Alpha Strategic Regulatory News Announcement
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Alpha Strategic PLC - Final Results
RNS Number:3328G
Alpha Strategic PLC
18 July 2006
18 July 2006
ALPHA STRATEGIC PLC
AUDITED PRELIMINARY RESULTS FOR PERIOD ENDED 31ST MARCH 2006
Alpha Strategic plc, the specialist hedge fund management group, announces
maiden preliminary results since its successful IPO in August last year:
Highlights
*First year of operation
*Shareholders' funds of £2,520m; tight cost control
*Loss on ordinary activities before taxation £209,000
*(Post period end) First acquisition of Winton Advisors Limited achieved
Colin Barrow, Chairman commented,
'We are extremely pleased with our progress since the IPO last year especially
following our success in completing our first transaction, since the year end,
with one of the highest quality managers in London, Winton Capital Management
Limited.
We firmly believe that the long-term future of the company will be determined by
entering into arrangements with large, high quality managers who have the
financial strength, track record and foresight to see the many advantages of the
Alpha model.
We have a very healthy level of cash, which is key at this stage in our
development as a listed company and we believe that together with Alpha's
excellent business model we are in a good position to secure future interest in
the company from similarly high quality managers to Winton.'
For further information:
Alpha Strategic plc
Kit Malthouse/Colin Barrow (020) 7222 2223
Maitland
Neil Bennett (020) 7379 5151
Chairman's Statement
It is with great pleasure that we present this our first annual report. It has
been an eventful and pleasing first period.
Since our successful flotation in August 2005 we have been pursuing our stated
aim of seeking to acquire revenue streams from hedge fund management businesses.
We have held discussions with a large number of managers and their advisers,
informing the industry about our business model and the benefits to hedge fund
managers. The reception has been universally positive and we have established a
number of relationships, which we believe should prove fruitful in the future.
Throughout, we have stressed that our primary concern in selecting target
acquisitions is quality. We firmly believe that the long term future of the
company will be determined by only entering into arrangements with large, high
quality managers who have the financial strength, track record and foresight to
see the many advantages of the Alpha model.
We were therefore extremely pleased, that following the period end, we were
successful in completing our first transaction with one of the highest quality
managers in London, Winton Capital Management Limited.
Winton, who manage over US $5 billion in a style based upon the statistical
properties of market behaviour, was founded by David Harding, one of the
original creators of the AHL trading system (now part of Man Group PLC).
We agreed to acquire a subsidiary company from Winton, called Winton Advisors
Limited, which provides certain services in return for an entitlement to half
the fees due on a US $100 million capacity sub-fund based in Luxembourg.
The fund is aimed at the Swiss institutional market and is therefore in the
process of seeking Swiss regulatory approval in addition to the Luxembourg
approval already granted. This will facilitate the marketing process and we
expect the fund to reach capacity within 12 months. If Winton perform to their
historic average of approximately 20% return, then our share of the annual
management and performance fees once capacity has been reached, would be around
US $2.5 million. Funds under management have risen since the acquisition to US
$16.5m.
The key component of this transaction however is the very high quality that
Winton represent. We believe this can only add to the future success of the
company, and will doubtless make us more attractive to future candidate
managers.
During the period we also appointed Nicola Meaden as a non-executive director.
Nicola brings many years of top level experience in the hedge fund industry, and
has already been an invaluable addition to the board. Our thanks go to her and
our senior non-executive director, Colin Clark, for their wise counsel and work
during the period. Our thanks also go to our shareholders for their continuing
support
In financial terms, the result for the period is satisfactory. Cost containment
was uppermost in our mind, and I am pleased that, despite the fairly heavy cost
of flotation, we have maintained a very healthy cash balance.
Colin Barrow CBE, Chairman
Profit and Loss Account Notes Period from
Incorporation
to 31st March
2006
For the period ended 31st March 2006 £'000
Administrative expenses (282)
-------------
Operating Loss (282)
Interest receivable and
similar income 73
-------------
Loss on ordinary
activities before tax (209)
Taxation on loss on
ordinary activities 3 -
-------------
Loss for the period (209)
========
Loss per share (pence) 4 (11.62)p
========
There are no recognised gains or losses for the period other than the loss for
the period.
Reconciliation of movement in Shareholders' funds Period from
Incorporation
to 31st March
2006
£'000
Loss for the financial period (209)
Issue of Ordinary Shares 2,950
Issue of A Shares 50
Share issue expenses (271)
-------------
Net addition to Shareholders'
funds 2,520
Shareholders' funds at the start of the period -
-------------
Shareholders' funds at the end
of the period 2,520
========
Notes 31st March 2006
Balance Sheet £'000
As at 31st March 2006
Current assets
Debtors 8
Investments 5 2,476
Cash 73
-------------
2,557
Creditors: Amounts falling due within one year (37)
-------------
Net current assets 2,520
-------------
Net assets 2,520
========
Capital and Reserves
Called up share capital 80
Share Premium Account 2,649
Profit and Loss Account (209)
-------------
Shareholders' Funds 2,520
========
The financial statements were approved by the board of directors and authorised
for issue on 13th July 2006.
