TIDMCRS
RNS Number : 0989R
Crystal Amber Fund Limited
04 March 2021
4 March 2021
Crystal Amber Fund Limited
Interim results for the six months ended 31 December 2020
The Company announces its unaudited interim results for the six
months ended 31 December 2020.
Key Points
-- Net Asset Value ("NAV") (1) per share grew by 21.7% over the period to 129 pence per share.
-- The Fund's NAV per share growth compares to a 24.3% increase in the Numis Small Cap Index.
-- Successful completion of the turnaround plan at De La Rue plc.
-- Share price discount to NAV averaged 25.5% throughout the
period falling to 21.3% at 31 December 2020 as the Fund accelerated
its buy-back programme.
-- During the period, GBP6.2 million was allocated to share
buy-backs, acquiring 7.6 million shares at an average of 82.2 pence
per share.
-- An interim dividend of 2.5 pence per share was declared on 23
December 2020, which was paid on 5 February 2021 to shareholders on
the register on 8 January 2021.
For further enquiries please contact:
Crystal Amber Fund Limited
Christopher Waldron (Chairman) Tel: 01481 742
742
Allenby Capital Limited - Nominated Adviser
David Worlidge/Liz Kirchner Tel: 020 3328
5656
Winterflood Investment Trusts - Broker
Joe Winkley/Neil Langford Tel: 020 3100
0160
Crystal Amber Advisers (UK) LLP - Investment
Adviser
Richard Bernstein Tel: 020 7478
9080
(1) All capitalised terms are defined in the Glossary of
Capitalised Defined Terms unless separately defined.
Chairman's Statement
During the period from 30 June 2020 to 31 December 2020, net
asset value grew from GBP97.4 million (106 pence per share) to an
unaudited NAV of GBP108.9 million (129 pence per share). The Fund's
NAV per share performance over the six months to 31 December 2020
of 21.7%, compares to a 24.3% increase in the Numis Small Cap Index
in the same period.
The period under review saw ongoing uncertainty from the
COVID-19 pandemic, as well as final Brexit negotiations. The latter
adversely affected the appetite of global investors for UK stocks,
specifically small and medium sized companies, as well as the
appetite of corporate acquirers for attractively priced targets.
However, this has left many UK companies significantly undervalued
by international standards and if the UK's rapid vaccination
programme does translate into earlier economic recovery, we would
expect a re-rating of UK equities and fresh corporate activity.
As previously stated, the Board remains mindful that activist
investing requires a focussed portfolio, which inevitably increases
the concentration risk. During the period, there were no
significant changes in the composition of the Fund's core holdings.
The Fund's strategy and activist approach of patient engagement
remained consistent over the period. As described in the Investment
Manager's Report, there were important developments in several of
the Fund's core positions. Recent operational improvements are now
starting to be reflected in recovering share prices. This should
augur well for performance of the Fund as a whole.
The Fund continued its discount management policy through share
buy-backs. In October 2020, Invesco Perpetual sold its 20%
shareholding in the Fund, removing a longstanding stock overhang.
During the six months to 31 December 2020, 7,566,567 shares were
acquired by the Fund at an average price of 82.20 pence per share.
The share price discount to NAV averaged 25.5% throughout the
period and closed the period at a discount of 21.3%. During the
period, GBP6.2 million was allocated to share buy-backs. In
December, the Fund declared an interim dividend of 2.5 pence per
share, equivalent to GBP2.1 million.
The Fund's concentrated portfolio is well placed to benefit from
the anticipated economic recovery. Its past actions, most notably
the essential management changes at De La Rue plc propagated by the
Fund, have begun to bear fruit. Combined with other important
changes that the Fund has implemented within the portfolio,
including driving investee companies to take advantage of
structural shifts in the digital economy, including blockchain
technologies, the Board is confident of continued growth in
NAV.
Christopher Waldron
Chairman
3 March 2021
Investment Manager's Report
Strategy and Performance
During the period, the Fund achieved a considerable number of
positive changes in its major holdings. At 31 December 2020, equity
investments in 12 companies represented 99% of NAV. Three of those
are unlisted. The Fund also held a loan note in one of those
companies, GI Dynamics Inc. The Fund's net debt and accruals
position was GBP3.8 million, funded by a loan facility. The Fund's
top four holdings represented 82.9% of NAV.
During the period, the Fund exited STV Group and Redde Northgate
plc, realising a GBP9.4 million loss on the latter. The proceeds
from the sale of Redde Northgate plc were allocated to the share
buy-back programme. The Fund sold part of its investment in Board
Intelligence Ltd, realising a gain of GBP1.8 million. The Fund also
participated in De La Rue's fundraising at 110 pence per share and
continued to support GI Dynamics Inc., investing $5 million during
the period. The position in Allied Minds plc was reduced following
a near doubling of the share price after a period of share price
weakness in the spring of 2020, during which the Fund had increased
its holding.
The table below lists the top ten holdings as at 31 December
2020:
Pence per share Percentage of investee equity held
Ten largest shareholdings
------------------------------------ ---------------- -----------------------------------
De La Rue plc** 58.6 15.1%
Allied Minds plc** 19.1 20.5%
Equals Group plc 15.2 25.7%
GI Dynamics Inc. * 14.0 *
Hurricane Energy plc 6.6 11.2%
Board Intelligence Ltd* 4.6 *
Sutton Harbour Group plc 3.0 10.8%
Camellia plc** 2.5 1.1%
Kenmare Resources plc** 2.0 0.5%
Leaf Clean Energy Co* 1.6 *
Total of ten largest shareholdings 127.2
Other investments 5.4
Loan facility (3.8)
Cash and accruals 0.2
------------------------------------ ----------------
Total NAV 129.0
------------------------------------ ----------------
* Board Intelligence Ltd, GI Dynamics Inc. and Leaf Clean Energy
Co are private companies and their shares are not listed on a stock
exchange. Therefore, the percentage held is not disclosed.
**Within the percentage of investee company held in Allied Minds
plc and De La Rue plc, contracts for difference were held amounting
to 3.0% and 2.1%, respectively, of such holdings. The holdings in
Camellia plc and Kenmare Resources plc are also held on contracts
for difference.
Investee companies
Our comments on some of our principal investments are as
follows:
De La Rue plc ("De La Rue")
In July 2020, De La Rue completed its GBP100 million equity
fundraise, which was priced at 110 pence per share. The Fund
participated in the firm placing and open offer elements of the
raise. The company now has an almost debt-free balance sheet, a
vastly improved pension funding schedule, bank facilities extended
until December 2023 and, most significantly, a fully funded
turnaround plan.
The company's interim results in November 2020 and trading
update in January 2021 confirm that the company's turnaround plan
is proceeding well. The Fund continues to believe that De La Rue
enjoys a combination of strong competitive positions in high return
businesses and attractive growth opportunities. It holds a 30%
market share of global commercial banknote printing, which enables
the Currency division to accelerate and fully capitalise on the
structural shift towards polymer notes. The higher margin
Authentication division is forecasted to generate revenues for the
year to March 2022 of GBP100 million as against GBP68.5 million for
the year to March 2020.
Aside from its market positioning as the global market share
leader in banknote printing, De La Rue is well placed to deliver
significant earnings growth from its proprietary technology in both
security and authentication. Whilst COVID-19 immunity certification
is a fast-evolving situation, De La Rue is in discussions with
governments to provide solutions. Separately, De La Rue is
exploring the potential to use blockchain technology.
