Interim results for six months ending 30 June 2020
APQ Global Limited
("APQ Global" or the "Company")
Interim results for the period from 1 January 2020 to 30 June 2020
FINANCIAL HIGHLIGHTS
For the six months ended 30 June 2020
Financial highlights
Book Value at 30 June 2020 was $24.8m, a decrease of $48.1m from $72.9m since the start of the period. The term "book value" herein includes the assets of APQ Global Limited and its subsidiaries net of any liabilities. The results include the net assets of the Company and its subsidiaries, presented in US dollars.
Book Value per share in the period decreased by 61.49 from 93.19 to 31.70 cents.
Loss per share for the period were $0.59821 (for the six months ended 30 June 2019 - loss per share was $0.01348).
Dividends paid in GBP totalled 1.50 pence (1.97 cent) per share and were declared and paid during the period as follows:
· 1.50 pence (1.97 cent) per share Ex Dividend 30 January 2020 Paid 2 March 2020
There have been further AIM market trades since 30 June 2020, details of these can be found on the London Stock Exchange website by following the link below. Monthly book values are also made available as they fall due.
|
http://www.londonstockexchange.com/exchange/prices-and-markets/stocks/summary/company-summary/GG00BZ6VP173GGGBXASQ1.html |
For further enquiries, please contact:
APQ Global Limited
Bart Turtelboom - Chief Executive Officer
020 3478 9708
N+1 Singer - Nominated Adviser and Broker
James Maxwell / Justin McKeegan
020 7496 3000
Carey Group - TISE sponsor
Claire Torode
01481 737 279
Buchanan Communication - Financial PR
Charles Ryland / Henry Wilson
020 7466 5000
Notes to Editors
APQ Global Limited
APQ Global (ticker: APQ LN) is a global emerging markets income company with interests across Asia, Latin America, Eastern Europe, the Middle East and Africa. The Company's objective is to steadily grow earnings to deliver attractive returns and capital growth to shareholders. This objective is achieved through a combination of revenue generating operating activities and investing in growing businesses across emerging markets. APQ Global run a well-diversified and liquid portfolio, take strategic stakes in selected businesses and plan to take operational control of companies through the acquisition of minority and majority stakes in companies with a focus on emerging markets.
For more information, please visit apqglobal.com.
Business highlights
On 29 January 2020, the Company entered into an agreement to purchase 100% of the Parish Group Limited ("Parish"), a company incorporated and domiciled in Guernsey. Parish Group Limited is a fiduciary and corporate services provider. In consideration to the sellers for the acquisition:
· The Company paid a net amount of approximately $4,095,630 cash consideration to the Sellers;
· APQ Capital Services Limited, a wholly owned subsidiary of the Company, issued 268,000 Convertible Preference Shares (convertible into ordinary shares in APQ Global) to the Sellers (the "Convertible Preference Shares") at price of $10 per share; and
· The Company issued 1.0 million warrants in APQ Global ("Warrants"), with an exercise price equal to the most recently announced book value per share of 70.94 pence, to the Sellers.
The Convertible Preference Shares are convertible into a variable number of shares linked to the relative assets attributable to the convertible preference shares. On 30 June 2020, the conversion ratio on the Convertible Preference Shares issued by APQ Capital Services was amended to a fixed conversion ratio of 11.25 ordinary shares per convertible preference share. The investment in Parish was made through APQ Corporate Services Limited and is held for the purpose of investment income and capital appreciation. It will therefore be measured at fair value through profit and loss as part of the valuation of APQ Corporate Services Limited. On 10 June 2020, APQ Global appointed Parish Group as its company secretary and changed its registered office to the offices of Parish Group.
On 3 March 2020, the Company entered into an agreement to purchase 100% of the Delphos International, Ltd ("Delphos"), a US based Corporation. In consideration to the shareholders of Delphos for the acquisition, the Company paid an upfront amount of $1.5 million in cash (the "Upfront Payment"). The Company is also required to make an additional payment to clear the working capital of Delphos prior to the acquisition, this amounted to $112,265 In addition to the Upfront Payment, the Company shall potentially make up to three earn-out payments to the Sellers ("Earn-Out Payments"), depending on the levels of EBTDA generated by Delphos for the years ended 30 June 2020 and 30 June 2021, with each payment capped at $0.75 million and a further Earn-Out Payment capped at $0.5 million for the year ended 30 June 2022. In the event that the minimum contingencies applied to the Earn-Out payments are not met, the Company is not required to make any further payments in respect of that Earn-Out period.
On 1 May 2020, the Share purchase agreement for the acquisition of Palladium Trust Services Limited and the affiliated entities was amended so that the residual liability due at this date was derecognised through an immediate settlement of £80k.
On 10 June 2020, APQ Global appointed Parish Group as its company secretary and changed its registered office to the offices of Parish Group.
COVID-19
During the first quarter of 2020, the Company experienced difficult trading conditions in its liquid portfolio due to large market movements in emerging markets currencies, bonds and equities, caused by the COVID-19 pandemic.
During this time, the Company took decisive action to mitigate further risk to its balance sheet, de-risking its portfolio of liquid market securities, with the portfolio as of 31 March 2020 comprising:
• $40.6 million of unencumbered cash;
• $4.3 million of cash equities;
• $1.3 million of cash bonds; and
• $1.3 million of tangible book value in its private direct investments.
The Company has met all its payment obligations to various counterparties and is not in breach of any debt covenants.
Furthermore, with the ongoing uncertainty faced by emerging markets due to COVID-19, the Board has decided to implement the following further cash preservation measures, which are intended to facilitate a smooth recovery:
• Suspension of dividends paid to ordinary shareholders until further notice;
• The management bonus scheme to be cut from 20% of profits to 10%;
• Significant cost reduction across all of the Company; and
• Move to quarterly reporting of key metrics in the Company's income statement and balance sheet, an increase from semi-annually, starting for the reporting period Q2 2020.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
We confirm that to the best of our knowledge:
• the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU and gives a true and fair view of the assets, liabilities, financial position and profit of the group as required by DTR 4.2.4R;
• the half yearly report includes a fair review of the information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial
statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period.
For and on behalf of the Board
Wayne Bulpitt
Chairman, APQ Global Limited
Date: 15 September 2020
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
For the six months ended 30 June 2020
|
|
Note |
For the six months ended 30 June 2020 |
|
For the six months ended 30 June 2019 |
|
|
|
$ |
|
$ |
|
|
|
|
|
|
|
Turnover |
4 |
10,038,801 |
|
6,265,886 |
|
|
|
|
|
|
|
Net loss on financial assets at fair value through profit and loss |
13 |
(58,711,659) |
|
(4,532,368) |
|
|
|
|
|
|
|
Administrative expenses |
5 |
(2,061,620) |
|
(1,706,616) |
|
|
|
|
|
|
|
Operating loss for the period before tax |
|
(50,734,478) |
|
(26,902) |
|
|
|
|
|
|
|
Interest receivable |
8 |
2,515 |
|
350,046 |
|
|
|
|
|
|
|
Finance costs |
9 |
(1,263,074) |
|
(1,135,266) |
|
|
|
|
|
|
|
Net gain on financial liabilities at fair value through profit and loss |
|
570,507 |
|
- |
|
|
|
|
|
|
|
Net foreign exchange gain / (loss) |
|
4,601,598 |
|
(295,569) |
|
|
|
|
|
|
|
Loss on ordinary activities before taxation |
|
(46,822,932) |
|
(1,053,887) |
|
|
|
|
|
|
|
Tax on loss on ordinary activities |
|
- |
|
- |
|
|
|
|
|
|
|
Loss on ordinary activities after taxation for the financial period |
|
(46,822,932) |
|
(1,053,887) |
|
|
|
|
|
|
|
Basic and diluted earnings per share |
10 |
(0.59821) |
|
(0.01348) |
|
|
|
|
|
|
The notes section below form an integral part of the Financial Statements.
