(‘Capital for Colleagues’ or the ‘Company’)
AUDITED RESULTS FOR THE YEAR ENDED
CHIEF EXECUTIVE’S STATEMENT
We provide investment to existing and aspiring employee-owned businesses (“EOBs”) and help them to become effective and profitable organisations driven by the ethos of employee ownership.
We do this because we believe that employee ownership has the potential to improve corporate productivity, create wealth and generate attractive commercial returns for shareholders. It represents an alternative to the external shareholder-owned firm and can contribute to a more diverse and robust economy. It offers a corporate model which is less susceptible to stock market fluctuations and is less likely to fuel the bad corporate behaviours, such as poor governance, which are so damaging to public confidence in business. Real employee ownership (or “EO”) signifies a meaningful stake in a business for all its employees and, if this is achieved, then a company is said to have employee owners. What is “meaningful” goes beyond financial participation; the employees’ stake must underpin organisational practices that promote employee engagement in the company. EOBs are generally commercial organisations which focus on long-term sustainable profits rather than maximising short-term returns.
According to the
A report published in
Our commitment to the employee-owned sector mainly manifests itself in our ongoing support for and strong relationship with the
The financial year ended
Shareholders will be aware that we measure our success by an increasing net asset value (“NAV”). As at
We believe that “profit with purpose” appropriately sums up C4C’s approach to investment in EOBs. We are seeking to deliver a good return for our shareholders as well as profitable growth – both financially and culturally - for those companies that make up our investment portfolio.
In accordance with our business plan, we continue to align our interests with those of employee stakeholders at our investee companies as they become more established, co-owned EOBs. In this context, a number of our longstanding portfolio companies have accepted our offer to convert our existing debt instruments into equity, a welcome development.
To fulfil our commitment to positive impact, we continually strive to improve disclosure and information flow, although this is not always an easy task as many of our investees are small businesses. Without wishing to overburden our investee companies, we encourage them to report regularly on all areas of their business, including on the benefits of employee ownership. During the year, we introduced an improved reporting system, our “Traffic Light Reports”, under which investee companies report back to us on both financial and non-financial metrics. This process is managed on our behalf by
Since the formation of C4C, we have been committed advocates of employee ownership and we are proud of our achievements in this area, but this work had the potential to distract the Company from its core business of investing in EOBs. Therefore, in
C4C owns 34 per cent of CCAP, with
Day-to-day financial monitoring of investee businesses is undertaken by a CCAP representative with direct access to the board within each investee company. The establishment of CCAP frees C4C to focus on its core activity of providing capital to EOBs. We will use this capital to drive future growth in the EOB sector and to benefit from that growth. Streamlining our operations in this way is also in line with C4C’s previously stated intention of reducing its central, largely fixed overheads.
Portfolio developments during the year
An exciting new addition to the portfolio this year is TG Engineering (“TGE”) (http://tgengineering.com). TGE is a world class supplier of precision-machined and fabricated components for leading companies and institutions, primarily in the aerospace and scientific sectors. The company has a modern 20,000 sq. ft. manufacturing facility in Ferndown, near
NTE Vacuum Technology is a division of TGE which specialises in the manufacture of High and Ultra High Vacuum Chambers, Cryostats and Vacuum Beamlines. NTE manufactures and fabricates chambers from aluminium alloy, stainless steel and copper for leading research institutions, universities and businesses across
On the company website, the directors of TGE highlight the importance of C4C’s investment and the benefits of EO;
“Employee-owned businesses comprise a small but growing minority of businesses in the
TGE are already members of the EOA and we are working closely with the management and employees to build their EO culture and to develop an open and transparent flow of regular information about how the company is doing with the aim of helping the employees to think, feel and behave like co-owners.
Portfolio management activities during the year
CCAP was established in the year and C4C invested
We restructured the Company's investment in
We successfully exited our investment in
One of our existing investee companies,
We provided a short-term loan of
We invested
We provided a short-term loan of
The Company's holding of 'A' Ordinary Shares in
Engagement with investee companies
As mentioned above, we are in regular contact with all our investee companies for the purposes of financial reporting, business risk management and strategic guidance. Apart from these areas, a great deal of our engagement is around corporate structure and culture and ensuring that EO is properly embedded, so that co-owners can benefit fully.
A challenge we sometimes face is that management teams accept our investment but do not want to listen to the employee voice as much as we would like them to. Much of our work focuses on education and advocacy to ensure that entrepreneurial and sometimes “self-made” managing directors fully embrace EO so that the full benefits of co-ownership can be enjoyed.
Recent examples of engagement
Place 2
Social impact
We remain convinced of the positive social impact of employee ownership. We report specifically on this every year and we published our fourth annual Impact Report in the summer of 2018. In last year’s Annual Report and Accounts, we highlighted the
Goal 3 –
Ensuring healthy lives and promoting the well-being for all at all ages which is essential to sustainable development. There is evidence to suggest that employee-owned businesses generate higher levels of well-being among their staff compared with conventionally-owned businesses.
