VSA Capital Group - Final Results
RNS Number : 5235Q
VSA Capital Group PLC
29 June 2022
 

DATE: 29 June 2022

 

VSA Capital Group plc

 

("VSA", the "Company" or together with its subsidiaries the "Group")

 

Audited results for the year ended 31 March 2022

 

VSA Capital Group plc (Aquis: VSA), the international investment banking and broking firm is pleased to announce its audited results for the year ended 31 March 2022.

 

Highlights

 

·      Year started with the full integration of VSA Capital Limited into the Group on 1 April 2021

 

·      Turnover of £3.61m (previous year Nil), operating profit of £0.51m

 

·      Cash at year end £2.01m

 

·      Retained Corporate Clients 24 (2021: 19 clients of VSA Capital Limited)

 

We have been busy across all areas of the firm, including fundraises for private and public companies (IPOs, RTO's and placings) and advisory work on mergers, acquisitions and Takeover Code transactions. 

 

With many countries and industries focusing on control of their own energy and critical metal supplies, VSA is well placed to benefit from this with our core sectors being Natural Resources and Transitional Energy. 

 

During last year we have expanded our coverage successfully into the Leisure and Consumer Brands sectors acting for four companies, and we expect all to be active and to grow quickly.  In addition we have also expanded our activities into Technology and Software, eMobility and eCommerce.

 

In addition to our work advising and raising funds for companies listed on the London Stock Exchange, we have taken a strong stance to back the Aquis Stock Exchange as we genuinely believe London needs a second exchange and competition to the LSE.  We were particularly pleased to be appointed as Aquis Corporate Adviser to Aquis Exchange plc on its dual listing on the Aquis Growth Market.

 

 

Andrew Monk, CEO of VSA Capital Group plc said:

 

"This is the first year of reporting as a listed company on the Aquis Growth Market and I am pleased to report a healthy underlying profit, despite the final quarter being exceptionally tricky as it has been for all in our industry.  Despite the current turmoil in equity markets I am cautiously optimistic about the prospects for VSA Capital in the current year"

 

 

 

For more information, please contact:

 

VSA Capital Group plc

+44(0)20 3005 5000

Andrew Monk, CEO

Andrew Raca, Head of Corporate Finance

Marcia Manarin, Finance Director


 


Alfred Henry - AQSE Corporate Adviser

+44 (0)20 3772 0021

Jon Issacs

 

www.alfredhenry.com  

 

 

Chairman's Statement

 

I am pleased to present the first audited results for VSA Capital Group plc since its IPO on the Aquis Growth Market on 9 September 2021.  This date marked a return of the Group to the market following many years as an unlisted company and in a much stronger position than it had been before. 

 

In order to achieve the IPO, the business undertook a restructuring whereby VSA Capital Group plc acquired VSA Capital Limited, the underlying business of the Group, in a share for share exchange.  This restructuring was effected in accordance with the UK Takeover Code and resulted in a number of accounting peculiarities, particularly a considerable amount of goodwill which we are obliged to write off over a five year period, and also the fact that the strong performance of VSA Capital Limited had not been provided in the previous financial period as it was only acquired on the last day of that year.    

 

Nevertheless, the board is pleased with the outcome for the year and as outlined by our CEO, Andrew Monk, reflects further growth and progress for the Group.

 

The current year is undoubtedly challenging, but we are cautiously optimistic.  Meanwhile, personally, I am very confident in the executive team, and we as a board are confident that the Group's strategy is robust to continue to build shareholder value.

 

Mark Steeves

Chairman

 

 

 

CEO'S Report

 

Principal Activity

 

The principal activities of the Group are the provision of corporate finance advisory, stockbroking, fundraising and research services to both private and public companies.

 

Review of the Business

 

On 31 March 2021, in preparation for the IPO of the Company on the Aquis Growth Market, VSA Capital Group plc acquired VSA Capital Limited in a reverse takeover and its results are therefore consolidated into these Group accounts for the first time in the financial statements for the year ended 31 March 2022.

 

Review of the Year

 

This is our first year of reporting as a listed company on the Aquis Growth Market and I am pleased to report a healthy underlying profit, despite the final quarter of January to March being exceptionally tricky as it has been for all in our industry. Also, despite the current turmoil in equity markets I am cautiously optimistic about the prospects for VSA in the current year.

 

To understand the performance of the VSA Group, we have highlighted an underlying profit before tax to reflect our "real profit" in the Key Performance Indicators section below. Most companies are now reporting Underlying or Adjusted Profits to give a true reflection of performance as goodwill amortisation, which is a non-cash item, can give a very distorted impression of a business's performance. Because VSA Capital Group plc undertook a restructuring by acquiring VSA Capital Limited in order to achieve our IPO, we are now required to amortise the consequent "goodwill" that arose, but in reality, nothing has actually changed.  Such is the nature of IFRS accounting nowadays.

