Interim Results for six months ended 30 June 2021

RNS Number : 9848G
ARGO Group Limited
30 July 2021
 

Argo Group Limited

("Argo" or the "Company")

 

Interim Results for the six months ended 30 June 2021

 

Argo today announces its interim results for the six months ended 30 June 2021.

The Company will today make available its interim report for the six months period ended 30 June 2021 on the Company's website www.argogrouplimited.com.

 

 

Key highlights for the six months period ended 30 June 2021

 

This report sets out the results of Argo Group Limited (the "Company") and its subsidiaries (collectively "the Group" or "Argo") covering the six months ended 30 June 2021.

 

Revenues US$1.6 million (six months to 30 June 2020: US$1.4 million)

Operating loss US$0.7 million (six months to 30 June 2020: US$0.4 million)

Loss before tax US$0.2 million (six months to 30 June 2020: profit before tax US$0.2 million)

Net assets US$22.6 million (31 December 2020: US$22.8 million)

 

 

Commenting on the results and outlook, Kyriakos Rialas, Chief Executive Officer of Argo said:

 

 

" Argo Group is pleased to present its six months results for the period ending 30 June 2021. Income derived from management fees remains stable reflecting assets under management but excludes any potential performance fees that would crystallise at year end provided the NAV of The Argo Fund does not fall below the highwater mark.  Costs have gone up slightly due to some exceptional non-repetitive expenses but additional AUM are needed to comfortably cover running expenses.

Argo is currently focusing on its single Emerging Markets Fund with different share classes to reflect its strategies.  A new share class was launched earlier this year to attract investors looking for distressed situations in Emerging market bonds."

 

 

 

Enquiries

 

Argo Group Limited

Andreas Rialas

020 7016 7660

 

Panmure Gordon

Dominic Morley

020 7886 2500

 

 

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014 (as amended) as it forms part of the domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 (as amended) ("MAR").

 

 

 

 

The Group and its investment objective

 

Argo's investment objective is to provide investors with absolute returns in the funds that it manages by investing in multi strategy investments in emerging markets.

 

Argo was listed on the AIM market in November 2008 and has a performance track record dating back to 2000.

 

Business and operational review

 

For the six months ended 30 June 2021 the Group generated revenues of US$1.6 million (six months to 30 June 2020: US$1.4 million) with management fees accounting for US$1.2 million (six months to 30 June 2020: US$1.2 million). The Group does not accrue for performance fees until they are crystalized at the year end. Unrecognised performance fees at 30 June 2021 amounted to US$0.9 million (2020: US$ nil).

 

Total operating costs for the period, ignoring bad debt provisions, are US$2.0 million compared to US$1.6 million for the six months to 30 June 2020 . The Group has provided against management fees of US$0.4 million due from the Designated share class in The Argo Fund ("TAF") (six months to 30 June 2020: US$0.2 million). In the Directors' view these amounts are fully recoverable however they have concluded that it would only be appropriate to recognise income without provision from these investment management services once a liquidity event occurs in this share class.

 

Overall, the financial statements show an operating loss for the period of US$0.7 million (six months to 30 June 2020: US$0.4 million) and a loss before tax of US$0.2 million (six months to 30 June 2020: profit before tax of US$0.2 million).  Net loss on investments of US$0.04 million (six months to 30 June 2020: net profit on investments US$0.2 million) and interest income of US$0.5 million (six months to 30 June 2020: US$0.4 million).

 

At the period end, the Group had net assets of US$22.6 million (31 December 2020: US$22.8 million) and net current assets of US$8.4 million (31 December 2020: US$8.8 million) including cash reserves of US$1.2 million (31 December 2020: US$0.7 million).

 

Net assets include investments in The Argo Fund ("TAF") at fair values of US$7.1 million (31 December 2020: US$6.8 million)

 

At the period end TAF owed the Group total fees of US$1.1 million ( 31 December 2020 : US$1.0 million). At 30 June 2021, a provision for US$0.9 million was made against this amount as the timing of the receipt of the fees from the designated share class in TAF is unknown.

