Investor Relations
Latest Results
Preliminary Results
Westhouse Holdings plc (AIM:WHL) (with its subsidiaries "Westhouse" or the "Company"), the integrated corporate finance and broking house focusing on small and mid-cap companies, announces its Preliminary Results for the year ended 31 December 2009.
- Reverse acquisition of SovGEM successfully completed in June 2009
- Net assets increased to £6.85 million (2008: £1.98 million)
- Turnover improved by 6.7% to £4.78 million (2008: £4.48 million)
- Strong cash position of £1.75 million (2008: £0.61 million)
- Profit after tax and gain on acquisition of £1.12 million (2008: Loss of £0.61 million)
- Significantly increased revenues in the second half
- Market making desk expected to commence trading shortly
- Key hires made in broking, corporate finance and research
Commenting on the results, William Staple, Chief Executive, said: "2009 has been a year of considerable change for Westhouse, a reflection of our ambition to grow the business by expanding our established areas of expertise and also by developing new activities, while at the same time retaining a strong balance sheet.
"The improvement in sentiment we saw developing in the second half of last year has continued. We are beginning to see renewed interest in the IPO market with a number of potential transactions in prospect. We are also seeing more merger and acquisition advisory opportunities. Although it is still early to predict performance for the rest of this year, the outlook is encouraging, particularly taking into account the initiatives the Board has taken to strengthen and diversify the business."
Chairman's and Chief Executive's Statement
These are the Company's first Preliminary Results since the reverse acquisition of SovGEM which led to Westhouse becoming a publicly quoted company on 15 June 2009.
The main intention behind the reverse acquisition of SovGEM was to provide a strong capital base from which to grow the business. The Board believed that the first half of 2009 was the low point in the economic cycle, and the return of confidence, when it came to the equity markets, would present a unique opportunity for Westhouse to develop its business both in and beyond its original focus on the natural resources sector and emerging markets.
The Group's net assets at 31 December 2009 were £6.85 million (2008: £1.98 million), including £1.75 million in cash which provides the Group with a strong financial position for continued expansion. The Board has adopted a policy of gradual liquidation of the investment portfolio, taking advantage of the substantial appreciation in a number of the investments. As at 31 December 2009 £1.23 million had been realised in cash subsequent to the reverse acquisition and the remaining investment portfolio was valued at £4.36 million.
Turnover in 2009 improved by 6.7% to £4.78 million (2008: £4.48 million). However, the contrast between the first and second halves of the year was marked, as the Company began to see improved market conditions, with revenue in the second half of the year being more than twice that in the first half. In particular, Westhouse saw a significant increase in the number of its AIM-quoted clients undertaking secondary equity placements, including Nighthawk Energy, which raised £22 million in July 2009, and PureCircle, which raised £40 million in November 2009. Additionally a number of Takeover Code related assignments were undertaken, including acting as financial adviser and Rule 3 adviser to Origo Resource Partners and Hidefield Gold in relation to their respective takeovers, both transactions completing in December 2009.
Operating expenses in 2009 were held at £4.92 million, despite the costs associated with undertaking the reverse acquisition.
Including the £1.24 million gains made on the reverse acquisition of SovGEM, the profit after tax for 2009 amounted to £1.12 million, compared to a loss in 2008 of £0.61 million. Earnings per share amounted to 10p.
Westhouse has in the past focused on core areas, principally natural resources and emerging markets, and particularly on IPOs on AIM. Following the economic downturn and the changed market conditions the Board believes that the Company has successfully begun to reposition itself, providing a more robust business model going forward, with significantly less dependence on historic revenue streams.
In late 2009 the Board began to implement plans for a market making capability, believing that this would open up a new revenue stream and also leverage the Company's service to its existing clients. In order to facilitate this, Simon Doyle, who has been appointed to oversee the development of our secondary market sales and trading activities, has brought in two of his former colleagues to form the nucleus of the market making operation. Simon has 30 years' experience and has twice before been instrumental in establishing successful trading desks. Initially Westhouse intends to make markets in stocks of its corporate clients as well as other companies that Westhouse covers through research. This range will subsequently be broadened as Westhouse establishes its position in the markets. The Company expects its application to the FSA for a principal trading licence to be approved shortly so that Westhouse can commence market making activities.
The Board believes that Westhouse's corporate broking activities need to be complemented by a strong secondary market sales capability and, accordingly, the Company is planning to strengthen its institutional sales team, as well as extending its research coverage with several new appointments. In parallel, Westhouse has also reinforced its corporate finance team with a number of recent appointments including Tom Price, who was a director at Evolution Securities with over 20 years' experience advising small and mid-cap companies. We are also expanding our emerging markets capability. Tim Metcalfe, together with Zhining Xu, is focussing on the continuing development of the Company's Chinese advisory business. We are also exploring a number of opportunities in the Indian market. Tim Feather continues to build our oil and gas sector specialisation. We are seeing the prospect of a number of new business opportunities in all these areas as well as in our other areas of expertise, in particular in the mining sector.
On behalf of the Board we thank all of our employees for their contributions to another year of significant achievement. Our employees play a critical role in the Company's success and the Board appreciates this particularly because corporate finance and broking is a people business that depends on the enthusiasm and performance of the team as a whole. The Board remains committed to recruiting, retaining and developing the best people.
2009 has been a year of considerable change for Westhouse, a reflection of our ambition to grow the business by expanding our established areas of expertise and also by developing new activities.
