Alina Holdings PLC: Interim Report (30 June 2023)
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Alina Holdings PLC (ALNA)
Alina Holdings PLC
Alina Holdings PLC (Reuters: ALNA.L, Bloomberg: ALNA:LN) ("Alina" or the "Company")
Interim Results for the period ended 30 June 2023
The Company is pleased to announce its results for the six months ended 30 June 2023. The interim results have been submitted to the FCA and will shortly be available on the Company’s website: www.alina-holdings.com Highlights for the 6 months ended 30 June 2023 GROUP RESULTS 1H 2023 versus 1H 2022
Chairman’s Statement Trading update First Half 2023 results were disappointing due to the negative impact of refurbishment delays at the Hastings property and the decline in HEIQ shares. I am confident that once the refurbishment in Hastings is completed that the Company will find a solid tenant for the vacant unit at market rates, above what the previous tenant was paying. Notwithstanding the cyclical nature of all chemical companies, HEIQ’s performance has been more than disappointing, and the suspension of the Company’s shares, due to delayed Audit, is clearly very concerning.
Macro Background/Outlook Western economies are in the eye of the storm, with stock market bulls and bears reacting (read over reacting!) to every snippet of economic news and comment from the FED and the ECB. China’s growth has stalled and the World waits to see what the impact will be on Western inflation and economic growth. Worryingly, inflation in Europe having shown signs of abating, now appears to be on the rise again.
Niall Fergusson, Bloomberg columnist and the Milbank Family Senior Fellow at the Hoover Institution at Stanford University recently wrote…As Humpty Dumpty says to Alice: “When I use a word, it means just what I choose it to mean — neither more nor less.” Inflation has been above target for nearly two and a half years. Whenever it returns to 2%, we’ll be told: “That’s what we meant by transitory!”
The Company’s Board is still in the “Markets are overvalued camp”, and believe that Central Bank fiddling and tinkering will eventually result in the likelihood of stagflation in the UK and Europe and, if they get lucky, only recession in US.
Recessions have a habit of creeping up on one and then falling off a cliff. Past downturns have taken longer than expected to manifest themselves, but when they arrive they invariable bring pain and a dose of sanity back to markets as they adjust to the new “normal”.
Given that the FED and ECB are still way behind the curve, their efforts to curb inflation are, in my opinion, ironically adding to inflation rather than killing it. The outcome will be a slow and painful death probably resulting in a longer recession, rather than the desired short sharp recessions which characterised the past couple of corrections. In our opinion, the current increase in interest rates will severely damage property prices in the US, UK and Europe (the greatest store of personal value for most families), which will ultimately result in a substantial stock market correction … that I and other (older!) participants have alluded to for some time.
Operations Real Estate Hastings: the detection of asbestos in Hastings has delayed the letting of the largest area of the property (nearly 50%). Remediation is, however, now nearing completion and the unit will shortly be available to rent, which should have the dual positive impact of reducing costs (the Company is currently paying rates) whilst also substantially increasing revenues. With regard to the upper floors, planning permission has been applied for, and we are currently awaiting consent from the local council for conversion to mixed residential and commercial use.
Bristol: the local council is currently carrying out recladding to the residential tower, which abuts our retail units. Unfortunately, refurbishment of the adjoining property has been substantially delayed due to the scarcity of replacement cladding.
Staffordshire: the refurbishment of the last unlet unit at Company’s small residential property in Staffordshire is now nearing completion and the property will be put into auction in Q4 2023.
Holdings
https://www.dciadvisorsltd.com/index.html
As at June 30 2023, ALNA owned ~3.2% of DCI Advisors Ltd., which is focused on the development of luxury leisure properties in the Eastern Mediterranean Greece, Cyprus and Croatia).
The company has had a torrid life and has unsuccessfully been trying to wind down its property portfolio and return capital to shareholders for a number of years.