 

TAF ended the period with Assets under Management ("AUM") at US$126.7 million (2020: US$130.4 million). The current level of AUM remains below that required to ensure sustainable profits on a recurring management fee basis in the absence of performance fees. This has necessitated an ongoing review of the Group's cost basis. Nevertheless, the Group has ensured that the operational framework remains intact and that it retains the capacity to manage additional fund inflows as and when they arise.

 

The average number of permanent employees of the Group for the six months to 30 June 2021 was 19 ( 30 June 2020 : 20).

Fund performance

The Argo Funds

Fund

Launch

date

30 June

2021

6 months

30 June

2020

6 months

2020

year

total

Since inception

Annualised  performance

Sharpe

ratio

 

Down

months

AUM



%

%

%

%

CAGR %



US$m

The Argo Fund - A class

Oct-00

4.28

4.55

5.53

256.95

7.06

0.51

82 of 249

90.1

The Argo Fund - Other classes









36.6

Total









126.7

 

Following the wild gyrations in financial markets in the first half of 2020 due to Covid-19, the first six months of this year were relatively calm. Business sentiment and equity markets rose as vaccination campaigns got underway and then accelerated in most developed economies, especially in the US, UK and Europe. In addition, many governments also began to ease Covid-related mobility restrictions and activity levels picked up. Economic data in the period has generally been very strong, especially in the US, which posted an annualised growth rate of 6.4% in the first quarter. Although the eurozone economy contracted in the first quarter, indicators point to a strong economic rebound having taken place in Europe. After an estimated contraction of over 3% in 2020, the IMF have upgraded their global growth forecast to 6% in 2021, before moderating in 2022.

However, the reopening of economies and the quick rebound in activity that has followed has fuelled inflation in some countries. In June, the US consumer price index increased by 5.4% year on year, although some of the underlying details suggest that there are temporary factors at play, such as the rise in used car prices. The US Federal Reserve continues to see this inflation increase as transitory but has acknowledged that tapering is being discussed as are two rate hikes sometime in 2023. Notwithstanding the concerns about inflationary pressure,10-year US Treasury yields have dropped by 50 bps from the end of March, falling to 1.25%.

The Covid recession has had - so far at least - less impact than the 2008 global financial crisis due to an unprecedented policy response in the major economies, combining accommodative monetary measures with the running of large fiscal deficits. However, some emerging market economies have been hit harder and are expected to suffer more significant medium-term losses, for example countries that rely on tourism and for those with limited policy space to respond. Efforts to relieve financial strain on these countries such as the Debt Service Suspension Initiative and the allocation of additional SDR reserves by the IMF together with enhanced vaccine rollout should help emerging markets growth to rebound towards the end of 2021.

The NAV of the Class A shares of the TAF increased by 4.28% in the first half of 2021, compared to a rise of 4.55% in the same period of the previous year; the benchmark JP Morgan EMBI+ bond index fell by 3.12% in the first six months. The fund benefitted from the effect of higher oil prices on several long bond positions but was held back by various macro hedges and the failure of Argentine sovereign bonds to attract a bid post-restructuring. Class A shares issued by TAF continue to be invested in a diversified debt and macro positions which seek to capture alpha through long and short investment in liquid EM corporate and sovereign bonds and FX. In addition, there are other share classes within the TAF master/feeder structure which offer investors exposure to distressed debt portfolio and also special situations where the timeline to investment realisation will be longer.

 

Dividends and share purchase programme

The Group did not pay a dividend during the current or prior period .   The Directors intend to restart dividend payments as soon as the Group's performance provides a consistent track record of profitability.

 

Outlook

The Board remains optimistic about the Group's prospects based on the transactions in the pipeline and the Group's initiatives to increase AUM. A significant increase in AUM is still required to ensure sustainable profits on a recurring management fee basis and the Group is well placed with capacity to absorb such an increase in AUM with negligible impact on operational costs.

