Half-year Report

RNS Number : 4152B

Ross Group PLC

30 September 2022

 

Ross Group Plc Half Yearly Financial Report  30th June 2022 For a more printer friendly version please click here http://www.rns-pdf.londonstockexchange.com/rns/4152B_1-2022-9-30.pdf LEI: 213800PIS2QRIKPZB546 ROSS GROUP PLC
HALF YEARLY FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2022  Financial Summary (6 months to 30 June 2022) 2022 2021   £'000   £'000   Change Group Revenue - - - Gross Profit/(Loss) - - - Profit/(Loss) before tax (686) (85) 500.3% Basic earnings per share -0.28p -0.04p 500.3% Diluted earnings per share -0.22p -0.03p 500.3% Chairman's Statement It is once again my pleasure to report to you on both the business activities and the financial interim results of the Ross Group PLC ("Group") for the six month period ended 30th June 2022. I would like to report that, in this period, Ross Group PLC ("the Group") has continued to proceed to implement its planned business strategy, notwithstanding continuing to endure exceptional circumstances related to COVID and its consequential economic effects, all of which as a result has therefore subsequently resulted in a net loss after tax of £685,000 (2021 £85,000 loss) without revenue. The Board during the first half of 2022 has faced uniquely unprecedented challenges in the process of endeavouring to restructure its respective start-up businesses within the existing overall operations that were both acquired in 2019/2020 and subsequently effect by COVID during the last 2 years and also required restructuring of its Ross Diversified division into a more defined water, hydrogen, oil and gas specialist supply chain management and service-providing operation, including, but not limited to, supply chain financing, in addition to its existing Commodity business (including, but not limited to, teak wood and others) Consequently, this division is currently in detailed discussions with two exciting start-up businesses that are wanting to engage in such specialist supply chain management services and related operations. As a result, the Group is therefore currently in the process of implementing and/or amending its specialistic supply chain management protocols, procedures and respective disciplines, in order to put in place a more appropriate robust financial and investment infrastructure through the adoption and application of a more horizontal integrational sub-strategy that will hopefully place the Group to be in a better position so as to try to provide more efficient and successful specialist supply chain management services in the foreseeable future. The Group has also recently extended an invitation to Mr Stephen Johanns to be appointed as a Director-Designate (subject to his formal election approval at the forthcoming 2022 AGM) and believe that his specialist skill set in both the Group's supply chain management services in areas of energy and critical infrastructure, as well as his own expertise in critical mineral supply chain solutions, will help the Group produce some exciting and dynamic opportunities in the near future. As in previous years, whereby we have utilised our specialist supply chain management services in order to sustain our operational overhead, we will also now be endeavouring to explore specifically some strategic specialist supply chain opportunities and in doing we have recently initiated a specific restructuring of Ross Diversified Trading Ltd, a wholly-owned subsidiary of some 30 years, whereby it is envisioned that this division should specifically provide a particular platform for another specialist supply chain related business or businesses. Whilst there has been no revenue during this particular period from any outside third party contracts, it is now the Group's intention to significantly revert and re-implement resources that will enable the Group to grow its global supply chain services and produce a more substantial revenue stream in the future. Business Outlook For the second half of 2022 the Board will continue, along with our team of Advisors and Consultants, to work tirelessly with our specialist supply chain management team in trying to successfully build a business of a specialist supply chain strategy centered around its