TIDMPTH
RNS Number : 0307T
Promethean PLC
07 December 2012
7 December 2012
Promethean PLC ("Promethean" or the "Company")
Annual Report and Accounts and AGM Notice
Promethean PLC announces that the Annual Report and Accounts for
the year ended 30 June 2012, Notice of AGM and Proxy Form have been
posted to shareholders and are available from the Company's website
(www.prometheanplc.com).
The Annual General Meeting of the Company will be held at 3(rd)
Floor Exchange House, 54-62 Athol Street, Douglas, Isle of Man on
31 December 2012 at 10 a.m.
Enquiries:
Sir Peter Burt
Promethean PLC +44 (0) 207 246 2590
Stuart Gledhill
S. P. Angel Corporate Finance LLP: +44 (0)20 3463 2260
Chairman's Statement
Introduction
The year to 30 June 2012 was both a difficult and a very
frustrating one. Continued economic uncertainty throughout the
Eurozone and the consequences of the shortage of credit in the UK
as a result of foreign banks' withdrawal and UK banks' deleveraging
has made the process of realising the remaining assets within the
Promethean portfolio much slower than we had hoped. However since
the year end, we have reached a position where the potential is in
sight for an exit with the realisation of the remaining assets.
The Board have appreciated the support received from
shareholders over the past seven years. It was unfortunate but
probably inevitable that the impact of the credit crunchresulted in
the majority of shareholders voting at the beginning of 2009 to
change the original investment policy of Promethean plc and the
Fund being evergreen (as outlined in the original Prospectus) to a
policy of asset divestment. The consequent acceleration of the
realisation of the assets has resulted in a reduction in the
eventual proceeds realised because the Fund was seen as a forced
seller although I believe the Manager has done a good job in
difficult circumstances.
Following the Extraordinary General Meeting held in September
2011 and the immediate requirement to exit the public portfolio,
our investment in IFG Group was sold and the proceeds were
distributed to shareholders. Up to 30 June 2012, some 94 pence per
share has been returned to continuing third party shareholders,
including carried interest distributions paid to eligible
shareholders, with further realisations to come from the four
investments remaining at the year end.
The four remaining assets comprised: Cambria Automobiles plc,
InterMediactive, January Loan Services Limited and T.I.S. Group. It
is not unusual for the residual assets in a portfolio to be the
hardest to realise and so it has proved with the remaining assets
within the Group given the renewed period of fragility in the
Eurozone. I am pleased to say that terms have been agreed for the
realisation of all four.
On 7 September 2012, the Company distributed in specie its
investment in Cambria Automobiles plc to shareholders on the
register as at 12 July 2012. For each share held in Promethean plc,
shareholders received 0.73742 shares in Cambria. Negotiations for
the early repayment of the InterMediactive deferred consideration
proved successful and the outstanding loan notes and accrued
interest were repaid in October 2012. The proceeds will be
distributed to shareholders in due course. January Loan Services
Limited's management team have signed an option agreement under
which they will purchase the Group's 30% interest for GBP0.6m prior
to calendar year end 2013. The Manager is in discussions with them
on possible terms for an early exercise of that option. An
announcement about T.I.S. Group was made to the London Stock
Exchange on 19 November 2012. T.I.S. Group shareholders have
accepted an offer from the Protected Asset TEP Fund plc ("PATF").
The offer is subject to a number of conditions, including its
approval at a PATF EGM to be held on 14 December 2012. The
consideration due under the conditional agreement would be
GBP10.7m, which would equate to approximately 23.8 pence per
Promethean share and would be in the form of units in PATF. A copy
of the RNS released on 19 November 2012 follows this report.
Delisting resolution
In view of the possibility that the remaining existing assets
may be realised early in 2013, a resolution to cancel the admission
of the Company's securities (the "Ordinary Shares") to trading on
the AIM Market of the London Stock Exchange at any time during the
three month period beginning on 31 December 2012 and ending 31
March 2013 (the "Delisting") is being put forward as a Special
Resolution which requires the approval of 75% of the shares voted
at the Annual General Meeting to be held on 31 December 2012 (the
"AGM") in accordance with Rule 41 of the AIM Rules. Once the
existing assets are realised the Board will call an extraordinary
general meeting for shareholders to consider a special resolution
to sell or wind up the Company.
As always, my fellow directors, the Manager and I are happy to
hear from shareholders and to answer any questions which they may
have.
