Interim Results

RNS Number : 6545E

Crescent Hydropolis Resorts PLC

30 September 2008

 

30 September 2008

CRESCENT HYDROPOLIS RESORTS PLC

ANNOUNCEMENT

INTERIM REPORT

Chairman's Statement

29 September 2008

Crescent Hydropolis Resorts PLC (the Company), the world's leading developer of ultra-luxury underwater resort hotels under the Hydropolis design concept, announces its unaudited interim results for the period ended 30 June 2008. The Company had € 8,256.00 in cash as at 30 June 2008. The main items of expenditure are development costs associated with furthering the Company's latest and most advanced Hydropolis project on the island of Sanya, China, including legal, engineering, technical feasibility and travel costs. As reported in the 2007 Annual Report, project development costs relating to the Qingdao project are now largely complete for the Sanya project as well.

The Company intends to establish a new local project development company for the project in Sanya. Discussions and meetings have commenced during the past several months and the Company is proud to disclose that one of the major hotel operators of the world is actively taking part in such discussions. The Company's former chairman, Mr Joachim Hauser, has led several delegations to Sanya since the spring of 2008 to meet with Chinese authorities, including visits where a major Chinese construction group jointly presented plans with Mr Hauser for construction of the Hydropolis Underwater Hotel - being the first deep sea version of its kind in the world - to officials there. The Company is pleased to announce that it has entered into contractual discussions with the Chinese construction group to finance the Hydropolis Underwater Hotel project. The terms and conditions of the proposed joint venture and financing, when determined, will be announced by the Company in due course. The Company, led by its CEO & Executive Director, Uwe Hohmann, is also engaged in quite significant discussions with well connected individuals in the hospitality industry for a feasibility study of not only one, but maybe two more Hydropolis underwater hotel projects in the Middle East, of which one is likely to be a shallow water version of the Company's Hydropolis Underwater Concepts, while the other one, if materializing, will be a deep sea water version as well.

Securing financing for the China project remains the primary focus of the Company's directors at this point, and we believe a joint venture with a major construction partner, such as that envisioned by our current cooperation in China, is in the best interests of our shareholders. The board of directors wants to specifically acknowledge the endless and energy consuming, but also successful efforts of the Company's former Chairman and Founder, Joachim Hauser. Only now, it proves that his decision to focus only on the actual operational challenges in realizing the Company's first project was the most prudent he and the new board has taken. No material findings have adversely affected the ability of the Company to raise the required funds to commence construction. Efforts to raise new equity for working capital purposes are ongoing and the directors remain highly confident that new equity can be raised prior to year-end at more attractive share prices.

The recent and temporary suspension of trading of the Company's shares was the result of a number of unforeseen issues, all of which related to the change of professional services and updating all professionals relating to the pending matters as well as assembling all documents required to complete the annual report for 2007. AIM rules require suspension if the annual report is not issued within six months of the year end. Hence, the shares of the Company were suspended from trading for a few weeks. The suspension has now been lifted and trading has re-commenced - not only on AIM but also on the Stuttgart Exchange, Germany. The directors have undertaken efforts to improve market liquidity and to secure a broader base of shareholders whose interests are congruent with the Company's long-term plans and will endeavour to raise capital at higher share prices than at present.

The Company will undertake all efforts to retain a new NOMAD, since the current NOMAD for reasons unrelated to the Company's business has terminated his contract with the Company commencing September 30, 2008. Management is actively engaged, along with the support of the board of directors, to retain a new NOMAD within the required period of time. Subsequent to closing the Sanya's project's financing which will serve to strengthen the Company's capability to manage the Sanya project while expanding new business opportunities. 2007 was a challenging year, and the first half of 2008 has continued to be so. With the new developments in China and the promising meetings in the Middle East, however, the directors continue to be firmly of the view that the Sanya project will commence with on-site development in the coming months to be followed by further news relating to potential projects in the region of the Middle East.

Bernd Artinger, Non-Executive Chairman    Munich, September 29 2008

INDEPENDENT REVIEW REPORT TO CRESCENT HYDROPOLIS RESORTS PLC

Introduction

We have been engaged by the company to review the interim report for the period ended 30 June 2008 which comprises the income statement, the balance sheet, the statement of change in equity, the cashflow statement and the related notes. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the financial statements.

Directors' Responsibilities

The interim report is the responsibility of, and has been approved by the directors. The directors are responsible for preparing the interim report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in note 1, the annual financial statements of the Company are prepared in accordance with IFRSs as adopted by the European Union. The financial statements included in this interim report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting,' as adopted by the European Union.

