Final Results
29/06/2022 07:00
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RNS Number : 5235Q VSA Capital Group PLC 29 June 2022
DATE: 29 June 2022
VSA Capital Group plc
("VSA", the "Company" or together with its subsidiaries the "Group")
Audited results for the year ended 31 March 2022
VSA Capital Group plc (Aquis: VSA), the international investment banking and
broking firm is pleased to announce its audited results for the year ended 31
March 2022.
Highlights
· Year started with the full integration of VSA Capital Limited into
the Group on 1 April 2021
· Turnover of £3.61m (previous year Nil), operating profit of
£0.51m
· Cash at year end £2.01m
· Retained Corporate Clients 24 (2021: 19 clients of VSA Capital
Limited)
We have been busy across all areas of the firm, including fundraises for
private and public companies (IPOs, RTO's and placings) and advisory work on
mergers, acquisitions and Takeover Code transactions.
With many countries and industries focusing on control of their own energy and
critical metal supplies, VSA is well placed to benefit from this with our core
sectors being Natural Resources and Transitional Energy.
During last year we have expanded our coverage successfully into the Leisure
and Consumer Brands sectors acting for four companies, and we expect all to be
active and to grow quickly. In addition we have also expanded our activities
into Technology and Software, eMobility and eCommerce.
In addition to our work advising and raising funds for companies listed on the
London Stock Exchange, we have taken a strong stance to back the Aquis Stock
Exchange as we genuinely believe London needs a second exchange and
competition to the LSE. We were particularly pleased to be appointed as
Aquis Corporate Adviser to Aquis Exchange plc on its dual listing on the Aquis
Growth Market.
Andrew Monk, CEO of VSA Capital Group plc said:
"This is the first year of reporting as a listed company on the Aquis Growth
Market and I am pleased to report a healthy underlying profit, despite the
final quarter being exceptionally tricky as it has been for all in our
industry. Despite the current turmoil in equity markets I am cautiously
optimistic about the prospects for VSA Capital in the current year"
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
Jon Issacs www.alfredhenry.com (http://www.alfredhenry.com)
Chairman's Statement
I am pleased to present the first audited results for VSA Capital Group plc
since its IPO on the Aquis Growth Market on 9 September 2021. This date
marked a return of the Group to the market following many years as an unlisted
company and in a much stronger position than it had been before.
In order to achieve the IPO, the business undertook a restructuring whereby
VSA Capital Group plc acquired VSA Capital Limited, the underlying business of
the Group, in a share for share exchange. This restructuring was effected in
accordance with the UK Takeover Code and resulted in a number of accounting
peculiarities, particularly a considerable amount of goodwill which we are
obliged to write off over a five year period, and also the fact that the
strong performance of VSA Capital Limited had not been provided in the
previous financial period as it was only acquired on the last day of that
year.
Nevertheless, the board is pleased with the outcome for the year and as
outlined by our CEO, Andrew Monk, reflects further growth and progress for the
Group.
The current year is undoubtedly challenging, but we are cautiously optimistic.
Meanwhile, personally, I am very confident in the executive team, and we as
a board are confident that the Group's strategy is robust to continue to 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 first time in the financial statements for the year ended 31 March
2022.
Review of the Year
This is our first year of reporting as a listed company on the Aquis Growth
Market and I am pleased to report a healthy underlying profit, despite the
final quarter of January to March being exceptionally tricky as it has been
for all in our industry. Also, despite the current turmoil in equity markets I
am cautiously optimistic about the prospects for VSA in the current year.
To understand the performance of the VSA Group, we have highlighted an
underlying profit before tax to reflect our "real profit" in the Key
Performance Indicators section below. Most companies are now reporting
Underlying or Adjusted Profits to give a true reflection of performance as
goodwill amortisation, which is a non-cash item, can give a very distorted
impression of a business's performance. Because VSA Capital Group plc
undertook a restructuring by acquiring VSA Capital Limited in order to achieve
our IPO, we are now required to amortise the consequent "goodwill" that arose,
but in reality, nothing has actually changed. Such is the nature of IFRS
accounting nowadays.
