Half-yearly report
CAPITAL MANAGEMENT AND INVESTMENT PLC INTERIM RESULTS FOR THE SIX
MONTHS ENDED 31 JULY 2008
Capital Management and Investment PLC
Interim Results for the 6 month period ended 31 July 2009
Introduction
Your board reduced the carrying value of its investments in Algeco
Scotsman and Magticom in the Financial Statements for the 12 months
to 31st January 2009. Whilst trading in both companies in six months
covered by this Interim Report has not shown any improvement, we
believe that the carrying value of our investments continues to be
£29.1m.
Results for the half year
The Consolidated Income Statement for the six months ended 31st July
2009 shows a Loss Before Tax of £0.614m (2008 - Profit of £0.903m).
Net Asset Value per share is 13.5p (12.1p on a fully diluted basis
assuming the exercise of all the percentage warrants outstanding).
At the end of the period, CMI had net cash balances of £5.1m.
Investment in Algeco Scotsman
Trading continued to deteriorate in both Europe and North America.
The USA, UK, and Spain have been particularly badly hit - with both
rental and utilisation rates continuing to decline during the period.
An overhead reduction plan has been implemented and this has taken in
excess of an annualised ¿50m of cost out of the business. Capital
expenditure has also been cut back considerably. Despite these
measures, Algeco Scotsman is expected to breach its bank covenants by
the end of 2009. Discussions with the principal lenders are ongoing
and we expect that a proposal will be presented to Algeco Scotsman
shareholders within the next few weeks. This is likely to involve a
restructuring of the existing debt and additional equity from
existing or new shareholders. CMI has pre-emptive rights on any new
issue of shares and your board will communicate details of any firm
proposal to shareholders at the appropriate time.
Investment in Yola Investments Sarl ("Yola")
The company holds an investment in Magticom, the largest mobile
telephone operator in The Republic of Georgia via its 33%
shareholding in Yola Investments Sarl which in turn owns 43% of
Metromedia International Group Inc ("MIG") which owns 46% of
Magticom.
MIG has been in dispute with the holders of preference shares in MIG,
in connection with the value attributable to these preference shares.
Following a decision by the Chancery Court in Delaware that valued
the outstanding preference shares in MIG at $47.47 per share (total
of $188.4m), MIG filed for Chapter 11 protection from creditors on
18th June 2009.
MIG has appealed the decision to the Delaware Supreme Court and the
court is expected to announce its decision by April 2010. Meanwhile,
MIG is working to implement a solvent reconstruction of its balance
sheet under Chapter 11 protection. This will involve a redistribution
of value between Ordinary Shares and Preference Shares. The precise
nature of the redistribution of value will depend, amongst other
things, upon the outcome of the appeal.
The Directors believe that the appropriate carrying value of ordinary
shares in MIG held indirectly by CMI Investments continues to be £12m
as shown in the Balance Sheet as at 31st July 2009
Strategy going forward
CMI continues to actively monitor its investments in Yola and Algeco
Scotsman through regular meetings with the management teams of Algeco
Scotsman and Magticom, receipt of monthly financial reports, and
attendance at board meetings.
CMI has no plans at present to make any further new investments.
Dividends
The board is not recommending payment of a dividend for the period
under review.
Hugh Osmond
Chairman
27th October 2009.
Consolidated Income Statement
for the six month period ended 31st July 2009
Unaudited Unaudited Audited
Twelve
Six months Six months months
Ended Ended Ended
31 July 31 July 31 January
2009 2008 2009
£'000 £'000 £'000
Fair value loss on
investments - - (160,810)
Other income - - 3,773
- - (157,037)
Other administrative
(expenses)/income (626) 783 41
Operating (loss)/profit (626) 783 (156,996)
Finance Income 12 120 191
(Loss)/profit before tax (614) 903 (156,805)
Taxation expense - - (29)
(Loss)/profit for the period (614) 903 (156,834)
Basic (loss)/earnings per
share 2 (0.25)p 0.36p (62.70)p
Diluted (loss)/earnings per
share 2 (0.25)p 0.33p (62.70)p
Consolidated statement of Comprehensive Income/(expense)
(Loss)/profit for the period
(614) 903
(156,834)
Other comprehensive income/(expense):
Exchange differences on translation (2,371)
6,817 29,082
of foreign operations
_________ __________ _________
(2,985) 7,720
(127,752)
_________ __________ _________
Consolidated Statement of Changes in Equity
As at 31st July 2009
Share Share Merger Foreign Retained Total
Capital Premium Reserve Currency Earnings Equity
Account Translation
Reserve
£'000
£'000 £'000 £'000 £'000 £'000
Balance as at 31 2,499 38,109 1,693 9,391 112,927 164,619
January 2008
Total - - - 6,817 903 7,720
comprehensive
income for the
period
Balance as at 31 2,499 38,109 1,693 16,208 113,830 172,339
July 2008
Total - - - 22,265 (157,737) (135,472)
comprehensive
income/(expense)
for the period
Balance as at 31 2,499 38,109 1,693 38,473 (43,907) 36,867
January 2009
Total - - - (2,371) (614) (2,985)
comprehensive
income/(expense)
for the period
Balance as at 31 2,499 38,109 1,693 36,102 (44,521) 33,882
July 2009
Consolidated Balance Sheet
As at 31st July 2009
Unaudited Unaudited Audited
