ORA Capital Partners Announcements

RNS Number : 9623F ORA Capital Partners PLC 16 October 2008  
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ORA Capital Partners plc 
("ORA" or "the Company")

ORA Capital Partners Plc (AIM: ORA), the company involved in the growth and development of businesses in the United Kingdom, announces its financial results for the six months ended 31 July 2008.

Highlights:

Profit after tax for the six months of £38.2 million (2007: £1.4 million)
Equity attributable to holders of parent £146.3 million (2007: £69.3 million)

Commenting on the results, Richard Griffiths, Executive Chairman, stated "All of the principal trading companies within our business portfolio are well capitalised and making good progress on executing their respective business plans. I, therefore, remain confident that ORA can make considerable further progress through these difficult times in turbulent financial markets. The Company continues to run a low cost base and retain the management disciplines and shareholder alignment around which the company was founded."

Enquiries:

ORA Capital Partners Plc                                               020 7099 7260
Richard Griffiths - Executive Chairman
Michael Bretherton - Finance Director

Smith & Williamson Corporate Finance Limited                020 7131 4000
Azhic Basirov
Siobhan Sergeant

Kaupthing Singer & Friedlander Capital Markets Limited  020 3205 5000
Nicholas How
Marc Young
CHAIRMAN'S STATEMENT 

I am pleased to present the interim report of Ora Capital Partners ("ORA") for the half year to 31 July 2008.  

The six months ended 31 July 2008 was a period of solid financial performance for ORA with Group profits before tax for the half year of £38.5 million compared to £1.7 million for the corresponding period to 31 July 2007. Net assets at 31 July 2008 were £148.9 million compared with £71.2 million a year earlier and cash balances at 31 July 2008 were £41.9 million.

ORA is a holding and management company whose principal activity is the development and growth of trading companies within its business portfolio, the current focus of which is on technology, resources (including renewable resources), and financial services. These activities are reported in the Business Portfolio Return and Advisory Fees sector and the Financial Services sector respectively.

Business Portfolio Return and Advisory Fees

The profit before tax attributable to our Business Portfolio Return and Advisory Fees sector was £40.7 million for the half year compared with £1.2 million for the six months to 31 July 2007. The results reflect movements in the carrying value of ORA's investment portfolio business assets and our advisory fee income, less the central overheads attributable to those activities, together with interest income earned on cash balances available for investment.

The principal trading companies included in our business portfolio are Oxford Advanced Surfaces Plc ("Oxford Advanced Surfaces"), Nanoco Tech Plc ("Nanoco"), Obtala Resources Plc ("Obtala"), Ansco Petroleum Limited ("Ansco") and Oxeco Plc ("Oxeco"). In addition ORA holds units in the Rock Island Investments Limited fund (which represented 49.7 per cent of that fund at 31 July 2008) as well as a number of other small investments.

Oxford Advanced Surfaces develops and commercialises advanced materials and technology solutions leveraging its surface modification technology. The company's ONTO™ technology can be used to modify a broad range of materials to deliver diverse and valuable functionalities.  Initial applications include tailored wetting properties, adhesion, metallization, bio-activity in markets including electronics, advanced composites and laminates, biomaterials and low carbon technologies. During the period Oxford Advanced Surfaces announced a joint development agreement with DuPont Advanced Fiber Systems and completed a £5.0 million institutional fundraising on 1 August 2008. ORA holds a 28.1% stake in Oxford Advanced Surfaces which was capitalised at £146.0 million as at 31 July 2008.
 
Nanoco is a global leader in the development and production of semiconductor nanoparticles known as Quantum Dots. Nanoco partners major global manufacturers to develop applications incorporating quantum dots. These applications include next generation LEDs, OLED displays, solar cells and bio-imaging. Nanoco has continued to make progress in the commercialisation process in the period and appointed a major Asian distributor for its products.  ORA holds 41.2 per cent. of the issued equity of the company which is unlisted. Recent investment by major UK and Japanese institutions have valued the company at approximately £24.0 million on a fully diluted basis while providing a solid capital base for the further development of the business. 