Our Responsibility

Our responsibility is to express to the Company a conclusion on the financial statements in the interim report based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom.

A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the interim report for the period ended 30 June 2008 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

CHANTREY VELLACOTT DFK LLP

Chartered Accountants

London

Date 29 September 2008

CRESCENT HYDROPOLIS RESORTS PLC

CONDENSED INCOME STATEMENT FOR THE PERIOD ENDED 30 JUNE 2008

				Audited
	Note	Period ended	Period ended	Year ended
		30 June	30 June	31 December
		2008	2007	2007
		€	€	€
Management and project development costs	7	75,011	1,082,368	1,899,970
Administrative expenses		127,777	159,492	341,545
Loss on ordinary activities before interest		(202,788)	(1,241,860)	(2,241,515)
Interest receivable		750	10,158	12,324
LOSS FOR THE YEAR		(202,038)	(1,231,702)	(2,229,191)
Loss per share
Basic and diluted	2	0.2c	1.5c	2.7c

All of the above amounts relate to continuing activities.

There were no recognised gains and losses other than the results shown above.

The notes on pages 7 to 8 form part of these financial statements.

CRESCENT HYDROPOLIS RESORTS PLC

CONDENSED BALANCE SHEET AS AT 30 JUNE 2008

				Audited
		30 June	30 June	31 December
		2008	2007	2007
	Note	€	€	€
ASSETS
Non-current assets
Intangible assets	4	40,750,000	40,750,000	40,750,000
Current assets
Trade and other receivables		3,757	18,940	4,033
Cash and cash equivalents		8,256	288,089	16,983
TOTAL ASSETS		40,762,013	41,057,029	40,771,016
Equity and liabilities
Shareholders' equity
Share capital	3	893,836	823,836	823,836
Capital reserves		35,198,130	35,058,130	35,058,130
Accumulated losses		(6,798,464)	(5,598,937)	(6,596,426)
		29,293,502	30,283,029	29,285,540
Non-current liabilities
Long-term liabilities	5	10,750,000	10,750,000	10,750,000
Total non-current liabilities		10,750,000	10,750,000	10,750,000
Current liabilities
Trade and other payables		718,511	24,000	735,476
Total current liabilities		718,511	24,000	735,476
Total liabilities		11,468,511	10,774,000	11,485,476
TOTAL EQUITY & LIABILITIES		40,762,013	41,057,029	40,771,016

Approved by the Board of Directors and authorised for issue on 29 September 2008

Signed on behalf of the Board of Directors:

Uwe Hohmann

Chief Executive

The notes on pages 7 to 8 form part of these financial statements.

CRESCENT HYDROPOLIS RESORTS PLC

CONDENSED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 30 JUNE 2008

	Share	Capital	Accumulated
	capital	reserves	losses	Total
	€	€	€	€
Balance at 1 January 2007	823,836	35,058,130	(4,367,235)	31,514,731
Loss for the period	-	-	(1,231,702)	(1,231,702)
Balance at 30 June 2007	823,836	35,058,130	(5,598,937)	30,283,029
Loss for period	-	-	(997,489)	(997,489)
Balance at 31 December 2007	823,836	35,058,130	(6,596,426)	29,285,540
Issue of share capital	70,000	140,000	-	210,000
Loss for period	-	-	(202,038)	(202,038)
Balance at 30 June 2008	893,836	35,198,130	(6,798,464)	29,293,502
CRESCENT HYDROPOLIS RESORTS PLC
CONDENSED UNAUDITED CASH FLOW STATEMENT FOR THE PERIOD ENDED 30 JUNE 2008

			Audited
	30 June	30 June	31 December
	2008	2007	2007
	€	€	€
Cash flow from operating activities
Loss from operations	(202,788)	(1,241,860)	(2,241,515)
Operating cash flows before movement in working capital	(202,788)	(1,241,860)	(2,241,515)
Change in receivables	276	(14,029)	879
Change in payables	(16,965)	(75,797)	635,678
Net cash used in operating activities	(219,477)	(1,331,686)	(1,604,958)
Cash flows from returns on investments and servicing of finance
Interest received	750	10,158	12,324
Net cash from returns in investments and servicing of finance	750	10,158	12,324
Cash flows from financing activities
Share capital issued	210,000	_	_
Net cash flows from financing activities	210,000	_	_
Net decrease in cash and cash equivalents	(8,727)	(1,321,528)	(1,592,634)
Cash and cash equivalents at beginning of period	16,983	1,609,617	1,609,617
Cash and cash equivalents at end of period	8,256	288,089	16,983

NOTES TO INTERIM REPORT FOR THE PERIOD ENDED 30 JUNE 2008

1.    Basis of preparation

The Interim Accounts have been prepared in accordance with International Financial Reporting Standards (IFRSs). The financial information in the statement does not constitute statutory accounts .