 

Boosting AUM will be Argo's top priority in the next six months. The Group's marketing efforts continue to focus on TAF which has a 20-year track record as well as identifying acquisitions that are earnings enhancing.

 

Over the longer term, the Board believes there is significant opportunity for growth in assets and profits and remains committed to ensuring the Group's investment management capabilities and resources are appropriate to meet its key objective of achieving a consistent positive investment performance in the emerging markets sector.

 

 

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER

COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2021

 



Six months


Six months




ended


ended




30 June


30 June




2021


2020

 



Note

US$'000


US$'000








Management fees


1,250


1,227


Performance fees


283


-


Other income


131


144


Revenue


1,664


1,371








Legal and professional expenses


(249)


(267)


Management fees payable


(157)


-


Operational expenses


(339)


(335)


Employee costs


(1,129)


(1,202)


Bad debt provision

9, 10

(365)


(203)


Foreign exchange profit/(loss)


(4)


313


Depreciation

7

(103)


(97)


Operating loss


(682)


(420)








Interest income


519


409


Realised and unrealised (loss)/gain on investments


(38)


205


(Loss)/profit on ordinary activities before taxation


(201)


194








Taxation

5

-


  - 


(Loss)/profit for the period after taxation attributable to members of the Company

6

(201)


194


Other comprehensive income






Items that may be reclassified subsequently to profit or loss:






Exchange differences on translation of foreign operations


(10)


(15)


Total comprehensive income for the period


(211)


179

 






 



Six months


Six months

 



Ended


Ended

 



30 June


30 June

 



2021


2020

 



US$


US$

 

Earnings per share (basic)

6

(0.005)


0.005


Earnings per share (diluted)

6

(0.005)


0.004


 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2021



30 June


31 December

 



2021

 


2020

 

 


Note

US$'000


US$'000

 

Assets





 

Non-current assets





 

Land, fixtures, fittings and equipment

7

386


484

 

Loans and advances receivable

10

13,837


13,645

 

Total non-current assets


14,223


14,129

 






 

Current assets





 

Financial assets at fair value through profit or loss

8

7,110


6,818


Loan and advances receivable

10

12


13


Trade and other receivables

9

351


1,669


Cash and cash equivalents


1,236


675


Total current assets


8,709


9,175







 

Total assets


22,932


23,304

 






 

Equity and liabilities





 






 

Equity





 

Issued share capital

11

390


390

 

Share premium


25,353


25,353

 

Revenue reserve


(79)


122 

 

Foreign currency translation reserve


(3,065)


(3,055)

 

Total equity


22,599


22,810

 






 

Current liabilities





 

Trade and other payables


333


415

 

Total current liabilities


333


415

 

 

Non-current liabilities

 





 

Trade and other payables

15

-


79

 

Total non-current liabilities


-


79

 






 

Total equity and liabilities


22,932


23,304

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2021


 

Issued share capital

 

 

Share premium

 

 

Revenue reserve

 Foreign currency translation reserve

 

 

 

Total


2020

2020

2020

2020

2020


US$'000

US$'000

US$'000

US$'000

US$'000







As at 1 January 2020

390

25,353

(1,546)

(2,932)

21,265







Total comprehensive income






Profit for the period after taxation

-

-

194

  -

194

Other comprehensive income

-

-

-

(15)

(15)

As at 30 June 2020

390

25,353

(1,352)

(2,947)

21,444

 

 

 


 

Issued share capital

 

 

Share premium

 

 

Revenue reserve

 Foreign currency translation reserve

 

 

 

Total


2021

2021

2021

2021

2021


US$'000

US$'000

US$'000

US$'000

US$'000







As at 1 January 2021

390

25,353

122

(3,055)

22,810







Total comprehensive income






Loss for the period after taxation

-

-

(201)

  -

(201)

Other comprehensive income

-

-

-

(10)

(10)

As at 30 June 2021

390

25,353

(79)

(3,065)

21,599

 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED 30 JUNE 2021

 

 



Six months ended


Six months ended



30 June


30 June



2021


2020


Note

US$'000


US$'000






Net cash (outflow)/inflow from operating activities

12

(300)


