Half-year Report

London, 28 September 2018
 

Grand Vision Media Holdings plc
( “GVMH” or the “Company”)

Half-yearly report

The CEO’s Report

Background

In conjunction with the successful completion of the acquisition of GVC Holdings Limited (“GVC”) on 19 June 2018, I was appointed to the Board as Chief Executive Officer. The Company has changed its name to Grand Vision Media Holdings Plc, and raised £1,010,000 by the issue of new shares. The new combined group (the “Group”) looks forward to continuing with the development of the GVC business.

This exciting achievement will provide the resources and profile to build out the business by furthering our penetration of the Chinese market (the company’s current footprint in China represents less than 5% of the market there) and taking our products and services into new markets.

As an integrated out-door digital media company we are deploying innovative display and marketing technologies at strategic, high-traffic locations.  Our glasses-free 3D technology in digital out-of-home (OOH) media is enabling advertisers to engage with affluent consumers in important and growing markets.   Our “space management” approach utilising the cinema space for events and exhibitions offers a total solution to our advertisers, with the potential of direct conversion to sales.

Our network now covers over 180 locations covering 29 provinces in China and we are growing our business further within China and taking our technologies and expertise to new markets, specifically Thailand, Korea and Japan, where we have forged alliances and representations to take our business forward.

The digital OOH signage market is growing, and will continue to grow in the foreseeable future, and we want to be at the forefront of that growth by providing our customers with the ability to reach Chinese consumers as they become more affluent and seek access to more quality domestic and international products and services.

Two significant trends that are benefitting our growth are outbound travel and the Chinese appetite for foreign products.  The Group is well positioned to take advantage of this trend, acquiring many international brands and travel destinations as direct customers. 

Summary of Trading Results

GVMH Consolidated Results for the 6 Months to 30 June 2018

Revenue in the period was HKD7,415K. The Company had a loss before tax of HKD20,745k. The expenses in the period included the costs of the reverse takeover transaction amounting to HKD13,644K.

GVC Results for the 6 Months to 30 June 2018

Revenue in the period was HKD7,415K (H1 2017 : HKD3,771K), representing an increase of 97% for the same period last year.  This is mainly attributable to the addition of Golden Harvest chain of cinemas (67 cinemas) to our inventory in the corresponding period which took us to over 200 panels.  We have also been successful in delivering more integrated campaigns and marketing events to supplement the traditional OOH advertising revenue.  Revenue from social media marketing also grew by over 10 percent  to HKD 2,600K.  GVC had a loss before tax in the period of HKD6,745K (H1 2017 : HKD5,434K).

Outlook

The digital signage market globally is expected to reach almost $30bn by 2024, compared to approximately $15bn in 2015*. We believe that this growth will be driven not only by new, higher resolution displays and new types of technology, but also by integrating digital displays with customers’ smart phones.

We believe that we are well placed to benefit from this growth, and we will continue to develop our business in line with our strategy.

In the second half of the year we have been pursuing new opportunities in Thailand, Korea and in Japan where we have entered into a strategic alliance agreement with Eco Century Ltd (“Eco Century”). Eco Century is a Japanese marketing and payment service company, and together we are offering marketing and WeChat Pay services to Japanese clients with a focus to attract Chinese tourists and consumers.  We are also in discussion with these overseas partners to evaluate the possibility to introduce glasses free 3D technology to these countries. 

Responsibility Statement

We confirm that to the best of our knowledge:

a.             the condensed set of financial statements has been prepared in accordance with IAS 34 ‘Interim Financial Reporting’;

b.             the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year; and,

c.             the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties’ transactions and changes therein).

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.

The condensed accounts have not been reviewed by the auditors.

Jonathan Lo

Chief Executive Officer

28 September 2018

Interim Condensed Statement of Comprehensive Income

	Notes	GVMH 6 months Ended 30 June 2018	GVCH Year End 31 December 2017	GVCH 6 months Ended 30 June 2017
		HK$’000	HK$’000	HK$’000
Turnover		7,415	9,514	3,771
Cost of Sales		(4,166)	(4,460)	(2,179)
Gross Profit		3,249	5,055	1,592
Other Income / Expenditure		62	231	215
Administrative expenses	3	(8,263)	(9,832)	(4,852)
Depreciation		(2,008)	(6,972)	(2,239)
Admission costs		(8,385)	-	-
Premium on reverse acquisition		(5,259)	-	-
Operating loss		(20,604)	(11,518)	(5,284)
Finance Cost		(141)	(296)	(150)
Loss before taxation		(20,745)	(11,814)	(5,434)
Tax on loss on ordinary activities		-	-	-
Loss after taxation		(20,745)	(11,814)	(5,434)
Exchange difference arising on Translation			127	82
Loss and total comprehensive loss for the period		(20,745)	(11,687)	(5,352)
(Loss)/profit attributable to:
Equity holders of the Company		(20,699)	(11,784)	(5,492)
Non-controlling interests		(46)	(30)	58
		(20,745)	(11,814)	(5,434)
Total comprehensive (loss)/income attributable to:
Equity holders of the Company		(20,699)	(11,657)	(5,410)
Non-controlling interests		(46)	(30)	58
		(20,745)	(11,687)	(5,354)
Basic and diluted earnings per share (HK$)	5	(1.56)	(944)	(440)

