Unaudited Interim Report to 30 September 2022
16/12/2022 07:00
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RNS Number : 8973J VSA Capital Group PLC 16 December 2022
16 December 2022
VSA CAPITAL GROUP PLC
("VSA Capital" "VSA" or the "Company")
UNAUDITED INTERIM REPORT FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2022
VSA Capital Group plc (AQSE: VSA), announces its interim results for the half
year ending 30 September 2022.
Chairman's Interim Report
In introducing the Company's interim report this year, I am as conscious as
anyone of the difficult prevailing political, economic and market conditions.
As previously announced, we are reporting a loss for the period, although, as
Andrew Monk highlights, we have completed a very significant transaction post
the period end that will make a significant positive impact on the Group's
performance in the second half.
We finish the calendar year in a good position with a strong balance sheet and
are cautiously optimistic about 2023. We have a great team and an absolute
determination to be a strong player advising and raising funds for small and
medium sized public and private companies internationally.
Mark Steeves
Chairman
16 December 2022
CEO Interim report
What a difference 12 months can make. Since last year's interim report, the
world has completely changed and market conditions have done a total U-turn.
Deal flow has dried up and liquidity to invest has almost disappeared
completely. This is an industry-wide problem and is causing many firms to
reconsider their approach to the future. Equity markets are no longer growing
as Private Equity appears more attractive and with lower costs and
substantially less regulation. Without growth the economics for our industry
become very difficult and so change needs to happen. At VSA we do have the
advantage of being small and nimble and we are less exposed to the treadmill
of "doing deals" than larger firms. This is also why at VSA we look to find
areas or sectors that have less competition and where we effectively become "a
big fish hopefully in a growing pond".
We indicated in our full year results that we would report an interim loss and
we have of £840,693 as a headline number; this looks pretty bad but as we
know headline PBT no longer gives a clear picture of a Company's performance.
Within that figure is a paper loss on investments of approximately £350,000
and goodwill amortization of c.£165,000 and so our cash loss was only about
£300,000. This would still be disappointing but since our interim period we
have announced a substantial deal with Silverwood Brands plc acquiring, what
is in effect about 20% of Lush (Lush and Cosmetic Warriors) owned by Andrew
Gerrie and Alison Hawksley for £216.8m. The fee to VSA for advising on this
transaction was in Silverwood equity and so becomes an investment and will
mean we can forecast a profit for the year ending 31 March 2023. We also have
other deals we expect to land before our year end that will also have a
further positive impact. We have always had a second half bias, which is
explained by our year end being March and historically the market tends to
have its two busiest periods between January-March and September-November.
VSA now have a substantial shareholding in Silverwood Brands plc, which in
turn has a substantial shareholding in Lush and so whilst we hold that
position, the performance of Lush is very important. Lush is a very
well-respected global brand that still has great growth potential and
therefore we are very happy to be shareholders. As of today, it is our
intention to hold the stock as we believe there is good upside, but longer
term we will look to divest at the right time as it is not core to VSA's
business.
The deal by Silverwood was only achievable because the company was listed on
the Aquis Growth Market and the fact that it has rules that are modern,
pragmatic and sensible for smaller companies. This transaction could never
have been achieved on AIM or the LSE. VSA has a stated ambition to be the
leading adviser on Aquis, and I believe this transaction cements that position
and will lead to further good quality business as more companies come to
Aquis. Many of today's domestic brokers grew off the back of AIM in the mid
1990's and early 2000's when AIM grew from nothing to 2,000 Companies, i.e.,
2,000 IPOs and fundraises! Today AIM has shrunk significantly to well below
1,000 companies and there is little growth. We believe Aquis can repeat this
performance and VSA can grow with Aquis as it expands. London needs a
competitive exchange to the LSE, and this will not happen overnight. When AIM
started, Institutions would not touch it but slowly they did, with Aquis it is
retail who have been slow to adopt, not helped by the monopolistic positions
of the SIPP providers, but slowly they are also adopting.
Transitional Energy is still a major sector for VSA, and we continue to
believe it is a key area of focus and will produce significant results. Sadly,
the stock market today has switched off interest in this sector and we are
seeing a similar pattern to what happened during the dot-com boom where
investors got over-excited and drove prices too high and then got
disillusioned and took prices too low. Time has shown though that 20 years
later many of those companies have flourished and become the largest in the
World. We expect a similar pattern to happen in the Transitional Energy space.
Most of the larger brokers have also developed expertise in this sector and
everyone professes to understand lithium! That is like saying you understood
the internet in 2000. At VSA our knowledge runs across the whole value chain
and into many different chemistries and sciences.
China and our capabilities there are on hold due to Zero Covid and travel
restrictions and we have sadly short-term scaled back the activities of
Shanghai Mining Club, but we do expect to revive this in the future.
In summary, it has not been an easy six months for anyone, and it was not for
VSA but we are positive about our full year outcome. I wish to record thanks
to our shareholders at this time. We do not expect market conditions to
improve in the near future, but we believe we can buck the trend with our
innovative approach and clever thinking, and we are always open to ideas and
ways to increase shareholder value. Our staff are our most important asset,
and so I am pleased to see a strong team spirit and thank them for their
support of VSA.
Andrew Monk
CEO
16 December 2022
The directors of the Company take responsibility for this announcement.
