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Octagonal PLC (OCT)

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Friday 24 November, 2017

Octagonal PLC

Half-year Report

RNS Number : 4024X
Octagonal PLC
24 November 2017
 

24 November 2017

 

Octagonal plc

("Octagonal" or the "Company")

 

Unaudited Half-Year Results for the Six Months to 30 September 2017

 

Octagonal (AIM: OCT), announces its unaudited half-year results for the six months to 30 September 2017

 

Summary of Financial highlights for the six months to 30 September 2017

·     Unaudited revenues increased by 17.4% to £3.3m in the reporting period (September 2016: £2.9m and audited 12 months to 31 March 2017 £5.6m)

·     Synergis Capital Plc, 72.4% owned subsidiary of the Group raised external funding of over £1m during the period.

·     Unaudited adjusted operating profit excluding Synergis Capital plc consolidated costs and like for like basis comparison was £1.5m (2016: £1m and audited 31 March 2017 £1.9m).

·     Unaudited operating profit including additional consolidated cost of £482,000 in relation to the new business start up - Synergis Capital Plc was £1.1m (September 2016: £1.1m and audited 31 March 2017: £1.9m)

·     Net Assets £8.2m (September 2016: £6.1m and 31 March 2017: £6.6m)

·     Cash balance of £5.3m (September 2016: £2.6m and audited 31 March 2017: £3.8m)

 

Interim period trading highlights:

 

·     Cost efficiencies and margin improvement continues within Global Investment Strategy UK Ltd ("GIS") Significant work continues being undertaken to improve processing efficiencies, client reporting and reducing frictional costs; as a result net margins have improved from 40% to 47.5% over the comparable period.

·      Additional services to clients - Asset Management and enhanced FX, Futures and Options trading services made a positive contribution in the period. This continues the Company's strategy of organically growing, offering a broader range of services to clients where it sees long term value.

·      Corporate finance activities made a positive contribution in the period for the first time.

 

 

Business Overview 

 

Trading results

The revenue for the six months to 30 September 2017 from continuing operations was £3.3m (September 2016: £2.9m), a 17.4% increase on a like for like basis. Operating profit amounted to £1.1m with additional consolidated cost of £482,000 in Synergis Capital Plc ("Synergis), compared with £1m in the same period last year. Gross profit margins remain strong at 78% (September 2016: 68%) with operating profit margins reduced to 31% due to the additional consolidated Synergis costs (September 2016: 38%).  

In addition Net assets and Cash rose to £8.2m million (September 2016: £6.1m) and £5.3m (September 2016: £2.6m and audited 31 March 2017: £3.8m), respectively

Included in the operating profit above were consolidated 'PLC' costs for the interim period that remained low at £65,000, and pre revenue start-up cost for Synergis for the period were £482,000.

Synergis Capital Plc is 72.4% owned subsidiary of the group and it raised external funding of over £1m during the period.

 

Board Changes

On 7th June 2017, the Company announced that Grant Roberts, Non Executive Chairman stepped down from the board due to increased demand from his other business commitments and John Gunn was appointed Chairman initially on an interim basis.

 

Other activities post reporting period:

On 31st October 2017, the Company announced that the Court approved the capital reduction of the Company. As a result, all issued deferred shares in the capital of the Company and the Company's share premium account were all cancelled. The effect of these actions had been to eliminate the deficit on distributable reserves enabling the Company to declare dividends.

 

On 21 November 2017, the company announced the soft launch of the "SynerGIS" bond offering through its subsidiary GIS and was available for pre-registration.

 

Dividend 

On 7th November 2017, the Company declared a dividend of 0.1 pence per share payable on 15th December 2017.

 

John Gunn, CEO and Chairman, reports:

 

"This is a good set of results for the half year and this reflects the work done by the team to improve processing efficiencies and increasing margins.

We also managed to improve revenues and profits in spite of the negative impact of a slightly strengthened pound as our revenues are by majority USD and to a lesser extent Euro and GBP denominated.

This was the first time we have seen our corporate finance activities beginning to make a positive contribution to revenues and profits. We will naturally continue to develop these opportunities, although there is no certainty of maintaining these levels of revenue, which were below 10% of total revenues for the period.

