St Helens Private Equity Plc

December 07, 2009 03:00 ET

Final Results for the year ended 30 September 2009

                                                                              7  December 2009

                                    ST HELEN'S PRIVATE EQUITY PLC
                                     ("SHPE" or "the Company")
                                        (PLUS SYMBOL: SHPE)

                        FINAL RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2009

St  Helen's Private Equity Plc the Pre-IPO, Special Situations and 'Small cap' investment  company
announces audited annual accounts for the year ended 30 September 2009.


Turnover:                          GBP965 (2008: GBP7,217)
Total recognised loss before tax:  GBP 250,915 (2008: GBP737,749)
Shareholder Funds:                 GBP748,596 (2008: GBP808,313)
Recognised loss per share:         12.38p (2008: 45.38p loss)
Net Asset Value per share:         33p (2008: 48p)
Number of investments:             30 (2008: 35)


I am sorry to report the disappointing results for the year ended 30 September 2009, the Company's
fourth full year of operation.

The  Company  has made a post tax loss of GBP296,268 (2008: loss GBP625,100) for  the  full  year,
however  this  does  not include net revaluation gains of GBP45,353 on certain investments,  which
under  UK  accounting standards may not be included within reported profits and losses. Recognised
losses for the year were therefore reduced to only GBP250,915. Net assets per share have decreased
by 15p to 33p per share, which is a decrease of 31% for the twelve months.

Shareholders funds have decreased by 7.39% during the period to GBP748,596.

Market Review

Our  financial year began in the same way as the previous ended, with the banking crisis  in  full
flow and global financial markets in turmoil.  During the first quarter, the benchmark indices  we
track  our  long  term performance against dropped like stones in response to the  rapid  investor
'sell off'. Investor sentiment remained weak until late March of this year, by which time all  our
benchmark indices had registered new trough levels.

To  counteract the accelerating speed of economic decline last autumn, the government  implemented
drastic  monetary  policy  action, reducing interest rates to 0.5%  (the  lowest  on  record)  and
sanctioning  a  massive  £175  billion programme of Quantitative  Easing.  These  actions  changed
investor  perceptions  and  made  equities, with their  dividend  income  and  inflationary  hedge
qualities,  look  much more attractive relative to cash. As a result investor confidence  improved
and in the second half the majority of our benchmark indices regained their first half losses,  so
that by the end of our financial year they had performed as follows:

FTSE 100 index           +  4.72%
AIM UK 50 Index          - 10.44%
AIM All-share Index      +  3.92%

Although the markets recovered and there was record new fundraising, this was primarily focused on
the  banks  and other blue chip companies shoring up their Balance Sheets. The funding market  for
small  and micro cap businesses became very challenging, with the result that only those companies
with  compelling  propositions could raise money, and even those only at deep discounts  to  their
market  price  or  previous fundraising rounds. With low valuations, IPO and  Trade  sales  became
unattractive and the main exit routes for investments became almost non-existent. At the same time
the weak economy created a more challenging trading environment for companies.

In  summary  the  environment for small and micro cap businesses, such as those in our  portfolio,
remained  extremely  difficult as their access to equity and debt  finance  was  limited  and  the
challenges for winning customers, growing revenues, and maintaining margins increased.

Investment Performance Review

During  the  period the Net Asset Value of the Company decreased from 48p per  share  to  33p  per

Where  an  underlying  investment has a quoted share price this is used  for  valuation  purposes.
Unquoted  investments  are  generally valued using their cost  price,  unless  there  has  been  a
significant  event  that justifies revaluation. The valuations of all our unquoted  holdings  were
reviewed  at  31  March 2009 and 30 September 2009. We wrote down those where we believed  it  was
prudent  to do so. On this basis during the 12 month period the unquoted holdings in the portfolio
reduced in value to GBP320,466 representing 67.34% of their former value.

The Company suffered a total recognised loss of GBP250,915 resulting in a fall in NAV per share of
31%. The Directors do not recommend paying a dividend.

Share Price Performance

During the period the Company's share price declined by 46% from 65p to 35p. At the end of the
period the share price of 35p showed a premium of 6% to the Net Asset Value per share of 33p.

Investment Activity Review

At  the  start of the year, the Company held thirty five investments, one of which traded  on  the
Main  market,  six  of which traded on AIM, nine traded on PLUS, and the balancing  nineteen  were

SHPE's strategy is to invest relatively short term, at the point in a business's development where
there is the greatest possible opportunity for value uplift; this is usually before or around  the
time that the business undertakes an IPO. The Company then looks to exit investments subsequent to
this and recycle cash into new investments.

The  Company  uses  a  number of strategies to manage the high risk nature of private  equity  and
'small  cap' companies and reduce the impact of choosing companies that do not succeed, or  indeed
fail  completely. Firstly to diversify risk, we are seeking to increase the number of  investments
in  the  portfolio to over forty holdings. Secondly we are targeting investments  which  have  the
potential  to show returns in excess of 30% per annum. With these strategies the Company  aims  to
maximise its exposure to high performing investments whose performance will substantially outweigh
the losses incurred on those investments which do not succeed.

