AMANDA CAPITAL PLC STOCK EXCHANGE RELEASE
24 AUGUST 2011 AT 17.55
INTEGRATION OF AMANDA GROUP ADVANCES ACCORDING TO PLANS
The integration of Amanda Group began in the second quarter of the year. The operations were divided into three segments: Asset Management, Corporate Finance and Investments. By creating three segments, we wish to report the profitability of the different lines of business to Amanda’s shareholders in a transparent manner.
The Asset Management segment comprises private equity and hedge fund investments, equity and bond investments, sales and business support. The asset management segment, which covers more than 75% of the Group personnel, will concentrate its operations to one location during the autumn of 2011. This will enable seamless co-operation between persons working with different asset management products and create good preconditions for selling all asset management products in a centralised manner. ”I am especially proud of the fact that, despite difficult market conditions, we managed to carry out the first closing of the Amanda V East private equity fund at the end of June. Amanda V East, which is established and managed by Amanda, makes investments in growth and buyout private equity funds, which make investments in small and midsized unlisted companies in Russia, CIS, CEE and SEE countries”, says Janne Larma, CEO.
In the Corporate Finance segment, Advium acted as advisor in a few transactions, and at the beginning of summer we felt that the number of mergers and acquisitions and real estate transactions would grow towards the end of the year. The turbulence of the financial market, which escalated in August, will have a negative impact on the number of transactions, however, if prolonged.
In the Investments segment, the second quarter was rather active, and we obtained a cash flow of EUR 4.3 million from exits and invested EUR 2.5 million in capital calls.
”The second quarter was quite challenging in the capital markets, both in Finland and worldwide. Despite this, we at Amanda managed to continue with the integration in a successful manner and make a positive result in all segments”, says Janne Larma, CEO.
Additional information: Janne Larma, CEO, tel. +358 40 500 4366
Distribution: OMX Nordic Exchange Helsinki, www.amandacapital.fi
Amanda Group is a Finnish group of companies that specialises in asset management and corporate finance operations. The Group offers services related to mutual funds, private equity funds and hedge funds as well as traditional asset management for institutions and individuals. The assets managed by the Group total approximately EUR 3.8 billion. In addition, Advium Corporate Finance Ltd, which is part of the Group, offers advisory services related to mergers and acquisitions, real estate transactions and equity capital markets. More information on Amanda Group is available on the following websites: www.amandacapital.fi, www.eQvarainhoito.fi and www.advium.fi.
AMANDA CAPITAL PLC’S INTERIM REPORT 1 JANUARY TO 30 JUNE 2011
Result of operations and financial position during the period 1 January to 30 June 2011
- The Group’s management fees increased to EUR 4.2 million (EUR 2.0 million from 1 Jan. to 30 June 2010).
- The Group’s net investment income increased to EUR 3.8 million (EUR 0.6 million).
- The Group’s operating profit grew to EUR 4.3 million (EUR 0.9 million).
- Consolidated earnings after taxes were EUR 2.9 million (EUR 0.4 million).
- The interim report for the period 1 Jan. to 30 June comprises eQ Asset Management Group and Advium Corporate Finance Ltd from 1 April 2011. Therefore reference data of the interim report is not comparable.
- Earnings per share were EUR 0.09 (EUR 0.018).
- Equity per share rose to EUR 2.05 (EUR 1.80).
- The equity to assets ratio was 90.3% (88.4%).
Result of operations during the period 1 April to 30 June 2011
- The Group’s management fees totalled EUR 3.3 million (EUR 1.0 million).
- The Group’s net investment income was EUR 3.3 million (EUR 0.2 million).
- The Group’s operating profit was EUR 3.9 million (EUR 0.3 million).
- Consolidated earnings after taxes were EUR 2.8 million (EUR 0.1 million).
- Earnings per share were EUR 0.08 (EUR 0.005).
Financial environment
The first half of 2011 was restless in the capital market. Even though the direct impacts of the political unrest in North Africa and the earthquake in Japan on the market decreased by the summer of 2011 and the results and outlooks of companies have been reasonably good during the entire six-month period, the equity market has fallen strongly during the summer. Even the bond market has been unexceptionally unstable. The main reason for this continues to be the culmination of the debt crisis in Europe and the U.S. and the concern for the fact that there will not be enough political will for making decisions that would stabilise the market, in which case the crisis could expand to other indebted Mediterranean countries.
Because of the more favourable development in the first months of the year, the global equity market was almost at the same level at the end of June as at the beginning of the year (MSCI World +1.7% and Stoxx 600 -1.1%). For the Finnish equity market, the first half of the year was clearly weaker, and the HEX Cap index fell by 9.9%. The euro strengthened against the dollar by 8.6%.
At the end of May, the new culmination of the debt crisis in Greece resulted in a strong reaction in the government bonds of the euro zone. During the summer, the credit risk premiums of the indebted countries became wider and doubled in July in, for instance, Italy from 1.5 percentage points to more than 3 percentage points and in Portugal from 6 percentage points to 12 percentage points. The interest rate level of German government bonds remained almost unaltered. Among interest rate classes, high yield corporate loans gave the best return in the first half of the year, approximately +4%, and the returns of other corporate loan classes were also round +2 to 3% during the period under review.
At the end of July, anxiety in the American and European equity market increase rapidly. The reason for this was the fear for the expansion of the European debt crisis to Italy and Spain and the political conflict in the U.S. on means to put an end to the increase of the government debt burden. At the beginning of August, the valuation level of the equity market fell rapidly in Europe. As a fringe area, the Finnish equity market almost crashed, partly due to the second-quarter results of companies, which were weaker than expected. Because of the turbulence, the growth expectations of national economies will probably be cut down, and uncertainty is expected to prevail in the capital market far into the autumn.
Major events January to June 2011
The Annual General Meeting held on 16 March 2011 decided to approve the transaction whereby Amanda Capital Plc acquires 100% of the shares in Advium Corporate Finance Ltd and eQ Asset Management Group Ltd as well as the convertible bond issued by eQ Asset Management Group Ltd and authorise the Board of Directors to decide on a share issue. On the basis of the authorisation, the Board of Directors issued on 16 March 2011 altogether 10 302 605 new shares in Amanda Capital to the shareholders of Advium and eQ Asset Management Group as well as the holders of the convertible bond. Because of the execution of the share issue and combination agreement, Advium and eQ AMG have become fully owned subsidiaries of Amanda.
After the subscription and registration of the issued shares, the total number of shares issued by Amanda is 33 070 351. At its constitutive meeting on 16 March 2011, the Board of Directors of Amanda Capital Plc appointed Janne Larma CEO of Amanda Capital Plc, in accordance with a previous announcement.
The Amanda V East private equity fund, established and managed by Amanda, made its first closing on 30 June 2011 at the size of EUR 33.0 million. The private equity fund makes investments in growth and buyout private equity funds, which make investments in small and midsized unlisted companies in Russia, CIS, CEE and SEE countries. The fund is the second private equity fund of Amanda that makes investments in Eastern Europe. Like its predecessor, it makes investments in both new private equity funds and acquires shares from the secondary market. The fund will continue to collect means, and the final closing will take place by 30 June 2012.
Group net sales and result development
Advium Corporate Finance Ltd and eQ Asset Management Group Ltd, acquired on 16 March 2011, have had an impact on the result development of the first half of the year, and the results of said companies were consolidated with the result of Amanda Group from 1 April 2011.
The consolidated net sales totalled EUR 8.0 million (EUR 2.7 million from 1 Jan. to 30 June 2010). Management fees increased from the comparison period due to the acquisition of Advium Corporate Finance Ltd and eQ Asset Management Group Ltd. The net investment income of Amanda Group increased from the comparison period. The Group’s expenses and depreciation totalled EUR 3.7 million (EUR 1.8 million). Personnel expenses totalled EUR 1.9 million (EUR 0.8 million) and depreciation accounted for EUR 0.4 million (EUR 0.4 million). Other operating expenses were EUR 1.4 million (EUR 0.6 million).
The Group’s operating profit was EUR 4.3 million (EUR 0.9 million). The increase from the comparison period was due to the increasing income from investment operations and the result of the acquired companies. The profit for the period under review was EUR 2.9 million (EUR 0.4 million).
BUSINESS AREAS
The Board of Directors of Amanda Capital has decided to introduce three separate business segments from 1 April 2011: Asset Management, Corporate Finance and Investments.
Asset Management
The Asset Management segment consists of the business operations of eQ Asset Management Group and the asset management, investment advice, management and reporting services related to Amanda Capital’s private equity investments.
The operating environment of the Asset Management segment was more challenging than expected in the first half of the year. During the first months of the year, the earthquake in Japan and political unrest in North Africa made the market nervous. The debt crisis in Europe and above all the difficult situation of the Greece national economy has had a negative impact on both the development of the private equity market and the willingness of investors to make new investments in the securities market.