The Fund believes that De La Rue's current equity valuation is
significantly mispriced. At ten times calendar 2021 forecast
earnings, the Fund believes that the valuation fails to reflect
either its growth prospects or its operational upside. The Fund
strongly believes that its strategic value is far in excess of its
current market capitalisation.
Allied Minds plc ("Allied Minds")
Following its initial investment in the fourth quarter of 2018,
the Fund focused on securing a major reduction in excessive parent
company costs: ongoing HQ expenses were running at an estimated
US$17-20 million per annum at that time. These have now been
reduced to approximately $5.75 million per annum. In response to
concerted pressure exerted by the Fund, Allied Minds ended its
extraordinary practice of paying management 10% of gains arising
from any successful individual investment, without taking account
of the losses incurred on other investments in the portfolio.
In October 2020, Allied Minds released its interim results and
referred to the "underlying strength of the portfolio". Spin Memory
was described as "the preeminent MRAM IP provider [...]
transforming the semiconductor industry". Reassuringly, it was
stated that "Spin Memory has made significant progress against its
key operational objectives since its last funding round". Allied
Minds' 43% shareholding in Spin Memory was valued at $77 million
based on that last funding round. This compares with its $44
million cash cost since 2006. In July 2020, Allied Minds invested a
further $4 million in Spin Memory bringing the carrying value to
around 35% of the company's net asset value. Despite this, Spin
Memory still remains a "pre-revenue" business after 15 years.
Following this update, the Fund held detailed discussions with
the board of Allied Minds and expressed its concerns.
On 4 January 2021, Allied Minds announced that due to COVID-19,
the required testing of Spin Memory's chip had been delayed for
nearly nine months and this delay had affected Spin Memory's
ability to secure new customers. As a result, and coupled with an
unexpected loss of a government bid in late Q4 2020, Spin Memory is
now facing liquidity issues. The Fund expects the contemplated
funding round to be carried out at a far lower valuation than its
carrying value.
On 15 January 2021, Allied Minds announced that its Chief
Executive had "decided to step down from the board with immediate
effect". Going forward, the portfolio will be managed by the three
non-executive directors. The Fund welcomes the streamlined
management of the portfolio, in which three companies comprise more
than 90% of the latest reported carrying value.
The Fund notes that the current 28 pence per share price
compares with an estimated 26 pence per share carrying value of the
36.6% holding in Federated Wireless together with parent company
cash of 6 pence per share. Holdings in BridgeComm, Orbital
Sidekicks, TableUp and Spark Insights are together valued at 12
pence per share. Whilst there is uncertainty as to the current
value of the Spin Memory holding, the Fund estimates that at least
5 pence per share could be achievable. Overall, therefore, the
share price would have to increase by 75% to reach the Fund's
estimated net asset value of Allied Minds.
The Fund expects the Allied Minds' board to proactively seek to
realise the inherent value of the portfolio in a timely manner and
return proceeds to shareholders. It should be open to any structure
that could achieve this objective including, if considered
appropriate, reversing Federated Wireless into a Special Purpose
Acquisition Company (SPAC).
Equals Group ("Equals")
As an e-banking and international payment services provider
serving both retail and business customers mainly in the United
Kingdom under an e-money licence, Equals is well placed to benefit
from the structural shift in digital payments. Whilst Equals
provides faster, cheaper and more convenient money management than
traditional banking services, its payments platforms should be
capable of being repositioned to enable its one million customers
to access the latest evolving blockchain technologies and/or
products. The Fund regards last week's announcement as the first
step in Equals' journey to incorporate decentralised finance
("DeFi") accessibility.
Equals ended the period under review in a far better position
than at the start. Revenues for the year to December 2020 were
GBP29 million, just 6% lower than the prior year. Given Equals'
original focus on travel money, this was a creditable outcome. The
business also achieved cash breakeven and an improved net cash
position of GBP8 million.
The Fund believes that with a market capitalisation of GBP61
million and with the shares trading on a current year enterprise
value to revenue of just 1.5, the valuation fails to reflect both
its customer relationships and its digital and DeFi prospects.
GI Dynamics Inc ("GI Dynamics")
COVID-19 has placed the need to tackle Type 2 diabetes and
obesity at the top of the public health agenda. These two
conditions are key contributors to mortality outcomes in COVID-19
patients. GI Dynamics, with its EndoBarrier, brings a proven
treatment that can meet a large unmet clinical need.
During the period under review, the Fund was instrumental in the
recruitment of a new Chief Executive and the appointment of a new
board of directors with strong, relevant experience gained from
working formerly at Medtronic and Boston Scientific.
GI Dynamics is concentrating its focus in three areas. Firstly,
CE Mark certification, which will enable the company to quickly
deliver meaningful revenues. Secondly, enrolment for its FDA
approved clinical trial. Thirdly, to initiate enrolment in its
agreed pivotal trial in India, with its joint venture partner,
Sanofi backed, Apollo Sugar.
The pandemic has inevitably affected the pace of the regulatory
process and patient enrolment, but the CE Mark regulatory review is
due to complete in May 2021. As soon as COVID-19 restrictions are
eased, GI Dynamics intends to restart enrolment for its US clinical
trial. GI Dynamics' application for a joint trial with Apollo Sugar
has now been submitted for regulatory approval.
The Fund is encouraged that in recent weeks, it has received two
unsolicited approaches from third parties interested in partnering
and/or investing in GI Dynamics. Whilst these discussions are at an
early stage, they demonstrate the recent progress that has been
made.
In July 2020, GI Dynamics delisted from the Australian Stock
Exchange. Later this year, the Fund intends to assess the relative
merits for GI Dynamics to list either on the London Stock Exchange,
via a US listed SPAC or via a NASDAQ listing.
Hurricane Energy plc ("Hurricane")
The Fund has been a shareholder in Hurricane since March 2013.
In April 2016, Hurricane asked the Fund to invest GBP7 million to
enable it to commence its workstream. Six months later, when
Hurricane raised additional capital, the Fund invested GBP12.6
million at 34 pence per share. In the mishandled fundraise of June
2017, the Fund invested a further $10 million.
Aside from Kerogen Capital, which until recently was represented
on Hurricane's board, the Fund is Hurricane's largest shareholder
and the only disclosable institutional shareholder. Following last
year's oil price collapse, the Fund added to its shareholding and
currently owns more than 11% of its share capital.
The Fund regards itself as a long-term part owner of Hurricane.
In 2015, the Fund introduced Hurricane to its highly regarded
technical consultants who have engaged constructively with the
company on several occasions. The Fund believes that since 2013, it
has done everything possible to support the business.
Over the last six months, the Fund has experienced a dramatic
deterioration in the way that Hurricane is engaging with the Fund.
This is consistent with what the Fund considers to be inadequate,
confusing and poor messaging to market participants.
Within its regulatory news service announcement of 11 September
2020, Hurricane stated that it would be "engaging with all our key
stakeholders regarding our formal work programme and financial
arrangements and updating the market". On 8 October 2020, Hurricane
stated that "as disclosed in the interim results announcement, the
Company intends to engage with all key stakeholders regarding its
forward work programme, capital allocation and financing
arrangements". During September and October 2020, the Fund
suggested, following discussions with other Hurricane shareholders,
that it should allocate a portion of its cash to buy in some of the
Hurricane loan notes at below 50% of par value. The Chairman of
Hurricane had previously told the Fund that he regarded such a
purchase as "a commercial no brainer". No update on bond purchases
or capital allocation has been provided to the Fund or the
market.
