Source - RNS
RNS Number : 2769L
Charlemagne Capital Limited
30 September 2016
 

Friday 30 September 2016

Charlemagne Capital Limited
Results for the six months to 30 June 2016

Financial Summary

 


As at 30 June 2016


As at 1 January 2016





Assets under Management  ("AuM")

US$2.08bn


US$1.90bn






6 months to

30 June 2016


6 months to

30 June 2015





Net management fees

US$9.0m


US$10.7m

Net performance fees

US$0.3m


US$0.7m

Other (loss)/income

(US$0.2m)


US$0.4m





Operating (loss)/profit

(US$1.0m)


US$0.1m





(Loss)/Profit after tax and non-controlling interests

(US$1.4m)


US$2.8m













Basic earnings per share for the period

(0.474c)


0.948c

Diluted earnings per share for the period

(0.473c)


0.935c





 

·       Group AuM US$2.1 billion as at 30 June 2016, up 9.9% since 1 January 2016

·       Net management fees down 15.5% on the prior year period

·       Loss after tax and non-controlling interests US$1.4 million

·       Operating loss US$1.0 million compared with profit of US$0.1 million in prior year period

·       Interim dividend of 0.5 US cents per share declared and paid during the period in respect of the year ended 31 December 2015

·       The Group has declared a special interim dividend of GB 3.0 pence per share for the 6 months ended 30 June 2016 conditional on the scheme implementing the recommended cash offer for the Company to be announced on 30 September 2016 becoming effective

·       Net assets attributable to shareholders of US$20.8 million (December 2015: US$23.6 million) includes cash and cash equivalents of US$13.9 million and current asset investments of US$9.8 million.

 

Enquiries:

 

 

N+1 Singer - Tel. 020 7496 3000

Gillian Martin     

               

Smithfield Consultants - Tel. 020 7360 4900

John Kiely

Ged Brumby         

 

 

Financial Summary

Summary Financial Information

The results and the assets and liabilities of the Group for the current and comparative interim periods along with the last full financial year (extracted from the audited financial statements) are set out below in summary:-

Results

Notes

Unaudited

Unaudited

Audited



for the six months to

for the six months to

year to



30 June 2016

30 June 2015

31 December 2015

 


US$'000

US$'000

US$'000






Revenue


9,104

11,751

24,793






Operating (loss)/profit


(952)

51

450

 










(Loss)/profit before tax


(952)

51

450






(Loss)/profit after exceptional tax credit


(952)

3,305

3,674






Balance sheet summary










Assets and liabilities





Property and equipment


77

64

86

Current assets


28,812

35,545

38,203

Total assets


28,889

35,609

38,289

Total liabilities


7,634

9,345

13,316

Net assets


21,255

26,264

24,973

Non-Controlling Interest


427

550

1,350

Net assets attributable to shareholders


20,828

25,714

23,623






Earnings per share


US$ cents

US$ cents

US$ cents

Basic

9

(0.474c)

0.948

0.800

Diluted

9

(0.473c)

0.935

0.796








US$'000

US$'000

US$'000

Dividends

5

1,454

1,454

2,909


Assets under Management ("AuM")

 

The table below sets out the Group's AuM as at 30 June 2016 and the movements experienced in each product range in the period since 1 January 2016.

 


1 January 2016

Net subscriptions

Net performance

 

 30 June

2016

Movement in period


AuM (US$m)

(US$m)

(%)

(US$m)

(%)

AuM (US$m)

(%)

Magna

508

(45)

(8.9)

30

6.2

493

(3.1)

OCCO

493

23

4.7

25

5.0

541

9.7

Institutional

805

65

8.1

85

10.1

955

18.6

Specialist

91

11

12.1

(6)

(6.2)

96

5.5

Total

1,897

54

2.8

134

7.0

2,085

9.9

 

Note: Closing AuM is stated as including all subscription and redemption orders received for the relevant funds as at the close of the period but not processed until the first dealing date of the following period.



