TIDMELX
RNS Number : 8557H
El Oro Ltd
15 March 2018
EL ORO LTD 15 March 2018
Interim Results
El Oro Ltd announces its interim results for the six months
ended 31 December 2017.
The interim results for the six months ended 31 December 2017
will be posted to shareholders and will be available shortly on the
Company's website www.eloro.com.
Extracts from the interim results are set out below.
For further information, please contact:
Aztec Financial Services (Guernsey) Limited
Chris Copperwaite
Tel: 01481 748 831
El Oro Limited
Robin Woodbine Parish, Chairman
Una Ni Dhonaill
Tel: 020 7581 2782
EL ORO LTD
CHAIRMAN'S STATEMENT
Interim Report as at 31 December 2017
The El Oro Group's profit before taxation for the six month
period ended 31 December 2017 was GBP1,723,982 (profit before
taxation for the six month period ended 31 December 2016:
GBP5,132,080). The Group's net assets at 31 December 2017 were
GBP55,917,415 or 88.5p per share (net assets at 31 December 2016:
GBP53,708,984 or 84.6p per share).
In recent weeks, the Seine has surged 13 feet above its usual
level, whilst the plugs have been removed from the Mount Nelson
Hotel baths, as Cape Town endures a 100 year record drought, and
faces the prospect of standpipes in the streets by the end of
April. The beggar clad only in black bin liners at its entrance is
a sorry spectacle, whilst downtown salerooms offer McLarens, Aston
Martins and Rolls-Royces. South Africa has seen the defenestration
of President Zuma, whilst the Guptas, having emerged from the
poverty of Uttar Pradesh in the early 90s, count their spoils in
the safety of their Dubai bank accounts, perhaps adjacent to those
of ex-President Mugabe and his graceless wife. Whilst newly-elected
President Ramaphosa may have less time to perfect his fly-fishing,
the soaring Rand reveals the level of hope resting on his
shoulders. We wish him well in restoring South Africa's reputation,
solvency and economic well-being.
The soaring level of the Dow, happening on his watch as
proclaimed by President Trump in his State of the Union address,
was followed swiftly by a 10% fall, and rising interest rates as
bonds fell on the whiff of inflation and further Fed rate
increases. The clever-clogs VOL index, trading the previously
benign volatility index, lost its investors $1.7bn before being
closed.
Whilst many of these events have occurred after the end of the
half-year, the modest progress made by the portfolio over the past
6 months, including the payment of a 2.4p dividend, should be
reassuring to all but those wanting the fizz of more frenzied
trading.
Our old stalwarts, Young and Co., M.P. Evans, Halstead and
Goodwin amongst others have shown little price improvement, whilst
maintaining or increasing their dividends. The more esoteric stocks
like Shopify and Mercadolibre have soared along with their
technology compatriots in China and the USA. Bacanora with its
lithium plant in Mexico under construction has reached new highs.
Critical Elements has slipped back after terminating its previous
partnership. It is to be hoped that an equally or more propitious
agreement can be achieved, as many car and battery companies
compete for sources of relatively near-term supply. In a similar
vein, we are encouraged by the performance of Australian Mines,
whose Cobalt project in Queensland promises supplies of that
essential ingredient of battery-technology.
Atalaya, developing the old Rio Tinto mine near Seville shows
encouraging progress. Central Asian Metals continues its generous
dividend policy, encouraged by the strength of the copper price,
and will in due course, benefit from the strength of zinc, with its
new purchase of Lynx Resources. Dominic Scriven's Vietnam
Enterprise Investment Fund has reached new heights, reflecting
astute investment decisions and the youthful profile of the
Vietnamese demographics. REA Holdings remains a work-in-progress,
but we continue to believe that its strategic partner and increased
planting levels will eventually produce positive returns.
Regrettably, the EU is considering a ban on the use of Palm Oil,
even though neither M.P.Evans nor REA Holdings have plantations in
proximity to the jungle habitat of the Orang-Utan.
Phoenix Group continues to pay a welcome dividend, and has in
recent days risen sharply following its agreement to buy insurance
assets from Aberdeen Standard.
Amongst the smaller holdings, Burford Capital remains
underpinned by the promise of its litigation successes; Fulcrum
Utility wins more contracts, and Transurban has shown strong profit
growth from its Australian Toll Roads, and a steady dividend
flow.
North Atlantic Smaller Companies Trust continues its ascent,
whilst maintaining a wary eye on valuations in the United States.
