Interim Results

RNS Number : 6415U
Minoan Group PLC
31 July 2015
 



31 July 2015

 

Interim Results Announcement

 

Minoan Group Plc

(the "Group" or the "Company" or "Minoan")

announces its unaudited interim results for the 6 months ended 30 April 2015

 

HIGHLIGHTS

 

Financials (comparisons to the six months ending 30 April 2014)

 

·      Group total transaction value of £ 28.7m, up 18.6% from £24.2m

·      T&L Gross Profit of £2.98m, up 19.4% from £2.49m

·      Operating loss of £584,000, down 1.7% from £594,000

 

Operational

 

·      Underlying performance of the Group's travel division has continued to improve

·      Gross Sales, Commissions and EBITDA have all increased compared to 1H2014

·      T&L division's PBT shows a small decline entirely as a result of an increased depreciation and amortisation charge

·      As previously announced, issues relating to the Group's back office, which will have a one-off impact on H2 performance, have been resolved

·      Draft Presidential Decree received unanimous support by Plenum of the Greek Council of State and has been signed off by the President of the Council of State

 

 Christopher Egleton, Minoan Chairman, said:

 

"The Group has seen improved growth in the first half, with the travel division benefitting from the strength of the pound and the UK's continuing economic recovery. Trading remains strong with the business in robust shape to move forward over the rest of this year and management continue to examine earnings enhancing strategic acquisitions to further improve the travel and leisure division's performance.

 

The approval of the Itanos Gaia luxury resort project in Crete is nearing its final stages. The recent Parliamentary decision in favour of a renewed agreement with creditors should stabilise government procedures and allow the Presidential Decree to be signed. In anticipation of this, the management team has been strengthened with the appointment of experienced property and construction consultant Nicholas Day as a director of Loyalward Limited to help the Group realise the full benefits of the Itanos Gaia project.

 

Given the positive performance over the past six months, the Group looks forward to building on the progress made, delivering further improvements in trading performance and increasing shareholder value over the rest of this year."

 

The Company's unaudited interim results for the 6 months ended 30 April 2015 can be viewed on Minoan's website, www.minoangroup.com, with effect from 31 July 2015.

 

 

For further information visit www.minoangroup.com or contact:

 

Minoan Group Plc


Christopher Egleton

christopher.egleton@minoangroup.com

Duncan Wilson

0141 226 2930

Bill Cole

020 8253 4305



WH Ireland Limited

020 7220 1666

Adrian Hadden/Mark Leonard




Throgmorton Street Capital

020 7071 0808

Forbes Cutler




Morgan Rossiter

020 3195 3240

Richard Morgan Evans/James Rossiter


 

 

 

Chairman's Statement    

Introduction

 

Since my last Statement, accompanying the Report and Financial Statements for the year ended 31 October 2014, the situation in Greece, following the change of Government in January this year has been characterised as a series of crises. However, the recent approval by the Greek Parliament of the various legislative measures requested by the Country's creditors is expected to begin to lead to a normalisation of Government procedures.

The underlying performance of the Group's travel division has continued to improve notwithstanding a number of general difficulties experienced in the sector, most notably the problems in Greece as well as, more recently, the tragic events in Tunisia. Nevertheless, in the half year results Total transaction value  and Gross profit have increased by 18.6% and 19.4% respectively. 

Greece

The political and financial situation in Greece has been documented in detail throughout the British and International media. Although the worst of the crisis seems to have passed, and the recent Parliamentary votes have been in favour of the new agreement with creditors, it is possible that there may be further hitches before final agreement on the detail is forthcoming.

In the meantime the Government is making major efforts to secure new investment in the country and various Ministers have stated publicly that foreign investment is a priority.

The fact that the Group's project has the unanimous approval of the Draft Presidential Decree by a Plenum of the Greek Council of State should not be forgotten. Given this, and once normal Government activities resume, I expect to be able to confirm progress with the granting of the Presidential Decree. 

As soon as possible after this I will give shareholders a more detailed update on the Group's plans.

Travel and Leisure ("T&L")

 

In the six months ended 30 April 2015, Gross Sales, Commissions and EBITDA have increased over the comparative period last year. The T&L division's profit before tax shows a small decline, entirely as a result of an increased charge for depreciation and amortisation. As announced in the trading update on 14 July 2015, the division's results for the full year will be affected by a number of "one off" impacts resulting from a dispute with the provider of back office services. This has now been successfully resolved.