Interim Condensed Statement of Changes in Equity

	Share  Capital	Share Premium	Group Reorganization Reserve	Capital Contribution arising from shareholders loan	Exchange Reserve	Non-Controlling Interest	Retained Earnings	Total Equity
	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
GVC At 30 June 2017	97	18,707	(9,060)	844	87	(3,330)	(15,626)	(8,281)
Re-Organization Reserve	-	-	-	-	-	-	14,695	14,695
Capital Contribution	-	-	-	-	-	-	844	844
Exchange Reserve	-	-	-	-	45	-	87	132
Non-Controlling Interest	-	-	-	-	-	(87)	-	(87)
Loss for the Period	-	-	-	-	-	-	(21,918)	(21,918)
Balance at 31 December 2017	97	18,707	(9,060)	844	132	(3,417)	(21,918)	(14,615)
Share issue	9	-	-	-	-	-	-	9
Share Premium	-	11,661	-	-	-	-	-	11,661
Exchange Reserve	-	-	-	-	(209)	-	-	(209)
Non-Controlling Interest	-	-	-	-	-	(47)	-	(47)
Loss for the Period	-	-	-	-	-	-	(6,699)	(6,699)
Balance at 30 June 2018	106	30,368	(9,060)	844	(77)	(3,464)	(28,617)	(9,900)
GVMH PLC
Balance at 19 June 2018	99,782	45,835	-	-	-	-	(21,918)	123,699
Re-Organization Reserve	-	-	(96,631)					(96,631)
Capital Contribution	-	-	-	844	-	-	-	844
Exchange Reserve	-	-	-	-	(222)	-	-	(222)
Non-Controlling Interest	-	-	-			(3,464)		(3,464)
Loss for the period	-	-	-	-	-	-	(20,699)	(20,699)
Balance at 30 June 2018	99,782	45,835	(96,631)	844	(222)	(3,464)	(42,617)	3,527

* On 19 June 2018, the Company’s shares were admitted to the Standard Listing segment of the Official List of the UK Listing Authority and to trading on the London Stock Exchange Main Market. In total these shares amounted to 96,287,079 Ordinary Shares.

Share capital is the amount subscribed for shares at nominal value.

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

Interim Condensed Statement of the Financial Position

	Notes	GVMH 30 June 2018	GVC 31 December 2017	GVC 30 June 2017
		HK$’000	HK$’000	HK$’000
Assets
Non-Current Assets
Property, plant and equipment		4,192	6,165	8,222
Investment in Subsidiary		-	-	-
Total Non-Current Asset		4,192	6,165	8,222
Current assets
Inventories		2,403	2,826	441
Trade and Other Receivables		6,083	3,812	2,920
Deposits and Pre-Payments		871	672	911
Cash and Cash Equivalents		8,692	1,136	2,509
Total Current Assets		18,049	8,446	6,781
Total Assets		22,241	14,611	15,004
Equity and Liabilities
Share Capital	6	99,782	97	97
Share Premium Account	6	45,835	18,707	18,707
Group Re-organization Reserve		(96,631)	(9,060)	(9,060)
Capital Contribution arising from Shareholder’s Loan		844	844	844
Exchange Reserves		(222)	132	87
Non-Controlling Interest		(3,464)	(3,417)	(3,330)
Retained Earnings		(42,617)	(21,918)	(15,626)
Total Equity		3,527	(14,615)	(8,281)
Liabilities
Non-Current Liabilities
Shareholders loan		8,502	5,860	5,214
Total Non-Current Liabilities		8,502	5,860	5,214
Current Liabilities
Trade and Other Payables		9,759	7,601	8,380
Amount Due to Directors		71	46	-
Deposits Received		382	4,048	1,922
Convertible Bonds		-	11,670	7,768
Total Current Liability		10,212	23,365	18,070
Total Liabilities		18,714	29,225	23,284
Total Equity and Liabilities		22,241	14,611	15,004

