Marwyn Management Partners : Results for the 6 month period to 30 June 2014

Marwyn Management Partners PLC



Marwyn Management Partners PLC

24 September 2014

Marwyn Management Partners plc ("MMP" or "the Company")

Results for the 6 month period to 30 June 2014

The Board of MMP releases below the results for the period from 1 January to 30 June 2014.

Chairman's Statement

I am pleased to present the unaudited interim results for Marwyn Management Partners plc (the "Company" or "MMP") for the six months ended 30 June 2014.

The Company and its subsidiaries (the "Group") has undergone significant change with the sale of its transport business, Metropolitan European Transport ("MET"), and the post period end move to the AIM Market of the London Stock Exchange plc ("AIM"), debt-for-equity swap and placing.

The Group's revenue of £6.2 million for the period was generated by its sole ongoing operating subsidiary Le Chameau SAS ("Le Chameau"). Following the sale of MET, its results are reported as discontinued operations. Consolidated operating loss for the period was £3.5 million. At 30 June 2014, the Group's consolidated net assets were (£5.1) million and consolidated net debt was £13.7 million.

Since the half year end the Company has relisted on AIM, raising an additional £5.4 million from existing and new investors. Additionally, £12.0 million of loans from Marwyn Value Investors LP ("MVI") were converted into MMP shares.

Operating update

Le Chameau

Le Chameau is the focus of our business. Trading for the business continues in line with our expectations and we continue to strengthen the operational management team, with a new CFO and Operations Director joining the business since the beginning of the year. We remain extremely excited about the opportunities available for Le Chameau in existing and new markets.

Principal risks and uncertainties

The principal risks and uncertainties that affect the Group are described on pages 11 and 12 of the Group's Report and Consolidated Financial Statements for the year ended 31 December 2013. These are still considered the most relevant risks and uncertainties which the Group faces and they could have an impact on the Group's performance in the second half of the financial year.

Outlook

With the move to AIM, fundraising and recapitalisation completed, the Company is now properly financed to develop the Le Chameau business going forward.

Robert Ware

Chairman

24 September 2014

MARWYN MANAGEMENT PARTNERS PLC

Consolidated Income Statement (unaudited)

For the 6 month period to 30 June 2014

				1 January 2014 to 30 June 2014 (unaudited)		1 January 2013 to 30 June 2013 (restated , unaudited)		Year to 31 December 2013 (audited)
			Note	£'000		£'000		£'000
Continuing operations
Revenue				6,107		7,961		21,431
Cost of sales				(2,355)		(3,794)		(9,473)
Gross profit				3,752		4,167		11,958
Administration expenses				(7,294)		(6,418)		(16,333)
Operating loss			3	(3,542)		(2,251)		(4,375)
Analysed as
Loss from operations before exceptional items				(3,542)		(2,164)		(4,288)
Exceptional items included in administration expenses		4		-		(87)		(87)
Operating loss				(3,542)		(2,251)		(4,375)
Finance revenue				-		-		5
Finance costs				(402)		(162)		(482)
Loss before taxation				(3,944)		(2,413)		(4,852)
Taxation				-		-		(39)
Loss after taxation from continuing activities				(3,944)		(2,413)		(4,891)
Loss from discontinued activities (net of taxation)				(2,710)		(1,952)		(14,754)
Loss for the period				(6,654)		(4,365)		(19,645)
Loss for the period attributable to:
-     Equity holders of the Company				(6,026)		(4,081)		(18,901)
-     Non-controlling interests				(628)		(284)		(744)
				(6,654)		(4,365)		(19,645)
Basic and diluted loss per share on continuing operations			7	(6.3p)		(3.8p)		(7.8p)
Basic and diluted loss per share attributable to the owners of the parent			7	(9.6p)		(6.5p)		(30.0p)
Total other comprehensive loss
-      Exchange differences on translation of foreign operations				59		(49)		282
-      Fair value movements on fuel hedges				-		(17)		(33)
Total other comprehensive loss				59		(66)		249
Total comprehensive loss for the period attributable:
-     Equity holders of the Company				(5,967)		(4,147)		(18,652)
-     Non-controlling interests				(628)		(284)		(744)
				(6,595)		(4,431)		(19,396)

The notes form an integral part of the financial information.