Obtala is a multi-commodity mining and exploration group with its primary focus in Tanzania.  Following admission to AIM in April 2008, the company strengthened the board with the appointment of three directors with a combined 88 years' experience in the mining sector. Having acquired additional gemstone and gold prospecting licences, Obtala now holds operating interests in 29 licences covering over 6,599km2.  Exploration has commenced with initial focus on a number of high priority targets. Following admission to AIM, ORA holds 33.4% of the issued share capital of Obtala, which was capitalised at £66.0 million as at 31 July 2008.

Ansco is a private company in which ORA holds a 33.9 per cent. share. The company was founded in 2007 with the aim of building a hydrocarbons exploration and development group. The company currently holds hydrocarbon interests in Africa and is actively looking at other hydrocarbon opportunities in both Africa and Eastern Europe.   

Oxeco's primary business is the development of novel X-ray crystallography structure determination software and the provision of a small molecule X-ray crystallography structure service. Oxeco was established by ORA and successfully launched as a public company on the AIM market in December 2006. Oxeco was capitalised at £36.0 million as at 31 July 2008 and ORA holds 45.2 per cent of the company's issued equity.

Financial Services
 
Novum Securities Limited ("Novum") was founded in 2006 as a Financial Services Authority authorised firm able to provide agency broking and corporate finance advisory services.  Ora currently holds 58.4% of the issued equity of Novum, the balance of which is substantially held by management and staff.

The revenue attributable to Novum in the half year ended 31 July 2008 was £2.4 million and the related profit before tax was £1.1 million versus comparable revenues of £0.4 million for the six months to 31 July 2007 with related profits of £0.2 million.  

Outlook

All of the principal trading companies within our business portfolio are well capitalised and making good progress on executing their respective business plans. I, therefore, remain confident that ORA can make considerable further progress through these difficult times in turbulent financial markets. The Company continues to run a low cost base and retain the management disciplines and shareholder alignment around which the company was founded.

Finally, I would like to thank our employees and the managers of our business portfolio companies, for all their hard work and support in the continued growth and development of the Group.
Richard Griffiths
Executive Chairman
16 October 2008

CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 31 JULY 2008

Six months to 31 July 2008
Six months to 31 July 2007
Year to 31 January 2008
(Unaudited)
(Unaudited)
(Audited)

Notes
£'000
£'000
£'000
CONTINUING OPERATIONS
REVENUE
3
40,764
2,095 
42,429

Administrative expenses
 
(2,035)
(688)
(2,134)
Depreciation charges
 
(75)
(32)
(122)
NET OPERATING EXPENSES

(2,110)
(720)
(2,256)
OPERATING PROFIT

38,654
1,375
40,173
Interest payable

(930)
(748)
(1,535)
Interest receivable

790
1,045
2,324
PROFIT BEFORE TAXATION
4
38,514
1,672 
40,962
Taxation
5
(334)
(365)
(429)
PROFIT FOR THE PERIOD FROM CONTINUING OPERATIONS

38,180
1,307
40,533
DISCONTINUED OPERATIONS
Profit after tax from discontinued operations

-
31
58

PROFIT FOR THE PERIOD

38,180
1,338
40,591

ATTRIBUTABLE TO
Equity holders of parent

37,880
1,273
40,475
Minority interest

300
65
116
38,180
1,338
40,591
EARNINGS PER SHARE
Basic and diluted on profit for the period
6
37.88p
1.45p
43.08p

Basic and diluted on profit from continuing operations
6
37.88p
1.43p
43.03p
    The profit for the period from the Group's continuing operations includes contributions from subsidiaries acquired in the period as set out in note 12 of the financial statements. 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 JULY 2008
Attributable to equity holders of the Company
 
