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Western Selection Plc - Half-year Report

Announcement provided by

Western Selection P.L.C. · WESP

31/03/2023 07:00

Western Selection Plc - Half-year Report PR Newswire

Western Selection PLC

(“Western” or the “Company”)

Unaudited Condensed Interim Financial Statements for the 6 months ended

31 December 2022

The Company today announces its unaudited interim results for the six months ended 31 December 2022 (the ‘Interim Statement’).

Chairman’s Statement

Business Model

The Company’s business model has been to seek to generate growth in value for shareholders over the medium to long term by taking sizeable minority stakes in relatively small companies, maintaining a dialogue through which the Company could provide advice and support to these growing companies until support was no longer required and the stake could be sold.  

Companies that were targeted as Core Holdings had an experienced management team, a credible business model and good prospects for growth. At present we are not seeking to invest in new Core Holdings.

Much has changed over the last few years and the concentration of the Company's investment into a small number of illiquid companies, all of which stopped paying dividends over the Covid period, and the increasing regulatory costs of maintaining the listing has taken its toll, resulting in the Company pausing its dividend in September 2019. The volatility in the valuation of the Company’s assets makes it imprudent to recommence a dividend payment at this time. The Board continue to review the Company’s operations in order to deliver best value to shareholders.

Due to the volatility in the market subsequent to the period end, all of the treasury investments have been sold realising £7,361,000. The offer for Crestchic Plc by Aggreko Limited has completed and we have received £4,011,000 from the sale of this investment. The Company now has cash balances of approximately £11.6m, equivalent to approximately 64.6p per share.


With continuing global economic challenges, the Company maintained a cautious investment strategy over the period. Our quoted Core Holdings, Crestchic Plc (“Crestchic”) and Kinovo Plc (“Kinovo”), have continued to trade throughout the period and their share prices have increased by 108% and 113% respectively.

We sold 65,500 Crestchic shares in the period realising £63,000 profit and increased our Treasury Investments by £1,088,000.

Crestchic paid a dividend of £11,684 in the period (2021: £Nil). No dividend was received from Kinovo (2021: £37,500).

Operating expenses were £147,000 in the half year (2021: £136,000). 

The Company is reporting a profit before tax for the period of £400,000 with earnings per share of 2.18p compared with a profit before tax of £117,000 and earnings per share of 0.64p for the same period last year.

As a result, net assets per share have increased to 76p at 31 December 2022 compared with 56p per share at 30 June 2022. At the close of business 29 Mar 2023, our net asset value was 80p per share. An analysis of assets is shown in the unaudited Statement of Financial Position.

Treasury Operations

Treasury operations started the period with £5,529,000 in an international selection of blue-chip investments. A net £1,088,000 was invested in blue-chip shares in the period and at the period end the market value of these investments had risen to £7,037,000. Subsequent to the period end these investments have all been sold realising £7,361,000.

Core Holdings

Crestchic Plc (previously Northbridge Industrial Services Plc)

Crestchic hires and sells specialist industrial equipment to a non-cyclical customer base. With offices or agents in the UK, USA, Dubai, Germany, Belgium, France, Australia, New Zealand, Singapore, Brazil, Korea and Azerbaijan, Crestchic has a global customer base. This includes utility companies, the oil and gas sector, shipping, construction and the public sector. The product range includes load banks and transformers.

During the period, we sold 65,500 Crestchic shares realising £124,000.  On 8 December 2022, a Recommended Cash Offer by Aggreko Limited  for Crestchic was announced at a price of 401 pence per share. At 31 December 2022, Western owned 1,000,000 Crestchic shares which represented 3.4% of Crestchic’s issued ordinary share capital. The market value of this investment on 31 December 2022 was £3,960,000 (30 June 2022: £2,024,000), representing 29% of Western’s net assets. The offer completed in February 2023 and Western has received £4,011,000 on disposal of this investment. 

