Alpha Strategic Regulatory News Announcement
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Alpha Strategic PLC - Final Results
RNS Number:3250Y
Alpha Strategic PLC
14 June 2007
Alpha Strategic plc ('Alpha Strategic' or the 'Company')
Audited Preliminary Results for the year to 31 March 2007
Financial Highlights
*First acquisition, of Winton Advisors, completed.
*First income received.
*Global Futures Fund grows over 300% to over $41m.
*Net assets up 6%.
*Loss per share halved, significant progress towards profitability.
*Healthy cash balance maintained at £2.3 million.
Colin Barrow, Chairman of the Company, commented: ' Alpha has made a good start.
Our first transaction is of undisputed quality, and a firm foundation for the
future. '
Enquiries:
Colin Barrow, Chairman
Kit Malthouse, Chief Executive Officer
Tel: 020 7222 2223
Chairman's Statement
Our first full financial year has been one of steady progress.
We completed our first transaction with Winton Capital Management Limited in May
last year, through the acquisition of Winton Advisors Limited, which has now
changed its name to Alpha Winton Limited. This has provided us with a strong
foundation for future transactions. These accounts show the first fruits of that
acquisition with both management and incentive fees being received and an
increase in net assets as a result.
We continue to await approval from the regulators for more public distribution
of the Global Futures Fund in Switzerland but even in the absence of this and
the concomitant limits on marketing, assets in the fund have grown from $11.5
million to over $41 million since we completed the transaction.
Winton has shown solid performance during the period and continues to outperform
its main competitor.
We have successfully contained overheads for the first full year, and maximized
income from our healthy cash balance of £2.3m.
We continue to pursue a number of promising conversations with other high
quality hedge fund managers only, and I am confident that we will effect further
transactions soon.
Our first transaction should yield sufficient income to move us into profit and
positive cash flow, and this gives us the head room to source the right kind of
transaction.
It is undoubtedly the case that, as we educate the industry, and managers see
the ill effects of other capital events such as IPOs or stake sales to large
institutions, momentum is building around your company. We believe we have a
superior model which brings together hedge fund managers and outside investors
in the least contentious and most valuable way for both sides.
We have been very encouraged by our progress in the last year. With the growth
in funds under management combined with continuing performance levels from
Winton, we anticipate being able to report significant progress towards
profitability at our interims to be published in December.
Colin Barrow, Chairman.
Acquisition
On 22nd May 2006 the Company announced the acquisition of the entire share
capital of Winton Advisors Limited, which has now changed its name to Alpha
Winton 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.
Substantial Shareholders
At 31st March 2007 the substantial shareholders of the Company were as follows:
Colin Barrow 15.00%
David Harding 11.25%
Roy Nominees Ltd 10.00%
Auvergne & Bourgogne 9.07%
IPGL Limited 8.33%
MOX Securities Nominees Ltd 5.01%
Malcolm Easey 5.00%
Horizon Management DP Ltd 4.50%
HSDL Nominees Ltd 3.45%
Colin Martin Clark 3.02%
Nicola Marie Meaden 3.02%
Consolidated Profit and Loss Account
For the year ended 31st March 2007
Notes Year to Period from
31st March 2007 Incorporation
to 31st March
2006
£'000 £'000 £'000
Turnover
Acquisitions 2 191 -
Administrative expenses
Continuing operations (451) (282)
Acquisitions (23) -
Total administrative
expenses (474) (282)
Operating (loss)/profit
Continuing operations (451) (282)
Acquisitions 168 -
------- ----------
Total operating loss (283) (282)
Interest receivable and
similar income 110 73
------- ----------
Loss on ordinary
activities before and
after tax (173) (209)
------- ----------
Basic and diluted loss
per share (pence) 4 (5.30)p (11.62)p
------- ----------
Consolidated Balance Sheet
As at 31st March 2007
Notes 31st March 2007 31st March 2006
£'000 £'000
Fixed Assets
Intangible assets - goodwill 386 -
------------ -----------
Current assets
Debtors 39 8
Investments 5 2,134 2,476
Cash 167 73
------------ -----------
2,340 2,557
Creditors: amounts falling due
within one year (53) (37)
------------ -----------
Net current assets 2,287 2,520
------------ -----------
Net assets 2,673 2,520
------------ -----------
Capital and reserves
Called up share capital 83 80
Share premium account 2,649 2,649
Merger reserve 323 -
Profit and loss account (382) (209)
------------ -----------
Shareholders' funds 2,673 2,520
------------ -----------
Reconciliation of movement in shareholders' funds Year to Period from
31st March Incorporation
2007 to 31st March
2006
£'000 £'000
Loss for the financial year/period (173) (209)
Issue of Ordinary Shares 326 2,950
Issue of A shares - 50
Share issue expenses - (271)
------------ -----------
Net addition to shareholders' funds 153 2,520