DCI shares are up +15% YTD, in anticipation of the potential sale of Company assets, whilst the share price movement is welcome we are disappointed with the Board’s decision to use debt to fund working capital, which it can neither service nor repay unless the sale of property assets is successfully concluded…in an environment of increasing interest rates.
https://www.heiq.com/investors/
We are decidedly annoyed with the situation at HEIQ. The company’s shares have been suspended since 2 May 2023 due to the company’s inability to file audited accounts for 2022, “as a result of the acquisition and implementation of new systems as well as changes to processes within the organisation. This has impacted the timing of the audit work, in this first year for the company's new auditor, Deloitte”.
In both HEIQ’s RNSs of 27 April 2023 and 2 May 2023 the company stated, “The Directors anticipate that the Company will be in a position to publish the audited report and accounts in the coming weeks.” In its RNS of 2 May 2023, the company stated that “The company will provide further market updates around the expected timing of the annual results publication once its financial reporting and the audit work is sufficiently progressed”. The coming weeks have come and gone, and it is now more than 4 months since HEIQ’s shares were suspended and no further announcements have, to the best of our knowledge, been made which, given the number of acquisitions that the Company has made in the past 18 months, gives us substantial cause for concern.
Conclusion The most recent inflation data might seem to suggest that warnings of a reprise of the 1970s were wrong. The optimists have been in the ascendancy since last spring’s mini-banking crisis. Now, the consensus, with the exception of a few older, maybe wiser heads(?), suggest that the economy can return to the Fed's target of 2% rate of inflation without a recession. Lest we forget, pain-free disinflation was a recurring delusion of the 1970s which suffered painful (Central Bank induced) recessions in 1970, 1974-75 and 1980. As a reminder for those too young to know, or too old to remember, monetary policy acts with long and variable time-lags. The time it takes from the moment the yield curve inverts (as happened in July 2022) to the start of a recession has historically ranged between 4 and 16 months. Higher interest rates impact an economy in multiple complex ways, but ultimately they are bad news for all indebted companies or individuals who need to refinance their liabilities in an environment of rising interest rates.
The idea that the West can recover from the fiscal and monetary excesses of the past twenty years without economic pain seems like wishful thinking…unless, that is, you believe in miracles or fairy tales…which brings us back to Humpty Dumpty and Alice in Wonderland.
Responsibility Statement
We confirm that to the best of our knowledge:
Cautionary statement This Interim Management Report (IMR) has been prepared solely to provide additional information to shareholders to assess the Company’s strategies and the potential for those strategies to succeed. The IMR should not be relied on by any other party or for any other purpose.
Duncan Soukup Chairman Thalassa Holdings Ltd 28 September 2023
Interim Condensed Consolidated Statement of Income For the six months ended 30 June 2023
The notes on pages 13 to 16 form an integral part of this consolidated interim financial information.
For the six months ended 30 June 2023
The notes on pages 13 to 16 form an integral part of this consolidated interim financial information.
As at 30 June 2023
The notes on pages 13 to 16 form an integral part of this consolidated interim financial information. These financial statements were approved by the board on 28 September 2023.
Signed on behalf of the board by:
Duncan Soukup Interim Condensed Consolidated Statement of Cash Flows For the six months ended 30 June 2023
The notes on pages 13 to 16 form an integral part of this consolidated interim financial information.
Interim Condensed Consolidated Statement of Changes in Equity For the six months ended 30 June 2023
The notes on pages 13 to 16 form an integral part of this consolidated interim financial information.