Herald Investment Trust remains our ideal exposure to the
Technology sector, under the ever-watchful eye of Katie Potts,
whilst the effervescent Dan Betts should receive plaudits for
bringing his Hummingbird mine in Mali into production. There are
also signs of life stirring amongst our unlisted holdings, and
every possibility that Coal in South Africa, in the form of
Minergy, and steel in Serbia, under Steelmin, might in due course
reward the patient.
Unfortunately the raft of new regulations that are strangling
the City are more pernicious and damaging than anything that has
occurred before: MIFID II described by one Investment Manager as
"the worst piece of legislation that I have seen in my career".
PRIIPS; KIDS; and still to arrive GDPR; all have inflated
Management costs, entrenched the position of the big players, and
reduced the information flow to the small investor; typical
examples of European bureaucratic meddling, coming from Statist
societies that eschewed the 80's mantra of "Tell Sid". That private
share ownership has declined to new lows is a shameful indictment
of our approach to and belief in Capitalism, whilst big
institutions coagulate their investors into collective funds and
add a raft of fees that often exceed the dividend return.
Much of the new legislation pits Fund Managers against Clients,
implying that the former are ogres intent on defrauding their
clients, instead of trusted advisers, often maintaining
relationships of many years' standing.
"It is not hard to feel tormented by regulation...I am sure I am
not alone in appealing for some reprieve from the regulatory
leapfrog while we deal with so many sizeable global issues" spoke
the Chairman of Hiscox. Lurking in the wings is an attempt by Green
lobbies to prevent insurance of coal projects, although in
Britain's current big freeze, many consumers will be happy that a
few Coal-powered stations still survive.
Dismantling the proven Energy Infrastructure of the country,
leaving it unable to deal with the nuances of Nature, in a vain
attempt in to appease the great green Goddess of Climate Change,
will in due course bring even severer shortages and suffering than
experienced in recent days.
The law, as re-written echoes that of Jesus referring to the
Sadducees in Luke 11.v 42 "You pay tithe of mint and anise and
cumin, and have omitted the weightier matters of the law: Judgment,
mercy and faith-these you ought to have done, without leaving the
other undone".
To add to this, the great corporate beasts of Central Europe
prowl around seeking whom they may devour, with George Soros adding
his largesse to the shrill Soubry and absurd Clegg and Corbyn in
attempting to derail the vote of the British people. The malevolent
Sir John Major has added his widow's mite to the Remain argument,
oblivious to the almost terminal damage he accomplished with his
adherence to the Exchange Rate Mechanism 26 years ago, and
subsequent signing of the Maastricht Treaty.
Mr.Barnier's malicious manoeuvring is barely resisted by Theresa
May's fumbling attempts at compromise, and the Emergency Exit
begins to look increasingly inviting.
The collapse of Carillion, and woes of other infrastructure
firms prove the prescience of Henry Marsh's (Do No Harm) adage that
PFI in the NHS will prove to have done more damage than CDO's did
in the Financial Crisis. These monolithic near-monopolistic
enterprises are the antithesis of true Capitalism, and the smaller
firms now suffering through lack of payment are the ones that
should have been conducting the commissions in the first place.
The steel gantries being erected alongside the Great Western
Railway route to Newport in preparation for the electrification of
the line baffle many observers on a line operating since 1825
initially on steam and more recently on diesel. We understand that
the cost has already tripled. TFL has announced a deficit
approaching a billion pounds with falling tube and bus passenger
numbers; even with the implications of changing patterns of work
and travel, the absurdity of HS2 continues seemingly un-deflated
despite the demise of its main contractors. Meanwhile the 3(rd)
runway at Heathrow remains unbuilt with no date on the horizon for
commencement. The urge for grandiose gestures by central government
meeting the needs of a previous age is apparently undaunted by
economic vision in both the political and civil service strata. The
new format of offices with all-inclusive facilities has already
seen IWG (formerly Regus) wither as the fast moving technology of
today disrupt and disturb the models with which we have become
familiar and it would seem, complacent.
It is to be hoped that the Marines, Royal Navy and other areas
of our Defence Forces will be reinforced and re-equipped, rather
than dismembered, as would currently appear to be the intention.
Far better in these uncertain times, with recurring natural
catastrophes not to mention terrorist attacks, to be fully-prepared
and trained for any eventuality, than be facing oblivion such as
confronted Churchill and Britain at Dunkirk.
Our foreign policy continues to insist on sanctions against
Russia, and sending troops to the Baltic States, whilst Premier Xi
installs himself as President for life, and China's authoritarian
State asserts itself over all opposition both within and beyond its
borders. Unlike Russia, it is neither Christian nor impoverished by
virtue of its population and economic prowess.