Kinovo Plc (“Kinovo”)

Kinovo is an award-winning provider of gas and electrical installation, maintenance and general building services to local authority and housing associations predominantly in London and South East England. It has a strategy of growing organically and by acquisition. Further information about Kinovo, which is admitted to trading on AIM, is available on its website:

Kinovo announced its interim results for the six-month period to 30 September 2022 on 28 November 2022 showing a profit after tax of £1,344,000 (2021: profit after tax - £834,000). No interim dividend has been recommended during the current financial year.

Western owns 7,500,000 Kinovo shares, which represents 12.1% of Kinovo’s issued ordinary share capital. The market value of this investment at 31 December 2022 was £2,400,000 (30 June 2022: £3,075,000) representing 17.6% of Western’s net assets.

Industrial & Commercial Holdings PLC (“ICH”)

ICH is a small unquoted PLC in which Western holds a 29.9% interest. It owns land at Milngavie, adjacent to Dougalston golf course, just Northeast of Glasgow which, with planning permission, has potential for residential development. Through its development partner, Mactaggart & Mickel Limited, ICH continues to make representations for its land to be included for housing development in the local authority’s next five-year plan.

Western holds 15,252,744 shares in ICH (which represents approximately 29.9% of ICH’s issued share capital).

Edward Beale and I are non-executive directors of ICH.

City Group PLC (“City Group”)

Western holds 48.6% and London Finance & Investment Group PLC (Western’s largest shareholder) holds 51.4% of City Group which provides head office and company secretarial services to both these and other companies. City Group acts as a shared cost centre for related party clients and sells surplus time to unrelated clients.

Edward Beale and I are non-executive directors of City Group. 


The threat of recession combined with uncertainty over the effect of Covid in China and the continuing war in Ukraine is expected to lead to volatile investment markets.  In these uncertain times we continue to review the Company’s investments and, in the meantime, look to manage our treasury holdings with deposits placed with high quality banks and in highly liquid blue-chip instruments.  

31 March 2023



The Directors confirm that, to the best of their knowledge:

- the unaudited interim results for the six months ended 31 December 2022, have been prepared in accordance with IAS 34 “Interim financial reporting”, as adopted by the UK; and

- the Interim Statement includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R of the Disclosure and Transparency Rules.

Neither this Interim Statement nor any future interim statements of the Company will be posted to shareholders. The Interim Statement is available as follows:

  • on the Company’s website at; and
  • by writing to City Group PLC, the Company Secretary, at 1 Ely Place, London EC1N 6RY

The information contained in this announcement was previously classified as inside information for the purposes of the UK Market Abuse Regulation. Upon the publication of this announcement, this information is considered to be in the public domain.

The directors of the Company accept responsibility for the contents of this announcement.

For further information, please contact:

Western Selection PLC +44 (0) 20 7796 9060
AQSE Corporate Adviser
Cairn Financial Advisers LLP
James Caithie / Liam Murray +44 (0) 20 7213 0880

Condensed Statement of Comprehensive Income

Half year ended Year ended
31 December 30 June
2022 2021 2022
£000 £000 £000
Income from investments in:
Listed Core Holdings 12 37 49
Other listed investments 88 47 148
100 84 197
Administrative expenses (147) (136) (234)
Loss on disposal of treasury investments - (30) (127)
Fair value adjustment on treasury investments 420 180 (142)
Operating profit/(loss) 373 98 (306)
Share of profits of associated companies 19 23 6
Impairment provisions - - (130)
Foreign exchange on bank balances 8 - 10
Finance costs - (4) (2)
Profit/(Loss) before taxation 400 117 (422)
Taxation (10) (3) (16)
Profit/(Loss) after taxation attributable to equity shareholders 390 114 (438)
Other comprehensive income
Profit on disposal of Core Holdings - 324 1,225
Fair value adjustment on Core Holdings 3,335 1,647 (862)
Total other comprehensive profit 3,335 1,971 363
Total comprehensive income/(loss) 3,725 2,085 (75)
Basic and diluted earnings/(loss) per share attributable to equity holders 2.18p 0.64p (2.4)p

