TIDMAVR
RNS Number : 2324G
Avarae Global Coins PLC
19 November 2015
19 November 2015
AVARAE GLOBAL COINS PLC
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER
2015
London (AIM: AVR):- 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 2015.
Highlights for the period include:
-- Net asset value per share of 14.5p at period end (30 September 2014: 14.3p);
-- Additions to the portfolio of GBP514,000 in the period (H1
2014: GBP276,000), including a small number of very high quality
rarities.
-- Carrying value of coin inventory of GBP10,956,000 at the
period end (H1 2014: GBP10,808,000);
-- Net cash balance of GBP850,000 at period end (H1 2014: GBP779,000);
-- Sales for the six month period of GBP723,000 (H1 2014: GBP81,000); and
-- Loss on ordinary activities for the period of GBP180,000 (H1 2014: loss GBP207,000).
Commenting, Diane Clarke, Director of Avarae, said:
"The first half of the current financial year has been a
particularly active one for Avarae, with a significant rebalancing
and concentration of the portfolio towards higher value coins
resulting in a reduction in the number of coins held by almost one
fifth. This, together with a strong balance sheet and an
anticipated reduction of administrative costs going forward, means
that the directors remain positive about the Company's future
prospects both for the current year and longer term."
For further information on Avarae Global Coins plc, please
contact:
Diane Clarke/Matt Wood +44 (0)16 2461 5614
Avarae Global Coins plc
Paul Shackleton/Nick Prowting +44 (0)20 7220 1666
WH Ireland Ltd
Toby Hall +44 (0)7713 341072
GTH Communications Limited - 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 2015. During the period under review, the
Company continued to manage its portfolio of rare and high quality
coins, disposing of a significant number of lower value coins and
replacing them with a small number of higher quality rarities. In
line with the Company's stated strategy, no revaluation of the coin
portfolio 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
hold predominantly for the long-term (i.e. 3 to 5 years). The aim
is to achieve capital growth for our shareholders, while also
taking advantage of short-term trading opportunities, as the market
for rare coins continues to grow. We also intend, where possible,
to provide income to our Shareholders through the regular payment
of dividends. Since listing in 2006, the Company has returned more
than GBP0.5 million in dividends.
The coin-dealing sector
Activity in the rare coin market remained positive in the period
to 30 September 2015, although as noted in our full year results
released earlier in the year, in-depth knowledge of the market
remains the key to success given the changing dynamics of the
market. The numismatic industry continues to witness an influx of
new buyers looking for tangible assets and fresh areas to place
their money, as traditional asset classes often fail to deliver
robust financial gains and continue to exhibit high volatility. The
majority of the funds coming into the numismatic market continue to
target the higher value coin rarities, which adds considerable
pressure on availability. While this trend is good for existing
holders of high quality coins, it can be challenging to obtain new
pieces to add to the portfolio.
Avarae's investments
In the six month period to 30 September 2015, the Company was
particularly active, acquiring approximately GBP514,000 worth of
coins (H1 2014: GBP276,000) and disposing of coins for
approximately GBP723,000 (H1 2014: GBP81,000). The Company disposed
of a significant number of lower value coins (approximately 150
coins) replacing them with a small number of very high quality
rarities.
Examples of coins acquired during the year include:
-- A mint state US Continental Dollar dated 1776 struck in pewter;
-- An extremely rare Edward IV, Gold Ryal struck at the Norwich mint;
-- One of the finest known Charles II, Five Guinea pieces; and
-- A mint state James I, gold Spur Ryal.
Financial Results
Sales were significantly higher at GBP723,000 compared to the
same period last year (H1 2014: GBP81,000), generating a gross
profit of GBP24,000 (H1 2014: GBP9,000 loss) at the half year.
The Directors are pleased with the activity in the period.
Historically, the Company's second half of its financial year has
always been its stronger half in terms of both sales value and the
level of gross profit generated. The usual higher sales value in
the second half of the year is primarily due to there being a
higher number of coin auctions in the second half of the year,
whereas the usual higher gross profits generated in H2 is due
entirely to the Company's policy of recording the value of coins
sold between 1 April and the date of signing the audited accounts
for that financial year ("pre-audit sign off sales") at their
actual sales price at the year-end (31 March). As a result, all
pre-audit sign off sales are recorded in the subsequent interim
results with zero gross profit, because profit on those sales has
been reflected in the previous year end revaluation. Nevertheless,
all coins sold in the interim period to 30 September 2015 were sold
at prices higher than their cost price with sales of the English
hammered gold coins returning compound annual returns in excess of
10%.
Administrative expenses, which are always tightly controlled,
were comparable to the same period last year, at GBP204,000 (H1
2014: GBP198,000). The resulting net loss after tax (before
dividends of GBP121,000) for the period was GBP180,000 (H1 2014:
loss of GBP207,000), equating to a loss per share of 0.22 pence (H1
2014: loss per share of 0.26 pence).
Importantly, on 17 November 2015, at the Directors' discretion,
the Company terminated its management services agreement ("MSA")
with Noble Investments (UK) Plc ("Noble") which it had entered into
at the time of the Company's admission to trading on AIM in May
2006 and under which the Company paid a quarterly retainer fee to
Noble. The Directors may continue to utilise the services of Noble
and its subsidiaries in the future but this will be on a case by
case basis with fees to be agreed at the time. Accordingly, the
Directors anticipate that, through terminating the MSA, the Company
should be able to reduce its annual administration costs
considerably for the benefit of all shareholders.
Avarae proposed a final dividend on 24 August 2015 of 0.15p per
share (2014: 0.15p per share), which, following approval by the
Company's shareholders at the AGM held on 23 September 2015,
resulted in a payment to shareholders in September 2015 of
GBP121,175 (October 2014: GBP121,175). As with the last interim
period, no dividend has been declared in respect of the interim
period.