Share  
Share  
  Revenue
  Minority 
Total  

Capital
Premium
Reserve
Interest
Equity

£'000
£'000
£'000
£'000
£'000
At 31 January 2007
707
31,070
1,426
2,695
35,898
Issue of shares
293
34,921
-
-
35,214
Expenses of issue of shares
-
(437)
-
-
(437)
Net profit for the period
-
-
1,338
-
1,338
Profit attributable to minority interests
-
-
(65)
65
-
Share of net assets at acquisition attributable to minority interests
-
-
-
1,693
1,693
Share of net assets on deconsolidation attributable to minority interests
-
-
-
(2,551)
(2,551)
At 31 July 2007
1,000
65,554
2,699
1,902
71,155
Net profit for the period
-
-
39,253
-
39,253
Profit attributable to minority interests
-
-
(51)
51
-
Share of net assets at acquisition attributable to minority interests
-
-
-
32
32
Share of net assets on deconsolidation attributable to minority interests
-
-
-
(32)
(32)
At 31 January 2008
1,000
65,554
41,901
1,953
110,408
Net profit for the period
-
-
38,180
-
38,180
Profit attributable to minority interests
-
-
(300)
300
-
Share of net assets at acquisition attributable to minority interests
-
-
-
276
276
At 31 July 2008
1,000
65,554
79,781
2,529
148,864
CONDENSED CONSOLIDATED BALANCE SHEET
AS AT 31 JULY 2008

 31 July  2008
 31 July  2007
 31  January
2008
(Unaudited)
(Unaudited)
(Audited)

Notes
£'000
£'000
£'000
ASSETS
Non-current assets
Investment portfolio
7
105,733
11,819
60,283
Property, plant and equipment

488
140
503
Goodwill
8
2,271
2,047
2,047
Total non-current assets

108,492
14,006
62,833

Current assets
Trade and other receivables

869
686
827
Investments in trading securities

769
2,114
3,964
Derivative trading assets

-
1,062
2,931
Cash and cash equivalents
9
41,931
57,136
44,863
Total current assets

43,569
60,998
52,585

TOTAL ASSETS

152,061
75,004
115,418

LIABILITIES
Current liabilities
Trade and other payables

(1,201)
(1,325)
(770)
Tax liabilities

(390)
(967)
(372)
Derivatives trading liabilities

(1,606)
(1,557)
(3,822)
Total current liabilities

(3,197)
(3,849)
(4,964)

Non-current liabilities
Deferred tax liabilities

-
-
(46)

TOTAL LIABILITIES

(3,197)
(3,849)
(5,010)

NET ASSETS

148,864
71,155
110,408

EQUITY
Issued capital
10
1,000
1,000
1,000
Share premium

65,554
65,554
65,554
Revenue reserve

79,781
2,699
41,901
Equity attributable to holders of parent

146,335
69,253
108,455
Minority interest
11
2,529
1,902
1,953
TOTAL EQUITY

148,864
71,155
110,408

Approved by the board and authorised for issue on 16 October 2008.

R I Griffiths                     M A Bretherton
Executive Chairman         Finance Director   
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 31 JULY 2008
 
Six months to 31 July 2008
Six months  to 31 July 2007
Year to 31 January 2008
(Unaudited)
(Unaudited)
(Audited)

Notes
£'000
£'000
£'000
OPERATING ACTIVITIES
Operating profit from continuing operations

38,654
1,375
40,173
Profit before tax from discontinued operations

-
40
78
Adjustment for:
Depreciation of property, plant and equipment

75
32
122
Unrealised loss/(profit) on partial disposal of subsidiary
12
30
(357)
(357)
Unrealised loss/(profit) on deconsolidation disposals 

-
13
(1,179)
Unrealised profits on revaluation of portfolio investments
7
(41,775)
(42)
(38,906)
Unrealised profits on other trading investments

(259)
(962)
(633)
Realised losses on disposal of portfolio investments 
7
589
-
-
Operating cash (out)/inflow

(2,686)
99
(702)
Sale/(purchase) of trading securities

(739)
(255)
(2,037)
Increase in trade and other receivables

(42)
(519)
(667)
Increase in trade and other payables

431
1,171
621
Interest paid

(931)
(748)
(1,535)
Taxation paid

(362)
-
(613)
Net cash outflow from operations

(4,329)
(252)
(4,933)

