Download our latest Annual Report for 2009 [PDF] - East West ...

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02Ambrian Capital plcAnnual Report & Accounts 2009Financial highlights 2009• Total income £18.78 million in 2009compared to negative total income of£(1.07) million in 2008.• Revenue £17.51 million in 2009, up 82%compared to 2008 (excluding gains andlosses from the Investment Portfolio).• Corporate Finance & Equities revenue£8.95 million in 2009, up more than twoand a half times compared to 2008.• Commodities revenue £8.56 million in2009, an increase of 34% compared to 2008.• Profit before share-based payment chargesand tax £4.01 million compared to a loss onthe same basis of £(16.30) million in 2008.• Ambrian ranked 1st in small cap metals andmining research (Thomson Reuters ExtelSurvey 2009) and 1st by number of retainedcorporate clients in the AIM Basic MaterialsSector (Hemscott Fourth Quarter 2009).• Ambrian handled 213,382 tonnes of refinedcopper in 2009, an amount equivalent toapproximately 6.9% of China’s total importsof refined copper in 2009.• Net tangible asset value per shareincreased 7.23% during the year to 31.18pat 31 December 2009.• Basic earnings per share 2.76p in 2009compared to a loss per share of (12.92)p in 2008.• Second interim dividend of 0.75p per sharedeclared and no final dividend proposed,taking total dividends for the year to 1.50pper share, unchanged from 2008.2009 Total income by division £m (%) Net asset value breakdown at 31/12/09 £m (%)3 14 13221 Corporate finance & equities2 Commodities3 Principal investmentsTotal income8.958.561.2718.78(48%)(46%)(6%)1 Own cash2 Working capital and fixed assets3 Principal investments4 Intangible assetsTotal net assets23.973.642.532.2932.43(74%)(11%)(8%)(7%)Operating revenue * (£m)Own cash (£m)1817.512522.2022.5623.9716142017.04121086423.00**8.4310.649.64151055.7602005 20062007 2008 200902005 2006 2007 2008 2009* Excludes Investment portfolio** UK GAAP
Ambrian Capital plcAnnual Report & Accounts 2009Chairman’s statement“The current year will no doubt providefurther challenges in a fragile economicworld but there will also be opportunitiesfor Ambrian.”Overview 03Business reviewGovernanceFinancial statementsShareholder informationAmbrian’s financial and operating performancein 2009 demonstrated continued progress in meetingour strategic objective. We are committed to buildinga business that has intrinsic value substantially inexcess of net asset value based on a differentiatedbusiness model and an enduring franchise.The growth in revenue and profit in 2009, in bothCorporate Finance & Equities and in Commodities,demonstrates the success of our natural resourcesfocused model. Ambrian continues to emphasisereturn on capital, cost control and maintenanceof a strong financial position. This year we have takena charge to Ambrian’s consolidated statement ofcomprehensive income for the fair value of shareoptions granted to staff by the Ambrian CapitalEmployee Benefit Trust in accordance with IFRS 2.We have also restated the 2008 accounts to reflectthis charge. Our remuneration policies are designedto retain and incentivise our most talented staff andrecruit the best people in the market in order to drivegrowth in shareholder value. We are in the processof putting in place a more effective share incentivescheme for our staff.Ambrian Partners continued to strengthen its positionin the UK small- and mid-cap metals and miningsector. It took advantage of the fall-out from the creditcrisis in the UK investment banking sector to hiretalented individuals in corporate finance, equity salesand trading and research. Ambrian Partners tooksteps during 2009 to improve the size, quality andsustainability of its equities business by selectivelyrecruiting specialist research analysts in non-cyclicalsectors. Equity market making showed a significantturnaround during the year as a result of the reboundin the junior natural resources sector.Ambrian Commodities remained profitable in 2009despite a drop in customer trading volumes and lowerinterest rates. In the second half of the year we changedto a new clearing bank and we now fund client marginsdue to the London Metal Exchange (LME) from our owncash resources.Ambrian Metals benefited in the first half of 2009 fromthe strength in demand for refined copper from Chinaand the Middle East. We are taking steps to upgradeour office in Shanghai from a representative office to a“Wholly Foreign Owned Enterprise” (WFOE) which willenable Ambrian Metals to trade with a wider range ofChinese customers. We expect the WFOE to becomefully operational in the second half of 2010.In January 2010, we transferred Ambrian’s remaininginvestment portfolio into Ambrian PrincipalInvestments Limited (APIL), a wholly-owned Jerseyregistered company, which is managed by AmbrianAsset Management Limited. This will enable theperformance of our principal investment portfolioto be clearly identified and provides the basis foran audited track record.We continue to broaden both the services we offerto clients and our geographical presence. In February2010, we formed Ambrian Resources AG in partnershipwith three ex-Glencore International executives.Based in Switzerland, Ambrian Resources is focusedon arranging and managing strategic investmentswhich offer the opportunity to complement theactivities of our other businesses. We expect to allocateapproximately 10% of the Group’s shareholders’ equityto strategic principal investments.A second interim dividend of 0.75p per share will bepaid to shareholders on 30 March 2010. This takes thetotal dividend for the year to 1.50p per share, unchangedfrom 2008. We are not recommending payment of afinal dividend. Since our first dividend payment in October2005, Ambrian has paid shareholders a cumulativetotal of £7.12 million in cash dividends. A further£1.10 million has been returned to shareholdersthrough share buybacks over the same period.The current year will no doubt provide further challengesin a fragile economic world but there will also beopportunities for Ambrian. Despite our accomplishmentsin 2009, we know that there is still much to be done ifwe are to achieve our objective and build our businessin the long term. We benefit greatly from our ChiefExecutive, Tom Gaffney, who has shown outstandingleadership in expanding and diversifying our businessin a difficult environment.Finally, I would like to thank our clients for entrustingus with their business, all of our staff for their hardwork over the past year and my fellow directors fortheir guidance and support.W Lawrence Banks, cbeChairman22 March 2010
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