Capital for Colleagues plc / EPIC: CFCP / Market: ISDX / Sector: Investment
3 January 2017
CAPITAL FOR COLLEAGUES PLC
('Capital for Colleagues' or the 'Company')
Audited Results for the year ended 31 August 2016
Capital for Colleagues plc, the investment vehicle focused on opportunities in
the Employee Owned Business ('EOB') sector, is pleased to announce its audited
results for the year ended 31 August 2016.
CHIEF EXECUTIVE'S STATEMENT
At the end of our second full year as an ISDX Growth Market-quoted company, I
am pleased to report on another busy and productive period for Capital for
Colleagues PLC (C4C) where we have succeeded in moving the company from "proof
of concept" to "business as usual".
Employee ownership is a successful business model which is acknowledged to
improve productivity and create wealth while providing an environment of stable
employment as well as the potential for attractive commercial returns for
investors. We provide capital and practical assistance 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 tend to
be sector agnostic in terms of business activity and we structure our
investments to reflect the individual requirements and prospects of each
investee company. As a result, the funding we provide is very flexible and
takes the form of debt, equity or convertible hybrid financing structures. The
premise underlying all of our investments is that they should facilitate the
full engagement of employees in a business.
All investments also need to offer an eventual opportunity to exit or be
expected to return capital as well as providing an attractive dividend or
profit stream. Often, a prerequisite for C4C investing is the establishment of
an Employee Benefit Trust (EBT) or an Employee Ownership Trust (EOT) as a
significant and active shareholder in the business.
During the year under review, we further developed and expanded our portfolio
of private EOBs to sixteen. We believe that the unquoted EOBs in our portfolio
now generate total annual turnover of around GBP 67 million and support around
550 jobs. At the year end we were also invested in twelve publicly-traded
companies which have demonstrable employee engagement practices. They too
yielded good returns on what is a small part of our portfolio.
In the year to 31 August 2016, the Company invested a further GBP 2.44million
in new and existing investee companies and we now have investments across a
range of business areas, from civil engineering to accountancy, reflecting the
diversity of EOBs and the breadth of investment opportunities available to us.
Our advisory practice, which provides specialist advice and support to EOBs or
companies looking to become employee-owned, had another encouraging year. We
provide a comprehensive service: advising clients on what needs to be done to
become employee-owned, helping to manage the transition to employee owned
status and providing the financial capital to achieve it.
C4C is an active member of the Employee Ownership Association or EOA. The EOA
represents organisations which are employee-owned or transitioning to employee
ownership across the UK. We are an Approved Adviser for them as well as their
only current equity funding partner. Under the terms of our agreement, the EOA
will refer to us any members or other suitable prospects who are considering an
employee buyout, who have begun the transition to employee ownership or who are
seeking funding to develop an existing EOB.
EOA membership has grown from significantly less than 100 three years ago to
around 320 members today. As a sign of our commitment to leadership in the
sector, C4C has sponsored the EOA's two-day annual conference in 2015 and 2016.
We have always been convinced of the positive social impact of employee
ownership and we remain active members of the Social Stock Exchange (SSX). The
SSX, which is itself growing rapidly, provides access to the world's first
regulated investment exchange dedicated to businesses and investors seeking to
achieve a positive social and environmental impact through their activities. We
value our membership of the SSX because it is a tangible demonstration or
"kitemark" of our commitment to that objective. It also allows us, through the
discipline of producing our annual Impact Report, to evidence our progress in
social impact. As a requirement of our membership, we published our second
Social Impact Report for C4C with the tagline "making work work better" and the
report is available on our website.
C4C was nominated in two categories at the Small Cap Awards 2016 and we were
delighted to win the "Alternative Financing Deal of the Year" award which
recognised the Company's innovative GBP 300,000 institutional and crowd placing
completed in 2015.
We undertook a short survey among employees of investee companies to gain an
insight into attitudes towards employee ownership. Our sample size was far too
small for scientific analysis, but the respondents were very positive about EO.
For example, 82% say that working for an EOB "makes me feel happier in my work"
and 81% agree with the statement that "If I want to, I can participate in
important decisions about my company." 89% agree that "when properly
implemented, EO is a force for social good".
The progress of C4C over the last year is reflected in the development of our
investment portfolio. As I have mentioned, we were invested in 28 companies by
the end of the financial year.
An example of a new addition to the portfolio during the financial year is
Anthesis Consulting Group Ltd. Anthesis is a consultancy business specialising
in sustainability. Since its foundation in 2013, the company has developed
rapidly through organic growth and acquisition, building an international
business with operations in Britain, North America, Continental Europe and Asia
and attracting a broad range of clients. The company advises on areas such as,
strategy and communications, operations, product and supply chain plus software
and systems. Initially, we invested GBP 500,000 in the company and, post the
year end, we subscribed another GBP 100,000 for additional ordinary shares as
part of a larger fundraising in which new professional investors participated
alongside employees of Anthesis and other existing investors. The funds raised
by Anthesis will be used to support its ambitious growth plans.
After making our initial investments, we are now moving successfully into the
next phase of our investment strategy in which we convert some existing loans
into equity and financially recognise the growth in value and acknowledge the
success of our unquoted portfolio.
With regard to education and advocacy, we will continue to promote employee
ownership as a better way of doing business not just on behalf of C4C, but also
through the EOA. We have also organised and attended events to raise awareness
of employee ownership amongst companies and professionals in London, Liverpool,
Sheffield and Manchester and we plan more events this year. In education, we
presented on C4C and employee ownership at Alliance Manchester Business School.
