18 April 2012
Starvest Plc
Half-year report - six months ended 31 March 2012
Chairman's statement
I am pleased to provide a portfolio valuation update as at 31 March 2012, the
interim financial statements for the six months ended on 31 March 2012 and a
commentary on the progress made during the period.
Investment performance
As I indicated in my annual report last October, 2010 was a year of two parts:
from a high valuation point at the end of 2010, the portfolio saw a steady
decline in the following nine months to 30 September 2011. This steady decline
has continued to date.
The decline has been across our portfolio. Our nine leading stocks have all
fallen during the period, some to below cost. This is disappointing, although
not entirely unexpected given the challenging conditions in world markets.
We remain encouraged that each of the leading investee companies remain active
and continue to develop their projects. We believe that these projects will
translate into improved share prices and therefore into improved asset
valuations but that it is currently advisable to take a long term view on these
developments.
In summary:
* Company net asset value has fallen to £4.98m;
* Starvest's mid share price has fallen to 10.0 pence;
* Closing net asset value of 13.3 pence per share;
* Mid share price on 31 March 2012 had a discount to net asset value of 25%;
* There were no investment sales during the period.
Basis of valuation
Starvest uses closing bid prices or the Directors' lower valuation if deemed
appropriate. In addition, a 10% discount is made against those investments
where the Company holds either a large percentage of a given investee or where
the investment constitutes 7% or more of the portfolio. These valuation
discounts totalled £430,000 at 31 March 2012 (2011: £1.08m). Adjusting for this
discount, the full value based on bid prices was 14.48 pence per share leading
to a share price discount of 31%.
Company statistics
31 March 31 December 2011 30 September 31 March 2011
2012 2011
Trading portfolio value £4.31m £4.75m £5.47m £10.03m
Company asset value net £4.98m £5.42m £6.62m £10.10m
of debt
Net asset value - fully 13.33 pence 14.6 pence 17.57 pence 26.16 pence
diluted per share
Share price - mid 10.00 pence 12.00 pence 13.00 pence 11.75 pence
Share price discount to 25% 17% 26% Premium 9%
fully diluted net asset
value
Market capitalisation £3.71m £4.1m £4.77m £4.1m
Portfolio comment
During the period, Starvest added to its investment in Ariana Resources plc by
exercising an option. Otherwise, there were no purchases during the period.
Starvest's largest investments, comprising 86% of the declared valuation, in
order of size were:
* Oracle Coalfields plc
* Ariana Resources plc
* Regency Mines plc
* Kefi Minerals plc
* Centamin plc
* Beowulf Mining plc
* Red Rock Resources plc
* Greatland Gold plc
* Sunrise Resources plc
Since the period end, the Company has supported a fundraising by Alba Mineral
Resources plc and agreed to support two new exploration ventures both of which
intend to seek admission to PLUS Markets.
Other points of note during the half year
The cautious basis of valuation has resulted in further impairments at the
interim stage amounting to £237,000 net. Adding the overheads and taking credit
for net interest results in a loss before taxation of £342,651 and a loss after
taxation of £253,651 or 0.6 pence per share.
Dividend payments
A year ago, we announced the resumption of a dividend payment. In view of the
more challenging conditions which currently prevail, the Board has decided to
defer the announcement of a dividend for the current year until conditions
improve but most likely until the year end.
In early July, the Company expects to announce an update to the net asset value
as at 30 June 2012.
R Bruce Rowan
Chairman & Chief Executive
18 April 2012
Profit & loss account
6 months to 31 6 months to 31 Year ended
March 2012 March 30 September
2011 2011
Unaudited Unaudited Audited
£ £ £
Operating income - 1,324,020 3,788,942
Direct costs - (234,241) (629,896)
-------------------------------------------------------
Gross profit - 1,089,779 3,159,046
Administrative expenses (113,040) (88,791) (228,799)
Amounts written off trade (301,523) (35,198) (399,799)
investments 64,249 848,498 295,075
Amounts written back to
trade investments
-------------------------------------------------------
Operating profit/(loss) (350,314) 1,814,288 2,825,523
on ordinary activities
Interest receivable 7,663 469 1,877
Interest payable - (1,837) (1,837)
-------------------------------------------------------
Profit/(loss) on ordinary (342,651) 1,812,920 2,825,563
activities before
taxation
Tax on profit on ordinary 89,000 (490,000) (762,418)
activities
-------------------------------------------------------
Profit/(loss) on ordinary (253,651) 1,322,920 2,063,145
activities after taxation
-------------------------------------------------------
Earnings/(loss) per share
- see note 3 (0.6) pence 3.6 pence 5.6 pence
Basic (0.6) pence 3.3 pence 5.1 pence
Fully diluted
-------------------------------------------------------
Balance sheet
6 months ended 6 months ended Year ended
31 March 2012 31 March 2011 30 September
2011
Unaudited Unaudited Audited
£ £ £
Current assets
Debtors 102,614 208,822 27,710
Trading investments 3,231,485 3,681,164 3,368,759
Cash at bank and in 1,488,275 407,539 1,893,536
hand
------------------------------------------------------
4,822,374 4,297,525 5,290,005
Creditors - amounts
falling due within one
year (814,614) (522,960) (867,008)
Other creditors
------------------------------------------------------
Net current assets 4,007,760 3,774,565 4,422,997
------------------------------------------------------
Share capital and
reserves 394,173 390,173 390,173
Called up share 2,118,396 2,100,396 2,100,396
capital 1,495,191 1,283,996 1,932,428
Share premium account
Profit and loss
account
------------------------------------------------------
Equity shareholders' 4,007,760 3,774,565 4,422,997
funds
------------------------------------------------------
Cash flow statement
6 months ended 6 months ended Year ended
31 March 2012 31 March 2011 30 September
2011
Unaudited Unaudited Audited
£ £ £
Net cash (outflow)/inflow (251,338) 740,926 2,317,308
from operating activities
Returns on investment and
servicing of finance:
Interest receivable 7,663 469 1,877
Interest payable - (1,837) (1,837)
--------------------------------------------------
7,663 (1,368) 40
--------------------------------------------------
Taxation recovered - 9,490 9,490
--------------------------------------------------
Dividend paid (183,586) - (91,793)
--------------------------------------------------
Financing:
Issue of new shares 22,000 - -
--------------------------------------------------
22,000 - -
--------------------------------------------------
Increase/(decrease) in (405,261) 749,048 2,235,045
cash in the period
Opening cash balance 1,893,536 - -
brought forward - (341,509) (341,509)
Net debt brought forward
--------------------------------------------------
Closing cash balance 1,488,275 407,539 1,893,536
--------------------------------------------------
Movement on equity shareholders' funds
6 months ended 6 months ended Year ended
31 March 2012 31 March 2011 30 September
2011
Unaudited Unaudited Audited
£ £ £
Total recognised (253,651) 1,322,920 2,063,145
(loss)/profits relating to
the period 22,000 - 92,000
Shares issued (183,586) - (91,793)
Dividends paid
--------------------------------------------------
(Decrease)/increase in (415,237) 1,322,920 1,971,352
shareholders' funds
4,422,997 2,451,645 2,451,645
Opening shareholders'
funds
--------------------------------------------------
Closing shareholders' 4,007,760 3,774,565 4,422,997
funds
--------------------------------------------------
Interim report notes
1. Interim report
The information relating to the six month periods to 31 March 2012 and 31 March
2011 is unaudited.
