Half-yearly Report

Anglo African Agriculture plc                                                                                     

Half yearly report for the six months ended 30 April 2015

The Chairman’s Report

The board of AAA is very aware that the environment for the whole Natural Resources sector, which includes Agriculture, has been extremely tough over the last three years. To that end we are pleased that we have not trodden upon a mine field and lost shareholder value over the least three years unlike many other companies. We are also aware though that most shareholders invested in us three years ago to develop and grow an African agricultural company and our growth has been limited to only one acquisition, Dynamic Intertrade. This business we believe has good growth potential but is small as a standalone business. We have also not been able to expand it with our own resources as much as we wanted. Much of the reason for this is the additional costs we have incurred in order to move to a standard listing on the Main Market of the London Stock Exchange.  Many of these costs were unexpected as in recent years’ regulation for small companies has intensified and pushed up costs particularly for those companies that bear them disproportionately. We have made the move though as we know liquidity is important both for shareholders but also to grow and we believe the main market will give us this.

The Board continues to review acquisitions and joint ventures. Our one over-riding principle is to create value for shareholders and not to enter into a bad deal.

The recent collapse in our share price, the day before we were originally due to list, was disappointing as we believe it reflected a lack of liquidity in our equity (which we are trying to resolve) rather than the performance of the business. This does make any corporate transaction harder and potentially reduces the long term value that can be achieved. The fall occurred despite minimum trading volume. As I have said the Board acknowledges that it needs to create liquidity and this is why we have moved to the Main Market. The Board is also considering other ways to create liquidity. 

The last 6 months have also been a busy period for the Company operationally as we moved our spice processing business to Cape Town, whilst maintaining the Guar process business in Brits and giving it room to expand. The move to Cape Town has incurred costs but we expect these to be recouped quickly due to lower transportation costs by being closer to a port and many of our customers. The new premises have also allowed us to install a steam steriliser which is now required by our customers and also we hope to be FSSC certified (Food Safety Systems Certificate) by the autumn which again is being required by customers. This would put us in line with full international standards that are required globally.

The weakness of the Rand against a strong sterling has not been helpful but potentially will encourage trade overseas and we have seen more interest for our birds eye chillies from the UK.

Results for the period

The loss for the 6 month period to 30 April 2015 was £99.6k and includes an exchange loss of £27k resulting from the foreign currency loans held by Dynamic. The business remains seasonal with higher turnover being generated in the second half of the year. This factor, along with the commissioning of the steam steriliser, should yield a more positive result by the year end.

Comparative data

The comparative data presented in this report is not directly comparable with the 6 months to 30 April 2015 as the full year to 31 October 2014 included the consolidated results for only 4 months of that year from the point that the investment in Dynamic Intertrade increased to 100%.  The 6 months to 30 April 2014 represented only the holding company accounts.

Looking forward

The strategy implemented by the directors has allowed the group to establish a strong platform to develop and grow the business.   

Andrew Monk

Non Executive Chairman

17 August 2015

FOR FURTHER INFORMATION PLEASE CONTACT:

Anglo African Agriculture plc

Andrew Monk, Chairman

Tel: [phone]

VSA Capital Limited

Andrew Raca

Richard Buckle

Tel [phone]

Consolidated Statement of Comprehensive Income

	6 months Ended 30 April 2015	Year Ended 31 October 2014	6 months Ended 30 April 2014
	£	£	£
Turnover	684,985	865,985	-
Cost of Sales	(468,162)	(583,751)	-
Gross Profit	216,823	282,234	-
Other Income	607	15,856	-
Finance Costs	-	(5,698)	-
Administrative expenses	(321,221)	(646,187)	(103,180)
Operating loss	(103,791)	(353,795)	(103,180)
Bank Interest Receivable	4,156	286	6,000
Loss before taxation	(99,635)	(353,509)	(97,180)
Tax on loss on ordinary activities	-	-	-
Loss and total comprehensive income for the period.	(99,635)	(353,509)	(97,180)
Basic and diluted earnings per share	(0.11p)	(0.44p)	(0.13p)

Since there is no other comprehensive loss, the loss for the period is the same as the total comprehensive loss for the period attributable to the owners of the Group.

Consolidated Statement of Changes In Equity

For the 6 month period to 30 April 2015

	Share Capital	Share Premium	Retained Earnings	Share Based Payments Reserve	Total Equity
	£	£	£	£	£
Balance at 1 November 2014	94,896	1,107,373	(474,701)	16,369	743,937
Loss for the period			(99,635)		(99,635)
Balance at 30 April 2015	94,896	1,107,373	(574,336)	16,369	644,302

Retained losses represent the cumulative loss of the Group attributable to equity shareholders.

Share-based payments reserve relate to the charge for share-based payments in accordance with IFRS 2.