New sales have been challenging, above all in the second quarter. The assets under management grew, however, to EUR 3 829 million from January to June. On 30 June 2011, the assets managed under equity and bond investments totalled EUR 1 069 million and within private equity investments, the commitments under management were EUR 2 760 million (original investment commitments).
The nervousness of the market was also reflected on the total net subscriptions in mutual funds operating in the Finnish market, which were EUR 132 million negative in January-June. The net subscriptions in the eQ Funds totalled, however, EUR 34 million during the period.
The mutual fund eQ Emerging Dividend, which makes investments in dividend stock in emerging markets, was launched in February. Morningstar, which makes international fund management company comparisons, rated eQ Fund Management Company Ltd the best special equity house in Finland in 2011, the second time in a row.
The Amanda V East private equity fund, established and managed by Amanda, made its first closing on 30 June 2011 at EUR 33.0 million. The private equity fund makes investments in growth and buyout private equity funds, which make investments in small and midsized unlisted companies in Russia, CIS, CEE and SEE countries. The fund is already Amanda’s second private equity fund that makes investments in Eastern Europe, and like its predecessor, it makes investments in both new private equity funds and acquires shares from the secondary market. The fund will continue to collect means, and the final closing will take place by 30 June 2012. The fund has introduced its investment operations and made its first investment commitment in a Ukrainian private equity fund established in 2008 and managed by Horizon Capital.
Asset Management April to June/2011 January to June/2011
Net sales EUR 1.7 million EUR 3.1 million
Operating profit EUR 0.6 million EUR 1.0 million
Personnel 49 49
The income statement of eQ Asset Management Group has been consolidated with the income statement of Amanda Group and the Asset Management segment from 1 April 2011.
Corporate Finance
The Corporate Finance segment offers services related to mergers and acquisitions, real estate transactions and equity capital markets.
Uncertainty prevailed in the financial market during the period under review, and transaction processes continue to be rather long. Private equity investors are returning to the market for mergers and acquisitions, which is expected to increase the number of transactions in general in the near future.
During the period under review, Advium acted as advisor in two transactions. In April, Advium acted as advisor for the buyer, when Sponda Plc bough of Suomi Mutual Life Assurance Company the Fennia block in the city centre of Helsinki at a transaction value of EUR 122 million. In May, Advium acted as advisor for the sellers, when Partioaitta was sold to the Swedish outdoor equipment company Fenix Outdoor AB.
The number of personnel of Advium has remained unaltered during the period, and was 13 at the end of June.
After the period under review, Advium has acted as advisor for the seller, as a fund managed by the private equity investor Sentica Partners and the acting management sold Miratel Oy, which provides communication and alarm systems, to the Swiss company Ascom Holding AG.
It is typical of corporate finance business that success fees have a considerable impact on invoicing, due to which the result may vary considerably from quarter to quarter.
Corporate Finance April to June/2011 January to June/2011
Net sales EUR 1.1 million EUR 1.1 million
Operating profit EUR 0.6 million EUR 0.6 million
Personnel 13 13
The income statement Advium Corporate Finance Ltd has been consolidated with the income statement of Amanda Group from 1 April 2011.
Investments
The business operations of the Investments segment consist of private equity fund investments made from the own balance sheet of Amanda Group. Additional information on the investments of Amanda Group can be found on the company website at www.amandacapital.fi under Investment Activities.
During the period under review, the net income of Amanda Capital Plc’s Investments segment totalled EUR 3.8 million (EUR 0.6 million from 1 Jan. to 30 June 2010). At the end of the period under review, the fair value of the private equity funds was EUR 43.9 million (EUR 36.0 million). The amount of the remaining investment commitments was EUR 17.4 million (EUR 20.2 million on 30 June 2010). During the period under review, private equity funds called in a total of EUR 3.0 million and returned EUR 5.6 million.
Amanda Capital has made a decision that it will only make new investments in funds managed by Amanda in future.
Investments April to June/2011 January to June/2011
Net sales EUR 3.3 million EUR 3.8 million
Operating profit EUR 3.2 million EUR 3.6 million
Personnel 1 1
Balance sheet
The consolidated balance sheet total was EUR 75.1 million (EUR 46.48 million). The increase from the comparison period was mainly due to the positive development of the market values of the private equity fund investments and the transaction concluded on 16 March 2011.
At the end of the period under review, Amanda’s shareholders’ equity was EUR 67.8 million (EUR 41.0 million). The shareholders' equity was influenced by the profit for the period of EUR 2.9 million and the change in the fair value reserve of EUR 4.3 million, in total EUR 6.2 million, as well as the transaction executed on 16 March 2011, whereby 10 302 605 shares were issued at the price of EUR 1.59 per share. The increase in the reserve for invested unrestricted equity by EUR 16.4 million is due to the share issue related to the transaction. The changes are specified in detail in the tables attached to this release.
EUR 3.2 million (EUR 0.0 million) of the debt was interest-bearing long-term debt and EUR 0.0 million (EUR 4.0 million) was interest-bearing short-term debt. Interest-free long-term debt amounted to EUR 1.7 million (EUR 0.7 million) and interest-free short-term debt totalled EUR 2.4 million (EUR 0.7 million). Amanda’s equity to assets ratio was 90.3% (88.4%).
Shares and share capital
Amanda Capital Plc’s number of shares increased as a result of the decision by the Annual General Meeting, according to which Amanda Capital Plc will acquire the shares of Advium Corporate Finance Ltd and eQ Asset Management Group Ltd as well as a convertible bond issued by eQ Asset Management Group Ltd by issuing 10 302 605 new shares. After the subscription and registration of the issued shares, the total number of shares issued by Amanda is 33 070 351. The increase did not influence the share capital of EUR 11 383 873.
Own shares
On 30 June 2011, Amanda Capital Plc acquired 163 153 own shares at the price of EUR 1 per share. The transaction is related to the corporate acquisition carried out on 16 March 2011, in which Amanda Capital Plc acquired the share capital of eQ Asset Management Group Ltd and Advium Corporate Finance Ltd. As a person who was party in the transaction terminated his employment, Amanda had the right, in accordance with the terms of the transaction, to repurchase shares given as payment. The right to repurchase own shares was granted by the Annual General Meeting held on 14 April 2010.
During the comparison period, Amanda held at the end of the period under review a total of 475 707 own shares acquired for hedging the share-based incentive plan and 91 657 shares acquired based on authorisations by Annual General Meetings.
Shareholders
On 27 June 2011, Amanda published a flagging announcement, in which Ulkomarkkinat Oy announced that it had acquired shares in such a manner that the flagging threshold of 10% was exceeded. In addition, Ulkomarkkinat Oy participated in the guarantee arrangements for Amanda Capital Plc’s share issue directed to the personnel and share holdings. Because of the arrangement, Ulkomarkkinat Oy had in certain situations a pre-emptive right to purchase these shares. If Ulkomarkkinat Oy was to exercise the pre-emptive purchase right, its holding in Amanda Capital would have risen to over one tenth. The guarantee arrangement has ended, and the holding of Ulkomarkkinat Oy rose to more than one tenth. In addition, Amanda published a flagging announcement on 30 June 2011, in which Berling Capital Oy participated in the guarantee arrangement of the share issue directed to Amanda Capital Plc’s personnel and the share holdings. Because of the arrangement, Berling Capital Oy had in certain situations a pre-emptive right to purchase these shares. If Berling Capital Oy was to exercise the pre-emptive purchase right, its holding in Amanda Capital would have risen to over one tenth. The guarantee arrangement has ended, and the holding rose to more than one tenth.
Ten largest shareholders as at 30 June 2011
Share of shares and votes, %
Veikko Laine Oy 11.05
Fennogens Investments S.A. 10.99
Berling Capital Oy 10.77
Ulkomarkkinat Oy 10.09
Chilla Capital S.A. 8.06
Oy Hermitage Ab 7.15
Mandatum Life Insurance Company 6.21
Oy Cevante Ab 4.29
Linnalex Ab 2.67
Louko Antti 2.26
On 30 June 2011, Amanda Capital Plc had 3 310 shareholders.
Option scheme 2010
During the period under review, the Board of Directors of the company decided to allocate 450 000 options from the Option Scheme 2010 to Janne Larma, CEO. At the end of the period, a total of 900 000 options had been allocated. Based on the authorisation received by the Board on 14 April 2010, there were 1 100 000 unallocated options at the end of the period under review. The terms and conditions of the option scheme have been published in a stock exchange release of 18 August 2010, and they can be found in their entirety on the company website at www.amandacapital.fi.
After the period under review, 200 000 options were returned to Amanda Capital Plc from the Option Scheme 2010.
Decisions adopted by annual general meeting
Amanda Capital Plc’s annual general meeting, held on 16 March 2011 in Helsinki, decided upon the following:
Confirmation of the financial statements:
Amanda Capital Plc’s annual general meeting confirmed the financial statement of the company, which included the group financial statements, the management report and the audit report for the financial year 2010.
