TIDMASTR
RNS Number : 2554J
Astaire Group Plc
28 June 2011
Astaire Group Plc ("Astaire" or the "Group")
Preliminary results for the year ended 31 December 2010
Chairman's Statement
The Company announces results for the year ended 31 December
2010 as detailed below, from which shareholders will see that 2010
was a very poor year for Astaire. The year was dominated by three
key events, which are described in more detail below, as
follows:
1. The major shareholder, Evolve Capital PLC, decided to end its
active management in Astaire and, as a consequence, the Board was
restructured in May 2010;
2. Corporate Synergy Holdings Limited, a dormant subsidiary (but
one that wholly owned Astaire Securities Plc) received a claim for
compensation in the amount of approximately GBP4 million, plus
interest, in respect of alleged events which occurred in 2002;
and
3. As a consequence of 2. above and the resultant loss of
confidence by clients and staff in the operating businesses, the
Board concluded that it had to end the previous strategy of
pursuing consolidation in the financial services industry and,
instead, focus on disposing of the operational businesses of the
Group.
These three events were announced on 26 May 2010 and since then,
the Board has been dedicated to resolving all of the issues with
the objective of returning any available excess cash to
shareholders when possible.
Evolve Capital plc
The strategy adopted in 2009, following Evolve Capital Plc's
successful takeover offer for Astaire (then called Blue Oar Plc)
originally focussed on consolidation in the smaller company
corporate finance advisory and investment banking sector and on
private client stockbrokers. This strategy was effected through a
series of corporate transactions.
As noted above, the Board decided in May 2010 that, following
the notification of litigation, this was no longer a viable
strategy and announced that it was considering alternative
ownership arrangements for the operating companies. The Boards of
Evolve and Astaire also substantially changed in order for the two
companies to operate more independently. Oliver Vaughan (former
Chairman) and Edward Vandyk (former Chief Executive) both resigned
at that time from the Astaire Board.
Since that date, Astaire has operated independently and has
concentrated on implementing the new strategy of disposing of
operating businesses in an orderly fashion.
Disposals
Three disposals have now been effected, as follows:
Astaire Securities Plc
It was announced on 15 October 2010 that contracts had been
exchanged for the sale of Astaire Securities plc to Sandfire
Capital Inc. for a total consideration of GBP2.45 million,
comprising GBP2 million cash on completion and GBP450,000 to be
placed in an escrow account in relation to Astaire Securities'
continuing eligibility for Nominated Adviser status and against any
warranty claims or shortfall in the proceeds of the sale of certain
assets below their book value. The GBP450,000 placed in escrow has
now all been received by Corporate Synergy Holdings Limited
("CSH").
The effect of the sale of Astaire Securities was to reduce the
Group's consolidated trading losses. However, while the receipt of
the cash proceeds strengthened the Group's consolidated balance
sheet, substantially all the cash proceeds have been retained by
CSH until the Izodia claim is settled (as explained below).
Dowgate Capital Stockbrokers Limited
The sale of Dowgate Capital Stockbrokers Limited ("Dowgate") to
3B Capital Limited ("3B Capital") was announced on 24 December
2010. The contract provided for the sale of the whole of the issued
share capital of Dowgate to 3B Capital for GBP900,000, of which
GBP675,000 was payable in cash at completion and the balance of
GBP225,000 is due no later than 30 June 2012, subject to any claims
against the warranties and indemnities provided by the seller.
Rowan Dartington & Co Limited
The sale of Rowan Dartington was announced on 10(th) February
2011 and was approved at a general meeting of Astaire's
shareholders on 3 March 2011. The sale subsequently completed on 8
March 2011. The terms of the sale provided for a new company, Rowan
Dartington Holdings Limited ("RDH"), to buy the share capital of
Rowan Dartington. The consideration comprised GBP1 million in loan
notes and shares representing 30% of the share capital of RDH,
subject to clawback against any warranty and indemnity claims over
the next three to five years.
