Interim Unaudited Consolidated Financial Statement

RNS Number : 0392G
Reconstruction Capital II Ltd
02 August 2016
 

2 August 2016

Reconstruction Capital II Limited (the "Company")

Interim Unaudited Consolidated Financial Statements

for the six months ended 30 June 2016

 

Reconstruction Capital II Ltd ("RC2", the "Company" or the "Group"), a close-end investment company incorporated in the Cayman Islands admitted to trading on the AIM market of the London Stock exchange, today announces its results for the six months ended 30 June 2016.

Copies of the company's interim financial statements will today be posted to shareholders.  The annual reports are also available on the Company's website http://www. reconstructioncapital2.com/.

Financial highlights

·    The net asset value as at 30 June 2016 was EUR 0.4212 per share on an undiluted basis (EUR 0.3736 per share as at 31 December 2015).  The corresponding net asset value per share on a fully diluted basis was EUR 0.3118 (EUR 0.2847 per share as at 31 December 2015).

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

Operational highlights

Private Equity Programme

RC2 did not make any new investments under its Private Equity Programme. The Company continued to pursue a number of exits, both from its investee companies as well as from certain assets held by them.  The investments held under the Private Equity Programme had a fair value of EUR 46.5m at the end of June, up 4.5% since the 2015 year-end audit report, primarily due to the effect of an increase in the Albalact SA share price.

Trading Programme

As at 30 June 2016, RC2's listed equities held under the Trading Programme had a total market value of EUR 0.21m, a 22.4% decrease over the first half of the year, due to the disposal of one of the holdings and a partial disposal of another.  All the investments held under the Trading Programme were in Romanian equities.

For further information, please contact:

Reconstruction Capital II Limited

Ion Florescu / Anca Moraru

Tel:  +40 21 316 7680

 

Grant Thornton UK LLP (Nominated Adviser)

Philip Secrett / Carolyn Sansom

Tel: +44 (0) 20 7383 5100

 

 

 

ADVISER'S REPORT

 

As at 30 June 2016, Reconstruction Capital II Limited ("RC2" or the "Fund") had a total unaudited net asset value ("NAV") of EUR38.7m, or EUR0.4212 per share on an undiluted basis which represents a 12.7% increase compared to the audited NAV per share at the end of December 2015. The fully diluted NAV per share increased by 9.5% from EUR0.2847 to EUR0.3118 in the corresponding period.

 

The increase in NAV is primarily due to the growth in the share price of Albalact, which was driven by the announcement of RC2 and the Ciurtin family's agreement to sell their shares in the company to Lactalis, a world-leading French dairy company, subject to a number of conditions precedent, the last of which were fulfilled in July 2016.

 

As at 30 June 2016, RC2 had cash and cash equivalents of approximately EUR1.1m, borrowings of EUR9.5m, and EUR0.2m of accrued liabilities to its service providers.

 

Private Equity Programme

 

The investments held under the Private Equity Programme had a fair value of EUR46.5m as at 30 June 2016, an increase of 4.5% over the period. This was due to a combination of an increase in the market value of the holding in Albalact SA (EUR4.1m), offset by a write down of the investments in Glasro Holdings Limited (EUR2.0m) and Top Factoring SRL (EUR0.1m) to reflect the payment of dividends during the period.

 

Trading Programme

 

As at 30 June 2016, RC2's listed equities held under the Trading Programme had a total market value of EUR0.21m, a 22.4% decrease over the first half of 2016, due to the disposal of one of its holdings and a partial disposal of another. All the investments held under the Trading Programme were in Romanian equities.

 

New Europe Capital SRL

 

 

  

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 June 2016

 

 

 

30 June

2016

30 June

2015

31 December

2015

 

EUR

EUR

EUR

 

Unaudited

Unaudited

Audited

Investment income

 

 

 

 

Gain/(loss) on revaluation of investments

 

 

 

 

at fair value through profit or loss

 

2,042,263

235,864

(148,934)

Gain on disposal of investments

 

16,737

-

176,627

Interest income

 

-

49,348

99,583

Dividend income

 

2,101,970

1,700,000

2,404,456

Other income

 

12,103

-

29,232

Total investment income

 

4,173,073

1,985,212

2,560,964

Expenses

 

 

 

 

Impairment on loan receivables

 

-

-

(892,639)

Operating expenses

 

(588,931)

(560,946)

(1,058,837)

Total expenses

 

(588,931)

(560,946)

(1,951,476)

Operating profit

 

3,584,142

1,424,266

609,488

Financial expenses

 

(525,698)

(488,132)

(977,294)

Profit/(loss) before taxation

 

3,058,444

936,134

(367,806)

Income tax expense

 

(79)

-

(697)

Profit/(loss) from continuing operations

 

3,058,365

936,134

(368,503)

Loss from discontinued operations

 

-

-

(43,104)

Profit/(loss) for the period/year

 

3,058,365

936,134

(411,607)

Other comprehensive income

 

 

 

Amounts that may be reclassified to profit or loss

 

 

Exchange differences on translating

 