The first six months saw the "specialist" sector, which includes Golf, Santa and Canada among others, do particularly well. Gross sales increased by over 35% and commission by 27%. This, together with the overall improvement, reflects the continuing effect of the successful integration of earlier acquisitions.

Notwithstanding the effect of the dispute referred to above, which restricted our ability to expand more rapidly in certain areas, the underlying trading performance of the division continues to improve with July already being the best trading month of the year. In addition, we are examining a number of significant transactions to expand this division, not least through acquisitions which will be earnings enhancing.

Chairman's Statement (continued)     

 

Outlook

 

As the political picture in Greece becomes more stable and Government procedures are less impacted by the macro economic problems I expect to be able to update shareholders with positive news.

In the travel division, underlying performance continues to improve and, in due course, I hope to be able to announce significant progress. 

Christopher W Egleton

 

Chairman

31 July 2015

 

 

Unaudited Consolidated Statement of Comprehensive Income

6 months ended 30 April 2015

 


6 months ended 30.04.15

                        £'000

6 months ended 30.04.14

                      £'000

Year ended 31.10.14

                         £'000

Total transaction value

28,723

24,215

50,757





Revenue

2,981

2,496

5,932

Cost of sales

-

-

(252)

Gross profit

2,981

2,496

5,680





Operating expenses

(3,011)

(2,665)

(5,306)





Other operating expenses




Corporate development costs

(244)

(262)

(501)

Charge in respect of share-based payments

(310)

(163)

(639)

Operating loss

(584)

(594)

(766)





Finance costs

(175)

(100)

(270)

Loss before taxation

(759)

(694)

(1,036)





Taxation

-

-

-

Loss for period  attributable to equity holders of the Company

(759)

(694)

(1,036)





Loss per share attributable to equity holders of 




the Company: Basic and diluted

(0.43)p

(0.42)p

(0.61)p





 

 

 

 

Unaudited Consolidated Statement of Changes in Equity

6 months ended 30 April 2015

 

6 months ended 30 April 2015

 

Share capital

£'000

Share premium

£'000

Merger

reserve 

£'000

Retained earnings 

£'000

 

      Total

equity

 £'000

Balance at 1 November 2014

14,843

30,261

9,349

(11,955)

 

               42,498

Loss for the period

-

-

-

        (759)

 

(759)

Net proceeds from shares issued

              80

531

-

                         -

 

                    611

Share-based payments:

 

 

 

 

 

 

Current period charges

-

-

-

                     310

 

                    310

Balance at 30 April 2015

14,923

30,792

9,349

(12,404)

 

               42,660

 

 

6 months ended 30 April 2014

 

Share capital

£'000

Share premium

£'000

Merger

reserve  £'000

Retained earnings £'000

Non-controlling interest 

£'000

      Total

equity

£'000

Balance at 1 November 2013

14,693

28,781

9,349

(11,997)

                    919

                   41,745

Loss for the period

-

-

-

        (694)

                         -

(694)

Net proceeds from shares issued

              56

498

-

                         -

                         -

                        554

Acquisition of non - controlling interest

                 -

-

-

                         -

                  (919)

                                       (919)

Share-based payments:

 

 

 

                    

 

 

Current period charges

-

-

-

                    163

                         -

                        163

Settlement of liabilities

-

-

-

                    439

                         -

                        439

Balance at 30 April 2014

14,749

29,279

9,349

(12,089)

                         -

               41,288

 

 

Year ended 31 October 2014

 

Share capital

£'000

Share premium

£'000

Merger

reserve £'000

Retained earnings   £'000

Non-controlling interest 

£'000

               Total

              equity  £'000

14,693

28,781

9,349

(11,997)

                  919

               41,745

Loss for the year

-

-

-

(1,036)

                   -               

               (1,036)

Net proceeds from shares issued

150

1,480

-

                 -

                       -

                 1,630

Acquisition of non-controlling interest

-

-

-

-

                                                (919)                

                  (919)

Share-based payments:

 

 

 

 

 

 

Current year charges

-

-

-

             639

                      -

                    639

Settlement of liabilities

-

-

-

             439

                     -

                    439

Balance at 31 October 2014

14,843

30,261

9,349

      (11,955)

                     -

               42,498

 