To understand the progress of our business, the key criteria to consider are
the Group's underlying profits, cash generated and the number and quality of
corporate clients which produce much of the Group's revenue.
Our cash position is healthy at £2.0mn (2021: £1.8mn). Our retained
clients have increased to 24 (19 at the time that VSA Capital was acquired)
and the quality of our clients has improved significantly. All this
contributes to my cautious optimism.
Looking forward in the current global situation, although the economic outlook
is not good, there is also a resetting of many industries to reflect a more
nationalistic approach and control of countries' own energy and critical metal
supplies. VSA is well placed to benefit from this with our core sectors being
Natural Resources and Transitional Energy. We were marketing lithium mines
across the globe more than 10 years ago and well before other UK investment
banks got involved and this has given us a great position and understanding of
all the critical and battery metals.
We have also taken a strong stance during the resurgence of Cornish Mining.
Last year we completed the £41m fundraising and IPO of Tungsten West plc
which, although technically in West Devon, will be a key component of the
future Cornish Mining industry. Cornwall has plentiful reserves of Tin,
Tungsten, Copper and Lithium. The UK can become a global mining player again,
but it will take time, require a lot of capital, the support of the UK
Government as well as collaboration between the different mining companies
operating there. We expect to play a significant part in this.
During last year we have expanded our coverage successfully into the Leisure
and Consumer Brands sectors acting for four companies, and we expect all to be
active and to grow quickly. We are also advising on a number of transactions
in the space.
We have broadened our Corporate Finance advisory practice continuing our
public company Takeover Code work, private company fundraising and M&A
advisory activities, which has led to us broadening our sector activities
particularly in Technology and Software, eMobility and eCommerce. We are
keen to grow into one or two other sectors if we can find the right people and
without risking the profitability of our core sectors.
We have taken a strong stance to back the Aquis Stock Exchange as we genuinely
believe London needs a second exchange and competition to the LSE, which is
losing market share annually on a global basis. In the USA you have NYSE and
Nasdaq and in China they have three exchanges; Shanghai, Shenzhen and Beijing.
Canada has the TSX/TSX-V and the Canadian Stock Exchange. In Asia, Hong Kong
and Singapore compete. In a post Brexit world London needs a second exchange
and Aquis is perfectly positioned. We have completed successful, well-funded
IPOs on the Aquis Growth Market, which is growing, but it needs more
participation by the retail trading platforms and PCBs to ensure liquidity is
in the market. Sadly, in today's world it appears that many players care less
about what they offer their clients but simply want an easy, well-paid life. I
believe Aquis will eventually become the 'Nasdaq of London' and we were
particularly pleased to be appointed as Aquis Corporate Adviser to Aquis
Exchange plc on its dual listing on the Aquis Growth Market.
Our international operations and in particular our Shanghai office have
declined significantly in the last two years due to the inability to travel to
those destinations to develop business. We are not anticipating a rapid
pick-up in deal flow from our Shanghai office in the coming year, but we are
hopeful we can start to benefit from our partnerships in Kenya and South
Africa.
Our joint ventures in Bond trading and asset management continue to bring in
useful additional revenue and give us optionality on future possibilities. The
Shanghai Mining Club, which has a joint venture with Investing In African
Mining Indaba, continues to grow even though the conference has had to adapt
to a hybrid virtual format. But we have high hopes that this can grow
significantly going forward.
As a company we continue to look for acquisitions, which would help us grow
without undue risk. So far, we are yet to find one that would fit with our
culture, come at a valuation that is good for shareholders and adds long term
value to our business.
Outlook
We remain cautiously optimistic despite the worsening conditions for global
markets that are unlikely to improve for some time. We have always seen our
profits biased towards the second half and normally show a loss at the interim
stage and we expect that to be true this year. We then also expect to have a
strong second half and show a profit for the full year ending 31 March 2023.