1. General information Alina Holdings PLC (“Alina” or the “Company”) is a company registered on the Main Market of the London Stock Exchange. 2. Significant Accounting policies The Group prepares its accounts in accordance with applicable UK Adopted International Accounting Standards (IFRSs). The accounting policies applied by the Company in this unaudited consolidated interim financial information are the same as those applied by the Company in its consolidated financial statements as at and for the period ended 31 December 2022 except as detailed below. The financial information has been prepared under the historical cost convention, as modified by the accounting standard for financial instruments at fair value. Estimates There are no changes to the estimates since last reporting period. Segmental reporting IFRS 8 requires operating segments to be identified on the basis of internal reports that are regularly reported to the chief operating decision maker to allocate resources to the segments and to assess their performance. Since the strategy review in July 2013 the Group has identified one operation and one reporting segment, being rental income in the UK, which is reported to the Board of directors on a quarterly basis. The Board of directors is considered to be the chief operating decision maker. 2.1. Basis of preparation The condensed consolidated interim financial information for the six months ended 30 June 2023 has been prepared in accordance with International Accounting Standard No. 34, ‘Interim Financial Reporting’. They do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Company as at and for the year ended 31 December 2022. These condensed interim financial statements for the six months ended 30 June 2023 and 30 June 2022 are unaudited and do not constitute full accounts. The comparative figures for the period ended 31 December 2022 are extracted from the 2022 audited financial statements. The independent auditor’s report on the 2022 financial statements was not qualified. All intra-group transactions, balances, income and expenses are eliminated in full on consolidation. 2.2. Going concern The financial information has been prepared on the going concern basis as management consider that the Group has sufficient cash to fund its current commitments for the foreseeable future. 3. Earnings per share
Notes to the Interim Condensed Consolidated Financial Information Continued 4. Investment Properties
The Directors are pleased to announce the completion of sale on 26th April 2023 of the Oldham, Manchester property held for sale as at 31 December 2022.
Notes to the Interim Condensed Consolidated Financial Information Continued 5. Investment Holdings The Group classifies the following financial assets at fair value through profit or loss (FVPL):- Equity investments that are held for trading
Investments have been valued incorporating Level 1 inputs in accordance with IFRS7. They are a combination of cash and securities held with the listed broker. Financial instruments require classification of fair value as determined by reference to the source of inputs used to derive the fair value. This classification uses the following three-level hierarchy: Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 — inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); Level 3 — inputs for the asset or liability that are not based on observable market data (unobservable inputs). For period ending 30 Jun 23, portfolio holdings cash balances have been reclassified to cash and cash equivalents. 6. Lease liabilities
In the above table, interest represents the difference between the carrying amount and the contractual liability/cash flow. All leases expire in more than five years. Notes to the Interim Condensed Consolidated Financial Information Continued 7. Related party balances and transactions As at the period end the Group owed £49,886.70 (December 2022: £17,073, June 2022: £49,303) to Thalassa Holdings Limited (“Thalassa”), a company under common directorship. The balance relates to accounting and registered office services supplied to the Group by Thalassa at cost. The total amount is treated as an unsecured, interest free loan made repayable on demand. During the period the Group accrued £75,755 (December 2022: £155,000, June 2022: £88,887) for consultancy and administrative services provided to the Group by a company in which the Chairman has a beneficial interest. The balance owed by the Group at the period end date was (£33,245) (December 2022: £717, June 2022: £88,887). Athenium Consultancy Ltd, a company in which the Group owns shares invoiced the group for financial and corporate administration services totalling £90,750 for the period (Jun 2022: £82,500).
8. Share capital
During the year to 30 September 2019, the Company underwent a Court approved restructure of capital and buy back of shares. Under this action the issued 20p shares were converted to 1p; capital reserves were transferred to distributable reserves; 59,808,456 shares were repurchased, and a new Capital Redemption Reserve of £0.598m was established. Investment in Own Shares At the year-end, 9,164,017 shares were held in treasury (June 2022: 9,164,017), and at the date of this report 9,164,017 were held in treasury.
9. Subsequent events There were no subsequent events.
10. Copies of the Interim Report The interim report is available on the Company’s website: www.alina-holdings.com. Dissemination of a Regulatory Announcement that contains inside information in accordance with the Market Abuse Regulation (MAR), transmitted by EQS Group. The issuer is solely responsible for the content of this announcement. |
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| ISIN: | GB00B1VS7G47 |
| Category Code: | IR |
| TIDM: | ALNA |
| LEI Code: | 213800SOAIB9JVCV4D57 |
| OAM Categories: | 1.2. Half yearly financial reports and audit reports/limited reviews |
| Sequence No.: | 274694 |
| EQS News ID: | 1737213 |
| End of Announcement | EQS News Service |
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