Date: |
30 September 2015 |
On behalf of: |
Western Selection P.L.C. (“Western”
or “the Company") |
Western Selection
P.L.C.
Preliminary announcement of unaudited
results for the year ended 30th June 2015
Western’s objective is to generate growth in value for
shareholders over the medium to long term and pay a progressive
dividend.
Our business model is to take sizeable minority stakes in
relatively small companies, usually immediately before or as their
shares come to market, and have directors in common through which
we can provide advice and support for these growing
companies. These may or may not become associated
companies. The aim is that these Core Holdings will grow to a
stage at which our support is no longer required and our stake can
then be sold over time into the market.
Companies that are targeted as Core Holdings will have an
experienced management team, a credible business model and also
good prospects for growth. Core Holdings may be in any sector
where management feels it has specific competence.
Our objective is not to build a diversified portfolio, but to
identify a limited number of good opportunities for growth in
value. This may well see risk concentrated even further than
it has previously been.
To acquire these stakes in new core investment holdings, we need
to be able to react quickly, and therefore to have readily
available funds to invest. To achieve this we will maintain a
Treasury Operation consisting of a mix of cash, debt facilities and
liquid investments.
Results for the year
The Company’s profit for the year before exceptional items was
£159,000 (2014 - £202,000). During the year Mr D. C. Marshall stepped down as a director of
Creston. Western subsequently sold its investment in Creston plc
for £4,040,000, realising an exceptional gain of £2,615,000.
After this exceptional item our profit for the year was £2,774,000
compared to a profit last year after exceptional items of
£803,000.
Dividend income from Core Holdings has increased slightly to
£238,000 from £229,000 last year. Dividend income from
Treasury Operations decreased slightly from £97,000 last year to
£85,000. Administrative expenses have increased by 3%
reflecting the full year impact of last year’s increase in
directors’ fees.
Shareholders’ funds per share have fallen substantially from
102p to 75p primarily due to the fall in value of our investment in
Northbridge Industrial Services plc. We continue to believe
in the long term prospects for Northbridge Industrial Services
plc.
Dividend
The Company paid an interim dividend of 1.05p per share on
27th March 2015.
A final dividend of 1.05p per share is proposed, making 2.1p for
the year, compared to 2.0p for 2014. The dividend will be
paid on 4th December 2015
to shareholders on the register at the close of business on
20th November 2015.
Core Holdings
Northbridge Industrial Services plc
(“Northbridge”)
Northbridge hires and sells specialist industrial equipment to a
global customer base. It has offices or agents in the U.K.,
U.S.A., Dubai, Germany, Belgium, France, Australia, Singapore, India, Brazil, Korea and Azerbaijan. Customers
include utility companies, the oil and gas sector, shipping,
construction and the public sector. The product range includes
loadbanks, transformers, generators, compressors, loadcells and oil
tools. Further information about Northbridge is available on
their website: www.northbridgegroup.co.uk.
Northbridge will announce its unaudited interim profits after
tax for the six months ended 30th June 2015 on 30th September 2015.
Western acquired a further 25,000 Northbridge shares on
2 June 2015 for £52,000 bringing its
holding to 1,900,000 shares. Western’s holding is 10.2% of
Northbridge’s issued share capital. The value of this
investment at 30th June
2015 was £3,895,000 (2014 - £9,750,000) being 29% (2014 -
53%) of Western’s net assets.
Mr D. C. Marshall is a
non-executive director of Northbridge.
Swallowfield plc (“Swallowfield”)
Swallowfield is a market leader in the development, formulation,
manufacture and supply of cosmetics, toiletries and related
household products for global brands and retailers operating in the
cosmetics, personal care and household goods market. Further
information about Swallowfield is available on their website:
www.swallowfield.com.
Swallowfield announced its annual results to 30th
June 2015 on 22nd
September 2015 and recorded a profit
after tax of £746,000 compared to a profit of £157,000 for the
comparable period last year. No dividends were received from
Swallowfield during the year (2014 – nil). Profits are
expected to recover further in the current year and dividends are
expected to be resumed shortly.
At the reporting date, Western owned 1,869,149 shares which is
16.5% of Swallowfield’s issued share capital. The market
value of this investment on 30th June 2015 had increased by 11% to £2,019,000 from
the value at June 2014 of £1,813,000.
This is 15% (2014 - 10%) of Western’s net assets.
Mr E. J. Beale is a non-executive
director of Swallowfield.
Bilby Plc (“Bilby”)
In July 2015 we invested
£1,500,000 in acquiring 1,875,000 shares in Bilby which is 5.5% of
their issued share capital.
