Alpha Strategic Regulatory News Announcement
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Alpha Strategic PLC - Interim Results
RNS Number:9333N
Alpha Strategic PLC
15 December 2006
Alpha Strategic PLC
('Alpha' or the 'Company')
Interim Results for the 6 months ended 30th September 2006
Financial Highlights
* First acquisition of Winton Advisors completed.
* First income received.
* Strong growth in funds under management up 300% since acquisition.
* Net assets up 8%.
* Loss per share held at previous low levels.
* Healthy cash balance maintained at £2.4 million.
* Forecast to turn cash generative in first half 2007.
To obtain a copy of this report, and for comprehensive information on the
Company and its directors, please visit our website at:
www.alphastrategic.co.uk
Chairman's Statement
The past six months have been an exciting time for the Company. Our first
acquisition took longer than many expected, but this was a result of our stated
aim of partnering only with managers of the very highest quality. Alpha's
objective is to achieve a blend of income from managers using different
strategies, but it is a prerequisite that they are first class at what they do.
We completed our first transaction with Winton Capital Management Limited in May
through the acquisition of Winton Advisors Limited. This has provided us with a
strong foundation for future transactions. These accounts show the first fruits
of that acquisition
Fee income has now started to flow from the Global Futures Fund and we believe
it will grow rapidly over the coming months. We continue to await approval from
the regulators for more public distribution of the fund in Switzerland. However,
I note that despite the current limits on marketing, assets in the fund have
grown from $11.5 million to over $34 million since we completed the transaction.
Additionally the manager has shown solid performance during the period and we
believe it is likely we should receive more incentive fees in the second half.
We continue to pursue a number of promising conversations with other high
quality hedge fund managers.
The Company has successfully contained costs during the period and has maximized
its income from our healthy cash balances.
There has been much talk about M&A in the industry over the last year, however
few transactions have materialised, and even fewer involving public companies.
Alpha has a unique business model that has been carefully designed to address
issues for hedge fund managers while building stable revenue for shareholders.
We have been very encouraged by our progress in the last six months. With the
growth in funds under management combined with continuing performance levels
from Winton, we anticipate being able to report that we have become cash
generative in the first half of 2007.
Colin Barrow, Chairman.
14th December 2006
Consolidated Profit and Loss Account For the 6 months ended 30th September 2006
Notes 6 months to Period from Period from
30th Sep 2006 Incorporation Incorporation
to 30th Sep 2005 to
30th Mar 2006
(Unaudited) (Unaudited)
(Audited)
£'000 £'000 £'000
Turnover 46 - -
Administrative
expenses (213) (112) (282)
Amortisation
of goodwill (12) - -
------------------- ------ ---------- ----------- ----------
Operating loss 5 (179) (112) (282)
Interest
receivable and
similar income 54 6 73
------------------- ------ ---------- ----------- ----------
Loss on
ordinary
activities
before and
after tax (125) (106) (209)
------------------- ------ ---------- ----------- ----------
Loss per share
(pence) 2 (3.8)p (3.5)p (11.62)p
------------------- ------ ---------- ----------- ----------
Consolidated Balance Sheet as at 30th September 2006
Notes 30th Sept 2006 30th Sep 2005 31st Mar 2006
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Fixed Assets
Intangible assets -
goodwill 403 - -
------------------- ------ ---------- ----------- ----------
Current assets
Debtors 54 57 8
Cash 172 166 73
Investments 3 2,229 2,500 2,476
------------------- ------ ---------- ----------- ----------
2,455 2,723 2,557
Creditors: amounts
falling due within
one year (136) (100) (37)
------------------- ------ ---------- ----------- ----------
Net current assets 2,319 2,623 2,520
------------------- ------ ---------- ----------- ----------
Net assets 2,722 2,623 2,520
------------------- ------ ---------- ----------- ----------
Capital and reserves
Called up share
capital 4 83 80 80
Share premium account 4 2,973 2,649 2,649
Profit and loss
account 4 (334) (106) (209)
------------------- ------ ---------- ----------- ----------
Shareholders' funds 2,722 2,623 2,520
------------------- ------ ---------- ----------- ----------
Reconciliation of movement in 6 months Period from Period from
shareholders' funds ended Incorporation Incorporation
30th Sep 2006 to to
30th Sep 2005 31st Mar 2006
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Loss for the
financial
period (125) (106) (209)
Issue of
ordinary
shares 327 2,950 2,950
Issue of A
shares - 50 50
Share issue
expenses - (271) (271)
------------------- ---------- ----------- ----------
Net addition
to
shareholders'
funds 202 2,623 2,520
Shareholders'
funds at the
start of the
period 2,520 Nil Nil
------------------- ---------- ----------- ----------
Shareholders'
funds at the
end of the
period 2,722 2,623 2,520
------------------- ---------- ----------- ----------
Consolidated Cash Flow Statementfor the 6 months to 30th September 2006
6 months Period from Period from
ended Incorporation Incorporation
30th Sep 2006 to to
30th Sep 2005 31st Mar 2006
(Unaudited) (Unaudited) Audited)
Note £'000 £'000 £'000
Net cash outflow from
operating activities
Operating loss (179) (112) (282)
Decrease/(incr
ease) in
debtors (46) (57) (8)
(Decrease)/inc