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 GBP514,000 of coins acquired in the period under
review, together with the GBP320,000 of coins acquired during the
year ended 31 March 2015, remain valued at cost. The total value of
the coin portfolio at the period end was GBP10.96 million (30 Sept
2014: GBP10.8 million), spread across more than 800 coins.
The Company ended the period under review with net cash of
GBP850,000 (30 September 2014: GBP779,000) and no borrowings. The
higher cash balance is primarily as a result positive movements in
working capital in the period. Trade and other receivables were
GBP0.05 million at the period end (H1 2014: GBP1.2 million) and
payables at GBP0.15 million (H1 2014: GBP1.3 million).
At the period end, the Company had net assets of GBP11.7 million
(30 September 2014: GBP11.5 million), resulting in a net asset
value per Ordinary Share of 14.5p (30 September 2014: 14.3p).
Director changes
On 23 September 2015, Mr Guus Berting, a non-executive director
of the Company, stepped down from the board after 7 years' service.
The board would like to express its thanks to Mr Berting for his
services to the Company during this period.
Outlook
The first half of the current financial year has been a
particularly active one for Avarae, with a significant rebalancing
and concentration of the portfolio towards higher value coins
resulting in a reduction in the number of coins held by almost one
fifth. This, together with a strong balance sheet and an
anticipated reduction of administrative costs going forward, means
the directors remain positive about the Company's future prospects
both for the current year and longer term.
18 November 2015
Directors
Avarae Global Coins plc
Unaudited Income Statement
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from 1 April 2015 to 30 September 2015
1 April 1 April 14 1 April
15 to 30 Sept 14
to 30 Sept 14 to 31 Mar
15 15
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
Revenue
Sales 723 81 626
Cost of Sales (699) (90) (425)
Coin revaluation - - 618
---- ---- ----
Gross profit/(loss) 24 (9) 819
Administrative expenses (204) (198) (440)
---- ---- ----
(Loss)/Profit on ordinary
activities before: (180) (207) 379
Finance income - - 1
---- ---- ----
(Loss)/Profit on ordinary
activities before tax (180) (207) 380
Tax on (loss)/profit on - - -
ordinary activities
---- ---- ----
(Loss)/Profit on ordinary
activities after taxation (180) (207) 380
Dividends (121) - (121)
---- ---- ----
Retained (loss)/profit for
the period (301) (207) 259
---- ---- ----
(Loss)/Earnings per share 2 (0.22)p (0.26)p 0.47p
There were no recognised gains or losses other than the loss for
the period.
Unaudited Balance Sheet
as at 30 September 2015
As at As at As at
30 Sept 15 30 Sept 14 31 Mar 15
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
Assets
Current Assets
Coin inventory 3 10,956 10,808 11,141
Trade and other receivables 4 45 1,203 105
Cash at bank 850 779 882
---- ---- ----
Total Assets 11,851 12,790 12,128
---- ---- ----
Liabilities and Equity
Creditors: amounts falling
due within one year 5 151 1,255 127
---- ---- ----
Total Liabilities 151 1,255 127
---- ---- ----
Equity
Called up equity share
capital 6 808 808 808
Share premium 8,880 8,880 8,880
Profit and loss account 2,012 1,847 2,313
---- ---- ----
Total Equity Shareholders'
Funds 11,700 11,535 12,001
---- ---- ----
Total Liabilities and
Equity 11,851 12,790 12,128
---- ---- ----
Diane Clarke Matt Wood
Unaudited Cash Flow Statement
From 1 April 2015 to 30 September 2015
1 April 1 April 1 April 14
15 14 to 31 Mar
to 30 Sept to 30 Sept 15
15 14
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP' 000
Cash flows from operating activities:
(Loss)/Profit for the period (180) (207) 380
Adjustments for:
Increase/(Decrease) in payables 24 395 (733)
Decrease/(increase) in receivables 60 607 1,705
Decrease/(increase) in inventory 185 (187) (521)
---- ---- ----
Net cash flow from operations 89 608 831
Interest received - - 1
---- ---- ----
Net cash received from investing
activities - - 1
Dividends paid (121) - (121)
---- ---- ----
Net cash from financing activities (121) - (121)
---- ---- ----
Net (decrease) / increase in
cash and cash equivalents (32) 608 711
---- ---- ----
Opening cash position 882 171 171
---- ---- ----
Closing cash and cash equivalents 850 779 882
---- ---- ----
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 for the year ended 31 March 2015.
(2) Earnings per share
The loss per share for the period was 0.22p (H1 2014: loss of
0.26p). The calculation of loss per share is based on the loss on
ordinary activities after taxation of GBP180,000 for the period (H1
2014: loss of GBP207, 000) and the weighted average number of
shares in issue during the period under review remained unchanged
at 80,783,334 (2014: 80,783,334).
(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 2015 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 2015 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 15
15 14
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Trade debtors - 1,129 83
Prepayments and other debtors 45 74 22
---- ---- ----
Total 45 1,203 105
---- ---- ----
There are no trade debtors due at 30 September 2015.
(5) Payables
As at As at As at
30 Sept 30 Sept 31 Mar 15
15 14
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Trade creditors 143 1,243 23
Accrued expenses 8 12 57
Other Creditors - - 47
---- ---- ----
151 1,255 127
---- ---- ----
All creditors are due within one year.
(6) Share capital
As at As at As at
30 Sept 15 30 Sept 31 Mar 15
14
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 808 808 808
---- ---- ----
(7) Preparation of the Interim Report
This report was approved by the Directors on 18 November
2015.
The results for the period ended 30 September 2015 are unaudited
and do not constitute statutory accounts as defined in the
Companies Act.
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