Interim Results

RNS Number : 3432N

Reconstruction Capital II Ltd

27 September 2012

 

Reconstruction Capital II Limited ("RC2" or the "Company")

27 September 2012

 Interim Unaudited Consolidated Financial Statements

for the six months ended 30 June 2012

Reconstruction Capital II Ltd ("RC2" or the "Company"), a closed-end investment company admitted to trading on the AIM market of the London Stock Exchange, today announces its interim results for the six months ended 30 June 2012.

Financial highlights

·      Net asset value, excluding non-controlling interest, as at 30 June 2012 was EUR 77.64m, representing EUR 0.7764 per share, a 4.24% fall since the beginning of the year;

·      As at 30 June 2012 the Company's market capitalisation was approximately EUR 56.12m, and 100m shares were in issue with a closing share price of EUR 0.56 per share;

·      Loss before taxation for the period ended 30 June 2012 was EUR 3.18m (restated loss of EUR 1.1m for the period ended 30 June 2011);

·      The Directors do not recommend the payment of a dividend.   

Operational highlights

·     In February 2012, RC2 completed the final step of the asset swap with the founding shareholders of East Point Holdings Ltd ("EPH"), thereby increasing its shareholding in EPH from 59.0% to 63.0%. Because the asset swap was substantially accomplished in 2011, the transaction had already been accounted for in RC2's 2011 audited accounts.

·     In April 2012, RC2 sold 7.7% of its shareholding in Glasro Holdings Limited ("Glasro") to the CEO of Top Factoring SRL for a total consideration of EUR 5,000. The sale took place in order to replicate the shareholding structure of Top Factoring where RC2 also owns  92.3%. Glasro and Top Factoring operate together as a group.

·     In the first half of 2012, RC2 continued to sell down its listed equities held under the Trading Programme, thereby generating EUR €1.3m of cash proceeds. At the end of June 2012, RC2's listed equities held under the Trading Programme had a total market value of EUR 0.5m.

The financial information has been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted in the European Union. The financial information set out above does not constitute the Company's statutory accounts for the period ended 30 June 2012.

The interim report of the Group for the six months ended 30 June 2012 has been posted to shareholders. Extracts of the financial statements appear below and the full version is available on the Company's website - www.reconstructioncapital2.com 

For further information, please contact:

Reconstruction Capital II Limited

Ion Florescu, Ivanka Ivanova

Tel: [phone]

Grant Thornton Corporate Finance (Nominated Adviser)

Philip Secrett, David Hignell

Tel: [phone]

LCF Edmond de Rothschild Securities (Broker)

Hiroshi Funaki

Tel: [phone]

INVESTMENT MANAGER AND INVESTMENT ADVISORS' REPORT

Dear Shareholders,

On 30 June 2012, Reconstruction Capital II Limited ("RC2" or the "Group") had a total unaudited net asset value ("NAV") of EUR 77.64m after deducting non-controlling interests, or EUR 0.7764 per share, which represents a decrease of EUR 3.4m, or 4.24%, since the beginning of the year.

By comparison, as at 30 June 2012, the published NAV per share was EUR 0.8873, with the difference of EUR 0.1109 deriving from the effects of consolidating Mamaia Hotels SRL and Top Factoring SRL ("Top Factoring"). Both investments are booked at fair value when computing RC2's published net asset value per share.

In February 2012, RC2 completed the final step of the asset swap with the founding shareholders of East Point Holdings Ltd ("EPH"), thereby increasing its shareholding in EPH from 59.0% to 63.0%. Because the asset swap was substantially accomplished in 2011, the transaction had already been accounted for in RC2's 2011 audited accounts.

In April 2012, RC2 sold 7.7% of its shareholding in Glasro Holdings Limited ("Glasro") to the CEO of Top Factoring SRL for a total consideration of EUR 5,000. The sale took place in order to replicate the shareholding structure of Top Factoring where RC2 also owns  92.3%. Glasro and Top Factoring operate together as a group.

In the first half of 2012, RC2 continued to sell down its listed equities held under the Trading Programme, thereby generating EUR €1.3m of cash proceeds. At the end of June 2012, RC2's listed equities held under the Trading Programme had a total market value of EUR 0.5m.

