Interim Unaudited Financial Statements

RNS Number : 2764Y
Reconstruction Capital II Ltd
20 August 2018
 

20 August 2018

Reconstruction Capital II Limited (the "Company")

Interim Unaudited Financial Statements

for the six months ended 30 June 2018

 

Reconstruction Capital II Limited ("RC2", the "Company" or the "Group"), a closed-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 2018.

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

Financial highlights

On 30 June 2018, Reconstruction Capital II Limited ("RC2") had a total unaudited net asset value ("NAV") of €35.7m or €0.2463 per share, which represents a 1.61% fall since the beginning of the year.

At a general meeting of shareholders held on 21 February 2018 a decision was made to acquire 22% of the issued share capital of Reconstruction Capital Plc (RC) for €1.6m and 10% of the issued share capital of The Romanian Investment Fund Limited (RIF) for €1.7m. Both funds are Romanian-focused and have as their main underlying asset a 60% shareholding in Policolor SA in which RC2 already owns the balance of 40%. RC2 now has a further 15.36% indirect shareholding as a result of these acquisitions. To date, only part of the acquisition has been settled for €1.1m, the balance of €2.1m being due once the vendors have resolved certain technical issues for settlement.

As at 30 June 2018, RC2 had cash and cash equivalents of approximately €4.6m while its wholly-owned subsidiary RC2 Cyprus Ltd had cash and cash equivalents of €2.3m. As at 30 June 2018, RC2 had sundry liabilities of €2.3m, including the €2.1m due for the settlement of the acquisitions of shares in RC and RIF.

Operational highlights

In May, Policolor signed an amendment to the sales contract with the buyers of its main site in Bucharest, bringing forward the sale of 4.4ha of its remaining 7.6ha from 2019 to 2018. The land being sold in 2018 has been divided into three plots, with the first plot already having been sold in May generating cash proceeds of €1.4m. A second plot of land was sold in July, generating proceeds of €1.5m, and a further 2.2ha is due to be sold in the autumn, generating cash proceeds of €3m. In May, Policolor also signed the contract for the construction of its new Bucharest plant, which is due to be completed in the spring of 2019 and to become operational in the summer of that year.

Operationally, the Policolor Group had a reasonable first half of the year with sales marginally ahead of the same period last year at €33.3m (cf. 2017 €32.9m), whilst EBITDA fell by 10.6% to €1.95m compared to the same period of the previous year.

The fair value of the investments held under the Private Equity Programme increased by €3.4m to €33.6m during the period, primarily due to the acquisition of the shares in RC and RIF detailed above.

For further information, please contact:

Reconstruction Capital II Limited

Cornelia Oancea / Anca Moraru

Tel: +40 21 316 76 80

 

Grant Thornton UK LLP

(Nominated Adviser)

Philip Secrett
Tel: +44 (0) 20 7383 5100

 

finnCap Limited

(Broker)

William Marle / Giles Rolls

Tel: +44 20 7220 0500

 

 

 

 

 

 

 

 

 

ADVISER'S REPORT

 

For the six months ended 30 June 2018

 

On 30 June 2018, Reconstruction Capital II Limited ("RC2") had a total unaudited net asset value ("NAV") of €35.7m or €0.2463 per share, which represents a 1.61% fall since the beginning of the year.

 

At a general meeting of shareholders held on 21 February 2018 a decision was made to acquire 22% of the issued share capital of Reconstruction Capital Plc (RC) for €1.6m and 10% of the issued share capital of The Romanian Investment Fund Limited (RIF) for €1.7m. Both funds are Romanian-focused and have as their main underlying asset a 60% shareholding in Policolor SA in which RC2 already owns the balance of 40%. RC2 now has a further 15.36% indirect shareholding as a result of these acquisitions. To date, only part of the acquisition has been settled for €1.1m, the balance of €2.1m being due once the vendors have resolved certain technical issues for settlement.

 

As at 30 June 2018, RC2 had cash and cash equivalents of approximately €4.6m while its wholly-owned subsidiary RC2 Cyprus Ltd had cash and cash equivalents of €2.3m. As at 30 June 2018, RC2 had sundry liabilities of €2.3m, including the €2.1m due for the settlement of the acquisitions of shares in RC and RIF.