Sir Peter Burt
Chairman
7 December 2012
Investment Manager's Review
Promethean Investments Fund LP (the "Fund") is managed by
Promethean Investments LLP (the "Manager"). Promethean plc (the
"Company") is the sole limited partner in the Fund. The Fund is a
limited partnership that holds the Company's investments.
Overview
For the last 12 months the Manager has been looking to exit its
remaining portfolio. The realisation process has been extremely
challenging due to the market's awareness of the Manager as a
forced seller and the protracted period of below-average economic
growth and uncertainty in the UK economy. The Manager's approach
has been to try to focus on an exit route for each particular
business within the portfolio then develop and execute that
route.
To date, some 94 pence per share has been returned to continuing
third party share holders (including carried interest distributions
paid to eligible shareholders) and together with the current NAV,
represent 132 pence per share, compared to the original placing
price of 100 pence per share. The Manager believes that this
performance relative to similar UK listed funds raised and invested
during the same period has been satisfactory.
During the year the Group reported a loss on investing
operations of GBP8.6m (2011: profit GBP0.5m). The main contributing
items to the loss from Investing Operations of GBP8.6m were the
unrealised loss on Cambria Automobiles plc (GBP5.8m) and the
realised loss on IFG Group plc (GBP3.8m).
Portfolio
As at 30 June 2012, the portfolio was as follows:
Valuation(4) Gain/(Loss)
Company Sector Cost GBP'000 GBP'000 GBP'000
----------------------- ---------------------- ------------- ------------- ------------
Cambria Automobiles
plc (1) Automotive retailing 8,114 7,164 (950)
----------------------- ---------------------- ------------- ------------- ------------
InterMediactive Group
(2) Telecoms services - 3,247 3,247
----------------------- ---------------------- ------------- ------------- ------------
January Loan Services
Limited (3) Financial services 115 625 510
----------------------- ---------------------- ------------- ------------- ------------
TIS Group Financial services 10,006 5,942 (4,064)
----------------------- ---------------------- ------------- ------------- ------------
Total 18,235 16,978 (1,257)
----------------------------------------------- ------------- ------------- ------------
Notes:
(1) The cost of Cambria Automobiles plc reflects the original
cost of the investment less the cost of the in specie capital
return and carried interest distributions made on 1 April 2010.
(2) The cost of InterMediactive Group has been reduced to zero
as the remaining investment reflects the carrying value of the
vendor loan notes only following the sale of InterMediactive on 1
April 2010.
(3) The cost of January Loan Services Limited reflects the
amount of the secured loan notes held by Promethean in Enterprise
Group that were offset to reflect the assets retained by January
Loan Services Limited.
(4) The valuations are in accordance with IFRS / IPEVCV
guidelines. Valuation of listed investments is based on the closing
bid price as at 30 June 2012. The valuation of private companies
also includes accrued interest of GBP171,000 on loan notes which is
disclosed separately on the statement of financial position.
Portfolio Review
Cambria Automobiles plc
On 7 September 2012, the Company distributed in specie its
holding in Cambria Automobiles plc ("Cambria") to shareholders on
the register as at 12 July 2012. For each share held in Promethean
plc, shareholders received 0.73742 shares in Cambria.
IFG Group plc
The Fund realised its stake in IFG Group plc ("IFG") in November
2011 for GBP3.8m. This resulted in a realised loss on the cost of
the investment of GBP2.5m. Gross dividends received over the period
of investment amounted to GBP0.5m.
InterMediactive Group
The Fund held loan notes in InterMediactive Group ("IMA") which
formed part of the deferred consideration of its sale on 1 April
2010. In October 2012, GBP3.3m was received from IMA, representing
full payment of the outstanding loan notes and interest as at 30
September 2012. The investment generated total gross proceeds of
GBP21.4m, representing a return of 2.5 times.
January Loan Services Limited
The Group announced on 12 June 2012 that an agreement had been
reached with the management of January Loan Services Limited
("JLSL") on an option to purchase its 30% stake for GBP625,000. The
option expires in December 2013.
TIS Group
On 13 November 2012 Promethean Investments Fund LP exchanged
contracts for the conditional sale of its holding in T.I.S. Group
to the Protected Asset TEP Fund plc ("PATF"). Completion of the
sale is subject to the satisfaction of various conditions,
including the passing of a number of resolutions at a class meeting
of the holders of PATF's participating shareholders, scheduled to
be held on 14 December 2012. If the sale completes, gross proceeds
of GBP10.7m will be receivable, representing 23.8 pence per share.
