St Helen’s Capital plc (“St Helen’s” or “the Company”)
Final Results
St Helen’s Capital plc, the PLUS-quoted specialist small-cap focused institutional broker, announces its results for the year ended 31 March 2007.
Overview
· Foundations in place to build position as an institutional broker and financial adviser focused on growth companies
· Expanded coverage to include AIM in addition to its position as the leading advisor on PLUS
· New team appointed to bolster business on AIM and target larger transactions including a new Chief Executive, Head of Broking and Head of Research
· Raised GBP1.5m through an institutional placing to finance growth strategy
· Eight new AIM brokership clients won since February 2007 in addition to existing 36 PLUS clients
· Developing strong reputation amongst institutional investors - post reporting period involved in a number of transactions, including raising GBP115 million for Tanfield Group plc
St Helen’s Chief Executive, Ruari McGirr, said, “We are making great progress towards achieving our objective of becoming a leading small-cap focused institutional broker. We have restructured our business and made some strategic appointments to ensure we have the right team in place to build our position in the growth company arena. We have invested in putting in place the right foundations for growth and we are already seeing the benefits coming through, with a number of new client wins and involvement in significant fundraisings since the period end. We believe that there are considerable opportunities in the under-serviced small-cap market, where St Helen’s can take advantage. Encouragingly this is proving to be a very busy year for us.”
For further information visit www.sthelenscapital.com or contact:
Ruari McGirr St Helen’s Capital Plc Tel: 020 7628 5582
Mark Warde-Norbury St Helen’s Capital Plc Tel: 020 7628 5582
Chairman’s Statement
St Helen’s has reached the next stage of development in its stated objective of becoming a leading small-cap focused institutional stock broker and financial adviser. The Company has now expanded its coverage to include AIM, as the Board feels that there is a substantial opportunity to develop both the PLUS and AIM businesses by providing a full range of institutional broking services to potential small-cap clients.
This has been a year of change within St Helen’s and many of our new objectives have already been achieved. We have made strategic appointments to the Board, brought in a new team to bolster the business on AIM, raised additional capital via a GBP1.5m institutional placing to finance our growth strategy and put in place the foundations on which to build our position as an institutional broker and financial adviser focused on growth companies.
Personnel are crucial in the market in which we operate. Accordingly, we are building a team with the ability to execute our strategy that includes AIM, PLUS and pre-IPO transactions. Ruari McGirr, an experienced corporate financier, has been appointed as Chief Executive, Sebastian Wykeham as Head of Broking and David Johnson as Head of Research. We are in the process of recruiting further professionals with the relevant experience to continue to reinforce our position in our targeted area of business.
Since our AIM broking business was established in February this year, we have already won eight AIM brokership clients, in addition to the 36 PLUS clients that we currently represent. Our broking team is carving out a reputation amongst institutional investors and has already been involved in a number of transactions post the reporting period, including raising GBP115 million for Tanfield Group plc where it acted as joint broker.
We believe that the growth company sector has often been under-serviced and we are working on a number of transactions and business opportunities that we believe will be attractive to our institutional investor base and raising our profile further. We are not market specific per se and will bring companies to whichever market is most appropriate, driven by investor and company considerations.
We have no immediate plans to become a Nominated Advisor for AIM listed companies (“Nomad”) as we focus our resource on developing the broking business and are successfully working with a number of Nomad houses. Our PLUS business will continue to be integral to St Helen’s and, with the rising profile of PLUS, we are ideally placed to benefit.
We are the leading advisor on PLUS and now have the core team and experience to target larger transactions, considerably widen our business activity and develop our AIM brokership function. The company is now financially robust and I believe that we have a bright future and have created a company that has the ability and knowledge to deliver on its strategy and become the broker of choice in the small cap arena.
Mark Warde-Norbury
Chairman
31 July 2007
The Directors of the Issuer accept responsibility for this announcement.
The information below has been extracted from the Company’s Audited Accounts for the year-ended 31 March 2007 which contains an unqualified Audit Report.
Directors’ Report
The Directors present their report and financial statements for the year ended 31 March 2007.
Review of the business
The Directors report a loss for the year of GBP657,595 (2006: GBP193,914). Turnover reduced to GBP871,000 (2006: GBP973,000). In addition, the Company made unrealised investment losses of GBP63,000 (2006: gains of GBP252,000). Net assets reduced by GBP113,000 (20%) to GBP471,000 (2006: increased by GBP154,000 (36%)).