Decision in respect of the result shown on the balance sheet:
The proposal by the board of directors not to distribute any dividend and to book the parent company’s financial result of the financial period on the profit and loss account was confirmed.
Discharge from liability to the board of directors, managing directors and deputy managing director:
The annual general meeting decided to grant discharge from liability to the board of directors and the managing directors.
The number of board members, appointment of board members and the remuneration of the members of the board:
In accordance with the decision of the annual general meeting, five board members, being Ole Johansson, Georg Ehrnrooth, Eero Heliövaara, Jussi Seppälä and Catharina Stackelberg-Hammarén were appointed for a term until the next annual general meeting. The annual general meeting decided that the members of the board would receive remuneration as follows: the chairman of the board will receive 3,300 Euros and the board members will receive 1,800 Euros per month. Travel and lodging costs will be compensated in accordance with the company’s expense policy. The board appointed Ole Johansson as chairman of the board in its constituting meeting held immediately after the annual general meeting.
Auditors:
Ernst & Young Oy, corporation of authorized public accountants, will continue as auditor of the company, and Ulla Nykky APA will act as Lead Auditor. It was decided to compensate the auditors as per issued invoice.
Approval of a corporate transaction and authorising the Board of Directors to decide on the issuance of shares:
The annual general meeting decided to approve the transaction, whereby Amanda Capital Plc acquires all shares in Advium Corporate Finance Ltd and eQ Asset Management Group Ltd as well as the convertible bond issues by eQ Asset Management Group Ltd and decided to authorise the board of directors to decide on a share issue comprising of no more than 10,302,605 new shares. The subscription price for each share is 1.41 Euros.
The authorisation includes a right for the board of directors to decide on all other terms of the share issue, including the right to decide whether the subscription price is to be booked in full or in part in the reserve for invested unrestricted equity or as an increase of the share capital, and it includes the right to decide on a directed issue of shares.
The authorisation is intended to be used to implement the corporate transaction.
The authorisation does not replace earlier authorisations, which will remain in force and the new authorisation is valid until 31.7.2011.
Amendment of field of activity – article:
It was decided to amend the field of activity as follows: The company’s field of activity is to own and manage shares, other securities and real estate as well as to engage in securities trading and other investment operations. The company takes care of the centralised administrative duties of the investment firms, fund management companies and other companies belonging to the Group.
Personnel and organisation
At the end of the period under review, the number of personnel was 63. The Asset Management segment had 49 employees, the Corporate Finance segment 13 employees and the Investments segment 1 employee. The personnel of the Asset Management segment comprises nine persons with fixed-term employment and the Corporate Finance segment two persons with fixed-term employment.
The overall salaries paid to the employees of Amanda Capital Group during the period under review totalled EUR 1.9 million (EUR 0.8 million). This sum comprises the salaries of Advium Corporate Finance Ltd and eQ Asset Management Group from 1 April to 30 June 2011 and the salaries of Amanda Capital Plc’s and Amanda Advisors Ltd’s personnel from 1 January to 30 June 2011.
Major risks and short-term uncertainties
The result of the Asset Management segment depends on the development of the assets under management, which is highly dependent of the development of the private equity market. On the other hand, the management fees of private equity funds are based on long-term agreements that produce a stable cash flow.
Success fees, which depend on the number of mergers and acquisitions and real estate transactions, have a considerable impact on the result of the Corporate Finance segment. These vary considerably within one year and are dependent on economic trends.
The risks associated with Amanda Group's investment operations are the market risk, currency risk and liquidity risk. Among these, the market risk has the greatest impact on investments. Amanda’s investments are well diversified, which means that the impact of one investment in a company, made by one individual fund, on the yield of the investments is often small.
Corporate acquisitions
On 16 March 2011, Amanda Capital Plc acquired 100 % of the shares in Advium Corporate Finance Ltd and eQ Asset Management Group Ltd and the convertible bond issued by eQ Asset Management Group Ltd. The combined entity is a strong Finnish company that specialises in the management of private equity and alternative investments, traditional asset management and corporate finance advisory services. The value of the transaction totalled EUR 16.6 million, and it was paid by issuing 10 302 605 new shares in Amanda Capital. Of the shares, 5 854 563 were allocated to the shareholders of Advium Corporate Finance Ltd, and their purchase price was EUR 9.4 million. 3 903 042 shares were allocated to the shareholders of eQ Asset Management Group Ltd, their purchase price being EUR 6.3 million, and 545 000 shares were issued for acquiring the convertible bond issued by eQ Asset Management Group Ltd, the purchase price being EUR 0.9 million. The purchase price comprises a transfer tax of EUR 0.2 million.
The purchase price exceeded Advium Corporate Finance Ltd’s net assets by EUR 9.3 million and the purchase price of eQ Asset Management Group Ltd’s exceeded the net assets by EUR 5.2 million. As for Advium, EUR 2.0 million was allocated to intangible assets by calculating a fair value for the Advium brand. For eQ Asset Management Group Ltd’s part, EUR 2.5 million was allocated to intangible assets by calculating fair values for the concluded customer agreements and the brand. A deferred tax liability allocated to these assets was recorded in the amount of EUR 0.1 million. The remaining goodwill for Advium is EUR 7.3 million and for eQ Asset Management Group Ltd EUR 2.8 million. The goodwill is based on the personnel and offers Amanda the opportunity to expand its operations to new business areas, which increases its customer base and product selection.
Had Advium Corporate Finance and eQ Asset Management Group been consolidated with Amanda Group at the beginning of 2011, Amanda Group’s net sales had been EUR 1.6 million higher during the period under review.
| Acquired net assets and goodwill at preliminary values (EUR million): | |||||||
| Advium | eQ Asset Management | ||||||
| Cash and investments | 0.5 | 1.3 | |||||
| Tangible assets | 0.1 | 0.1 | |||||
| Intangible assets | 0.0 | 0.7 | |||||
| Receivables | 0.5 | 0.8 | |||||
| Financial liabilities | -0.6 | -1.4 | |||||
| Other liabilities | -0.4 | -0.4 | |||||
| Acquired net assets | 0.1 | 1.0 | |||||
| Adjustment of the acquisition cost of the convertible bond | 0.0 | 0.1 | |||||
| Acquisition cost | 9.4 | 6.3 | |||||
| Unallocated purchase price | 9.3 | 5.2 | |||||
| Fair value of the brand | 2.0 | 2.0 | |||||
| Customer agreements | 0.0 | 0.5 | |||||
| Deferred tax | 0.1 | ||||||
| Goodwill | 7.3 | 2.8 | |||||
The Group increased its holding in the investment firm Active Hedge Advisors AHA Oy, which has offered advisory services to eQ Asset Management in connection with the investment operations of the eQ Active Hedge Fund, from 50 to 100%. This transaction has no impact on the portfolio management of the eQ Active Hedge Fund.
| Acquired net assets and goodwill at preliminary values (EUR 1 000): | |||
| Cash and investments | 43.7 | ||
| Other liabilities | 1.1 | ||
| Acquired net assets | 42.6 | ||
| Acquisition cost | 100.0 | ||
| Unallocated purchase price | 57.4 | ||
| Customer agreements | 57.4 | ||
Events after the reporting period
After the end of the reporting period, the Board of Directors has appointed Janne Larma, Petter Hoffström, Lauri Lundström and Annamaija Peltonen to Amanda Group’s management team.
Outlook
The fall of share prices that took place at the beginning of the third quarter and the considerable uncertainty in the financial market will have a negative impact on the Group’s business operations, when prolonged. This will first be seen as a decreased in the assets managed by the Group and consequently in management fees.
AMANDA CAPITAL PLC
Board of Directors
Tables
Principles for drawing up the report
This financial statements bulletin has been prepared in accordance with the International Financial Reporting Standards (IFRS) and the IAS 34 Interim Financial Reporting standard approved by the EU. When preparing the interim report, Amanda has applied the same principles as in the financial statements for the year 2010, and the calculating formulas of the key ratios have been presented in the financial statements. As for the net investment income, Amanda Group’s net sales are recognised in Amanda’s income statement in different quarters due to factors independent of the company.