There is no other comprehensive income.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)----
As at 30 June 2020
|
|
|
30 June 2020 |
|
31 December 2019 |
|
|
Note |
$ |
|
$ |
|
Assets |
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Property, plant and equipment |
12 |
14,598 |
|
17,670 |
|
Leased assets |
21 |
42,401 |
|
84,802 |
|
Investments |
13 |
59,088,030 |
|
105,414,240 |
|
Total non-current assets |
|
59,145,029 |
|
105,516,712 |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
Trade and other receivables |
14 |
1,018,134 |
|
871,691 |
|
Cash and cash equivalents |
|
643,918 |
|
1,505,234 |
|
Total current assets |
|
1,662,052 |
|
2,376,925 |
|
|
|
|
|
|
|
Total assets |
|
60,807,081 |
|
107,893,637 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Trade and other payables |
15 |
(2,393,245) |
|
(912,783) |
|
Total current liabilities |
|
(2,393,245) |
|
(912,783) |
|
|
|
|
|
|
|
Long term liabilities |
|
|
|
|
|
3.5% Convertible Unsecured Loan Stock |
16 |
(32,250,590) |
|
(34,064,993) |
|
6% Convertible preference shares |
17 |
(1,347,099) |
|
- |
|
Total long-term liabilities |
|
(33,597,689) |
|
(34,064,993) |
|
|
|
|
|
|
|
Net assets |
|
24,816,147 |
|
72,915,861 |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
Share capital |
18 |
99,801,153 |
|
99,733,054 |
|
Equity component of 3.5% Convertible Unsecured Loan Stock |
16 |
6,919,355 |
|
6,919,355 |
|
Equity component of 6% Convertible preference shares |
17 |
100,813 |
|
- |
|
Share based payment reserve |
19 |
287,650 |
|
300,798 |
|
Share warrants reserve |
20 |
107,702 |
|
- |
|
Retained earnings |
|
(77,473,013) |
|
(29,109,833) |
|
Exchange reserve |
|
(4,927,513) |
|
(4,927,513) |
|
|
|
|
|
|
|
Total equity |
|
24,816,147 |
|
72,915,861 |
|
|
|
|
|
|
|
Net asset value per ordinary share |
|
31.70c |
|
93.19c |
The Financial Statements were approved by the Board of Directors of APQ Global Limited and signed on 14 September 2020 on its behalf by:
___________________ ___________________
Bart Turtelboom Wesley Davis
Chief Executive Officer Director
The notes section below form an integral part of the Financial Statements.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
For the six months ended 30 June 2020
|
|
Share capital
$ |
CULS equity component
$ |
Convertible preference shares equity component
$ |
Share warrants
$ |
Other capital reserves
$ |
Retained earnings
$ |
Exchange reserve
$ |
Total
$ |
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2019 |
99,596,856 |
6,919,355 |
- |
- |
264,076 |
(25,409,610) |
(4,927,513) |
76,443,164 |
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income for the period |
|
|
|
|
|
|
|
|
|
Loss for the period |
- |
- |
- |
- |
- |
(1,053,887) |
- |
(1,053,887) |
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period |
99,596,856 |
6,919,355 |
- |
- |
264,076 |
(26,463,497) |
(4,927,513) |
75,389,277 |
|
|
|
|
|
|
|
|
|
|
|
Contributions by and distributions to owners |
|
|
|
|
|
|
|
|
|
Share based payments |
- |
- |
- |
- |
105,846 |
- |
- |
105,846 |
|
Share based payments settled in cash |
- |
- |
- |
- |
(6,736) |
- |
- |
(6,736) |
|
Issue of share awards |
68,098 |
- |
- |
- |
(68,098) |
- |
- |
- |
|
Dividends |
- |
- |
- |
- |
- |
(3,029,052) |
- |
(3,029,052) |
|
|
|
|
|
|
|
|
|
|
|
As at 30 June 2019 |
99,664,954 |
6,919,355 |
- |
- |
295,088 |
(29,492,549) |
(4,927,513) |
72,459,335 |
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
$ |
CULS equity component
$ |
Convertible preference shares equity component
$ |
Share warrants
$ |
Other capital reserves
$ |
Retained earnings
$ |
Exchange reserve
$ |
Total
$ |
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2020 |
99,733,054 |
6,919,355 |
- |
- |
300,798 |
(29,109,833) |
(4,927,513) |
72,915,861 |
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income for the period |
|
|
|
|
|
|
|
|
|
Loss for the period |
- |
- |
- |
- |
- |
(46,822,932) |
- |
(46,822,932) |
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period |
99,733,054 |
6,919,355 |
- |
- |
300,798 |
(75,932,765) |
(4,927,513) |
26,092,929 |
|
|
|
|
|
|
|
|
|
|
|
Contributions by and distributions to owners |
|
|
|
|
|
|
|
|
|
Issue of Share warrants |
- |
- |
- |
107,702 |
- |
- |
- |
107,702 |
|
Adjustment to convertible preference share terms |
- |
- |
100,813 |
- |
- |
- |
- |
100,813 |
|
Share based payments |
- |
- |
- |
- |
61,688 |
- |
- |
61,688 |
|
Share based payments settled in cash |
- |
- |
- |
- |
(6,737) |
- |
- |
(6,737) |
|
Issue of share awards |
68,099 |
- |
- |
- |
(68,099) |
- |
- |
- |
|
Dividends |
- |
- |
- |
- |
- |
(1,540,248) |
- |
(1,540,248) |
|
|
|
|
|
|
|
|
|
|
|
As at 30 June 2020 |
99,801,153 |
6,919,355 |
100,813 |
107,702 |
287,650 |
(77,473,013) |
(4,927,513) |
24,816,147 |
|
|
|
|
|
|
|
|
|
|
The notes section below form an integral part of the Financial Statements.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW (UNAUDITED)
For the six months ended 30 June 2020
|
|
|
For the six months ended 30 June 2020 |
|
For the six months ended 30 June 2019 |
|
|
|
|
|
Restated |
|
Cash flow from operating activities |
Note |
$ |
|
$ |
|
|
|
|
|
|
|
Cash generated from operations |
|
|
|
|
|
Loss for the financial period |
|
(46,822,932) |
|
(1,053,887) |
|
Adjustments for non-cash income and expenses |
|
|
|
|
|
Equity settled share-based payments |
19 |
61,688 |
|
105,846 |
|
Depreciation tangible fixed assets |
12 |
6,858 |
|
6,885 |
|
Depreciation right of use assets |
|
42,401 |
|
41,238 |
|
Net loss on financial assets at fair value through profit and loss |
13 |
58,711,659 |
|
4,532,368 |
|
Net gain on financial liabilities at fair value through profit and loss |
|
(570,507) |
|
- |
|
Net gain on amendment to 6% convertible preference share terms |
|
(661,581) |
|
- |
|
Exchange rate fluctuations |
|
(3,757,891) |
|
(5,912) |
|
Changes in operating assets and liabilities |
|
|
|
|
|
Increase in trade and other receivables |
14 |
(191,814) |
|
(894,705) |
|
Decrease in trade and other payables |
15 |
(38,364) |
|
(134,678) |
|
Decrease in receivables from group undertakings |
14 |
45,371 |
|
- |
|
Decrease in payables from group undertakings |
15 |
(31,361) |
|
- |
|
Cash generated from operations |
|
6,793,527 |
|
2,597,155 |
|
|
|
|
|
|
|
Interest receivable |
8 |
(2,515) |
|
(350,046) |
|
Finance costs |
9 |
1,263,074 |
|
1,135,266 |
|
|
|
|
|
|
|
Net cash inflow from operating activities |
|
8,054,086 |
|
3,382,375 |
|
|
|
|
|
|
|
Cash flow from investing activities |
|
|
|
|
|
Payments to acquire investments |
13 |
(8,009,911) |
|
(237,396) |
|
Payments to acquire property, plant and equipment |
12 |
(3,786) |
|
(3,135) |
|
Interest received |
8 |
2,515 |
|
350,046 |
|
Loan to APQ Cayman Limited |
14 |
- |
|
349,504 |
|
|
|
|
|
|
|
Net cash (outflow)/inflow from investing activities |
|
(8,011,182) |
|
459,019 |
|
|
|
|
|
|
|
Cash flow from financing activities |
|
|
|
|
|
Equity dividends paid |
11 |
(1,540,248) |
|
(3,029,052) |
|
Preference share dividends paid |
9 |
(67,536) |
|
- |
|
Interest on CULS |
16 |
(633,819) |
|
(681,109) |
|
Cash settled share-based payments |
19 |
(6,737) |
|
(6,736) |
|
Payments for lease rental |
21 |
(44,280) |
|
(45,113) |
|
|
|
|
|
|
|
Net cash outflow from financing activities |
|
(2,292,620) |
|
(3,762,010) |
|
|
|
|
|
|
|
Net (decrease) / increase in cash and cash equivalents |
|
(2,249,716) |
|
79,384 |
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period |
|
1,505,234 |
|
511,871 |
|
|
|
|
|
|
|
Exchange rate fluctuations on cash and cash equivalents |
|
1,388,400 |
|
(21,123) |
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
643,918 |
|
570,132 |
|
|
|
For the six months ended 30 June 2020 |
|
For the six months ended 30 June 2019 |
|
|
|
$ |
|
$ |
|
Reconciliation of cash flows to debt |
|
|
|
|
|
Brought forward |
|
34,132,003 |
|
31,834,626 |
|
Cash flows used in servicing interest payments of CULS |
|
(633,819) |
|
(681,109) |
|
Cash flows used in principal payments of lease liabilities |
|
(44,280) |
|
(45,113) |
|
Non cash flows - recognition of lease liability |
|
- |
|
143,850 |
|
Non-cash flows - net impact of recognition of convertible preference shares |
|
1,347,099 |
|
- |
|
Non cash flows - amortisation of discount on CULS issue |
|
1,150,021 |
|
1,135,266 |
|
Non cash flows - amortisation of discount on lease liabilities |
|
2,184 |
|
- |
|
Exchange differences |
|
(2,334,217) |
|
(5,934) |
|
Closing balance |
|
33,618,991 |
|
32,381,586 |
|
|
|
|
|
|
|
Net debt comprises the following: |
|
|
|
|
|
Convertible Unsecured Loan Stock 2024 |
|
32,250,590 |
|
32,257,873 |
|
6% convertible preference shares |