While this transaction was announced and completed after the
year-end, it represented the final disposal of the Group's
operations and the accounts have been prepared on the basis that
all of the above disposals are discontinued businesses.
Izodia
Shareholders were notified on 26 May 2010 that a dormant holding
company within the Astaire Group, Corporate Synergy Holdings
Limited ("CSH"), had received, from lawyers acting on behalf of
Izodia plc, service of a claim form and particulars of claim filed
with the High Court, claiming compensation of approximately GBP4
million plus interest in respect of events alleged to have occurred
in mid-2002.
As announced on 24 June 2011 agreement was reached whereby
Izodia agreed to drop all claims against CSH. Under the terms of
the settlement, under which no party admitted any liability and the
details of which are subject to a confidentiality clause, CSH paid
a GBP500,000 contribution to Izodia's legal costs. CSH had funded
the litigation to in excess of GBP800,000 for defence counsel's
fees. CSH expects to recover a substantial proportion of these fees
from insurers (but not the GBP500,000 contribution to Izodia's
legal costs). The Board believes that this was the best available
result in the circumstances, in the context of the alternative
being an expensive and very protracted continuation of litigation,
the outcome of which is necessarily subject to a degree of
uncertainty notwithstanding the Board's belief in the strength of
the defence. The GBP500,000 contribution to costs has been included
in operating expenses for 2010.
Current position
The Group no longer has any operating businesses and only has
one employee, Chris Roberts, the finance director. Following the
disposal of Rowan Dartington, the Group is now defined as an
investment company under the AIM Rules for Companies. Its policy is
to seek to return any available excess cash to shareholders,
including any deferred consideration under the terms of the
disposal of Rowan Dartington.
As announced on 24 June 2010 the Board was recently informed
that Evolve, the Company's majority shareholder, may hold the view
that Astaire should become a more active investing company and that
it may wish to appoint individuals to the Board to implement such a
strategy. Were such a strategy to be implemented it would mean that
rather than seeking Shareholder approval for returning any excess
cash to Shareholders, as previously proposed, the Company would
instead be seeking to invest the cash that it currently holds, and
any amounts realised from its present investments, into as yet
unspecified investment opportunities with a view to increasing the
value of the Company's assets for the ultimate benefit of all of
its Shareholders. The Board is considering with its advisers the
announcement made by Evolve on 24 June 2011 concerning this.
The Group has been actively disposing of other miscellaneous
assets since the year-end
As noted in the circular to shareholders dated 11 February 2011,
the Board has now carried out a review of the value of maintaining
an AIM quotation and has concluded that the cost of being quoted on
AIM is no longer justified by any benefit for shareholders. The
Board has therefore written to shareholders recommending that the
quotation and trading of Astaire's shares on AIM is cancelled. It
is estimated that this will realise annualised cost savings of
approximately GBP100,000.
Overall, at 31 May 2011, the Astaire Group had consolidated cash
resources of approximately GBP4.7 million, excluding GBP500,000
held by lawyers pending agreement of the settlement referred to
above.
The Board will not be recommending the payment of a dividend for
2010.
A General Meeting to approve these accounts will be held on 27
July 2011 and we look forward to welcoming you.
James Noble
Chairman
28 June 2011
Enquiries:
Astaire Group Plc Tel: 020 7448 4400
James Noble, Chairman
Fairfax I.S. PLC
Nominated Adviser/Broker Tel: 020 7598 5368
David Floyd, Katy Birkin
Financial Review
Results
The loss after tax for the year from all operations was GBP7.7
million compared with a loss of GBP7.3 million in 2009. The loss
after tax from continuing operations increased from GBP0.45 million
in 2009 to GBP2.9 million in 2010.
Following the sale or commitment to sell all of the operating
businesses and subsequent reclassification of the income and
related expenses as "discontinued operations" the Board has
concluded that the use of underlying result before tax as the
comparative measure and indicator of performance is no longer
appropriate and has therefore ceased to use it. On this basis there
is no analysis of trading performance other than the result before
tax.