The interim report has not been audited.
| CONSOLIDATED INCOME STATEMENT, EUR 1 000 | |||||||||||||
| 4–6/11 | 4–6/10 | 1–6/11 | 1–6/10 | 1–12/10 | |||||||||
| NET SALES | |||||||||||||
| Net investment income | 3 325 | 210 | 3 759 | 627 | 1 136 | ||||||||
| Management fees | 3 289 | 1 008 | 4 232 | 2 027 | 3 972 | ||||||||
| Total | 6 615 | 1 219 | 7 991 | 2 654 | 5 108 | ||||||||
| Depreciation | -244 | -193 | -389 | -366 | -710 | ||||||||
| Operating expenses | -2 441 | -748 | -3 295 | -1 414 | -2 570 | ||||||||
| Operating profit | 3 930 | 277 | 4 308 | 874 | 1 829 | ||||||||
| Financial income and expenses | -183 | -123 | -345 | -267 | -623 | ||||||||
| Profit before taxes | 3 747 | 154 | 3 962 | 607 | 1 205 | ||||||||
| Income taxes | -969 | -52 | -1 050 | -198 | -371 | ||||||||
| Minority interests | -3 | - | -3 | - | - | ||||||||
| PROFIT (LOSS) FOR THE PERIOD | 2 775 | 103 | 2 910 | 409 | 834 | ||||||||
| Other comprehensive income: | |||||||||||||
| Available-for-sale financial assets, net | 345 | 812 | 4 300 | 1 610 | 3 407 | ||||||||
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 3 121 | 915 | 7 210 | 2 019 | 4 241 | ||||||||
| Earnings per share, EUR | 0.08 | 0.005 | 0.09 | 0.018 | 0.04 | ||||||||
| Earnings per average share, EUR *) | 0.10 | 0.005 | 0.10 | 0.018 | 0.04 | ||||||||
| *) Weighted average number of shares outstanding during the period. | |||||||||||||
|
CONSOLIDATED BALANCE SHEET, EUR 1 000 |
||||
| 30 June 2011 | 30 June 2010 | 31 December 2010 | ||
| ASSETS | ||||
| LONG-TERM ASSETS | ||||
| Intangible and tangible | ||||
| assets | 19 779 | 4 984 | 4 623 | |
| Investments available for sale | ||||
| Private equity investments | 43 919 | 36 046 | 40 625 | |
| Accrued income | 133 | - | - | |
| Deferred tax assets | 102 | 2 173 | 1 684 | |
| CURRENT ASSETS | ||||
| Accrued income and advance payments | 4 398 | 463 | 441 | |
| Investments available for sale | ||||
| Financial securities | 45 | 166 | - | |
| Cash | 6 751 | 2 545 | 4 112 | |
| TOTAL ASSETS | 75 128 | 46 376 | 51 486 | |
| SHAREHOLDERS’ EQUITY AND LIABILITIES | ||||
| SHAREHOLDERS’ EQUITY | 67 832 | 40 986 | 44 229 | |
| LIABILITIES | ||||
| Non-current liabilities | 4 858 | 662 | 946 | |
| Current liabilities | 2 438 | 4 727 | 6 310 | |
| TOTAL LIABILITIES | 7 296 | 5 390 | 7 256 | |
| TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES | 75 128 | 46 376 | 51 486 | |
| CONSOLIDATED CASH FLOW STATEMENT, EUR 1 000 | ||||
| 1–6/11 | 1–6/10 | 2010 | ||
| CASH FLOW FROM OPERATIONS | ||||
| Operating profit | 4 308 | 874 | 1 829 | |
| Depreciation and write-downs | 389 | 366 | 710 | |
| Investments available for sale, | ||||
| change | 88 | -2 908 | -4 752 | |
| Change in working capital | ||||
| Business receivables, increase (-) | ||||
| decrease (+) | 413 | 18 | 39 | |
| Interest-free debt, increase (+) | ||||
| decrease (-) | 940 | 87 | -130 | |
| Interest-bearing debt, increase (+) | ||||
| decrease (-) | -3 164 | 1 000 | 2 800 | |
| Total change in working capital | -1 810 | 1 105 | 2 709 | |
| Cash flow from operations before | ||||
| financial items and taxes | 2 974 | -563 | 496 | |
| Financial income and expenses | -345 | -267 | -623 | |
| Taxes | -1 050 | -198 | -371 | |
| CASH FLOW FROM OPERATIONS | 1 579 | -1 028 | -498 | |
| CASH FLOW FROM INVESTMENTS | ||||
| Investing activities in investments | -71 | -2 | 15 | |
| Corporate acquisitions | 1 120 | |||
| CASH FLOW FROM INVESTMENTS | 1 049 | -2 | 15 | |
| CASH FLOW FROM FINANCING | ||||
| Purchase of own shares | 0 | 24 | -31 | |
| Sale of own shares | - | 1 085 | ||
| Other changes | 11 | -25 | -34 | |
| CASH FLOW FROM FINANCING | 11 | -1 | 1 020 | |
| INCREASE/DECREASE IN LIQUID ASSETS | 2 639 | -1 031 | 537 | |
| Liquid assets at 1 Jan. | 4 112 | 3 575 | 3 575 | |
| Liquid assets at 31 June | 6 751 | 2 545 | 4 112 | |
| Liquid assets contain cash and bank deposits. | ||||
| CHANGE IN CONSOLIDATED SHAREHOLDERS’ EQUITY, EUR 1 000 | ||||||||||||||
| Share capital | Reserve for invested unrestricted equity | Other reserves | Fair value reserve | Retained earnings | Total | |||||||||
| Shareholders’ equity at 1 Jan. 2010 | 11 384 | 29 614 | -1 769 | -7 701 | 7 439 | 38 968 | ||||||||
| Comprehensive income | 1 610 | 1 610 | ||||||||||||
| Profit (loss) for the period | 409 | 409 | ||||||||||||
| Total comprehensive income | 1 610 | 409 | 2 019 | |||||||||||
| Purchase of own shares | 24 | 24 | ||||||||||||
| Other changes | -25 | -25 | ||||||||||||
| Shareholders’ equity at 30 June 2010 | 11 384 | 29 614 | -1 745 | -6 091 | 7 824 | 40 986 | ||||||||
| Shareholders’ equity at 1 Jan. 2011 | 11 384 | 29 614 | 0 | -6 819 | 10 051 | 44 229 | ||||||||
| Comprehensive income | 4 300 | 4 300 | ||||||||||||
| Profit (loss) for the period | 2 910 | 2 910 | ||||||||||||
| Total comprehensive income | 4 300 | 2 910 | 7 210 | |||||||||||
| Purchase of own shares | 16 381 | 0 | 16 381 | |||||||||||
| Other changes | 11 | 11 | ||||||||||||
| Shareholders’ equity at 30 June 2011 | 11 384 | 45 995 | 0 | -2 520 | 12 972 | 67 832 | ||||||||
|
SEGMENT INFORMATION, EUR 1 000 |
||||||||||||||
| Jan to June/2011 | Corporate | Undivided part of the | Group, | |||||||||||
| Asset Management | Finance | Investments | Group | total | ||||||||||
| Net sales | 3 095 | 1 138 | 3 759 | 7 991 | ||||||||||
| Operating profit | 994 | 554 | 3 559 | -801 | 4 308 | |||||||||
| Profit (loss) for the period | -1 398 | 2 910 | ||||||||||||
| Long-term assets | 10 620 | 9 394 | 43 919 | 63 933 | ||||||||||
Undivided part of the Group in Operating profit row includes personnel,
administration and other expenses related to group management. Also on-off
items related to eQ and Advium corporate acquisitions are presented in this row.
One-off costs related to corporate acquisitions are law and consulting expenses
EUR 276 thousand and audit expenses EUR 42 thousand.
Undivided part of the Group in Profit (loss) for the period row includes
financial income and expenses and income taxes.
| CONSOLIDATED KEY RATIOS | ||
| 2011 | 2010 | |
| Profit (loss) for the period (EUR 1 000) | 2 910 | 409 |
| Earnings per share, EUR | 0.9 | 0.018 |
| Earnings per average share, EUR *) | 0.0 | 0.018 |
| Equity per share, EUR | 2.5 | 1.80 |
| Equity per average share, EUR *) | 2.6 | 1.85 |
| Return on investment, ROI % p.a. | 2.7 | 3.1 |
| Return on equity, ROE % p.a. | 2.6 | 2.0 |
| Equity to assets ratio, % | 90.3 | 88.4 |
| Share price at the end of period, EUR | 1.78 | 1.45 |
| Number of personnel at the end of period | 63 | 13 |
| Private equity investments to equity | ||
| ratio, % | 64.7 | 87.9 |
| Investment commitments to equity | ||
| ratio, % | 90.4 | 137.3 |
| *) Weighted average number of shares outstanding during the period. | ||
| CHANGE IN BOOK VALUE OF PRIVATE EQUITY FUNDS, EUR 1 000 | ||||
| Book value of private equity funds at 1 Jan. 2011 | 40 625 | |||
| Increases from corporate acquisitions | 50 | |||
| Draw-downs to private equity funds | 3 018 | |||
| Return of capital from private equity funds | -5 585 | |||
| Changes in the value of private equity funds | ||||
| in fair value reserve | 5 811 | |||
| Book value of private equity funds at 30 June 2011 | 43 919 | |||
| REMAINING COMMITMENTS | ||||||||
| On 30 June 2011, Amanda Capital Plc’s remaining commitments in private | ||||||||
| equity funds stood at EUR 17.4 million (EUR 20.2 million on 30 June 2010). | ||||||||
| Other liabilities totalled EUR 0.2 million at the end of the period under review (EUR 0.2 on 30 June 2010). | ||||||||
AMANDA CAPITAL PLC STOCK EXCHANGE RELEASE
24 AUGUST 2011 AT 17.45
INTEGRATION OF AMANDA GROUP ADVANCES ACCORDING TO PLANS
The integration of Amanda Group began in the second quarter of the year. The operations were divided into three segments: Asset Management, Corporate Finance and Investments. By creating three segments, we wish to report the profitability of the different lines of business to Amanda’s shareholders in a transparent manner.