|
1,347,099 |
|
- |
|
Lease liabilities |
|
21,302 |
|
123,713 |
|
|
|
33,618,991 |
|
32,381,586 |
*The cash flow for the six months ended 30 June 2019 has been restated due to an error in the classification of exchange rate differences on CULS, which had been treated as a movement in cash and cash equivalents rather than as a non-cash adjustment to cash generated from operating activities. In addition, the payments to acquire investments was stated gross of the deferred consideration. There has been no change to the Group's overall cash position for the six months ended 30 June 2019.
The notes section below form an integral part of the Financial Statements.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the six months ended 30 June 2020
1. Corporate information
The interim consolidated financial statements of APQ Global Limited (the "Group") for the six months ended 30 June 2020 were authorised for issue in accordance with a resolution of the Board of Directors on 14 September 2020. The Company is incorporated as a limited company in Guernsey. The Company was incorporated on 10 May 2016 for an unlimited duration in accordance with the Companies (Guernsey) Law, 2008 . The Company's registered office is at PO Box 142, The Beehive, Rohais, St Peter Port, Guernsey, GY1 3HT.
The objective of the Company is to steadily grow its earnings to seek to deliver attractive returns and capital growth through a combination of building growing businesses in emerging markets as well as earning revenue from income generating operating activities.
The Company and its subsidiaries have no investment restrictions and no maximum exposure limits will apply to any investments made by the Group, unless otherwise determined and set by the Board from time to time. No material change will be made to the Company's or subsidiaries objective or investing policy without the approval of Shareholders by ordinary resolution.
The Group's investment activities are managed by the Board.
The shares are quoted on The International Stock Exchange for informational purposes. The ordinary shares are admitted to trading on AIM.
2. Significant accounting policies
2.1 Basis of preparation
These interim consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 2019 Annual Report.
Taking account of the financial resources available to the Company, the directors believe that the Company is well placed to manage its business risks successfully despite the current uncertain economic outlook. After making enquiries the directors have a reasonable expectation that the Company has adequate resources for the foreseeable future, a period of not less than twelve months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing the condensed financial statements.
2.2 Basis of accounting
APQ Global Limited has applied the same accounting policies and methods of computation in its interim consolidated financial statements as in its 2019 annual financial statements.
2.3 Functional and presentational currency
The Company's presentational and functional currency is US Dollars.
2.4 Fair value measurement
The Company measures its investments in APQ Cayman Limited, APQ Corporate Services Limited, APQ Knowledge Limited and BARTR Holdings Limited at fair value at each reporting date.
For APQ Cayman Limited this is considered to be the carrying value of the net assets of APQ Cayman Limited. APQ Cayman Limited measures its underlying investments at fair value.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability or, in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible to the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
The fair value for financial instruments traded in active markets at the reporting date is based on their quoted price (bid price for long positions and ask price for short positions), without any deduction for transaction costs.
For all other financial assets, not traded in an active market, including APQ Corporate Services Limited, APQ Knowledge Limited and BARTR Holdings Limited, the fair value is determined by using valuation techniques deemed to be appropriate in the circumstances. These have been determined in accordance with the International Private Equity and Venture Capital Valuation (IPEV) Guidelines. These guidelines require the valuer to make judgements with regards to the most appropriate valuation method to be used and the results and inputs used to determine these valuations. Valuation methods that may be used include:
· The income approach - valuation through discounted cash flow forecast of future cash flows or earnings, using appropriate discount rates.
· The market approach - valuation by comparing the asset being valued to comparable assets for which price information is readily available. This price information can be in the form of transactions that have occurred or market information on companies operating in a similar industry.
· The cost approach - valuation based on the cost of reproducing or replacing the asset being valued.
The use of these guidelines requires management to make judgements in relation to the inputs utilised in preparing these valuations. These include but are not limited to:
· Determination of appropriate comparable assets and benchmarks;
· Future cash flow expectations deriving from these assets;
· Appropriate discount factors to be used in determining the discounted future cash flows; and
· Adjustments required to existing market data to make it more comparable to the asset being valued.
For financial liabilities measured at fair value through profit and loss, including the derivative conversion option on convertible preference shares the Company uses valuation techniques deemed to be appropriate for the type of instrument being valued, incorporating a range of inputs such as conversion date, exercise price on conversion.
For assets and liabilities that are measured at fair value on a recurring basis, the Company identifies transfers between levels in the hierarchy by re-assessing the categorisation (based on the lowest level input that is significant to the fair value measurement as a whole), and deems transfers to have occurred at the beginning of each reporting period.
2.5 6% Convertible preference shares
APQ Capital Services Limited, a subsidiary of the Company, issued 6% convertible preference shares ("CPS"). The CPS contain a perpetual 6% dividend rate and a conversion option for ordinary shares of APQ Global Limited. On initial issue the CPS were recognised as a liability comprising a liability held at amortised cost and a derivative conversion option held at fair value through profit and loss.
At the date of issue, the fair value of the liability component held at amortised cost was estimated by assuming that an equivalent non-convertible obligation of the Company would have a coupon rate of 7.9%. The fair value of the derivative component, containing a variable conversion rate, is derived from the difference between the value of the consideration determined for the acquisition of Parish Group Limited and the fair value assigned to the liability held at amortised cost.
The terms of the CPS were amended on the 30 June 2020, to amend the conversion option to a fixed ratio of CPS to ordinary shares. Subsequent to this amendment to the CPS are regarded as a compound instrument, comprising of a liability component and an equity component. Due to the significant change in the terms of the CPS the initial instrument was derecognised and then recognised at the new fair value. Any gain/loss on the derecognition of the liability is recognised in the statement od comprehensive income.
On amendment, the fair value of the liability component was estimated by assuming that an equivalent non-convertible obligation of the Company would have a coupon rate of 11.9%. The fair value of the equity component was determined in based on the present value of the average gain on conversion based on a range of simulated share prices.
The dividends on the convertible preference shares are taken to the statement of comprehensive income as finance costs.
2.6 Share warrants
Share warrants issued are measured at fair value at the date of issue using the Black-Scholes pricing model, which incorporates certain input assumptions including the warrant price, risk-free interest rate, expected warrant life and expected share price volatility. The fair value is included as a component of equity and is transferred from the share warrant equity reserve to share capital on exercise. If the warrants expire then the fair value is transferred from the share warrant equity reserve to retained earnings.