Bilby is an established, and award winning, provider of gas
installation, maintenance and general building services to local
authority and housing associations across London and South East England. They have
a strategy of growing organically and by acquisition. Further
information about Bilby is available on their website:
www.bilbyplc.com.
Bilby announced its results for the 14 month period to
31st March 2015 on 23rd
June 2015 showing a profit after tax
of £1,552,000. It has announced a dividend of 2.32p per share
payable in August which will provide us with income of £43,500.
Hartim Limited (“Hartim”)
Hartim is the unquoted holding company for Tudor Rose
International Limited (“TRI”) which was founded in 1984. It
works closely with a number of leading UK branded fast moving
consumer goods companies, offering a complete sales, marketing and
logistical service. Based in Stroud, Gloucestershire, TRI sells into 78 countries
worldwide including USA,
Spain, Portugal, Italy, Czech
Republic, Russia,
Turkey, South Africa, Saudi
Arabia, UAE, Malaysia,
Australia and China.
Western holds 49.5% of Hartim, which has a 31st December year
end, and which generated trading profits before tax in the year to
30th June 2015 of £68,000.
Turnover in the period was £18,022,000 (2014 - £20,448,000).
Western’s share of a loss after tax, including a charge for
disallowed tax losses, for the twelve months to 30th June 2015 was £5,000 (2014 –profit of
£382,000, after exceptional profit on former Australian subsidiary
of £337,000) and the book value of the investment at 30th June 2015 was £1,223,000 (2014 - £1,228,000)
being 9% (2014 - 7%) of Western’s assets.
Western has two nominees on the Board of Hartim: Mr E. J. Beale and Mr L. H.
Marshall (a director of City Group P.L.C., Western’s company
secretary).
Industrial & Commercial Holdings
PLC (“ICH”)
ICH is a small unquoted PLC in which Western holds a 29.9%
interest. It owns land with potential for residential
planning permission at Milngavie, adjacent to Dougalston golf
course, just north east of Glasgow. ICH is currently making
representations for its land to be included in the local
authority’s next five year plan, but it may take some time for
permission to be received. Mr D. C.
Marshall and Mr J. M.
Robotham are directors of ICH.
City Group P.L.C.
Western holds 48.6% and London Finance & Investment Group
P.L.C. (Western’s largest shareholder) holds 51.4% of City Group
P.L.C., which provides head office and company secretarial services
to both these and
other companies. City Group P.L.C. acts as a shared cost
centre for related party clients and sells surplus time to
unrelated clients. Mr E. J. Beale is
Chief Executive of City Group P.L.C. and Mr D.C. Marshall and Mr J.M. Robotham are directors of City Group
P.L.C.
Treasury Operations
Treasury operations comprise bank borrowing facilities of
£1,500,000 and liquid investments. At the year end we held cash
balances of £3,889,000 (2014 – nil) and liquid investments valued
at £2,450,000 (2014 - £2,910,000). We had no debt at
30th June 2015 (2014 -
£590,000). Since the year end cash balances have reduced by
£1,500,000 due to the investment in Bilby.
Outlook
The outlook for the global equity markets uncertain. In
the short term our shareholders funds per share will continue to
remain volatile reflecting movements in the market and the
non-liquidity of its Core Holdings. We are invested in
sensible businesses whose value we expect will shine through in the
medium to long term, despite any short term hiccups.
D.C. Marshall
Chairman
Unaudited Statement of Comprehensive Income
For the year ended
30th June |
2015 |
|
2014 |
|
£000 |
|
£000 |
|
|
|
|
Income from
investments in: |
|
|
|
Listed strategic
undertakings |
238 |
|
229 |
Other listed
undertakings |
85 |
|
97 |
|
323 |
|
326 |
|
|
|
|
Administrative
expenses |
(324) |
|
(314) |
|
|
|
|
Profit on disposal of
investment in Creston plc |
2,615 |
|
- |
Profit on disposal of
other investments |
143 |
|
440 |
Operating
profit |
2,757 |
|
452 |
|
|
|
|
Share of
(losses)/profits of associated companies before exceptional