Result before tax
The result before tax can be divided into the following:
2010 2009
GBP'000 GBP'000
Loss from continuing operations before taxation (3,050) (325)
Loss from discontinued operations before
taxation (5,388) (7,323)
"Continuing operations" essentially consists of the ongoing
activities of Astaire, Corporate Synergy Holdings and Dowgate
Capital which are active in seeking to realise value from the
assets they hold and minimise their exposure to liabilities. In the
case of Corporate Synergy Holdings the liabilities relate almost
exclusively to the recently settled litigation and in Dowgate
Capital they relate to a property lease. Astaire Group continues to
incur the costs associated with running a publicly quoted
group.
"Discontinued operations" relate to the activities of Astaire
Securities, which was sold during the year, Dowgate where there was
a signed contract to sell prior to the year end and Rowan
Dartington, where the Group had resolved to sell and were in
advanced discussions with a view to completion of a sale early in
2011. Subsequent to the year end, the sales of both Rowan
Dartington and Dowgate were completed and announced.
Income Statement
Gross fee and commission income for the Group in 2010 was GBPnil
as all the revenues generated arose from "discontinued"
operations.
Realised gains on equity investments and option positions
delivered a net gain of GBP282,000 (2009: GBP401,000). The as yet
unrealised movement in the valuation of options and warrants held
at 31 December 2010 was a loss of GBP263,000 (2009: gain of
GBP899,000) and a slight improvement on the position as at 30 June
2010 of a loss of GBP425,000.
Following the disposal of Astaire Securities plc, the Group made
a loss on the investment of GBP799,000.
Operating expenses excluding impairments, amortisation,
share--based payments and restructuring charges, fell significantly
as they no longer included all the discontinued operations. These
expenses are expected to be reduced further during 2011 with
minimal headcount and the settlement of the Izodia litigation.
The carrying value of goodwill and other intangibles has been
reviewed in the light of the anticipated discontinued nature of the
operations and impaired accordingly; these impairments are
incorporated into the discontinued operations line. The
amortisation and impairment charges, included in discontinued
operations, for 2010 was GBP4.1 million. These charges related to
both Rowan Dartington and Dowgate businesses.
Restructuring costs of GBPnil (2009:GBP897,000) primarily relate
to the costs of redundancies effected earlier in the year, and
again are included in discontinued operations.
Business Review
Investment banking
The investment banking division comprised what was Astaire
Securities. Revenues generated in this division originated from
corporate fees and retainers, primarily from acting as Nominated
Adviser to AIM companies, fundraising commission and commission on
execution of market trades on behalf of a range of UK and
international clients.
Revenues in this division included in discontinued activities
amounted to GBP4.6 million for the period up to disposal in October
2010, compared with GBP8.5 million in 2009. The division
contributed a loss for that period of GBP1.1 million, reduced from
a loss of GBP1.5 million in 2009.
Private client and wealth management
The private client and wealth management division comprises the
activities of Rowan Dartington and Dowgate Capital Stockbrokers.
Revenues generated originate from the execution of trades and fees
from advice and management of investment portfolios for private
clients, charities and smaller pension funds.
Revenues from this division, included in discontinued
operations, for 2010 were GBP8.9 million, compared with GBP7.9
million in 2009. The division contributed a loss of GBP4.0 million,
compared with GBP4.4 million in 2009, including impairment
provisions of GBP3.0 million (2009: GBP1.9 million).
Loss per share
The basic loss per share from continuing operations for the year
was 1.40 pence compared to the loss in 2009 of 3.52 pence. The loss
per share from continuing and discontinued operations was 3.74p (
2009: 3.95p).
Balance Sheet
Net assets per share declined from 7.0 pence at 31 December 2009
to 3.25 pence at 31 December 2010. The main contributors to this
were the trading loss from discontinued operations together with
the impairment of intangibles and goodwill previously referred to
and the loss on disposal of Astaire Securities Plc.