MARWYN MANAGEMENT PARTNERS PLC

Consolidated Balance Sheet (unaudited)

As at 30 June 2014

		30 June 2014 (unaudited)		30 June 2013 (unaudited)		31 December 2013 (audited)
	Note	£'000		£'000		£'000
ASSETS
Goodwill	8	1,071		5,076		1,116
Other intangible assets		1,928		3,149		2,429
Property, plant and equipment		3,517		14,664		3,329
Other non current asset		216		217		225
Deferred tax asset		337		1,090		387
Total non-current assets		7,069		24,196		7,486
Current Assets
Inventories		5,417		6,443		4,670
Trade and other receivables		4,952		8,493		5,594
Discontinuing business held for sale - assets		-		-		12,973
Cash and cash equivalents		969		3,137		5,593
Total current assets		11,338		18,073		28,830
Total assets		18,407		42,269		36,316
EQUITY AND LIABILITIES
Equity
Share capital	10	631		631		631
Share premium		20,441		20,441		20,441
Other reserves		(999)		(1,072)		(944)
Accumulated losses		(25,656)		(4,810)		(19,630)
Equity attributable to holders of the parent		(5,583)		15,190		498
Non-controlling interests		446		1,848		1,074
Total equity		(5,137)		17,038		1,572
Non-current liabilities
Loans and borrowings	9	12,855		11,309		12,848
Derivative financial liabilities		-		68		-
Provisions for other liabilities and charges		-		20		-
Retirement benefit obligations		1,098		1,353		1,171
Deferred tax liabilities		19		20		-
Total non-current liabilities		13,972		12,770		14,019
Current liabilities
Trade and other payables		7,531		8,553		6,216
Loans and borrowings	9	1,788		3,413		1,186
Deferred consideration		-		43		-
Provisions for other liabilities and charges		253		435		350
Retirement benefit obligations		-		17		-
Liabilities in respect  of assets held for resale		-		-		12,973
Total current liabilities		9,572		12,461		20,725
Total liabilities		23,544		25,231		34,744
Total equity and liabilities		18,407		42,269		36,316

The financial statements were approved by the Board of Directors on 24 September 2014 and were signed on its behalf by:

Mark Kirkland

Chief Financial Officer                                                                                                                                  Company number: 7409681

MARWYN MANAGEMENT PARTNERS PLC

Consolidated Statement of Changes in Equity (unaudited)

For the 6 month period ending 30 June 2014

	Share capital £'000	Share premium £'000	Other reserves £'000	Accumulated losses £'000	Total amounts attributable to equity holders of the parent £'000	Non-controlling interests £'000	Total equity £'000
Total equity at 1 January 2014	631	20,441	(944)	(19,630)	498	1,074	1,572
Loss for the period	-	-	-	(6,026)	(6,026)	(628)	(6,654)
Other comprehensive income:
Currency translation differences	-	-	(55)	-	(55)	-	(55)
Total comprehensive income	631	20,441	(999)	(25,656)	(5,583)	446	(5,137)
Total equity at 30 June 2014	631	20,441	(999)	(25,656)	(5,583)	446	(5,137)

For the 6 month period ending 30 June 2013

	Share capital £'000	Share premium £'000	Other reserves £'000	Accumulated losses £'000	Total amounts attributable to equity holders of the parent £'000	Non-controlling interests £'000	Total equity £'000
Total equity at 1 January 2013	631	20,441	(1,003)	(729)	19,340	668	20,008
Loss for the period	-	-	-	(4,081)	(4,081)	(284)	(4,365)
Other comprehensive income:
Currency translation differences	-	-	(49)	-	(49)	-	(49)
Fuel hedges, net of tax	-	-	(17)	-	(17)	-	(17)
Disposal of minority interest	-	-	-	-	-	1,464	1,464
Total comprehensive income	631	20,441	(1,069)	(4,810)	15,193	1,848	17,041
Share based payment	-	-	(3)	-	(3)	-	(3)
Total equity at 30 June 2013	631	20,441	(1,072)	(4,810)	15,190	1,848	17,038

For the year to 31 December 2013

Year ended 31 December 2013	Share capital £'000	Share premium £'000	Other reserves £'000	Accumulated losses £'000	Total amounts attributable to equity holders of the parent £'000	Non-controlling interests £'000	Total equity £'000
Loss for the year	-	-	-	(18,901)	(18,901)	(744)	(19,645)
Other comprehensive income:
Currency translation differences	-	-	282	-	282	-	282
Cash flow hedges, net of tax	-	-	(33)	-	(33)	-	(33)
Total comprehensive income	-	-	249	(18,901)	(18,652)	(744)	(19,396)
Total equity at 1 January 2013	631	20,441	(1,003)	(729)	19,340	668	20,008
Shares issued by subsidiary undertakings	-	-	(190)	-	(190)	1,150	960
Total equity at 31 December 2013	631	20,441	(944)	(19,630)	498	1,074	1,572

The notes form an integral part of the financial information.

