REG - Cholet Investments - Half Yearly Report

Thu Jun 30, 2011 2:00am EDT

* Reuters is not responsible for the content in this press release.

RNS Number : 4108J
Cholet Investments PLC
30 June 2011
 

30 June 2011

 

Cholet Investments plc

("Cholet" or the "Company")

 

Unaudited Interim results for the six months ended 31 March 2011

 

CHAIRMAN'S STATEMENT

I am pleased to present the unaudited results for the six months ended 31 March 2011.

 

Performance

The unaudited net asset value ("NAV") of the Company at 31 March 2011 was £1,604,973 (30 September 2010:£1,556,858). The NAV per ordinary share increased to 72.0p at the period end, up from 69.8p as at 30 September 2010.

 

As announced, on 24 November 2010 the Company received settlement in full in respect of its insurance claim for a £1,100,000 deposit paid to Henry Homes (Wallington) Limited on the commencement of its proposed Canon House development project. Settlement of the claim by Zurich Insurance resulted in the Company's assets comprising of approximately £1,600,000 in cash. Most of this cash has since been distributed to shareholders by way of a redemption of shares, further details of which are set out below.

 

The Company's share price at the start of the period was 4p and increased to 7p at the period end. The Company's share price closed at 6p on the 28 June 2011, reflecting inter alia a reorganisation of the Company's share capital and other changes effected during the period.

 

Changes effected during the period

As a result of various resolutions passed at the Extraordinary General Meeting of the Company on 31st March 2011 (the "Resolutions") and as announced over recent months a number of changes occurred during or as a consequence of decisions made within the period. These are summarised below.

 

Redemption of shares and reorganisation of capital

Following the passing of the relevant Resolutions and the elections of shareholders, the Company redeemed 90.6 per cent of its existing issued participating share capital on 1 April 2011. A total of 2,020,754 participating shares were redeemed at 71p per share representing an aggregate redemption of £1,434,735.34. These shares were subsequently cancelled.  Also as a result of the relevant Resolutions passed and on the same date, each of the remaining shares in issue was replaced by ten new shares, such that the Company's entire issued share capital admitted to trading on AIM on 1 April 2011 amounted to 2,098,830 new ordinary shares.

 

Deregulation, reclassification, change of name and changes in board composition

On the 31 March 2011 the Jersey Financial Services Commission gave its consent to the deregulation and reclassification of the Company, formerly structured as a Collective Investment Fund, as a Jersey registered ordinary operating company. Following the passing of the relevant Resolutions and on the same date the Company also changed its name to Cholet Investments plc and, reflecting the adoption of a new investing policy, Brian Howard replaced Donald Reid as a non-executive director of the Company. I thank Donald for his service to the Company and of course welcome Brian to the Board.

 

New investing policy

Following the passing of the relevant Resolutions the Company continues as an "investing company" under the AIM Rules but with a new objective; that objective being to make an acquisition or acquisitions which would constitute a reverse takeover under Rule 14 of the AIM Rules by 24 November 2011 (the date twelve months following the date on which the Company divested of all of its property assets). In particular and as a result of the relevant Resolutions passed, the Directors intend to seek to acquire a company/business or companies/businesses in the waste/waste to energy sector in exchange for the issue of ordinary shares; more specifically companies/businesses which have one or more of the following characteristics:

 

·      established and reliable access to waste feedstock;

·      transfer stations and/or treatment plants which have significant waste volume throughputs or the ability to process suitable volumes and types of waste; and/or

·      the ability to operate successfully as suppliers of feed stock to the emerging new generation of plants that will depend on renewable sources of fuel.

 

In accordance with the relevant Resolutions passed, Development Capital Management Limited, in its capacity as consultant to the Company, is assisting the Directors in this regard, although these criteria are not exhaustive and the Company may choose, subject to the approval of shareholders at the appropriate time, to make an investment which does not fulfil these investment criteria but reflects the value of the Company as currently constituted.

 

Issue of equity

To enhance this value and to enable the Company to undertake appropriate levels of due diligence in respect of reverse takeover opportunities, I am also pleased to report that pursuant to the relevant Resolutions passed, the Company completed a placing of 3,000,000 new ordinary shares in the capital of the Company at a price of 5p per share on 2 June 2011. While not undertaken during the period, this placing followed the passing of the Resolutions on 31 March 2011 and, as a result of the admission of the placing shares to trading on AIM on 8 June 2011, the Company now has 5,098,830 ordinary shares in issue.

