Audited results for the year ended 31 March 2024
08/07/2024 07:00
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RNS Number : 4009V VSA Capital Group PLC 08 July 2024
DATE: 8 July 2024
VSA Capital Group plc
("VSA", the "Company" or together with its subsidiaries the "Group")
Audited results for the year ended 31 March 2024
VSA Capital Group plc (Aquis: VSA), the international investment banking and
broking firm announces its audited results for the year ended 31 March 2024.
Highlights
· Turnover of £1.89m (previous year £4.36m), underlying loss
of £2.40m (previous year profit £0.61m)
· Cash at year end £229k (previous year £1.27m)
· Retained Corporate Clients of VSA Capital Limited 27 (2023: 24)
A year of difficult market conditions.
No one in our industry found 2023 a good year and VSA was no exception; and
combined with certain other factors which were specific to VSA our results are
very disappointing. The good news is market conditions in 2024 have improved
significantly, and VSA has started its financial year very successfully.
Andrew Monk, CEO of VSA Capital Group plc said:
"These results are extremely disappointing, but they are also now in the past
and we are on a much stronger footing. We have shown our capabilities with
flying colours in the £56mn capital raise for Invinity Energy Systems in May.
Backing smaller Companies and helping them grow is what VSA is all about. We
also believe that we are at the start of a huge bull market in commodities for
the next 3-5 years and this will give us a fantastic macro environment for us
to deliver significantly better results in 2024, although the World is still a
very uncertain place with changing politics globally, wars that never seem to
end and a brewing East / West cold war."
For more information, please contact:
VSA Capital Group plc +44(0)20 3005 5000
Andrew Monk, CEO
Andrew Raca, Head of Corporate Finance
Marcia Manarin, Finance Director
Alfred Henry - AQSE Corporate Adviser +44 (0)20 3772 0021
Nick Michaels www.alfredhenry.com (http://www.alfredhenry.com)
Maya K. Wassink
Chairman's Statement
Following what has been a very challenging year, I present the audited Annual
Report and Accounts for VSA Capital Group plc, which is the holding company of
the regulated investment banking and broking firm, VSA Capital Limited.
In his report, our CEO Andrew Monk details the environment in which our
company and our competitors have been working during this last year. The
consequence has been that a number of well-known names have disappeared. It
is to the credit of Andrew Monk and his team that VSA is not one of them.
The loss for the year is obviously very disappointing. But it reflects the
state of the market in which we operate. None of this should come as a
surprise to our shareholders. Our results include a very significant
non-cash item, being the reversal of the Silverwood Brands Plc transaction
which resulted in the value attributed to the Silverwood shares being
reversed. Furthermore, as for 2022/23, the results include another tranche
of amortisation of £330,770 resulting from a simple restructuring that we
undertook on 31 March 2021, and this is expected to repeat for another two
years. Once the intangible assets are fully amortised, which we currently
anticipate will be in March 2026, our accounts will no longer be affected by
the amortisation charge on this asset.
On the plus side, our CEO is able to highlight the very significant £56m
fundraising transaction for Invinity Energy Systems that VSA advised on
following the year end. I hope that this significant achievement will mark a
positive step forward for VSA in the months and years ahead.
I pay tribute to the very significant efforts during the year of my fellow
directors and all our staff. And I would also like to thank our corporate
clients who trust us as their advisers. During these difficult times we
remain committed to them as we work together to help them build shareholder
value.
Mark Steeves
Chairman
CEO'S Report
Principal Activity
The principal activities of the Group are the provision of corporate finance
advisory, stockbroking, fundraising and research services to both private and
public companies.
Review of the Business
On 31 March 2021, in preparation for the IPO of the Company on the Aquis
Growth Market, VSA Capital Group Plc acquired VSA Capital Limited in a reverse
takeover and its results are therefore consolidated into these Group accounts
for the third time in the financial statements for the year ended 31 March
2024.
Review of the Year
There is no other way to say it, this year was horrendous. Our loss of £2.7m
for the year was very disappointing and the working environment also became
very unpleasant. Market conditions are the worst I have known in my 40 years
working in the Financial Industry and, sadly, when times are tough some people
show less honesty and integrity, which simply makes it harder for everyone, as
it creates a lasting negativity even though they do not appreciate it at the
time.
Turnover for the year was very distorted due to the write down of investments
being negative, and so underlying turnover was £1.9mn and the underlying loss
was £2.4m (also adding back amortisation) and cash fell to a year end level
of £229,000. This was also lower than we had hoped due to an increase in our
Debtor book to £589,157. Debtors have become an issue across the City, as
many small companies struggle for cash as they cannot raise new equity; but in
general payment is nearly always eventually recovered.
