Half Yearly Report

RNS Number : 2297D

Pathfinder Properties PLC

30 November 2009

 



FOR IMMEDIATE RELEASE                                                                                      30 November 2009

PATHFINDER PROPERTIES PLC

Unaudited Interim Results

for the six months ended 30 June 2009

The Board of Pathfinder announces the results of the Company for the six months ended 30 June 2009, which are set out below. The unaudited interim financial statements for the six months ended 30 June 2009 have been sent to all shareholders. Copies may be obtained from the Company by writing to Pathfinder Properties PLC, 1001 Finchley Road, London NW11 7HB and are available on the Company's website, www.pathfinderplc.com

CHAIRMAN'S STATEMENT

Please find enclosed accounts for the six months ending 30 June 2009.  Also enclosed is a circular which is asking shareholders to vote on the future direction of the company.

As you are no doubt aware the property market has severely declined in the present economic climate, and this is especially the case with development sites.  Our main asset in Newark, on which we have bank loan of £2.9m, was professionally valued in August 2008 at £5.9m, the revaluation in August 2009 saw a reduction of over £4m.

Clearly a company of our size would find it difficult to continue trading when it is in breach of its banking covenants by such a large amount.

Therefore in order for the company to survive the board looked for a solution.  The enclosed circular sets out the new direction for the company.  The board believes this transaction will give shareholders value in the future.

Proposals from the Circular

Following the disposal of the Ilford site and the Brewery site in Newark as announced on 22 May 2009, the Group has been left with a single development at the Newark development site, being the River Edge and the Road Frontage. This development has been progressed to a position whereby the Group can no longer fund any further development from its existing resources. However, the Directors believe that it is not worthwhile progressing with further development of this site in the current economic climate. As a result, the Company effectively has no sustainable business to justify its status as an AIM traded entity. Accordingly, the Directors believe that it is in Shareholders' interests to dispose of its property and, at the same time, release the Group from its liability for the associated bank financing on the Newark site of the Group, in order to establish a new investing policy in an area in which the Directors' believe could best provide the basis for establishing Shareholder value. The Company has been approached by a group of investors involved in mining proposals who have the ability to attract investors. The Directors unanimously believe that the proposed change of direction is in the best interests of the Company and its Shareholders. 

The Company has agreed to dispose of the River Edge and Road Frontage sites at the Newark development for £1. These two remaining developments are held in a wholly owned subsidiary of the Company, Newark Property Development Limited ("NPD"), which was specifically formed for holding these properties. The Company is therefore proposing to sell NPD to Kerrington Limited ("Kerrington"), a company controlled by a Director of the Company, Gerry Lee. Kerrington will assume responsibility for repayment of the debt of £2.9m due from NPD to Royal Bank of Scotland PLC. Although the Newark development sites are valued at £2.9m in the Company's balance sheet as at 30 June 2009, a current valuation has been undertaken by Knight Frank which values them at £1.85m.  

Pathfinder's proposed strategy is to turn it into an investing company and establish a new investing policy to acquire mainly significant minority interests in both listed and unlisted companies and/or assets which the Directors believe represent opportunities to create Shareholder value, specifically within the natural resource sectors, with a focus on Central Asia and Sub-Saharan Africa although such companies may operate worldwide. The focus will be on metals and mature resource situations with both established resources and the ability to increase these through additional exploration and also bring these into production. The Company will be an active investor.

In addition, Pathfinder is proposed to complete a Capital Reorganisation to facilitate the Proposals, to adopt New Articles of Association, to issue Convertible Loan Agreements raising £506,000 and issue Warrants in conjunction with this and then make an initial Investment in IM Minerals Ltd, an exploration company with licences over TiO2 prospects in Mozambique. Further details of these proposals are included in a Shareholder Circular sent out to Shareholders along with the Report and Accounts.