INVESTING ACTIVITIES
Interest received

790
1,045
2,324
Purchases of property, plant and equipment

(60)
(10)
(463)
Purchase of portfolio investments
7
(3,036)
(5,000)
(10,413)
Sale of portfolio investments
7
3,681
310
310
Acquisitions of subsidiaries
12
(2)
(5,966)
(8,934)
Cash and bank in subsidiaries at acquisition
12
24
6,004
9,004
Cash and bank in deconsolidated subsidiaries

-
(6,190)
(9,227)
Net cash in/(out)flow from investing activities

1,397
(9,807)
(17,399)

FINANCING ACTIVITIES
Proceeds from issue of share capital

-
35,214
35,214
Expense of issue of share capital

-
(437)
(437)
Net cash inflow from financing activities

-
34,777
34,777

(DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS

(2,932)
24,718
12,445
Cash and cash equivalents at start of period

44,863 
32,418
32,418
CASH AND CASH EQUIVALENTS AT END OF PERIOD

41,931
57,136
44,863

NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 JULY 2008

1.  BASIS OF PREPARATION

The interim financial statements of Ora Capital Partners Plc are unaudited, condensed consolidated financial statements for the six months to 31 July 2008. These include unaudited comparatives for the six months to 31 July 2007 together with audited comparatives for the year to 31 January 2008.

2.   SIGNIFICANT ACCOUNTING POLICIES

The condensed consolidated financial statements have been prepared under the historical cost convention except for the revaluation of certain financial instruments and investments.

The accounting policies adopted are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31 January 2008.

The condensed consolidated financial statements do not constitute statutory accounts. The statutory accounts for the period to 31 January 2008 have been reported on by the Company's auditors and have been filed with the Registrar of Companies. The report of the auditors was unqualified.
3.   REVENUES ANALYSIS

Six months to 31 July 2008
Six months to 31 July 2007
Year to
31 January 2008

Notes
£'000
£'000
£'000

Unrealised gains on revaluation of portfolio investments
7
41,775
42
38,906
Realised losses on portfolio investment disposals
7
(589)
-
-
Unrealised (loss)/profit on partial disposal of subsidiary
12
(30)
357
357
Unrealised profit/(loss) on deconsolidation of subsidiaries

-
(13)
1,179
Profit on disposal of shares in subsidiary
 
-
83
83
Gross portfolio return
 
41,156
469
40,525
Advisory fees and other revenues

71
147
158
Financial services revenue

2,438
396
1,562
Financial trading income

(2,901)
1,083
184
Total revenue

40,764
2,095
42,429

4.   SEGMENTAL REPORTING ANALYSIS 

Ora Capital Partners Plc is a holding and management company, the principal activity of which is the development and growth of trading companies within its business portfolio together with the development and growth of its financial services subsidiaries. These activities are reported in the Business Portfolio Return and Advisory Fees sector and the Financial Services sector respectively.  

In addition, the Company may commit surplus cash to specific opportunities where the management team considers there to be potential for significant value creation which may include the acquisition of equities and derivative financial instruments. These activities are reported in the Financial Trading sector.  

The Group's turnover and profit before taxation were all derived from its principal activities in the sectors noted below and were wholly undertaken in the United Kingdom.
Six months ended 31 July 2008
 
Business Portfolio Return and Advisory Fees  
Financial Services
Financial Trading
Total

£'000
£'000
£'000
£'000

Income statement
Revenues
41,227
2,438
(2,901)
40,764
Administrative expenses
(588)
(1,387)
(60)
(2,035)
Depreciation charges
(18)
(56)
(1)
(75)
Profit/(loss)before interest
40,621
995
(2,962)
38,654
Net interest
48
77
(265)
(140)
Profit/(loss)before tax
40,669
1,072
(3,227)
38,514

Balance sheet
Assets
133,517
7,388
11,156
152,061
Liabilities
(294)
(1,296)
(1,607)
(3,197)
Net assets
133,223
6,092
9,549
148,864

Six months ended 31 July 2007

Business Portfolio Return and Advisory Fees  
Financial Services
Financial Trading 
Total