Six months Six Twelve months
months
Ended Ended Ended
31 July 2009 31 July 2008 31 January 2009
£'000 £'000 £'000
ASSETS
Non Current assets
Property, plant and - - -
equipment
Investments 29,110 171,420 31,313
29,110 171,420 31,313
Current assets
Trade and other 117 543 270
receivables
Cash and cash equivalents 5,104 4,946 6,007
Total Current Assets 5,221 5,489 6,277
Total Assets 34,331 176,909 37,590
LIABILITIES
Current Liabilities
Trade and other payables (248) (727) (516)
Short Term Loan - (3,660) -
Corporation tax payables (201) (183) (207)
Total Current Liabilities (449) (4,570) (723)
TOTAL NET ASSETS 33,882 172,339 36,867
EQUITY
Share capital 2,499 2,499 2,499
Share premium accounts 38,109 38,109 38,109
Merger reserve 1,693 1,693 1,693
Foreign Currency 36,102 16,208 38,473
Translation Reserve
Retained earnings (44,521) 113,830 (43,907)
TOTAL EQUITY 33,882 172,339 36,867
Consolidated Cash Flow Statement
For the six months ended 31st July 2009
Unaudited Unaudited Audited
Six months Six months Twelve months
Ended Ended Ended
31 July 2009 31 July 2008 31 January
2009
£'000 £'000 £'000
Cash flows from operating
activities
Profit for the (614) 903 (156,834)
period
Adjustments for:
Depreciation - - 1
Fair value loss on - - 160,810
investment
Finance Income (12) (120) (191)
Other Income - - (3,773)
Foreign Exchange Gains (45) (1,394) (1,235)
Income tax expense - - 29
(671) (611) (1,193)
Cash flows from operating activities before changes in
working capital and provisions
Decrease/ (increase) in (274) (297) 588
trade and other receivables
Increase/ (decrease) in 153 474 (24)
trade and other payables
(121) 177 564
Cash outflow from (792) (434) (629)
operations
Income taxes paid - - (28)
- - (28)
Net cash flows from (792) (434) (657)
operating activities
Investing activities
Repayment of Share - - 1,363
Capital in Yola
Interest received 12 120 191
Net cash generated/ (used 12 120 1,554
in) investing activities
Net cash from/ (used in) - - -
financing activities
Net (decrease)/increase in (780) (314) 897
cash and cash equivalents
Cash and cash equivalents 6,006 5,207 5,207
at beginning of the year
Exchange (losses)/gains on (122) 53 (97)
cash and cash equivalents
Cash and cash equivalents 5,104 4,946 6,007
at end of the year
Notes
1 Basis of Preparation
These financial statements have been prepared in accordance with
International Financial Reporting Standards, International Accounting
Standards and Interpretations (collectively IFRS) issued by the
International Accounting Standards Board (IASB) as adopted by
European Union ("adopted IFRSs"), and are in accordance with IFRS as
issued by the IASB and with those parts of the Companies Act 2006
applicable to companies preparing its financial statements in
accordance with IFRS.
The principal accounting policies used in preparing the interim
results are those the group expects to apply in its financial
statements for the year ended 31 January 2010 and are unchanged from
those disclosed in the Group's Report and Financial Statements for
the year ended 31 January 2009 with the exception of the adoption of
IAS1 (Revised). This has resulted in presentation of the consolidated
statement of comprehensive income.
The financial information for the six months ended 31 July 2009 and
31 July 2008 is unreviewed and unaudited and does not constitute the
Group's statutory financial statements for those periods. The
comparative financial information for the full year ended 31 January
2009 has however been derived from the audited statutory financial
statements for that period. A copy of those statutory financial
statements has been delivered to the Registrar of Companies. The
auditors' report on those accounts was unqualified, did not include
reference to any matters to which the auditors drew attention by way
of emphasis without qualifying their report and did not contain a
statement under section 237(2) -(3) of the Companies Act 1985.
2 Earnings per ordinary share
The basic loss per share of 0.25p (2008 earnings - 0.36p per share)
is calculated by reference to the loss after taxation of £614,000
(2007 profit - £903,000) and the weighted average number of ordinary
shares in issue during the year of 249,938,158 (2008 - 249,938,158).
The diluted loss per share of 0.25p (2008 earnings - 0.33p per share)
is based on the above loss. The diluted earnings per share in 2008 is
based on the 2008 earnings and the diluted weighted average number of
ordinary shares in issue during the year. The dilutive impact on the
potential ordinary shares from unexercised warrants and share options
is shown below:
The 500,000 approved and unapproved options granted at an exercise
price of 43p are not dilutive at present. Consequently they have been
omitted from the EPS calculation.
Unaudited Six Unaudited Six Audited Twelve
months ended 31 months ended 31 months ended
July 2009 July 2008 31 January
2009
Basic number of 249,938,158 249,938,158 249,938,158
shares
Unexercised 18,995,300 21,310,517 18,209,780
warrants
268,933,458 271,248,675 268,147,938
3 Interim Report
Additional copies of the interim report are available from the
Company Secretary, Capital Management and Investment PLC, 54 Baker
Street, London W1U 7BU. A copy has been placed on the company's
website www.cmi-plc.co.uk
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solely responsible for the content of this announcement.