Edward Azouz

Chairman

26th November 2009

Pathfinder Properties PLC

CONSOLIDATED INCOME STATEMENT

For the six months ended 30 June 2009

								Unaudited	Unaudited	Audited
							Notes	6 months to	6 months to	Year ended
								30 June 2009	30 June 2008	31 Dec 2008
								£'000	£'000	£'000
REVENUE								7	2	70
Cost of sales								-	(8,066)	(8,746)
								______	______	______
Gross profit								7	(8,064)	(8,676)
Administrative expenses								(134)	(296)	(474)
Goodwill written off								-	-	(154)
								______	______	______
								(127)	(8,360)	(9,304)
Other income					2			92	-	2
								______	______	______
OPERATING (LOSS)								(35)	(8,360)	(9,302)
Profit on sale of investment properties								-	-	-
Profit on sale of non current investments								-	-	-
								______	______	______
								(35)	(8,360)	(9,302)
Finance income								-	24	19
Finance costs								(46)	(156)	(385)
								______	______	______
(LOSS) BEFORE TAXATION								(81)	(8,492)	(9,668)
Taxation								-	-	(333)
								______	______	______
(LOSS) AFTER TAXATION								(81)	(8,492)	(10,001)
Equity minority interests								-	-	-
								______	______	______
LOSS ATTRIBUTABLE TO MEMBERS								(81)	(8,492)	(10,001)
								______	______	______
(Loss) per share (basic and diluted)					4			(0.1p)	(10.62p)	(12.5p)

All operations principally relate to Property Development which declined throughout the period and is to be discontinued (see Post Balance Sheet Events Note 5).

CONSOLIDATED BALANCE SHEET

As at 30 June 2009

							Unaudited	Unaudited	Audited
						Notes	30 June 2009	30 June 2008	31 Dec 2008
							£'000	£'000	£'000
ASSETS
NON CURRENT ASSETS
Goodwill							-	154	-
Property, plant and equipment							-	14	-
Investment in joint ventures
Share of gross assets							-	24	-
Share of gross liabilities							-	(23)	-
							-	1	-
Investments							-	-	-
							______	______	______
TOTAL NON CURRENT ASSETS							-	169	-
							______	______	______
CURRENT ASSETS
Inventories							2,900	7,067	2,900
Trade and other receivables							59	932	351
Deferred tax							-	333	-
Cash and cash equivalents							12	33	20
							______	______	______
TOTAL CURRENT ASSETS							2,971	8,365	3,271
							______	______	______
							______	______	______
TOTAL ASSETS							2,987	8,534	3,271
LIABILITIES
Current liabilities
Trade and other payables							71	195	81
Interest bearing loans and borrowings							2,900	4,182	3,109
							______	______	______
							2,971	4,377	3,190
LIABILITIES: Non current liabilities
Interest bearing loans and borrowings							-	2,213	-
							______	______	______
TOTAL LIABILITIES					3		2,971	6,590	3,190
							______	______	______
							0	1,994	81
Equity minority interests							-	(354)	-
							______	______	______
TOTAL NET ASSETS							0	1,590	81
							______	______	______
EQUITY: CAPITAL & RESERVES
Share capital - issued and fully paid							7,997	7,997	7,997
Share premium							1,970	1,970	1,970
Other reserves							-	2,647	-
Retained earnings							(9,967)	(11,024)	(9,886)
							______	______	______
TOTAL EQUITY							0	1,590	81
							______	______	______

CONSOLIDATED CASH FLOW STATEMENT

For the six months ended 30 June 2009

							Unaudited	Unaudited	Audited
							6 months to	6 months to	Year ended
							30 June 2009	30 June 2008	31 Dec 2008
							£'000	£'000	£'000
Cash flows generated from operating activities							247	(1,490)	2,370
Interest paid							(46)	(156)	(385)
							______	______	______
Net cash flows from operating activities							201	(1,646)	1,985
							______	______	______
Cash flows from investing activities
Proceeds from sale of investment properties							-	-	-
Interest received							-	24	19
							______	______	______
Net cash flows from investing activities							-	24	19
							______	______	______
Cash flows from financing activities
Proceeds from borrowings							-	729	655
Repayments of borrowings							(209)	-	(3,216)
Minority interest							-	-	(350)
Joint ventures							-	-	1
							______	______	______
Net cash flows from financing activities							(209)	729	(2,910)
							______	______	______
Net (decrease) in cash and cash equivalents							(8)	(893)	(906)
Cash and cash equivalents at beginning of period							20	926	926
							______	______	______
Cash and cash equivalents at end of period							12	33	20
							______	______	______

GROUP STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

						Share capital	Share premium	Other reserves	Retained earnings
1 January 2008						7,997	1,970	2,647	(2,532)
Loss for the year						-	-	-	(10,001)
Adjustment						-	-	(2,647)	2,647)
						______	______	______	______
31 December 2008						7,997	1,970	-	(9,886)
						______	______	______	______
Loss for the 6 months to 30 June 2009						-	-	-	(81)
						______	______	______	______
30 June 2009						7,997	1,970	-	(9,967)
						______	______	______	______

The adjustment from other reserves represents the derecognition of the historically created Merger Reserve and Capital Reserve due to the negligible net asset values of all subsidiaries as at 31 December 2008.