Chief Executive's Report

Emerging markets equities gained during the first half of the year with a sharp fall in the initial weeks evolving into one of the better periods for the asset class in the last few years.  Having declined 6.6% to the end of February, the MSCI Emerging Markets index ended the half with an overall gain of 6.4% over the six months.  However, following the significant underperformance of the asset class over the last five years - MSCI EM was down 22% between the start of 2011 and the end of 2015 compared to a gain of 44% in MSCI World during the same period - industry-wide flows, which have amounted to withdrawals of over $100bn in the previous three years, continued to be negative during the period.  This suggests investor positioning is very light and risk aversion high.  From July, there has been some indication that this is starting to change, with 11 consecutive weeks of inflows into the asset class.

 

The portfolios the Group manages on behalf of clients have continued to perform well over the period, with four of the seven strategies in our Magna fund range in the first quartile of their respective FactSet Morningstar peer rankings.  MENA and Frontiers performed particularly strongly during the half.  The longer term numbers remain good, with five of the seven funds in the top half.  The OCCO Eastern European Fund also continues to deliver consistent numbers in what has been a tough market environment.

 

The Group's assets under management rose from $1.9bn to $2.1bn during the half year, mainly due to market moves and investment performance.  During the six months, overall flows for the Group were positive, in contrast to the negative flows seen by the industry as a whole referred to above.  The average level of AuM during the period was US$1.9 billion compared with US$2.2 billion in the prior year period.  Net management fees receivable were US$9.0 million compared with US$10.0 million for the previous six months and US$10.7 million for the comparable period in 2015, reflecting the decrease in AuM during the period and a small reduction in net revenue margin.  Net crystallised performance fees in the period were US$0.3 million (2015: US$0.7 million) and accruing (non crystallised) performance fees for 2016 as at 30 June were US$8.5 million, compared with US$0.9 million as at the same date in 2015.  Operating loss for the six month period was US$ 0.95 million (2015: profit US$ 0.05 million) and loss attributable to shareholders was US$ 1.38 million (2015: profit US$ 2.76 million following the receipt of an exceptional tax credit of US$ 3.2 million).  Loss after tax attributable to shareholders represents negative earnings per share of 0.47 US cents for the period.

 

Group AuM at the end of August stands at US$2.19bn due to positive market performance and net inflows during the period since June.  This level of AuM is still below break-even on a recurring fee basis therefore the quantum of performance fees at year end will be the principal determinant of the level of operating loss/profit for the year as a whole. Accruing (non-crystallised) performance fees as at 31 August are US$11.4 million, US$9.1 million of which relates to OCCO and are subject to a minority interest, compared with US$ 1.5 million as at the same date in 2015.  The Group has a strong balance sheet with net assets attributable to shareholders of US$20.8 million, which include cash and cash equivalents of US$13.9 million and current asset investments of US$9.8 million. 

 

Conversations with current and potential investors in our strategies in recent months have had a different tone to them compared with twelve or eighteen months ago.  Whereas the focus was previously on the stock picking within the portfolios we manage, the discussions now are as likely to include a fair amount of time on the outlook for the asset class.  After a long period of underperformance, many of those prescient enough to have been bearish in emerging markets equities are reconsidering their positions.   After five years of disappointments, the second quarter was the first period for at least eight quarters in which positive earnings surprises have outnumbered negative ones.  Emerging markets currencies are stable to stronger: current accounts are in a better state than two or three years ago, the increases in the US interest rates are, in our opinion, likely to be modest in nature and reasonably well spaced.  The emerging markets GDP growth differential over developed economies, which has halved from over 4% to 2% in the last five years, is now starting to expand again.  Finally, the Brexit vote and the upcoming elections in the US, France and Germany are a reminder that emerging markets do not have a monopoly of political risk.

 

The directors have declared a special interim dividend of GB3.0 pence per share for the 6 months ended 30 June 2016, conditional on the scheme implementing the recommended cash offer for the Company to be announced on 30 September 2016 becoming effective.  

