Source - PRN

Capital for Colleagues plc / EPIC: CFCP / Market: ISDX / Sector: Investment

31 May 2017

CAPITAL FOR COLLEAGUES PLC
(‘Capital for Colleagues’ or the ‘Company’)

Unaudited Interim Results for the six months ended 28 February 2017

Capital for Colleagues, the investment vehicle focused on opportunities in the Employee Owned Business (‘EOB’) sector, is pleased to announce its unaudited interim results for the six months ended 28 February 2017.

Highlights

  • Additional GBP 661,491 invested in the period – GBP 464,491 in new investments and GBP 197,000 in follow-on funding
  • Revenues of GBP 198,352 (2016: GBP 370,000), comprising interest receivable and other fees
  • Net assets of GBP 4.2 million as at 28 February 2017 (2016: GBP 4.2 million)
  • A loss of GBP 1.06 million for the six-month period (reflecting the exceptional write off of GBP 1.3 million in connection with the FJ Holdings Group investments)
  • Investment portfolio at the period end comprised 15 unquoted EOBs
  • GBP 2.42 million raised after the period end for further investment in EOBs
  • Pipeline of opportunities remains strong; Directors confident of continuing growth from existing and new investments

Chief Executive’s Statement

In the six months ended 29 February 2017, the Company invested a further GBP 661,491 in new and existing investee companies.   As we never tire of saying, employee ownership is a proven, successful business model, which is recognised to improve productivity and create wealth, whilst providing a stable employment environment and the possibility of attractive commercial returns for investors. This message seems to be getting through, as the breadth of opportunities available to us continues to expand. We now have investments across a range of business areas, most recently adding IT services to our stable of EOBs.

The main development in the period ended 28 February 2017 was the placing into administration of the FJ Holdings Group (‘FJH’), where the Company’s loans to and investment in FJH were valued at approximately GBP 1.3 million. Following confirmation from the Administrators, these legacy investments have been written down to zero and the impact of this caused the Company’s net asset value to fall to 43.54p per share as at 28 February 2017.

Investment in smaller, unquoted companies always carries with it a risk that some investments will fail. The Board is committed to minimising this risk and the Company will continue to invest in a diversified range of EOBs with the intention that the majority will become successful and sustainable, delivering meaningful returns to the Company and its shareholders.

In accordance with our business plan, we are continuing to align our interests with those of employee stakeholders at our investee companies as they become more established co-owned businesses. In this context, many of our portfolio companies have accepted our offer to convert our existing debt instruments into equity, a progression we are delighted with. One of the by-products of this change is the short-term effect on the Company’s income, whereby interest previously receivable is exchanged for long-term capital value and dividend income. There is inevitably a short-term gap between these two investment models and the Board is continually reviewing the carrying value of all investments to ensure that they are fairly reflected.

After the end of the interim period, Capital for Colleagues successfully raised GBP 2.42 million through an open offer to shareholders and a subscription for ordinary shares at a price of 42p per share. The fundraising received strong support from the Directors, existing shareholders and from new investors, including Bill Ainscough. The proceeds of the subscription are being used by the Company for investment in EOBs in accordance with the Company’s investment strategy.

Financial Results

In the period ended 29 February 2017, the Company generated income of GBP 198,352 (2016: GBP 370,000), principally from interest receivable and other fees associated with our investments.  As at 28 February 2017, the Company had net assets of GBP 4.2 million (2016: GBP 4.2 million).

Outlook

Capital for Colleagues’ ability to advise existing and potential EOBs as well as to provide them with funding, means that the Company is exceptionally well placed to create growth in the EOB sector and to benefit from that growth.

We continue to work closely with the Employee Ownership Association and other supporters of employee ownership to promote the commercial and financial benefits of EOBs and we believe that the UK’s relative political and economic stability will continue to foster an environment where EOBs are perceived as important generators of equitable and dynamic growth.

John Eckersley
Chief Executive

For further information, please visit www.capitalforcolleagues.com or contact:

CAPITAL FOR COLLEAGUES PLC
Richard Bailey, Chairman
John Eckersley, Chief Executive
0161 464 7538
PETERHOUSE CORPORATE FINANCE LIMITED
Mark Anwyl
Duncan Vasey
020 7469 0930

PROFIT AND LOSS ACCOUNT

Unaudited 6 months to 28 February 2017
GBP 000’s
Unaudited 6 months to 29 February 2016
GBP 000’s
Audited 12 months to 31 August 2016
GBP 000’s
Revenue 198 364 560
 Unrealised Gains 208 6 228
406 370 788
Administrative expenses (247) (330) (630)
PROFIT FROM ONGOING OPERATIONS 159 40 158
Exceptional Item (1,321) - -
PROFIT/(LOSS) BEFORE TAXATION (1,162)  40 158
Tax 102 - (130)
PROFIT/(LOSS) FOR THE PERIOD (1,060) 40 28

BALANCE SHEET

As at
28 February 2017
GBP 000’s
As at
29 February 2016
GBP 000’s
As at
31 August 2016
GBP 000’s
ASSETS
Non Current Assets
Investments held at fair value through profit or loss  3,296 2,246 3,427
Loans and receivables 689 884 1,081
3,985 3,130   4,508
Current Assets
Trade and other receivables 208 784 654
Cash and cash equivalents 161 243 279
369 1,027 933
TOTAL ASSETS 4,354 4,157 5,441

EQUITY AND LIABILTIES
Equity
Called up share capital 3,850 3,070 3,850
Share premium 1,036 672 1036
Retained (loss) (695) 376 364
Total Equity 4,191 4,118 5,250

Current Liabilities
Trade and other payables
Provision for liabilities
163
39
89
102

TOTAL EQUITY AND LIABILITIES

4,354

4,157

5,441

The interim results have not been reviewed by the Company's auditors.

The Directors of the Company are responsible for the contents of this announcement.

Notes

Capital for Colleagues is an investment company focused on the Employee Owned Business (‘EOB’) sector.  The Company has a clear strategy aimed at investing in, advising and growing established, mainly UK-based, EOBs as well as assisting companies which are looking to launch employee ownership schemes, providing the capital and advice to help them achieve their objectives.

Capital for Colleagues has a proven management team, with a wide network of contacts and affiliates, as well as established access to investment opportunities, enabling the Company to execute its strategy and identify and capitalise on EOB-focused investment opportunities.