3. Segment Information
For management purposes, the Group is organised into one main operating segment, which invests in equities and credit, government and local currency bonds. All of the Group's activities are interrelated, and each activity is dependent on the others. Accordingly, all significant operating decisions are based upon analysis of the Group as one segment. The financial results from this segment are equivalent to the financial statements of the Group as a whole.
The following table analyses the Group's assets by geographical location. The basis for attributing the assets are the place of listing for the securities or for non-listed securities, country of domicile.
|
|
|
30 June 2020 |
|
31 December 2019 |
|
Group |
|
$ |
|
$ |
|
|
|
|
|
|
|
Cayman |
|
44,559,266 |
|
102,885,960 |
|
United Kingdom |
|
371,772 |
|
425,085 |
|
Guernsey |
|
15,876,043 |
|
4,582,592 |
|
|
|
|
|
|
|
|
|
60,807,081 |
|
107,893,637 |
4. Analysis of turnover
|
|
|
For the six months ended 30 June 2020 |
|
For the six months ended 30 June 2019 |
|
|
|
$ |
|
$ |
|
|
|
|
|
|
|
Dividends received from APQ Cayman Limited |
|
7,635,275 |
|
5,963,216 |
|
Dividends received from APQ Corporate |
|
989,193 |
|
- |
|
Rental income |
|
- |
|
(674) |
|
Telecommunications minutes income |
|
674,821 |
|
303,344 |
|
Other income from early settlement of deferred compensation |
|
77,931 |
|
- |
|
Other income from amendment to 6% convertible preference share terms |
|
661,581 |
|
- |
|
|
|
|
|
|
|
|
|
10,038,801 |
|
6,265,886 |
5. Analysis of administrative expenses
|
|
|
For the six months ended 30 June 2020 |
|
For the six months ended 30 June 2019 |
|
|
|
|
$ |
|
$ |
|
|
|
|
|
|
|
|
|
Personnel expenses |
|
302,790 |
|
237,051 |
|
|
Depreciation of tangible fixed assets expenses |
|
6,858 |
|
6,885 |
|
|
Depreciation of right of use assets |
|
42,401 |
|
45,168 |
|
|
Audit fees |
|
87,372 |
|
48,350 |
|
|
Audit related services - review of interim financial statements |
|
- |
|
8,273 |
|
|
Auditors remuneration - non audit fees |
|
6,996 |
|
- |
|
|
Nominated advisor fees |
|
31,753 |
|
32,424 |
|
|
Cost of purchasing telecommunications minutes |
|
665,948 |
|
409,168 |
|
|
Expenses incurred in relation to investment in BARTR Holdings Limited |
|
2,463 |
|
189,929 |
|
|
Administration fees and expenses |
|
97,086 |
|
94,035 |
|
|
Director's remuneration |
|
100,948 |
|
114,960 |
|
|
Other expenses |
|
158,762 |
|
191,058 |
|
|
Professional fees |
|
722,266 |
|
389,720 |
|
|
Share based payment expenses |
|
61,688 |
|
105,846 |
|
|
Insurance |
|
5,686 |
|
5,500 |
|
|
Recharge of expenses to APQ Cayman Limited |
|
(231,397) |
|
(171,751) |
|
|
|
|
|
|
|
|
|
|
|
2,061,620 |
|
1,706,616 |
|
6. Director's remuneration
|
|
|
For the six months ended 30 June 2020 |
|
For the six months ended 30 June 2019 |
|
|
|
$ |
|
$ |
|
|
|
|
|
|
|
Director's remuneration |
|
98,940 |
|
112,390 |
|
Share based payment expenses |
|
49,350 |
|
84,677 |
|
Social security costs on director's remuneration |
|
2,008 |
|
2,570 |
|
|
|
|
|
|
|
|
|
150,298 |
|
199,637 |
|
|
|
|
|
|
|
The highest paid director was Bart Turtelboom (2018 - Bart Turtelboom) |
|
79,777 |
|
123,604 |
|
|
|
|
|
|
|
Average number of directors in the year |
|
4 |
|
4 |
|
|
|
|
|
|
7. Personnel expenses
|
|
|
For the six months ended 30 June 2020 |
|
For the six months ended 30 June 2019 |
|
|
|
$ |
|
$ |
|
|
|
|
|
|
|
Short term benefits - wage and salaries |
|
110,933 |
|
111,281 |
|
Short term benefits - social security costs |
|
13,883 |
|
8,773 |
|
Short term benefits - other benefits |
|
173,219 |
|
113,242 |
|
Short term benefits - Share based payment expenses |
|
12,338 |
|
21,169 |
|
Post-employment benefits |
|
4,755 |
|
3,755 |
|
|
|
|
|
|
|
|
|
315,128 |
|
258,220 |
|
|
|
|
|
|
|
Personnel expenses include expenses per note 5 and the portion of share based payments relating to individuals who are not directors of the Company. |
||||
|
|
|
|
|
|
|
Key management personnel expenses, excluding director's remuneration detailed in note 6, is as follows: |
||||
|
|
|
|
|
|
|
Short term benefits - other benefits |
|
169,808 |
|
110,068 |
|
Short term benefits - Share based payment expenses |
|
12,338 |
|
21,169 |
|
|
|
182,146 |
|
131,237 |
8. Interest receivable
|
|
|
For the six months ended 30 June 2020 |
|
For the six months ended 30 June 2019 |
|
|
|
$ |
|
$ |
|
|
|
|
|
|
|
Loan interest receivable from APQ Cayman Limited |
|
- |
|
350,046 |
|
Loan interest receivable from Palladium Trust Services Limited |
|
1,884 |
|
- |
|
Loan interest receivable from New Markets Media & Intelligence Ltd |
|
631 |
|
- |
|
|
|
|
|
|
|
|
|
2,515 |
|
350,046 |
9. Finance costs
|
|
|
For the six months ended 30 June 2020 |
|
For the six months ended 30 June 2019 |
|
|
|
$ |
|
$ |
|
|
|
|
|
|
|
Interest on 3.5% Convertible Unsecured Loan Stock 2024 |
|
1,150,021 |
|
1,135,266 |
|
Discount on unwinding of deferred consideration |
|
43,333 |
|
- |
|
Discount on unwinding of lease liability |
|
2,184 |
|
- |
|
Dividends paid on 6% convertible preference shares |
|
67,536 |
|
- |
|
|
|
|
|
|
|
|
|
1,263,074 |
|
1,135,266 |
10. Earnings Per Share
The basic and diluted earnings per shares are calculated by dividing the profit or loss by the average number of ordinary shares outstanding during the period.
|
|
|
For the six months ended 30 June 2020 |
|
For the six months ended 30 June 2019 |
|
|
|
$ |
|
$ |
|
|
|
|
|
|
|
Total comprehensive income for the period |
|
(46,822,952) |
|
(1,053,887) |
|
Average number of shares in issue |
|
78,271,130 |
|
78,170,417 |
|
|
|
|
|
|
|
Earnings per share |
|
(0.59821) |
|
(0.01348) |
For the current period and prior period, the effect of potentially dilutive instruments in issue are not dilutive as the effect of this dilution would be to decrease the loss per share.
Potentially dilutive instruments in issue
The Group had share awards vested but not yet issued. They would increase the weighted average number of shares by 321,278 (30 June 2019 - 438,106).
The Group has 6,000 (2018 - 6,000) units of Convertible Loan Stock which are potentially dilutive if converted into ordinary shares. This would increase the weighted average number of shares by 6,000 (30 June 2019 - 6,000).
On the 29 January 2020, APQ Global issued 1,000,000 share warrants with an exercise price of 70.94p. The possible impact of this dilution would be to increase the weighted average number of shares by 1,000,000 (30 June 2019 - nil).
On the 29 January 2020, APQ Global issued 268,000 convertible preference shares which were convertible into a variable number of shares linked to the relative assets attributable to the convertible preference shares. On 30 June 2020, the terms of the Convertible preference shares were changed so that they are now convertible into 11.25 ordinary shares per convertible preference share. The possible impact of this dilution would be to increase the weighted average number of shares by 3,015,000 (30 June 2019 - nil).