 

 

foreign operations

-

28,283

-

Total comprehensive income/(loss) for the period/year

 

3,058,365

 

964,417

 

(411,607)

Profit/(loss) for the period/year attributable to:

 

 

 

- Equity holders of the parent

3,058,365

936,134

(371,941)

- Non-controlling interest

-

-

(39,666)

 

3,058,365

936,134

(411,607)

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (continued)

For the six months ended 30 June 2016

 

 

30 June

2016

30 June

2015

31 December

2015

 

EUR

EUR

EUR

 

Unaudited

Unaudited

Audited

Total comprehensive income/(loss) attributable to:

- Equity holders of the parent

 

3,058,365

 

938,256

 

(371,941)

- from continuing operations

3,058,365

938,256

(368,503)

- from discontinued operations

-

-

(3,438)

- Non-controlling interest

-

26,161

(39,666)

- from continuing operations

-

26,161

-

- from discontinued operations

-

-

(39,666)

 

3,058,365

964,417

(411,607)

 

Total comprehensive income/(loss) from:

- Continuing operations

 

 

3,058,365

 

 

964,417

 

 

(368,503)

- Discontinued operations

-

-

(43,104)

 

3,058,365

964,417

(411,607)

 

 

 

Total Earnings Per Share attributable to the equity shareholders of the Company

 

 

 

 

Basic undiluted earnings per share

 

0.0314

0.0094

(0.0037)

Fully diluted earnings per share

 

0.0224

0.0086

0.0036

 

 

 

 

 

Continuing operations Earnings Per Share attributable to the equity shareholders of the Company

 

 

 

 

Basic undiluted earnings per share

 

0.0314

0.0094

(0.0037)

Fully diluted earnings per share

 

0.0224

0.0086

0.0036

 

 

 

 

 

Discontinued operations Earnings Per Share attributable to the equity shareholders of the Company

 

 

 

 

Basic undiluted earnings per share

 

-

-

(0.00003)

Fully diluted earnings per share

 

-

-

(0.00002)

 

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2016

 

 

 

30 June

2016

30 June

2015

31 December

2015

 

EUR

Unaudited

EUR

Unaudited

EUR

Audited

ASSETS

 

 

 

 

Non-current assets

Property, plant and equipment

 

 

-

 

11,509

 

-

Financial assets at fair value through profit or loss

 

 

46,459,213

 

44,833,347

 

44,455,046

Loans receivable

 

616,709

616,709

Total non-current assets

 

47,075,922

46,303,969

45,071,755

 

Current assets

 

 

 

 

Financial assets at fair value through profit or loss

 

 

208,502

 

350,013

 

268,591

Trade and other receivables

 

30,815

299,418

37,462

Cash and cash equivalents

 

1,077,611

1,097,293

1,083,954

Total current assets

 

1,316,928

1,746,724

1,390,007

 

TOTAL ASSETS

 

 

48,392,850

 

48,050,693

 

46,461,762

 

LIABILITIES

 

 

 

 

Current liabilities

Trade and other payables

 

 

210,467

 

569,710

 

123,725

Loans and borrowings

 

-

45,331

46,490

Corporation tax payable

 

-

2,418

-

Total current liabilities

 

210,467

617,459

170,215

 

Non-current liabilities

Convertible loan notes

 

 

 

9,459,742

 

 

8,446,199

 

 

8,934,201

Total non-current liabilities

 

9,459,742

8,446,199

8,934,201

 

TOTAL LIABILITIES

 

 

9,670,209

 

9,063,658

 

9,104,416

 

NET ASSETS

 

 

38,722,641

 

38,987,035

 

37,357,346

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)

As at 30 June 2016

 

 

 

30 June

2016

30 June

2015

31 December

2015

 

EUR

EUR

EUR

 

Unaudited

Unaudited

Audited

CAPITAL AND RESERVES ATTRIBUTABLE TO EQUITY HOLDERS

 

 

 

 

Share capital

 

919,378

1,000,000

1,000,000

Share premium

 

111,742,914

121,900,310

121,900,310

Retained deficit

 

(74,569,096)

(84,822,361)

(86,172,409)

Equity component of convertible loan notes

 

629,445

629,445

629,445

Foreign exchange reserve

 

-

(24,123)

-

 

 

38,722,641

38,683,271

37,357,346

Non-controlling interests

 

-

303,764

-

TOTAL EQUITY

 

38,722,641

38,987,035

37,357,346

 

 

 

30 June

2016

30 June

2015

31 December

2015

EUR

EUR

EUR

Unaudited

Unaudited

Audited

Net Asset Value per share

 

 

 

 

Basic undiluted net asset value per share

 

0.4212

0.3868

0.3736

Fully diluted net asset value per share

 

0.3118

0.2898

0.2847

 

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 June 2016

 

 

Foreign exchange

 

Retained (deficit)/

 

Equity component of

 

 

 

Non- controlling

 

 

Share capital

 

Share premium

 

reserve

 

earnings

 

loan notes

 

Subtotal

 

interest

 

Total

 

EUR

 