195






Cash flows used in investing activities





Interest received on cash and cash equivalents


1


3

Purchase of fixtures, fittings and equipment

7

(2)


(1)

Proceeds from sale of financial assets at fair value through profit or loss


1,001


11,779

Loan investments


-


(11,200)











Net cash generated from investing activities


1,000


581






Cash flows from financing activities





Payment of lease liabilities


(119)


(44)

Repurchase of own shares


-


-






Net cash used in financing activities








Net decrease in cash and cash equivalents


581


732






Cash and cash equivalents at 1 January 2021 and

  1 January 2020


675


863






Foreign exchange loss on cash and cash equivalents


(20)


6






Cash and cash equivalents as at 30 June 2021 and 30 June 2020


1,236


1,601

 

 

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months ended 30 June 2021

 

1.  CORPORATE INFORMATION

 

  The Company is domiciled in the Isle of Man under the Companies Act 2006.  Its registered office is at 33-37 Athol Street, Douglas, Isle of Man, IM1 1LB. The condensed consolidated interim financial statements of the Group as at and for the six months ended 30 June 2021 comprise the Company and its subsidiaries (together referred to as the "Group").

 

  The consolidated financial statements of the Group as at and for the year ended 31 December 2020 are available upon request from the Company's registered office or at www.argogrouplimited.com.

 

  The principal activity of the Company is that of a holding company and the principal activity of the wider Group is that of an investment management business. The functional currency of the Group undertakings are US dollars, Sterling and Romanian Lei. The presentational currency is US dollars.

 

  Wholly owned subsidiaries    Country of incorporation

 

Argo Capital Management Limited

United Kingdom

Argo Property Management Srl 

Romania

 

2.  ACCOUNTING POLICIES

 

(a)  Basis of preparation

 

  These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2020.

 

  The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2020.

 

  These condensed consolidated interim financial statements were approved by the Board of Directors on 29 July 2021. 

 

b)  Financial instruments and fair value hierarchy

 

The following represents the fair value hierarchy of financial instruments measured at fair value in the Condensed Consolidated Statement of Financial Position. The hierarchy groups financial assets and liabilities into three levels based on the significance of inputs used in measuring the fair value of the financial assets and liabilities. The fair value hierarchy has the following levels:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

 

Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

 

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

 

The level within which the financial asset or liability is classified is determined based on the lowest level of significant input to the fair value measurement

 

3.  SEGMENTAL ANALYSIS

 

The Group operates as a single asset management business.

The operating results of the companies are regularly reviewed by the Directors of the Group for the purposes of making decisions about resources to be allocated to each company and to assess performance. The following summary analyses revenues, profit or loss, assets and liabilities:


 

Argo Group Ltd

 

Argo Capital Management Ltd

 

Argo Property Management

Srl

Six months ended

 30 June 


2021

2021

2021

2021


US$'000

US$'000

US$'000

US$'000






Total revenues for reportable segments customers

-

1,533

131

1,664

Intersegment revenues

-

-

 

-

-






Total profit/(loss) for reportable segments

86

(316)

(193)

(423)

Intersegment profit/(loss)

(222)

-

-

(222)






Total assets for reportable segments assets

21,561

1,066

305

22,932

Total liabilities for reportable segments

7

275

51

333

 

Revenues, profit or loss, assets and liabilities may be reconciled as follows:

 

Six months


Ended


30 June 2021


US$'000

Revenues


Total revenues for reportable segments

1,664

Elimination of intersegment revenues

-

Group revenues

1,664



Profit or loss


Loss for reportable segments

(423)

Elimination of intersegment loss

222

Other unallocated amounts

-

Loss on ordinary activities before taxation

(201)



Assets


Total assets for reportable segments

22,936

Elimination of intersegment receivables

(4)

Group assets

22,932



Liabilities


Total liabilities for reportable segments

3,716

Elimination of intersegment payables

(3,383)

Group liabilities

333

 

 


 