The Asset Management segment comprises private equity and hedge fund investments, equity and bond investments, sales and business support. The asset management segment, which covers more than 75% of the Group personnel, will concentrate its operations to one location during the autumn of 2011. This will enable seamless co-operation between persons working with different asset management products and create good preconditions for selling all asset management products in a centralised manner. ”I am especially proud of the fact that, despite difficult market conditions, we managed to carry out the first closing of the Amanda V East private equity fund at the end of June. Amanda V East, which is established and managed by Amanda, makes investments in growth and buyout private equity funds, which make investments in small and midsized unlisted companies in Russia, CIS, CEE and SEE countries”, says Janne Larma, CEO.
In the Corporate Finance segment, Advium acted as advisor in a few transactions, and at the beginning of summer we felt that the number of mergers and acquisitions and real estate transactions would grow towards the end of the year. The turbulence of the financial market, which escalated in August, will have a negative impact on the number of transactions, however, if prolonged.
In the Investments segment, the second quarter was rather active, and we obtained a cash flow of EUR 4.3 million from exits and invested EUR 2.5 million in capital calls.
”The second quarter was quite challenging in the capital markets, both in Finland and worldwide. Despite this, we at Amanda managed to continue with the integration in a successful manner and make a positive result in all segments”, says Janne Larma, CEO.
Additional information: Janne Larma, CEO, tel. +358 40 500 4366
Distribution: OMX Nordic Exchange Helsinki, www.amandacapital.fi
Amanda Group is a Finnish group of companies that specialises in asset management and corporate finance operations. The Group offers services related to mutual funds, private equity funds and hedge funds as well as traditional asset management for institutions and individuals. The assets managed by the Group total approximately EUR 3.8 billion. In addition, Advium Corporate Finance Ltd, which is part of the Group, offers advisory services related to mergers and acquisitions, real estate transactions and equity capital markets. More information on Amanda Group is available on the following websites: www.amandacapital.fi, www.eQvarainhoito.fi and www.advium.fi.
AMANDA CAPITAL PLC’S INTERIM REPORT 1 JANUARY TO 30 JUNE 2011
Result of operations and financial position during the period 1 January to 30 June 2011
- The Group’s management fees increased to EUR 4.2 million (EUR 2.0 million from 1 Jan. to 30 June 2010).
- The Group’s net investment income increased to EUR 3.8 million (EUR 0.6 million).
- The Group’s operating profit grew to EUR 4.3 million (EUR 0.9 million).
- Consolidated earnings after taxes were EUR 2.9 million (EUR 0.4 million).
- The interim report for the period 1 Jan. to 30 June comprises eQ Asset Management Group and Advium Corporate Finance Ltd from 1 April 2011. Therefore reference data of the interim report is not comparable.
- Earnings per share were EUR 0.09 (EUR 0.018).
- Equity per share rose to EUR 2.05 (EUR 1.80).
- The equity to assets ratio was 90.3% (88.4%).
Result of operations during the period 1 April to 30 June 2011
- The Group’s management fees totalled EUR 3.3 million (EUR 1.0 million).
- The Group’s net investment income was EUR 3.3 million (EUR 0.2 million).
- The Group’s operating profit was EUR 3.9 million (EUR 0.3 million).
- Consolidated earnings after taxes were EUR 2.8 million (EUR 0.1 million).
- Earnings per share were EUR 0.08 (EUR 0.005).
Financial environment
The first half of 2011 was restless in the capital market. Even though the direct impacts of the political unrest in North Africa and the earthquake in Japan on the market decreased by the summer of 2011 and the results and outlooks of companies have been reasonably good during the entire six-month period, the equity market has fallen strongly during the summer. Even the bond market has been unexceptionally unstable. The main reason for this continues to be the culmination of the debt crisis in Europe and the U.S. and the concern for the fact that there will not be enough political will for making decisions that would stabilise the market, in which case the crisis could expand to other indebted Mediterranean countries.
Because of the more favourable development in the first months of the year, the global equity market was almost at the same level at the end of June as at the beginning of the year (MSCI World +1.7% and Stoxx 600 -1.1%). For the Finnish equity market, the first half of the year was clearly weaker, and the HEX Cap index fell by 9.9%. The euro strengthened against the dollar by 8.6%.
At the end of May, the new culmination of the debt crisis in Greece resulted in a strong reaction in the government bonds of the euro zone. During the summer, the credit risk premiums of the indebted countries became wider and doubled in July in, for instance, Italy from 1.5 percentage points to more than 3 percentage points and in Portugal from 6 percentage points to 12 percentage points. The interest rate level of German government bonds remained almost unaltered. Among interest rate classes, high yield corporate loans gave the best return in the first half of the year, approximately +4%, and the returns of other corporate loan classes were also round +2 to 3% during the period under review.
At the end of July, anxiety in the American and European equity market increase rapidly. The reason for this was the fear for the expansion of the European debt crisis to Italy and Spain and the political conflict in the U.S. on means to put an end to the increase of the government debt burden. At the beginning of August, the valuation level of the equity market fell rapidly in Europe. As a fringe area, the Finnish equity market almost crashed, partly due to the second-quarter results of companies, which were weaker than expected. Because of the turbulence, the growth expectations of national economies will probably be cut down, and uncertainty is expected to prevail in the capital market far into the autumn.
Major events January to June 2011
The Annual General Meeting held on 16 March 2011 decided to approve the transaction whereby Amanda Capital Plc acquires 100% of the shares in Advium Corporate Finance Ltd and eQ Asset Management Group Ltd as well as the convertible bond issued by eQ Asset Management Group Ltd and authorise the Board of Directors to decide on a share issue. On the basis of the authorisation, the Board of Directors issued on 16 March 2011 altogether 10 302 605 new shares in Amanda Capital to the shareholders of Advium and eQ Asset Management Group as well as the holders of the convertible bond. Because of the execution of the share issue and combination agreement, Advium and eQ AMG have become fully owned subsidiaries of Amanda.
After the subscription and registration of the issued shares, the total number of shares issued by Amanda is 33 070 351. At its constitutive meeting on 16 March 2011, the Board of Directors of Amanda Capital Plc appointed Janne Larma CEO of Amanda Capital Plc, in accordance with a previous announcement.
The Amanda V East private equity fund, established and managed by Amanda, made its first closing on 30 June 2011 at the size of EUR 33.0 million. The private equity fund makes investments in growth and buyout private equity funds, which make investments in small and midsized unlisted companies in Russia, CIS, CEE and SEE countries. The fund is the second private equity fund of Amanda that makes investments in Eastern Europe. Like its predecessor, it makes investments in both new private equity funds and acquires shares from the secondary market. The fund will continue to collect means, and the final closing will take place by 30 June 2012.
Group net sales and result development
Advium Corporate Finance Ltd and eQ Asset Management Group Ltd, acquired on 16 March 2011, have had an impact on the result development of the first half of the year, and the results of said companies were consolidated with the result of Amanda Group from 1 April 2011.
The consolidated net sales totalled EUR 8.0 million (EUR 2.7 million from 1 Jan. to 30 June 2010). Management fees increased from the comparison period due to the acquisition of Advium Corporate Finance Ltd and eQ Asset Management Group Ltd. The net investment income of Amanda Group increased from the comparison period. The Group’s expenses and depreciation totalled EUR 3.7 million (EUR 1.8 million). Personnel expenses totalled EUR 1.9 million (EUR 0.8 million) and depreciation accounted for EUR 0.4 million (EUR 0.4 million). Other operating expenses were EUR 1.4 million (EUR 0.6 million).
The Group’s operating profit was EUR 4.3 million (EUR 0.9 million). The increase from the comparison period was due to the increasing income from investment operations and the result of the acquired companies. The profit for the period under review was EUR 2.9 million (EUR 0.4 million).
BUSINESS AREAS
The Board of Directors of Amanda Capital has decided to introduce three separate business segments from 1 April 2011: Asset Management, Corporate Finance and Investments.
Asset Management
The Asset Management segment consists of the business operations of eQ Asset Management Group and the asset management, investment advice, management and reporting services related to Amanda Capital’s private equity investments.
The operating environment of the Asset Management segment was more challenging than expected in the first half of the year. During the first months of the year, the earthquake in Japan and political unrest in North Africa made the market nervous. The debt crisis in Europe and above all the difficult situation of the Greece national economy has had a negative impact on both the development of the private equity market and the willingness of investors to make new investments in the securities market.