rease in
creditors 99 100 37
Depreciation
and
amortisation 12
------------------- ------ ---------- ----------- ----------
(114) (69) (253)
Net cash
inflow from
returns on
investment and
servicing of
finance 54 6 73
------------------- ------ ---------- ----------- ----------
Net cash
outflow before
use of liquid
resources and
financing (60) (63) (180)
Management of liquid
resources
Sale of
investment 247 - 24
Acquisitions 6 (88)
Purchase of
investments - (2,500) (2,500)
------------------- ------ ---------- ----------- ----------
Net cash
inflow/(outflo
w) before
financing 99 (2,563) (2,656)
Financing
Issue of A
shares - 50 50
Issue of
ordinary
shares - 2,950 2,950
Share issue
costs - (271) (271)
------------------- ----------- ----------- ----------
- 2,729 2,753
----------- ----------- ----------
Increase in
cash 99 166 73
------------------- ---------- ----------- ----------
Reconciliation of net cash flow to 6 months Period from Period from
movement in net funds ended Incorporation Incorporation
30th Sep 2006 to to
(Unaudited) 30th Sept 2005 31st Mar 2006
(Unaudited) (Audited)
Increase in
cash 99 166 73
Opening net
cash 73 - -
------------------- ---------- ----------- ----------
Closing net
cash 172 166 73
------------------- ---------- ----------- ----------
Notes to the interim results for the 6 months ended 30th September 2006
1. Basis of preparation
The interim results were approved by the directors on 14th December 2006. The
interim results have been prepared in accordance with UK accounting standards
and in accordance with the Companies Act 1985. However the interim results are
unaudited and do not constitute statutory accounts within the meaning of section
240 of the Companies Act 1985.
Basis of consolidation
The financial statements of the group consolidate those of the parent company
and of its subsidiary. Purchased goodwill arising on acquisitions is capitalised
and amortised over its expected useful economic life and is subject to review
for impairment in value.
Goodwill
Goodwill arising on an acquisition of a subsidiary undertaking is the difference
between the fair value of the consideration paid and the fair value of the
assets and liabilities acquired. It is amortised through the Profit and Loss
account over a period of 12 years. Impairment tests on the carrying value of
goodwill are undertaken at the end of the first full financial year following
acquisition or in other periods if events or changes in circumstances indicate
that the carrying value may not be recoverable.
The consolidated profit and loss account, consolidated balance sheet and
consolidated cash flow statement, which are unaudited, have been prepared in
accordance with accounting policies consistent with the financial statements for
the period ended 31st March 2006 and the additional accounting policies stated
above. The comparatives for the period ended 31st March 2006 are not the
Company's full statutory accounts for that year. A copy of the statutory
accounts for that year has been delivered to the Registrar of Companies. The
auditors' report on those accounts was unqualified and did not contain a
statement under section 237(2)-(3) of the Companies Act 1985.
2. Loss per share
The loss per share is calculated on the loss on ordinary activities after tax of
£125,000 and using the weighted average number of ordinary shares in issue
during the period of 3,220,357. There are no financial instruments in issue
which would have a dilutive effect on the loss per share.
3. Investments
The Company holds the bulk of its cash as an investment in a sterling currency
fund in order to maximize earnings. At 30th September the value of this holding
was £2,228,889.
4. Share capital and reserves
Ordinary Shares A Shares Share premium Profit & loss
account
£'000 £'000 £'000 £'000
At 1st April
2006 30 50 2,649 (209)
Allotments
during the
period 3 - 324 -
Retained loss
for the period - - - (113)
------------------ --------- -------- --------- ----------
At 30th
September 2006 33 50 2,973 (322)
------------------ --------- -------- --------- ----------
5. Related party transactions
During the period, the Company has accounted for costs of £20,000 for use of
services and occupation of premises owned by Colin Barrow, a director of the
Company.
6. Acquisition
Winton Advisors Limited
On 23rd May 2006, the Company acquired the entire issued share capital of Winton
Advisors Limited. Consideration for the purchase was £327,010 which was
satisfied by the issue of 308,500 ordinary shares of 1 pence each ('Ordinary
Shares') in the Company at a price of £1.06 per share.
The table below shows the financial effect of the acquisition:
£'000
Current assets
Cash -
--------------------------------------- ---------
Net assets -
--------------------------------------- ---------
As represented by:
Shares issued 327
Cost of acquisition 88
Net assets acquired -
--------------------------------------- ---------
Goodwill arising on acquisition 415
--------------------------------------- ---------
Winton Advisors Limited is entitled to 50% of the management and incentive fees
generated from The ESA Global Futures Fund in exchange for certain advisory
services. This equates to approximately 0.5% of funds under management and 10%
of profits, subject to a number of performance conditions.
7. Copies of the results
Copies of the interim results will be sent to shareholders in due course and can
be obtained by contacting the company secretary at London House, 8 Barton
Street, London SW1P 3NE or by visiting the Company website,
www.alphastrategic.co.uk where is it available for download.
This information is provided by RNS
The company news service from the London Stock Exchange
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