 

In May, Policolor signed an amendment to the sales contract with the buyers of its main site in Bucharest, bringing forward the sale of 4.4ha of its remaining 7.6ha from 2019 to 2018. The land being sold in 2018 has been divided into three plots, with the first plot already having been sold in May generating cash proceeds of €1.4m. A second plot of land was sold in July, generating proceeds of €1.5m, and a further 2.2ha is due to be sold in the autumn, generating cash proceeds of €3m. In May, Policolor also signed the contract for the construction of its new Bucharest plant, which is due to be completed in the spring of 2019 and to become operational in the summer of that year.

 

Operationally, the Policolor Group had a reasonable first half of the year with sales marginally ahead of the same period last year at €33.3m (cf. 2017 €32.9m), whilst EBITDA fell by 10.6% to €1.95m compared to the same period of the previous year.

 

The fair value of the investments held under the Private Equity Programme increased by €3.4m to €33.6m during the period, primarily due to the acquisition of the shares in RC and RIF detailed above.

   

New Europe Capital SRL

 

STATEMENT OF COMPREHENSIVE INCOME

 

For the six months ended 30 June 2018

 

 

 

30 June

 

30 June

 

31 December

 

 

2018

2017

2017

 

 

EUR

 

EUR

 

EUR

 

 

Unaudited

 

Unaudited

 

Audited

Revenue

 

 

 

 

 

 

Fair value loss on financial assets at

 

 

 

 

 

 

fair value through profit or loss

 

(2,077,374)

(4,011,373)

(10,981,533)

Recovery of previously written off

 

 

 

 

 

 

receivable

 

-

-

189,000

Interest income

 

2,153,054

2,146,080

4,334,820

Dividend income

 

-

3,500,000

7,619,610

Other income

 

10

-

-

 

 

 

 

 

 

 

Total revenue

 

75,690

1,634,707

1,161,897

Expenses

 

 

 

 

 

 

 

(126,000)

-

-

Impairment on trade and other receivables

Operating expenses

 

(534,322)

(1,096,874)

(1,619,749)

Financial expenses

 

(721)

(200)

(188)

 

 

 

 

 

 

 

Total expenses

 

(661,043)

(1,097,074)

(1,619,937)

 

 

 

 

 

 

 

Profit for the period/year

 

(585,353)

537,633

(458,040)

 

 

 

 

 

 

 

Other comprehensive income

 

-

-

-

Total comprehensive income for

 

 

 

 

 

 

 

(585,353)

537,633

(458,040)

the period/year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share attributable to

 

 

 

the owners of the Company

 

 

Basic and diluted earnings per share

(0.0040)

0.0037

(0.0031)

 

 

 

 

STATEMENT OF FINANCIAL POSITION

As at 30 June 2018

 

 

 

 

30 June

 

30 June

 

31 December

 

 

 

2018

2017

2017

 

 

EUR

 

EUR

 

EUR

 

 

 

Unaudited

 

Unaudited

 

Audited

ASSETS

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

Financial assets at fair value through

 

 

 

 

 

 

 

profit or loss

 

 

33,568,867

34,804,972

30,143,162

 

 

 

 

 

 

 

 

Total non-current assets

 

 

33,568,867

34,804,972

30,143,162

Current assets

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade and other receivables

 

18,281

50,564

136,439

Cash and cash equivalents

 

 

4,567,668

3,028,792

6,439,763

 

 

 

 

 

 

 

 

Total current assets

 

 

4,585,949

3,079,356

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

 

38,154,816

37,884,328

36,719,364

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Trade and other payables

 

2,451,315

335,779

430,510

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

 

2,451,315

335,779

430,510

 

 

 

 

 

 

 

 

NET ASSETS

 

 

35,703,501

37,548,549

36,288,854

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EQUITY ATTRIBUTABLE TO OWNERS

 

 

 

 

 

Share capital

 

 

1,449,460

1,465,223

1,449,460

Share premium

 

 

110,581,355

110,829,614

110,581,355

Retained deficit

 

 

(76,327,314)

(74,746,288)

(75,741,961)

 

 

 

 

 

 

 

 

TOTAL EQUITY

 

 

35,703,501

37,548,549

36,288,854

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Asset Value per share

 

 

 

 

Basic and diluted net asset value per

 

 

 

 

share

0.2463

  0.2563

0.2504

 

 

  

 

STATEMENT OF CHANGES IN EQUITY

 

For the six months ended 30 June 2018

 

 

 

 

 

 

Retained

 

Equity

 

 

 

 

 

Share

 

(deficit)/

 

component of

 

 

 

Share capital

 

premium

 

earnings

 

loan notes

 

Total

 

EUR

 

EUR

 

EUR

 

EUR

 