During the year, we became involved in assisting the Social Mobility Foundation
(Registered Charity No. 1115888) by offering mentoring and work experience to
sixth formers from disadvantaged backgrounds. A student joined us for a week's
work experience in August and we continue to support other Foundation
initiatives.
Financial Results
In the twelve months ended 31 August 2016, the Group invested GBP 2.44 million
across a portfolio of sixteen unquoted EOBs and twelve publicly traded EOBs.
The Company generated revenue of GBP 560,000 in the year and as at 31 August
2016 the Group had net assets of GBP 5.25 million equating to a Net Asset Value
per share of 54.54p. As illustrated by the Consolidated Statement of
Comprehensive Income, the effect of our planned move away from high yielding
loans and towards equity-linked instruments was yet to be felt during the year.
However, generally, we have now begun to give up the income we receive on
investments of a fixed capital natural and are replacing it with a reduced
income but an added entitlement to future hoped-for capital growth. Our focus
has always been on enhancing long term net asset value and this transition is
the best way of achieving this, in our view. It is entirely in accordance with
our stated strategy and hopefully well understood by our fellow shareholders.
The Directors do not recommend the payment of a dividend.
Outlook
As we build on our leading position in the EOB sector, we remain committed to
the continued expansion of our investment and advisory portfolio and to
generating attractive returns for our shareholders. We have increasing access
to numerous potential investee companies, in varying sectors and of various
sizes, which we believe can deliver the returns we require. The Directors are
confident that the EOB sector will keep expanding and that EOBs will continue
to deliver strong performance. Reflective of this, after the period end we made
two new investments, increasing our portfolio to eighteen unquoted EOBs.
Subject to having adequate funds, we expect to keep making investments into
EOBs. A broad strategic objective is to make larger investments into bigger
businesses so that more workers can enjoy the benefits of employee ownership.
We remain very positive about the opportunities to develop our company and we
believe that we are well placed to capitalise on the significant growth
potential of the EOB sector. Statistics demonstrate that the EOB sector is
becoming increasingly important to our economy, with 10% of UK GDP expected to
be generated by EOBs by 2020. As a result, we are confident in our ability to
create value for our shareholders and we would like to thank them for their
continued support. We are proud to be in the vanguard of this exciting sector
and I look forward with confidence to another year of progress.
John Eckersley
Chief Executive
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 AUGUST
2016
2016 2015
GBP 000's GBP 000's
Revenue 560 523
Realised gains on investments 157 -
Unrealised revaluation gains on investments 71 459
------------- -------------
788 982
Administrative expenses (630) (557)
------------- -------------
OPERATING PROFIT 158 425
Finance income - 1
------------- -------------
PROFIT BEFORE TAX 158 426
Tax (charge)/credit (130) 2
------------- -------------
RETAINED PROFIT AFTER TAX FOR THE YEAR 28 428
====== ======
RETAINED PROFIT ATTRIBUTABLE TO:
Owners of the company for the year 28 428
====== ======
TOTAL COMPREHENSIVE INCOME
ATTRIBUTABLE TO:
Owners of the company for the year 28 428
======= =======
Profit per share
Basic and diluted 0.32p 5.79p
======= ======
GROUP AND COMPANY STATEMENT OF FINANCIAL POSITION AT 31 AUGUST 2016
Group Company
2016 2015 2016 2015
GBP 000's GBP 000's GBP 000's GBP 000's
ASSETS
NON-CURRENT ASSETS
Investments held at fair value
through profit or loss 3,427 1,855 3,427 1,855
Loans and receivables 1,081 1,507 1,081 1,507
---------------- ------------- ------------- -------------
4,508 3,362 4,508 3,362
--------------- -------------- -------------- --------------
CURRENT ASSETS
Trade and other receivables 654 417 658 414
Cash and cash equivalents 279 355 279 355
--------------- -------------- -------------- --------------
933 772 937 769
-------------- --------------- -------------- --------------
TOTAL ASSETS 5,441 4,134 5,445 4,131
======= ====== ====== ======
EQUITY AND LIABILTIES
EQUITY
Called up share capital 3,850 3,070 3,850 3,070
Share premium 1,036 672 1,036 672
Retained profit 364 336 369 343
--------------- ------------ ------------ ------------
TOTAL EQUITY 5,250 4,078 5,255 4,085
-------------- ------------- ------------- -------------
CURRENT LIABILITIES
Trade and other payables 89 56 88 46
-------------- ------------- ------------- -------------
89 56 88 46
====== ======= ======= =======
CREDITORS: AMOUNTS FALLING DUE IN
MORE THAN ONE YEAR
Provisions for liabilities 102 - 102 -
-------------- ------------- ------------- -------------
TOTAL EQUITY AND LIABILITIES 5,441 4,134 5,445 4,131
====== ======= ======= =======
The Directors of the Company are responsible for the contents of this
announcement.
For further information please visit www.capitalforcolleagues.com or contact:
CAPITAL FOR COLLEAGUES PLC 0161 233 4891
Richard Bailey, Chairman
John Eckersley, Chief Executive
PETERHOUSE CORPORATE FINANCE LIMITED 020 7469 0930
Mark Anwyl
Duncan Vasey
Capital for Colleagues plc - Audited Results for the year ended 31 August 2016
January 03, 2017 at 05:20 am
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