For further information, please contact:
VSA Capital Group plc +44 20 3005 5000
Andrew Monk - Chief Executive Officer amonk@vsacapital.com (mailto:amonk@vsacapital.com)
Andrew Raca - Head of Corporate Finance araca@vsacapital.com (mailto:araca@vsacapital.com)
Marcia Manarin - Finance Director & COO mmanarin@vsacapital.com (mailto:mmanarin@vsacapital.com)
AQSE Exchange Growth Market Corporate Adviser
Alfred Henry Corporate +44 20 3772 0021
Finance Limited
Nick Michaels / Maya Klein Wassink enquiries@alfredhenry.com (mailto:enquiries@alfredhenry.com)
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX-MONTH PERIOD TO 30 SEPTEMBER 2022
Six months Six months Year ended
ended ended 31 March 2022
30 September 2022 30 September 2021 Audited
Unaudited Unaudited
£'000 £'000
£'000
£ £ £
Turnover 846 1,163 3,606
Cost of sales (82) - (176)
Gross profit 764 1,163 3,430
Other operating income 20 - 35
Administrative expenses (1,271) (1,398) (2,955)
Operating (loss) / profit (487) (235) 510
Finance income 1 - 1
Gains / (losses) on investments (355) - (443)
(Loss) / profit on ordinary activities before taxation (841) (235)
68
Tax on profit/loss on ordinary activities - (3) (26)
(Loss) / profit for the year (841) (238) 42
Other Comprehensive income - - -
Total Comprehensive income (841) (238) 42
Earnings per share - profit after tax
pence pence pence
Basic (4.3) (1.2) 0.2
Diluted (2.7) (0.8) 0.1
GROUP STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2022
As at As at As at
30 September 2022 Unaudited 30 September 2021 Unaudited 31 March 2022
£'000 £'000 Audited
£'000
Non-current assets
Property, plant and equipment - right of use 557 234 645
Property, plant and equipment - owned 94 11 108
Intangible Assets 1,158 1,488 1,323
Total non-current assets 1,809 1,733 2,076
Current assets
Trade and other receivables 497 876 537
Investments 555 1,152 692
Cash and cash equivalents 1,247 814 2,010
Total current assets 2,299 2,842 3,239
Total assets 4,108 4,575 5,315
Current liabilities
Trade and other payables 272 565 557
Finance liabilities - borrowings 189 104 108
Total current liabilities 461 669 665
Non-current liabilities
Finance liabilities - borrowings 325 23 487
Total non-current liabilities 325 23 487
Total liabilities 786 692 1,152
Equity
Share Capital 3,524 3,524 3,524
Share premium account 418 418 418
Share-based payments reserve 52 52 52
Accumulated profits/(losses) (672) (111) 169
Total equity 3,322 3,883 4,163
Total Equity and Liabilities 4,108 4,575 5,315
CONSOLIDATED GROUP CASHFLOW STATEMENT
FOR THE SIX-MONTH PERIOD ENDED 30 SEPTEMBER 2022
Six months ended 30 September 2022 Six months ended 30 September 2021 Year ended 31 March 2022
Unaudited Unaudited Audited
£'000 £'000 £'000
Cash flows from operating activities
Profit / (loss) before income tax (841) (238) 68
Tax paid - - (20)
Depreciation and amortisation 270 232 522
Gain / (loss) on current asset investments 405 (110) 439
(Increase) / decrease in trade / other receivables 40 (641) (301)
Increase / (decrease) in trade / other payables (285) (490) (504)
Change in share based payments reserve - 25 25
NET CASH USED IN OPERATING ACTIVITIES (411) (1,222) 229
Cash flows from investing activities
Proceeds from disposal of plant, property and equipment - - 213
Purchase of plant, property and equipment (3) (2) (848)
Proceeds from other investing activities 11 124 210
Purchase of other investments (279) - (177)
NET CASH GENERATED FROM INVESTING ACTIVITIES (271) 122 (602)
Cash flows from financing activities
Share capital issue - 118 253
Purchase of shares into treasury - - (134)
New finance leases - - 595
Finance lease repayments (81) (68) (195)
NET CASH GENERATED FROM FINANCING ACTIVITIES (81) 50 519
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (763) (1,050) 146
Cash and cash equivalents at beginning of period 2,010 1,864 1,864
CASH AND CASH EQUIVALENTS AT END OF PERIOD 1,247 814 2,010
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX-MONTH PERIOD TO 30 SEPTEMBER 2022
1 General Information
VSA Capital Group plc is a listed public limited company (Aquis: VSA)
incorporated in the UK and registered in England and Wales (Company Number
04918684). The Company's registered office is at Park House, 16-18 Finsbury
Circus, London, EC2M 7EB.
These interim financial statements do not include all of the information
required for full annual financial statements and should be read in
conjunction with the consolidated financial statements of the Group as at and
for the year ended 31 March 2022 which have been prepared in accordance with
International Financial Reporting Standards ("IFRS") as adopted by the
European Union.
The interim financial statements for the six months ended 30 September 2022
are unaudited and have not been reviewed by the Company's auditors Hilden Park
Accountants Limited. The comparative interim figures for the six months ended
30 September 2021 are also unaudited.
2 Basis of
preparation
The accounting policies applied by the Group in the preparation of these
condensed consolidated interim financial statements are the same as those
applied by the Group in its consolidated financial statements for the year
ended 31 March 2022.
3 Profit or loss per share
Six months ended 30 September 2022 Six months ended 30 September 2021 Year ended 31 March 2022
Unaudited Unaudited Audited
£'000 £'000 £'000
Basic
Profit/ (Loss) for the period attributable to owners of the Company (841) (238) 42
Weighted average number of shares: 19,428,966 19,428,966 19,428,466
Basic earnings/(loss) per share (pence): (4.3) (1.2) 0.2
Diluted
Profit/ (Loss) for the period attributable to owners of the Company (841) (238) 42
Weighted average number of shares: 30,899,366 30,408,166 30,279,466
Diluted earnings/(loss) per share (pence): (2.7) (0.8) 0.1
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.
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