MARWYN MANAGEMENT PARTNERS PLC

Consolidated Condensed Cash Flow Statement (unaudited)

For the 6 month period to 30 June 2014

		1 January 2014 to 30 June 2014		1 January 2013 to 30 June 2013			Year to 31 December 2013 (audited)
		£'000		£'000			£'000
Cash flows from operating activities
Operating loss (including discontinued operations)		(6,142)		(4,021)			(19,606)
Adjustments for:
Loss on disposal/impairment of discontinuing operations		1,340		-			10,580
Depreciation and amortisation		160		1,408			2,284
(Increase)/decrease in inventories		747		(1,016)			348
(Increase) in trade and other receivables		(145)		(620)			(411)
(Decrease)/increase in trade and other payables		428		(1,214)			(57)
Interest received		-		-			4
Interest paid		(42)		(394)			(415)
Share based payment charges		-		3			(3)
Tax paid		-		-			(12)
Cash (outflow)/inflow from operations		(3,654)		(5,854)			(7,288)
Cash flow from investing activities
Acquisition of subsidiaries, net of cash acquired		-		(688)			(583)
Disposal of property, plant and equipment		-		-			(425)
Purchase of property, plant and equipment		(368)		(1,229)			(4,085)
Net cash out flow from investing activities		(368)		(1,917)			(5,093)
Cash flow from financing activities
Repayment of borrowings		(602)		(297)			(809)
Proceeds from bank loans		-		698			2,625
Proceeds from issue of loan notes		-		6,588			12,785
Share and loan note issue costs		-		(87)			(87)
Proceeds from issue of ordinary shares to non-controlling interests		-		1,150			1,150
Net cash inflow/(outflow) from financing activities		(602)		8,052			15,664
Effect  of exchange rate on cash and cash equivalents		-		96			111
Classified as assets held for resale		-		-			(561)
Net (decrease)/increase in cash and cash equivalents		(4,624)		377			2,833
Cash and cash equivalents at the start of the period		5,593		2,760			2,760
Cash and cash equivalents at the end of the period		969		3,137			5,593
The amount of undrawn borrowing facilities at 30 June 2014 was £0.8 million.

The notes form an integral part of the financial information.

1.            Reporting entity

MMP is a company incorporated and domiciled in the UK.  The address of the registered office is 11 Buckingham Street, London, WC2N 6DF. The Company is a corporate vehicle launched to pursue acquisition led growth strategies. The Company identifies and works alongside management teams with proven sector expertise to deliver capital value through the execution of its "buy and build" strategies. As at 30 June 2014, the Company had a standard listing on the Main Market of the London Stock Exchange plc (the "Main Market"). On 14 July 2014 the Company delisted from the Main Market and became quoted on AIM.

2.           Accounting policies

(a)   Basis of preparation

The condensed consolidated unaudited interim financial information of the Group has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS 34 'Interim Financial Reporting', as adopted by the European Union. The condensed consolidated interim financial information should be read in conjunction with the Report and Consolidated Financial Statements for the year to 31 December 2013, which were prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. The accounting policies used are consistent with those applied in the year to 31 December 2013. The financial information has been prepared on a going concern basis.

(b)  Going-concern basis

After a review of the Group's budget for 2014 and 2015, its liquid resources and its medium term plans, and following the recapitalisation of the Company in July 2014, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and, accordingly, consider that it is appropriate to adopt the going concern basis in preparing these financial statements.

(c)   Basis of consolidation

(i) Subsidiaries

The consolidated condensed financial statements comprise the financial information of the Company and its subsidiaries as at 30 June 2014.  Subsidiaries are entities controlled by the Company. The financial information of subsidiaries is included in the financial information from the date that control commences until the date that control ceases. In accordance with IAS 27, adjustments for significant transactions that occurred between the dates of the subsidiary's and parents financial statements have been made where appropriate.