This represents an increase of GBP4.8m on the valuation as at 30
June 2012 of GBP5.9m, representing a further increase in NAV of
10.5 pence per share.
Outlook
Despite uncertain economic conditions, the Manager is still
working towards seeking exits on all investments before 31 December
2012.
Principles of valuation of unlisted investments
Investments are stated at amounts considered by the directors to
be a reasonable assessment of their fair value, where fair value is
the amount at which an asset could be exchanged between
knowledgeable, willing parties in an arm's length transaction.
All investments are valued according to one of the following
bases:
-- Cost (less any provision required)
-- Earnings multiple
-- Sale price
-- Price of recent transaction or
-- Net assets
Investments are only valued at cost for a limited period after
the date of acquisition, otherwise investments are valued on one of
the other bases described above, and generally the earnings'
multiple basis of valuation will be used unless this is
inappropriate, as in the case of certain asset-based
businesses.
When valuing on an earnings' multiple basis, profits before
interest and tax of the current year will normally be used,
depending on whether or not more than six months of the accounting
period remain and the predictability of future profits. Such
profits will be adjusted to a maintainable basis, taxed at the full
corporation tax rate and multiplied by an appropriate and
reasonable price/earnings multiple. This is normally related to
comparable quoted companies, with adjustments made for points of
difference between the comparator and the company being valued, in
particular for risks, earnings' growth prospects and surplus assets
or excess liabilities.
Where a company has incurred losses, or if comparable quoted
companies are not primarily valued on an earnings' basis, then the
valuation may be calculated with regard to the underlying net
assets and any other relevant information, such as the pricing for
subsequent recent investments by a third party in a new financing
round that is actively being sought, then any offers from potential
purchasers would be relevant in assessing the valuation of an
investment and are taken into account in arriving at the
valuation.
Where appropriate, a marketability discount may be applied to
the investment valuation, based on the likely timing of an exit,
the influence over that exit, the risk of achieving conditions
precedent to that exit and general market conditions.
When investments have obtained an exit (either by listing or
trade sale) after the valuation date but before finalisation of
Promethean's relevant accounts, (interim or final), the valuation
is based on the exit valuation subject to an appropriate discount
to take account of the time period between valuation and exit
dates.
In arriving at the value of an investment, the percentage
ownership is calculated after taking into account any dilution
through outstanding warrants, options held by third parties or
other investors and performance related mechanisms.
Principles of valuation of listed investments
Investments are valued at bid-market price or the conventions of
the market on which they are quoted, subject if appropriate, to
marketability discounts where formal restrictions on trading
exist.
Events after the Reporting Period
On 13 November 2012 Promethean Investments Fund LP exchanged
contracts for the conditional sale of its holding in T.I.S. Group
to the Protected Asset TEP Fund plc ("PATF"). Completion of the
sale is subject to the satisfaction of various conditions,
including the passing of a number of resolutions at a class meeting
of the holders of PATF's participating shareholders, scheduled to
be held on 14 December 2012. If the sale completes, gross proceeds
of GBP10.7m will be receivable, representing 23.8 pence per share.
This represents an increase of GBP4.8m on the valuation as at 30
June 2012 of GBP5.9m, representing a further increase in NAV of
10.5 pence per share.
On 7 September 2012, Promethean plc distributed in-specie its
investment in Cambria Automobiles plc to shareholders on the
register as at 12 July 2012.
On 1 October 2012, InterMediactive Group ("IMA") repaid its
outstanding loan notes and accrued interest outstanding as at 30
September 2012. Gross proceeds of GBP3.3m were received.