 

 

 

 

Jayne Sutcliffe

Chief Executive

30 September 2016

Condensed Consolidated Statement of Comprehensive Income

Expressed in United States Dollars

Notes

Unaudited

Unaudited

Audited



Six months to

Six months to

Year to



30 June 2016

30 June 2015

31 December 2015



US$'000

US$'000

US$'000






Revenue

2

9,104

11,751

24,793






Expenses





Personnel expenses


(7,603)

(8,574)

(18,052)

Other costs


(2,453)

(3,126)

(6,291)

Operating (Loss)/Profit before tax


(952)

51

450

Taxation

3

-

3,254

3,224

(Loss)/Profit after tax


(952)

3,305

3,674

(Loss)/Profit after tax attributable to





Non-Controlling interests


426

548

1,348

Owners of the Company


(1,378)

2,757

2,326

(Loss)/Profit after tax


(952)

3,305

3,674

Other Comprehensive Income





Foreign currency translation differences


-

-

-

Total Comprehensive (Loss)/Income for the Period


(952)

3,305

3,674

Total Comprehensive(Loss)/Income attributable to





Non-Controlling Interest


426

548

1,348

Owners of the Company


(1,378)

2,757

2,326

Total Comprehensive Income for the Period


(952)

3,305

3,674








US$ cents

US$ cents

US$ cents

Earnings per share





Basic

8

(0.474)

0.948

0.800

Diluted

8

(0.473)

0.935

0.796






 

 



Condensed Consolidated Statement of Financial Position

Expressed in United States Dollars

Notes

Unaudited

Audited



As at

As at



30 June 2016

31 December 2015



US$'000

US$'000





Non-current assets




Property and equipment


77

86

Total non-current assets


77

86

Current assets




Current investments


9,822

9,560

Trade and other receivables

5

5,063

10,911

Cash and cash equivalents


13,927

17,732

Total current assets


28,812

38,203

 




Total assets


28,889

38,289

 




Equity




Issued share capital

7

2,909

2,909

Reserves


17,919

20,714

Shareholders' equity


20,828

23,623

Non-Controlling Interest


427

1,350

Total equity


21,255

24,973

 




Current liabilities




Trade and other payables

6

7,178

13,144

Financial liabilities at fair value through profit and loss


456

172

Total current liabilities


7,634

13,316





Total equity and liabilities


28,889

38,289

                                                                                                                         

 

 

 

Condensed Consolidated Statement of Changes in Equity


Share

Capital

Share

Premium

Retained

Earnings

Treasury Shares

Share Option Reserve

Foreign

Currency

Exchange

Reserve

Total attributable to the Owners of the Company

Non-Controlling Interest

Total Equity

 Equity

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000











At 1 January 2016

2,909

6,520

10,791

-

103

3,300

23,623

1,350

24,973

Share based payment plans

-

-

-

-

37

-

37

-

37

Comprehensive (loss) for the period

-

-

(1,378)

-

-

-

(1,378)

426

(952)

Dividends

-

-

(1,454)

-

-

-

(1,454)

(1,349)

(2,803)

At 30 June 2016

2,909

6,520

7,959

-

140

3,300

20,828

427

21,255








 


Share

Capital

Share

Premium

Retained

Earnings

Treasury Shares

Share Option Reserve

Foreign

Currency

Exchange

Reserve

Total attributable to the Owners of the Company

Non-Controlling Interest

Total Equity

 Equity

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000











At 1 January 2015

2,909

6,520

11,403

(16)

213

3,300

24,329

1,535

25,864

Share based payment plans

-

-

(8)

4

86

-

82

-

82

Comprehensive income for the period

-

-

2,757

-

-

-

2,757

548

3,305

Dividends

-

-

(1,454)

-

-

-

(1,454)

(1,533)

(2,987)

At 30 June 2015

2,909

6,520

12,698

(12)