The trading results of companies acquired during the period are accounted for under the purchase method of accounting. All intra-group transactions, balances, income and expenses are eliminated on consolidation. The

accounting policies of subsidiaries are changed when necessary to align them with the policies adopted by the Group. Non-controlling interests are the present ownership interests in subsidiary companies, stated at fair value.

(ii) Goodwill

Goodwill arising on the acquisition of subsidiary undertakings and businesses, representing the excess of the fair value of the consideration given over the fair value of the identifiable assets and liabilities acquired, is capitalised as an intangible asset. At the reporting date, where management's assessment and accounting of the business combination is in the process of being finalised, the carrying amount of the assets, liabilities and goodwill are stated as provisional. The provisional amounts will be finalised within 12 months from the date of acquisition, with appropriate adjustments made to the assets, liabilities and goodwill as prior year adjustments where necessary.

The carrying value of goodwill is tested for impairment at least annually by reference to the relevant cash generating unit (CGU) and is carried at cost less accumulated impairment losses. Any impairment is recognised immediately in the consolidated income statement and is not subsequently reversed.

3.           Segment information

The determination of operating segments is based on the business units for which information is reported to the Board.  Prior to the sale of MET, the Group had two reportable segments: transport and luxury goods, but sold the transport division during the period. The Chief Operating Decision Maker is Mark Watts, an Executive Director of the Company, who is responsible for determining the business units for which information is reported to the Board of MMP. The luxury goods segment consists of the Le Chameau business. The Central segment records central costs from head office expenditure and functions.

Information regarding the operations of each reportable segment is included in the following tables.  Performance is measured based on EBITDA. Segment profit/loss from operations is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries.

	Luxury goods	Central	Total
	£'000	£'000	£'000
Revenue from external customers	6,107	-	6,107
Adjusted EBITDA*	(2,678)	(704)	(3,382)
EBITDA*	(2,678)	(704)	(3,382)
Depreciation and amortisation	(160)	-	(160)
Loss from continuing operations	(2,838)	(704)	(3,542)
Net finance (expense)	(3)	(399)	(402)
Loss before tax on continuing activities	(2,841)	(1,103)	(3,944)
Total assets	17,710	697	18,407
Total assets include:
-     Cash and cash equivalents	689	280	969
Total liabilities	(9,927)	(13,617)	(23,544)

* A reconciliation of Adjusted EBITDA and EBITDA is set out in note 5.

Geographical segments

The UK is the Group's country of domicile. However, following the disposal of the gaming division and the classification of the Transport division as a discontinuing activity, the Group generates all of its revenue from the Luxury Goods division, principally from external customers in Europe.

4.    Exceptional expenses

	1 January 2012 to 30 June 2014		1 January 2012 to 30 June 2013		Year to 31 December 2013
	£'000		£'000		£'000
Fund raising costs	-		87		87
	-		87		87

5.    EBITDA

Pre-exceptional earnings before interest, tax, depreciation and administration ("EBITDA") and adjusted EBITDA comprises:

	1 January 2013 to 30 June 2014		1 January 2012 to 30 June 2013		Year to 31 December 2013
	£'000		£'000		£'000
Adjusted EBITDA	(3,382)		(1,984)		(3,916)
Less:
Exceptional expenses	-		(87)		(87)
EBITDA	(3,382)		(2,071)		(4,003)
Less depreciation and amortisation	(160)		(180)		(372)
Loss from continuing operations	(3,542)		(2,251)		(4,375)
Loss from discontinued activities	(2,710)		(1,952)		(14,792)
	(6,252)		(4,203)		(19,117)

6.    Results of discontinued operations

On 10 June 2014, the Group sold its entire interest in its Transport division, MET. The comparative Consolidated Income Statement for the 6 month period to 30 June 2013 has been restated to reflect the removal of the discontinued Transport activities.