The interim report has been prepared on the going concern and historical cost basis, except for any revaluation of listed investments.

There have been no changes in the company's accounting policies and methods of computation from those disclosed in the audited accounts to 31 December 2007.

The interim financial information for the period to 30 June 2008 was approved by the directors on 29 September 2008. The interim report is unaudited. Figures for the year ended 31 December 2007 are abridged from the full financial statements which carry an unqualified auditor's report and which have been filed with the Registrar of Companies

			Period ended		Period ended			Year ended
			30 June		30 June			31 December
			2008		2007			2007
			€		€			€
2.		Loss per share
		Loss for the period from continuing operations	(202,038)			(1,231,702)			(2,229,191)
		Weighted average number of ordinary shares
		in issue during the period	86,191,323			82,383,631			82,383,631
		Loss per share
		Basic	0.2c			1.5c			2.7c
		The directors are of the opinion that there are no dilutive instruments .
3.		Share Capital
		Authorised:
		1,000,000,298 ordinary shares of €0.01 each	10,000,000			10,000,000			10,000,000
		Called up, allotted and fully paid:
		Ordinary shares of €0.01 each	893,836			823,836			823,836
4.		Intangible fixed assets
		Cost	40,750,000			40,750,000			40,750,000
5.		Non current liabilities
		Deferred consideration	10,750,000			10,750,000			10,750,000
On 15 June 2005, CHR acquired the Hydropolis Project concept and all the associated know how from Crescent Hydropolis Holdings LLC for a consideration of 60,000,000 ordinary shares issued as fully paid at €0.50 per share (such shares being issued on 17 June 2005) and payment of €10,750,000 in cash in instalments with the final payment due as set forth in the payment schedule below.
The payments fall due as follows:
€2,750,000 to be paid upon completion of financing for the first Hydropolis Project ('the First Payment'.)
€2,000,000 to be paid 60 days following publication of the annual accounts for the period to 31 December during the first full fiscal year following the First Payment. ('the Second Payment')
€2,000,000 to be paid 60 days following publication of the annual accounts for the period to 31 December during the first full fiscal year following the Second Payment. ('the Third Payment')
€2,000,000 to be paid 60 days following publication of the annual accounts for the period to 31 December during the first full fiscal year following the Third Payment. ('the Fourth Payment')
€2,000,000 to be paid 60 days following publication of the annual accounts for the period to 31 December during the first full fiscal year following the Fourth Payment. ('the Final Payment')
In the event that on any instalment payment date CHR has insufficient working capital then the instalment is accrued until the following year without interest. Any unpaid consideration following the publication of the annual accounts for the period to 31 December 2009 will become due 60 days following publication of the annual accounts for each successive year until CHR is able to make payment and does so in full.
6.	Related party transactions
	There were no related party transactions during the period.
7.	Management & project development Costs			Period ended			Period ended			Year ended
				30 June			30 June			31 December
				2008			2007			2007
				€			€			€
	Engineering costs			-			480,310			-
	Project development costs			75,011			244,972			1,899,970
	Operating costs			-			357,086			-
				75,011			1,082,368			1,899,970

8.	Subsequent events
(i)    Going concern  Trade payables of €494,500 and commission payments of €112,500 are to be settled post period end by the issue of 4,945,000 Ordinary shares at €0.10 and 937,500 Ordinary shares at €0.12 respectively in order to reduce the outstanding liabilities of the Company. (ii)    Share options  On 15 September 2008 the Company issued 9,400,000 options for Ordinary shares at an exercise price of €0.05 per share.  These options were exercisable immediately and expire on 31 December 2009.

Copies of this unaudited interim statement are available from the Company's website at www.crescent-hydropolis.com

For further information contact:-

Uwe Hohmann                                    

Chief Executive

[phone]

[e-mail] 

Richard Swindells

Nabarro Wells & Co. Limited, Nominated Adviser

020 7634 4705

 

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