11. Dividends
Dividends were declared in the period ended 30 June 2020 as follows:
|
|
Ex-dividend date |
Payment date |
Dividend (£) |
Dividend ($) |
Dividend per share (£) |
Dividend per share ($) |
|
|
|
|
|
|
|
|
|
Dividend |
30 January 2020 |
2 March 2020 |
1,174,014 |
1,540,248 |
0.015 |
0.020 |
|
|
|
|
|
|
|
|
|
|
|
|
1,174,014 |
1,540,248 |
0.015 |
0.020 |
The stated dividend policy of the Company is to target an annualised dividend yield of 6% based on the Placing Issue Price. Due to the impact of COVID-19 the Company has ceased all dividends until further notice.
There is no guarantee that any dividends will be paid in respect of any financial period. The ability to pay dividends is dependent on a number of factors including the level of income returns from the Group's investments. There can be no guarantee that the Group will achieve the target rates of return referred to in this document or that it will not sustain any capital losses through its activities.
12. Property, plant and equipment
|
|
Office equipment |
|
Furniture and fixtures |
|
Leasehold improvements |
|
Total |
|
|
$ |
|
$ |
|
$ |
|
$ |
|
Cost |
|
|
|
|
|
|
|
|
At 1 January 2020 |
63,511 |
|
19,352 |
|
34,588 |
|
117,451 |
|
Additions during the period |
3,786 |
|
- |
|
- |
|
3,786 |
|
At 30 June 2020 |
67,297 |
|
19,352 |
|
34,588 |
|
121,237 |
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation |
|
|
|
|
|
|
|
|
At 1 January 2020 |
49,474 |
|
15,719 |
|
34,588 |
|
99,781 |
|
Charge for the period |
5,987 |
|
871 |
|
- |
|
6,858 |
|
At 30 June 2020 |
55,461 |
|
16,590 |
|
34,588 |
|
106,639 |
|
|
|
|
|
|
|
|
|
|
Net book value |
|
|
|
|
|
|
|
|
At 30 June 2020 |
11,836 |
|
2,762 |
|
- |
|
14,598 |
|
|
|
|
|
|
|
|
|
|
At 31 December 2019 |
14,037 |
|
3,633 |
|
- |
|
17,670 |
13. Investments
|
|
Unlisted investments |
|
|
|
|
||||||
|
|
APQ Cayman Limited |
|
APQ Corporate Services Limited |
|
APQ Knowledge Limited |
|
BARTR Holdings Limited |
|
Listed Investments |
|
Total |
|
|
$ |
|
$ |
|
$ |
|
$ |
|
|
|
$ |
|
At 1 January 2020 |
102,885,960 |
|
852,869 |
|
884,668 |
|
790,743 |
|
- |
|
105,414,240 |
|
Additions |
- |
|
10,336,558 |
|
|
|
|
|
2,048,891 |
|
12,385,449 |
|
Fair value movement |
(58,326,693) |
|
(550,000) |
|
- |
|
- |
|
165,034 |
|
(58,711,659) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,559,267 |
|
10,639,427 |
|
884,668 |
|
790,743 |
|
2,213,925 |
|
59,088,030 |
Consolidated investments
APQ Global Limited is the managing partner of APQ Partners LLP whose registered office is at 22-23 Old Burlington Street, London, W1S 2JJ. APQ Partners LLP supports the investment activities of APQ Global Limited and therefore does not meet the requirements of being an investment entity. This subsidiary is consolidated into the group financial statements.
On 31 July 2019, APQ Global Limited incorporated a wholly owned subsidiary, APQ Capital Services Limited, a Company incorporated in Guernsey. The registered address of APQ Capital Services Limited is PO Box 142, The Beehive, Rohais, St Peter Port, Guernsey, GY1 3HT. APQ Capital Services supports the investment activities of APQ Global Limited and therefore does not meet the requirements of being an investment entity. This subsidiary is consolidated into the group financial statements.
Unlisted investments held at fair value through profit and loss
APQ Global Limited wholly owns APQ Cayman Limited whose registered office is at the offices of Mourant Ozannes Corporate Services (Cayman) Limited, 94 Solaris Avenue, Camana Bay, PO Box 1348, Grand Cayman KY1-1108, Cayman Islands. The Company meets the definition of an investment entity. Therefore, APQ Cayman Limited is not consolidated and is recognised as an investment at fair value through profit or loss.
On the 19 November 2018, APQ Global Limited acquired a capital interest represents a 40% shareholding and equivalent voting rights BARTR Holdings Limited, a company incorporated in England and Wales, whose registered office is Tobias House St. Marks Court, Thornaby, Stockton-On-Tees, United Kingdom, TS17 6QW. BARTR Holdings Limited wholly owns two subsidiaries, BARTR Connect Limited, whose registered office is Tobias House St. Marks Court, Thornaby, Stockton-On-Tees United Kingdom, TS17 6QW, and BARTR Technologies Limited, whose registered office is 156 Great Charles Street Queensway, Birmingham, England, B3 3HN. On 19 May 2020, the capital interest was converted from ordinary shares to preference shares which have no voting rights, but preferential dividends and preferential rights on assets on wind up of BARTR Holdings Limited. BARTR Holdings Limited is not consolidated and is recognised as an investment at fair value through profit or loss.
On 10 January 2019, the Company incorporated a wholly owned subsidiary APQ Corporate Services Limited, for the purpose of acting as a holding company for new investments. The registered address of APQ Corporate Services Limited is PO Box 142, The Beehive, Rohais, St Peter Port, Guernsey, GY1 3HT. APQ Corporate Services Limited meets the definition of an investment entity. Therefore, APQ Corporate Services Limited is not consolidated and is recognised as an investment at fair value through profit or loss.
On 21 December 2018, the Group entered into an agreement to purchase 100% of the following 5 entities; Palladium Trust Services Limited, a Company incorporated in England and Wales, Palladium Trust Company (NZ) Limited, a company incorporated and domiciled in New Zealand, Palladium Corporate Service (Singapore) Pte Limited, a company incorporated and domiciled in Singapore, Palladium Finance Group Limited (Seychelles), a company incorporated and domiciled in the Seychelles and Palladium Trust Company (BVI) Limited, a company incorporated and domiciled in the British Virgin Islands. The completion of this purchase was finalised on 22 February 2019. The total consideration of the purchase agreement was $290,518 (£222,500). As at 30 June 2020, $nil is still due with respect to this purchase agreement and is included within deferred consideration in Note 15. All 5 of the entities are 100% owned by APQ Corporate Services Limited. The intention is to hold these investments for the purpose of obtaining investment income and capital appreciation. As their parent company, APQ Corporate Services Limited meets the definition of an investment entity, these entities are not consolidated and are recognised as an investment at fair value through profit or loss as part of the valuation of APQ Corporate Services Limited.
On 1 March 2019, the Company incorporated a wholly owned subsidiary APQ Knowledge Limited also for the purpose of acting as a holding company for new investments. The registered address of APQ Knowledge Limited is PO Box 142, The Beehive, Rohais, St Peter Port, Guernsey, GY1 3HT. APQ Knowledge Limited meets the definition of an investment entity. Therefore, APQ Knowledge Limited is not consolidated and is recognised as an investment at fair value through profit or loss.
On 26 February 2019, the Group entered into an agreement to purchase 100% of Frontier Consultancy Limited, a Company incorporated in England and Wales. Frontier Consultancy Limited changed its name to New Markets Media & Intelligence Ltd on 13 March 2019. The total consideration of the purchase agreement was $613,947 (£463,742). As at 30 June 2020, $249,373 (£201,823) is still due with respect to this purchase agreement and is included within deferred consideration in Note 15. The entity is 100% owned by APQ Knowledge Limited. The intention is to hold this investment for the purpose of obtaining investment income and capital appreciation. As its parent company, APQ Knowledge Limited meets the definition of an investment entity, New Markets Media & Intelligence Ltd is not consolidated and is recognised as an investment at fair value through profit or loss as part of the valuation of APQ Corporate Services Limited.