New sales have been challenging, above all in the second quarter. The assets under management grew, however, to EUR 3 829 million from January to June. On 30 June 2011, the assets managed under equity and bond investments totalled EUR 1 069 million and within private equity investments, the commitments under management were EUR 2 760 million (original investment commitments).
The nervousness of the market was also reflected on the total net subscriptions in mutual funds operating in the Finnish market, which were EUR 132 million negative in January-June. The net subscriptions in the eQ Funds totalled, however, EUR 34 million during the period.
The mutual fund eQ Emerging Dividend, which makes investments in dividend stock in emerging markets, was launched in February. Morningstar, which makes international fund management company comparisons, rated eQ Fund Management Company Ltd the best special equity house in Finland in 2011, the second time in a row.
The Amanda V East private equity fund, established and managed by Amanda, made its first closing on 30 June 2011 at EUR 33.0 million. The private equity fund makes investments in growth and buyout private equity funds, which make investments in small and midsized unlisted companies in Russia, CIS, CEE and SEE countries. The fund is already Amanda’s second private equity fund that makes investments in Eastern Europe, and like its predecessor, it makes investments in both new private equity funds and acquires shares from the secondary market. The fund will continue to collect means, and the final closing will take place by 30 June 2012. The fund has introduced its investment operations and made its first investment commitment in a Ukrainian private equity fund established in 2008 and managed by Horizon Capital.
Asset Management April to June/2011 January to June/2011
Net sales EUR 1.7 million EUR 3.1 million
Operating profit EUR 0.6 million EUR 1.0 million
Personnel 49 49
The income statement of eQ Asset Management Group has been consolidated with the income statement of Amanda Group and the Asset Management segment from 1 April 2011.
Corporate Finance
The Corporate Finance segment offers services related to mergers and acquisitions, real estate transactions and equity capital markets.
Uncertainty prevailed in the financial market during the period under review, and transaction processes continue to be rather long. Private equity investors are returning to the market for mergers and acquisitions, which is expected to increase the number of transactions in general in the near future.
During the period under review, Advium acted as advisor in two transactions. In April, Advium acted as advisor for the buyer, when Sponda Plc bough of Suomi Mutual Life Assurance Company the Fennia block in the city centre of Helsinki at a transaction value of EUR 122 million. In May, Advium acted as advisor for the sellers, when Partioaitta was sold to the Swedish outdoor equipment company Fenix Outdoor AB.
The number of personnel of Advium has remained unaltered during the period, and was 13 at the end of June.
After the period under review, Advium has acted as advisor for the seller, as a fund managed by the private equity investor Sentica Partners and the acting management sold Miratel Oy, which provides communication and alarm systems, to the Swiss company Ascom Holding AG.
It is typical of corporate finance business that success fees have a considerable impact on invoicing, due to which the result may vary considerably from quarter to quarter.
Corporate Finance April to June/2011 January to June/2011
Net sales EUR 1.1 million EUR 1.1 million
Operating profit EUR 0.6 million EUR 0.6 million
Personnel 13 13
The income statement Advium Corporate Finance Ltd has been consolidated with the income statement of Amanda Group from 1 April 2011.
Investments
The business operations of the Investments segment consist of private equity fund investments made from the own balance sheet of Amanda Group. Additional information on the investments of Amanda Group can be found on the company website at www.amandacapital.fi under Investment Activities.
During the period under review, the net income of Amanda Capital Plc’s Investments segment totalled EUR 3.8 million (EUR 0.6 million from 1 Jan. to 30 June 2010). At the end of the period under review, the fair value of the private equity funds was EUR 43.9 million (EUR 36.0 million). The amount of the remaining investment commitments was EUR 17.4 million (EUR 20.2 million on 30 June 2010). During the period under review, private equity funds called in a total of EUR 3.0 million and returned EUR 5.6 million.
Amanda Capital has made a decision that it will only make new investments in funds managed by Amanda in future.
Investments April to June/2011 January to June/2011
Net sales EUR 3.3 million EUR 3.8 million
Operating profit EUR 3.2 million EUR 3.6 million
Personnel 1 1
Balance sheet
The consolidated balance sheet total was EUR 75.1 million (EUR 46.48 million). The increase from the comparison period was mainly due to the positive development of the market values of the private equity fund investments and the transaction concluded on 16 March 2011.
At the end of the period under review, Amanda’s shareholders’ equity was EUR 67.8 million (EUR 41.0 million). The shareholders' equity was influenced by the profit for the period of EUR 2.9 million and the change in the fair value reserve of EUR 4.3 million, in total EUR 6.2 million, as well as the transaction executed on 16 March 2011, whereby 10 302 605 shares were issued at the price of EUR 1.59 per share. The increase in the reserve for invested unrestricted equity by EUR 16.4 million is due to the share issue related to the transaction. The changes are specified in detail in the tables attached to this release.
EUR 3.2 million (EUR 0.0 million) of the debt was interest-bearing long-term debt and EUR 0.0 million (EUR 4.0 million) was interest-bearing short-term debt. Interest-free long-term debt amounted to EUR 1.7 million (EUR 0.7 million) and interest-free short-term debt totalled EUR 2.4 million (EUR 0.7 million). Amanda’s equity to assets ratio was 90.3% (88.4%).
Shares and share capital
Amanda Capital Plc’s number of shares increased as a result of the decision by the Annual General Meeting, according to which Amanda Capital Plc will acquire the shares of Advium Corporate Finance Ltd and eQ Asset Management Group Ltd as well as a convertible bond issued by eQ Asset Management Group Ltd by issuing 10 302 605 new shares. After the subscription and registration of the issued shares, the total number of shares issued by Amanda is 33 070 351. The increase did not influence the share capital of EUR 11 383 873.
Own shares
On 30 June 2011, Amanda Capital Plc acquired 163 153 own shares at the price of EUR 1 per share. The transaction is related to the corporate acquisition carried out on 16 March 2011, in which Amanda Capital Plc acquired the share capital of eQ Asset Management Group Ltd and Advium Corporate Finance Ltd. As a person who was party in the transaction terminated his employment, Amanda had the right, in accordance with the terms of the transaction, to repurchase shares given as payment. The right to repurchase own shares was granted by the Annual General Meeting held on 14 April 2010.
During the comparison period, Amanda held at the end of the period under review a total of 475 707 own shares acquired for hedging the share-based incentive plan and 91 657 shares acquired based on authorisations by Annual General Meetings.
Shareholders
On 27 June 2011, Amanda published a flagging announcement, in which Ulkomarkkinat Oy announced that it had acquired shares in such a manner that the flagging threshold of 10% was exceeded. In addition, Ulkomarkkinat Oy participated in the guarantee arrangements for Amanda Capital Plc’s share issue directed to the personnel and share holdings. Because of the arrangement, Ulkomarkkinat Oy had in certain situations a pre-emptive right to purchase these shares. If Ulkomarkkinat Oy was to exercise the pre-emptive purchase right, its holding in Amanda Capital would have risen to over one tenth. The guarantee arrangement has ended, and the holding of Ulkomarkkinat Oy rose to more than one tenth. In addition, Amanda published a flagging announcement on 30 June 2011, in which Berling Capital Oy participated in the guarantee arrangement of the share issue directed to Amanda Capital Plc’s personnel and the share holdings. Because of the arrangement, Berling Capital Oy had in certain situations a pre-emptive right to purchase these shares. If Berling Capital Oy was to exercise the pre-emptive purchase right, its holding in Amanda Capital would have risen to over one tenth. The guarantee arrangement has ended, and the holding rose to more than one tenth.
Ten largest shareholders as at 30 June 2011
Share of shares and votes, %
Veikko Laine Oy 11.05
Fennogens Investments S.A. 10.99
Berling Capital Oy 10.77
Ulkomarkkinat Oy 10.09
Chilla Capital S.A. 8.06
Oy Hermitage Ab 7.15
Mandatum Life Insurance Company 6.21
Oy Cevante Ab 4.29
Linnalex Ab 2.67
Louko Antti 2.26
On 30 June 2011, Amanda Capital Plc had 3 310 shareholders.
Option scheme 2010
During the period under review, the Board of Directors of the company decided to allocate 450 000 options from the Option Scheme 2010 to Janne Larma, CEO. At the end of the period, a total of 900 000 options had been allocated. Based on the authorisation received by the Board on 14 April 2010, there were 1 100 000 unallocated options at the end of the period under review. The terms and conditions of the option scheme have been published in a stock exchange release of 18 August 2010, and they can be found in their entirety on the company website at www.amandacapital.fi.
After the period under review, 200 000 options were returned to Amanda Capital Plc from the Option Scheme 2010.
Decisions adopted by annual general meeting
Amanda Capital Plc’s annual general meeting, held on 16 March 2011 in Helsinki, decided upon the following:
Confirmation of the financial statements:
Amanda Capital Plc’s annual general meeting confirmed the financial statement of the company, which included the group financial statements, the management report and the audit report for the financial year 2010.