Condensed Changes in Shareholders’ Equity

Ordinary Share capital Share premium account Capital reserve account Unrealised profits/
 (losses) on investments
Share of undistributed profits/
(losses) of associates
Realised profits/
£000 £000 £000 £000 £000 £000 £000
Period ended 31 Dec 2022
Balances at 1 July 2022 7,180 2,654 3 (817) (58) 1,001 9,963
Profit/(Loss) for the period - - - 420 19 (49) 390
Other comprehensive profit - - - 3,272 - 63 3,335
Transactions with shareholders
Unpaid dividend liability released - - - - - 10 10
Balances at 31 Dec 2022






Period ended 31 Dec 2021
Balances at 1 July 2021 7,180 2,654 3 679 (64) (414) 10,038
Profit/(Loss) for the period - - - 187 23 (96) 114
Other comprehensive profit - - - 1,648 - 323 1,971
Balances at 31 Dec 2021







Condensed Statement of Financial Position

Half year ended Year ended
31 December 30 June
2022 2021 2022
£000 £000 £000
Non-current Assets
Investment in Associated companies 69 197 50
Investments in Core Holdings 6,360 7,787 3,149
6,429 7,984 3,199
Current Assets
Treasury portfolio investments 7,037 4,708 5,529
Trade and other receivables 15 8 27
Cash and cash equivalents 265 198 1,259
7,317 4,914 6,815
Current Liabilities
Trade and other payables (48) (75) (51)
Net Current Assets 7,269 4,839 6,764
Financial Liabilities due after more than one year - (700) -
Net assets 13,698 12,123 9,963
Share capital 7,180 7,180 7,180
Share premium account 2,654 2,654 2,654
Capital reserve account 3 3 3
Unrealised profits/(losses) on investments 2,875 2,514 (817)
Share of undistributed losses of associates (39) (41) (58)
Realised profits and losses 1,025 (187) 1,001
Shareholders’ funds 13,698 12,123 9,963
Net assets per share 76p 68p 56p
Number of shares in issue 17,949,872 17,949,872 17,949,872

Condensed Statement of Cash Flows

Half year ended Year ended
31 December 30 June
2022 2021 2022
£000 £000 £000
Profit/(Loss) before taxation 400 117 (422)
Adjustments for non-cash and non-operating expenses:
Loss on disposal of treasury investments - 37 127
Fair value adjustment on treasury investments (420) (187) 142
Foreign exchange (8) - (10)
Share of results of associates (19) (23) (6)
Impairment provision - - 130
Net interest paid - 4 2
Decrease in trade and other receivables 7 9 (6)
Decrease in trade and other payables 12 (8) (35)
Cash absorbed by operations (28) (51) (78)
Taxation paid (10) (3) (16)
Net interest paid - (4) (2)
Cash outflow from operating activities (38) (58) (96)
Cash flow from Investment activities
Proceeds of disposal of Core Holdings 124 787 3,817
Purchase of treasury portfolio investments (1,088) (685) (2,373)
Proceeds on disposal of treasury investments - 128 574
Cash (outflow)/inflow from investment activities (964) 230 2,018
Financing activities
Loan drawdown - - (700)
Cash inflow/(outflow) from financing activities - - (700)
Movement in cash and cash equivalents (1,002) 172 1,223
Cash and cash equivalents at start of year 1,259 26 26
Effects of exchange rate changes on cash and cash equivalents 8 - 10
Cash and cash equivalents at end of year 265 198 1,259

Reconciliation to movements in cash and cash equivalents

At start Cash Exchange At end
of Period Flow movement of Period
Half year ended £000 £000 £000 £000
31 December 2022
Cash and cash equivalents 1,259 (1,002) 8 265
Bank borrowings - - - -
Net debt 1,259 (1,002) 8 265
31 December 2021
Cash and cash equivalents 26 172 - 198
Bank borrowings (700) - - (700)
Net cash (674) 172 - (502)
Year ended 30 June 2022
Cash and cash equivalents 26 1,223 10 1,259
Bank borrowings (700) 700 - -
Net cash/(debt) (674) 1,923 10 1,259

Notes to the condensed financial statements

1. Basis of preparation

This condensed interim financial report has been prepared in accordance with the accounting policies contained in the Company’s 2022 Annual Report and Accounts and complies with the UK-adopted IAS 34 ‘Interim financial reporting’. The financial information contained in this report has not been audited or reviewed by the Company’s auditors.