items |
(3) |
|
194 |
Share of associated
company’s exceptional item |
- |
|
167 |
Share of
(losses)/profits of associated companies |
(3) |
|
361 |
|
|
|
|
|
|
|
|
Interest
receivable |
41 |
|
20 |
Finance costs |
(11) |
|
(23) |
Profit before
taxation |
2,784 |
|
810 |
Taxation |
(10) |
|
(7) |
Profit after
taxation attributable to equity shareholders |
2,774 |
|
803 |
|
|
|
|
Other comprehensive
income |
|
|
|
Items that may be
reclassified subsequently to profit and loss :- |
|
|
|
Fair value recycled
from equity on disposal |
(1,885) |
|
(440) |
Fair value adjustment
on listed undertakings |
(5,470) |
|
3,642 |
Deferred taxation on
fair values |
137 |
|
(137) |
Total Other
Comprehensive (loss)/profit |
(7,218) |
|
3,065 |
|
|
|
|
Total Comprehensive
(loss)/profit |
(4,444) |
|
3,868 |
|
|
|
|
|
|
|
|
Basic and diluted
profit per share attributable to ordinary equity holders |
15.5p |
|
4.5p |
Unaudited Statement of Changes in Equity
|
Share capital |
Share premium account |
Capital reserve
account |
Unrealised profits on investments |
Share of
undistributed profits/ (losses) of associates |
Realised profits |
Total |
|
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
£000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended
30th June 2014 |
|
|
|
|
|
|
|
Balances at
1st July 2013 |
7,180 |
2,654 |
3 |
3,666 |
(610) |
1,906 |
14,799 |
Profit for the
period |
- |
- |
- |
- |
361 |
442 |
803 |
Items that can be
reclassified to the income statements -Other Comprehensive Income –
Fair values net of tax |
- |
- |
- |
3,065 |
- |
- |
3,065 |
Total Comprehensive
Income |
- |
- |
- |
3,065 |
361 |
442 |
3,868 |
|
|
|
|
|
|
|
|
Transactions with
shareholders |
|
|
|
|
|
|
|
Final dividend paid in
respect of prior year |
- |
- |
- |
- |
- |
(188) |
(188) |
Interim dividends paid
in respect of the year |
- |
- |
- |
- |
- |
(171) |
(171) |
Total transactions
with shareholders |
- |
- |
- |
- |
- |
(359) |
(359) |
Balances at
30th June 2014 |
7,180 |
2,654 |
3 |
6,731 |
(249) |
1,989 |
18,308 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended
30th June 2015 |
|
|
|
|
|
|
|
Balances at
1st July 2014 |
7,180 |
2,654 |
3 |
6,731 |
(249) |
1,989 |
18,308 |
Profit for the
period |
- |
- |
- |
3,019 |
(3) |
(242) |
2,774 |
Items that can be
reclassified to the income statements -Other Comprehensive Income –
Fair values net of tax |
- |
- |
- |
(7,218) |
- |
- |
(7,218) |
Total Comprehensive
Loss |
- |
- |
- |
(4,199) |
(3) |
(242) |
(4,444) |
|
|
|
|
|
|
|
|
Transactions with
shareholders |
|
|
|
|
|
|
|
Final dividend paid in
respect of prior year |
- |
- |
- |
- |
- |
(188) |
(188) |
Interim dividends paid
in respect of the year |
- |
- |
- |
- |
- |
(189) |
(189) |
Total transactions
with shareholders |
- |
- |
- |
- |
- |
(377) |
(377) |
Balances at
30th June 2015 |
7,180 |
2,654 |
3 |
2,532 |
(252) |
1,370 |
13,487 |
Unaudited Statement of Financial Position
At 30th
June |
|
2015 |
|
2014 |
|
|
£000 |
|
£000 |
Non-current
Assets |
|
|
|
|
Investment in
Associates |
|
666 |
|
669 |
Investments classified
as held for sale |
|
8,364 |
|
17,775 |
Trade and other
receivables |
|
660 |
|
660 |
|
|
9,690 |
|
19,104 |
Current
Assets |
|
|
|
|
Trade and other
receivables |
|
24 |
|
24 |
Cash and cash
equivalents |
|
3,889 |
|
- |
|
|
3,913 |
|
24 |
|
|
|
|
|
Current
Liabilities |
|
|
|
|
Trade and other
payables |
|
(116) |
|
(683) |
|
|
|
|
|
Net Current Assets/
(Liabilities) |
|
3,797 |
|
(659) |
|
|
|
|
|
Non-current
Liabilities |
|
|
|
|
Deferred taxation |
|
- |
|
(137) |
Net Assets |
|
13,487 |
|
18,308 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
Share capital |
|
7,180 |
|
7,180 |
Share premium
account |
|
2,654 |
|
2,654 |
Capital reserve
account |
|
3 |
|
3 |
Unrealised profits on
investments |
|
2,532 |
|
6,731 |
Share of undistributed
losses of associates |
|
(252) |
|
(249) |
Realised profits |
|
1,370 |
|
1,989 |
Shareholders' Funds |
|
13,487 |
|
18,308 |
Unaudited Statement of Cash Flow
For the year ended
30th June |
|
2015 |
|
2015 |
|
2014 |
|
2014 |
|
|
£000 |
|
£000 |
|
£000 |
|
£000 |
|
|
|
|
|
|
|
|