 

Change of accounting policy

The audited financial statements for the year ended 30 September 2010 were prepared on a break up basis but following the passing of the relevant Resolutions on 31 March 2011, these unaudited interim financial statements are prepared on a going concern basis.

 

I look forward to updating you further as the Company's new investing policy is implemented.

 

Roger King

Chairman

29 June 2011

 

List of Contacts:

 

Development Capital Management

(Consultant to Cholet)

Andy Gardiner

Tom Pridmore

020 7355 7600

 

Merchant Securities Limited

(Nominated Adviser and Broker)

Simon Clements

020 7628 2200

 

 

CONSOLIDATED INCOME STATEMENT FOR THE SIX MONTHS ENDED 31 MARCH 2011

 



(unaudited)



Six months ended



31 March 2011



Revenue

Capital

Total


Notes

£

£

£











Realised gains on sale of property


-

-

-

Realised gains on investments held at fair value

 through profit or loss


-

-

-

Unrealised loss on investments held at fair value

 through profit or loss


-

-

-

Interest income

4

2,114

-

2,114

Rental income


383

-

383

Investment management fee

5

(6,182)

-

 (6,182)

Deposit recovered


-

-

-

Rental expenses


-

-

-

Other expenses


15,800

-

15,800






Net gain/(loss) on ordinary activities before taxation


48,115

-

48,115






Taxation

2

-

-

-






Net gain/(loss) for the period after taxation

3

48,115

-

48,115






Gain per share (pence)


2.2

-

2.2






 


(unaudited)


Six months ended


31 March 2010


Revenue

Capital

Total


£

£

£






-

-

-

Realised gains on sale of property

-

-

-

Realised gains on investments held at fair value

 through profit or loss

-

6,935

6,935

Unrealised loss on investments held at fair value

 through profit or loss

42,727

-

42,727

Interest income

36,988

-

36,988

Rental income

(96,849)

-

(96,849)

Investment management fee

-

-

-

Deposit recovered

(16,122)

-

(16,122)

Rental expenses

(242,775)

-

(242,775)

Other expenses




Net gain/(loss) on ordinary activities before taxation

(276,031)

6,935

(269,096)





Taxation

(8,735)

-

(8,735)





Net (loss)/gain for the period after taxation

(284,766)

6,935

(277,831)





(Loss)/Gain per share (pence)

(4.3)

0.1

(4.2)





 


(audited)


Year ended


30 September 2010


Revenue

Capital

Total


£

£

£






-

    36,316

36,316

Realised gains on sale of property

-

4,820

4,820

Realised gains on investments held at fair value

 through profit or loss

-

(6,935)

(6,935)

Unrealised loss on investments held at fair value

 through profit or loss

40,457

-

40,457

Interest income

47,838

-

47,838

Rental income

(194,223)

-

(194,223)

Investment management fee

-

1,099,997

1,099,997

Deposit recovered

(7,708)

-

(7,708)

Rental expenses

(345,133)

-

(345,133)

Other expenses




Net gain on ordinary activities before taxation

(458,769)

1,134,198

675,429





Taxation

(9,568)

-

(9,568)

Provision for winding down expenses

(165,524)

-

(165,524)





Net (loss)/gain for the period after taxation

(633,861)

1,134,198

500,337





(Loss)/Gain per share (pence)

(13.7)

24.5

10.8





 

CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2011

 



(unaudited) 31 March

 (unaudited)

31 March

(audited)

 30 September





 2011

 2010

 2010


Notes

 £

 £

 £






 

Current assets





Debtors


1,275

3,486

1,108,735

Cash and cash equivalents


1,688,243

3,108,525

784,771



1,689,518

3,112,011

1,893,506

Creditors - amounts falling due within one year





Other payables


(84,545)

(198,128)

(336,648)






Net current assets


1,604,973

2,913,883

1,556,858






Total net assets


1,604,973

2,913,883

1,556,858






Equity





Stated capital

7

4,493,645

6,601,572

4,493,645

Capital reserve


(706,395)