Yours truly,

New Europe Capital SRL

New Europe Capital DOO

New Europe Capital Limited

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2012

			30-Jun-12	30-Jun-11	31-Dec-11
				As Restated
			EUR	EUR	EUR
			Unaudited	Unaudited	Audited
Continuing Operations
Revenue			3,530,592	1,886,594	5,735,892
Gross Profit			3,530,592	1,886,594	5,735,892
Investment (loss) / income
(Loss) / Gain on investments at fair value through profit or loss			(2,164,847)	467,038	(10,373,504)
Interest income			1,515	18,793	34,290
Dividend income			1,278	30,123	35,354
Other investment income			108,099	135,533	320,320
Total investment (loss) / income			(2,053,955)	651,487	(9,983,540)
Expenses
Operating expenses			4,276,225	3,121,592	9,617,491
Total expenses			4,276,225	3,121,592	9,617,491
Operating (loss)			(2,799,588)	(583,511)	(13,865,139)
Interest expense			(377,430)	(477,204)	(217,892)
(Loss) before taxation			(3,177,018)	(1,060,715)	(14,083,031)
Income tax expense			(42,550)	(590,826)	326,079
Net (loss) for the period from continuing operations			(3,219,568)	(1,651,541)	(13,756,952)
Discontinued operations
(Loss) for the period on operations acquired with a view to sell			-	-	(2,364,295)
Net (loss) for the period			(3,219,568)	(1,651,541)	(16,121,247)
Other comprehensive (loss) /  income
Exchange differences on translating foreign operations			(132,543)	878,698	53,420
Total comprehensive (loss) for the period			(3,352,111)	(772,843)	(16,067,827)
Net (loss) / profit for the period attributable to:
- Equity holders of the parent			(3,102,823)	(2,084,625)	(15,734,573)
- Non-controlling interest			(116,745)	433,084	(386,674)
			(3,219,568)	(1,651,541)	(16,121,247)

Total comprehensive (loss)/ income attributable to:
- Equity holders of the parent			(3,227,383)	(1,036,602)		(15,737,942)
- Non-controlling interest			(124,728)	263,759		(329,885)
			(3,352,111)		(772,843)	(16,067,827)
Earnings / (Loss) Per Share attributable to the equity shareholders of the Company
From continuing operations			(0.0310)	(0.0208)		(0.1337)
Basic and diluted earnings / (loss) per share
From continuing and discontinued operations
Basic and diluted earnings / (loss) per share			(0.0310)	(0.0208)		(0.1573)

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 30 JUNE 2012

			30-Jun-12	30-Jun-11	31-Dec-11
				As Restated
			EUR	EUR	EUR
			Unaudited	Unaudited	Audited
Assets
Non-current assets
Property, plant and equipment			9,178,667	11,738,536	9,494,417
Financial assets at fair value through profit or loss			31,431,278	41,737,826	33,480,715
Goodwill			1,257,153	1,257,153	1,257,153
Total non-current assets			41,867,098	54,733,515	44,232,285
Current assets
Financial assets at fair value through profit or loss			500,360	3,063,735	1,970,473
Inventories			47,000	121,254	27,000
Trade and other receivables			7,468,773	2,830,196	5,209,555
Cash and cash equivalents			1,822,642	1,030,187	497,325
			9,838,775	7,045,372	7,704,353
Assets of disposal group classified as held for sale			123,801,246	128,725,761	123,801,246
Total assets			175,507,119	190,504,648	175,737,884
Liabilities
Current liabilities
Trade and other payables			4,687,809	2,848,724	2,695,704
Loans and borrowings			4,874,284	1,059,452	3,642,240
Corporation tax payable			76,283	44,545	104,625
Total current liabilities			9,638,376	3,952,721	6,442,569
Liabilities of disposal group classified as held for sale			81,304,970	85,871,323	83,503,970
Non-current liabilities
Deferred tax			6,000	(123,023)	27,000
Leases			53,367	-	48,432
Loans and borrowings			3,863,256	1,431,132	1,647,400
Total non-current liabilities			3,922,623	1,308,109	1,722,832
Total liabilities			94,865,969	91,132,153	91,669,371
Total net assets			80,641,150	99,372,495	84,068,513

Capital and reserves attributable to equity holders
Share capital			1,000,000	1,000,000	1,000,000
Share premium reserve			121,900,310	121,900,310	121,900,310
Retained deficit			(43,496,149)	(26,524,234)	(40,174,182)
Foreign exchange reserve			(1,767,539)	(591,587)	(1,642,979)
Total equity and reserves			77,636,622	95,784,489	81,083,149
Non-Controlling Interests			3,004,528	3,588,006	2,985,364
Total equity			80,641,150	99,372,495	84,068,513