 

 

Unaudited Consolidated Balance Sheet as at 30 April 2015

 


 

As at 30.04.15
£'000

 

As at 30.04.14
£'000

 

As at 31.10.14
£'000

Assets




Non-current assets




Intangible assets

9,568

8,979

9,414

Property, plant and equipment

718

745

717

Total non-current assets

10,286

9,724

10,131





Current assets




Inventories

40,607

39,017

40,042

Receivables

1,916

922

1,592

Cash and cash equivalents

539

73

127

Total current assets

43,062

40,012

41,761





Total assets

53,348

49,736

51,892





Equity




Share capital

14,923

14,749

14,843

Share premium account

30,792

29,279

30,261

Merger reserve account

9,349

9,349

9,349

Retained earnings

(12,404)

(12,089)

(11,955)

Total equity

42,660

41,288

42,498





Liabilities




Non-current liabilities

4,000

2,542

3,500

Current liabilities

6,688

5,906

5,894

Total liabilities

10,688

8,448

9,394





Total equity and liabilities

53,348

49,736

51,892

 

 

Unaudited Consolidated Cash Flow Statement

6 months ended 30 April 2015

 


6 months ended 30.04.15

£'000

6 months ended 30.04.14

£'000

  Year ended 31.10.14

£'000





Cash flows from operating activities




Net cash inflow/(outflow) from continuing operations (note 1)

396

(909)

(2,138)

Finance costs

(175)

(100)

(270)

Net cash generated from/(used in) operating activities

221

(1,009)

(2,408)





Cash flows from investing activities




Purchase of property, plant and equipment

(64)

(81)

(122)

Purchase of intangible assets

(256)

(246)

(713)

Non cash movement in intangible assets

-

(100)

(153)

Acquisition of shares in subsidiary company

-

(430)

(430)

Net cash used in investing activities

(320)

(857)

(1,418)





Cash flows from financing activities




Net proceeds from the issue of ordinary shares

11

-

667

Loans received

500

1,701

3,081

Payments of hire purchase liabilities

-

(33)

(66)

Net cash generated from financing activities

511

1,668

3,682





Net increase/(decrease) in cash

412

(198)

(144)





Cash at beginning of period

127

271

271

Cash at end of period

539

73

127





 

 

Notes to the Unaudited Consolidated Cash Flow Statement

6 months ended 30 April 2015

 

1             Cash flows from operating activities

 


6 months ended 30.04.15

                   £'000

6 months ended 30.04.14

                         £'000

Year ended 31.10.14

                         £'000

Loss before taxation

(759)

(694)

(1,036)

Finance costs

175

100

270

Depreciation

52

101

102

Amortisation

102

5

130

Exchange loss relevant to property, plant and equipment

11

5

22

Increase in inventories

(565)

(650)

(1,675)

Share-based payments

310

602

1,078

Increase in receivables

(324)

(26)

(696)

Decrease in non-current liabilities

-

(100)

-

Increase/(decrease) in current liabilities

794

(636)

(126)

Non cash movement in current liabilities

-

(39)

  -

Non cash movement in equity

600

423

(207)

Net cash inflow/(outflow) from continuing operations

396

(909)

(2,138)

 

 

  Notes to the unaudited interim results

6 months ended 30 April 2015

 

1. General information

 

The Company is a public limited company incorporated in England and Wales and quoted on AIM. The Company's principal activity in the period under review was that of a holding and management company of a Group involved in the design, creation, development and management of environmentally friendly luxury hotels and resorts and in the operation of independent travel businesses, through which the Group provides a broad range of services including, inter alia, transportation, hotel and other accommodation and leisure services.

 

2. Basis of preparation

 

The interim financial statements are unaudited and do not constitute statutory accounts as defined in Section 434(3) of the Companies Act 2006. A copy of the audited Report and Financial Statements for the year ended 31 October 2014 has been delivered to the Registrar of Companies. The auditor's report on these accounts was unqualified and did not contain statements under s498(2) to s498(4) of the Companies Act 2006. The Report and Financial Statements for the year ended 31 October 2014 were approved by the Board on 30 March 2015.

 

The interim financial statements for the 6 months ended 30 April 2015 comprise an Unaudited Consolidated Statement of Comprehensive Income, Unaudited Consolidated Statement of Changes in Equity, Unaudited Consolidated Balance Sheet and Unaudited Consolidated Cash Flow statement plus relevant notes.