Promethean Investments LLP
7 December 2012
Promethean plc
Group Statement of Comprehensive Income for the year
to 30 June 2012
Year ended Year ended
30 June 30 June
2012 2011
GBP'000 GBP'000
Investing Operations
Investment and other income 3,683 3,223
Realised and unrealised loss on
financial investments (12,279) (2,768)
----------- -----------
(8,596) 455
Management and other expenses (1,778) (1,326)
Loss from investing activities (10,374) (871)
----------- -----------
Loss before finance costs and taxation (10,374) (871)
----------- -----------
Finance income 1 3
Finance costs (6) (5)
Loss before tax (10,379) (873)
----------- -----------
Income tax expense (118) (34)
Group Loss and Total comprehensive
income (10,497) (907)
----------- -----------
Loss per share - (basic and diluted) (23.23p) (2.01p)
Promethean plc
Group Statement of Financial Position as at 30 June 2012
June 2012 June 2011
GBP'000 GBP'000
Non-current assets
Property, plant and equipment - 12
Investments 16,807 29,524
16,807 29,536
----------- ----------
Current assets
Trade and other receivables 1,261 665
Cash and cash equivalents 717 1,249
----------- ----------
1,978 1,914
----------- ----------
Total assets 18,785 31,450
----------- ----------
Current liabilities
Trade and other payables 1,550 1,099
Taxation liabilities 132 35
Total liabilities 1,682 1,134
----------- ----------
Net assets 17,103 30,316
----------- ----------
Equity
Share capital 452 452
Share premium 10,387 13,103
Unrealised investment revaluation
reserve (23,461) (20,096)
Retained earnings 29,725 36,857
----------- ----------
Total equity 17,103 30,316
----------- ----------
Net asset per share GBP0.38 GBP0.67
Promethean plc
Company Statement of Financial Position as
at 30 June 2012
2012 2011
GBP'000 GBP'000
Non-current assets
Investments held at fair value through
profit or loss 17,201 30,206
Current assets
Trade and other receivables 632 28
Cash and cash equivalents 85 189
--------- --------
717 217
--------- --------
Total assets 17,918 30,423
--------- --------
Current liabilities
Trade and other payables 683 72
Taxation liabilities 132 35
--------- --------
Total liabilities 815 107
--------- --------
Net assets 17,103 30,316
--------- --------
Equity
Share capital 452 452
Share premium 10,387 13,103
Unrealised investment revaluation reserve (15,519) (997)
Retained earnings 21,783 17,758
Equity attributable to equity holders
of the parent 17,103 30,316
--------- --------
Promethean plc
Statement of changes in equity for the year ended
30 June 2012
Group
Unrealised
investment Retained
Share Share revaluation earnings
capital premium reserve distributable Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 30 June 2011 452 13,103 (20,096) 36,857 30,316
--------- --------- ------------- --------------- ---------
Capital return - (2,712) - - (2,712)
Expenses relating to the
return of capital to the
shareholders - (4) - - (4)
--------- --------- ------------- --------------- ---------
Transactions with owners - (2,716) - - (2,716)
Loss for the year - - - (10,497) (10,497)
Unrealised gains reserve
transfer - - (3,365) 3,365 -
--------- --------- ------------- --------------- ---------
Loss for the year - - (3,365) (7,132) (10,497)
Other comprehensive income - - - - -
--------- --------- ------------- --------------- ---------
Total comprehensive income
for the year - - (3,365) (7,132) (10,497)
Balance as at 30 June 2012 452 10,387 (23,461) 29,725 17,103
--------- --------- ------------- --------------- ---------
Company
Unrealised
investment Retained
Share Share revaluation earnings
capital premium reserve distributable Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 30 June 2011 452 13,103 (997) 17,758 30,316
--------- --------- ------------- --------------- ---------
Capital return - (2,712) - - (2,712)
Expenses relating to the
return of capital to the
shareholders - (4) - - (4)
--------- --------- ------------- --------------- ---------
Transactions with owners - (2,716) - - (2,716)
Loss for the year - - - (10,497) (10,497)
Unrealised gains reserve
transfer - - (14,522) 14,522 -
--------- --------- ------------- --------------- ---------
Loss for the year - - (14,522) 4,025 (10,497)
Other comprehensive income - - - - -
--------- --------- ------------- --------------- ---------
Total comprehensive income
for the year - - (14,522) 4,025 (10,497)
Balance as at 30 June 2012 452 10,387 (15,519) 21,783 17,103
--------- --------- ------------- --------------- ---------
Promethean plc
Statement of changes in equity for the year ended 30
June 2012 (continued)
Group
Unrealised
investment Retained
Share Share revaluation earnings
capital premium reserve distributable Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 30 June 2010 452 13,103 (17,374) 35,042 31,223
--------- --------- ------------- --------------- --------
