Capital for Colleagues plc - Interim Results PR Newswire

Capital for Colleagues plc / EPIC: CFCP / Market: AQSE / Sector: Investment

28 May 2020


(‘Capital for Colleagues’ or the ‘Company’)  

Unaudited Interim Results for the six months ended 29 February 2020

Capital for Colleagues, the investment vehicle focused on opportunities in the Employee Owned Business (‘EOB’) sector, is pleased to announce its unaudited interim results for the six months ended 29 February 2020.

Financial Highlights

    --  Revenues of £271,000 (2019: £198,000), comprising interest receivable
        and fees
    --  Profit of £1.04M for the six-month period (2019: profit of £585,000)
    --  Net assets of £7.75M as at 29 February 2020 (28 February 2019: £7.41M)
    --  NAV per share of 50.17 pence as at 29 February 2020 (28 February 2019:
        48.05 pence per share)
    --  The post period end impact of Covid-19 is an estimated reduction in NAV
        to between 42.6p and 45.1p per share

Portfolio Highlights

    --  £405,068 invested in The Security Awareness Group Ltd (‘TSAG’) -
        £300,068 in preference shares and ordinary shares and a loan of £105,000
    --  £149,000 of follow-on funding provided during the period
    --  Certain investments revalued upwards by a total of £1,333,000 during the
        period, to reflect underlying performance and prospects
    --  Investment portfolio at the period end comprised 18 unquoted EOBs (28
        February 2019: 17)

Chief Executive’s Statement

There was continued progress across the Company’s portfolio during the six months ended 29 February 2020 and this has enabled the Directors to increase the value attributable to a number of the Company’s investments. We are particularly pleased with the performance of our investments in the Technology sector, which have been revalued upwards by £940,000 to reflect their ongoing progress from early stage companies to established businesses. This revaluation also serves to continue to re-balance the portfolio and reduce the previous weighting towards Industrials.

Material developments in the six months

    --  The Company invested a total of £405,068 in The Security Awareness Group
        Ltd (‘TSAG’) - £300,068 in preference shares and ordinary shares and a
        loan of £105,000.
    --  TSAG is a recently formed company, established to acquire the business
        and assets of The Security Company (International) Limited (‘TSC’),
        which has been delivering behavioural change and security awareness
        programmes since 1997. Huntingdon-based TSC has clients in numerous
        sectors, including pharmaceuticals, atomic energy, precious metals,
        banking, government, IT, insurance and law; its clients include
        household names, such as Specsavers, KraftHeinz, the British Red Cross
        and the Prince’s Trust.
    --  Follow-on loans totaling £149,000 were made to existing investees, Place
        2 Place Logistics Limited and South Cerney Outdoor Limited, providing
        those companies with additional working capital.

After the end of the period, one of the Company’s investees, TG Engineering Limited (‘TGE’), was placed into administration. The business had been suffering from commercial issues for some time and these, combined with the financial effects of the Covid-19 pandemic, obliged the Directors to appoint administrators to TGE on 28 April 2020. The Company had previously provided in full against the whole of the carrying value of the investment in TGE, and, as such, there has been no material effect on the net assets of the Company in or after the period under review.

The Directors remain cautiously optimistic of the Company’s prospects in light of the balance and perceived resilience of the companies in its portfolio. The Directors also believe that Employee Ownership can play a key role in the anticipated post Covid-19 economic recovery and that the Company is therefore particularly well-placed to participate in and benefit from that recovery.

Financial Results

In the six months ended 29 February 2020, the Company generated income of £271,000 (2019: £198,000), principally from interest and dividends receivable and fees associated with our investments.  As at 29 February 2020, the Company had net assets of £7.75M (2019: £7.41M), with the increase in value reflecting the revaluation of our investments in the Technology sector. The reported profit for the period of £1,039,000 is driven by the unrealised gains arising from these revaluations.