The decision by Silverwood Brands plc to reverse their successful transaction
with the Lush stake took us completely by surprise and became a very difficult
situation for VSA with legal action taken against us, which has subsequently
been settled and closed. It has also had a massive negative impact on all
shareholders who have seen the value collapse. Clearly this is highly
disappointing for everyone, but also something we have moved on from and
simply learnt a few lessons about the sort of business we want to be involved
in for the future. This had a huge impact on our NAV which has fallen by 300%
to £1.68m.
Our retained clients stood at 27, but our retained income will drop as we now
have a new product which includes retained clients called VSA Lite and we
charge less to support these companies (without research). The Lite service
creates a useful bond with corporate clients which we hope will be followed by
conversion to full retained clients in the future.
Sector Focus
In the last year we continued with our core sector expertise of Natural
Resources, Transitional Energy, Technology and Consumer/Leisure. However,
going forward it is our intention to focus more on Natural Resources and
Transitional Energy as it is in these sectors that we have the best reputation
and also where there is less competition. We will continue to look after our
clients in other sectors and do transactions that come our way, and where we
feel we can execute, but we will give less emphasis.
Mining is a sector of great interest going forward. Last year I wrote "Mining
as a sector has seen a lack of investment now for about 15 to 20 years."
Production across the industry is slowing as demand picks up and so this will
result in many commodities facing a 'squeeze' at some stage in the future.
Pretty much all experts agree on this, but stock markets are not responding -
although inevitably, they must. Well, it did not happen last year but every
year that goes by means the squeeze will be bigger, and I believe we are now
at the start of a commodities bull market that will be very strong for 3-5
years, and we must take full advantage of that.
Transitional Energy is, I believe, a sector of huge potential; but again, last
year was tough, although after our year-end, we did raise £56mn for Invinity
Energy Systems, a Vanadium Flow Battery company we have looked after for many
years. This was an exceptional deal and one of the largest fundraises in
London for 2024 when we did it. We also introduced the UK Infrastructure Bank
as a shareholder in their first ever quoted investment. This was a transaction
to be very proud of and shows the capability of VSA.
Equity Capital Markets
A year ago, I worried that the equity market was in terminal decline, and I
was right to be worried, as it has simply got worse over the last 12 months.
It is incredible how London has been allowed to lose its international status
as a premier stock market. The UK Government has shown absolutely no
understanding of its importance, and the relationship between strong stock
markets and strong economies, which generate more tax receipts and thus
better-quality services such as the NHS can be provided. Luckily the current
government, which must surely rank as one of the worst ever Conservative
governments, is inevitably going to be decimated in the upcoming general
election. Labour is not known for supporting the City, but it could not do
less and may even realise that it needs to in order to revive the economy.
We will take nothing for granted and keep a low-cost base as well as look to
win deals that can be achieved even in a poor capital markets environment.
International Reach
We continue to have a very international reach and mindset. In the last year,
we have not really broadened this, as we have been very focussed on sorting
issues "back at home". It is something we believe can add value and, later in
the year, I hope we can start to give more of a push to this part of our
business. In the meantime, it is a capability we have and one that cost us
very little.
Outlook
I am pleased to say that after a disastrous year last year, we have already
started this year significantly better. The £56mn fundraise for Invinity
Energy Systems has given us a very healthy start, and also has been a positive
beacon for other companies to engage with us as very few firms in the City are
capable of such a large fundraise. We had expected to land this deal in the
last financial year, and in fact, we are also working on another large deal
that we also expected to land last year, which we now expect will land towards
the end of the current financial year. Everything is taking much longer than
usual.
This does allow us to be cautiously optimistic, but it still will not be easy
in these horrific market conditions. We have also been exploring all sorts of
ideas for VSA, and discussing with numerous groups, ways that could put the
Company and its shareholders in a stronger position.
It is also a fact that, although I feel exceptionally young still, and believe
I remain fit due to cycling to work daily, and playing a lot of sport, I am
63. It is only sensible to plan for some sort of succession that allows me to
set a possible 3-5-year target for retirement. Not that I think retirement is
in my vocabulary! There are numerous ways this could happen, and if I am right
about a very strong bull market starting in commodities, then we could be a
very valuable asset, and I believe, as the year unfolds, so will the strategic
direction of VSA.