Consolidated Statement of the Financial Position

	30 April 2015	31 October 2014	30 April 2014
	£	£	£
Assets
Non-Current Assets
Investment	8,601	8,864	84,915
Other Financial Assets	2,675	7,875	-
Loan to Joint Venture	93,877	94,431	-
Property, Plant and Equipment	44,574	41,759	-
Goodwill on Consolidation	226,644	226,644	-
	376,371	379,573	84,915
Current assets
Inventories	387,996	380,911
Trade and Other Receivables	171,279	483,821	456,000
Cash and Cash Equivalents	73,838	90,456	151,144
	633,113	955,188	607,144
Total Assets	1,009,484	1,334,761	692,059
Equity and Liabilities
Share Capital	94,896	94,896	76,014
Share Premium Account	1,107,373	1,107,373	741,916
Share-Based Payments Reserve	16,369	16,369	16,369
Retained Earnings	(574,336)	(474,701)	(218,240)
Total Equity	644,302	743,937	616,059
Current Liabilities
Trade and Other Payables	365,182	590,824	76,000
Total Liabilities	365,182	590,824	76,000
Total Equity and Liabilities	1,009,484	1,334,761	692,059

Consolidated Cash Flow Statement

	6 Months Ended 30 April 2015	Year Ended 31 October 2014	6 Months Ended 30 April 2014
	£	£	£
Cash flows from operating activities
Operating loss	(103,791)	(353,795)	(103,180)
Add: Depreciation	6,832	4,582	-
Foreign exchange movements	-	101,580	-
Changes in working capital
Increase in inventories	(7,085)	(117,606)	-
(Increase) / decrease in receivables	312,542	(101,258)	46,180
Increase / (decrease) in payables	(225,642)	195,222	-
Interest received	4,156	286	6,000
Net cash flow from operating activities	(12,988)	(270,989)	(51,000)
Investing Activities
Net cash on acquisition of subsidiary	-	85,266	-
Decrease in Investments	263	-	-
Acquisition of fixed assets	(9,647)	-	-
(Increase) / decrease in financial assets	5,200	(4,926)	-
(Increase) / decrease in Loans	554	(46,876)	-
Repayments on loans receivable		130,837	-
Net cash flow from investing activities	(3,630)	164,301	-
Cash flows from financing activities:
Net proceeds from issue of shares	-	172,000	102,000
Loan (made)/ repaid  to current asset investment	-	-	75,000
Net cash flow from financing activities	-	172,000	177,000
Net cash flow	(16,618)	65,312	126,000
Opening Cash	90,456	25,144	25,144
Closing Cash	73,838	90,456	151,144

Notes to the unaudited Interim Report

1. Basis of preparation

This announcement was approved by the Board of directors on * August 2015

The financial information in this interim report has been prepared in accordance with the International Financial Reporting Standards. IFRS comprises standards issued by the International Accounting Standards Board (IASB) and the interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) as adopted by the European Union (EU).

The financial information has been prepared under the historical cost convention, as modified by the accounting for financial instruments at fair value.

The Directors are of the opinion that the financial information should be prepared on a going concern basis, in the light of the Company's financial resources.

These condensed interim financial statements for the six months ended 30 April 2015 and 30 April 2014 are unaudited. The summary financial statements for the 12 months ended 31 October 2014 have been audited.  The Auditors issued an unqualified audit report on these accounts and they have been filed with the Registrar of Companies.

No taxation charge has arisen for the period and the Directors have not declared an interim dividend.

2. Earnings per share

Earnings per share data is based on the Group result for the year and the weighted average number of shares in issue.

	6 Months Ended 30 April 2015	Year Ended 31 October 2014	6 Months Ended 30 April 2014
	£	£	£
Loss after tax	(99,635)	(353,509)	(97,180)
Weighted average number of ordinary shares - basic	94,896,125	80,358,407	74,290,948
Diluting effect of warrants and options	16,775,133	39,494,844	31,939,422
Weighted average number of ordinary shares - diluted	111,671,258	119,853,251	106,230,370
Basic earnings per share	(0.11p)	(0.44p)	(0.13p)
Diluted earnings per share	(0.11p)	(0.44p)	(0.13p)

Basic loss per share is calculated by dividing the loss attributable to equity shareholders by the weighted average number of ordinary shares in issue during the period:

Basic and diluted earnings per share are the same, since where a loss is incurred the effect of outstanding share options and warrants is considered anti-dilutive and is ignored for the purpose of the loss per share calculation.

As at 30 April 2015 there were 11,257,995 (30 April 2014 – 28,261,330) outstanding share warrants and 5,517,138 (30 April 2014 – 3,678,092) outstanding share options, both are potentially dilutive.

3. Reports

A copy of this announcement will be mailed to shareholders and copies will be available for members of the public at the Company's Head Office – New Liverpool House, 15-17 Eldon Street, London EC2M 7LD.