299

3,300

25,714

550

26,264












Share

Capital

Share

Premium

Retained

Earnings

Treasury Shares

Share Option Reserve

Foreign

Currency

Exchange

Reserve

Total attributable to the Owners of the Company

Non-Controlling Interest

Total Equity


US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000











At 1 January 2015

2,909

6,520

11,403

(16)

213

3,300

24,329

1,535

25,864

Share based payment plans

-

-

(29)

16

(110)

-

(123)

-

(123)

Comprehensive income for the year

-

-

2,326

-

-

-

2,326

1,348

3,674

Dividends

-

-

(2,909)

-

-

-

(2,909)

(1,533)

(4,442)

At 31 December 2015

2,909

6,520

10,791

-

103

3,300

23,623

1,350

24,973



Condensed Consolidated Statement of Cash Flows

Expressed in United States Dollars

Notes

Unaudited

Unaudited

Audited



Six months to

Six months to

Year to



30 June 2016

30 June 2015

31 December 2015



US$'000

US$'000

US$'000

Operating (Loss)/Profit


(952)

51

450

Adjustments for:





Depreciation


18

18

38

Provision for unrealised loss/(gain) on foreign exchange
contracts and investments


21

(206)

501

Equity settled incentive plans


37

82

149

Other incentive plans


246

234

689

Decrease/(increase) in trade & other receivables


5,848

2,074

(1,222)

(Decrease)/increase in trade & other payables


(6,211)

(2,153)

919

Tax received


-

3,214

3,319

Cash flows from operating activities


(993)

3,314

4,843

 





Investing activities





Purchase of property and equipment


(9)

(22)

(64)

Cash flows used in investing activities


(9)

(22)

(64)

 





Financing activities





Dividends paid to non-controlling interest


(1,349)

(1,533)

(1,533)

Dividends paid


(1,454)

(1,454)

(2,909)

Cash flows used in financing activities


(2,803)

(2,987)

(4,442)

 





Net (decrease)/increase in cash and cash equivalents


(3,805)

305

337

Cash and cash equivalents at the beginning of the period


17,732

17,395

17,395

Cash and cash equivalents at the end of the period


13,927

17,700

17,732

 





 



Notes to the Condensed Consolidated Interim Financial Statements

 

1.                    Basis of Preparation and Significant Accounting Policies

The condensed consolidated interim financial statements have been prepared on a condensed basis, in accordance with the requirements of International Accounting Standard 34 "Interim Financial Reporting".  They do not include all of the information required in annual financial statements in accordance with IFRS and where appropriate should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2015.

The condensed consolidated interim financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 31 December 2015.

The condensed consolidated interim financial statements are prepared on the historical cost basis except that the following are stated at their fair value: financial instruments at fair value through profit or loss including derivative financial instruments.  Recognised assets and liabilities that are hedged are stated at fair value in respect of the risk that is hedged. 

2.             Segment Reporting

Unaudited







Six months to 30 June 2016








US$'000

US$'000

US$'000

US$'000

US$'000

US$'000


Magna

OCCO

Institutional

Specialist

Other

Total

Net Management Fees

2,098

4,128

2,339

463

-

9,028

Net Performance Fees

45

191

15

10

-

261

Return on Investment

-

-

-

-

278

278

FX loss including loss on Forwards





(581)

(581)

Other Income

-

-

-

-

118

118

Segment Revenue

2,143

4,319

2,354

473

(185)

9,104








Segment Result

1,911

2,642

2,214

440

(185)

7,022

Unallocated Expenses






(7,974)

Results from Operating Activities






(952)

 

Unaudited







Six months to 30 June 2015








US$'000

US$'000

US$'000

US$'000

US$'000

US$'000


Magna

OCCO

Institutional

Specialist

Other

Total

Net Management Fees

2,936

4,503

2,789

457

-

10,685

Net Performance Fees

104

374

56

126

-

660

Return on Investment

-

-

-

-

250

250

Other Income

-

-

-

-

156

156

Segment Revenue

3,040

4,877

2,845

583

406

11,751








Segment Result

2,664

3,210

2,678

510

406

9,468

Unallocated Expenses






(9,417)

Results from Operating Activities






51

 

 

3.             Taxation

 

Income tax expense is recognised in each interim period based on the best estimate of the weighted average annual income tax rate expected for the full financial year.  Amounts accrued for income tax expense in one interim period may be adjusted in a subsequent period of that financial year if the estimate of the effective rate of income tax changes. 