On 12 April 2019, APQ Corporate Services Limited incorporated a wholly owned subsidiary, GEO Strategic Partners Limited, a Company incorporated in the Isle of Man. The intention is to hold this investment for the purpose of obtaining investment income and capital appreciation. As its parent company, APQ Corporate Services Limited meets the definition of an investment entity, GEO Strategic Partners Limited is not consolidated and is recognised as an investment at fair value through profit or loss as part of the valuation of APQ Corporate Services Limited.
On 31 July 2019, APQ Global Limited incorporated a wholly owned subsidiary, APQ Connect Limited, a Company incorporated in Guernsey. The registered address of APQ Connect Limited is PO Box 142, The Beehive, Rohais, St Peter Port, Guernsey, GY1 3HT.
On 29 January 2020, the Company entered into an agreement to purchase 100% of the Parish Group Limited ("Parish"), a company incorporated and domiciled in Guernsey. Parish Group Limited is a fiduciary and corporate services provider. In consideration to the sellers for the acquisition
· The Company paid a net amount $4,095,630 cash consideration to the Sellers;
· APQ Capital Services Limited, a wholly owned subsidiary of the Company, issued 268,000 Convertible Preference Shares (convertible into ordinary shares in APQ Global) to the Sellers (the "Convertible Preference Shares") at price of $10 per share; and
· The Company issued 1.0 million warrants in APQ Global ("Warrants"), with an exercise price equal to the most recently announced book value per share of 70.94 pence, to the Sellers.
Total consideration is valued at $6,883,332.
The registered address of Parish is PO Box 142, The Beehive, Rohais, St Peter Port, Guernsey, GY1 3HT.The investment in Parish was made through APQ Corporate Services Limited and is held for the purpose of investment income and capital appreciation. It will therefore be measured at fair value through profit and loss as part of the valuation of APQ Corporate Services Limited.
On 3 March 2020, the Company entered into an agreement to purchase 100% of the Delphos International, Ltd ("Delphos"), a US based Corporation. In consideration to the shareholders of Delphos for the acquisition, the Company paid an upfront amount of $1.5 million in cash (the "Upfront Payment"). The Company is also required to make an additional payment to clear the working capital of Delphos prior to the acquisition, this amounted to $112,265 In addition to the Upfront Payment, the Company shall potentially make up to three earn-out payments to the Sellers ("Earn-Out Payments"), depending on the levels of EBTDA generated by Delphos for the years ended 30 June 2020 and 30 June 2021, with each payment capped at $0.75 million and a further Earn-Out Payment capped at $0.5 million for the year ended 30 June 2022. In the event that the minimum contingencies applied to the Earn-Out payments are not met, the Company is not required to make any further payments in respect of that Earn-Out period. The Earn-Out payment with respect to the year ended 30 June 2020 has been paid after the reporting period. Total consideration for the acquisition of Delphos is valued at $3,453,226. Total value of undiscounted future deferred contingent cashflows as at the 30 June 2020 is $2,028,628.
The registered address of Delphos is 2121 K St, NW, Suite 1020, Washington, DC 20037. The investment in Delphos was made through APQ Corporate Services Limited and is held for the purpose of investment income and capital appreciation. It will therefore be measured at fair value through profit and loss as part of the valuation of APQ Corporate Services Limited.
Listed investments held at fair value through profit and loss
The Company has made direct investments in equities that are freely traded on international stock exchanges. These investments are highly liquid.
Valuation techniques
APQ Cayman Limited has a portfolio of tradable assets and liabilities which it values at fair value using the same policies as the Company. The Company is able to redeem its holding of APQ Cayman Limited at its net asset value. Fair value of the investment in APQ Cayman Limited is therefore measured at its Net Asset Value.
The investment in BARTR Holdings Limited was completed on 19 November 2018. Fair value has been determined in relation to the most recent round of fund raising by BARTR Holdings Limited. This is due to BARTR Holdings Limited being a pre-revenue technology start-up company for which other valuation techniques are not appropriate.
The investment in APQ Corporate Services Limited was completed on 10 January 2019. Fair value has been determined through the income approach, incorporating comparison with external sources and the expected cash flows of the investment.
The investment in APQ Knowledge Limited was completed on 1 March 2019. Fair value has been determined through the income approach, incorporating comparison with external sources and the expected cash flows of the investment.
Listed investments are measured at fair value using the current market price for the underlying equity as quoted on the applicable stock exchange the security is traded on.
Fair value hierarchy
The Company classifies its investments into the three levels of the fair value hierarchy based on:
Level 1: Quoted prices in active markets for identical assets or liabilities;
Level 2: Those involving inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices); and
Level 3: Those with inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The Company has classified its investments in APQ Cayman Limited, BARTR Holdings Limited, APQ Corporate Services Limited and APQ Knowledge Limited as level 3 as the inputs utilised in valuing the investments are deemed to be unobservable. The most significant unobservable input used in the fair value of the investment in APQ Cayman is the NAV. The most significant unobservable input used in the fair value of the investments in BARTR Holdings Limited is the most recent funding raised by BARTR Holdings Limited. The most significant unobservable input used in the fair value of the investments in APQ Corporate Services Limited and APQ Knowledge Limited are the future expected cash flows of the investments, used in deriving a valuation using discounted cash flows. The movement in the investments in the year are shown above.
The listed investments are designated as Level 1 instruments in the fair value hierarchy as fair value can be determined by the quoted market price for these assets.
The movement of investments classified by level is as per the below. There have been no transfers between levels.
|
|
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
|
|
|
$ |
|
$ |
|
|
|
$ |
|
At 1 January 2020 |
|
- |
|
- |
|
105,414,240 |
|
105,414,240 |
|
Additions |
|
2,048,891 |
|
- |
|
10,336,558 |
|
12,385,449 |
|
Fair value movement |
|
165,034 |
|
- |
|
(58,876,693) |
|
(58,711,659) |
|
|
|
|
|
|
|
|
|
|
|
|
|
2,213,925 |
|
- |
|
56,874,105 |
|
59,088,030 |
14. Trade and other receivables
|
|
|
|
|
|
30 June 2020 |
|
31 December 2019 |
|
|
|
|
|
|
$ |
|
$ |
|
|
|
|
|
|
|
|
|
|
Trade debtors |
|
|
|
|
76,423 |
|
68,581 |
|
Amounts due from group undertakings |
|
|
|
|
236,118 |
|
281,489 |
|
Prepayments and accrued income |
|
|
|
|
668,224 |
|
466,914 |
|
Other debtors |
|
|
|
|
37,369 |
|
54,707 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,018,134 |
|
871,691 |
|
|
|
|
|
|
|
|
|
15. Trade and other payables
|
|
|
|
|
|
30 June 2020 |
|
31 December 2019 |
|
|
|
|
|
|
|
$ |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
Trade creditors |
|
|
|
|
78,847 |
|
75,260 |
|
|
Other creditors |
|
|
|
|
20,341 |
|
1,960 |
|
|
Amounts due to group undertakings |
|
|
|
|
30,048 |
|
61,409 |
|
|
Accruals |
|
|
|
|
80,413 |
|
140,745 |
|
|
Lease liability |
|
|
|
|
21,302 |
|
67,010 |
|
|
Deferred consideration |
|
|
|
|
2,162,294 |
|
566,399 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,393,245 |
|
912,783 |
|
16. 3.5% Convertible Unsecured Loan Stock 2024
|
|
Nominal number of CULS |
|
Liability component |
|
Equity component |
|
|
$ |
|
$ |
|
$ |
|
|
|
|
|
|
|
|
As at 1 January 2020 |
41,446,167 |
|
34,064,993 |
|
6,919,355 |
|
Amortisation of discount on issue and issue expenses |
- |
|
1,150,021 |
|
- |
|
Interest paid during the period |
- |
|
(633,819) |
|
- |
|
Exchange differences |
- |
|
(2,330,605) |
|
- |
|
|
|
|
|
|
|
|
As at 30 June 2020 |
41,446,167 |
|
32,250,590 |
|
6,919,355 |
At an Extraordinary General Meeting held on 4 September 2017, Resolutions were passed approving the issue of 4,018 3.5 per cent. convertible unsecured loan stock 2024 ("CULS") to raise £20,090,000 before expenses. The CULS were admitted to trading on the International Securities Market, the London Stock Exchange's market for fixed income securities and dealings commenced at 8.00 a.m. on 5 September 2017.