(1,806,392)

(706,395)

Issue costs reserve


(679,868)

(679,868)

(679,868)

Revenue reserve


(1,502,409)

(1,201,429)

(1,550,524)






Total shareholders' funds (all equity)

8

1,604,973

 2,913,883

1,556,858






Net asset value per share (pence)

8

72.0

52.3

69.8

 

CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 31 MARCH 2011

 


(unaudited)

Six months ended

31 March 2011

(unaudited)

Six months ended

31 March 2010

(audited)

Year
ended

30 September 2010




 £

 £

 £





Cash flow from operating activities




Cash released from escrow

-

150,000

150,000

Cash receive from insurance claim

1,099,997

-

-

Rental income received

2,292

39,756

45,765

Deposit interest received

-

36,468

38,647

Other income

-

9,485

-

Sale of property

-

1,967,500

-

Investment management fees paid

-

(96,849)

(194,223)

Rental expenses

-

(16,122)

(7,342)

Other expenses

(201,138)

(227,107)

(350,455)

Net cash inflow from operating activities

901,151

1,863,131

(317,608)





Taxation paid

-

-

(2,588)





Cash flow from investing activities




Interest income received

2,321

4,500

4,500

Sale of investment property

-

-

1,967,500

Sale of investments

-

103,307

103,307

Net cash inflow from investing activities

2,321

107,807

2,075,307





Increase in cash before financing

903,472

1,970,938

1,755,111





Cash flow from financing activities




Redemption of shares

-

(3,903,582)

(6,011,509)





Net increase / (decrease) in cash and cash equivalents

903,472

(1,932,644)

(4,256,398)





Cash and cash equivalents at the start of the period

784,771

5,041,169

5,041,169

Cash and cash equivalents at the end of the period

1,688,243

3,108,525

781,771





 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 31 MARCH 2011

 

 

 



Issue






Stated

Capital

costs

Revenue


 

 

 

capital

reserves

reserve

reserve

Total




£

£

£

£

£

For the six months ended 31 March 2010 (unaudited)

At 1 October 2010


4,493,645

(706,395)

(679,868)

(1,550,524)

1,556,858

Profit for the period

-

-

-

48,115

48,115









At 31 March 2011


4,493,645

(706,395)

(679,868)

(1,502,409)

1,604,973









For the six months ended 31 March 2010 (unaudited)

At 1 October 2009


10,505,154

(1,840,593)

(679,868)

(916,663)

7,068,030

Redemption of shares

(3,903,582)

-

-

-

(3,903,582)

Realised capital

-

34,201

-

-

34,021

Loss for the period

-


-

(284,766)

(254,766)









At 31 March 2010


6,601,572

(1,806,392)

(679,868)

(1,201,429)

2,913,883









For the year ended 30 September 2010 (audited)

At 1 October 2009


10,505,154

(1,840,593)

(679,868)

(916,663)

7,068,030

Redemption of shares

(6,011,509)

-

-

-

(6,011,509)

Profit/(Loss) for the year


-

1,134,198

-

(633,861)

500,337









At 30 September 2010


4,493,645

(706,395)

(679,868)

(1,550,524)

1,556,858









 

NOTES TO THE INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 31 MARCH 2011

 

1.         Accounting Policies

 

(a) Basis of preparation

 

The consolidated interim financial statements have been prepared under the historical cost convention, as modified to include the revaluation of quoted investments and investment properties and in accordance with applicable Accounting Standards and the Statement of Recommended Practice for "Financial Statements of Investment Trust Companies" issued in January 2009. Applicable Accounting Standards for these purposes are International Financial Reporting Standards ("IFRS"), as adopted by the International Accounting Standards Board ("IASB"). 

 

(i) IFRS applied

 

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Fund's accounting policies.  Changes in assumptions may have a significant impact on the financial statements in the period the assumptions changed.  Management believes that the underlying assumptions are appropriate.

 

The IFRS improvements project contains numerous amendments to IFRS that the IASB considers non-urgent but necessary. 'Improvement to IFRS' comprise amendments that result in accounting changes for presentation, recognition or measurement purposes, as well as terminology or editorial amendments related to a variety of individual IFRS standards. Most of the amendments are effective for annual periods beginning on or after 1 January 2010 respectively, with earlier application permitted.  No material changes to accounting policies are expected as a result of these amendments.