On 18 December 2020, the Chief Executive of Hurricane told the
Fund that he would ask Hurricane's lawyers if, given that there had
been no covenant breaches and repayment was more than 18 months
away, bond holder consent would be required before the company
could enter into financial commitments on its forward workstream
and capital allocation. He said that he would revert back to the
Fund. The Fund followed up in writing on this point on 8, 13, 26,
27 and 30 January 2021. On 31 January 2021, the Chief Executive
responded to say that they had been advised to "be engaging with
the bond holders". There was no answer to the question as to
whether consent would be required.
On 8 January 2021, the Fund shared its updated technical report
with Hurricane. This stated why the Fund and its consultants
believe that the board of Hurricane does not seem to be focusing on
the upside potential of the fractured basement play within
Hurricane's licences. The Fund sought an explanation as to why
Hurricane was not keen to tie back the existing Lincoln Crestal
well which was reported to have tested at a sustained commercial
rate. Production from Lincoln could significantly increase overall
output with minimal pressure drawdown at Lancaster. The Fund
believes that the Lancaster basement play may contain resources
greatly in excess of the pool currently being developed by the
Lancaster EPS.
At the date of this report, the Fund has not been provided with
any explanation. On 14 February 2021, the Fund wrote to Hurricane
requesting a call between Hurricane and its technical consultants.
Despite follow up by the Fund, Hurricane has failed to arrange such
a call.
On 14 February 2021, the Fund wrote to the Chief Executive of
Hurricane requesting that Crystal Amber nominates a director to the
board of Hurricane. Other than responding to note that the request
had been shared with the board of Hurricane, the Fund has received
no response to this request.
On 2 March 2021, Hurricane stated that within its stakeholder
engagement, "discussions on the Company's formal work programme,
strategy, financing and balance sheet recapitalisation are
ongoing". As described above, the Fund has had no such discussions
with Hurricane,
The Fund notes that the seven board members of Hurricane own
shares with a total value of GBP60,000.
The Fund is no longer prepared to be excluded from participating
in the evaluation of impending critical decisions by those who have
virtually no skin in the game. The Fund always prefers to engage
privately and constructively with its investee companies. However,
the Fund has found the board of Hurricane to be both indecisive and
obstructive. Therefore, it now intends to take appropriate action
in order to maximise Hurricane's potential.
A trading update in January 2021 highlighted how cash generation
has recently improved as a result of the recovery in the oil price,
with the company generating $19 million in the month of December
2020 alone, taking cash to $106 million. The Fund notes that the
price of Brent crude has recently continued its strong recovery,
from $38 per barrel in October 2020 to more than $60 a barrel. The
Fund believes that in 2021, this increase alone should add more
than $100 million in cash to Hurricane. It should also
significantly increase the value of Hurricane's other, hitherto,
untapped resources if this level is maintained.
Leaf Clean Energy Company ("Leaf")
Leaf delisted in January 2020, following the return of proceeds
from the sale of its interest in Invenergy. The company is in the
process of completing tax returns for submission to the Internal
Revenue Service in connection with capital gains tax applicable to
the sale. Leaf issued an update to shareholders advising of the
expected timescales of this process and the quantum of the return.
Accordingly, the holding in Leaf has been revalued by the Fund to
reflect these expectations.
Hedging activity
The Fund did not engage in hedging activity during the
period.
Realisations
Over the period, the Fund realised losses of GBP9.1 million.
These relate mainly to the exit of Redde Northgate plc, which
realised a loss of GBP9.4 million. A partial exit from Board
Intelligence Ltd realised a gain of GBP1.8 million.
Outlook
Both during the period under review and since, the Fund has
worked closely and intensely with its portfolio companies.
Prospects at De La Rue are better than at any time during the
Fund's presence on its register. The Fund has succeeded in ensuring
that Allied Minds is now solely focused on realisations and returns
of capital in a timely manner. As the largest shareholder in
Equals, the Fund has not only been a key driver in its improved
operational focus but in its recent strategic repositioning to
capitalise on exciting opportunities within decentralised finance.
At GI Dynamics, the Fund has transformed the board and its
available skill set.
Crystal Amber Asset Management (Guernsey) Limited
3 March 2021
Condensed Statement of Profit or Loss and Other Comprehensive
Income (Unaudited)
For the six months ended 31 December 2020
Six months ended 31 December Six months ended 31 December
2020 2019
(Unaudited) (Unaudited)
Revenue Capital Total Revenue Capital Total
Notes GBP GBP GBP GBP GBP GBP
Income
Dividend income from
listed investments 269,645 - 269,645 3,187,696 - 3,187,696
Interest received - - - 2,846 - 2,846
------------ ------------ ---------- ------------- -------------
269,645 - 269,645 3,190,542 - 3,190,542
Net gains/(losses) on
financial assets
designated at FVTPL and
derivatives held for
trading:
Equities
Net realised
(losses)/gains 4 - (3,000,627) (3,000,627) - 6,436,556 6,436,556
Movement in unrealised
losses 4 - 30,709,787 30,709,787 - (61,257,939) (61,257,939)
Debt instruments
Movement in unrealised
gains 4 - 3,171,912 3,171,912 - 102,503 102,503
Derivative financial
instruments
Net realised losses 4 - (6,114,887) (6,114,887) - (1,159,632) (1,159,632)
Movement in unrealised
(losses)/gains 4 - (3,908,027) (3,908,027) - (6,503,873) (6,503,873)
- 20,858,158 20,858,158 - (62,382,385) (62,382,385)
------------ ------------ ------------ ---------- ------------- -------------
Total income/(expense) 269,645 20,858,158 21,127,803 3,190,542 (62,382,385) (59,191,843)
------------ ------------ ------------ ---------- ------------- -------------
Expenses
Transaction costs - 29,234 29,234 - 330,788 330,788
Exchange movements on
revaluation of
investments and
working capital 528,477 1,511,639 2,040,116 134,996 607,773 742,769
Management fees 10 737,204 - 737,204 1,628,161 - 1,628,161
Directors' remuneration 65,000 - 65,000 78,804 - 78,804
Administration fees 67,424 - 67,424 114,150 - 114,150
Custodian fees 30,297 - 30,297 50,808 - 50,808
Audit fees 17,550 - 17,550 14,100 - 14,100
Facility fees 6 265,941 - 265,941 - - -
Other expenses 161,344 - 161,344 184,918 - 184,918
------------ ------------ ---------- ------------- -------------
1,873,237 1,540,873 3,414,110 2,205,937 938,561 3,144,498
------------
(Loss)/return for the
period (1,603,592) 19,317,285 17,713,693 984,605 (63,320,946) (62,336,341)
============ ============ ============ ========== ============= =============
Basic and diluted
(loss)/earnings per
share (pence) 2 (1.80) 21.65 19.85 1.04 (66.88) (65.84)
============ ============ ============ ========== ============= =============
All items in the above statement derive from continuing
operations.
The total column of this statement represents the Company's
Statement of Profit or Loss and Other Comprehensive Income prepared
in accordance with IFRS. The supplementary information on the
allocation between revenue return and capital return is presented
under guidance published by the AIC.
The Notes to the Unaudited Condensed Financial Statements form
an integral part of these Interim Financial Statements.