The information contained in this interim financial report does not constitute statutory accounts within the meaning of the Companies Act 2006. The Company’s statutory accounts for the year ended 30 June 2022 have been reported on by the Company's auditors and have been delivered to the Registrar of Companies. The report of the auditors was unqualified.

New standards and interpretations

A number of new standards and amendments to standards and interpretations are effective for financial periods beginning after 1 January 2022 and have not been applied in preparing these condensed interim financial statements. None of these are expected to have a significant effect on the financial statements of the Company.

Estimates and judgements

When preparing the condensed interim financial statements, management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results. The judgements, estimates and assumptions applied in the condensed interim financial statements, including the key sources of estimation uncertainty, were the same as those applied in the Company’s last annual financial statements for the year ended 30 June 2022.

Going Concern

The Board is satisfied that the Company will be able to operate within the level of its facilities for the foreseeable future. For this reason, the Board considers it appropriate for the Company to adopt the going concern basis in preparing its financial statements.

2. Earnings/(loss) per share

The calculation of earnings/(loss) per share is based on the weighted average number of shares in issue for the period (17,949,872) and the profit on ordinary activities after tax of £390,000.

3.     Principal risks and uncertainties

The principal risks and uncertainties which could impact the Company’s long-term performance and its performance over the remaining six months of the financial year are disclosed on pages 8-9 of the Company’s 2022 Annual Report and Accounts. The key risks and mitigating activities have not changed from these:

·       Stock market volatility, and economic uncertainty including impact on banking system;

·       Possible volatility of share prices of Strategic Investments and General Portfolio investments;

·       Dividend income;

·       Ability to make strategic investments; and

·       Exposure to strategic investments

4.     Financial Instruments

Financial assets and liabilities are classified in their entirety into one of the three levels determined on the basis of the lowest input that is significant to the fair value measurement.

Listed prices (unadjusted) in active markets for identical assets or liabilities – Level 1.

Values other than listed prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) – Level 2.

Values for the asset or liability that are not based on observable market data (that is unobservable inputs) –Level 3.

Fair Value Half year ended Year ended
The categories of financial instruments used by the Company are: Hierarchy Level 31 December 30 June
2022 2021 2022
Financial assets £000 £000 £000
At fair value through profit or loss
Treasury portfolio investments 1 7,037 4,708 5,529
At fair value through other comprehensive income
Investments in Core Holdings 1 6,360 7,787 3,149
Financial Liabilities
At amortised cost
Trade and other payables n/a (48) (70) (51)
Bank loan n/a - (700) -
At fair value through profit or loss
Interest rate swap 2 - (5) -

5.     Treasury Investments

Half year ended Year ended
31 December 30 June
2022 2021 2022
£000 £000 £000
Cost 5,454 3,756 3,792
Fair value adjustment 75 209 209
Balance brought forward 5,529 4,001 4,001
Additions 1,088 685 2,373
Disposals - cost - (165) (711)
Fair value adjustment 420 180 (142)
Fair value adjustment released on disposal - 7 8
Balance carried forward 7,037 4,708 5,529

Subsequent to the period end these investments have all been sold realising £7,361,000.

Caution regarding forward looking statements

Certain statements in this announcement, are, or may be deemed to be, forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ''believe'', ''could'', "should" ''envisage'', ''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect", ''will'' or the negative of those, variations or comparable expressions, including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors' current expectations and assumptions regarding the Company's future growth, results of operations, performance, future capital and other expenditures (including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Such forward looking statements reflect the Directors' current beliefs and assumptions and are based on information currently available to the Directors.

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