EUR

 

EUR

 

EUR

 

EUR

 

EUR

 

EUR

 

EUR

Balance at 1 January 2015

1,000,000

 

121,900,310

 

(26,245)

 

(85,758,495)

 

629,445

 

37,745,015

 

277,603

 

38,022,618

Profit for the period

-

 

-

 

-

 

936,134

 

-

 

936,134

 

-

 

936,134

Other comprehensive income

-

 

-

 

2,122

 

-

 

-

 

2,122

 

26,161

 

28,283

Total comprehensive income for the period

-

 

-

 

2,122

 

936,134

 

-

 

938,256

 

26,161

 

964,417

Balance at 30 June 2015

1,000,000

 

121,900,310

 

(24,123)

 

(84,822,361)

 

629,445

 

38,683,271

 

303,764

 

38,987,035

Loss for the period

-

 

-

 

-

 

(1,308,075)

 

-

 

(1,308,075)

 

(39,666)

 

(1,347,741)

Other comprehensive loss

-

 

-

 

(2,122)

 

-

 

-

 

(2,122)

 

(26,161)

 

(28,283)

Total comprehensive loss for the period

-

 

-

 

(2,122)

 

(1,308,075)

 

-

 

(1,310,197)

 

(65,827)

 

(1,376,024)

Discontinued operations - share of non-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

controlling interest

-

 

-

 

26,245

 

(41,973)

 

-

 

(15,728)

 

(237,937)

 

(253,665)

Transactions with owners

-

 

-

 

26,245

 

(41,973)

 

-

 

(15,728)

 

(237,937)

 

(253,665)

Balance at 31 December 2015

1,000,000

 

121,900,310

 

-

 

(86,172,409)

 

629,445

 

37,357,346

 

-

 

37,357,346

Profit for the period

-

 

-

 

-

 

3,058,365

 

-

 

3,058,365

 

-

 

3,058,365

Other comprehensive income

-

 

-

 

-

 

-

 

-

 

-

 

-

 

-

Total comprehensive income for the period

-

 

-

 

-

 

3,058,365

 

-

 

3,058,365

 

-

 

3,058,365

Repurchase and cancellation of own shares

(80,622)

 

(10,157,396)

 

-

 

8,544,948

 

-

 

(1,693,070)

 

-

 

(1,693,070)

Transactions with owners

(80,622)

 

(10,157,396)

 

-

 

8,544,948

 

-

 

(1,693,070)

 

-

 

(1,693,070)

Balance at 30 June 2016

919,378

 

111,742,914

 

-

 

(74,569,096)

 

629,445

 

38,722,641

 

-

 

38,722,641

 

 

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 30 June 2016

 

 

30 June

2016

30 June

2015

31 December

2015

EUR

EUR

Unaudited

Unaudited

Audited

Cash flows from operating activities

 

 

 

Profit/(loss) for the period/year

3,058,365

936,134

(411,607)

Adjustments for:

 

 

 

(Gain)/loss on revaluation of investments at fair value

 

 

 

through profit or loss

(2,042,263)

(235,864)

148,934

(Gain)/loss on disposal of investments

(16,737)

-

(176,627)

Loss for the period/year from discontinued operations

-

-

43,104

Impairment on loans receivable

-

-

892,639

Interest income

-

(49,348)

(99,583)

Financial expenses

525,698

488,132

977,294

Dividend income

(2,101,891)

(1,700,000)

(2,403,759)

Net loss on foreign exchange

60

-

5,200

Net cash outflow before changes in working capital

(576,768)

(560,946)

(1,024,405)

Decrease/(increase) in trade and other receivables

7,365

(833)

2,043

Increase/(decrease) in trade and other payables

86,742

(305,878)

(391,140)

Purchase of financial assets

-

(535,000)

(535,000)

Sale of financial assets

114,922

16,204

267,040

Interest income received

-

44

45

Dividends received

2,101,173

1,700,000

2,403,759

Net cash flows from continuing activities

1,733,434

313,591

722,342

Net cash flows from discontinued activities

-

-

20,296

Net cash generated from operating activities

1,733,434

313,591

742,638

Cash flows from financing activities

 

 

 

Repayment of loan granted by related party

(40,000)

-

-

Interest paid

(6,647)

-

(237,274)

Payments to purchase own shares

(1,693,070)

-

-

Net cash flow used by financing activities

(1,739,717)

-

(237,274)

Net (decrease)/increase in cash and cash equivalents

 

 

 

before currency adjustment

(6,283)

313,591

Effects of exchange rate differences on cash and cash

 

 

 

equivalents

(60)

15,096

(67,877)

Net (decrease)/increase in cash and cash equivalents

 

 

 

after currency adjustment

(6,343)

328,687

437,487

Cash and cash equivalents at the beginning of the

 

 

 

period/year

1,083,954

768,606

768,606

Cash and cash equivalents included in discontinued

 

 

 

operations

-

-

(122,139)

Cash and cash equivalents at the end of the

 

 

 

period/year

1,077,611

1,097,293

1,083,954

 


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