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS OF 30 JUNE 2012

	Share Capital	Share Premium	Foreign exchange reserve	Retained (Deficit)/ Earnings	Sub-total	Non- controlling Interest	Total
	EUR	EUR	EUR	EUR	EUR	EUR	EUR
Balance at 1 January 2011 - as previously reported	1,000,000	121,900,310	(2,876,569)	(26,548,471)	93,475,270	6,844,191	100,319,461
Prior year adjustment	-	-	1,236,959	2,108,862	3,345,821	(3,345,821)	-
Balance at 1 January 2011 - as restated	1,000,000	121,900,310	(1,639,610)	(24,439,609)	96,821,091	3,498,370	100,319,461
(Loss) / Profit for the period - as restated	-	-	-	(2,084,625)	(2,084,625)	433,084	(1,651,541)
Other comprehensive income / (loss)                                - as restated	-	-	1,048,023	-	1,048,023	(169,325)	878,698
Total comprehensive income  / (loss) for the period                     - as restated	-	-	1,048,023	(2,084,625)	(1,036,602)	263,759	(772,843)
Dividends paid to non-controlling interests	-	-	-	-	-	(174,123)	(174,123)
Balance at 30 June 2011 - as restated	1,000,000	121,900,310	(591,587)	(26,524,234)	95,784,489	3,588,006	99,372,495
(Loss) / Profit for the period	-	-	-	(13,649,948)	(13,649,948)	(819,758)	(14,469,706)
Other comprehensive (loss) / income	-	-	(1,051,392)	-	(1,051,392)	226,114	(825,278)
Total comprehensive (loss) / income for the year	-	-	(1,051,392)	(13,649,948)	(14,701,340)	(593,644)	(15,294,984)
Dividends paid to non-controlling interests	-	-	-	-	-	(8,998)	(8,998)
Balance at 31 December 2011	1,000,000	121,900,310	(1,642,979)	(40,174,182)	81,083,149	2,985,364	84,068,513
(Loss) / Profit for the period	-	-	-	(3,102,823)	(3,102,823)	(116,745)	(3,219,568)
Other comprehensive (loss) / income	-	-	(124,560)	-	(124,560)	(7,983)	(132,543)
Total comprehensive (loss) / income for the period	-	-	(124,560)	(3,102,823)	(3,227,383)	(124,728)	(3,352,111)
Disposal of interest in subsidiary to non-controlling interests (Note 8)	-	-	-	(219,144)	(219,144)	219,144	-
Dividends paid to non-controlling interests	-	-	-	-	-	(75,252)	(75,252)
Balance at 30 June 2012	1,000,000	121,900,310	(1,767,539)	(43,496,149)	77,636,622	3,004,528	80,641,150

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 30 JUNE 2012

 

		30-Jun-12	30-Jun-11	31-Dec-11
			As Restated
		EUR	EUR	EUR
		Unaudited	Unaudited	Audited
Cash flows from operating activities
Net profit before tax		(3,177,018)	(1,060,715)	(14,083,031)
Adjustments for:
Depreciation and amortisation		179,143	164,865	295,636
Impairment / revaluation of fixed assets		-	(191,059)	2,087,000
(Gain)/ loss on financial assets at fair value through profit or loss		2,164,847	(467,038)	10,373,504
Interest income		(1,515)	(18,793)	(34,290)
Dividend income		(1,278)	(30,123)	(35,354)
Net cash outflow before changes in working capital		(835,821)	(1,602,863)	(1,396,535)
(Increase) / decrease in trade and other receivables		(4,202,739)	3,802,987	1,397,761
Increase/ (decrease) in trade and other payables		1,968,699	468,186	458,299
(Increase)/ decrease in inventories		(20,000)	59,747	154,000
Decrease in provision		-	-	-
Interest received		1,515	18,661	34,290
Dividend received		1,278	4,389	35,354
Net proceeds from sale of financial assets		1,349,264	-	815,336
Cash (used in)/ generated by operating activities		(1,737,804)	2,751,107	1,498,505
Income tax paid		(63,550)	(58,227)	(267,921)
Net cash (used in)/ generated by operating activities		(1,801,354)	2,692,880	1,230,584
Cash flows from investing activities
Sale of property, plant and equipment		-	-	5,911
Purchase of property, plant and equipment		(130,825)	-	(226,776)
Purchase of financial assets		-	(713,862)	(589,500)
Sale of financial assets		-	500,222	211,933
Net Cash flow used in investing activities		(130,825)	(213,640)	(598,432)
Cash flows from financing activities
Dividends paid to non-controlling interests		(75,252)	(174,123)	(183,121)
Proceeds from loans		3,889,240	688,534	3,613,609
Payments of loans		(696,820)	(2,412,709)	(4,338,783)
Net Cash flow used in financing activities		3,117,168	(1,898,298)	(908,295)
(Decrease)/increase in cash and cash equivalents		1,184,989	580,942	(276,143)
Cash at beginning of period/ year		497,325	812,543	812,543
Effect of foreign exchange rate changes		140,328	(363,298)	(39,075)
Cash at end of period/ year		1,822,642	1,030,187	497,325

 

END

 

 

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