Half-year Report

RNS Number : 9007L

Ross Group PLC

15 September 2021

 

Ross Group Plc Half Yearly Financial Report 30th June 2021
HALF YEARLY FINANCIAL REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2021 Financial Summary (6 months to  30 June 2021) 2021 2020   £'000   £'000   Change Group Revenue - - - Gross Profit/(Loss) - - - Profit/(Loss) before tax (267) (830) 67.8% Basic earnings per share -0.122p -0.379p 67.8% Diluted earnings per share -0.122p -0.379p 67.8% Chairman's Statement It is once again my pleasure to report to you on both the business activities and the financial interim results of the Ross Group PLC ("Group") for the six month period ended 30th June 2021. Throughout the COVID pandemic period, the Group has continued diligently researching and exploring specific supply chain management strategic opportunities; primarily involving potential start-ups, mergers, acquisitions and/or business alliances. Our existing Chitin investment is progressing in accordance with the expectation of RGP-525 and whilst RGP-525 is continuing its research and development into mass production of Chitin, your Board is confident that this has the potential to become a worthy business in the future.  In addition, the Group is still deploying our specialist supply chain management services on a project-by-project basis. Since becoming Chairman, I have always been mindful - even while our Board of Directors were constantly conducting such exploratory and research work - that our operating businesses and Premium Listing Company status should always be capable of generating sufficient profit and/or cashflow from its traditional specialist supply chain management services, in order to primarily cover running costs of the business on a potentially worst-case scenario and/or to be able to finance due diligences of potentially feasible opportunities. Also, especially given the continuation of COVID into this exceptionally unusual year, we have had to rightfully continue to incur such significant restructuring expenses - all of which are considered to be reasonable given our previous years of careful and conservative costings - which throughout this particular period, we are also pleased to announce that the Board has responded as best as possible through taking diligent and prudent measures accordingly.  In this respect, our 2021 interim result of a £267,000 loss (2020: £830,000 loss) is considered both understandable and justifiable. As the Group is still undergoing a research, development and exploratory mode, there has subsequently been no income during this period. Costs and overhead have progressively decreased over 2020 - Largely due to the implementation, effect and relative success of our various restructuring strategies.  We continue to be prudent and focused in our supply chain management and also our Board remains conservatively confident that we will be progressively focusing in on identifying and being able to put forward an appropriate specialist supply chain strategy and/or appropriate acquisition for due consideration and to hopefully be able to then recommend to our Shareholders at some stage in the foreseeable future. As a result, your Board has recently also decided to place an additional amount of equity equal to 6% of its existing shareholding as per the Announcement released on the London Stock Exchange's RNS website on 10th September 2021 which we believe will be able to better support detailed discussions and due diligences; especially in the second half of this year. The Board and myself are satisfied with the progress that we have made over this period in identifying, initiating, and implementing our emergency short-term strategic plans; including, but not limited to, the ongoing restructuring of the Group and, in particular, specific businesses, in order to be able to both maintain running an efficient supply chain management operation, while also being capable of capturing any considered appropriate opportunity; as and when or if it is presented.  Regarding the consequential subject of Brexit, given the departure from the EU, the timing, terms and impact of the United Kingdom's exit are still somewhat difficult to evaluate; especially with the combined confluence and continuation of COVID.  Regardless of the time scale, terms and conditions of the United Kingdom's exit from the European Union, the result with regard to the political and economic outlook of the United Kingdom and the European Union, has been largely not resulted in any major volatility on the exchange rate between the Pound Sterling ("£") and the Euro ("€") and more generally, between the £/Pound and other international currencies such as the US Dollar ("US$") Because the operating subsidiaries of RGP are presently based both in the United States and also outside of Europe, they are therefore predominately in a US$ currency environment and while this could lead to adverse consequences in terms of US$/£ exchange rates, our respective subsidiaries and/or joint ventures are not yet fully trading or selling