Net current assets have fallen to GBP6.8 million (31 December
2009: GBP9.8 million), of which, at 31 December 2010 GBP4 million
(31 December 2009: GBP7.8 million) was represented by cash in the
continuing operations (there remained cash in both Rowan Dartington
& Co Limited and Dowgate Capital Stockbrokers Limited which is
not included in this GBP4 million as it left the Group on the sales
of those businesses).
Cash Flow
During the year cash fell from GBP7.8 million to GBP4.0 million,
a reduction of GBP3.8 million. The main elements of this were the
net cash outflow from operations (continuing and discontinued) and
the cash reclassified as assets held for sale of GBP0.8
million.
Dividends
As noted in the Chairman's Statement, the Board are not
recommending the payment of a final dividend for 2010 (2009:
nil).
Christopher Roberts
Finance Director
28 June 2011
Consolidated Income Statement
for the year ended 31 December 2010
2010 2009
Continuing operations GBP'000 GBP'000
Fee and commission income - 40
Fee and commission expenses - -
---------- ----------
Net fee and commission income - 40
Other income - -
---------- ----------
Total income - 40
---------- ----------
Profit on disposal of available--for--sale
investments 282 367
(Loss) / Gain on fair value through profit
and loss investments (263) 899
Loss on sale of subsidiary undertaking (799) (619)
Operating expenses
Impairment of goodwill and other intangibles - -
Amortisation of other intangibles - -
Restructuring costs - -
Unrecovered debtor balances - -
Share--based payments credit 85 721
Share--based payments charge - -
Other operating expenses (2,391) (1,823)
----------------------------------------------- ---------- ----------
Total operating expenses (2,306) (1,102)
---------- ----------
Operating loss (3,086) (415)
Investment revenue 36 90
Finance costs - -
---------- ----------
Loss on ordinary activities before taxation (3,050) (325)
Taxation credit / (charge) 183 (126)
---------- ----------
Loss from continuing operations (2,867) (451)
Discontinued operations
Loss from discontinued operations (note
3) (4,802) (6,808)
---------- ----------
Loss for the period (7,669) (7,259)
Loss attributable to equity shareholders
of Astaire Group plc (7,669) (7,259)
========== ==========
Loss per ordinary share (pence)
From continuing operations
- Basic (1.40) (0.25)
- Diluted (1.40) (0.25)
---------- ----------
From continuing and discontinued operations
- Basic (3.74) (3.95)
- Diluted (3.74) (3.95)
---------- ----------
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2010
2010 2009
GBP'000 GBP'000
Loss for the year (7,669) (7,259)
---------- ----------
Other comprehensive income
Gains on revaluation of available--for--sale
investments taken to equity, net of tax 20 62
Exchange differences on translation of
foreign operations - 3
Transferred to profit or loss on sale
of available--for--sale investments (63) (134)
---------- ----------
Other comprehensive income for the year,
net of tax (43) (69)
---------- ----------
Total comprehensive income for the year (7,712) (7,328)
---------- ----------
Total comprehensive income attributable
to equity shareholders of Astaire Group
plc (7,712) (7,328)
========== ==========
Consolidated Balance Sheet
as at 31 December 2010
2010 2009 2008
GBP'000 GBP'000 GBP'000
ASSETS
Non--current assets
Goodwill - 1,676 1,093
Other intangible assets - 3,232 3,841
Property, plant and equipment - 493 906
Total non-current assets - 5,401 5,840
---------- ---------- ----------
Current assets
Trade and other receivables 1,369 7,713 7,065
Available--for--sale investments 565 1,156 1,224
Fair value through profit and loss
investments 929 1,784 522
Cash and cash equivalents 4,004 7,814 13,601
Assets held for sale 7,679 - -
Total current assets 14,546 18,467 22,412
---------- ---------- ----------
Total assets 14,546 23,868 28,252
---------- ---------- ----------
LIABILITIES
Current liabilities
Trade and other payables 2,366 8,150 7,152
Current tax liabilities 1 20 55