Argo Group Ltd

Argo Capital Management (Cyprus) Ltd

 

Argo Capital Management Ltd

 

Argo Capital Management Property Ltd

Six months ended

 30 June 


2020

2020

2020

2020

2020


US$'000

US$'000

US$'000

US$'000

US$'000







Total revenues for reportable segments customers

-

120

1,227

144

1,491

Intersegment revenues

-

120

-

-

120







Total profit/(loss) for reportable segments

818

-

(423)

(201)

194

Intersegment profit/(loss)

-

120

(120)

-

-







Total assets for reportable segments assets

20,370

341

1,460

303

22,474

Total liabilities for reportable segments

6

90

857

78

1,031

 

Revenues, profit or loss, assets and liabilities may be reconciled as follows:

 

Six months


Ended


30 June 2020


US$'000

Revenues


Total revenues for reportable segments

1,491

Elimination of intersegment revenues

(120)

Group revenues

1,371



Profit or loss


Total profit for reportable segments

194

Elimination of intersegment loss

-

Other unallocated amounts

-

Profit on ordinary activities before taxation

194



Assets


Total assets for reportable segments

25,358

Elimination of intersegment receivables

(2,884)

Group assets

22,474



Liabilities


Total liabilities for reportable segments

3,915

Elimination of intersegment payables

(2,884)

Group liabilities

1,031

 

4.  SHARE-BASED INCENTIVE PLANS

 

  On 14 March 2011 the Group granted options over 5,900,000 shares to directors and employees under The Argo Group Limited Employee Stock Option Plan. All options are exercisable at 24p per share within 10 years of the grant date.

 

  The fair value of the options granted was measured at the grant date using a Black-Scholes model that takes into account the effect of certain financial assumptions, including the option exercise price, current share price and volatility, dividend yield and the risk-free interest rate. The fair value of the options granted is spread over the vesting period of the scheme and the value is adjusted to reflect the actual number of shares that are expected to vest.

 

The principal assumptions for valuing the options are:

 

Exercise price (pence)

24.0

Weighted average share price at grant date (pence)

17.0

Weighted average option life (years)

10.0

Expected volatility (% p.a.)

15.0

Dividend yield (% p.a.)

10.0

Risk-free interest rate (% p.a.)

0.907

 

The fair value of options granted is recognised as an employee expense with a corresponding increase in equity. The total charge to employee costs in respect of this incentive plan is £nil (30 June 2020: £nil)

 

The number and weighted average exercise price of the share options during the period is as follows:

 


Weighted average exercise price

No. of share options

Outstanding at beginning of period

24.0p

4,115,000

Granted during the period

-

  -

Forfeited during the period

24.0p

(3,865,000)

Outstanding at end of period

24.0p

  250,000

Exercisable at end of period

24.0p

  250,000

 

The options outstanding at 30 June 2021 have an exercise price of 24p and a weighted average contractual life of 5.6 years.  Outstanding share options are contingent upon the option holder remaining an employee of the Group.

 

No share options were issued during the period.

 

 

5.  TAXATION

 

  Taxation rates applicable to the parent company and the UK and Romanian subsidiaries range from 0% to 19% (2020: 0% to 19%).

 

Consolidated statement of profit or loss

Six months


Six months


ended


Ended


30 June


30 June


2021


2020


US$'000


US$'000





Taxation charge for the period on Group companies

-


-

 

The charge for the period can be reconciled to the profit shown on the Condensed Consolidated Statement of profit or loss as follows:


Six months


Six months


Ended


Ended


30 June


30 June


2021


2020


US$'000


US$'000





(Loss)/profit before tax

(201)


194





Applicable Isle of Man tax rate for Argo Group Limited of 0%

-


-

Timing differences

-


-

Non-deductible expenses

-


-

Other adjustments

-


-

Tax effect of different tax rates of subsidiaries operating in other jurisdictions

-


-

Tax charge

  -


-

 

Consolidated statement of financial position





30 June


31 December


2021


2020


US$'000


US$'000





Corporation tax payable

-


-

 

 

6.  EARNINGS PER SHARE

 

  Earnings per share is calculated by dividing the net profit for the period by the weighted average number of shares outstanding during the period.