Whilst our business remains subject to fluctuations in global markets, we continue to be confident in the outlook for the remainder of the year.

Our application for our Hong Kong license continues and we'll update shareholders when there are meaningful developments.

Finally I am please to announce that the company soft launched the SynerGIS Bond offering inviting depositors to pre register.'

 

 

For further information please visit www.octagonalplc.com or contact:

 

Octagonal Plc

+44 (0) 20 7048 9400

John Gunn, CEO

 

 

 

Beaumont Cornish Limited (Nominated Adviser and Broker)

James Biddle / Roland Cornish

+44 (0) 20 7628 3396

www.beaumontcornish.com

 

 

 

 

Unaudited Group Income Statement and statement of comprehensive income

For the 6 months ended 30 September 2017

 

 

Unaudited

Unaudited

Audited

 

30 September 2017

30 September 2016

31 March 2017

£'000

£'000

£'000

 

 

 

 

Revenue

3,348

2,853

5,596

Cost of sales

(745)

(907)

(1,617)

Gross profit

2,603

1,946

3,979

 

 

 

 

Administrative expenses

(1,556)

(875)

(2,053)

 

 

 

 

Operating profit

1,047

1,071

1,926

 

 

 

 

Other gains and losses

                      -

(168)

(613)

Finance income

-

-

-

Finance costs

                     -

(1)

                    -

 

 

 

 

Profit before tax

1,047

902

1,313

 

 

 

 

Taxation

(220)

(195)

(311)

 

 

 

 

 

 

 

 

Profit for the year

827

707

1,002

 

 

 

 

Attributable to:

 

 

 

Shareholders in the Parent Company

932

707

1,035

Non-controlling Interests

(105)

-

(33)

 

 

 

 

 

827

707

1,002

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted (pence per share)

 

 

 

From continuing and total operations

0.166p

0.126p

0.185p

 

 

 

 

 

 

Unaudited Group Statement of Financial Position

As at 30 September 2017

 

 

 

Un audited

Un audited

Audited

 

 

30 September 2017

30 September 2016

31 March 2017

£'000

£'000

£'000

 

 

 

 

 

Non-Current assets

 

 

 

 

Goodwill

 

2,869

2,869

2,869

Other Intangibles

 

169

 

50

Property, plant and equipment

 

77

66

62

Deferred Tax asset

 

67

-

65

 

 

3,182

2,935

3,046

 

 

 

 

 

Current assets

 

 

 

 

Available for sale investments

 

108

579

126

Trade and other receivables

 

574

644

327

Cash and cash equivalents

 

5,349

2,628

3,813

 

 

6,031

3,851

4,266

TOTAL ASSETS

 

9,213 

6,786 

7,312

 

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

 

309

345

286

Current tax liabilities

 

681

350

389

Borrowings

 

-

-

-

 

 

990

695

675

Non-Current liabilities

 

 

 

 

Borrowings

 

-

 

 

 

 

 

NET ASSETS/(LIABILITIES)

 

8,223

6,091

6,637

 

 

 

 

 

Equity

 

 

 

 

Share capital

 

1,104

1,104

1,104

Share premium account

 

3,669

3,669

3,669

Reverse acquisition reserve

 

679

679

679

Retained earnings

 

2,518

                        639

1,148

Equity attributable to owners of the company

 

7,970

6,091

6,660

Non- Controlling interests

 

253

-

37

 

 

 

 

 

Total Equity

 

8,223

6,091

6,637

 

 

 

 

 

Unaudited Group Statement of Changes in Equity

For the 6 months ended 30 September 2017

 

 

Share capital

Share Premium

Reverse acquisition reserve

Retained earnings

Equity attributable to owners of the Company

Non-controlling interests

Total equity

 

 

 

 

 

 

 

 

 

£'000

£'000

£'000

£'000

£'000

£'000 

£'000

Balance at

1 April 2015

2,613

-

-

(670)

1,943

-

1,943

Proceeds of share issues

43

1,657

-

-

1,700

-

1,700

Share issue costs

-

-97

-

-

(97)

-

(97)

 

 

 

 

 

 

 

 

Balance at

31 March 2016

1,104

3,669

679

(67)