Condensed Statement of Financial Position (Unaudited)
As at 31 December 2020
As at As at As at
31 December 30 June 31 December
2020 2020 2019
(Unaudited) (Audited) (Unaudited)
Assets Notes GBP GBP GBP
Cash and cash equivalents 237,957 5,916,155 818,969
Trade and other receivables 151,334 2,610,053 471,068
Financial assets designated at FVTPL and derivatives held
for trading 4 111,889,639 89,066,925 169,258,239
Total assets 112,278,930 97,593,133 170,548,276
------------- ------------- -------------
Liabilities
Trade and other payables 182,898 198,172 2,653,945
Loan facility 6 3,205,825 - -
Total liabilities 3,388,723 198,172 2,653,945
------------- ------------- -------------
Equity
Capital and reserves attributable to the Company's equity
shareholders
Share capital 7 997,498 996,248 994,998
Treasury shares reserve 8 (18,485,298) (12,265,601) (10,711,341)
Distributable reserve 90,579,709 90,579,709 90,579,708
Retained earnings 35,798,298 18,084,605 87,030,966
Total equity 108,890,207 97,394,961 167,894,331
------------- ------------- -------------
Total liabilities and equity 112,278,930 97,593,133 170,548,276
------------- ------------- -------------
NAV per share (pence) 3 128.99 106.02 179.21
============= ============= =============
The Interim Financial Statements were approved by the Board of
Directors and authorised for issue on 3 March 2021.
Christopher Waldron Jane Le Maitre
Chairman Director
3 March 2021 3 March 2021
The Notes to the Unaudited Condensed Financial Statements form
an integral part of these Interim Financial Statements.
Condensed Statement of Changes in Equity (Unaudited)
For the six months ended 31 December 2020
Treasury
Share shares Distributable Retained earnings Total
Capital reserve Reserve Capital Revenue Total Equity
Notes GBP GBP GBP GBP GBP GBP GBP
Opening
balance at 1
July 2020 996,248 (12,265,601) 90,579,709 20,511,896 (2,427,291) 18,084,605 97,394,961
Issue of
Ordinary
shares 7 1,250 - - - - - 1,250
Purchase of
Ordinary
shares into
Treasury 8 - (6,219,697) - - - - (6,219,697)
Return for the
period - - - 19,317,285 (1,603,592) 17,713,693 17,713,693
Balance at 31
December 2020 997,498 (18,485,298) 90,579,709 39,829,181 (4,030,883) 35,798,298 108,890,207
======== ============= ============== =========== ============ =========== ============
For the six months ended 31 December 2019
Treasury
Share shares Distributable Retained earnings Total
Capital reserve Reserve Capital Revenue Total Equity
Notes GBP GBP GBP GBP GBP GBP GBP
Opening
balance
at 1 July
2019 993,748 (6,895,640) 95,310,182 152,452,180 (3,084,873) 149,367,307 238,775,597
Issue of
Ordinary
shares 7 1,250 - - - - - 1,250
Purchase
of
Ordinary
shares
into
Treasury 8 - (3,815,701) - - - - (3,815,701)
Dividends
paid in
the
period - - (4,730,474) - - - (4,730,474)
Return for
the
period - - - (63,320,946) 984,605 (62,336,341) (62,336,341)
-------- ------------- -------------- ------------- ------------ ------------- -------------
Balance at
31
December
2019 994,998 (10,711,341) 90,579,708 89,131,234 (2,100,268) 87,030,966 167,894,331
======== ============= ============== ============= ============ ============= =============
The Notes to the Unaudited Condensed Financial Statements form
an integral part of these Interim Financial Statements.
Condensed Statement of Cash Flows (Unaudited)
For the six months ended 31 December 2020
Six months Six months
ended ended
31 December 31 December
2020 2019
(Unaudited) (Unaudited)
GBP GBP
Cash flows from operating activities
Dividend income received from listed equity investments 269,645 2,823,185
Bank interest received - 3,847
Management fees paid (737,204) (2,457,983)
Performance fee paid - (2,456,957)
Directors' fees paid (65,000) (82,500)
Other expenses paid (341,248) (432,972)
------------- -------------
Net cash outflow from operating activities (873,807) (2,603,380)
------------- -------------
Cash flows from investing activities
Purchase of equity investments (28,684,716) (45,498,009)
Sale of equity investments 50,502,804 55,148,758
Purchase of debt instruments (385,683) (1,827,410)
Sale of debt instruments - 1,892,069
Purchase of derivative financial instruments (32,222,870) (3,521,230)
Sale of derivative financial instruments 9,289,813 2,853,240
Transaction charges on purchase and sale of investments (22,169) (361,109)
------------- -------------
Net cash (outflow)/inflow from investing activities (1,522,821) 8,686,309
------------- -------------
Cash flows from financing activities
Proceeds from loan facility 12,370,000 -
Repayments of loan facility (9,439,633) -
Proceeds from issue of Ordinary Shares 1,250 1,250
Purchase of Ordinary shares into Treasury (6,213,187) (3,815,701)
Dividends paid - (2,381,424)
------------- -------------
Net cash outflow from financing activities (3,281,570) (6,195,875)
------------- -------------
Net decrease in cash and cash equivalents during the period (5,678,198) (112,946)
Cash and cash equivalents at beginning of period 5,916,155 931,915
Cash and cash equivalents at end of period 237,957 818,969
============= =============
The Notes to the Unaudited Condensed Financial Statements form
an integral part of these Interim Financial Statements.
Notes to the Unaudited Condensed Financial Statements
For the six months ended 31 December 2020
General Information
Crystal Amber Fund Limited (the "Company") was incorporated and
registered in Guernsey on 22 June 2007 and is governed in
accordance with the provisions of the Companies Law. The registered
office address is PO Box 286, Floor 2, Trafalgar Court, Les
Banques, St Peter Port, Guernsey, GY1 4LY. The Company was
established to provide shareholders with an attractive total return
which is expected to comprise primarily capital growth with the
potential for distributions of up to 5 pence per share per annum
following consideration of the accumulated retained earnings as
well as the unrealised gains and losses at that time. The Company
seeks to achieve this through investment in a concentrated
portfolio of undervalued companies, which are expected to be
predominantly, but not exclusively, listed or quoted on UK markets
and which have a typical market capitalisation of between GBP100
million and GBP1,000 million.
GI Dynamics Inc., is a subsidiary of the Company and was
incorporated in Delaware. As at 31 December 2020, it had five
wholly-owned subsidiaries and its principal place of business is
Boston. Refer to Note 10 for further information.
The Company's Ordinary shares were admitted to trading on AIM,
on 17 June 2008. The Company is also a member of the AIC.
All capitalised terms are defined in the Glossary of Capitalised
Defined Terms unless separately defined.
1. SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of
these Interim Financial Statements are set out below. These
policies have been consistently applied to those balances
considered material to the Interim Financial Statements throughout
the current period, unless otherwise stated.
Basis of preparation
The Interim Financial Statements have been prepared in
accordance with IAS 34, Interim Financial Reporting.
The Interim Financial Statements do not include all the
information and disclosures required in the Annual Financial
Statements and should be read in conjunction with the Company's
Annual Financial Statements for the year to 30 June 2020. The
Annual Financial Statements have been prepared in accordance with
IFRS.
The same accounting policies and methods of computation are
followed in the Interim Financial Statements as in the Annual
Financial Statements for the year ended 30 June 2020.
The presentation of the Interim Financial Statements is
consistent with the Annual Financial Statements. Where
presentational guidance set out in the SORP "Financial Statements
of Investment Trust Companies and Venture Capital Trusts" (issued
by the AIC in November 2014 and updated in February 2018 and
October 2019) is consistent with the requirements of IFRS, the
Directors have sought to prepare the Interim Financial Statements
on a basis compliant with the recommendations of the SORP. In
particular, supplementary information which analyses the Statement
of Profit or Loss and Other Comprehensive Income between items of a
revenue and capital nature has been presented alongside the total
Statement of Profit or Loss and Comprehensive Income.