The information relating to the year ended 30 September 2011 is extracted from
the audited accounts of the Company which have been filed at Companies House and
on which the auditors issued an unqualified audit report.
2. Basis of accounting
The report has been prepared using accounting policies that are consistent with
those adopted by the Company in accordance with UK GAAP for the statutory
accounts for the year ended 30 September 2011, although the information does not
constitute statutory accounts within the meaning of section 435 of the Companies
Act 2006.
The Company will report again for the full year to 30 September 2012.
The Company's investments at 31 March 2012 are valued at the lower of cost or
the valuation adopted at 30 September 2011 or the current market value based on
bid prices at the close of business. The Chairman's statement includes a
valuation based on bid prices at 31 March 2012.
3. Earnings per share
6 months ended 31 6 months ended 31 Year ended
March 2012 March 2011 30 September 2011
Unaudited Unaudited Audited
£ £ £
These have been (253,651) 1,322,920 2,063,145
calculated on a
profit/(loss) of:
---------------------------------------------------------
The weighted average 36,818,358 36,717,259 36,717,259
number of shares used
was:
---------------------------------------------------------
Basic profit/(loss) (0.69) pence 3.6 pence 5.6 pence
per share:
---------------------------------------------------------
The weighted average 40,492,259 40,492,259 40,492,259
number of shares and
outstanding options
used was:
---------------------------------------------------------
Fully diluted (0.63) pence 3.3 pence 5.1 pence
profit/(loss) per
share:
---------------------------------------------------------
Investment portfolio
Starvest now holds trade investments in the companies listed below; of these the
following nine companies comprised 85% of the portfolio value as at 31 March
2012:
* Oracle Coalfields plc Coal mining in Pakistan
www.oraclecoalfields.com
* Regency Mines plc Copper & nickel exploration in Australia and Papua
New Guinea and investments in Red Rock Resources plc
and Oracle Coalfields plc
www.regency-mines.com
* Kefi Minerals plc Gold and copper exploration in Turkey and Saudi
Arabia
www.kefi-minerals.com
* Beowulf Mining plc Iron ore, gold, copper and uranium exploration in
Sweden
www.beowulfmining.com
* Red Rock Resources plc Iron ore and manganese exploration in Australia,
Greenland and Zambia; gold exploration in Kenya and
Columbia with investments in other companies
www.rrrplc.com
* Ariana Resources plc Gold exploration in Turkey
www.arianaresources.com
* Centamin plc Gold exploration and mining in Egypt
www.centamin.com
* Greatland Gold plc Gold exploration in Western Australia and Tasmania
www.greatlandgold.com
* Sunrise Resources plc Mineral exploration in Finland, Australia and Ireland
www.sunriseresourcesplc.com
Other direct and indirect mineral exploration companies:
* Equity Resources plc Investment holding company with interests in
Regency Mines plc and Red Rock Resources plc
* Alba Mineral Resources plc Nickel, uranium & gold in Scotland,
Mauritania, Sweden and Ireland
www.albamineralresources.com
* Minera IRL Limited Gold exploration in South America
www.minera-irl.com
* Gippsland Limited Tantulum exploration in Egypt
www.gippslandltd.com.au
* International Mining & Investment holding company
Infrastructure Corporation plc
www.imicplc.com
Other investee companies are listed in the Company's 2011 annual report
available on request as below.
Shareholders and others who wish to receive electronic copies of announcements
are invited to register their email address on the home page of the Company
website: www.starvest.co.uk.
Copies of this interim report are available free of charge by application in
writing to the Company Secretary at the Company's registered office, 55 Gower
Street, London WC1E 6HQ, by email to email@starvest.co.uk or from the Company's
website at www.starvest.co.uk.
Enquiries to:
* Bruce Rowan, telephone 020 7486 3997
* John Watkins, telephone 01483 771992, or to john@starvest.co.uk
* Gerry Beaney, Colin Aaronson or David Hignell, Grant Thornton Corporate
Finance, telephone 020 7383 5100
End
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Source: Starvest plc via Thomson Reuters ONE
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