Provisions - 511 -
Obligations under finance leases - - 34
Liabilities directly associated with
assets held for sale 5,374 - -
Total current liabilities 7,741 8,681 7,241
---------- ---------- ----------
Non-current liabilities
Deferred tax liabilities 130 893 836
Obligations under finance leases - - 52
Total non--current liabilities 130 893 888
---------- ---------- ----------
Total liabilities 7,871 9,574 8,129
---------- ---------- ----------
EQUITY
Share capital 205 205 167
Share premium account 17,631 17,631 15,716
Merger reserve - 938 2,559
Fair value and other reserves 11 54 456
Retained earnings (11,172) (4,534) 1,225
Equity attributable to holders of the
parent 6,675 14,294 20,123
---------- ---------- ----------
Total equity and liabilities 14,546 23,868 28,252
---------- ---------- ----------
Consolidated Statement of Changes in Equity
as at 31 December 2010
Fair
value
and
Share Share Merger other Retained Total
capital premium reserve reserves earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
January 2009 167 15,716 2,559 456 1,225 20,123
Issue of share
capital 38 1,915 - - - 1,953
Share-based
payments - - - - (454) (454)
Total
comprehensive
income for
the period - - - (69) (7,259) (7,328)
Transfer to
retained
earnings - - (1,621) (333) 1,954 -
Balance at 31
December
2009 205 17,631 938 54 (4,534) 14,294
--------- --------- --------- ---------- ---------- ---------
Share--based
payments - - - - 93 93
Total
comprehensive
income for
the period - - - (43) (7,669) (7,712)
Transfer to
retained
earnings - - (938) - 938 -
Balance at 31
December
2010 205 17,631 - 11 (11,172) 6,675
--------- --------- --------- ---------- ---------- ---------
Consolidated Cash Flow Statement
for the year ended 31 December 2010
2010 2009
GBP'000 GBP'000
Net cash used in operating activities (3,317) (5,263)
---------- ----------
Investing activities
Interest received 49 336
Dividends received 17 21
Proceeds on disposal of available-for-sale
investments 349 2,337
Proceeds on disposal of property,
plant and equipment 1 -
Purchases of available-for-sale investments (212) (2,117)
Purchases of property, plant and equipment (434) (198)
Acquisition of subsidiary - (1,310)
Disposal of subsidiary (263) (95)
Net cash used in investing activities (493) (1,026)
---------- ----------
Financing activities
Capital element of finance leases
repaid - (25)
Proceeds from issue of ordinary share
capital - 501
Net cash from financing activities - 476
---------- ----------
Net decrease in cash and cash equivalents (3,810) (5,813)
Cash and cash equivalents at beginning
of year 7,814 13,601
Effect of foreign exchange rates - 26
Cash and cash equivalents at end of
year 4,004 7,814
---------- ----------
( )
( )
Notes to the Preliminary Announcement
for the year ended 31 December 2010
1. Basis of preparation
This announcement has been based on the Group's financial
statements which have been prepared in accordance with IFRS as
adopted by the European Union and IFRIC interpretations and with
the Companies Act 2006.
The consolidated financial statements have been prepared under
the historical cost convention, with the exception of financial
instruments, which are stated in accordance with IAS 39 Financial
Instruments: Recognition and Measurement.
2. Going concern
As part of its regular assessment of the prospects for the
Group, the Board reviews a plan to 31 December 2012. Group cash
balances have decreased further during 2010 and since the year end,
but the Group has sufficient cash resources and no borrowings, and
as detailed in the Chairman's Statement has cut costs.
The Board have produced an eighteen month plan to 31 December
2012 focusing on asset realisation, minimising costs and concluding
outstanding litigation.
As a result of their considerations, the Directors have a
reasonable expectation at the time of approving the financial
statements that the Company and the Group have adequate resources
to continue in operational existence for the foreseeable future.