Interim Condensed Cash Flow Statement

	Notes		GVMH 6 Months Ended 30 June 2018	GVC For the year ended 31 December 2017	GVC 6 Months Ended 30 June 2017
			HK$’000	HK$’000	HK$’000
Cash flows from operating activities
Operating loss			(20,745)	(11,814)	(5,434)
Add: Depreciation			2,008	6,972	2,239
Add: Finance Cost on Shareholders loan			141	296	150
Add: Non Cash Success fee			6,972	-	-
Add: Premium on reverse acquisition			5,259	-	-
Changes in working capital
(Increase) / decrease in inventories			403	(2,422)	(38)
(Increase) / decrease in receivables			120	(2,146)	(1,493)
Increase / (decrease) in payables			(5,432)	(1,931)	1,742
Net cash flow from operating activities			(11,274)	(11,045)	(2,834)
Investing Activities
Acquisition of GVMH net of cash balances			6,032	-	-
Payments for Purchase of Property, Plant and equity			(34)	(245)	(2,636)
Net cash flow from investing activities			5,998	(245)	(2,636)
Cash flows from financing activities:
(Repayment of) / proceeds from Shareholder loans			2,500	500	-
Convertible bond			-	11,670	7,768
Net proceeds from issue of shares		6	6,978	-	-
Net proceeds from share premium			3,489	-	-
Net cash flow from financing activities			12,967	12,170	7,768
Net cash flow for the period			7,691	880	2,298
Opening Cash and cash equivalents			1,136	129	129
Effect on Foreign exchange rate changes			(135)	127	82
Closing Cash and cash equivalents			8,692	1,136	2,509

Notes to the Interim Condensed Financial Statements

1.            General Information

GRAND VISION MEDIA HOLDINGS PLC (‘the Company’) is incorporated in the United Kingdom. Details of the registered office, the officers and advisers to the Company are presented on the Directors and Advisers page at the end of this report.  The information within these interim condensed financial statements and accompanying notes must be read in conjunction with the audited annual financial statements that have been prepared for the period ended 31 December 2017.   

2.            Basis of Preparation

These unaudited condensed consolidated interim financial statements for the six months ended 30 June 2018 were approved by the board and authorised for issue on 28 September 2018. 

The basis of preparation and accounting policies set out in the Annual Report and Accounts for the period ended 31 December 2017 have been applied in the preparation of these condensed interim financial statements.  These interim financial statements have been prepared in accordance with the recognition and measurement principles of the International Financial Reporting Standards (“IFRS”) as endorsed by the EU that are expected to be applicable to the financial statements for the year ending 31 December 2018 and on the basis of the accounting policies expected to be used in those financial statements. 

The figures for the six months ended 30 June 2018 and 30 June 2017 are unaudited and do not constitute full accounts. The comparative figures for the period ended 31 December 2017 are extracts from the 2017 audited accounts.  The independent auditor’s report on the 2017 accounts was not qualified.

The assets and liabilities of the legal subsidiary, GVC Holdings Limited are recognized and measured in the Group financial statements at the pre-combination carrying amounts, without restatement of fair value. The retained earnings and other equity balances recognized in the Group financial statements reflect the retained earnings and other equity balances of Grand Vision Media Holdings plc immediately before the reverse and the results of the period from 1 January 2018 to 30 June 2018 are those of GVC Holdings Limited and post reverse for GVMH . However, the equity structure appearing in the Group financial statements reflects the equity structure of the legal parent, Grand Vision Media Holdings plc, including the equity instruments issued in order to effect the reverse; and comparatives numbers presented in the financial statements are the consolidated numbers of GVC Holdings Limited for the periods ended 31 December 2017 and 30 June 2017.

3.            Segmental Reporting

In the opinion of the Directors, the Company has one class of business, being that of social media marketing and operates in the Peoples Republic of China.

4.            Company Result for the period

The Company has elected to take the exemption under section 408 of the Companies Act 2006 not to present the parent Company income statement account.

The operating loss of the Company for the six months ended 30 June 2018 was HK$ 20,745,000 (2017:
loss of HK$ 5,434,000, year ended 31 December 2017: HK$ 11,814,000). The current period operating loss incorporated the following main items:

	GVMH 30 June 2018	GVCH 31 December 2017	GVCH 30 June 2017
	(Unaudited)	(Audited)	(Unaudited)
	HK$’000	HK$‘000	HK$‘000
Accounting and administration fees	114	260	257
Employment expenses	4,035	6,161	2,518
Rent fees	1,183	2,232	1,332
Legal and professional fees	396	273	90
Other expenses	2,535	906	655
Total	8,263	9,832	4,852

5.            Earnings per Share

Earnings per share data is based on the Company result for the six months and the weighted average number of shares in issue.