£'000
£'000
£'000
£'000

Income statement
Revenues
616
396
1,083
2,095
Administrative expenses
(381)
(225)
(82)
(688)
Depreciation charges
(16)
(14)
(2)
(32)
Profit before interest
219
157
999
1,375
Net interest
1,021
24
(748)
297
Profit before tax
1,240
181
251
1,672

Balance sheet
Assets
60,584
5,887
8,533
75,004
Liabilities
(635)
(144)
(3,070)
(3,849)
Net assets
59,949
5,743
5,463
71,155

Year ended 31 January 2008
 
Business Portfolio Return and Advisory Fees  
Financial Services
Financial Trading 
Total

£'000
£'000
£'000
£'000

Income statement
Revenues
40,683
1,562
184
42,429
Administrative expenses
(695)
(1,235)
(204)
(2,134)
Depreciation charges
(28)
(87)
(7)
(122)
Profit/(loss)before interest
39,960
240
(27)
40,173
Net interest
2,377
116
(1,704)
789
Profit/(loss)before tax
42,337
356
(1,731)
40,962

Balance sheet
Assets
89,485
6,379
19,554
115,418
Liabilities
(888)
(300)
(3,822)
(5,010)
Net assets
88,597
6,079
15,732
110,408
5.   TAXATION

The accrued tax charge for the six month interim period is based on an estimated effective tax rate of 1% after allowance for tax exemption on business portfolio returns under substantial shareholdings relief and after allowance for utilisation of tax losses brought forward in subsidiaries (six months to 31 July 2007: effective tax rate 22%; year to 31 January 2008: effective tax rate 1%).

6.   EARNINGS PER SHARE

Basic earnings per share is based on the profit for the six months of £37,880,000 attributable to equity holders of the parent divided by the weighted average number of ordinary shares in issue during the period of 100,000,000 (six months to 31 July 2007: profit £1,273,000 divided by the weighted average of 87,772,787 shares; year to 31 January 2008: profit £40,475,000 divided by the weighted average of 93,953,576 shares). Fully diluted earnings per share are the same as basic earnings per share.

Continuing operations basic earnings per share is based on the same weighted average number of shares as above applied to profit from continuing operations from the six months of £37,880,000 (six months to 31 July 2007: profit £1,253,000; year to 31 January 2008: profit £40,428,000). Fully diluted continuing operations earnings per share are the same as basic continuing operations earnings per share.
7.   INVESTMENT PORTFOLIO
Unquoted Equity Shares
Quoted Equity Shares
Total Equity Shares

£'000
£'000
£'000
Book value at 31 January 2007
3,221
-
3,221
Additions
5,000
-
5,000
Disposals
(310)
-
(310)
Transfers from investment in subsidiaries on deconsolidation (note 13)
-
3,866
3,866
Unrealised (losses)/profits on the revaluation of investments
(149)
191
42
Book value at 31 July 2007
7,762
4,057
11,819
Additions
-
5,413
5,413
Transfer between quoted and unquoted
(3,680)
3,680
-
Transfers from investment in subsidiaries on deconsolidation (note 13)
2,968
1,219
4,187
Unrealised profits on the revaluation of investments
12,566
26,298
38,864
Book value at 31 January 2008
19,616
40,667
60,283
Additions
3,036
-
3,036
Transfer from trading securities and derivatives
-
4,909
4,909
Disposals
(2,157)
(1,524)
(3,681)
Realised losses on disposal
(343)
(246)
(589)
Transfer between quoted and unquoted
(2,968)
2,968
-
Unrealised (losses)/profits on the revaluation of investments
(128)
41,903
41,775
Book value at 31 July 2008
17,056
88,677
105,733

At 31 July 2008 the Group has portfolio investments where it holds 20% or more of the issued share capital of the following companies.