 

To understand the progress of our business, the key criteria to consider are the Group's underlying profits, cash generated and the number and quality of corporate clients which produce much of the Group's revenue.

 

Our cash position is healthy at £2.0mn (2021: £1.8mn).  Our retained clients have increased to 24 (19 at the time that VSA Capital was acquired) and the quality of our clients has improved significantly.  All this contributes to my cautious optimism.

 

Looking forward in the current global situation, although the economic outlook is not good, there is also a resetting of many industries to reflect a more nationalistic approach and control of countries' own energy and critical metal supplies. VSA is well placed to benefit from this with our core sectors being Natural Resources and Transitional Energy.  We were marketing lithium mines across the globe more than 10 years ago and well before other UK investment banks got involved and this has given us a great position and understanding of all the critical and battery metals.

 

We have also taken a strong stance during the resurgence of Cornish Mining. Last year we completed the £41m fundraising and IPO of Tungsten West plc which, although technically in West Devon, will be a key component of the future Cornish Mining industry. Cornwall has plentiful reserves of Tin, Tungsten, Copper and Lithium. The UK can become a global mining player again, but it will take time, require a lot of capital, the support of the UK Government as well as collaboration between the different mining companies operating there.  We expect to play a significant part in this. 

 

During last year we have expanded our coverage successfully into the Leisure and Consumer Brands sectors acting for four companies, and we expect all to be active and to grow quickly. We are also advising on a number of transactions in the space. 

 

We have broadened our Corporate Finance advisory practice continuing our public company Takeover Code work, private company fundraising and M&A advisory activities, which has led to us broadening our sector activities particularly in Technology and Software, eMobility and eCommerce.  We are keen to grow into one or two other sectors if we can find the right people and without risking the profitability of our core sectors.

 

We have taken a strong stance to back the Aquis Stock Exchange as we genuinely believe London needs a second exchange and competition to the LSE, which is losing market share annually on a global basis. In the USA you have NYSE and Nasdaq and in China they have three exchanges; Shanghai, Shenzhen and Beijing. Canada has the TSX/TSX-V and the Canadian Stock Exchange.  In Asia, Hong Kong and Singapore compete.  In a post Brexit world London needs a second exchange and Aquis is perfectly positioned. We have completed successful, well-funded IPOs on the Aquis Growth Market, which is growing, but it needs more participation by the retail trading platforms and PCBs to ensure liquidity is in the market. Sadly, in today's world it appears that many players care less about what they offer their clients but simply want an easy, well-paid life. I believe Aquis will eventually become the 'Nasdaq of London' and we were particularly pleased to be appointed as Aquis Corporate Adviser to Aquis Exchange plc on its dual listing on the Aquis Growth Market.

 

Our international operations and in particular our Shanghai office have declined significantly in the last two years due to the inability to travel to those destinations to develop business. We are not anticipating a rapid pick-up in deal flow from our Shanghai office in the coming year, but we are hopeful we can start to benefit from our partnerships in Kenya and South Africa.

 

Our joint ventures in Bond trading and asset management continue to bring in useful additional revenue and give us optionality on future possibilities. The Shanghai Mining Club, which has a joint venture with Investing In African Mining Indaba, continues to grow even though the conference has had to adapt to a hybrid virtual format. But we have high hopes that this can grow significantly going forward.

 

As a company we continue to look for acquisitions, which would help us grow without undue risk. So far, we are yet to find one that would fit with our culture, come at a valuation that is good for shareholders and adds long term value to our business.


Outlook

 

We remain cautiously optimistic despite the worsening conditions for global markets that are unlikely to improve for some time. We have always seen our profits biased towards the second half and normally show a loss at the interim stage and we expect that to be true this year. We then also expect to have a strong second half and show a profit for the full year ending 31 March 2023.

 

Andrew Monk

CEO

 



 

Key performance indicators

 

Reported (accounting) profit           

 

Year ended 31 March 2022 Underlying Profits

 

£399,144 comprising £68,374 profit on ordinary activities before taxation plus amortisation of £330,770 (2021: £194,097 (no amortisation))

 

Cash at 31 March 2022

 

£2.01m (£1.87m)

 

Retained Corporate Clients at 31 March 2022

 

24 (19 clients of VSA Capital Limited)

 

 

 

 

GROUP STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 MARCH 2022

 

 

Notes

2022

2021

 

 

 

 

 

 

£

£

Turnover

2

3,605,562

-

Cost of sales

 

(175,761)

-

Gross profit

 

3,429,801

-

Other operating income

 