Following Admission there were 4,018 CULS in issue. Holders of the CULS are entitled to convert their CULS into Ordinary Shares on a quarterly basis throughout the life of the CULS, commencing 31 December 2017, and all outstanding CULS will be repayable at par (plus any accrued interest) on 30 September 2024. The initial conversion price is 105.358 pence, being a 10 per cent. premium to the unaudited Book Value per Ordinary Share on 31 July 2017. Following conversion of 80 per cent. or more of the nominal amount of the CULS originally issued, the Company will be entitled to require remaining CULS Holders to convert their outstanding CULS into Ordinary Shares after they have been given an opportunity to have their CULS redeemed.
On 22 January 2018, the Company raised a further £10,207,300 ($14,492,418) before expenses through the issue of 1,982 units of 3.5 per cent. convertible unsecured loan stock 2024 in denominations of £5,000 ($7,099) nominal each, at an issue price of £5,150 ($7,312) per unit.
17. 6% convertible preference shares
|
|
Nominal number of preference shares |
|
Liability held at amortised cost |
|
Liability held at fair value through profit and loss |
|
Equity component |
|
|
$ |
|
$ |
|
$ |
|
$ |
|
|
|
|
|
|
|
|
|
|
As at 1 January 2020 |
- |
|
- |
|
- |
|
- |
|
Preference shares issued during the acquisition of Parish |
268,000 |
|
2,026,016 |
|
653,984 |
|
- |
|
Fair value movement on derivative component |
- |
|
- |
|
(570,507) |
|
- |
|
Derecognition on amendment to conversion terms |
- |
|
(2,026,016) |
|
(83,477) |
|
- |
|
Recognition following the amendment to conversion terms |
- |
|
1,347,099 |
|
- |
|
100,813 |
|
|
|
|
|
|
|
|
|
|
As at 30 June 2020 |
268,000 |
|
1,347,099 |
|
- |
|
100,813 |
On the 29 January 2020, APQ Capital Services Limited, a subsidiary of APQ Global, issued 268,000 convertible preference shares at a value of $10 per share, which were convertible into a variable number of shares linked to the relative assets attributable to the convertible preference shares. These convertible preference shares were admitted to trading on The International Stock Exchange on 30th January 2020
The conversion option into a variable number of shares was identified as a derivative option which was designated at fair value through profit and loss. This instrument was designated as a Level 3 in accordance with the fair value hierarchy as per Note 13. Fair value has been determined in conjunction with a third party valuation firm, using forecasting of the share price at the date the conversion option is exercised. The following assumptions were used in the calculation of the value of the derivative option:
|
|
|
Assumptions |
|
|
|
|
|
Implicit interest rate |
|
7.9% |
|
Duration |
|
7 years |
On 30 June 2020, the terms of the Convertible preference shares were changed so that they are now convertible into 11.25 ordinary shares per convertible preference share. The fair value of the convertible preference shares was remeasured at this date and the previously recognised carrying values of these convertible preference shares were derecognised. Fair value was remeasured using the following assumptions:
|
|
|
Assumptions |
|
|
|
|
|
Implicit interest rate |
|
11.9% |
|
Duration |
|
6.6 years |
18. Share Capital
The issued share capital of the Company is 78,294,203 ordinary shares of no par value listed on The International Stock Exchange and AIM.
Quantitative information about the Company's capital is provided in the statement of changes in equity and in the tables below.
The shares are entitled to dividends when declared and to payment of a proportionate share of the Companies net asset value on any approved redemption date or upon winding up of the Company.
The Company's objectives for managing capital are:
• To invest the capital in investments meeting the description, risk exposure and expected return indicated in its listing documents.
• To maintain sufficient liquidity to meet the expenses of the Company, pay dividends and to meet redemption requests as they arise.
• To maintain sufficient size to make the operation of the Company cost-efficient.
• The Board has authority to purchase up to 14.99 per cent. of the issued Ordinary Share capital of the Company. The Board intends to seek a renewal of this authority at each annual general meeting of the Company. No buy backs occurred during the period under review.
|
|
Ordinary shares |
|
|
|
|
|
|
No |
|
£ |
|
$ |
|
|
|
|
|
|
|
|
As at 1 January 2020 |
78,241,047 |
|
76,797,815 |
|
99,733,054 |
|
|
|
|
|
|
|
|
Shares issued from share awards during the period |
53,156 |
|
50,340 |
|
68,099 |
|
|
|
|
|
|
|
|
At 30 June 2020 |
78,294,203 |
|
76,848,155 |
|
99,801,153 |
During the period ended 30 June 2020, 53,156 (period ended 30 June 2019 - 53,156) shares were issued as part of the share award scheme as detailed in note 19.
19. Share awards
On 19 April 2017 (and amended 17 July 2018), the Company established a share award scheme for the employees of the Company. The scheme grants the Board the authority to allot share awards or share options with service conditions attached. Share awards or options can only be awarded for performance periods whereby the book value per share (excluding dividend transactions) exceeds the book value per share for all previous performance period ends. The maximum amount of share awards or options is determined by reference to 20% of the increased performance of the current book value per share against all previous performance periods. The Board retains the right to settle these awards in either shares or cash.
The first share awards were granted in 2018 with respect to the performance period ended 31 December 2017.
|
Grant date |
|
Type of award |
|
No. of instruments |
|
Fair value of instrument granted pence |
|
Vesting conditions |
|
Final vesting date |
|
|
|
|
|
|
|
|
|
|
|
|
|
1 January 2018 |
|
Shares |
|
584,141 |
|
128.11 |
|
Awards vest quarterly over 5 years provided the employee is still in service of the Group. |
|
31 December 2022 |
|
|
|
2020 |
|
2019 |
||||
|
|
|
Number of awards |
|
Weighted average of fair value of instrument |
|
Number of awards |
|
Weighted average of fair value of instrument |
|
|
|
|
|
cents |
|
|
|
cents |
|
|
|
|
|
|
|
|
|
|
|
Outstanding at 1 January |
|
379,692 |
|
128.11 |
|
496,520 |
|
- |
|
Settled in equity |
|
(53,156) |
|
128.11 |
|
(53,156) |
|
128.11 |
|
Settled in cash |
|
(5,258) |
|
128.11 |
|
(5,258) |
|
128.11 |
|
Outstanding at 30 June |
|
321,278 |
|
128.11 |
|
438,106 |
|
128.11 |
|
|
|
|
|
Charge for awards to be settled in Equity |
|
Charge for awards settled in Cash |
|
Total charge for share based awards |
|
|
|
|
|
$ |
|
$ |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
Period ended 30 June 2019 |
|
|
|
99,110 |
|
6,736 |
|
105,846 |
|
|
|
|
|
|
|
|
|
|
|
Period ended 30 June 2020 |
|
|
|
54,951 |
|
6,737 |
|
61,688 |
The unvested portion of the share awards currently granted is $123,937 (At 30 June 2019 - $266,169). Of the awards outstanding the number vested that are available for settlement amount to 29,207 (At 30 June 2019 - 29,207)
20. Share warrants
On 29 January, the Company issued 1,000,000 warrants as part of the acquisition of Parish Group Limited. The fair value of the warrants issued as part of the consideration for this investment was determined using the Black Scholes option pricing model. The assumptions used in the valuation are as follows:
|
|
|
Assumptions |
|
|
|
|
|
Share price on issue (cents) |
|
68.50 |
|
Exercise price of share warrants (cents) |
|
70.94 |
|
Volatility |
|
10.45% |
|
Duration |
|
6.6 years |
|
Risk free rate |
|
1.00% |
|
Dividend yield |
|
0.00% |
|
Issue date |
|
Warrants outstanding at 1 January 2020 |
Warrants issued in the period |
Warrants exercised in the period |
Warrants lapsed in the period |
Warrants outstanding at 30 June 2020 |
Exercise price cents |
Expiry Date |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29 January 2020 |
|
- |
1,000,000 |
- |
- |
1,000,000 |
70.94 |
30 August 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
1,000,000 |
- |
- |
1,000,000 |
|
|
The weighted average remaining life of the warrants outstanding is 6.2 years
21. Leases
Finance lease commitments
The Company's subsidiary, APQ Partners LLP, leases rental space and information with regards to this lease is outlined below:
|
|
|
|
|
|
|
Rental lease asset |
|
|
|
$ |
|
|
|
|
|
|
|
Leased asset on 1 January 2020 |
|
|
|
84,802 |
|
Depreciation for the period |
|
|
|
(42,401) |
|
|
|
|
|
|
|
At 30 June 2020 |
|
|
|
42,401 |
|
Rental lease liability |
|
|
|
30 June 2020 |
|
|
|
|
|
$ |
|
|
|
|
|
|
|
Lease asset on 1 January 2020 |
|
|
|
67,010 |
|
Unwinding discount on lease liability |
|
|
|
2,184 |
|
Payments for lease |
|
|
|
(44,280) |
|
Exchange differences |
|
|
|
(3,612) |
|
|
|
|
|
|
|
At 30 June 2020 |
|
|
|
21,302 |
22. Capital Management
The Group can raise new capital which may be implemented through the issue of a convertible debt instrument or such other form of equity or debt as may be appropriate. It also has a buy-back authority subject to a maximum buy-back of 14.99 per cent of the issued Ordinary Shares.