Cash Flow statement for the period ended 31st March 2006 Notes Period from
Incorporation
to 31st March
2006
£'000
Net cash outflow from
operating activities 6 (253)
Net cash inflow from
returns on investment
and servicing of
finance - interest
received 73
-------------
Net cash outflow before
use of liquid resources
and financing (180)
Management of liquid resources
Sale of investment 24
Purchase of investments (2,500)
-------------
Net cash outflow before
financing (2,656)
Financing
Issue of A shares 50
Issue of Ordinary
Shares 2,950
Share issue costs (271)
-------------
2,753
-------------
Increase in cash 73
========
Reconciliation of net cash flow to movement in net funds Period from
Incorporation
to 31st March
2006
£'000
Increase in cash 73
Cash outflow from change in
liquid resources (2,476)
-------------
Movement in net funds resulting
from cash flows (2,403)
Opening net funds -
-------------
Closing net funds (2,403)
========
Analysis of On Cash movement Non-cash At 31st March
changes in incorporation movement 2006
net funds
Cash - 73 - 73
Other liquid
resources - (2,476) - (2,476)
------------- ------------- ------------- -------------
Total - (2,403) - (2,403)
============= ============= ============= =============
Notes to the Financial Statements
for the period ended 31st March 2006
1. Basis of preparation
The financial statements have been prepared under the historical cost convention
and are in accordance with applicable accounting standards. The following
principal accounting policies have been applied:
Deferred taxation
Deferred tax balances are recognised in respect of all timing differences that
have originated but not reversed by the balance sheet date except that the
recognition of deferred tax assets is limited to the extent that the company
anticipates making sufficient taxable profits in the future to absorb the
reversal of the underlying timing differences.
Deferred tax balances are not discounted.
Liquid resources
For the purposes of the cash flow statement, liquid resources are defined as
current asset investments and short term deposits.
Current asset investments
Current asset investments are stated at the lower of cost and net realisable
value.
2. Directors Emoluments
Amounts paid to directors during the period was:
Period from
Incorporation
to 31st March
2006
£'000
Directors Emoluments 159
========
Highest Paid Director 75
========
Other than the directors there were no other employees during the period.
3. Taxation
There is no charge due to the loss incurred in the period. The tax assessed for
the period varies from the standard rate of corporation tax in the UK. The
differences are explained below:
Period from
Incorporation
to 31st March
2006
£'000
Loss on ordinary activities
before taxation (209)
Loss on ordinary activities at
the standard rate of
corporation tax in the UK of
30% (63)
Effect of:
Expenses not deductible for tax
purposes 1
Losses carried forwards 62
-------------
Current tax charge -
=============
At 31st March 2006, the company had a deferred tax asset of £62,000 relating to
tax losses carried forwards which had not been provided for in the financial
statements.
4. Loss per share
The loss per share is calculated on the loss on ordinary activities after tax of
£209,027 and using the weighted average number of shares in issue during the
period of 1,798,259. There were no instruments in issue which had a dilutive
effect on the loss per share.
5. Investments
During the period the company has used the £2,500,000 of the cash raised during
the flotation to purchase shares in a sterling currency fund in order to
maximize earnings. During the period certain shares in the fund were sold to
provide working capital and at 31st March 2006 the carrying and market value of
this holding was £2,475,685. The investment is unlisted.
6. Reconciliation of operating loss to cash flows
Period from
Incorporation
to 31st March
2006
£'000
Operating loss (282)
Movement in debtors (8)
Movement in creditors 37
-------------
Net cash outflow from operating
activities (253)
=============
7. Related party transactions
During the period, the company has accounted for costs of £33,333 for use of
services and occupation of premises owned by Colin Barrow, a director of the
company.
During the period the company has paid £492 to County Asset Finance Limited, a
company controlled by Kit Malthouse, a director of the company. This represents
a recharge of costs incurred in use of County Asset Finance's Companies House
account, and was recharged at cost.
8. Post Balance Sheet Event
On 22nd May 2006 the company announced the acquisition of the entire share
capital of Winton Advisors Limited. Consideration for the purchase was £327,010
satisfied by the issue of 308,500 Ordinary Shares of 1 pence each at a price of
£1.06 per share. The shares were admitted to trading on AIM on 26th May 2006.
9. Status of Financial Information
The above audited financial information does not constitute the Company's full
financial statements within the meaning of section 240 of the Companies Act
1985. It is an extract from the Report and Accounts for the period from
incorporation to 31 March 2006 approved by the Board of Directors on 13 July
2006, but not yet delivered to the Registrar of Companies. Full audited
financial statements for the period from incorporation to 31 March 2006 which
include an unqualified auditors' report, will be filed at Companies House when
the Report and Accounts are posted to shareholders.
10. Copies of the Report and Accounts
The Report and Accounts for the period from incorporation to 31 March 2006 and
the notice of the Annual General Meeting which will be held on 12th September
2006, are expected to be posted to shareholders on 19th July 2006. When posted
copies will be available at London House, 8 Barton Street, London SW1P 3NE.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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