One  new  investment and one follow-on investment were made, both at the very end of the year.  We
received  the retention monies on the previous sale of MEM capital holding. A total of  six  other
investments  were either partly or wholly divested, the majority at substantial  losses.  None  of
these  six  investments were able to survive the challenging fundraising and trading  environment,
four  were  liquidated, one of them went into administration and one was sold on  highly  dilutive

On  a more positive note three of our investee companies raised significant new investment towards
the  end of our financial year. Two of the companies raised sums well in excess of £6 million  and
should now have sufficient working capital to execute their business plan and reach break-even.

During  the  year  none  of our unquoted companies were able to achieve a public  quote  in  their

At  the  end  of  the year the Company held thirty investments, one of which traded  on  the  Main
market,  four  of  which  traded on AIM, eight traded on PLUS, and the  balancing  seventeen  were
unlisted. The top twenty investments in the portfolio by value are set out in the table following:

 Company              Date   of      Market         Activity
 Kromek               August 2006    Unquoted       Technology    company   developing    Cadmium
 (Durham  Scientific  and July                      Telluride,  a valuable specialist  industrial
 Crystals)            2007                          material,  for  the Security, Inspection  and
                                                    Defence markets
 Karus Therapeutics   June 2007      Unquoted       Developer  of  pharmaceuticals for  treatment
                                                    of   chronic  diseases  such  as  cancer  and
 Site Intelligence    August 2005    Unquoted       Web Analytics software
 M2M Imaging          July 2006      Unquoted       Developer  of technology for high performance
 Myconostica          April 2008     Unquoted       Developer   and  distributor   of   molecular
                                                    diagnostic  products to  aid  the  rapid  and
                                                    accurate   diagnosis  of   life   threatening
                                                    fungal infections
 Neutrahealth         April 2007     AIM            Manufacturer      and     distributor      of
                                                    nutraceutical  products  with  a   'buy   and
                                                    build' consolidation strategy
 TMORenewables        March 2007     Unquoted       'Disruptive'  technology  provider   to   the
                                                    Biofuel sector
 Quercus              August 2006    PLUS           Publisher, winner of small publisher  of  the
                                                    year award
 Twenty               June 2005      AIM            Marketing  services business with a  buy  and
                      and                           build strategy
                      March 2007
 Angel Mining         June 2008      AIM            Zinc    and   Lead   mining   explorer   with
                                                    exploration properties in Greenland
 Hartfield            March 2007     PLUS           Investment   vehicle   seeking   a    reverse
 Securities                                         takeover opportunity
 Rainbow Rewards      Sept 2009      Unquoted       US based, Cash back rewards scheme
 Jongo                March 2007     Unquoted       Web  Portal  and  Search  Engine  for  global
                                                    Internet  users  that  seek  information  and
                                                    content on the subject of China.
 Relay Station        November       Unquoted       Mass broadcaster of voice and text messages

 Running River        April 2007     PLUS           Investor  in  renewable energy with  strategy
                                                    focused on UK run of the river projects
 Synapse              March 2006     Unquoted       Developer of micro-current tendon repair  and
                                                    woundcare solutions
 Datum                May 2005       PLUS           Developer   and  distributor  of   Enterprise
                      Sept 2007                     Content Management software
 Cadogan Petroleum    August 2007    LSE            Gas and Oil Explorer in the Ukraine
 Petro-Kamchatka      April 2008     Unquoted       Oil and Gas explorer in Eastern Russia
 Axon                 June 2008      Unquoted       Provider  of  Telehealthcare solutions  which
 telehealthcare                                     enable   individuals  with  chronic  diseases
                                                    such  as diabetes to monitor and manage their
                                                    health from home

Kromek is the largest single investment in the portfolio representing over 15% of NAV. As a result
the  future  performance  of this investment has the potential to have a material  impact  on  the
performance  of the whole portfolio. Recent newsflow from Kromek has been encouraging.  They  have
reported  that  their  anti-terrorist liquid scanning equipment  is  being  trialled  at  airports
internationally  and they have won a contract worth up to $4 million with the  US  Defense  Threat
Reduction  Agency.  More  information is available at No other  single  investment
accounts for more than 5% of NAV.

During  the  year the Company raised GBP191,198 of net new funds through the issue of 563,217  new
ordinary shares at 35p per share.


There were no Board changes during the year.


The  reduced  availability of equity and debt finance coupled with an improving but  weak  economy
provides a challenging trading outlook for small and micro cap companies.