Andrew Monk
CEO
Key performance indicators
Reported (accounting) Loss
Year ended 31 March 2024 Underlying Loss
£2.4m (2023 profit: £0.61m)
Cash at 31 March 2024
£229k (2023: £1.27m)
Retained Corporate Clients at 31 March 2024
27 clients of VSA Capital Limited (2023: 24)
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
Notes 2024 2023
as restated
£ £
Turnover 2 1,887,528 4,358,875
Cost of sales (180,146) (166,179)
Gross profit 1,707,382 4,192,696
Other operating income 54,000 39,000
Administrative expenses (2,828,018) (3,090,564)
Operating (Loss) / Profit (1,066,636) 1,141,132
Finance (expenses)/income 4 5,560 (721)
(Losses) on investments 4 (1,669,892) (859,650)
(Loss) / Profit on ordinary activities before tax (2,730,968) 280,761
Tax on Profit on ordinary activities 5 36,511 (29,558)
(Loss) / Profit for the year (2,694,457) 251,203
Other Comprehensive Income - -
Total Comprehensive Income (2,694,457) 251,203
EARNINGS PER SHARE - PROFIT AFTER TAX Notes pence pence
Basic 7 (7.2) 0.7
Diluted 7 (7.2) 0.5
The statement of comprehensive income has been prepared on the basis that all
operations in the year ended 31 March 2024 are continuing operations.
There were no discontinued operations during the current financial year.
GROUP AND COMPANY BALANCE SHEET
FOR THE YEAR ENDED 31 MARCH 2024
2024 2023 2024 2023
Notes Group Group Company Company
as restated as restated
ASSETS £ £ £ £
Non-current assets
Property, plant & equipment - owned 51,527 77,515 - -
Property, plant & equipment - right of use 292,546 468,900 - -
Intangible assets 661,540 992,311 - -
Deferred tax asset 54,209 108,349 - -
Investment in subsidiaries - - 3,873,996 3,873,996
Total non-current assets 1,059,822 1,647,075 3,873,996 3,873,996
Current assets
Investments 374,970 2,141,416 2,684 6,322
Trade and other receivables 797,558 381,464 233,057 49,041
Cash and cash equivalents 6 229,264 1,273,122 24,560 267,292
Total current assets 1,401,792 3,796,002 260,301 322,655
TOTAL ASSETS 2,461,614 5,443,077 4,134,297 4,196,651
EQUITY AND LIABILITIES
Share capital 3,523,547 3,523,547 3,523,547 3,523,547
Share premium 418,057 418,057 418,057 418,057
Share-based payments reserve 4,731 13,892 4,731 13,892
Accumulated profits/(losses) (2,286,696) 407,761 175,216 214,159
Total equity 1,659,639 4,363,257 4,121,551 4,169,655
LIABILITIES
Current liabilities
Trade and other payables 512,002 529,199 12,746 26,996
Finance liabilities - borrowings 216,836 216,566 - -
Total current liabilities 728,838 745,765 12,746 26,996
Non-current liabilities
Finance liabilities - borrowings - 216,830 - -
Deferred tax liabilities 73,137 117,225 - -
Total non-current liabilities 73,137 334,055 - -
TOTAL EQUITY AND LIABILITIES 2,461,614 5,443,077 4,134,297 4,196,651
The financial statements were approved by the Board of Directors on 5(th) July
2024 and were signed on its behalf by:
Andrew
Monk
Andrew Raca
Director
Director
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
Share Capital Share Premium Share based payments reserve Retained Earnings Total
£ £ £ £ £
As 1 April 2022 3,523,547 418,057 51,585 169,094
4,162,283
Effect of change in accounting standard - - - (12,536) (12,536)
3,523,547 418,057 51,585 156,558 4,149,747
As restated at 1 April 2022
Total comprehensive income as restated - - - 251,203 251,203
Movement in share based premium reserve - - (37,693) - (37,693)
As restated at 1 April 2023 3,523,547 418,057 13,892 407,761
4,363,257
Total Comprehensive Income - - - (2,694,457) (2,694,457)
Movement in share based premium reserve - - (9,161) - (9,161)
At 31 March 2024 3,523,547 418,057 4,731 (2,286,696)
1,659,639
GROUP AND COMPANY CASHFLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
2024 2023 2024 2023
Group Group Company Company
Notes £ £ £ £
Net cash generated/(used) in operating activities
Profit / (loss) before income tax (2,730,968) 280,761 (38,943) (4,831)
Tax paid (46,563) - - -
Depreciation and amortisation 536,458 540,043 - -
Loss / (gain) on current asset investments 1,669,892 859,650 3,638 6,394
Sales settled by shares - (2,277,074) - -
(Increase)/decrease in trade / other receivables (275,529) 107,468 (184,016) (47,509)
Increase / (decrease) in trade / other payables 29,365 (13,427) (14,250) 11,306
Change in share based payments reserve (9,161) (37,693) (9,161) (37,693)
NET CASH (GENERATED)/USED IN OPERATING ACTIVITIES (826,506) (540,272) (242,732) (72,333)
Net cash generated from/(used in) investing activities
Proceeds from disposal of plant, property and equipment - - - -
Purchases of plant, property and equipment (3,346) (2,671) - -
Proceeds from other investing activities 101,834 280,215 - -
Other investments - additions (99,280) (312,437) - -
Dividends received - - - -
NET CASH (GENERATED)/USED IN INVESTING ACTIVITIES (792) (34,893) - -
Cash flows from financing activities
Share capital issue - - - -
Purchase of shares into treasury - - - -
Finance lease repayments (216,560) (161,716) - -
NET CASH GENERATED/(USED) FROM FINANCING ACTIVITIES (216,560) (161,716) - -
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (1,043,858) (736,881) (242,732) (72,333)
Cash and cash equivalents at beginning of period 1,273,122 2,010,003 267,292 339,625
CASH AND CASH EQUIVALENTS AT END OF PERIOD 6 229,264 1,273,122 24,560 267,292
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
1 Statutory Information,
VSA Capital Group plc is a public limited company limited by shares, is listed
on the Aquis Stock Exchange, is incorporated in the UK and registered in
England and Wales (Company Number 04918684). The Company's registered and head
office is at Park House, 16-18 Finsbury Circus, London, United Kingdom, EC2M
7EB.