Six months


Six months

 


ended


Ended

 


30 June


30 June

 


2021


2020

 


US$'000


US$'000

 





 

Net (loss)/profit for the period after taxation attributable to members

(201)


194






 


No. of shares


No. of shares

 





 

Weighted average number of ordinary shares for basic earnings per share

38,959,986


38,959,986

 

Effect of dilution (Note 4)

250,000


4,115,000

 

Weighted average number of ordinary shares for diluted earnings per share

39,209,986


43,074,986

 

 


Six months


Six months


Ended


ended


30 June


30 June


2021


2020


US$


US$





Earnings per share (basic)

(0.005)


0.005

Earnings per share (diluted)

(0.005)


0.004

 

 

7.  LAND, FIXTURES, FITTINGS AND EQUIPMENT


 

Right

of use

assets

Fixtures, fittings and equipment

 

 

 

Land

 

 

Total


USD'000000

US$'000

US$'000

US$'000

Cost





At 1 January 2020

808

260

179

1,247

Additions

-

-

-

-

Disposals

-

-

-

-

Foreign exchange movement

25

6

17

48

At 31 December 2020

833

266

196

1,295

Additions

-

2

-

2

Disposals

-

(62)

-

(62)

Foreign exchange movement

9

-

(5)

4

At 30 June 2021

842

206

191

1,239






Accumulated Depreciation





At 1 January 2020

 

344

 

242

 

-

  586

Depreciation charge for period

188

10

-

198

Disposals

-

-

-


Foreign exchange movement

23

4

-

27

At 31 December 2020

555

256

-

811

Depreciation charge for period

99

4

-

103

Disposals

-

(62)


(62)

Foreign exchange movement

6

(5)

-

1

At 30 June 2021

660

193

-

853






Net book value





At 31 December 2020

278

10

28

196

484

At 30 June 2021

342

18

181

541

 

 

 

8.  FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

 






30 June 2021


30 June 2021

Holding

Investment in management shares

Total cost


Fair value



US$'000


US$'000






10

The Argo Fund Ltd

-


-



-


-

 

Holding

Investment in ordinary shares

Total cost


Fair value



US$'000


US$'000






19,920

The Argo Fund Ltd*

5,511


7,110



5,511


7,110

 



31 December


31 December



2020


2020

Holding

Investment in management shares

Total cost


Fair value



US$'000


US$'000






10

The Argo Fund Ltd

-


-

100

Argo Distressed Credit Fund Ltd

-


-

1

Argo Special Situations Fund LP

-


-



-


-

 

Holding

Investment in ordinary shares

Total cost


Fair value



US$'000


US$'000






20,061

The Argo Fund Ltd*

5,511


6,818



5,511


6,818

 

*Classified as current in the consolidated statement of Financial Position

Note that some of the Argo Funds listed above may have investments in each other.

 

 

9.  TRADE AND OTHER RECEIVABLES

 


At 30 June 2021


At 31 December 2020


US$ '000


US$ '000





Trade receivables - Gross

1,306


1,292

Less: provision for impairment of trade receivables

(1,139)


(780)

Trade receivables - Net

167


512

Other receivables

47


1,062

Prepayments and accrued income

137


95


351


1,669

The Directors consider that the carrying amount of trade and other receivables approximates their fair value. All trade receivable balances are recoverable within one year from the reporting date except as disclosed below.

 

  The movement in the Group's provision for impairment of trade and loan receivables is as follow:

 


At 30 June 2021


At 31 December 2020


US$ '000


US$ '000





Opening balance

14,101


12,405

Bad debt recovered

-


-

Charged during the period

365


484

Foreign exchange movement

 

 

(417)


1,212

Closing balance

14,049


14,101

 

10. LOANS AND ADVANCES RECEIVABLE

 


 At 30 June

2021


At 31 December

2020

 


US$'000


US$'000

 





 

Deposits on leased premises - current

12


13

 

Deposits on leased premises - non-current (see below)

113


  111

9

 

Other loans and advances receivable - non-current (note 14)

 

13,724


13,534



13,849


13,658


 

The deposits on leased premises relate to the Group's offices in London and Romania.