Shareholders' funds at the start of the
year/period 2,520 -
------------ -----------
Shareholders' funds at the end of the
year/period 2,673 2,520
------------ -----------
Consolidated Cash Flow Statement
for the year to 31st March 2007
Note Year to Period from
31st March Incorporation
2007 to 31st March
2006
£'000 £'000
Net cash outflow from operating
activities
Operating loss (283) (282)
Increase in debtors (31) (8)
Increase in creditors 16 37
Depreciation and amortization 29 -
------------ -----------
Net cash outflow from operating
activities (269) (253)
Net cash inflow from returns on
investment and servicing of
finance 110 73
Acquisition of subsidiary undertaking 7 (89) -
------------ -----------
Net cash outflow before use of liquid
resources and financing (248) (180)
Management of liquid resources
Sale of current asset investments 342 24
Purchase of current asset investments - (2,500)
------------ -----------
Net cash inflow/(outflow) before
financing 94 (2,656)
Financing
Issue of A shares - 50
Issue of Ordinary Shares - 2,950
Share issue costs - (271)
------------ -----------
Net cash inflow from financing 94 2,729
------------ -----------
Increase in cash 94 73
------------ -----------
Reconciliation of net cash flow to movement in Year to Period from
net funds 31st March Incorporation
2007 to 31st March
2006
£'000 £'000
Increase in cash 94 73
Net (inflow)/outflow from changes in
liquid resources (342) 2,476
------------ -----------
Movement in net cash and liquid resources (248) 2,549
Opening net cash and liquid resources 2,549 -
------------ -----------
Closing net cash and liquid resources 2,301 2,549
------------ -----------
1. Basis of Preparation
The financial statements have been prepared under the historical cost convention
as modified by the revaluation of short leasehold properties and in accordance
with applicable accounting standards in the United Kingdom. The principal
accounting policies of the company have remained unchanged from those set out in
the Company's 2006 annual report and financial statements.
The financial information set out above does not constitute the Company's
statutory accounts for the periods ended 31st March 2007 and 2006, but is
derived from those accounts. Statutory accounts for 2006 have been delivered to
the Registrar of Companies and those for 2007 will be delivered following the
Company's Annual General Meeting. The Auditors have reported on those accounts;
their reports were unqualified and did not contain statements under the
Companies Act 1985, sections 237(2) or (3).
2. Turnover
All of the Group's turnover is generated in the UK from the one business class
of providing services to hedge fund management businesses. The Group has no
geographical or business segments.
3. Taxation
There is no charge due to the loss incurred in the year. The tax assessed for
the year varies from the standard rate of corporation tax in the UK. The
differences are explained below:
Year to Period from
31st March Incorporation
2007 to 31st March
2006
£'000 £'000
Loss on ordinary activities before taxation (173) (209)
Loss on ordinary activities at the standard
rate of corporation tax in the UK of 30% (52) (63)
Effect of
Expenses not deductible for tax purposes - 1
Losses carried forward 52 62
------------ -----------
Current tax charge - -
------------ -----------
At 31st March 2007 the Company had a deferred tax asset of £114,000 (2006
-£62,000) relating to tax losses carried forward which have 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
£173,000 (period ended 31st March 2006 - £209,027) and using the weighted
average number of Ordinary Shares in issue during the year of 3,264,549 (period
ended 31st March 2006 - 1,798,259. At 31st March 2007, the conversion of the A
Shares and the warrants in issue are anti-dilutive in calculating the loss per
share based on the loss after taxation.
5. Current Asset Investments
The Company holds the bulk of its cash as an investment in a sterling currency
fund in order to maximize earnings. During the year shares in the fund were sold
to provide working capital. At 31st March 2007 the cost and value of this
holding was £2,134,280 (2006 - £2,475,685).
6. Related party transactions
During the year, the Company has accounted for costs of £40,000 (2006 - £33,333)
for use of services and occupation of premises owned by Colin Barrow, a director
of the Company. At 31st March 2007, £12,118 (2006 - £10,000) had been accrued in
respect of rent to be paid to Colin Barrow.
7. Acquisition
Winton Advisors Limited
On 23rd May 2006, the Company acquired the entire issued share capital of Winton
Advisors Limited, which has now changed its name to Alpha Winton 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 326
Cost of acquisition 89
Net assets acquired -
---------
Goodwill arising on acquisition 415
---------
Prior to acquisition, Winton Advisors Limited had not undertaken any business
activities.
8. Copies of the results
Copies of the 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 they are available for download.
This information is provided by RNS
The company news service from the London Stock Exchange
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