The above financial figures were prepared as at 29 February 2020 in advance of the severe restrictions relating to Covid-19 and the consequential effect on the UK and the world economy. The Board of Directors of the Company has, since 29 February 2020, reviewed the position in the context of the Company’s own (and its investees’) ability to manage the businesses through the situation and assessed any direct effect on their enterprise value. 

    --  The Board applauds the UK government initiatives which mitigate against
        the worst effects for UK businesses. Our Employee Ownership principles
        will stand our investee businesses in good stead during the weeks and
        months ahead and leave them in good shape for the anticipated return to
        normal business in due course.

    --  Capital for Colleagues has sufficient cash resources to maintain its own
        operations and to allow flexible treatment of investee companies and
        their obligations.

    --  Covid-19 has affected the value of all businesses and the Company will
        not be an exception to this. The Board has specifically reviewed the
        carrying values of all investments in the context of changes since 29
        February 2020 and has concluded that the value of the Company’s
        portfolio as a whole has likely reduced by an amount in the range of 10%
        to 15%. Therefore, the Directors believe that the declared NAV per share
        of 50.17p needs to be discounted (tax adjusted) to be within a range of
        42.6p to 45.1p per share.

    --  However, this is a rapidly evolving situation, with no guarantee as to
        when business life may revert to normality. We will continue to monitor
        our investee companies in light of the changing situation, including
        considering any further impact upon the value of our portfolio of

The Board would like to send all shareholders, investees, suppliers and staff its best wishes and offer its support over the coming months.

Whilst ongoing uncertainty around the economy continues to have some impact on the wider economy, the Directors are confident that the breadth and quality of the Company’s portfolio will ensure that our investments will continue to prosper.

We continue to promote the commercial and financial benefits of EOBs at every opportunity and are pleased to see increasing recognition of EOBs as important generators of equitable and dynamic growth.

Alistair Currie

Chief Executive

For further information, please visit or contact:

CAPITAL FOR                                    01985 201 980
Richard Bailey,
Alistair Currie,
Chief Executive

PETERHOUSE CAPITAL                             020 7469 0930
Mark Anwyl
Allie Feuerlein


                     Unaudited 6 months  Unaudited 6 months Audited 12 months to
                    to 29 February 2020 to 28 February 2019       31 August 2019

                                  £’000               £’000                £’000

 Revenue                            271                 198                  570

 Realised                             -                   -                  (6)

 Unrealised gains/                1,333                 630                  892

                                  1,604                 828                 1456

 Administrative                   (322)               (243)                (560)

 PROFIT FROM                      1,282                 585                  896

 Impairment of                        -                   -                (882)
 investments and
 loans (including

 PROFIT BEFORE                    1,282                 585                   14

 Tax                              (243)                   -                    -

 PROFIT FOR THE                   1,039                 585                   14


                                  As at               As at                As at

                       29 February 2020    28 February 2019           31 August

                                  £’000               £’000                £’000


 Non-Current Assets

 Property, plant &                    2                                        2

 Investments held                 7,031               5,233                5,450
 at fair value
 through profit or

 Investments in                      16                   -                   16

 Loans and                        1,068               1,836                  928

                                  8,117               7,069                6,396

 Current Assets

 Trade and other                    133                 152                  284

 Cash and cash                       91                 278                  261

                                    224                 430                  545

 TOTAL ASSETS                     8,341               7,499                6,941



 Called up share                  6,176               6,176                6,176

 Share premium                    1,099               1,099                1,099

 Retained (loss)                    472                 144                (567)

 Total Equity                     7,747               7,419                6,708


 Trade and other                    205                  72                   87

 Provision for                      389                   8                  146

 TOTAL EQUITY AND                 8,341               7,499                6,941

The interim results have not been reviewed by the Company's auditors.

The Directors of the Company are responsible for the contents of this announcement.

Capital for Colleagues

Capital for Colleagues is an investment company focused on the UK EOB sector. The Company has a proven management team, with a wide network of contacts and affiliates, as well as established access to investment opportunities, enabling the Company to execute its strategy and capitalise on EOB-focused investment opportunities.

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 Regulatory Information Service, this inside information is now considered to be in the public domain.