 

The accounting policies adopted in the preparation of the interim financial statements are consistent with those followed in the preparation of the annual financial statements for the year ended 30 September 2009. New accounting standards have been issued since the year end 30 September 2009 but none of these are yet effective.

 

(ii) Going concern

 

The audited financial statements for the year ended 30th September 2010 were prepared on a break up basis but following the passing of the relevant Resolutions on 31st March 2011, these unaudited interim financial statements are prepared on a going concern basis.

 

(b) Use of estimates and judgments

 

The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting polices and the reporting amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

 

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

 

The most significant estimates and judgements relate to the determination of fair value of investment property and the disclosed fair value of properties that are the subject of property contracts yet to complete. The fair values of both kinds of properties are determined by independent valuers and are based upon a market approach methodology, using assumptions on local markets prices, comparable units and transaction levels.

 

(c) Basis of consolidation

 

The consolidated interim financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up for the six months ended 31 March. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from activities. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences up to the date that control ceases.

 

The Company has only one subsidiary, OPF Investment Properties Limited, which it acquired during the year ended 30 September 2007. As this subsidiary has not yet commenced trading and remained dormant throughout the period, the Company's financial statements are materially similar in all respects to the Group's financial statements, therefore the Company has presented only consolidated financial statements for the six months ended 31 March 2010, 31 March 2009 and 31 March 2008, and the years ended 30 September 2009 and 30 September 2008.

 

(d) Revenue recognition

 

(i) Interest income

Interest receivable on fixed interest securities is recognised in "Interest income" using the effective interest method. The effective interest method is a way of calculating the amortised cost of a financial asset or a financial liability (or groups of financial assets or financial liabilities) and of allocating the interest income or interest expense over the relevant period.

 

The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments through the expected life of the financial instrument or, where appropriate, a shorter period, to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, the Group estimates cash flows considering all contractual terms of the financial instrument but not future credit losses. The calculation includes all amounts paid or received by the Group that are an integral part of the effective interest rate, including transaction costs and all other premiums or discounts.

 

(ii) Profit on off-plan sales

Profit on off-plan sales is recognised once contracts with onward buyers have become unconditional. The profit or loss is calculated in line with the profit-share arrangement with each developer based on the difference between the amount agreed with the buyer and the Company's purchase price.

 

(iii) Rental income

Rental income from investment properties is based on a short term tenancy agreements and is recognised in the period earned. Property operating costs are expensed as incurred including any element of expenditure not recovered from tenants.

 

(e) Expenses

 

Expenses are charged through the income statement, except for expenses which are attributable to the disposal of an investment, which are deducted from the disposal proceeds of the investment. In addition, certain expenses associated with the acquisition of an investment have been capitalised.

 

(f) Cash and cash equivalents

 

Cash and cash equivalents comprise current deposits with banks. Cash equivalents comprises of current deposits with banks.

 

(g) Taxation

 

The taxation charge arises from income tax deducted at source on the net rental income.

 

Deferred tax is recognised in respect of all temporary differences that have originated but not reversed at the balance sheet date, where transactions or events that result in an obligation to pay more tax in the future or right to pay less tax in the future have occurred at the balance sheet date. This is subject to deferred tax assets only being recognised if it is considered more likely than not that there will be suitable profits from which the future reversal of the temporary differences can be deducted. 

 

(h) Share capital

 

Founder shares

Founder shares are classified as equity. Founder shares are not eligible for participation in Company investments and carry no voting rights at general meetings of the Company.

 

(i) Currency

The results and financial position of the Group are expressed in Pounds Sterling, which is the Group's functional currency.

 

2.         Taxation

 

Profits arising in the Fund for the 2011 Year of Assessment will be subject to Jersey Income Tax at the rate of 0% (2010: 0%).

 

3.         Returns per share

 

The return per share is based on the net profit for the period of £15,547 (31 March 2010: net loss £277,831; 30 September 2010 net profit: £500,337) and on 2,230,637 shares (31 March 2010: 6,618,322; 30 September 2010: 4,632,365), being the weighted average number of shares in issue.