Going concern
As at 31 December 2020, the Company had net assets of GBP108.9
million (30 June 2020: GBP97.4 million) and cash balances of GBP0.2
million (30 June 2020: GBP5.9 million) which are sufficient to meet
current obligations as they fall due.
In the period prior to 31 December 2020 and up to the date of
this report, the COVID-19 pandemic has continued to have a negative
impact on the global economy. As this situation is both
unprecedented and evolving, it raises some uncertainties and
additional risks for the Company.
The Directors and Investment Manager are actively monitoring the
potential effect on the Company and its investment portfolio. In
particular, they have considered the potential impact of the
following specific key matters:
-- Unavailability of key personnel at the Investment Manager or Administrator;
-- Increased volatility in the fair value of investments,
including any potential impairment in value; and
-- Increased uncertainty as to the timing and quantum of dividend receipts.
In considering the potential impact of COVID-19 on the Company
and its investment portfolio, the Directors have taken account of
the mitigation measures already in place. At Company level, key
personnel at the Investment Manager and Administrator have
successfully implemented business continuity plans to ensure
business disruption is minimised, including remote working where
required, and all staff are continuing to assume their day-today
responsibilities.
In relation to the Company's investment portfolio, 82% of the
Company's investments are valued by reference to the market bid
price as at the date of this report. As these are quoted prices in
an active market, any volatility in the global economy is therefore
reflected within the value of the financial assets designated at
fair value through profit or loss. As such, the Company has not
included any fair value impairments in relation to its
investments.
Based on the Board's assessment of those matters most likely to
be affected by COVID-19 and taking account of the various risk
mitigation measures already in place, the Directors do not consider
that the effects of COVID-19 are likely to create a material
uncertainty over the assessment of the Company as a going
concern.
On the basis of this review, and after making due enquiries,
including consideration of the continuation vote to
take place at the 2021 AGM (as noted below), the Directors have
a reasonable expectation that the Company has adequate resources to
continue in operational existence for at least 12 months from the
date of approval of this report. Accordingly, they continue to
adopt the going concern basis of accounting in preparing these
financial statements.
Continuation vote
The Company is subject to a continuation vote scheduled to occur
every two years. The next continuation vote will be proposed at the
2021 AGM and will require at least 75% of the votes cast in favour
to pass. In the event that the vote does not receive the required
75% of the votes cast, the Directors are required to formulate
proposals to be put to the shareholders to reorganise, reconstruct,
or wind up the Company.
Segmental reporting
Operating segments are reported in a manner consistent with
internal reporting provided to the chief operating decision maker.
The chief operating decision maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the Board as a whole. The key
measure of performance used by the Board to assess the Company's
performance and to allocate resources is the total return on the
Company's NAV, as calculated under IFRS, and therefore no
reconciliation is required between the measure of profit or loss
used by the Board and that contained in these Interim Financial
Statements.
For management purposes, the Company is domiciled in Guernsey
and is engaged in a single segment of business mainly in one
geographical area, being investment in UK equity instruments, and
therefore the Company has only one operating segment.
2. BASIC AND DILUTED EARNINGS/(LOSS) PER SHARE
Earnings/(loss) per share is based on the following data:
Six months Six months
ended ended
31 December 31 December
2020 2019
(Unaudited) (Unaudited)
Return/(loss) for the period GBP17,713,693 ( GBP 62,336,341)
Weighted average number of issued Ordinary shares 89,227,868 94,680,571
Basic and diluted earnings/(loss) per share (pence) 19.85 (65.84)
------------------------------------------------------ -------------- ------------------
3. NAV PER SHARE
NAV per share is based on the following data:
As at As at As at
31 December 30 June 31 December
2020 2020 2019
(Unaudited) (Audited) (Unaudited)
NAV per Condensed Statement of Financial
Position GBP108,890,207 GBP 97,394,961 GBP167,894,331
Total number of issued Ordinary shares
(excluding Treasury shares) 84,420,000 91,861,567 93,684,567
----------------------------------------------- ----------------------------- ---------------
NAV per share (pence) 128.99 106.02 179.21
----------------------------------------------- ----------------- ----------------------------- ---------------
4. FINANCIAL ASSETS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR
LOSS AND DERIVATIVES HELD FOR TRADING
1 July 1 July 1 July
2020 to 2019 to 2019 to
31 December 30 June 31 December
2020 2020 2019
(Unaudited) (Audited) (Unaudited)
GBP GBP GBP
Equity investments 95,312,797 83,197,300 165,250,604
Debt instruments 3,645,619 5,848,545 4,002,635
---------------------------------------------------------- ----------------------- -------------- -------------
Financial assets designated at FVTPL 98,958,416 89,045,845 169,253,239
Derivative financial instruments held for trading 12,931,223 21,080 5,000
---------------------------------------------------------- -----------------------
Total financial assets designated at FVTPL and
derivatives held for trading 111,889,639 89,066,925 169,258,239
---------------------------------------------------------- ----------------------- -------------- -------------
Equity investments
Cost brought forward 167,187,388 183,283,825 183,283,825
Purchases 36,502,739 59,441,534 45,498,009
Sales (50,584,763) (77,221,490) (55,148,758)
Net realised (losses)/gains (3,000,627) 1,870,189 6,436,556
Adjustment to cost brought forward - (186,670) -
----------------------- --------------
Cost carried forward 150,104,737 167,187,388 180,069,632
---------------------------------------------------------- ----------------------- -------------
Unrealised (losses)/gains brought forward (84,056,730) 47,197,282 47,197,282
Movement in unrealised losses 30,709,787 (131,440,682) (61,257,939)
Adjustment to unrealised gains brought forward - 186,670 -
---------------------------------------------------------- ----------------------- -------------- -------------
Unrealised losses carried forward (53,346,943) (84,056,730) (14,060,657)
---------------------------------------------------------- ----------------------- -------------- -------------
Effect of exchange rate movements on revaluation (1,444,997) 66,642 (758,371)
---------------------------------------------------------- ----------------------- -------------- -------------
Fair value of equity investments 95,312,797 83,197,300 165,250,604
---------------------------------------------------------- ----------------------- -------------- -------------
Debt instruments
Cost brought forward 8,104,315 3,950,568 3,950,568
Purchases 4,056,625 4,153,747 -
Conversion of loans (8,902,986) - -
Cost carried forward 3,257,954 8,104,315 3,950,568
---------------------------------------------------------- ----------------------- -------------- -------------
Unrealised (losses)/gains brought forward (2,004,674) 660,939 968,535
Movement in unrealised gains/(losses) 3,171,912 (2,665,613) 102,503
---------------------------------------------------------- ----------------------- -------------- -------------
Unrealised gains/(losses) carried forward 1,167,238 (2,004,674) 1,071,038
---------------------------------------------------------- ----------------------- -------------- -------------
Effect of exchange rate movements on revaluation (779,573) (251,096) (1,018,971)
---------------------------------------------------------- -------------- -------------
Fair value of debt instruments 3,645,619 5,848,545 4,002,635
---------------------------------------------------------- ----------------------- -------------- -------------
Total financial assets designated at FVTPL 98,958,416 89,045,845 169,253,239
---------------------------------------------------------- ----------------------- -------------- -------------
Derivative financial instruments held for trading
Cost brought forward - 712,142 712,142
Purchases 32,222,870 6,237,568 3,521,230
Sales (9,289,813) (14,091,736) (2,853,240)
Net realised (losses)/gains (6,114,887) 7,142,026 (1,159,632)
---------------------------------------------------------- ----------------------- -------------- -------------
Cost carried forward 16,818,170 - 220,500
---------------------------------------------------------- ----------------------- -------------- -------------
Unrealised gains brought forward 21,080 6,288,373 6,288,373
Movement in unrealised (losses)/gains (3,908,027) (6,267,293) (6,503,873)
---------------------------------------------------------- ----------------------- -------------- -------------
Unrealised (losses)/gains carried forward (3,886,947) 21,080 (215,500)
---------------------------------------------------------- -------------- -------------
Fair value of derivatives held for trading 12,931,223 21,080 5,000
---------------------------------------------------------- ----------------------- -------------- -------------
Total financial assets designated at FVTPL and
derivatives held for trading 111,889,639 89,066,925 169,258,239
---------------------------------------------------------- ----------------------- -------------- -------------
The following table details the Company's positions in
derivative financial instruments:
Nominal amount Value
(Unaudited) (Unaudited)
31 December 2020 GBP
Derivative financial instruments
De La Rue plc - contracts for difference 3,998,312 6,717,164
Allied Minds plc - contracts for difference 7,320,182 2,379,059
Camellia plc - contracts for difference 30,000 2,130,000
Kenmare Resources plc - contracts for difference 550,000 1,705,000
11,898,494 12,931,223
-------------------------------------------------- --------------- ------------
Nominal amount Value
(Audited) (Audited)
30 June 2020 GBP
Derivative financial instruments
GI Dynamics Inc. warrant (Expiry: January 2025) 229,844,650 21,080
-------------------------------------------------- --------------- ------------
229,844,650 21,080
-------------------------------------------------- --------------- ------------
5. FINANCIAL INSTRUMENTS
Fair value measurements
The Company measures fair values using the following fair value
hierarchy that prioritises the inputs to valuation techniques used
to measure fair value. The hierarchy gives the highest priority to
unadjusted quoted prices in active markets for identical assets or
liabilities (Level 1 measurements) and the lowest priority to
unobservable inputs (Level 3 measurements). The three levels of the
fair value hierarchy under IFRS 13 are as follows:
Level 1: Quoted price (unadjusted) in an active market for an identical instrument.