 

 

Unaudited

Unaudited

 

Six months to

Six months to

 

30 June 2016

30 June 2015


US$'000

US$'000

Income tax expense for the period

-

-

Amount recovered in respect of prior years

-

(3,254)

 

-

(3,254)

 

The amount recovered in respect of prior years during 2015 relates to the Charlemagne Employee Benefit Trust settlement agreement entered into with HMRC on 23 March 2015.  Under the terms of the settlement agreement contributions to the trust made in previous years were allowed as a deduction from taxable income in respect of those years of assessment resulting in the amount of tax recovered shown above.

 

4.             Dividends

 

Unaudited

Unaudited

 

Six months to

Six months to

 

30 June 2016

30 June 2015


US$'000

US$'000




Interim dividend of 0.5 US cents (2015: 0.5 US cents)

1,454

1,454


An interim dividend of 0.5 US cents (GB 0.3513p) (2015: 0.5 US cents, GB 0.3393p) per ordinary share in respect of the year ended 31 December 2015 was paid on 22 April 2016 to those shareholders on the register on 29 March 2016 and was charged to the income statement in 2016. 

The Group has declared an interim dividend of 3.0 GB pence per ordinary share in respect of the half year to 30 June 2016 conditional on the scheme implementing the recommended cash offer for the Company to be announced on 30 September 2016 becoming effective.

5.             Receivables

 

Unaudited

Audited

 

Six months to

Year to

 

30 June 2016

31 December 2015


US$'000

US$'000

Trade customers

3,298

6,763

Other receivables

1,110

1,969

EBT settlements

-

1,398

Prepayments

655

781


5,063

10,911

 

 

6.             Accounts Payable, Accruals and Other Payables

 

Unaudited

Audited

 

Six months to

Year to

 

30 June 2016

31 December 2015


US$'000

US$'000

Accruals for performance awards

3,795

7,586

EBT settlements

-

1,398

Other incentive plans

1,638

1,391

Other accruals and payables

1,745

2,769


7,178

13,144

 

7.             Issued Share Capital

Shares

Unaudited

Audited


30 June 2016

31 December 2015


US$'000

US$'000

Authorised



2,000,000,000 ordinary shares of US$0.01 each

20,000

20,000




Issued and fully paid



At beginning of period; 290,885,616 (2015: 290,885,616) ordinary shares of US$0.01 each

2,909

2,909

At end of period; 290,885,616(2015: 290,885,616) fully paid

2,909

2,909


As at the date of issuing the financial statements there were 290,885,616 ordinary shares of US$0.01 each issued and fully paid.

8.             Earnings per Share

 

The calculation of basic earnings per share of the Group is based on the net loss attributable to shareholders for the six months to 30 June 2016 of US$1.378m (2015: profit of US$2.757m) and the weighted average number of shares of 290,885,616 (2015: 290,885,616) in issue during the period.

The calculation of diluted earnings per share of the Group includes the effect of those outstanding share options where specified performance conditions have been satisfied but which have not yet vested.  The calculation of diluted earnings per share of the Group is based on the net loss attributable to shareholders for the six months to 30 June 2016 of US$1.378m (2015: profit of US$2.757m) and the weighted average number of shares of 291,210,725 (2015: 294,850,476) in issue during the period.

 

9.             Share Based Incentive Plans

 

During the period the Group did not issue any new share based incentive programmes to its employees and none of the previously granted options vested or expired.

 

Equity Settled

 

At the beginning and end of the period there were 1,527,148 share options outstanding with a weighted average exercise price of GBP0.031.