Our  business  model assumes that a number of investments will fail and the greater  part  of  our
performance  is  dependent on a small number of investments being very successful  and  delivering
exceptional returns. The difficult economic period we have been through has been traumatic  for  a
large  number  of  our investments and the weakest ones have failed. As I have stated  before  the
critical  success factors for our future performance are twofold. Firstly that we do not lose  too
many  of our potential stars during the downturn and secondly that market sentiment and valuations
for  small  companies  strengthens significantly, resulting in re-vitalised  IPO  and  trade  sale

Although recent stock market performance and economic data has been encouraging, there are still a
number of factors which could slow down or stall the recovery.

In  conclusion, we still believe we have a number of investments in the portfolio that are capable
of delivering above average returns and it is encouraging to report that three of the companies in
our  portfolio  have ambitions to IPO during 2010. At the Year End we had £165,000  (approximately
22%  of NAV) of resources available for investment. This provides us with the opportunity to  keep
investing  selectively at a time when we anticipate the market will present the  Company  with  an
increasing number of good value opportunities.

On the basis of our current Net Asset Value per share and cash resources, and subject to no
further material deterioration in the economic outlook, we believe the Company is reasonably
positioned for the future and continue to actively seek good investment proposals.

Jon Pither


The following details are extracted from St Helen's Private Equity Plc Report and Accounts for the
year ended 30 September 2009. The Auditors, H W Fisher & Company has audited these annual results.


                                                                Note                   YEAR               YEAR
                                                                                      ENDED              ENDED
                                                                                    30 SEPT            30 SEPT
                                                                                       2009               2008
                                                                                        GBP                GBP
Turnover                                                                                965              7,217
Administrative expenses                                                            (67,595)           (84,546)
Operating Loss                                                                     (66,630)           (77,329)
Exceptional profit on sale of investments                                            69,151             22,547
Other income                                                                          2,013             16,919
Amounts written off investments                                                   (300,802)          (587,237)
Interest payable and similar charges                                                      -                  -
Loss on ordinary activities before                                                (296,268)          (625,100)
Taxation                                                                                  -                  -
Loss on ordinary activities after taxation                                        (296,268)          (625,100)
Basic & diluted loss per share (pence)                           1                 (14.61)p           (38.44)p

                                                                                       YEAR               YEAR
                                                                                      ENDED              ENDED
                                                                                    30 SEPT            30 SEPT
                                                                                       2009               2008
                                                                                        GBP                GBP
Loss for the financial year                                                       (296,268)          (625,100)
Unrealised    surplus/(deficit)   on    revaluation    of                            45,353          (112,649)
Total recognised losses relating to the year                                      (250,915)          (737,749)
Basic & diluted recognised loss per share (pence)                1                 (12.38)p           (45.38)p

                                                                                     AS AT             AS AT
                                                                                   30 SEPT           30 SEPT
                                                                                      2009              2008
                                                                                       GBP               GBP
Fixed Assets                                                                                                
Investments                                                                        633,731           711,514
Current Assets                                                                                              
Debtors                                                                             10,147             7,117
Cash at bank and in hand                                                           119,379           116,962
Creditors: Amounts Falling Due Within One Year                                    (14,661)          (27,280)
Net Current Assets                                                                 114,865            96,799
Total assets less current liabilities                                              748,596           808,313
Capital And Reserves                                                                                        
Called up share capital                                                            135,171           101,378
Share Premium Account                                                            1,190,328         1,032,923
Revaluation Reserve                                                                 62,853            17,500
Profit & Loss Account                                                            (639,756)         (343,488)
Shareholders' Funds                                                                748,596           808,313


    1.  The calculation of the basic loss per share and diluted loss per share is based on the
        loss attributable to ordinary shareholders of GBP296,268 (2008: a loss of GBP625,100), divided by
        the weighted average number of shares in issue during the year. During the year no options were
        exercised, there is no potential dilution as the fair value is below the issue price.
        The  calculation  of the basic recognised loss per share and diluted recognised  loss  per
        share  is based on the recognised loss attributable to ordinary shareholders of GBP250,915
        (2008:  a  loss of GBP737,749), divided by the weighted average number of shares in  issue
        during the year. During the year no options were exercised, there is no potential dilution
        as the fair value is below the issue price.
        The weighted average number of shares used in the calculations are set out below:

                                                                                       2009               2008
                                                                           Number of shares          Number of
                                                                                  2,027,201          1,625,852

    2.  Full accounts for the Company for the year, which received an unqualified auditors' report
        will be posted to shareholders as soon as is practicable.
    3.  The  financial information in this announcement has been extracted from the Company's
        audited accounts. This financial statement does not constitute statutory accounts within the
        meaning of Section 435 of the Companies Act 2006 (the "Act")."

    4.  The Directors have not declared a dividend for the period.

    5.  This statement was approved by the Board of Directors on 30 November 2009.  Copies of this
        statement will be available free of charge from the Company's Registered Office at 15 St Helen's
        Place, London, EC3A 6DE.



ST HELEN'S PRIVATE EQUITY PLC                TEL: 020 7628 5582
Hamish Williams

FISHER CORPORATE PLC                         TEL: 020 7388 7000
Carolyn Hazard

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