 

The interim financial statements are prepared in accordance with EU adopted International Financial Reporting Standards ("IFRS") and the International Financial Reporting Interpretations Committee ("IFRIC") interpretations and the Companies Act 2006 applicable to companies reporting under IFRS.

 

The principal accounting policies adopted in the preparation of the interim financial statements are consistent with those adopted in the Report and Financial Statements for the year ended 31 October 2014.

 

Going concern

 

The interim unaudited financial statements have been prepared on the going concern basis.

 

The directors have considered the financial and commercial position of the Group in relation to its project in Crete (the "Project") and also in respect of its travel and leisure business. In particular, the directors have reviewed the matters referred to below.

 

A Plenum of the Greek Council of State, the highest court in Greece, has unanimously approved the draft presidential decree in respect of the Project with no dissenting opinions. The draft presidential decree approves the development plan and the strategic environmental impact study. The Company is awaiting the granting of the formal Presidential Decree.

 

Accordingly, the directors consider it relevant that having completed financial joint venture agreements prior to the above, and any other consents, they will conclude further Project joint venture agreements in the near term. In addition, the directors are considering other options which would have a major beneficial impact on the Group's resources. 

 

In addition to specific Project related matters as noted above, and as has been the case in the past, the Group continues to raise capital in order to meet its existing working capital requirements and the directors consider that any necessary funds will be raised as required.

 

Notes to the unaudited interim results (continued)

6 months ended 30 April 2015

 

2. Basis of preparation (continued)

 

Going concern (continued)

 

With a number of acquisitions in the planned expansion of its Travel and Leisure business having been completed over a period of time, the Group is now generating profits and cash flow within this sector of its activities.

 

Having taken these matters into account, the directors consider that the going concern basis of preparation of the financial statements is appropriate.

 

3. Segmented information

 

The Group strategy and growth objectives necessitate the building of an associated infrastructure. The Group considers it appropriate to identify separately the corporate development division together with costs related to acquisitions. Accordingly, the Group is organised into three divisions both by business segment and geographical location:

 

·      the luxury resorts division, currently being the development of a luxury resort in Crete, which includes the central administration costs of the Group;

 

·      the Travel and Leisure division (UK), being the operation and management of the travel businesses; and

 

·      the corporate development division (UK) as described above.

 

 

Notes to the unaudited interim results (continued)

6 months ended 30 April 2015

 

3. Segmented information (continued)

 

The information presented below is consistent with how information is presented to the Board, with the Group's accounting policies and with the geographical location of the relevant divisions.

 


 6 months ended 30 April 2015


Luxury Resorts

Travel and Leisure

Corporate Development

Total


£'000

£'000

£'000

£'000

Total transaction value

                 -

      28,723

-

    28,723






Revenue

-

        2,981

-

       2,981  

Cost of sales

-

        -

-

                 -

Gross profit

-

        2,981    

-

       2,981






Operating expenses

(173)

        (2,838)

(244)

  (3,255)


(173)

           143 

(244)

(274)

Charge in respect of share based payments

(310)

                -

-

(310)

Operating (loss)/profit

(483)

            143       

(244)

(584)

Finance costs

(144)

         (31)

-

(175)

(Loss)/profit before taxation

(627)

             112     

(244)

(759)






Operating expenses include:





Depreciation and amortisation

-

154

-

         154 

Operating leases - plant and equipment

-

11

-

             11    






Assets/liabilities





Goodwill

6,127

          2,451

-

       8,578

Other non-current assets

134

          1,574  

-

       1,708

Current assets

41,402

          1,660

-

     43,062

Total assets

       47,663

          5,685

-

     53,348






Non-current liabilities

4,000

                  -

-

        4,000

Current liabilities

5,247

           1,441

-

        6,688

Total liabilities

9,247

1,441

-

      10,688






 

 

Notes to the unaudited interim results (continued)

6 months ended 30 April 2015

 

3. Segmented information (continued)

 


6 months ended 30 April 2014


Luxury Resorts

Travel and Leisure

Corporate Development

Total


£'000

£'000

£'000

£'000

Total transaction value

                 -

        24,215

-

      24,215






Revenue

-

           2,496

-

        2,496

Cost of sales

-

        -

-

                 -

Gross profit

-

           2,496 

-

        2,496






Operating expenses

(337)