Level 2: Valuation techniques based on observable inputs, either
directly (i.e. as prices) or indirectly (i.e. derived from prices).
This category includes instruments valued using: quoted prices in
active markets for similar instruments; quoted prices for identical
or similar instruments in markets that are considered less than
active; or other valuation techniques for which all significant
inputs are directly or indirectly observable from market data.
Level 3: Valuation techniques using significant unobservable
inputs. This category includes all instruments for which the
valuation technique includes inputs that are not based on
observable data, and the unobservable inputs have a significant
effect on the instrument's valuation. This category includes
instruments that are valued based on quoted prices for similar
instruments for which significant unobservable adjustments or
assumptions are required to reflect differences between the
instruments.
The level in the fair value hierarchy within which the fair
value measurement is categorised in its entirety is determined on
the basis of the lowest level input that is significant to the fair
value measurement. For this purpose, the significance of an input
is assessed against the fair value measurement in its entirety. If
a fair value measurement uses observable inputs that require
significant adjustment based on unobservable inputs, that
measurement is a Level 3 measurement. Assessing the significance of
a particular input to the fair value measurement in its entirety
requires judgement, considering factors specific to the asset or
liability.
The determination of what constitutes 'observable' requires
significant judgement by the Company. The Company considers
observable data to be that market data that is readily available,
regularly distributed or updated, reliable and verifiable, not
proprietary, and provided by independent sources that are actively
involved in the relevant market.
The objective of the valuation techniques used is to arrive at a
fair value measurement that reflects the price that would be
received if an asset was sold or a liability transferred in an
orderly transaction between market participants at the measurement
date.
The following tables analyse, within the fair value hierarchy,
the Company's financial assets measured at fair value at 31
December 2020 and 30 June 2020:
Level 1 Level 2 Level 3 Total
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
31 December
2020 GBP GBP GBP GBP
Financial
assets
designated
at FVTPL and
derivatives
held for
trading:
Equity
investments
- listed
equity
investments 78,265,999 - - 78,265,999
Equity
investments
- unlisted
equity
investments - - 17,046,798 17,046,798
Debt
instruments
- loan
notes - - 3,645,619 3,645,619
Derivatives
- contracts
for
difference
instruments 12,931,223 - - 12,931,223
91,197,222 - 20,692,417 111,889,639
------------- ------------------------------------------ ----------------------------- ----------------------------- -------------------------
Level 1 Level 2 Level 3 Total
(Audited) (Audited) (Audited) (Audited)
30 June 2020 GBP GBP GBP GBP
Financial assets designated at FVTPL and derivatives held for
trading:
Equities - listed equity investments 74,747,380 2,003,070 - 76,750,450
Equities - unlisted equity investments - - 6,446,850 6,446,850
Debt - loan notes - 610,415 5,238,130 5,848,545
Derivatives - warrant instruments - 21,080 - 21,080
74,747,380 2,634,565 11,684,980 89,066,925
----------------------------------------------------------------- ------------ ---------- ----------- ------------
The Level 1 equity investments were valued by reference to the
closing bid prices in each investee company on the reporting
date.
The Level 3 equity investment in Board Intelligence was valued
by reference to the valuation multiples of publicly-listed cloud
software companies, after applying a discount equivalent to that
which prevailed at the time of investment in March 2018. The Level
3 equity investment in Leaf Clean Energy Company was valued by
reference to the expected proceeds from the company's wind down, as
guided by management in its last shareholder letter. The Level 3
equity investment in GI Dynamics Inc was valued by reference to its
discounted cash flow valuation. The loan notes were classified as
Level 3 debt instruments as there was no observable market data.
The Board has concluded that the fair value of the loan note is
approximate to the loan principal plus accrued interest.
For financial instruments not measured at FVTPL, the carrying
amount is approximate to their fair value.
Fair value hierarchy - Level 3
The following table shows a reconciliation from the opening
balances to the closing balances for fair value measurements in
Level 3 of the fair value hierarchy:
Six months Year Six months
ended Ended Ended
30
31 December June 31 December
2020 2020 2019
(Unaudited) (Audited) (Unaudited)
GBP GBP GBP
Opening balance 11,684,980 9,561,369 9,561,369
Leaf Clean Energy Company - Transfer to Level 3 on 30 January 2020 - 105,908 -
GI Dynamics Inc - Transfer to Level 3 on 22 July 2020 1,494,943 - -
Purchases 11,784,561 3,551,095 -
Movement in unrealised gains/(losses) 7,318,480 (1,851,998) 705,261
Sales/conversion of loans (11,149,307) - -
Net realised gain 1,830,764 - -
Effect of exchange rate movements (2,272,004) 318,606 (134,996)
Closing balance 20,692,417 11,684,980 10,131,634
-------------------------------------------------------------------- -------------- ------------ ------------
The Company recognises transfers between levels of the fair
value hierarchy on the date of the event of change in circumstances
that caused the transfer.
During the period, the Company's equity investment in GI
Dynamics Inc. was transferred to Level 3 following the delisting of
the investee company on 22 July 2020.
Assuming all other variables are held constant:
-- If unobservable inputs in Level 3 debt investments had been
5% higher/lower (30 June 2020: 5% higher/lower), the Company's
return and net assets for the period ended 31 December 2020 would
have increased/decreased by GBP182,281 (30 June 2020:
GBP261,907);
-- If unobservable inputs in Level 3 equity investments had been
25% higher/lower (30 June 2020: 25% higher/lower), the Company's
return and net assets for the period ended 31 December 2020 would
have increased/decreased by GBP4,261,700 (30 June 2020:
GBP1,611,713); and
-- There would have been no impact on the other equity reserves.