EUR

Balance at 1 January 2017

1,476,223

127,991,989

(75,283,921)

-

54,184,291

Profit for the period

-

-

537,633

-

537,633

Other comprehensive income

-

-

-

-

-

 

 

 

 

 

 

 

 

 

 

Total comprehensive income for the period

-

-

537,633

-

537,633

 

 

 

 

 

 

 

 

 

 

Issue of B shares

16,997,375

(16,997,375)

-

-

-

Redemption of B shares

(16,997,375)

-

-

-

(16,997,375)

Repurchase and cancellation of own shares

(11,000)

(165,000)

-

-

(176,000)

 

 

 

 

 

 

 

 

 

 

Transactions with owners

(11,000)

(17,162,375)

-

-

(17,173,375)

Balance at 30 June 2017

 

 

 

 

 

 

 

 

 

1,465,223

110,829,614

(74,746,288)

-

37,548,549

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss for the period

-

-

(995,673)

-

(995,673)

Other comprehensive income

-

-

-

-

-

 

 

 

 

 

 

 

 

 

 

Total comprehensive income for the period

-

-

(995,673)

-

(995,673)

 

 

 

 

 

 

 

 

 

 

Repurchase and cancellation of own shares

(15,763)

(248,259)

-

-

(264,022)

 

 

 

 

 

 

 

 

 

 

Transactions with owners

(15,763)

(248,259)

-

-

(264,022)

Balance at 31 December 2017

 

 

 

 

 

 

 

 

 

1,449,460

110,581,355

(75,741,961)

-

36,288,854

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the period

-

-

(585,353)

-

(585,353)

Other comprehensive income

-

-

-

-

-

 

 

 

 

 

 

 

 

 

 

Total comprehensive income for the period

-

-

(585,353)

-

(585,353)

Balance at 30 June 2018

 

 

 

 

 

 

 

 

 

1,449,460

110,581,355

(76,327,314)

-

35,703,501

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOW STATEMENT

For the six months ended 30 June 2018

 

30 June

 

30 June

 

31 December

 

 

2018

2017

2017

 

 

EUR

 

EUR

 

EUR

 

 

Unaudited

 

Unaudited

 

Audited

 

Cash flows (used in)/generated from operating

 

 

 

 

 

 

activities

(585,353)

537,633

(458,040)

 

Profit/(loss) before taxation

 

Adjustments for:

 

 

 

 

 

 

Fair value loss on financial assets at fair value

2,077,374

4,011,373

10,981,533

 

through profit or loss

 

Impairment on trade and other receivables

126,000

-

-

 

Reversal of loan impairment

-

-

(189,000)

 

Interest income

(2,153,054)

(2,146,080)

(4,334,820)

 

Dividend income

-

(3,500,000)

(7,619,610)

 

Net loss on foreign exchange

721

200

188

 

Net cash outflow before changes in working

 

 

 

 

 

 

(534,312)

(1,096,874)

(1,619,749)

 

capital

 

(Increase)/decrease in trade and other receivables

(7,842)

(32,773)

7,352

 

(Decrease)/increase in trade and other payables

(83,686)

43,377

138,108

 

Purchase of financial assets

(1,224,079)

(370,000)

(370,000)

 

Disposals and repayments of financial assets

-

-

63,000

 

Dividends received

-

3,500,000

7,500,000

 

Net cash (used in)/generated from operating

 

 

 

 

 

 

(1,849,919)

2,043,730

5,718,711

 

activities

 

Cash flows used in financing activities

 

 

 

 

 

 

-

(176,000)

(440,022)

 

Payments to purchase own shares

 

Redemptions of B shares

(21,455)

(16,842,979)

(16,842,979)

 

 

 

 

 

 

 

 

Net cash flow used in financing activities

(21,455)

(17,018,979)

(17,283,001)

 

Net decrease in cash and cash equivalents

 

 

 

 

 

 

(1,871,374)

(14,975,249)

(11,564,290)

 

before currency adjustment

 

Effects of exchange rate differences on cash and

(721)

(200)

(188)

 

cash equivalents

 

Net decrease in cash and cash equivalents after

 

 

 

 

 

 

(1,872,095)

(14,975,449)

(11,564,478)

 

currency adjustment

 

Cash and cash equivalents at the beginning of the

6,439,763

18,004,241

18,004,241

 

period/year

 

Cash and cash equivalents at the end of the

 

 

 

 

 

 

4,567,668

3,028,792

6,439,763

 

period/year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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