The improvement in sentiment that the Company saw developing in the second half of last year has continued. We are beginning to see renewed interest in the IPO market with a number of potential transactions in prospect. We are also seeing more merger and acquisition advisory opportunities. Although it is still early to predict performance for the rest of this year, the outlook is encouraging, particularly taking into account the initiatives the Board has taken to strengthen and diversify the business.
| Garth Milne Chairman |
William Staple Chief Executive |
Consolidated income statement
| For the year ended 31 December | Note | 2009 £ |
2008 £ |
| Revenue | 4 | 4,779,849 | 4,478,460 |
| Gains on sale of investments | 142,121 | 4,028 | |
| Gains / (losses) in fair value of assets held at fair value through profit or loss |
11 | 210,784 | (237,110) |
| Gains / (losses) on available for sale assets - impairments | 11 | (288,834) | (98,494) |
| Finance revenue | 3,036 | 68,933 | |
| Total income | 4,846,956 | 4,215,817 | |
| Administration expenses | (4,917,128) | (4,921,597) | |
| Finance costs | (297) | (3,446) | |
| Gain on acquisition | 12 | 1,241,269 | - |
| Profit / (loss) before tax | 1,170,800 | (709,226) | |
| Taxation | (48,923) | 96,123 | |
| Net result for the period | 1,121,877 | (613,103) | |
| Attributable to owners of the parent | 1,121,877 | (613,103) | |
| Earnings per share - basic and diluted | 7 | 0.10 | (0.61) |
Consolidated statement of financial position
| As at 31 December | Note | 2009 £ |
2008 £ |
| Assets Non current assets |
|||
| Goodwill | 306,750 | 306,750 | |
| Property plant and equipment | 262,081 | 189,706 | |
| 568,831 | 496,456 | ||
| Current assets | |||
| Available for sale assets | 11 | 3,564,816 | 515,465 |
| Financial assets held at fair value | 11 | 803,224 | 86,868 |
| Trade and other receivables | 8 | 368,653 | 246,523 |
| Prepaid expenses | 8 | 431,957 | 384,513 |
| Taxation | - | 96,123 | |
| Cash and cash equivalents | 1,751,191 | 609,834 | |
| 6,919,841 | 1,939,326 | ||
| Total assets | 7,488,672 | 2,435,782 | |
| Equity | |||
| Share capital | 572 | 108,602 | |
| Share premium account | 3,652,377 | 1,007,272 | |
| Merger reserve | 2,025,707 | - | |
| Perpetual subordinated loan | 375,000 | 500,000 | |
| Reserve in respect of share based payments | 298,090 | 270,677 | |
| Reverse acquisition reserve | (1,686,801) | - | |
| Revaluation reserve | 11 | 1,118,727 | 148,725 |
| Profit and loss account | 1,064,354 | (54,746) | |
| Equity attributable to owners of the parent | 6,848,026 | 1,980,530 | |
| Minority interest | - | - | |
| Total equity | 6,848,026 | 1,980,530 | |
| Current Liabilities | |||
| Accounts payable and accrued liabilities | 613,680 | 455,252 | |
| Corporation Tax | 26,966 | - | |
| Total current liabilities | 9 | 640,646 | 455,252 |
| Total liabilities | 640,646 | 455,252 | |
| Total equity and liabilities | 7,488,672 | 2,435,782 |
Consolidated cash flow statement
| For the year ended 31 December | Note | 2009 £ |
2008 £ |
| Cash flows from operating activities | |||
| Profit / (loss) before tax | 1,170,800 | (709,226) | |
| Adjustments for: | |||
| Revenue relating to financial assets held at fair value | - | (86,865) | |
| (Gains) / losses on investments | (142,121) | (4,028) | |
| (Gains) / losses in fair value assets held at fair value | (210,784) | 237,110 | |
| (Gains) / losses on investments | 288,834 | 98,494 | |
| Gain on acquisition | (1,241,269) | - | |
| Finance revenue | (3,036) | (68,933) | |
| Finance costs | 297 | 3,446 | |
| Depreciation | 78,568 | 57,187 | |
| Dividends received in kind | (15,674) | - | |
| Share based expense | 27,413 | 118,613 | |
| Non-cash expenses | - | 15,470 | |
| Decrease / (increase) in receivables | (198,420) | 64,797 | |
| (Decrease) / increase in payables | (285,980) | (809,503) | |
| Tax refund / (paid) in period | 92,691 | (242,417) | |
| Net cash flows from operating activities | (438,681) | (1,325,855) | |
| Cash flows from investing activities | |||
| Purchase of equipment | (150,946) | (26,087) | |
| Proceeds from sale of investments | 1,232,003 | 187,127 | |
| Purchase of investments | (186,800) | (45,020) | |
| Interest received | 2,917 | 68,933 | |
| Net cash flows used in investing activities | 897,174 | 184,953 | |
| Cash flows from financing activities | |||
| Issue of ordinary share capital | 850,000 | 236,000 | |
| Issue of shares | 22,000 | - | |
| Transaction costs in connection with share issue | (65,724) | - | |
| Net repayment of perpetual subordinated loan | (125,000) | - | |
| Cash acquired from acquisitions | 1,885 | - | |
| Interest paid | (297) | (3,446) | |
| Interest on perpetual subordinated loan | - | (43,612) | |
| Net cash flows from financing activities | 682,864 | 188,942 | |
| Net increase / (decrease) in cash and cash equivalents | 1,141,357 | (951,960) | |
| Cash and cash equivalents at beginning of period | 609,834 | 1,561,794 | |
| Cash and cash equivalents at end of period | 1,751,191 | 609,834 | |
Notes
The notes are available in the printable pdf of the results. To download it, please click here