Andrew Monk
CEO
Key performance indicators
Reported (accounting) profit
Year ended 31 March 2022 Underlying Profits
£399,144 comprising £68,374 profit on ordinary activities before taxation
plus amortisation of £330,770 (2021: £194,097 (no amortisation))
Cash at 31 March 2022
£2.01m (£1.87m)
Retained Corporate Clients at 31 March 2022
24 (19 clients of VSA Capital Limited)
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2022
Notes 2022 2021
£ £
Turnover 2 3,605,562 -
Cost of sales (175,761) -
Gross profit 3,429,801 -
Other operating income 34,750 -
Administrative expenses (2,954,406) (19,803)
Operating Profit/(loss) 510,145 (19,803)
Finance income 4 736 213,900
Gains/(Losses) on investments 4 (442,507) -
Profit on ordinary activities before taxation 68,374 194,097
Tax on Profit/(Loss) on ordinary activities 5 (26,482) -
Profit for the year 41,892 194,097
Other Comprehensive Income - -
Total Comprehensive Income 41,892 194,097
EARNINGS PER SHARE - PROFIT AFTER TAX Notes pence pence
Basic 7 0.2 106.5
Diluted 7 0.1 66.4
The statement of comprehensive income has been prepared on the basis that all
operations in the year ended 31 March 2022 are continuing operations.
There were no discontinued operations during the current financial year. The
Company acquired VSA Capital Limited on 31 March 2021 and the Group statement
of comprehensive income for the year ended 31 March 2021 does not therefore
include financial information relating to VSA Capital Limited.
GROUP AND COMPANY BALANCE SHEET
FOR THE YEAR ENDED 31 MARCH 2022
2022 2021 2022 2021
Notes Group Group Company Company
ASSETS £ £ £ £
Non-current assets
Property, plant & equipment - owned 107,764 11,811 - -
Property, plant & equipment - right of use 645,253 297,540 - -
Intangible assets 1,323,081 1,653,851 - -
Investment in subsidiaries - - 3,873,996 3,873,996
Total non-current assets 2,076,098 1,963,202 3,873,996 3,873,996
Current assets
Investments 691,769 1,163,492 12,716 75,757
Trade and other receivables 536,932 235,367 1,532 1,644
Cash and cash equivalents 6 2,010,003 1,863,785 339,625 24,813
Total current assets 3,238,704 3,262,644 353,873 102,214
TOTAL ASSETS 5,314,802 5,225,846 4,227,869 3,976,210
EQUITY AND LIABILITIES
Share capital 3,523,547 3,645,260 3,523,547 3,645,260
Share premium 418,057 177,524 418,057 177,524
Share-based payments reserve 51,585 25,786 51,585 25,786
Accumulated profits/(losses) 169,094 127,202 218,990 127,202
Total equity 4,162,283 3,975,772 4,212,179 3,975,772
LIABILITIES
Current liabilities
Trade and other payables 557,408 1,055,436 15,690 438
Finance liabilities - borrowings 107,623 136,066 - -
Total current liabilities 665,031 1,191,502 15,690 438
Non-current liabilities
Finance liabilities - borrowings 487,488 58,572 - -
TOTAL EQUITY AND LIABILITIES 5,314,802 5,225,846 4,227,869 3,976,210
The financial statements were approved by the Board of Directors on 28 June
2022 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 2022
Share Capital Share Premium Share based payments reserve Retained Earnings Total
£ £ £ £ £
At 31 March 2020 135,740 2,048 25,786 (66,895) 96,679
Total comprehensive income - - - 194,097 194,097
Share issue 3,509,520 175,476 - - 3,684,996
3,645,260 177,524 25,786 127,202 3,975,772
At 31 March 2021
Total Comprehensive Income - - - 41,892 41,892
Share issue 12,027 240,533 - - 252,560
Company purchase of own shares into Treasury (133,740) - - - (133,740)
Movement in share based premium reserve - - 25,799 - 25,799
At 31 March 2022 3,523,547 418,057 51,585 169,094
4,162,283
GROUP AND COMPANY CASHFLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2022
2022 2021
Group Group
Notes £ £
Net cash generated/(used) in operating activities
Profit / (loss) before income tax 68,374 194,097
Tax paid (19,740) -
Depreciation and amortisation 521,947 -
Loss / (gain) on current asset investments 438,628 (213,900)
(Increase)/decrease in trade / other receivables (301,565) 6,918
Increase / (decrease) in trade / other payables (504,770) (403)