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:

	GVMH 30 June 2018	GVCH 31 December 2017	GVCH 30 June 2017
	HK$	HK$	HK$
Loss after tax	(20,699,000)	(11,784,000)	(5,492,000)
Weighted average number of ordinary shares in issue	13,234,439	12,486	12,486
Basic and diluted loss per share	(1.56)	(944)	(440)

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. There were no potential dilutive shares in issue during the period.

6.            Share Capital

Ordinary shares are classified as equity. Proceeds from issuance of ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are deducted against share capital.

Allotted, called up and fully paid ordinary  shares of 10p each	Number of shares	Share Capital	Share Capital	Share Premium	Share Premium
		£	HK$	£	HK$
Balance at 26 February 2016	50,000,000	50,000	518,150	-	-
Balance at 30 June 2016	50,000,000	50,000	518,150	-	-
Share issue – 2 August 2016	60,000,000	60,000	621,780	-	-
Consolidate shares – 3 August 2016	(108,900,000)	-	-	-	-
Balance at 31 December 2016	1,100,000	110,000	1,139,930	-	-
Share issue – 10 January 2017	5,130,000	513,000	5,316,219	257,000	2,663,291
Balance at 30 June 2017	6,230,000	623,000	6,456,149	257,000	2,663,291
After Acquisition Share 19 June 2018	90,057,079	9,005,708	93,326,151	4,502,854	46,663,075
Balance at 30 June 2018	96,287,079	9,628,708	99,782,300	4,759,854	49,326,366

7              Events Subsequent to 30 June 2018

There were no events subsequent to the period end.

8                   Reverse Acquisition

The reverse acquisition occurred just prior to the period end and the consolidated numbers of GVC Holdings Limited are presented below for illustration purposes only:

Income statement for GVCH for the period ended 30 June 2018

		GVCH 6 months Ended 30 June 2018
		HK$’000
Turnover		7,415
Cost of Sales		(4,166)
Gross Profit		3,249
Other Income / Expenditure		62
Administrative expenses		(7,907)
EBITDA		(4,596)
Finance Cost		(141)
Depreciation		(2,008)
Gain (Loss) on disposal		-
Loss before taxation		(6,745)
Tax on loss on ordinary activities		-
Loss after taxation		(6,745)
Exchange difference arising on Translation
Loss and total comprehensive loss for the period		(6,745)
(Loss)/profit attributable to:
Equity holders of the Company		(6,699)
Non-controlling interests		(47)
		(6,745)
Total comprehensive (loss)/income attributable to:
Equity holders of the Company		(6,699)
Non-controlling interests		(47)
		(6,745)
Basic and diluted loss per share (HK$)		(540)

Balance Sheet for GVCH for the period ended 30 June 2018

		GVCH 30 June 2018
		HK$’000
Assets
Non-Current Assets
Property, plant and equipment		4,192
Investment in Subsidiary		-
Total Non-Current Asset		4,192
Current assets
Inventories		2,403
Trade and Other Receivables		3,845
Deposits and Pre-Payments		803
Cash and Cash Equivalents		2,660
Total Current Assets		9,711
Total Assets		13,903
Equity and Liabilities
Share Capital		106
Share Premium Account		30,368
Group Re-organization Reserve		(9,059)
Capital Contribution arising from Shareholder’s Loan		844
Exchange Reverses		(77)
Non-Controlling Interest		(3,464)
Retained Earnings		(28,617)
Total Equity		(9,899)
Liabilities
Non-Current Liabilities
Shareholders loan		8,501
Total Non-Current Liabilities		8,501
Current Liabilities
Trade and Other Payables		9,216
Amount due to GVMH		5,632
Amount Due to Directors		71
Deposits Received		382
Other Creditors		-
Total Current Liability		15,301
Total Liabilities		23,802
Total Equity and Liabilities		13,903

9.           Reports  

This interim condensed financial statements will be available shortly on the Company website at www.gvmh.co.uk

For more information:

Grand Vision Media Holdings plc	http://gvmh.co.uk/
Edward Kwan-Mang Ng, Director	Tel: [phone] or [e-mail]
Alfred Henry Corporate Finance Ltd
Nick Michaels / Jon Isaacs	Tel: [phone] or [e-mail]

 ENDS -