34,750

-

Administrative expenses

 

(2,954,406)

(19,803)

Operating Profit/(loss)


510,145

(19,803)

Finance income

4

736

213,900

Gains/(Losses) on investments

4

(442,507)

-

Profit on ordinary activities before taxation


68,374

194,097

Tax on Profit/(Loss) on ordinary activities

5

(26,482)

-

Profit for the year


41,892

194,097

Other Comprehensive Income

 

-

-

Total Comprehensive Income

 

41,892

194,097

 

 

EARNINGS PER SHARE - PROFIT AFTER TAX

Notes

pence

pence

 

 

 

 

Basic

7

0.2

106.5





Diluted

7

0.1

66.4

 

The statement of comprehensive income has been prepared on the basis that all operations in the year ended 31 March 2022 are continuing operations.

 

There were no discontinued operations during the current financial year.  The Company acquired VSA Capital Limited on 31 March 2021 and the Group statement of comprehensive income for the year ended 31 March 2021 does not therefore include financial information relating to VSA Capital Limited.

 

 

 

GROUP AND COMPANY BALANCE SHEET

FOR THE YEAR ENDED 31 MARCH 2022

 


 

2022

2021

2022

2021


Notes

Group

Group

Company

Company

ASSETS


£

£

£

£

Non-current assets






Property, plant & equipment - owned

 

107,764

11,811

-

-

Property, plant & equipment - right of use

 

645,253

297,540

-

-

Intangible assets

 

1,323,081

1,653,851

-

-

Investment in subsidiaries

 

-

-

3,873,996

3,873,996

Total non-current assets


2,076,098

1,963,202

3,873,996

3,873,996







Current assets






Investments


691,769

1,163,492

12,716

75,757

Trade and other receivables


536,932

235,367

1,532

1,644

Cash and cash equivalents

6

2,010,003

1,863,785

339,625

24,813

Total current assets


3,238,704

3,262,644

353,873

102,214







TOTAL ASSETS


5,314,802

5,225,846

4,227,869

3,976,210







EQUITY AND LIABILITIES






Share capital


3,523,547

3,645,260

3,523,547

3,645,260

Share premium

 

418,057

177,524

418,057

177,524

Share-based payments reserve

 

51,585

25,786

51,585

25,786

Accumulated profits/(losses)


169,094

127,202

218,990

127,202

Total equity


4,162,283

3,975,772

4,212,179

3,975,772







LIABILITIES






Current liabilities






Trade and other payables

 

557,408

1,055,436

15,690

438

Finance liabilities - borrowings

 

107,623

136,066

-

-

Total current liabilities


665,031

1,191,502

15,690

438







Non-current liabilities






Finance liabilities - borrowings

 

487,488

58,572

-

-







TOTAL EQUITY AND LIABILITIES


5,314,802

5,225,846

4,227,869

3,976,210

 

The financial statements were approved by the Board of Directors on 28 June 2022 and were signed on its behalf by:

 

Andrew Monk                                      Andrew Raca

Director                                                 Director

 

GROUP STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 MARCH 2022

 

 

Share Capital

Share Premium

Share based payments reserve

Retained Earnings

Total


£

£

£

£

£







At 31 March 2020

135,740

2,048

25,786

(66,895)

96,679

Total comprehensive income

-

-

-

194,097

194,097

Share issue

3,509,520

175,476

-

-

3,684,996







 

At 31 March 2021

3,645,260

 

177,524

 

25,786

 

127,202

 

3,975,772

 






 

Total Comprehensive Income

-

-

-

41,892

41,892

Share issue

12,027

240,533

-

-

252,560

Company purchase of own shares into Treasury

(133,740)

-

-

-

(133,740)

Movement in share based premium reserve

-

-

25,799

-

25,799






 

At 31 March 2022

3,523,547

418,057

51,585

169,094

 

4,162,283

 

 

 

GROUP AND COMPANY CASHFLOW STATEMENT

FOR THE YEAR ENDED 31 MARCH 2022

 

2022

2021

 

 

Group

Group

 

 

Notes

£

£

 

Net cash generated/(used) in operating activities




 

Profit / (loss) before income tax


68,374

194,097

 

Tax paid


(19,740)

-

 

Depreciation and amortisation


521,947

-

 

Loss / (gain) on current asset investments


438,628

(213,900)

 

(Increase)/decrease in trade / other receivables


(301,565)

6,918

 

Increase / (decrease) in trade / other payables


(504,770)

(403)

 

Change in share based payments reserve


25,799

-

 

NET CASH USED IN OPERATING ACTIVITIES

 


228,673

(13,288)







Net cash generated from/(used in) investing activities




 