Change in share based payments reserve 25,799 -
NET CASH USED IN OPERATING ACTIVITIES 228,673 (13,288)
Net cash generated from/(used in) investing activities
Purchase of subsidiary undertaking - (3,873,996)
Proceeds from disposal of plant, property and equipment 212,808 -
Purchases of plant, property and equipment (847,651) -
Proceeds from other investing activities 210,262 198,992
Other investments - additions (177,167) -
Dividends received - -
NET CASH GENERATED FROM INVESTING ACTIVITIES (601,748) (3,675,004)
Cash flows from financing activities
Share capital issue 252,560 3,684,996
Purchase of shares into treasury (133,740) -
New finance leases 595,111 -
Finance lease repayments (194,638) -
NET CASH GENERATED FROM FINANCING ACTIVITIES 519,293 3,684,996
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 146,218 (3,296)
Cash and cash equivalents at beginning of period 1,863,785 28,109
- 1,838,972
Cash acquired with subsidiary undertaking
CASH AND CASH EQUIVALENTS AT END OF PERIOD 6 2,010,003 1,863,785
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
1 Statutory Information
VSA Capital Group plc is a public limited company limited by shares,
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 £3,605,562 (2021: £nil) comprises corporate finance fees of
£2,797,340 (2021: £nil), broking fees of £578,069 (2021: £nil), bond
trading of £85,462 (2021: £nil), research fees of £138,750 (2021: £nil)
and other income of £5,941 (2021: £nil).
3 Employees and Directors (Group)
31/3/22 31/3/21
£ £
Wages and salaries 1,763,882 1,620,541
Social security costs 217,903 172,476
Other pension costs 33,926 29,228
2,015,711 1,822,245
The average number of employees during the year was as follows:
31/3/22 31/3/21
Directors 5 3
Corporate finance 6 7
Research and sales 9 7
Account and administration 2 2
22 19
4 Net finance costs
Finance income: deposit account interest 2022: £736 2021: £nil
Gains/(losses) on market value of investments 2022: (£429,225) 2021: £213,900
Finance costs: finance lease interest 2022: (13,282) 2021: £nil
2022: (442,507) 2021: £213,900
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:
2022 2021
£ £
Profit on ordinary activities before tax 68,374 194,097
Profit on ordinary activities multiplied by the
standard rate of corporation tax in the UK of 19% (2021: 19%) 12,991 36,878
Effects of:
Prior Year tax losses utilised (12,991) (36,878)
Tax paid on Investment Income 26,482 -
Tax Charge 26,482 -
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 £2.9m (2021: £2.8m) have been
carried forward as at 31 March 2022. The rate of corporation tax is set to
rise to 25% in 2023.
6 Cash
2022 2021 2022 2021
Group Group Company Company
£ £ £ £
Cash at bank 2,010,003 1,863,785 339,625 24,813
7 Profit & Loss Per Share
As at 31 March 2022 As at 31 March 2021
Audited Audited
Basic
Profit/ (Loss) for the period attributable to owners of the Company (£) 41,892 194,097
Weighted average number of shares: 19,428,966 182,263
Basic earnings/(loss) per share (pence): 0.2 106.5
Diluted
Profit/ (Loss) for the period attributable to owners of the Company (£) 41,892 194,097
Weighted average number of shares: 30,279,466 292,484
Diluted earnings/(loss) per share (pence): 0.1 66.4
The basic and diluted earnings per share were determined by dividing the
profit or loss attributable to the equity
holders of the Company by the weighted average number of shares outstanding
during the periods.
8 Annual Report and Accounts
Copies of the 2022 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 2022 will be delivered to
the Registrar of Companies in due course.
Statutory accounts for the year ended 31 March 2021 have been delivered to the
Registrar of Companies. The auditors' report on those accounts was
unqualified, did not draw attention to any matters by way of emphasis, and did
not contain a statement under 498(2) or 498(3) of the Companies Act 2006.
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