	1 January 2013 to 30 June 2014 £'000		1 January 2012 to 30 June 2013 £'000		Year to 31 December 2013 £'000
Revenues	11,033		13,363		25,800
Expenses	(12,402)		(15,315)		(29,962)
Loss before tax	(1,369)		(1,952)		(4,162)
Taxation	(1)		-		(12)
Loss after tax	(1,370)		(1,952)		(4,174)
Loss on sale of discontinued operations	(1,340)		-		(10,580)
Loss for the year/period	(2,710)		(1,952)		(14,754)
Loss per Ordinary share - basic and diluted	(2.1p)		(3.1p)		(24.4p)

7.     Loss per Ordinary share

		Loss £'000		Weighted average number of shares		Loss per share
Basic and diluted loss per share on continuing operations
6 month period to 30 June 2014		(3,944)		63,077,077		(6.3p)
6 month period  to 30 June 2013		(2,413)		63,077,077		(3.8p)
Year to 31 December 2013		(4,891)		63,077,077		(7.8p)
Basic and diluted loss per share attributable to the owners
6 month period to 30 June 2014		(6,026)		63,077,077		(9.6p)
6 month period  to 30 June 2013		(4,081)		63,077,077		(6.5p)
Year to 31 December 2013		(18,901)		63,077,077		(30.0p)

The loss per Ordinary share has been calculated using the weighted average number of Ordinary shares of the Company. As the Group has incurred losses in all periods there is no further dilution from any warrants or other financial instruments in issue.

8.     Goodwill

	30 June 2014		30 June 2013		31 December 2013
	£'000		£'000		£'000
Cost or valuation
At beginning of period	4,866		4,866		4,866
Derecognised on disposal	(3,848)		-		-
Exchange differences	53		210		98
At end of period	1,071		5,076		4,964
Accumulated impairment losses
Impairment losses brought forward	(3,848)		-		-
Derecognised on disposal	3,848		-		-
Impairment losses for the period	-		-		(3,848)
At end of period	-		-		(3,848)
Carrying amount
At end of period	1,071		5,076		1,116

9.    Loans, borrowings and derivative financial liabilities

	30 June 2014		30 June 2013		31 December 2013
	£'000		£'000		£'000
Bank loans	1,275		2,395		666
Finance leases	-		5,443		-
Loan notes	13,368		6,889		13,368
Fuel hedge	-		68		-
Other loans	-		45		-
	14,643		14,840		14,034
Loans, borrowings and derivative financial liabilities split as:	£'000		£'000		£'000
Current	1,788		3,413		1,186
Non-current	12,855		11,377		12,848
	14,643		14,840		7,786

10.     Share Capital and Warrants

Ordinary shares

The Company has issued 63,077,077 Ordinary shares of £0.01 each.

Warrants

The Company had in issue 10,375,000 warrants which expired in the period.

Warrant holders had subscription rights to subscribe in cash during the subscription period for all or any of the ordinary shares for which they are entitled to subscribe under such warrants of which they are the holder at the subscription price (£1) and subject to the other restrictions and conditions described in the Warrant Instrument. The subscription periods for the warrants expired in January 2014 and their listing was cancelled in July 2014.

11.   Related parties

Whilst the Board is responsible for the Company's objectives and business strategy and its overall supervision (including the approval of any acquisitions), the Company has outsourced most of its operating functions, including the identification and assessment of acquisition opportunities, and the design and execution of the restructuring process and setting the strategy for any acquired company or business, to Marwyn Operating Partners LLP (the "Operator"), a UK limited liability partnership. The members of the Operator are James Corsellis and Mark Watts, (the 'Founders') and the Company (in respect of a minority participating interest held for regulatory reasons).  The Operator is managed by the Founders. As part of the refinancing completed in July 2014 the operator agreement was terminated. No fee was paid in respect of the operator agreement in the period (2013: £159,548).

During the period, Marwyn Capital LLP charged MET, the transport subsidiary of the Group, £105,410 for corporate finance and office services. Additionally, Marwyn Capital LLP charged Le Chameau SAS, the luxury goods subsidiary of the Group, £120,000 for corporate finance and office services. The members of Marwyn Capital LLP are the Founders.

The Founder Securities in Marwyn Management Partners Subsidiary Limited are owned by Marwyn Capital Growth LP (a limited partnership of which, inter alia , James Corsellis and Mark Watts are limited partners) and Marwyn Management Partners LLP (a limited partnership of which, inter alia , James Corsellis, Mark Watts and Robert Ware are limited partners).

In July 2014 as a result of the refinancing and placing the Company became a subsidiary of Marwyn Value Investors LP of Axio House, Robin Place, St Helier, Jersey JE2 4LT.

This information is provided by RNS

The company news service from the London Stock Exchange

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