5,385

-

5,385

Adjustment arising from change in non-controlling interest

-

-

-

180

180

70

250

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at

31 March 2017

1,104

3,669

679

1,148

6,600

37

6,637

 

 

 

 

 

 

 

 

Total comprehensive income for the year

-

-

-

932

932

(106)

826

Adjustment arising from change in non-controlling interest

-

-

-

438

438

 322

760

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at

31 March 2017

1,104

3,669

 679

2,329

7,969

254

8,223

 

 

 

 

 

 

 

 

 

 

Unaudited Group Statement of Cash flows

For the 6 months ended 30 September 2017

 

 

Unaudited

Unaudited

Audited

 

30 September 2017

30 September 2016

31 March 2017

 

£'000

£'000

£'000

OPERATING ACTIVITIES

 

 

 

Profit/(loss) for the year before taxation

1,047

902

1,313

Adjusted for:

 

 

 

Finance expense

-

Finance income

-

Depreciation

7

7

21

Investment impairment

18

168

613

 

 

 

 

(Increase)/Decrease in trade and other receivables

(247)

61

167

Increase/(Decrease) in trade and other payables

22

(75)

149

 

 

 

 

Net cash from /(used in) operating activities

(225)

(14)

2,263

Tax paid

 

 

(200)

Net cash used in operating activities

847

1,063

2,063

INVESTING ACTIVITIES

 

 

 

Purchase of property, plant and equipment

(14)

(11)

(28)

Development costs

(119)

 

(50)

Purchase of investments

(50)

Related party repayment of loan

-

25

76

 

 

 

 

Net cash from/(used in) investing activities

(133)

14

(52))

FINANCING ACTIVITIES

 

 

 

Non-controlling interest investment

821

250

Interest paid

-

(1)

-

 

 

 

 

Net cash from/(used in) financing activities

821

(1)

250

Net (decrease)/increase in cash and cash equivalents

1,535

1,076

2,261

Cash and cash equivalents at beginning of year

3,813

1,552

1,552

Cash and cash equivalents at end of year

5,348

2,628

3,813

 

 

 

 

Notes to the interim statement

For the 6 months ended 30 September 2017

 

1. General information

Octagonal plc is a company incorporated in the England and Wales with number 6214926, and whose registered office is: 2nd Floor, 2 London Wall Buildings, London EC2M 5PP, under the Companies Act 2006. The Company's main activity is that of a financial services business offering a wide range of services to institutional, family office and high net worth clients.

The Company's functional currency is Sterling.  The Company's financial statements are presented in Sterling, which is the Company's presentational currency.

 

2. Basis of preparation

The financial information set out in this interim report for the six months ended 30 September 2017 is unaudited and does not constitute statutory accounts as defined in Section 434 of Companies Act (2006).

The Company's statutory financial statements for the period ended 31 March 2017, prepared under IFRS, have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

These financial statements have been prepared on a going concern basis under the historical cost convention. The Directors believe that the going concern basis is appropriate for the preparation of these interim financial statements as the Company is in a position to meet all its liabilities as they fall due. These interim financial statements for the six months to 30 September 2017 were approved by the Board on

22 November 2017.

 

3. Earnings per share

The basic earnings per share is based on the profit for the year divided by the weighted average number of shares in issue during the year. The weighted average number of ordinary shares for the  period ended year ended 30 September 2017 assumes that all shares have been included in the computation based on the weighted average number of days since issue.

 

Unaudited

Unaudited

Audited

 

30 September 2017

£'000

30 September 2016

£'000

31 March 2017

£'000

Profit attributable to owners of the Group

£932,279

£707,000

£1,035,000

Weighted average number of ordinary shares in issue for basic and fully diluted earnings

 560,893,552

 560,226,886

560,226,886

Earnings per share (pence per share)

 

 

 

Basic and fully diluted:

0.166p

0.126p

0.185p

 

 

4. Dividend

On 7th November 2017, the Company declared a dividend of 0.1 pence per share payable on 15th December 2017.

 

5. Distribution

The half yearly report for the six-month period ended 30 September 2017 will shortly be available on the Company's website (www.octagonalplc.com) or directly from the Company at its registered address.

 

-ends-

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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