Loss for the year - - - (907) (907)
Unrealised gains reserve
transfer - - (2,722) 2,722 -
--------- --------- ------------- --------------- --------
Loss for the year - - (2,722) 1,815 (907)
Other comprehensive income - - - - -
--------- --------- ------------- --------------- --------
Total comprehensive income
for the year - - (2,722) 1,815 (907)
Balance as at 30 June 2011 452 13,103 (20,096) 36,857 30,316
--------- --------- ------------- --------------- --------
Company
Unrealised
investment Retained
Share Share revaluation earnings
capital premium reserve distributable Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 30 June 2010 452 13,103 (3,396) 21,064 31,223
--------- --------- ------------- --------------- --------
Loss for the year - - - (907) (907)
Unrealised gains reserve
transfer - - 2,399 (2,399) -
--------- --------- ------------- --------------- --------
Loss for the year - - 2,399 (3,306) (907)
Other comprehensive income - - - - -
--------- --------- ------------- --------------- --------
Total comprehensive income
for the year - - 2,399 (3,306) (907)
Balance as at 30 June 2011 452 13,103 (997) 17,758 30,316
--------- --------- ------------- --------------- --------
Promethean plc
Statement of Cash Flows for the year ended 30 June 2012
Group Company Group Company
2012 2012 2011 2011
GBP'000 GBP'000 GBP'000 GBP'000
Cash outflow from operating activities
Net loss for the year (10,379) (10,400) (873) (907)
Adjustments for :
Depreciation 13 - 16 -
Finance income (1) - (3) -
Finance cost 6 - 5 -
Unrealised investment losses 11,957 13,005 2,722 580
Increase in trade and other receivables (3,331) (604) (3,070) -
(Decrease)/increase in payables (198) 611 73 (30)
Tax (paid)/received (21) - (28) 6
Loss on disposal of subsidiary 322 - - -
Net cash (outflow)/inflow in operating
activities (1,632) 2,612 (1,158) (351)
--------- --------- -------- --------
Cash inflow from investing activities
Disposal of subsidiaries 6 - - -
Proceeds from returns on investments 3,822 - 128 -
Purchase of property, plant and equipment (7) - - -
Finance income 1 - 3 -
Net cash inflow in investing activities 3,822 - 131 -
--------- --------- -------- --------
Cash (outflow)/inflow from financing
activities
Capital return (2,716) (2,716) - -
Finance cost (6) - (5) -
Net cash (outflow)/inflow in financing
activities (2,722) (2,716) (5) -
--------- --------- -------- --------
Net (decrease)/increase in cash and
cash equivalents (532) (104) (1,032) (351)
--------- --------- -------- --------
Cash and cash equivalents at beginning
of year 1,249 189 2,281 540
--------- --------- -------- --------
Cash and cash equivalents at end
of year 717 85 1,249 189
--------- --------- -------- --------
NOTES TO THE ACCOUNTS
Note 1 - General Information
The information in this preliminary announcement has been
extracted from the annual report of the company and does not
constitute statutory accounts as defined in section 80 of the
Companies Act 2006. The full annual report and financial statements
for the year ended 30 June 2012 will be filed with the Registrar of
Companies in the Isle of Man and be available from the Company's
website (www.prometheanplc.com) shortly.
The Annual General Meeting of the Company will be held at the
offices of The Company Secretary, Promethean plc, 3rd Floor,
Exchange House, 54-62
Athol Street, Douglas, Isle of Man IM1 1JD, on 31 December 2012
at 10:00 a.m.
Copies of the annual report will be sent to Shareholders shortly
and will be available from: The Company Secretary, Promethean plc,
3rd Floor,
Exchange House, 54-62 Athol Street, Douglas, Isle of Man IM1 1JD
and Promethean Investments LLP, 5-6 Argyll Street, London W1F
7TE.
Note 2 - Events after the reporting period
On 13 November 2012 Promethean Investments Fund LP exchanged
contracts for the conditional sale of its holding in T.I.S. Group
to the Protected Asset TEP Fund plc ("PATF"). Completion of the
sale is subject to the satisfaction of various conditions,
including the passing of a number of resolutions at a class meeting
of the holders of PATF's participating shareholders, scheduled to
be held on 14 December 2012. If the sale completes, gross proceeds
of GBP10.7m will be receivable, representing 23.7 pence per share.
This represents an increase of GBP4.7m on the valuation as at 30
June 2012 of GBP4.7m, representing a further increase in NAV of
10.5 pence per share.
On 7 September 2012, Promethean plc distributed in-specie its
investment in Cambria Automobiles plc to shareholders on the
register as at 12 July 2012.
On 1 October 2012, InterMediactive Group ("IMA") repaid its
outstanding loan notes and accrued interest outstanding as at 30
September 2012. Gross proceeds of GBP3.3m were received.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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