The comparative balances have been restated to account for changes in accounting policies on revenue recognition and the profits on the sale of investments in accordance with applicable accounting standards.
Review of trading
St Helen’s has consolidated its position as the leading PLUS Corporate Finance Advisory firm and now acts for 36 (2006: 23) companies which represents 18% (2006: 15%) of the total number of companies traded on PLUS.
During the year the Company completed 9 (2006: 24) fund raisings amounting to a total of GBP5.2m (2006: GBP10m) and introduced 21 (2006: 16) new companies to PLUS which was 30% (2006: 36%) of the total number of new entrants for the period.
Of the 9 fund raisings mentioned above, 2 of the most successful PLUS IPO’s in 2007 were carried out by the Company: Quercus Publishing PLC and Air Touring PLC. These, however, were counter to the trend in 2007, compared to 2006, where a significant proportion of new entrants to PLUS did not include a fundraising.
On 16 March 2006 St Helen’s Capital announced that it had become a Member of the London Stock Exchange and had received permission to act as an AIM broker.
St Helen’s Capital PLC’s strategic direction
The results above, and specifically the lack of fundraising activity in the Company’s market, meant that fee income fell well short of the levels in previous years. The Directors assessed this situation as more than a short-term anomaly and determined to move the Company’s activity into a market where the professional expertise of the staff could be used more lucratively. To complement this plan, in February 2007 the Directors recruited 3 senior professionals, including a new Chief Executive and Head of Broking in order to develop the Company’s operations into a significant broker to small cap investors and Corporates across PLUS and AIM. The Directors believe the Company is now well placed in these markets and will continue to seek opportunities to develop the business further.
Risk profile
There is an inherent risk in businesses which depend in part on one off transaction fees as the earning of such fees can be unpredictable. The timing and size of fundraising fee income has historically caused periodic short term cash-flow timing difficulties. To overcome this, a successful GBP1.5m Placing was closed on 26 April 2007.
As the Company expands its broking activity there is a risk that the cost base is increased more quickly than the revenue. There is also a need as the business undertakes more complicated activities to develop its compliance and procedures in conjunction with these.
Staff matters
As mentioned above, in February 2007 Ruari McGirr was recruited as the new Chief Executive, Sebastian Wykeham as Head of Broking, and David Johnson as Head of Research. The Company has also taken on a number of other staff to support its new strategy and the opportunities that it is seeking to exploit.
Issue of share options
As an incentive to join St Helen’s Capital PLC, on 2 February 2007, Ruari McGirr and Sebastian Wykeham were each offered c4.34m Options exercisable at 5p, in tranches of c1.1m on achieving 4 objectives: gaining admission to AIM, and the Company’s share price reaching 20p, 30p and 50p. These options will be forfeited if the beneficiary fails to remain with the company for 3 years.
At the same time, and on the same basis, David Johnson was offered c2.03m Options exercisable at 5p, in tranches of 508,000, with the same restrictions.
On 30 March 2007, Jon Pither and Marke Warde-Norbury were each offered 1m Options, the first 400,000 of which are exercisable at 10p, the next 400,000 at 20p, and the remaining 200,000 at 30p. There are no further restrictions.
At the same time and on the same basis, Barry Hocken was offered 500,000 Options, exercisable in tranches (respectively) of 200,000, 200,000 and 100,000 with no further restrictions.
Various members of staff have, since March 2007 to date been offered (in aggregate) 1.525m Options, exercisable at the market price on the day each offer was made, which will be forfeited if the beneficiary fails to remain with the company for 3 years.
As at the time of writing 17,469,255 options in total have been offered to directors and staff.
To the extent that the value of Options at the exercise price(s), for each individual falls within the EMI limit of GBP100,000, EMI schemes have been written to reflect the above arrangements. To the extent that the value exceeds GBP100,000, the Options will be subject to an ‘Unapproved Scheme’.
In order to attract the right calibre of Market Professional to join St Helen’s Capital PLC, it is the Company’s intention to offer further Options as required.
Future prospects
The Directors believe that the opportunities before the Company are more exciting than at any time in its history.
The Company’s ability to serve investors and Corporates in the small cap sector has improved through adding institutional broking and research functions, and the ability to deliver shareholder value is accordingly enhanced.
Results and dividends
The directors do not recommend payment of an ordinary dividend.
Profit and loss account for the year ended 31 March 2007
2007 2006
as restated
GBP GBP
Turnover 871,360 973,384
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