Decision in respect of the result shown on the balance sheet:
The proposal by the board of directors not to distribute any dividend and to book the parent company’s financial result of the financial period on the profit and loss account was confirmed.
Discharge from liability to the board of directors, managing directors and deputy managing director:
The annual general meeting decided to grant discharge from liability to the board of directors and the managing directors.
The number of board members, appointment of board members and the remuneration of the members of the board:
In accordance with the decision of the annual general meeting, five board members, being Ole Johansson, Georg Ehrnrooth, Eero Heliövaara, Jussi Seppälä and Catharina Stackelberg-Hammarén were appointed for a term until the next annual general meeting. The annual general meeting decided that the members of the board would receive remuneration as follows: the chairman of the board will receive 3,300 Euros and the board members will receive 1,800 Euros per month. Travel and lodging costs will be compensated in accordance with the company’s expense policy. The board appointed Ole Johansson as chairman of the board in its constituting meeting held immediately after the annual general meeting.
Auditors:
Ernst & Young Oy, corporation of authorized public accountants, will continue as auditor of the company, and Ulla Nykky APA will act as Lead Auditor. It was decided to compensate the auditors as per issued invoice.
Approval of a corporate transaction and authorising the Board of Directors to decide on the issuance of shares:
The annual general meeting decided to approve the transaction, whereby Amanda Capital Plc acquires all shares in Advium Corporate Finance Ltd and eQ Asset Management Group Ltd as well as the convertible bond issues by eQ Asset Management Group Ltd and decided to authorise the board of directors to decide on a share issue comprising of no more than 10,302,605 new shares. The subscription price for each share is 1.41 Euros.
The authorisation includes a right for the board of directors to decide on all other terms of the share issue, including the right to decide whether the subscription price is to be booked in full or in part in the reserve for invested unrestricted equity or as an increase of the share capital, and it includes the right to decide on a directed issue of shares.
The authorisation is intended to be used to implement the corporate transaction.
The authorisation does not replace earlier authorisations, which will remain in force and the new authorisation is valid until 31.7.2011.
Amendment of field of activity – article:
It was decided to amend the field of activity as follows: The company’s field of activity is to own and manage shares, other securities and real estate as well as to engage in securities trading and other investment operations. The company takes care of the centralised administrative duties of the investment firms, fund management companies and other companies belonging to the Group.
Personnel and organisation
At the end of the period under review, the number of personnel was 63. The Asset Management segment had 49 employees, the Corporate Finance segment 13 employees and the Investments segment 1 employee. The personnel of the Asset Management segment comprises nine persons with fixed-term employment and the Corporate Finance segment two persons with fixed-term employment.
The overall salaries paid to the employees of Amanda Capital Group during the period under review totalled EUR 1.9 million (EUR 0.8 million). This sum comprises the salaries of Advium Corporate Finance Ltd and eQ Asset Management Group from 1 April to 30 June 2011 and the salaries of Amanda Capital Plc’s and Amanda Advisors Ltd’s personnel from 1 January to 30 June 2011.
Major risks and short-term uncertainties
The result of the Asset Management segment depends on the development of the assets under management, which is highly dependent of the development of the private equity market. On the other hand, the management fees of private equity funds are based on long-term agreements that produce a stable cash flow.
Success fees, which depend on the number of mergers and acquisitions and real estate transactions, have a considerable impact on the result of the Corporate Finance segment. These vary considerably within one year and are dependent on economic trends.
The risks associated with Amanda Group's investment operations are the market risk, currency risk and liquidity risk. Among these, the market risk has the greatest impact on investments. Amanda’s investments are well diversified, which means that the impact of one investment in a company, made by one individual fund, on the yield of the investments is often small.
Corporate acquisitions
On 16 March 2011, Amanda Capital Plc acquired 100 % of the shares in Advium Corporate Finance Ltd and eQ Asset Management Group Ltd and the convertible bond issued by eQ Asset Management Group Ltd. The combined entity is a strong Finnish company that specialises in the management of private equity and alternative investments, traditional asset management and corporate finance advisory services. The value of the transaction totalled EUR 16.6 million, and it was paid by issuing 10 302 605 new shares in Amanda Capital. Of the shares, 5 854 563 were allocated to the shareholders of Advium Corporate Finance Ltd, and their purchase price was EUR 9.4 million. 3 903 042 shares were allocated to the shareholders of eQ Asset Management Group Ltd, their purchase price being EUR 6.3 million, and 545 000 shares were issued for acquiring the convertible bond issued by eQ Asset Management Group Ltd, the purchase price being EUR 0.9 million. The purchase price comprises a transfer tax of EUR 0.2 million.
The purchase price exceeded Advium Corporate Finance Ltd’s net assets by EUR 9.3 million and the purchase price of eQ Asset Management Group Ltd’s exceeded the net assets by EUR 5.2 million. As for Advium, EUR 2.0 million was allocated to intangible assets by calculating a fair value for the Advium brand. For eQ Asset Management Group Ltd’s part, EUR 2.5 million was allocated to intangible assets by calculating fair values for the concluded customer agreements and the brand. A deferred tax liability allocated to these assets was recorded in the amount of EUR 0.1 million. The remaining goodwill for Advium is EUR 7.3 million and for eQ Asset Management Group Ltd EUR 2.8 million. The goodwill is based on the personnel and offers Amanda the opportunity to expand its operations to new business areas, which increases its customer base and product selection.
Had Advium Corporate Finance and eQ Asset Management Group been consolidated with Amanda Group at the beginning of 2011, Amanda Group’s net sales had been EUR 1.6 million higher during the period under review.
| Acquired net assets and goodwill at preliminary values (EUR million): | |||||||
| Advium | eQ Asset Management | ||||||
| Cash and investments | 0.5 | 1.3 | |||||
| Tangible assets | 0.1 | 0.1 | |||||
| Intangible assets | 0.0 | 0.7 | |||||
| Receivables | 0.5 | 0.8 | |||||
| Financial liabilities | -0.6 | -1.4 | |||||
| Other liabilities | -0.4 | -0.4 | |||||
| Acquired net assets | 0.1 | 1.0 | |||||
| Adjustment of the acquisition cost of the convertible bond | 0.0 | 0.1 | |||||
| Acquisition cost | 9.4 | 6.3 | |||||
| Unallocated purchase price | 9.3 | 5.2 | |||||
| Fair value of the brand | 2.0 | 2.0 | |||||
| Customer agreements | 0.0 | 0.5 | |||||
| Deferred tax | 0.1 | ||||||
| Goodwill | 7.3 | 2.8 | |||||
The Group increased its holding in the investment firm Active Hedge Advisors AHA Oy, which has offered advisory services to eQ Asset Management in connection with the investment operations of the eQ Active Hedge Fund, from 50 to 100%. This transaction has no impact on the portfolio management of the eQ Active Hedge Fund.
| Acquired net assets and goodwill at preliminary values (EUR 1 000): | |||
| Cash and investments | 43.7 | ||
| Other liabilities | 1.1 | ||
| Acquired net assets | 42.6 | ||
| Acquisition cost | 100.0 | ||
| Unallocated purchase price | 57.4 | ||
| Customer agreements | 57.4 | ||
Events after the reporting period
After the end of the reporting period, the Board of Directors has appointed Janne Larma, Petter Hoffström, Lauri Lundström and Annamaija Peltonen to Amanda Group’s management team.
Outlook
The fall of share prices that took place at the beginning of the third quarter and the considerable uncertainty in the financial market will have a negative impact on the Group’s business operations, when prolonged. This will first be seen as a decreased in the assets managed by the Group and consequently in management fees.
AMANDA CAPITAL PLC
Board of Directors
Tables
Principles for drawing up the report
This financial statements bulletin has been prepared in accordance with the International Financial Reporting Standards (IFRS) and the IAS 34 Interim Financial Reporting standard approved by the EU. When preparing the interim report, Amanda has applied the same principles as in the financial statements for the year 2010, and the calculating formulas of the key ratios have been presented in the financial statements. As for the net investment income, Amanda Group’s net sales are recognised in Amanda’s income statement in different quarters due to factors independent of the company.