Standard Incorporate Coding of Mining & Mineral business in order to try and ensure that the Group has a more balanced structure that can allow and enable the exploring other opportunities that may also arise during this uncertain and unique time. The Directors have prepared cashflow forecasts to December 2023. These cashflows have been sensitized to assess the adequacy of cash and funding available should future economic effects of recession and/or inflation impinge the activities of the Group. The directors have also confirmed additional independent financial support should additional resources be required. Based on the sensitivity testing and additional resources available the Directors are satisfied the Group can continue as a going concern for the foreseeable future. Principal Risks and Uncertainties The main risk to the existing operations of the Group is the possibility of depleting necessary working capital in the event of not being able to achieve enough specialist supply chain management service revenues and/or incurring excessive expenses and/or overhead within a viable period of time. The Board is both fully aware of these risks and, as a result, has always endeavoured to managed its cash and cashflow conservatively and prudently; having already ensured that its exposure to any RGP-525 liabilities in this instance are primarily limited to its initial investment. In addition, the Board is equally endeavouring to ensure that funds are being made available to the Group, whilst also exploring other opportunities, specifically in the supply chain of water, hydrogen, oil and gas sectors for future growth. Your Directors are therefore reasonably confident that the Group currently has both the financial resources and capability to fund existing expenses for future specialist supply chain management growth. Dividend No ordinary interim dividend is proposed after considering the result for the first half of the year, and the existing deficiency of retained reserves. I would very much like to thank the members of the Board of Directors, as well as our contractors, consultants and advisors for all their continued, and highly appreciated, support, expertise and hard work. Finally, as always, on behalf of our Board of Directors, I would also like to personally extend my sincere thanks to our extraordinarily loyal and also new shareholders for all their continued confidence, patience and truly exceptional understanding. Sincerely, Barry Richard Pettitt Chairman and Group Managing Director Approved 30 September 2022 CONDENSED CONSOLIDATED INCOME STATEMENT UNAUDITED 6 months 6 months Year ended 30 June ended 30 June ended 31 Dec 2022 2021 2021   £'000   £'000   £'000 Restated Group Revenue - - - Gross Profit - - - Profit / (Loss) before Finance Cost (505) 131 (1,873) Finance Cost 181 216 703 (Loss) before Taxation (686) (85) (2,576) Taxation - - - (Loss) for the Period (686) (85) (2,576) Earnings per share (pence) -0.28 -0.04 -1.11 Diluted earnings per share (pence) -0.22 -0.03 -0.85 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY UNAUDITED Share Capital Accumulated Losses Translation Reserve Other Reserves Restated Restated Balance at 1 Jan 2021 11,218 (39,820) (199) 15,384 (Loss) / Profit for the period - (85) - - Foreign exchange adjustment - - (13) - Total comprehensive income / (deficit) - (85) (212) - Balance at 30 June 2021 11,218 (39,905) (212) 15,384 (Loss) / Profit for the period - (2,491) - - Foreign exchange adjustment - - - - Total comprehensive income / (deficit) - (2,491) - - Share issue 14 - - - Movement on convertible loans - 453 - - Balance at 31 Dec 2021 11,232 (41,943) (212) 15,384 Balance at 1 Jan 2022 11,232 (41,943) (212) 15,384 (Loss) / Profit for the period - (686) - - Foreign exchange adjustment - - (387) - Total comprehensive income / (deficit) - (686) (387) - Share issue 10 - - - Balance at 30 June 2022 11,242 (42,629) (599) 15,384 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION UNAUDITED 6 months 6 months Year Ended ended 30 June ended 30 June 31 Dec 2022 2021 2021 £'000 £'000 £'000 Restated Non Current Assets 53 802 68 Current Assets: Trade and Other Receivables 171 129 117 Cash and Cash Equivalents 12 307 209 183 436 326 Total Assets 236 1,238 394 Equity and