 

4.         Income

 


Six months

ended

Six months ended

Year

ended


31 March

2011

31 March

2010

30 September 2010


 £

 £

 £

Income from fixed interest securities

-

1,603

1,603

Deposit interest

2,114

36,468

38,854

Other income

-

4,656

-


2,114

42,727

40,457

 

5.         Management fee

 


Six months

ended

Six months ended

Year

Ended


31 March

2011

31 March

2010

30 September 2010


 £

 £

 £

Management fee

6,182

96,849

194,223

 

The management fees paid to Development Capital Management (Jersey) Limited with effect from July 2009 were £175,000 per annum. The management agreement between the Company and the Manager has been reduced from 12 months and is now terminable by giving the Manager not less than six months notice in writing, such notice not to be given before 30 June 2010.

 

6.         Investments held at fair value through profit or loss

 


31 March

2011

31 March

2010

30 September 2010


£

£

£

Opening valuation

-

105,422

105,422

Opening unrealised (gain) / loss

-

(6,935)

(6,935)

Opening book cost

-

98,487

98,487

Movements during the period:




Sales - proceeds

-

(105,422)

(103,307)

Sales - realised gains

-

6,935

4,820

Closing book cost and fair value

-

-

-

 

7.         Stated capital

The Company is a no par value ('NPV') company

 


31 March

2011

31 March

2010

30 September

2010

Authorised:

Number

Number

Number

Founder shares

10

10

10

99,999,990 participating shares

99,999,990

99,999,990

99,999,990


100,000,000

100,000,000

100,000,000





Issued and fully paid:

Number

Number

Number

Founder shares

2

2

2

Participating shares

2,230,637

5,576,545

2,230,637

 

All costs associated with the issue of shares have been taken to the issue costs reserve.

 

Further to a resolution dated 31 March 2011, the Company returned £1,434,735 to Shareholders by redeeming 2,020,754 Participating Shares at a price of 71p on 7 April 2011. Following this redemption, the Company the remaining 209,883 Participating Shares in issue were reorganised into 10 New Ordinary Shares for each remaining participating Share, giving a total of 2,098,830 New Ordinary Shares in issue from 1 April 2011.

 

8.         Net asset value per share

 


Net asset value


attributable per share


31 March

2011

31 March

2010

    30 September

2010


p

p

p

Participating shares

72.0

                     52.3

                     69.8






Net asset value


31 March

2011

31 March

2010

  30 September

2010


£

£

£


1,604,973

2,913,883

1,556,858

 

 

9.         Post balance sheet events

 

Redemption of shares and reorganisation of capital

 

Following the passing of the relevant Resolutions and the elections of shareholders, the Company redeemed 90.6 per cent of its existing issued participating share capital on 1 April 2011. A total of 2,020,754 participating shares were redeemed at 71p per share representing an aggregate redemption of £1,434,735.34. These shares were subsequently cancelled.  Also as a result of the relevant Resolutions passed and on the same date, each of the remaining shares in issue was replaced by ten new shares, such that the Company's entire issued share capital admitted to trading on AIM on 1 April 2011 amounted to 2,098,830 new ordinary shares.

 

Deregulation, reclassification, change of name and changes in board composition

 

On the 31 March 2011 the Jersey Financial Services Commission gave its consent to the deregulation and reclassification of the Company, formerly structured as a Collective Investment Fund, as a Jersey registered ordinary operating company. Following the passing of the relevant Resolutions and on the same date the Company also changed its name to Cholet Investments plc and, reflecting the adoption of a new investing policy, Brian Howard replaced Donald Reid as a non-executive director of the Company.

 

Issue of equity

 

To enhance this value and to enable the Company to undertake appropriate levels of due diligence in respect of reverse takeover opportunities, I am also pleased to report that pursuant to the relevant Resolutions passed, the Company completed a placing of 3,000,000 new ordinary shares in the capital of the Company at a price of 5p per share on 2 June 2011. While not undertaken during the period, this placing flowed from the passing of the Resolutions on 31 March 2011 and, as a result of the admission of the placing shares to trading on AIM on 8 June 2011, the Company now has 5,098,830 ordinary shares in issue.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
IR BIGDLDBDBGBC
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.