 

Cash Settled

 

There were no cash settled awards in existence during the period.

 

Other incentive plans

 

During the year ended 31 December 2014, awards of shares in the Magna Global Emerging Markets Fund ("the Fund") were issued to certain employees subject to the vesting conditions set out below. The fair value of the awards granted is spread over the vesting period, and recognised as an expense in the accounts with a corresponding increase in liabilities.  The fair value of the awards is measured by reference to the fair value of the equivalent number of shares held by the Company with the intention that they will be utilised to settle these awards as they vest.

The total number of shares subject to the award as at 30 June 2016 was 139,295.656 (2015: 156,843.762) with 100% of the shares allocated to each employee vesting upon three years' service provided that the Fund outperforms the MSCI Emerging Market Index (USD) ("the benchmark") by 1% to 2.99% per annum over the whole life of the award.  If the Fund outperforms the benchmark by 3% or more, 110% of the shares subject to the award vest but if the Fund's performance is less than the benchmark plus 0.99%, then 80% of the shares subject to the award vest.

The amount charged as an expense during the 6 months to June 2016 in respect of these awards is US$245,883.

 

Expenses in respect of share based incentive plans

 

The following amounts have been charged as an expense within these financial statements:

 


Six months to

30 June 2016

US$

Six months to

30 June 2015

US$

Equity settled incentive plans

37,652

85,741

Other incentive plans

245,883

468,283

Total charged to employee costs

283,534

554,024

 

 

10.        Financial Instruments - Fair Values

a)         Accounting Classification and Fair Values

The following table shows the carrying amounts and fair values of financial assets and financial assets and financial liabilities, including their levels in the fair value hierarchy.

30 June 2016 (unaudited)

Carrying amount

Fair value

Financial assets measured at fair value

Designated at fair value

Loans and receivables

other financial liabilities

Total

Level 1

Level 2

Level 3

Total


US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

Current investments

9,822

-

-

9,822

-

9,815

7

9,822


9,822

-

-

9,822

-

9,815

7

9,822

Financial assets not measured at fair value









Trade and other receivable

-

5,063

-

5,063





Cash and bank equivalents

-

13,927

-

13,927






-

18,990

-

18,990





Financial liabilities measured at fair value









Forward exchange contracts used for hedging

456

-

-

456

-

456

-

456


456

-

-

456

-

456

-

456

Financial liabilities not measured at fair value









Accounts payable, accruals and other payables

-

-

7,178

7,178






-

-

7,178

7,178





 

 

31 December 2015 (audited)

Financial assets measured at fair value

Designated at fair value

Loans and receivables

other financial liabilities

Total

Level 1

Level 2

Level 3

Total


US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

Current investments

9,560

                -  

            -  

9,560

-

9,553

7

9,560


9,560

                -  

            -  

9,560

-

9,553

7

9,560

Financial assets not measured at fair value









Trade and other receivable

                  -  

10,911

            -  

10,911





Cash and bank equivalents

                  -  

17,732

            -  

17,732






                  -  

28,643

            -  

28,643





Financial liabilities measured at fair value









Forward exchange contracts used for hedging

172

-

-

172

-

172

-

172


172

-

-

172

-

172

-

172

Financial liabilities not measured at fair value









Accounts payable, accruals and other payables

-

-

13,144

13,144






                  -  

                -  

13,144

13,144























Carrying amount

Fair value

 

b)         Measurement of Values

i)          Valuation techniques

The valuation technique applied to level 2 financial instruments is based on the net asset value per share of the relevant investments which are published by their appointed custodian.

Level 3 financial assets consist solely of investments in a private company.  The fair value of this investment is determined based on the most recent net assets of the company.

There have been no changes to the valuation techniques used during the period.

ii)               Level 3 fair values

Reconciliation of Level 3 fair values

The following table shows a reconciliation from the opening balances to the closing balances for Level 3 fair values.


Equity securities available for sale

Balance at 31 December 2015

7

Balance at 1 January 2016 and 30 June 2016

7





 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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