Goal 8 – Decent Work and Economic Growth.
A continued lack of decent work opportunities contributes to an erosion of the basic social contract underlying democratic societies which everyone must share to progress. The creation of quality jobs remains a major challenge for all economies and employee-owned businesses offer meaningful and sustainable work to their employees.
Goal 12 – Responsible Consumption and Production.
Sustainable consumption and production is about promoting resource and energy efficiency. C4C supports businesses which are committed to sustainability and social responsibility. For example, two of our investees, Ecomerchant and Carpenter Oak are both specialist suppliers of environmentally-friendly building materials.
Financial Results
I am pleased to report that revenue from operations was marginally up year-on-year to
At
Longer-term investors will be aware that our financial results for the year ended
On the balance sheet, we were encouraged to see the total asset base of the company grow from
To retain cash in the business and keep us in the best position to make further investments in EOBs, we do not propose to pay a dividend this year (2017: nil).
Outlook
Our ability to advise existing and potential EOBs as well as to provide them with funding, means that the company is exceptionally well-placed to create growth in the EOB sector and to benefit from that growth. Notwithstanding the short-term turbulence, we remain optimistic that the domestic political and economic environment will continue to foster a recognition of EOBs as important generators of equitable and dynamic growth. Subject to maintaining sufficient cash, we expect to keep making investments into EOBs. We still have a growing list of prospects at various stages of development. A broad strategic objective is to make larger investments into bigger businesses so that more workers can enjoy the benefits of employee ownership, as evidenced by our investment in TG Engineering.
We will continue to promote employee ownership as a better way of doing business not just on behalf of C4C, but also through the
The future for employee ownership and for C4C is exciting and shareholders can expect to see us continuing to generate profit with purpose.
Chief Executive
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED
2018 2017
GBP 000’s GBP 000’s
Revenue 384 372
Realised loss on investments (4) (5)
Unrealised revaluation gains on investments 437 317
------------- -------------
817 684
Administrative expenses (443) (530)
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OPERATING PROFIT 374 154
Impairment of investments and loans (134) (1,321)
------------- -------------
PROFIT / (LOSS) BEFORE TAX 240 (1,167)
Tax (charge) / credit (138) 120
------------- -------------
RETAINED PROFIT / (LOSS) AFTER TAX FOR THE YEAR 102 (1,047)
====== ======
RETAINED PROFIT / (LOSS) ATTRIBUTABLE TO
Owners of the company for the year 102 (1,047)
====== ======
TOTAL COMPREHENSIVE INCOME
ATTRIBUTABLE TO:
Owners of the company for the year 102 (1,047)
======= =======
Earnings / (loss) per share
Basic and diluted 0.66p (9.02)p
======= =======
GROUP AND COMPANY STATEMENT OF FINANCIAL POSITION AT
Group Company
2018 2017 2018 2017
GBP 000’s GBP 000’s GBP 000’s GBP 000’s
ASSETS
NON CURRENT
ASSETS
Investments
held at fair 5,034 4,592 5,034 4,592
value through
profit or loss
Investments in 24 - 24 -
associates
Loans and 1,321 535 1,321 535
receivables
---------------- ---------------- ------------- -------------
6,379 5,127 6,379 5,127
--------------- --------------- -------------- --------------
CURRENT ASSETS
Trade and 416 276 421 280
other
receivables
Cash and cash 175 1,283 175 1,283
equivalents
--------------- --------------- -------------- --------------
591 1,559 596 1,563
-------------- -------------- --------------- ---------------
TOTAL ASSETS 6,970 6,686 6,975 6,690
======= ======= ====== ======
EQUITY AND
LIABILITIES
EQUITY
Called up 6,176 6,154 6,176 6,154
share capital
Share premium 1,099 1,097 1,099 1,097
Retained (581) (683) (576) (678)
(loss)
--------------- --------------- ------------ ------------
TOTAL EQUITY 6,694 6,568 6,699 6,573
-------------- -------------- ------------- -------------
CURRENT
LIABILITIES
Trade and 130 110 130 109
other payables
-------------- -------------- ------------- -------------
130 110 130 109
====== ====== ======= =======
CREDITORS:
AMOUNTS
FALLING DUE IN
MORE THAN ONE
YEAR
Provisions for 146 8 146 8
liabilities
-------------- -------------- ------------- -------------
TOTAL EQUITY 6,970 6,686 6,975 6,690
AND
LIABILITIES
====== ====== ======= =======
The financial statements were approved and authorised for issue by the Board of Directors on
The Directors of the Company are responsible for the contents of this announcement.
**ENDS**
For further information, please visit www.capitalforcolleagues.com or contact:
CAPITAL FOR COLLEAGUES PLC 0161 464 3260Richard Bailey , ChairmanJohn Eckersley , Chief Executive PETERHOUSE CAPITAL LIMITED 020 7469 0930Mark Anwyl Duncan Vasey
The Company’s joint venture,
Market Abuse Regulation (MAR) Disclosure
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via a