Undertaking
31 July  2008   Issued Capital
31 July  2007   Issued Capital
31 January 2008   Issued Capital

%
%
%
Ansco Petroleum Ltd
33.9
-
48.1
Nanoco Tech Plc
42.2
43.4
43.0
Obtala Resources Plc
33.4
-
37.1
Oxeco Plc
45.2
45.2
45.3
Oxford Advanced Services Plc
28.1
42.9
28.1
Oxford NutraScience
23.9
-
-

In addition, at 31 July 2008 the Group has within portfolio investments 5,000,000 units in the Rock Island Investments Limited fund which represented 49.7% of that fund (49.7% at 31 July 2007 and 31 January 2008).

The Directors consider that the carrying amount of the investment portfolio approximates to fair value.

8.   GOODWILL

£'000
At 31 July 2007 and 31 January 2008
2,047
Arising on acquisition of subsidiary (note 12)
263
Partial disposal of subsidiary (note 12)
(39)
At 31 July 2008
2,271
 9.   CASH AND CASH EQUIVALENTS
 
The Group had cash and cash equivalents at 31 July 2008 as set out below.
31 July 2008
31 July 2007
31 January 2007

£'000
£'000
£'000
Cash at banks
30,734
42,858
32,299
Cash with institutions in support of trading
11,197
14,278
12,564

41,931
57,136
44,863
Cash with institutions in support of trading includes £8,542,000 held as security against open positions in derivative trading positions (31 July 2007: £5,736,000, 31 January 2008: £9,381,000)
10.   SHARE CAPITAL
Number
£'000
Authorised ordinary shares of 1p:
At  31 July, 2007,  31 January 2008 and 31 July 2008
175,000,000
1,750

Allotted, issued and fully paid ordinary shares of 1p:
At  31 July, 2007,  31 January 2008 and 31 July 2008
100,000,000
1,000
11.   MINORITY INTERESTS
£'000
At 31 January 2007
2,695
Minority interests in net assets at acquisition 
1,693
Minority interests in share of profits post acquisition
65
Minority interests on deconsolidation disposal 
(2,551)
At 31 July 2007
1,902
Minority interests in net assets at acquisition 
32
Minority interests in share of profits post acquisition
51
Minority interests on deconsolidation disposal 
(32)
At 31 January 2008
1,953
Minority interests in share of profits post acquisition
300
Share of net assets at acquisition attributable to minority interests (note 11)
276
At 31 July 2008
2,529
12.   PURCHASE OF SUBSIDIARY UNDERTAKINGS AND DILUTION DISPOSAL

On 2 June 2008, Novum Securities ("Novum") acquired 100% of the issued share capital of Larkin Badeni Communications Ltd. The acquisition was settled by the issue of 57,000 Novum shares with a value of £285,000, together with the settlement in cash of costs of £2,000.  The net assets acquired amounted to £24,000 represented entirely by cash balances, and the resultant goodwill on acquisition was £263,000.

The transaction diluted the Company's shareholding in Novum from 61.4 per cent. to 58.4 per cent. and gave rise to a loss of £30,000 on the deemed partial disposal of this subsidiary, inclusive of a £39,000 deemed disposal of goodwill. The transaction also gave rise to an increase of £276,000 in net assets attributable to minority interests.

13.   RELATED PARTY TRANSACTIONS

During the period Group companies entered into the following transactions with subsidiaries and with portfolio investments companies where the Group holds 20% or more of the issued share capital:

Six months to 31 July 2008
Subsidiaries
Portfolio Investments

£'000
£'000
Advisory fees charged in the period
-
13
Property rentals charged in the period
56
10
Amounts owed to Ora Capital Partners Plc at the period end
11,368
13

Amounts owed to the Company include loans of £11,345,000 made to the Company's wholly owned subsidiary OCS Trading Ltd. These loans are repayable on demand and carry interest at 8 per cent. per annum.
 
The amounts owed to Ora Capital Partners Plc are unsecured and will be settled in cash. No guarantees have been given or received.

In addition the Company paid remuneration to the Directors in the period in accordance with their service contracts and letters of appointment.

14.   INTERIM FINANCIAL REPORT

A copy of this interim report will be distributed to shareholders and is also available on the Company's website at www.oracp.com.
This information is provided by RNSThe company news service from the London Stock Exchange  END  IR DELFFVBBEFBD