The interim report has not been audited.
| CONSOLIDATED INCOME STATEMENT, EUR 1 000 | |||||||||||||
| 4–6/11 | 4–6/10 | 1–6/11 | 1–6/10 | 1–12/10 | |||||||||
| NET SALES | |||||||||||||
| Net investment income | 3 325 | 210 | 3 759 | 627 | 1 136 | ||||||||
| Management fees | 3 289 | 1 008 | 4 232 | 2 027 | 3 972 | ||||||||
| Total | 6 615 | 1 219 | 7 991 | 2 654 | 5 108 | ||||||||
| Depreciation | -244 | -193 | -389 | -366 | -710 | ||||||||
| Operating expenses | -2 441 | -748 | -3 295 | -1 414 | -2 570 | ||||||||
| Operating profit | 3 930 | 277 | 4 308 | 874 | 1 829 | ||||||||
| Financial income and expenses | -183 | -123 | -345 | -267 | -623 | ||||||||
| Profit before taxes | 3 747 | 154 | 3 962 | 607 | 1 205 | ||||||||
| Income taxes | -969 | -52 | -1 050 | -198 | -371 | ||||||||
| Minority interests | -3 | - | -3 | - | - | ||||||||
| PROFIT (LOSS) FOR THE PERIOD | 2 775 | 103 | 2 910 | 409 | 834 | ||||||||
| Other comprehensive income: | |||||||||||||
| Available-for-sale financial assets, net | 345 | 812 | 4 300 | 1 610 | 3 407 | ||||||||
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | 3 121 | 915 | 7 210 | 2 019 | 4 241 | ||||||||
| Earnings per share, EUR | 0.08 | 0.005 | 0.09 | 0.018 | 0.04 | ||||||||
| Earnings per average share, EUR *) | 0.10 | 0.005 | 0.10 | 0.018 | 0.04 | ||||||||
| *) Weighted average number of shares outstanding during the period. | |||||||||||||
|
CONSOLIDATED BALANCE SHEET, EUR 1 000 |
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| 30 June 2011 | 30 June 2010 | 31 December 2010 | ||
| ASSETS | ||||
| LONG-TERM ASSETS | ||||
| Intangible and tangible | ||||
| assets | 19 779 | 4 984 | 4 623 | |
| Investments available for sale | ||||
| Private equity investments | 43 919 | 36 046 | 40 625 | |
| Accrued income | 133 | - | - | |
| Deferred tax assets | 102 | 2 173 | 1 684 | |
| CURRENT ASSETS | ||||
| Accrued income and advance payments | 4 398 | 463 | 441 | |
| Investments available for sale | ||||
| Financial securities | 45 | 166 | - | |
| Cash | 6 751 | 2 545 | 4 112 | |
| TOTAL ASSETS | 75 128 | 46 376 | 51 486 | |
| SHAREHOLDERS’ EQUITY AND LIABILITIES | ||||
| SHAREHOLDERS’ EQUITY | 67 832 | 40 986 | 44 229 | |
| LIABILITIES | ||||
| Non-current liabilities | 4 858 | 662 | 946 | |
| Current liabilities | 2 438 | 4 727 | 6 310 | |
| TOTAL LIABILITIES | 7 296 | 5 390 | 7 256 | |
| TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES | 75 128 | 46 376 | 51 486 | |
| CONSOLIDATED CASH FLOW STATEMENT, EUR 1 000 | ||||
| 1–6/11 | 1–6/10 | 2010 | ||
| CASH FLOW FROM OPERATIONS | ||||
| Operating profit | 4 308 | 874 | 1 829 | |
| Depreciation and write-downs | 389 | 366 | 710 | |
| Investments available for sale, | ||||
| change | 88 | -2 908 | -4 752 | |
| Change in working capital | ||||
| Business receivables, increase (-) | ||||
| decrease (+) | 413 | 18 | 39 | |
| Interest-free debt, increase (+) | ||||
| decrease (-) | 940 | 87 | -130 | |
| Interest-bearing debt, increase (+) | ||||
| decrease (-) | -3 164 | 1 000 | 2 800 | |
| Total change in working capital | -1 810 | 1 105 | 2 709 | |
| Cash flow from operations before | ||||
| financial items and taxes | 2 974 | -563 | 496 | |
| Financial income and expenses | -345 | -267 | -623 | |
| Taxes | -1 050 | -198 | -371 | |
| CASH FLOW FROM OPERATIONS | 1 579 | -1 028 | -498 | |
| CASH FLOW FROM INVESTMENTS | ||||
| Investing activities in investments | -71 | -2 | 15 | |
| Corporate acquisitions | 1 120 | |||
| CASH FLOW FROM INVESTMENTS | 1 049 | -2 | 15 | |
| CASH FLOW FROM FINANCING | ||||
| Purchase of own shares | 0 | 24 | -31 | |
| Sale of own shares | - | 1 085 | ||
| Other changes | 11 | -25 | -34 | |
| CASH FLOW FROM FINANCING | 11 | -1 | 1 020 | |
| INCREASE/DECREASE IN LIQUID ASSETS | 2 639 | -1 031 | 537 | |
| Liquid assets at 1 Jan. | 4 112 | 3 575 | 3 575 | |
| Liquid assets at 31 June | 6 751 | 2 545 | 4 112 | |
| Liquid assets contain cash and bank deposits. | ||||
| CHANGE IN CONSOLIDATED SHAREHOLDERS’ EQUITY, EUR 1 000 | ||||||||||||||
| Share capital | Reserve for invested unrestricted equity | Other reserves | Fair value reserve | Retained earnings | Total | |||||||||
| Shareholders’ equity at 1 Jan. 2010 | 11 384 | 29 614 | -1 769 | -7 701 | 7 439 | 38 968 | ||||||||
| Comprehensive income | 1 610 | 1 610 | ||||||||||||
| Profit (loss) for the period | 409 | 409 | ||||||||||||
| Total comprehensive income | 1 610 | 409 | 2 019 | |||||||||||
| Purchase of own shares | 24 | 24 | ||||||||||||
| Other changes | -25 | -25 | ||||||||||||
| Shareholders’ equity at 30 June 2010 | 11 384 | 29 614 | -1 745 | -6 091 | 7 824 | 40 986 | ||||||||
| Shareholders’ equity at 1 Jan. 2011 | 11 384 | 29 614 | 0 | -6 819 | 10 051 | 44 229 | ||||||||
| Comprehensive income | 4 300 | 4 300 | ||||||||||||
| Profit (loss) for the period | 2 910 | 2 910 | ||||||||||||
| Total comprehensive income | 4 300 | 2 910 | 7 210 | |||||||||||
| Purchase of own shares | 16 381 | 0 | 16 381 | |||||||||||
| Other changes | 11 | 11 | ||||||||||||
| Shareholders’ equity at 30 June 2011 | 11 384 | 45 995 | 0 | -2 520 | 12 972 | 67 832 | ||||||||
|
SEGMENT INFORMATION, EUR 1 000 |
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| Jan to June/2011 | Corporate | Undivided part of the | Group, | |||||||||||
| Asset Management | Finance | Investments | Group | total | ||||||||||
| Net sales | 3 095 | 1 138 | 3 759 | 7 991 | ||||||||||
| Operating profit | 994 | 554 | 3 559 | -801 | 4 308 | |||||||||
| Profit (loss) for the period | -1 398 | 2 910 | ||||||||||||
| Long-term assets | 10 620 | 9 394 | 43 919 | 63 933 | ||||||||||
Undivided part of the Group in Operating profit row includes personnel,
administration and other expenses related to group management. Also on-off
items related to eQ and Advium corporate acquisitions are presented in this row.
One-off costs related to corporate acquisitions are law and consulting expenses
EUR 276 thousand and audit expenses EUR 42 thousand.
Undivided part of the Group in Profit (loss) for the period row includes
financial income and expenses and income taxes.
| CONSOLIDATED KEY RATIOS | ||
| 2011 | 2010 | |
| Profit (loss) for the period (EUR 1 000) | 2 910 | 409 |
| Earnings per share, EUR | 0.9 | 0.018 |
| Earnings per average share, EUR *) | 0.0 | 0.018 |
| Equity per share, EUR | 2.5 | 1.80 |
| Equity per average share, EUR *) | 2.6 | 1.85 |
| Return on investment, ROI % p.a. | 2.7 | 3.1 |
| Return on equity, ROE % p.a. | 2.6 | 2.0 |
| Equity to assets ratio, % | 90.3 | 88.4 |
| Share price at the end of period, EUR | 1.78 | 1.45 |
| Number of personnel at the end of period | 63 | 13 |
| Private equity investments to equity | ||
| ratio, % | 64.7 | 87.9 |
| Investment commitments to equity | ||
| ratio, % | 90.4 | 137.3 |
| *) Weighted average number of shares outstanding during the period. | ||
| CHANGE IN BOOK VALUE OF PRIVATE EQUITY FUNDS, EUR 1 000 | ||||
| Book value of private equity funds at 1 Jan. 2011 | 40 625 | |||
| Increases from corporate acquisitions | 50 | |||
| Draw-downs to private equity funds | 3 018 | |||
| Return of capital from private equity funds | -5 585 | |||
| Changes in the value of private equity funds | ||||
| in fair value reserve | 5 811 | |||
| Book value of private equity funds at 30 June 2011 | 43 919 | |||
| REMAINING COMMITMENTS | ||||||||
| On 30 June 2011, Amanda Capital Plc’s remaining commitments in private | ||||||||
| equity funds stood at EUR 17.4 million (EUR 20.2 million on 30 June 2010). | ||||||||
| Other liabilities totalled EUR 0.2 million at the end of the period under review (EUR 0.2 on 30 June 2010). | ||||||||