 

Other loans and advances receivable relates to a loan for $12.1 million (€10.2 million) principal made by Argo Group Limited to Argo Real Estate Limited Partnership in February 2020, an entity that is 100% owned by Andreas Rialas. The loan accrues interest at 9%.

 

The Group also has a balance receivable for $12.9 million (€10.9 million) from Argo Real Estate Limited Partnership that was assigned from Argo Real Estate Opportunities Fund Limited during the period. The carrying value of this balance is $nil.

 

 

11.  SHARE CAPITAL

 

  The Company's authorised share capital is unlimited with a nominal value of US$0.01.

 


30 June

30 June

31 December

31 December


2021

2021

2020

2020


No.

US$'000

No.

US$'000

Issued and fully paid





Ordinary shares of US$0.01 each

38,959,986

390

38,959,986

390


38,959,986

390

38,959,986

390

The Directors did not recommend the payment of a final dividend for the year ended 31 December 2020 and do not recommend an interim dividend in respect of the current period.

 

 

12.   RECONCILIATION OF NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES TO PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION

 


Six months ended

30 June 2021


Six months ended

30 June 2020


US$'000


US$'000





(Loss)/profit on ordinary activities before taxation

(201)


194





Interest income

(519)


(409)

Depreciation on fixtures, fittings and equipment

4


6

Depreciation on right of use asset

99


91

Realised and unrealised loss/(gain)

38


(205)

Net foreign exchange loss/(profit)

4


(313)

(Decrease)/increase in payables

(42)


97

Decrease in receivables, loans and advances

317


754

Corporation tax paid

-

 


(20)

Net cash (outflow)/inflow from operating activities

(300)


195

 

 

13.  FAIR VALUE HIERARCY

 

The table below analyses financial instruments measured at fair value at the end of the reporting period by the level of the fair value hierarchy (note 2b).

 

    At 30 June 2021


Level 1

Level 2

Level 3

Total


US$ '000

US$ '000

US$ '000

US$ '000

Financial assets at fair value through profit or loss

 

 

-

7,110

-

7,110

 

    At 31 December 2020


Level 1

Level 2

Level 3

Total


US$ '000

US$ '000

US$ '000

US$ '000

Financial assets at fair value through profit or loss

 

 

-

 

6,818

 

-

 

6,818

 

 

14.  RELATED PARTY TRANSACTIONS

 

Most Group revenues derive from The Argo Fund in which two of the Company's directors, Kyriakos Rialas and Kenneth Watterson, have influence through directorships and the provision of investment management services.

 

At the reporting date the Company holds investments in The Argo Fund Limited. These investments are reflected in the accounts at fair value of US$7.1 million (31 December 2020: $6.8 million).

 

  At the period end, the Group was owed $13.7 million (note 10) by Argo Real Estate Limited Partnership, an entity that is 100% owned by Andreas Rialas. The loan carries an interest rate of 9% per annum.

 

During the period, a balance owed by Argo Real Estate Opportunities Fund Limited for US$12.9 million (€10.9 million) (31 December 2020: US$13.3 million (€10.9 million)) was assigned to Argo Real Estate Limited Partnership. These balances are carried at US$ nil (31 December 2020: US$ nil) in the financial statements.

 

 

 

15.  TRADE AND OTHER PAYABLES


At 30 June


At 31 December


2021


2020


US$ '000


US$ '000





Trade creditors

99


118

Other creditors and accruals

234

 


297

Total current trade and other payables

333


415

 

  Trade creditors are normally settled on 30-day terms.

 


At 30 June


At 31 December


2021


2020


US$ '000


US$ '000





Other creditors and accruals


79

Total non-current trade and other payables

-


79

 

 

 

 

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