Liabilities Shareholders' Equity: Share Capital 11,242 11,218 11,232 Share Premium Account  3,708  3,146  3,540 Other Reserves 15,384 15,384 15,384 Convertible debentures 4,692 5,145 4,692 Translation reserve (599) (212) (212) Retained Earnings   (42,629)   (39,905)   (41,943) Total Equity (8,202) (5,224) (7,307) Non-Current Liabilities: Lease Liabilities 22 28 10 Long Term Borrowings 3,345 2,552 3,003 Provisions 813 - 813 Current Liabilities: Trade and Other Payables 3,673 3,178 3,315 Shareholders funds in advance - 378 - Lease Liabilities 10 35 37 Bank Overdraft and Loans 575 291 523 Total Liabilities 8,438 6,462 7,701 Total Equity and Liabilities 236 1,238 394 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS UNAUDITED 6 months 6 months Year Ended ended 30 June ended 30 June 31 Dec 2022 2021 2021   £'000   £'000   £'000 Net Cash From/(Used In) Operating Activities (661) (281) (885) Net Cash Used In Investing Activities (1) 567 793 Cash Flows From Financing Activities: Amount withdrawn by Directors 35 5 - Issue of ordinary shares 178 - 408 Net Increase/(Decrease) In Borrowings and Lease Liabilities 379 (75) (198) Net Cash Flow From Financing Activities (70) (70) 210 Net Increase/(Decrease) In Cash and Cash Equivalents (197) 216 118 Cash and Cash Equivalent at Beginning of Period 209 91 91 Cash and Cash Equivalent at End of Period 12 307 209 Notes to the Interim Report (1) The financial information contained in these statements for the six months ended 30 June 2022 and 30 June 2021 is unaudited and does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. These statements are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK. The interim financial statements have been prepared on the basis of the accounting policies set out in the audited statutory accounts for the year ended 31 December 2021. The comparative information at 30 June 2021 has been restated as detailed in note 11. (2) Reconciliation of Operating (Loss) / Profit to Net Cash Flows From Operating Activities 6 months 6 months Year Ended ended 30 June ended 30 June 31 Dec 2022 2021 2021   £'000   £'000   £'000 Restated Operating Profit / (Loss) (505) 134 (1,873) Profit on sale of fixed assets - (578) (337) Exchange differences (391) (13) (4) Depreciation and Amortisation 21 260 525 (Increase)/ Decrease In Trade and Other Receivables (18) 135 212 Increase/(Decrease) In Trade and Other Payables 232 (219) 592 Net Cash Generated From/(Used In) Operations (661) (281) (885) (3)  No ordinary interim dividend is proposed for 2022 (2021 - £Nil). (4) The comparative cash flow for the year ended 31 December 2021 has been extracted from the audited accounts. The cash flows for the six months ended 30 June 2021 and 30 June 2022 are unaudited. (5)  Reconciliation of Movements In Equity 6 months 6 months Year Ended ended 30 June ended 30 June 31 Dec 2022 2021 2021   £'000   £'000   £'000 Restated Share Premium Account Brought Forward 3,540 3,146 3,146 Movement 168 - 394 Carried Forward 3,708 3,146 3,540 Other Reserves Brought Forward 15,384 15,384 15,384 Movement - - - Carried Forward 15,384 15,384 15,384 Translation Reserve Brought Forward (212) (199) (199) Foreign exchange adjustment (387) (13) (13) Carried Forward (599) (212) (212) Retained Earnings Brought Forward   (41,943)   (39,820) (39,820) (Loss) / Profit for the Period (686) (85) (2,576) Value of conversion rights on convertible loans - - 453 Carried Forward (42,629) (39,905) (41,943) Convertible Debenture Brought Forward   4,692   5,145 5,145 Movement - - (453) Carried Forward 4,692 5,145 4,692 On 14 June 2022 the company made an announcement to the London Stock Exchange confirming the issue of 9,087,000 shares equivalent to 4% of its existing shareholding at a fixed price of 1.79 pence per new ordinary share. (6)  Non Current Assets Right of use assets Property, Plant & Land & Buildings Equipment Total   £'000   £'000   £'000 Cost At 1 January 2022 138 33 171 Foreign exchange adjustment 4 1 5 Additions - 1 1 At 30 June 2022 142 35 177 Depreciation / Amortisation At 1 January 2022 97 6 103 Charge for the period 18 3 21 On disposals - - - At 30 June 2022 115 9 124 Net Book Value At 30 June 2022 27 26 53 At 1 January 2022 41 27 68 (7)  Current Assets 30 June 31 Dec 30 June 2022 2021 2021 £'000  £'000  £'000 Restated Trade receivables - - - Prepayments and accrued income 11 9 11 Other debtors 62 45 47 Directors loan 98 63 58 Loans to associated undertakings - - 13 171 117 129 Interest is charged on the Directors loan at a commercial rate. (8)  Current Liabilities 30 June 31 Dec 30 June 2022 2021 2021 £'000  £'000  £'000  Restated Trade payables 368 293 245 Other creditors 448 407 496 Accruals and deferred income 210 280 191 Amounts owed to associated undertakings 2,647 2,335 2,246 Lease creditor 10 37 35 Other loans 229 177 - Debentures 346 346 291 Shareholders funds in advance - 378 4,258 3,875 3,882 (9)  Non Current Liabilities 30 June 31 Dec 30 June 2022 2021 2021 £'000  £'000  £'000  Restated Lease creditor 22 10 28 Debentures 1,318 1,256 825 Other loans 2,027 1,747 1,727 Provision 813 813 - 4,180 3,826 2,580 (10) On 27 September 2018 two convertible loan debentures were issued for £4,010,000 and £2,062,172 with a coupon rate of 5%. The loan notes are convertible into Ordinary shares of the parent entity in three years after the date of issue. At the Annual General Meeting on 31 December 2020 it was agreed to extend the conversion period to 26 September 2022. At the Annual General Meeting on 31 December 2021 it was agreed to extend the conversion period to 26 September 2025. The convertible loan debenture will give right to a percentage of the issued share capital of the parent company at the date of conversion. Each tranche of £1 million debenture owed by the long term holders correspond to 4.925% of the issued share capital at the date of conversion, resulting in a fixed percentage of the issued share capital of the company to be allotted to the loan holders regardless of the value / amount of the share capital of the company. 30 June 31 Dec 2022 2021 £'000  £'000  Face value of notes issued 6,072 6,072 Value of conversion rights 4,692 4,692 Convertible loan debenture liability 1,380 1,380 Interest expense recognized in period 61 222 The other loans have been advanced to the company from One World Limited. The funding was provided for a three year period, and interest is charged on these loans at 6%. (11) The Group has restated the condensed consolidated income statement, condensed consolidated statement of financial position, and condensed consolidated statement of changes in equity for 30 June 2021. This is due errors in the accounting treatment for convertible loan debentures, foreign exchange translation and recognition of a Group asset which was not owned by the Group. This has been considered as a prior year error and has been corrected in accordance with IAS 8 (Accounting Policies, Changes in Accounting Estimates and Errors).Further details on the impact of the restatement were included in the financial statements for the year ended 31 December 2021. (12) As no revenue has been generated throughout the group in this period nor the prior period, the Chief Operating Decision Maker believes the information already disclosed in the interim financial statements is adequate to fulfill the requirements of IFRS8 segmental reporting. This will be reconsidered at the year end and in future periods as the group begins to trade. (13) The Interim Report will be sent by mail to all registered shareholders and copies will be available from the Company's registered office at 71-75 Shelton Street, London, WC2H 9JQ. A downloadable copy will also be posted on the Company's website www.ross-group.co.uk Responsibility statement:  The Directors confirm that, to the best of their knowledge: - a) the condensed set of financial statements has been prepared in accordance with International Financial Reporting Standards (IFRS) and IAS 34 'Interim Financial Reporting'; b) the financial statements give a true and fair view of the assets, liabilities, financial position and loss of the group: c) the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and d) the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein). On behalf of the Board B Pettitt  Chief Executive Officer  Ross Group plc Registered Office 71 - 75 Shelton Street London WC2H 9JQ Contact - S Mehta, Non Executive Director Tel. - 07973 848349 Email - [e-mail] Website - www.ross-group.co.uk

 

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