited Interim Financial Statements:
(1) Accounting policies
Basis of accounting
The unaudited interim financial statements have been prepared
under the historical cost convention and in accordance with
International Financial Reporting Standards. The accounting
policies and methods of computation in the unaudited interim
financial statements are the same as those of the audited financial
statements 31 March 2011.
(2) Earnings per share
The profit per share for the period was 0.62p (H1 2010: loss of
0.16p). The calculation of earnings per share is based on the
profit of GBP503,000 for the period (H1 2010: loss of GBP136,000)
and the weighted average number of shares in issue of 80,783,334
(87,963,279).
(3) Coin inventory
At the end of each financial year, the coin inventory is
re-valued to market value less the VAT payable on sale. Inventory
purchased since 31 March 2010 is included at its original cost
price and under the current valuation policy has not been the
subject of any revaluations. The valuation of the portfolio held as
at 31 March 2011 was carried out by industry experts and only those
coins held by the Company for at least 12 months were the subject
of a revaluation exercise. This is considered by the Directors to
give a fair value for the inventory. The Directors anticipate
undertaking a further revaluation exercise for the coming financial
year end.
(4) Trade and other receivables
As at As at As at
30 Sept 30 Sept 31 Mar 11
11 10
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Trade debtors 1,501 473 439
Prepaid expenses 13 43 22
---- ---- ----
Total 1,514 516 461
---- ---- ----
Trade receivables do not carry any interest and are stated at
their nominal value as recorded by appropriate allowances for
estimated irrecoverable amounts.
(5) Payables
As at As at As at
30 Sept 30 Sept 31 Mar 11
11 10
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Trade creditors - 321 -
Accrued expenses 99 94 36
Other creditors 10 - 4
---- ---- ----
109 415 40
---- ---- ----
All creditors are due within one year.
(6) Share capital
As at As at As at
30 Sept 11 30 Sept 31 Mar 11
10
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Authorised
Ordinary shares of GBP0.01
each 2,000 2,000 2,000
---- ---- ----
Allotted, called up and fully
paid
ordinary shares of GBP0.01
each 808 868 808
---- ---- ----
(7) Preparation of the Interim Report
This report was approved by the Directors on 7 December
2011.
The results for the period ended 30 September 2011 are unaudited
and do not constitute statutory accounts as defined in The
Companies Act.
Additional copies of this report are available from the
Company's registered office, Ground Floor, West Suite, Exchange
House, 54-58 Athol Street, Douglas, Isle of Man, IM1 1JD or via the
Company's website www.avarae.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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