6. LOAN FACILITY
On 1 July 2020, the Company entered into a loan facility with
Intertrader Limited whereby it transferred an amount of equity
holdings with a value of GBP19.1 million as at 1 July 2020 to
Intertrader Limited to be held as collateral for CFD instruments.
The interest charged on the loan facility is 2% per annum of the
daily overnight loan balance. The Company may draw on a loan
facility of up to 25% of the value of the initial equity holdings
transferred. The balance of this facility is as follows:
As at As at
31 December 30 June
2020 2020
(Unaudited) (Audited)
GBP GBP
Opening balance - -
Drawdowns 12,370,000 -
Repayments by way of sale of CFD instruments (9,289,813) -
Repayments by way of dividends receivable on CFD instruments (149,820) -
Facility fees payable 265,941 -
Facility commissions payable 9,517 -
Closing balance 3,205,825 -
------------------------------------------------------------- ---------------------- ----------------
As at the date of this report, the amount owed to Intertrader
Limited under the loan facility was GBP1.7 million.
7. SHARE CAPITAL AND RESERVES
The authorised share capital of the Company is GBP3,000,000
divided into 300 million Ordinary shares of GBP0.01 each.
The issued share capital of the Company, including Treasury
shares, is comprised as follows:
31 December 2020 30 June 2020
(Unaudited) (Audited)
Number GBP Number GBP
Issued, called up and fully paid Ordinary shares of GBP0.01 each 99,749,762 997,498 99,624,762 996,248
================================================================== =========== ======== =========== ========
During the period, the Company created and issued 125,000
Ordinary shares of GBP0.01 divided equally amongst five charitable
organisations, the nominal value of which has been paid by Richard
Bernstein, who is a shareholder of the Company, a director and
shareholder of the Investment Manager and a member of the
Investment Adviser.
8. TREASURY SHARES RESERVE
Six months ended Year ended
31 December 2020 30 June 2020
(Unaudited) (Audited)
Number GBP Number GBP
Opening balance (7,763,195) (12,265,601) (3,527,782) (6,895,640)
Treasury shares purchased
during the period/year (7,566,567) (6,219,697) (4,235,413) (5,369,961)
Closing balance (15,329,762) (18,485,298) (7,763,195) (12,265,601)
=========================== ============= ============== ============= =============
During the period ended 31 December 2020: 7,566,567 (2019:
2,287,413) Treasury shares were purchased at an average price of
82.20 pence per share (2019: 166.81 pence per share), representing
an average discount to NAV at the time of purchase of 9.18% (2019:
16.4%). During the period ended 31 December 2020, Nil (2019: Nil)
Treasury shares were sold.
9. DIVIDS
On 23 December 2020, the Company declared an interim dividend of
GBP2,111,638, equating to 2.5 pence per Ordinary share, which was
paid on 5 February 2021 to shareholders on the register following
the period end on 8 January 2021, as further disclosed in Note
11.
10. RELATED PARTIES
Richard Bernstein is a director and a member of the Investment
Manager, a member of the Investment Adviser and a holder of 10,000
(30 June 2020: 10,000) Ordinary shares in the Company, representing
0.01% (30 June 2020: 0.01%) of the voting share capital of the
Company at 31 December 2020.
During the period the Company incurred management fees of
GBP737,204 (2019: GBP1,628,161) none of which was outstanding at 31
December 2020 (30 June 2020: GBPNil). No performance fees were
payable during the period (2019: GBPNil) (30 June 2020: GBPNil) and
none outstanding at the period/year end.
As at 30 June 2020, the Company held 94.1% (30 June 2020: 73.1%)
of the issued shares of GI Dynamics Inc., meaning that GID is an
unconsolidated subsidiary. GID was incorporated in Delaware, had
five wholly-owned subsidiaries and its principal place of business
is Boston. The five subsidiaries were as follows:
-- GI Dynamics Securities Corporation, a Massachusetts-incorporated nontrading entity;
-- GID Europe Holding B.V., a Netherlands-incorporated nontrading holding company;
-- GID Europe B.V., a Netherlands-incorporated company that
conducts certain European business operations;
-- GID Germany GmbH, a German-incorporated company that conducts
certain European business operations; and
-- GI Dynamics Australia Pty Ltd, an Australian-incorporated
company that conducts Australian business operations.
Under the terms of the IMA, the Investment Manager is entitled
to a performance fee in certain circumstances. This fee is
calculated by reference to the increase in NAV per Ordinary share
over the course of each performance period.
Payment of the performance fee is subject to:
1. the achievement of a performance hurdle condition: the NAV
per Ordinary share at the end of the relevant performance period
must exceed an amount equal to the placing price, increased at a
rate of: (i) 7% per annum on an annual compounding basis in respect
of that part of the performance period which falls from (and
including) the date of Admission up to (but not including) the date
of the 2013 Admission; (ii) 8% per annum on an annual compounding
basis in respect of that part of the performance period which falls
from (and including) the date of the 2013 Admission up to (but not
including) the date of the 2015 Admission and (iii) 10% per annum
on an annual compounding basis in respect of that part of the
performance period which falls from (and including) the date of the
2015 Admission up to the end of the relevant performance period
with all dividends and other distributions paid in respect of all
outstanding Ordinary shares (on a per share basis) during any
performance period being deducted on their respective payment dates
(and after compounding the distribution amount per share at the
relevant annual rate or rates for the period from and including the
payment date to the end of the performance period) ("the Basic
Performance Hurdle"). Such Basic Performance Hurdle at the end of a
performance period is compounded at the relevant annual rate to
calculate the initial per share hurdle level for the next
performance period, which will subsequently be adjusted for any
dividends or other distributions paid in respect of all outstanding
Ordinary shares during that performance period, and
2. the achievement of a "high-water mark": the NAV per Ordinary
share at the end of the relevant performance period must be higher
than the highest previously reported NAV per Ordinary share at the
end of a performance period in relation to which a performance fee,
if any, was last earned (less any dividends or other distributions
in respect of all outstanding Ordinary shares declared (on a per
share basis) since the end of the performance period in relation to
which a performance fee was last earned).
As the NAV per share at 31 December 2020 did not exceed the
Basic Performance Hurdle of 252.34 pence per share at that date, a
performance fee has not been accrued in the Interim Financial
Statements. In the event that, on 30 June 2021, the NAV per share
exceeds both the performance hurdle and the high watermark, the
performance fee will be an amount equal to 20% of the excess of the
NAV per share at that date over the higher of these hurdles
multiplied by the time weighted average number of Ordinary shares
in issue during the year ending 30 June 2021. Depending on whether
the Ordinary shares are trading at a discount or a premium to the
Company's NAV per share at 30 June 2021, the performance fee will
be either payable in cash (subject to the Investment Manager being
required to use the cash payment to purchase Ordinary shares in the
market) or satisfied by the sale of Ordinary shares out of Treasury
or by the issue of new fully paid Ordinary shares at the mid-market
closing price on 30 June 2021, respectively.
As at 31 December 2020, the Investment Manager held 6,994,397
Ordinary shares (30 June 2020: 7,037,991) of the Company,
representing 8.29% (30 June 2020: 7.66%) of the voting share
capital.