The Group's objectives for managing capital are:
• To invest the capital into investments through its subsidiary, APQ Cayman Limited.
• To maintain sufficient liquidity to meet the expenses of the Group and pay dividends.
• To maintain sufficient size to make the operation of the Group cost-effective.
The Group may utilise borrowings in connection with its business activities. Although there is no prescribed limit in the Articles or elsewhere on the amount of borrowings that the Group may incur, the Directors will adopt a prudent borrowing policy and oversee the level and term of any borrowings of the Group and will review the position on a regular basis.
The Group's capital comprises:
|
|
|
30 June 2020 |
|
31 December 2019 |
|
|
|
$ |
|
$ |
|
|
|
|
|
|
|
Share capital |
|
99,801,153 |
|
99,733,054 |
|
Preference shares |
|
100,813 |
|
- |
|
Equity component of 3.5% Convertible Unsecured Loan Stock 2024 |
|
6,919,355 |
|
6,919,355 |
|
Other capital reserves |
|
395,352 |
|
300,798 |
|
Retained earnings |
|
(77,473,013) |
|
(29,109,833) |
|
Exchange reserve |
|
(4,927,513) |
|
(4,927,513) |
|
|
|
|
|
|
|
Total shareholders' funds |
|
24,816,147 |
|
72,915,861 |
23. Related party transactions
Wayne Bulpitt founded the Active Group; he is also a shareholder of the Company.
Bart Turtelboom founded APQ Partners LLP and is also a director of APQ Cayman Limited as well as the largest shareholder of the Company.
The Directors are remunerated from the Company in the form of fees, payable monthly in arrears. Bart Turtelboom was entitled to an annual salary of £120,000 as Chief Executive Officer of the Company. From 1 April 2018 this was split between the Company and APQ Cayman Limited.
|
|
|
APQ Global Limited - Remuneration |
|
APQ Global Limited - Share based remuneration |
|
APQ Cayman Limited - Remuneration |
|
Total |
||||||||
|
|
|
$ |
|
$ |
|
$ |
|
$ |
||||||||
|
|
|
For the six months ended 30 June 2020 |
|
For the six months ended 30 June 2019 |
|
For the six months ended 30 June 2020 |
|
For the six months ended 30 June 2019 |
|
For the six months ended 30 June 2020 |
|
For the six months ended 30 June 2019 |
|
For the six months ended 30 June 2020 |
|
For the six months ended 30 June 2019 |
|
Bart Turtelboom |
Chief Executive Officer |
30,427 |
|
38,927 |
|
49,350 |
|
84,677 |
|
45,256 |
|
38,927 |
|
125,033 |
|
162,531 |
|
Wayne Bulpitt |
Non-Executive Chairman |
25,226 |
|
26,130 |
|
- |
|
- |
|
- |
|
- |
|
25,226 |
|
26,130 |
|
Wesley Davis |
Executive Director |
32,250 |
|
36,000 |
|
- |
|
- |
|
32,250 |
|
36,000 |
|
64,500 |
|
72,000 |
|
Philip Soulsby |
Non-Executive Director |
11,037 |
|
11,333 |
|
- |
|
- |
|
- |
|
- |
|
11,037 |
|
11,333 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
98,940 |
|
112,390 |
|
49,350 |
|
84,677 |
|
77,506 |
|
74,927 |
|
225,796 |
|
271,994 |
APQ Global Limited has incurred $31,898 (six months ended 30 June 2019 - $47,397) of fees and expenses to Active Services (Guernsey) Limited as administrator of the Company. As at 30 June 2020, APQ Global Limited owed $24,177 to Active Services (Guernsey) Limited (31 December 2019 - $21,677).
On 10 June 2020, the Company changed its administrator from Active Services (Guernsey) to Parish Group Limited, a wholly owned subsidiary of APQ Global Limited. APQ Global Limited has incurred $9,082 (six months ended 30 June 2019 - $nil) of fees and expenses to Parish Group Limited as administrator of the Company. As at 30 June 2020 the balance owed to Parish Group Limited was $nil (31 December 2019 - $nil).
As described in the Listing Document, and under the terms of the Services Agreement, APQ Partners LLP assist the Board and the Group's management based in Guernsey with the implementation of its business strategy, provide research on business opportunities in emerging markets and provide support for cash management and risk management purposes. APQ Partners LLP are entitled to the reimbursement of expenses properly incurred on behalf of APQ Global Limited in connection with the provision of its services pursuant to the agreement. APQ Partners LLP has recharged expenses of $213,638 (six months ended 30 June 2019 - $208,835) to APQ Global Limited during the period. As at 30 June 2020, APQ Global Limited was owed $152,650 from APQ Partners LLP (31 December 2019 - $142,010). In both the current and prior period amounts have been eliminated on consolidation.
During the period, the Group recharged expenses to APQ Cayman Limited of $250,318 (six months ended 30 June 2019 - $191,215) and was recharged expenses of $18,921 (six months ended 30 June 2019 - $19,463) from APQ Cayman Limited. During the six months ended 30 June 2019, the Company converted the $33,372,357 loan it had outstanding with APQ Cayman Limited, for which it had charged interest of $350,046 in that period. As at 30 June 2020, $38,761 (31 December 2019 - $29,418) was due from APQ Cayman Limited.
During the period, APQ Global Limited provided $nil (six months ended 30 June 2019 - $210,000) to BARTR Connect Limited in the context of an investment in BARTR Holdings Limited, an entity over which the Company has significant influence. At 30 June 2020, $nil (31 December 2019 - $nil) was due to BARTR Connect Limited.
During the period, APQ Global Limited provided funding of $nil (six months ended 30 June 2019 - $144,464) to APQ Corporate Services Limited during the period. As at 30 June 2020, $500,000 (31 December 2019 - $144,464) was due from APQ Corporate Services Limited.
During the period, APQ Global Limited paid expenses on behalf of APQ Connect Limited amounting to $101,933 (six months ended 30 June 2019 - $nil). As at 30 June 2020, $198,128 (31 December 2019 - $96,195) was due from APQ Connect Limited.
During the period, APQ Global Limited paid $67,536 (six months ended 30 June 2019 - $nil) as dividends to the holders of the convertible preference shares on behalf of APQ Capital Services Limited.
In 2019, APQ Global provided a loan to Palladium Trust Services Limited, a group undertaking, of $37,431. In addition, the loan attracts interest at a rate of 10%. During the period, APQ Global charged interest of $1,884 (six months ended 30 June 2019 - $nil). As at 30 June 2020, APQ Global Limited was owed $37,990 (31 December 2019 - $40,831) from Palladium Trust Services Limited.
In 2019, APQ Global Limited provided a loan to New Markets Media & Intelligence Ltd, of $24,299. In addition, the loan attracts interest at a rate of 10%. During the period, APQ Global Limited charges interest of $631 (six months ended 30 June 2019 - $nil). The loan has been fully repaid in the period. As at 30 June 2020 APQ Global Limited owed $30,048 (31 December 2019 - $1,960) to New Markets Media & Intelligence Ltd.
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