Purchase of subsidiary undertaking


-

(3,873,996)

 

Proceeds from disposal of plant, property and equipment


212,808

-

 

Purchases of plant, property and equipment


(847,651)

-

 

Proceeds from other investing activities


210,262

198,992

 

Other investments - additions


(177,167)

-

 

Dividends received


-

-

 

NET CASH GENERATED FROM INVESTING ACTIVITIES


(601,748)

(3,675,004)

 





 

Cash flows from financing activities




 

Share capital issue


252,560

3,684,996

 

Purchase of shares into treasury


(133,740)

-

 

New finance leases


595,111

-

 

Finance lease repayments


(194,638)

-

 

NET CASH GENERATED FROM FINANCING ACTIVITIES


519,293

3,684,996

 





 

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS


146,218

(3,296)

 





 

Cash and cash equivalents at beginning of period


1,863,785

28,109

 

 

Cash acquired with subsidiary undertaking


-

1,838,972

 





 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

6

2,010,003

1,863,785


 

  

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2022

 

 

1           Statutory Information

 

VSA Capital Group plc is a public limited company limited by shares, incorporated in the UK and registered in England and Wales (Company Number 04918684). The Company's registered and head office is at Park House, 16-18 Finsbury Circus, London, United Kingdom, EC2M 7EB.

 

2           Revenue

 

Segmental reporting                                             

Group Revenue of £3,605,562 (2021: £nil) comprises corporate finance fees of £2,797,340 (2021: £nil), broking fees of £578,069 (2021: £nil), bond trading of £85,462 (2021: £nil), research fees of £138,750 (2021: £nil) and other income of £5,941 (2021: £nil).

 

 

3           Employees and Directors (Group)

 

 

 

31/3/22

31/3/21

 


£

£

Wages and salaries


1,763,882

1,620,541

Social security costs


217,903

172,476

Other pension costs


33,926

29,228

 

 

2,015,711

1,822,245

 

The average number of employees during the year was as follows:

 

 

 

31/3/22

31/3/21

Directors


5

3

Corporate finance


6

7

Research and sales


9

7

Account and administration


2

2

 

 

22

19

 

 

4           Net finance costs

 

Finance income: deposit account interest

2022: £736

2021: £nil


 


Gains/(losses) on market value of investments

2022: (£429,225)

    2021: £213,900

Finance costs: finance lease interest

2022: (13,282)

2021: £nil

 

 

2022: (442,507)

2021: £213,900

 

 

5           Taxation

 

Analysis of the tax charge

Corporation tax is payable on investment income.

 

 

Factors affecting the tax charge

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

 


2022

2021


£

£

 

Profit on ordinary activities before tax

 

68,374

 

194,097




Profit on ordinary activities multiplied by the

 


standard rate of corporation tax in the UK of 19% (2021: 19%)

12,991

36,878


 


Effects of:

 


Prior Year tax losses utilised

(12,991)

(36,878)

Tax paid on Investment Income

26,482

-




Tax Charge

26,482

-

 

Due to the uncertainty of the timing of taxable profits for the Company in the future, a deferred tax asset in respect of the tax losses has not been included in the accounts. Tax losses of £2.9m (2021: £2.8m) have been carried forward as at 31 March 2022.  The rate of corporation tax is set to rise to 25% in 2023. 

 

 

6           Cash

 

 

 

2022      

Group

2021

Group

2022

Company

2021

Company


 

£

£

£

£

 

Cash at bank

 

 

2,010,003

 

1,863,785

 

339,625

 

24,813

 

 

7           Profit & Loss Per Share

 

 

As at 31 March 2022

As at 31 March 2021

 

Audited

Audited

Basic

 

 

Profit/ (Loss) for the period attributable to owners of the Company (£)

41,892

194,097

Weighted average number of shares:

19,428,966

182,263

Basic earnings/(loss) per share (pence):

0.2

106.5

 

 

 

Diluted



Profit/ (Loss) for the period attributable to owners of the Company (£)

41,892

194,097

Weighted average number of shares:

30,279,466

292,484

Diluted earnings/(loss) per share (pence):

0.1

66.4

 

The basic and diluted earnings per share were determined by dividing the profit or loss attributable to the equity

holders of the Company by the weighted average number of shares outstanding during the periods.

 

 

8           Annual Report and Accounts

 

Copies of the 2022 Report and Accounts will be posted to shareholders shortly.  Copies will also be available from the Company's registered office and from the Company's website  www.vsacapital.com

 

The statutory accounts for the year ended 31 March 2022 will be delivered to the Registrar of Companies in due course.

 

Statutory accounts for the year ended 31 March 2021 have been delivered to the Registrar of Companies.  The auditors' report on those accounts was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

 

 

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