|
Profit before
taxation |
|
|
|
2,784 |
|
|
|
810 |
Profit on sale of
Creston plc |
|
|
|
(2,615) |
|
|
|
- |
Profit on sale of
investments |
|
|
|
(143) |
|
|
|
(440) |
Share of results of
associates |
|
|
|
3 |
|
|
|
(361) |
Net interest
(receivable)/payable |
|
|
|
(30) |
|
|
|
3 |
Changes in working
capital |
|
|
|
|
|
|
|
|
(Increase) in trade
and other receivables |
|
|
|
- |
|
|
|
(2) |
Increase/(decrease) in
trade and other payables |
|
|
|
22 |
|
|
|
(3) |
Cash generated by
operations |
|
|
|
21 |
|
|
|
7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxation paid |
|
|
|
(10) |
|
|
|
(7) |
Net interest
received/(paid) |
|
|
|
30 |
|
|
|
(3) |
Net cash
generated/(absorbed) by operations |
|
|
|
41 |
|
|
|
(3) |
|
|
|
|
|
|
|
|
|
Cash flow from
investment activities |
|
|
|
|
|
|
|
|
Loan to associated
company |
|
- |
|
|
|
(660) |
|
|
Proceeds
on disposal of financial instruments |
|
931 |
|
|
|
168 |
|
|
Purchase of financial
instruments |
|
(104) |
|
|
|
(173) |
|
|
|
|
827 |
|
|
|
(5) |
|
|
Purchase of Core
Holdings |
|
(52) |
|
|
|
- |
|
|
Disposal of Core
Holdings |
|
4,040 |
|
|
|
566 |
|
|
|
|
4,815 |
|
|
|
561 |
|
|
Net cash generated
by investment activities |
|
|
|
4,815 |
|
|
|
(99) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing
activities |
|
|
|
|
|
|
|
|
Equity dividend
paid |
|
(377) |
|
|
|
(359) |
|
|
Net cash outflow
from financing activities |
|
|
|
(377) |
|
|
|
(359) |
|
|
|
|
|
|
|
|
|
Movement in cash
and cash equivalents |
|
|
|
4,479 |
|
|
|
(461) |
|
|
|
|
|
|
|
|
|
Net cash and cash
equivalents at start of year |
|
|
|
(590) |
|
|
|
(129) |
Net cash and cash equivalents at
end of year |
(a) |
|
|
3,889 |
|
|
|
(590) |
Note
(a)
Analysis of cash and cash equivalents
|
At start of
year |
|
Cash Flow |
|
At end of
year |
|
£000 |
|
£000 |
|
£000 |
2014/2015 |
|
|
|
|
|
Cash and cash equivalents |
- |
|
3,889 |
|
3,889 |
Bank borrowings |
(590) |
|
590 |
|
- |
Total cash and equivalents |
(590) |
|
4,479 |
|
3,889 |
2013/2014 |
|
|
|
|
|
Bank borrowings |
(129) |
|
(461) |
|
(590) |
Total net debt |
(129) |
|
(461) |
|
(590) |
Notes:-
1. |
Earnings per share are based on the
profit on ordinary activities after taxation and on 17,949,872
(2014 - 17,949,872) being the weighted average number of shares in
issue during the period. |
2. |
The net assets per share are
calculated taking investments at market value. The Company
has estimated Corporation Tax losses which cover the potential
liability on the unrealised gains on investments. |
3. |
The financial information contained
in this preliminary announcement of results has been prepared under
the recognition and measurement principles of International
Financial Reporting Standards and Interpretations issued by the
International Accounting Standards Board as adopted by the European
Union (‘IFRSs’). The financial information does not give
sufficient information to comply with IFRSs which will be contained
in the statutory accounts sent to shareholders. |
4. |
The financial information in this
preliminary announcement does not constitute the company’s
statutory accounts for the years ended 30th June 2015 or
30th June 2014 but is derived from those accounts.
The financial statements for both years have been prepared in
accordance with IFRSs as adopted by the EU. The statutory
accounts for 2014 have been delivered to the Registrar of Companies
and those for 2015 will be delivered following the Company’s annual
general meeting. The auditors reports on the accounts for
both years were unqualified, did not include references to any
matters to which the auditors drew attention by way of emphasis
without qualifying their reports and did not contain statements
under the Companies Act 2006, sections 498 (2) or (3). |
Copies of this notification are held at the Company’s office, 6
Middle Street, London, EC1A 7JA
(tel. 020 7796 9060) and are available for a period of 14 days from
the date of this announcement.
Enquiries to:
Western Selection P.L.C.
Edward Beale |
020 7796 9060 |
Loeb Aron & Co. Ltd.
Peter Freeman / Jonathan Willis-Richards |
020 7628 1128 |