         (2,328)

(262)

  (2,927)


(337)

            168

(262)

(431)

Charge in respect of share based payments

(163)

                 -

-

(163)

Operating (loss)/profit

(500)

            168   

(262)

(594)

Finance costs

(81)

           (19)

-

(100)

(Loss)/profit before taxation

(581)

             149    

(262)

(694)






Operating expenses include:





Depreciation and amortisation

3

103

-

           106

Operating leases - plant and equipment

-

22

-

             22






Assets/liabilities





Goodwill

6,127

            2,159

-

8,286

Other non-current assets

159

            1,279

-

1,438

Current assets

39,151

               861

-

40,012

Total assets

45,437

            4,299

-

49,736






Non-current liabilities

2,500

42

-

2,542

Current liabilities

5,475

431

-

5,906

Total liabilities

7,975

473


8,448






 

 

 

Notes to the unaudited interim results (continued)

6 months ended 30 April 2015 

 

3. Segmented information (continued)

 


Year ended 31 October 2014


Luxury Resorts

Travel and Leisure

Corporate Development

Total


£'000

            £'000

£'000

          £'000

Total transaction value

             -

         50,757

                 -

         50,757






Revenue

            -

           5,932

                 -

           5,932

Cost of sales

            -

              (252)

                 -

              (252)

Gross profit

            -

           5,680

                 -

           5,680






Operating expenses

(428)

           (4,878)

(501)

         (5,807)


(428)

              802  

(501)

(127)

Charge in respect of share-based payments

(639)

                  -

                -

(639)

Operating (loss)/profit

(1,067)

                802

(501)

(766)

Contribution to central costs

          300

              (300)

                 -

                     -

Finance costs

(222)

(48)

                 -

(270)

(Loss)/profit before taxation

(989)

                454

(501)

(1,036)

Taxation

            -

                  -      

                 -

                     -

(Loss)/profit after taxation

(989)

              454    

(501)

           (1,036)






Operating expenses include:





Depreciation and amortisation

               1

                231

                  -

                232

Operating leases - plant and equipment

              -

                  49

                  -

                  49






Assets/liabilities





Goodwill

6,127

2,451

                  -

            8,578

Other non-current assets

    146

1,407

                  -

            1,553

Current assets

      40,457

1,304

                  -

          41,761

Total assets

46,730

5,162

                  -

          51,892






Non-current liabilities

3,500

                    -

                   -

      3,500

Current liabilities

4,862

1,032

                   -

            5,894

Total liabilities

8,362       

1,032

                   -

             9,394

 

4. Goodwill

 

Goodwill arising on acquisitions represents the difference between the fair value of the net assets acquired and the consideration paid and has been recognised as an asset.

 

Goodwill is tested annually for impairment. In particular, the directors have considered the current value of the Group's overall interest in the Project and its progress and are of the opinion that the Project site has longer term value in excess of the carrying value of inventories.

 

The directors' opinion of the current value also takes into account the estimate dated 27 June 2011 of the development value of the Project site in the order of €100 million, which was included in the Company's AIM readmission document published on 30 September 2011 and which was reaffirmed in March 2012.

 

 

 

Notes to the unaudited interim results (continued)

6 months ended 30 April 2015

 

4. Goodwill (continued)

 

In addition, the directors are of the opinion that the projected value of the Travel and Leisure business, which is treated as one cash generating unit, is in excess of the value of the amount of goodwill attributable to it. This opinion is arrived at on the basis of the good names of the businesses acquired and the fact that the establishment of business clusters affords the Company the opportunity to realise certain economies of scale thus improving cash flow and profitability.

 

5. Loss per share attributable to equity holders of the Company

 

Earnings per share are calculated by dividing the earnings attributable to the equity holders of a company by the weighted average number of ordinary shares in issue during the period. Diluted earnings per share are calculated by adjusting basic earnings per share to assume the conversion of all dilutive potential ordinary shares. There are no dilutive instruments in issue, therefore the basic loss per share and diluted loss per share are the same. The weighted average number of shares used in calculating basic and diluted loss per share for the 6 months ended 30 April 2015 was 177,502,922 (6 months ended 30 April 2014: 166,024,704, year ended 31 October 2014: 168,636,782).

 

 

 

 

 

 

 

 

 

 

 


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