2 Revenue
Segmental reporting
Group Revenue of £1,887,528 (2023: £4,358,875) comprises:
Corporate Finance fees of £972,906 (2023: £3,455,272);
Broking fees of £734,574 (2023: £711,950);
Bond trading of £78,306 (2023: £85,212),
Research fees of £88,000 (2023: £102,083); and,
Other income of £13,742 (2023: £4,358).
3 Employees and Directors (Group)
31/3/24 31/3/23
£ £
Wages and salaries 1,527,505 1,738,138
Social security costs 174,004 223,792
Other pension costs 35,139 32,526
1,736,648 1,994,456
The average number of employees during the year was as follows:
31/3/24 31/3/23
Directors 4 5
Corporate finance 7 6
Research and sales 7 7
Account and administration 1 3
19 21
4 Net finance income
Finance income: deposit account interest 2024: £6,977 2023: £1,936
Financial Income 2024: £6,977 2023: £1,936
Finance costs: finance lease interest 2024: (£1,417) 2023: (£1,035)
Finance costs: other interest 2024: Nil 2023: (£1,622)
Financial Expenses 2024: (£1,417) 2023: (£2,657)
Total 2024: £5,560 2023: (£721)
5 Taxation
Analysis of the tax charge
Corporation tax is payable on investment income.
Factors affecting the tax charge
The tax assessed for the year is lower than the standard rate of corporation
tax in the UK. The difference is explained below:
2024 2023
as restated
£ £
Profit / (loss) on ordinary activities before tax (2,730,967) 280,761
Profit on ordinary activities multiplied by the
standard rate of corporation tax in the UK of 25% (2023: 19%) (682,742) 53,345
Effects of:
Tax losses utilised (46,563) (75,768)
Unutilised tax losses carried forward 524,164 -
Tax paid on Investment Income - 8,338
Other adjustments 97,311 47,303
Tax losses carried back 61,267 -
Deferred tax adjustments 10,052 (3,660)
Tax (Credit) / Charge (36,511) 29,558
Due to the uncertainty of the timing of taxable profits for the Company in the
future, a deferred tax asset in respect of the tax losses has not been
included in the accounts. Tax losses of £4.8m (2023: £2.7m) have been
carried forward as at 31 March 2024. The rate of corporation tax rose to 25%
in 2024 from 19% in 2023.
6 Cash
Group Group Company Company
2024 2023 2024 2023
£ £ £ £
Cash at bank 229,264 1,273,122 24,560 267,292
7 Profit & Loss Per Share
As at 31 March 2024 As at 31 March 2023 as restated
Audited Audited
Basic
Profit/ (Loss) for the period attributable to owners of the Company (£) (2,694,457) 251,203
Weighted average number of shares: 37,655,266 37,655,266
Basic earnings/(loss) per share (pence): (7.2) 0.7
Diluted
Profit/ (Loss) for the period attributable to owners of the Company (£) (2,694,457) 251,203
Weighted average number of shares: 37,655,266 48,720,866
Diluted earnings/(loss) per share (pence): (7.2) 0.5
Share options granted to employees could potentially dilute basic earnings per
share in the future but were not included in the calculation of diluted
earnings per share as they are antidilutive for the period presented. The
weighted number of shares used in the calculation of basic and diluted
earnings per share is the same for continuing and total earnings per share
calculations.
8 Annual Report and Accounts
Copies of the 2024 Report and Accounts will be posted to shareholders
shortly. Copies will also be available from the Company's registered office
and from the Company's website www.vsacapital.com
(http://www.vsacapital.com)
The statutory accounts for the year ended 31 March 2024 will be delivered to
the Registrar of Companies in due course.
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