For this reason, they continue to adopt the going concern basis in
preparing the financial statements.
3. Discontinued operations
On 22 October 2010 the Group completed the disposal of Astaire
Securities Plc, its London based investment banking business. The
Group had also taken the decision prior to the year end, to sell
both Dowgate Capital Stockbrokers Limited and Rowan Dartington
& Co Limited.
Contracts were exchanged for the sale of Dowgate Capital
Stockbrokers Limited on 24 December 2010 and the disposal
subsequently completed on 14th February 2011. The Group had also
entered in a agreement granting exclusivity to certain parties who
subsequently exchanged contracts and then completed on the
acquisition of Rowan Dartington & Co Limited on 8th March 2011.
Accordingly the activities of Astaire Securities Plc, Dowgate
Capital Stockbrokers Limited and Rowan Dartington & Co Limited
have been treated as discontinued.
On 3 June 2009 the Group completed the disposal of Inteq
Limited, its Australian corporate finance subsidiary. During 2009
the Group's subsidiary Blue Oar Asset Management LLP closed both
its managed funds and ceased operations. These actions were
effected as part of the Group's strategy, implemented following the
operating review carried out by the Board immediately following the
Group's acquisition by Evolve Capital Plc on 29 December 2008, to
cut costs and exit loss making businesses.
The results of the discontinued operations, which have been
included in the consolidated income statement, were as follows:
2010 2009
GBP'000 GBP'000
Total income 10,996 13,834
Profit on disposal of investments 6 78
Expenses (16,390) (21,235)
---------- ----------
Loss before taxation (5,388) (7,323)
Attributable taxation expense 586 515
---------- ----------
(4,802) (6,808)
Loss on disposal of discontinued operations (799) (619)
Attributable taxation expense 146 -
---------- ----------
Loss from discontinued operations (attributable
to owners of the Company) (5,455) (7,427)
---------- ----------
The major classes of assets and liabilities comprising the
operations classified as held for sale are as follows:
2010 2009
GBP'000 GBP'000
Other intangible assets 407 -
Property, plant and equipment 577 -
Trade and other receivables 5,885 -
Cash and bank balances 810 -
---------- ----------
Total assets classified as held for sale 7,679 -
---------- ----------
Trade and other payables (5,374) -
---------- ----------
Total liabilities associated with assets classified (5,374) -
as held for sale
---------- ----------
Net assets of disposal group 2,305 -
---------- ----------
4. Preliminary announcement
Whilst the financial information included in this preliminary
announcement has been prepared in accordance with the recognition
and measurement criteria of International Financial Reporting
Standards (IFRS), this announcement does not itself contain
sufficient information to comply with IFRS. Full financial
statements that comply with IFRS were approved by the Board of
Directors on 28 June 2011 and are expected to be published on the
Group's website, www.astairegroup.co.uk and posted to shareholders
before 30 June 2011.
The financial information set out above does not constitute the
Company's statutory accounts for the years ended 31 December 2010
or 2009, but is derived from those accounts. Statutory accounts for
2009 have been delivered to the Registrar of Companies and those
for 2010 will be delivered following the Company's annual general
meeting. The auditors have reported on these accounts; their
reports were unqualified, did not draw attention to any matters by
way of emphasis without qualifying their report and did not contain
statements under s498(2) or (3) of the Companies Act 2006 or
equivalent preceding legislation.
This announcement was approved at a meeting of the Board of
Directors held on 28 June 2011.
5. Availability of report and accounts
The Group's full report and accounts will be dispatched to
shareholders as soon as is practicable and in any event no later
than 30 June 2011. Copies will also be available on the Group's
website, www.astairegroup.co.uk, and on request from the Group's
head office at 46 Worship Street, London EC2A 2EA.
6. General Meeting
A General Meeting to approve the accounts is to be held on 27
July 2011. Notice of the GM will be dispatched to shareholders with
the Group's report and accounts.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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