NOTES

For the six months ended 30 June 2009

1    BASIS OF PREPARATION

The financial information has been prepared under the historical cost convention and on a going concern basis and in accordance with International Financial Reporting Standards and IFRIC interpretations adopted for use in the European Union, other than International Accounting Standard 34 - Interim Financial Reporting, which is not mandatory for AIM listed companies.

The financial information for the period ended 30 June 2009 has not been audited or reviewed in accordance with the International Standard on Review Engagements 2410 issued by the Auditing Practices Board. The figures were prepared using applicable accounting policies and practices consistent with those adopted in the statutory accounts for the year ended 31 December 2008. The figures for the year ended 31 December 2008 have been extracted from these accounts, which have been delivered to the Registrar of Companies, and contained an unqualified audit report.

The financial information contained in this document does not constitute statutory accounts as defined by Section 435 of the Companies Act 2006. In the opinion of the Directors the financial information for this period fairly presents the financial position, result of operations and cash flows for this period.

This Interim Financial Report was approved by the Board of Directors on 26th November 2009.

2    SEGMENTAL ANALYSIS

The Group's results arise solely from property development activities carried out in the U.K. which declined throughout the period and is to be discontinued (see Post Balance Sheet Events). The Income Statement includes other income of £92,000 which represents the contribution to overheads being made by Gerard Lee in order that the Company is not in a net liability position as at 30 June 2009.

3    LIABILITIES

							30 June 2009	30 June 2008	31 Dec 2008
Interest bearing loans and borrowings							2,900	6,395	3,109
Trade and other payables							87	195	81
							______	______	______
							2,987	6,590	3,190
							______	______	______

4    LOSS PER SHARE    

The calculation of loss per share is based on the loss after taxation divided by the weighted average number of shares in issue during the period. There is no difference between basic loss and fully diluted loss per share.

5    POST BALANCE SHEET EVENTS

• The Company has entered into a Share Purchase Agreement with Kerrington under the terms of which Kerrington has agreed to pay the Company £1 in consideration of the transfer to Kerrington of the entire issued share capital of NPD. The Completion of the Share Purchase Agreement is conditional on the passing of a resolution by the Shareholders of the Company authorising the disposal of the sites owned by NPD known as the River Edge site and the Road Frontage sites at Northgate, Newark.

Kerrington has agreed to purchase the shares in NPD subject to charges registered in favour of the Royal Bank of Scotland Plc in relation to an outstanding debt of £2.9m.

• It is proposed that the 79,971,393 Existing Ordinary Shares will be consolidated and sub-divided on the basis of and according to the steps set out as follows:-

It is proposed that every Existing Ordinary Share shall be sub-divided and reclassified as one Ordinary Share of 0.1p (Subdivided Share) and one deferred share of 9.9p (Deferred Share).

It is then proposed that every 20,000 Subdivided Shares will be consolidated into 1 New Ordinary Share of £20 unless a shareholding therefore equals or exceeds 20,000 Existing Ordinary Shares then Shareholders will be left with a fractional entitlement to the resulting Ordinary Shares if the Resolutions are approved.

Following the sub-division of the Existing Ordinary Shares and subsequent consolidation of the Subdivided Shares, the nominal value of each Ordinary Share will be £20 each. The 2006 Act provides that a Company may only lawfully issue new shares for a subscription price at or above the nominal value of those shares. In order that the Company may issue the New Ordinary Shares, pursuant to the Proposals, the Company proposes that each ordinary share in the capital of the Company then having a nominal value of £20 be sub-divided into 2,000 Ordinary Shares of 1 pence each.

• The Company has entered into Convertible Loan Agreements to provide an aggregate loan amount of £506,000 for a term of two years from the date of drawdown. Following a six month period from the date of drawdown of Convertible Loan monies, the Company shall also be entitled to repay the Loan monies. At any time after one calendar month following the drawdown of Convertible Loan monies the Lender is entitled to request that any amount still outstanding of such loan be converted into Ordinary Shares in the Company at a conversion price of 1.5p per Ordinary Share.

• The Company intends to invest £200,000 into IM Minerals Ltd to acquire a 4.67% shareholding.

For further information:

Edward Azouz, Chairman, Pathfinder Properties plc on 020 7603 7495

Gerry Lee, Director, on [phone]

Roland Cornish, Beaumont Cornish Limited on 020 7628 3396

 

END

 

 

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