The interests of the Directors in the share capital of the
Company at the period/year end, and as at the date of this report,
are as follows:
31 December 2020 30 June 2020
Number of Ordinary Total voting rights Number of Ordinary Total voting rights
shares shares
Christopher Waldron(1) 30,000 0.04% 30,000 0.03%
Jane Le Maitre(2) 13,500 0.02% 13,500 0.01%
Fred Hervouet 7,500 0.01% 7,500 0.01%
------------------------ ---------------------- -------------------- ---------------------- --------------------
Total 51,000 0.07% 51,000 0.05%
------------------------ ---------------------- -------------------- ---------------------- --------------------
(1) Chairman of the Company
(2) Ordinary Shares held indirectly
All related party transactions are carried out on an arm's
length basis.
11. POST BALANCE SHEET EVENTS
The Company declared an interim dividend of GBP2,111,638,
equating to 2.5 pence per Ordinary share, which was paid on 5
February 2021 to shareholders on the register on 8 January
2021.
The Company purchased 200,000 of its own Ordinary Shares during
the period between 1 January 2021 and 3 March 2021, which were held
as Treasury shares. Following these purchases, the total number of
Ordinary Shares held as Treasury shares by the Company is
15,529,762 .
On 16 February 2021, the Company reported that its unaudited NAV
at 31 January 2021 was 124.4 pence per Ordinary share.
12. AVAILABILITY OF INTERIM REPORT
Copies of the Interim Report will be available to download from
the Company's website www.crystalamber.com.
Glossary of Capitalised Defined Terms
"AGM" means the annual general meeting of the Company;
"AIC" means the Association of Investment Companies;
"AIM" means the Alternative Investment Market of the London
Stock Exchange;
"Annual Financial Statements" means the audited annual financial
statements of the Company, including the Statement of Profit or
Loss and Other Comprehensive Income, the Statement of Financial
Position, the Statement of Changes in Equity, the Statement of Cash
Flows and associated notes;
"Board" or "Directors" or "Board of Directors" means the
directors of the Company;
"Brexit" means the departure of the UK from the European
Union;
"CEO" means chief executive officer;
"CFD" means Contracts for Difference;
"CFO" means chief financial officer;
"Company" or "Fund" means Crystal Amber Fund Limited;
"Companies Law" means the Companies (Guernsey) Law, 2008, (as
amended);
"DeFi" means D ecentralised Finance;
"EBITDA" means earnings before interest, taxes, depreciation and
amortisation;
"EPS" or "Early Production System" means producing oil through a
temporary processing system and exporting the processed crude to a
storage vessel for subsequent transport to market;
"Equals" means Equals Group plc;
"GM" or "General Meeting" means a general meeting of the
Company;
"ESG" means Environmental, Social and Governance, referring to
the three central factors in measuring the sustainability and
societal impact of an investment in a company or business;
"FDA" means food and drug administration;
"FTSE" means Financial Times Stock Exchange;
"FVTPL" means Fair Value Through Profit or Loss;
"FY22" means the financial year 2022;
"GDP" means gross domestic product, a monetary measure of the
market value of all the final goods and services produced in a
specific time period;
"GID" or "GI Dynamics" means GI Dynamics, Inc.;
"HQ" means headquarters;
"IAS" means international accounting standards as issued by the
Board of the International Accounting Standards Committee;
"IFRS" means the International Financial Reporting Standards,
being the principles-based accounting standards, interpretations
and the framework by that name issued by the International
Accounting Standards Board, as adopted by the European Union;
"IMA" means the investment management agreement between the
Company and the Investment Manager dated 16 June 2008, as amended
on 21 August 2013, further amended on 27 January 2015 and further
amended on 12 June 2018;
"Interim Financial Statements" means the unaudited condensed
interim financial statements of the Company, including the
Condensed Statement of Profit or Loss and Other Comprehensive
Income, the Condensed Statement of Financial Position, the
Condensed Statement of Changes in Equity, the Condensed Statement
of Cash Flows and associated notes;
"Interim Report" means the Company's interim report and
unaudited condensed financial statements for the period ended 31
December;
"Lancaster EPS" means Lancaster Early Production System;
"Market Capitalisation" means the total number of Ordinary
shares of the Company multiplied by the closing share price;
"NAV" or "Net Asset Value" means the value of the assets of the
Company less its liabilities as calculated in accordance with the
Company's valuation policies and expressed in Pounds Sterling;
"NAV per share" means the Net Asset Value per Ordinary share of
the Company and is expressed in pence;
"Ordinary share" means an allotted, called up and fully paid
Ordinary share of the Company of GBP0.01 each;
"Remuneration Report" means part of the Remuneration Statement
which provides information on the remuneration and other financial
benefits paid to the Board of Directors, the Group CEO and the
Group Executive Committee members during the previous financial
period;
"Small Cap Index" means an index of small market capitalisation
companies;
"SMEs" means small and medium-sized enterprises and businesses
whose personnel numbers fall below certain limits. The abbreviation
"SME" is used by international organizations such as the World
Bank, the European Union, the United Nations and the World Trade
Organization;
"SORP" means Statement of Recommended Practice;
"SPAC" mean Special Purpose Acquisition Company;
"Treasury" means the reserve of Ordinary shares that have been
repurchased by the Company;
"Treasury shares" means Ordinary shares in the Company that have
been repurchased by the Company and are held as Treasury
shares;
"UK" or "United Kingdom" means the United Kingdom of Great
Britain and Northern Ireland;
"US" means the means the United States of America, its
territories and possessions, any state of the United States and the
District of Columbia;
"US$" or "$" means United States dollars; and
"GBP" or "Pounds Sterling" or "Sterling" means British pound
sterling and "pence" means British pence.
Directors and General Information
Directors Investment Manager
Christopher Waldron (Chairman) Crystal Amber Asset Management (Guernsey) Limited
Fred Hervouet (Chairman of Remuneration and Management PO Box 286
Engagement Committee) Floor 2, Trafalgar Court
Jane Le Maitre (Chairman of Audit Committee) Les Banques, St Peter Port
Guernsey GY1 4LY
Investment Adviser
Crystal Amber Advisers (UK) LLP Nominated Adviser
17c Curzon Street Allenby Capital Limited
London W1J 5HU 5 St. Helen's Place
London EC3A 6AB
Administrator and Secretary
Ocorian Administration (Guernsey) Limited Legal Advisers to the Company
PO Box 286 As to English Law
Floor 2, Trafalgar Court Norton Rose Fulbright LLP
Les Banques, St Peter Port 3 More London Riverside
Guernsey GYI 4LY London SE1 2AQ
Broker As to Guernsey Law
Winterflood Investment Trusts Carey Olsen
The Atrium Building PO Box 98
Cannon Bridge House Carey House
25 Dowgate Hill Les Banques
London EC4R 2GA St. Peter Port
Guernsey GY1 4BZ
Independent Auditor
KPMG Channel Islands Limited Custodian
Glategny Court Butterfield Bank (Guernsey) Limited
Glategny Esplanade PO Box 25
St. Peter Port Regency Court
Guernsey GY1 1WR Glategny Esplanade
St. Peter Port
Registered Office Guernsey GY1 3AP
PO Box 286
Floor 2, Trafalgar Court Registrar
Les Banques, St Peter Port Link Asset Services
Guernsey GYI 4LY 65 Gresham Street
London EC2V 7NQ
Identifiers
ISIN: GG00B1Z2SL48
Sedol: B1Z2SL4
Ticker: CRS
Website: http://crystalamber.com
LEI: 213800662E2XKP9JD811
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END
IR FLFFAVLIVIIL
(END) Dow Jones Newswires
March 04, 2021 02:00 ET (07:00 GMT)
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