Shareholders will be relieved to hear that a further tranche of
debt was paid off in recent weeks, with profits taken in a number
of positions prior to Wall Street's stumble. There are signs of
life in the Gold market, despite the best attempts of governments
from DRC to Tanzania to throw obstructions in the path of excellent
companies such as Randgold.
The prospect of the dollar weakening, if any smidgeon of
President Trump's Make America Great infrastructure programme were
to be enacted, gives a semblance of hope for those still deluded
enough to retain a belief in the insurance value of Gold. Even the
ghastly swaps have begun to ameliorate somewhat, as rates edge
higher.
The Board continue their process of evaluating several proposals
for the future of your company, and would hope to put their
suggestions to shareholders shortly.
In the meantime, sound stocks, reducing debt and a determination
to avoid previous follies should stand us all in good stead.
Ecclesiastes 9.v11: I returned and saw under the Sun, that the
race is not to the swift, neither yet bread to the wise, nor the
battle to the strong, nor yet riches to men of understanding, nor
yet favour to men of skill: but Time and chance happeneth to them
all.
With thanks to all the team at Cheval Place, where humour,
competence and loyalty abound, the Board and all our advisers
through thick and thin.
Robin Woodbine Parish.
15th March 2018
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited)
for the six months ended 31 December
2017 2016
GBP GBP
Revenue 684,430 656,151
Net gains on investments 1,931,695 5,483,782
---------- ----------
Total investment income 2,616,125 6,139,933
Expenses (637,639) (617,495)
---------- ----------
Profit before finance costs
and taxation 1,978,486 5,522,438
Finance costs (254,504) (390,358)
---------- ----------
Profit before taxation 1,723,982 5,132,080
Taxation credit/(charge) 32,979 (504,521)
Profit for the period 1,756,961 4,627,559
---------- ----------
Profit per share (basic and diluted) 2.8p 7.3p
---------- ----------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited)
for the six months ended 31 December
2017 2016
GBP GBP
Opening capital and reserves
attributable to equity holders 55,680,730 50,598,883
Total comprehensive income
and profit for the financial
year 1,756,961 4,627,559
Dividends paid (net) (1,520,276) (1,517,458)
Closing capital and reserves
attributable to equity holders 55,917,415 53,708,984
------------ --------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Unaudited)
As at 31 December
2017 2016
GBP GBP
Non-current assets
Property, plant and equipment 606,709 619,817
Investment in artwork 500,000 500,000
Intangible asset 6,200 66,000
1,112,909 1,185,817
----------- -----------
Current assets
Trade and other receivables 158,944 156,691
Investments held at fair value
through profit or loss 62,675,174 70,582,683
Cash and cash equivalents 289,554 719,412
----------- -----------
Total current assets 63,123,672 71,458,786
Current liabilities
Trade and other payables 329,907 303,608
Current tax liabilities 326,398 813,888
Financial liabilities at fair
value through profit or loss 3,079,664 4,683,313
Borrowings 3,100,000 -
Total current liabilities 6,835,969 5,800,809
----------- -----------
Net current assets 56,287,703 65,657,977
----------- -----------
Non-current liabilities
Borrowings - 11,000,000
Deferred tax liabilities 1,483,197 2,134,810
----------- -----------
Total non-current liabilities 1,483,197 13,134,810
----------- -----------
Net assets 55,917,415 53,708,984
----------- -----------
St
Share capital 434,906 437,732
Share premium reserve 6,017 6,017
Capital redemption reserve 359,641 356,815
Merger reserve 3,564 3,564
Retained earnings reserve 55,113,287 52,904,856
----------- -----------
Total equity 55,917,415 53,708,984
----------- -----------
Net asset value per share 88.5 p 84.6 p
------- -------
CONSOLIDATED STATEMENT OF CASH FLOW (Unaudited)
For the six months ended 31 December
2017 2016
GBP GBP
Net cash flow from operating
activities 3,327,473 2,013,308
Income taxes paid (674,903) (89,376)
------------ ------------
2,652,570 1,923,932
Cash flow from investing activities (3,105) (16,746)
Cash flow from financing activities (3,273,171) (1,881,717)
------------ ------------
Net movement in cash and cash
equivalents (623,706) (25,469)
Cash and cash equivalents at
30 June 913,260 693,943
Cash and cash equivalents at
31 December 289,554 719,412
------------ ------------
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This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BBGDXRGBBGIU
(END) Dow Jones Newswires
March 15, 2018 07:45 ET (11:45 GMT)
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