products, and therefore we do not anticipate any material negative impact and do not intend to take specific measures to cover fluctuations of the currency market at this stage. At this time, I would like to particularly personally thank our Board of Directors, our specialist contractors, consultants and advisors, for all their excellent support, commitment and hard work in helping the Group towards achieving its aims. Also, as always, I would also like to personally thank our extraordinary loyal shareholders for their continued patience and understanding. We would like to wish all of them and everyone else the very best of health during these continuing difficult and dangerous COVID times. Sincerely, Barry Richard Pettitt Chairman and Group Managing Director Approved 15th September 2021 CONDENSED CONSOLIDATED INCOME STATEMENT UNAUDITED 6 months 6 months Year ended 30 June ended 30 June ended  31 Dec   2021 2020 2020   £'000   £'000   £'000 Group Revenue - - 43 Gross Profit - - 4 Profit / (Loss) before Finance Cost 82 (559) (925) Finance Cost 349 271 538 (Loss) before Taxation (267) (830) (1,463) Taxation - - - (Loss) for the Period (267) (830) (1,463) Earnings per share (pence) -0.122 -0.379 -0.669 Adjusted earnings per share (pence) -0.122 -0.379 -0.669                 Earnings per share from continuing operations(pence) -0.122 -0.379 -0.669 Adjusted earnings per share (pence) -0.122 -0.379 -0.669 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY UNAUDITED Share Capital Accumulated Losses Other Reserves Total £'000 £'000 £'000 £'000 Balance at 1 Jan 2020 11,218 (39,175) 24,019 (3,938) (Loss) / Profit for the period (830) (830) Foreign exchange adjustment - (196) - (196) Total comprehensive income / (deficit) - (1,026) - (1,026) Movement on convertible loans - - 318 318 Balance at 30 June 2020 11,218 (40,201) 24,337 (4,646) (Loss) / Profit for the period (633) (633) Foreign exchange adjustment - 260 - 260 Total comprehensive income / (deficit) - (373) - (373) Value of conversion rights on convertible loans - - 8 8 Balance at 31 Dec 2020 11,218 (40,574) 24,345 (5,011) Balance at 1 Jan 2021 11,218 (40,574) 24,345 (5,011) (Loss) / Profit for the period (267) (267) Foreign exchange adjustment - 32 - 32 Total comprehensive income / (deficit) - (235) - (235) Movement on convertible loans - - 170 170 Balance at 30 June 2021 11,218 (40,809) 24,515 (5,076) CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION UNAUDITED 6 months 6 months Year Ended ended 30 June ended 30 June 31 Dec 2021 2020 2020 £'000 £'000 £'000 Non Current Assets 838 1,322 1,090 Current Assets: Inventories - 41 - Trade and Other Receivables 88 70 269 Cash and Cash Equivalents 307 345 91 395 456 360 Total Assets 1,233 1,778 1,450 Equity and Liabilities Shareholders' Equity: Share Capital 11,218 11,218 11,218 Share Premium Account  3,146  3,146  3,146 Other Reserves 15,384 15,384 15,384 Convertible debentures 5,985 5,650 5,815 Retained Earnings   (40,809)   (40,201)   (40,574) Total Equity (5,076) (4,803) (5,011) Non-Current Liabilities: Lease Liabilities 28 300 183 Long Term Borrowings 1,727 1,866 1,705 Current Liabilities: Trade and Other Payables 3,178 3,300 3,408 Shareholders funds in advance 378 - - Lease Liabilities 35 249 208 Bank Overdraft and Loans 963 866 957 Total Liabilities 6,309 6,581 6,461 Total Equity and Liabilities 1,233 1,778 1,450 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS UNAUDITED 6 months 6 months Year Ended ended 30 June ended 30 June 31 Dec 2021 2020 2020   £'000   £'000   £'000 Net Cash From/(Used In) Operating Activities (281) (222) (168) Net Cash Used In Investing Activities 567 (53) (19) Cash Flows From Financing Activities: Amount withdrawn by Directors 5 (11) (38) Net Increase/(Decrease) In Borrowings and Lease Liabilities (75) (18) (333) Net Cash Flow From Financing Activities (70) (29) (371) Net Increase/(Decrease) In Cash and Cash Equivalents 216 (304) (558) Cash and Cash Equivalent at Beginning of Period 91 649 649 Cash and Cash Equivalent at End of Period 307 345 91 Notes to the Interim Report (1) The financial information contained in these statements for the six months ended 30 June 2021 and 30 June 2020 is unaudited and does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. These statements are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK. The interim financial statements have been prepared on the basis of the accounting policies set out in the audited statutory accounts for the year ended 31 December 2020. (2) Reconciliation of Operating (Loss) / Profit to Net Cash Flows From Operating Activities 6 months 6 months Year Ended ended 30 June ended 30 June 31 Dec 2021 2020 2020   £'000   £'000   £'000 Operating Profit / (Loss) 82 (2,926) (925) Profit on sale of fixed assets (578) - 40 Exchange differences 29 (9) 92 Depreciation and Amortisation 260 1,478 279 (Increase)/ Decrease In Inventories - (1,311) 39  (Increase)/ Decrease In Trade and Other Receivables 176 (102) (146) Increase/(Decrease) In Trade and Other Payables (250) 14,619 453 Net Cash Generated From/(Used In) Operations (281) 11,749 (168) (3)  No ordinary interim dividend is proposed for 2021 (2020 - £Nil). (4) The comparative cash flow for the year ended 31 December 2020 has been extracted from the audited accounts. The cash flows for the six months ended 30 June 2020 and 30 June 2021 are unaudited. (5)  Reconciliation of Movements In Equity 6 months 6 months Year Ended ended 30 June ended 30 June 31 Dec 2021 2020 2020   £'000   £'000   £'000 Share Premium Account Brought Forward 3,146 3,146 3,146 Movement - - - Carried Forward 3,146 3,146 3,146 Other Reserves Brought Forward 15,384 15,384 15,384 Movement - - - Carried Forward 15,384 15,384 15,384 Retained Earnings Brought Forward   (40,574)   (39,175) (39,175) (Loss) / Profit for the Period (267) (830) (1,463) Foreign exchange adjustment 32 (196) 64 Carried Forward (40,809) (40,201) (40,574) Convertible Debenture Brought Forward   5,815   5,489 5,489 Movement 170 161 326 Carried Forward 5,985 5,650 5,815 (6)  Non Current Assets Right of use assets Property, Plant & Investments Land & Buildings Equipment Total   £'000   £'000   £'000   £'000 Cost At 1 January 2021 424 699 359 1,482 Foreign exchange adjustment - (3) - (3) Additions - - 11 11 Impairment reversal - - 2,969 2,969 Disposals - (558) (2,969) (3,527) At 30 June 2021 424 138 370 932 Depreciation / Amortisation At 1 January 2021 - 388 4 189 Charge for the period - 251 9 97 On disposals - (558) - - At 30 June 2021 - 81 13 94 Net Book Value At 30 June 2021 424 57 357 838 At 1 January 2021 424 311 355 1,090 (7)  Inventory 30 June 31 Dec 30 June 2021 2020 2020 £'000  £'000  £'000 Raw materials - - 41 - - 41 (8)  Current Assets 30 June 31 Dec 30 June 2021 2020 2020 £'000  £'000  £'000 Trade receivables - 83 - Prepayments and accrued income 11 109 11 Other debtors 6 - 8 Directors loan 58 63 36 Loans to associated undertakings 13 14 15 88 269 70 Interest is charged on the Directors loan at a commercial rate. (9)  Current Liabilities 30 June 31 Dec 30 June 2021 2020 2020 £'000  £'000  £'000  Trade payables 245 461 243 Other creditors 496 377 427 Accruals and deferred income 191 344 226 Amounts owed to associated undertakings 2,246 2,226 2,404 Lease creditor 35 208 249 Other loans 8 3 - Debentures 955 954 866 Shareholders funds in advance 378 - - 4,554 3,833 4,415 (10)  Non Current Liabilities 30 June 31 Dec 30 June 2021 2020 2020 £'000  £'000  £'000  Lease creditor 28 183 300 Debentures - - 86 Other loans 1,727 1,705 1,780 1,755 1,888 29,767 (11) On 27 September 2018 two convertible loan debentures were issued for £4,010,000 and £2,062,172 with a coupon rate of 5%. The loan notes are convertible into Ordinary shares of the parent entity in three years after the date of issue. The convertible loan debenture will give right to a percentage of the issued share capital of the parent company at the date of conversion. Each tranche of £1 million debenture owed by the long term holders correspond to 4.925% of the issued share capital at the date of conversion, resulting in a fixed percentage of the issued share capital of the company to be allotted to the loan holders regardless of the value / amount of the share capital of the company. 30 June 31 Dec 2021 2020 £'000  £'000  Face value of notes issued 6,072 6,072 Value of conversion rights 5,985 5,815 Convertible loan debenture liability 954 954 Interest expense recognized in period 171 329 The other loans have been advanced to the company from One World Limited. The funding was provided for a three year period, and interest is charged on these loans at 6%. (12) On 10 September 2021 the company made an announcement to the London Stock Exchange confirming the issue of 13,126,051 shares equivalent to 6% of its existing shareholding at a fixed price of 2.8 pence per new ordinary share. (13) As no revenue has been generated throughout the group in this period and the amount in the prior year was minimal and was through the subsidiary Ross Diversified Trading Limited, the Chief Operating Decision Maker believes the information already disclosed in the interim financial statements is adequate to fulfill the requirements of IFRS8 segmental reporting. This will be reconsidered at the year end and in future periods as the group begins to trade. (14) The Interim Report will be sent by mail to all registered shareholders and copies will be available from the Company's registered office at 71-75 Shelton Street, London, WC2H 9JQ. A downloadable copy will also be posted on the Company's website www.ross-group.co.uk Responsibility statement:  The Directors confirm that, to the best of their knowledge: - a) the condensed set of financial statements has been prepared in accordance with International Financial Reporting Standards (IFRS) and IAS 34 'Interim Financial Reporting'; b) the financial statements give a true and fair view of the assets, liabilities, financial position and loss of the company: c) 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 d) 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). On behalf of the Board B Pettitt  Chief Executive Officer  Ross Group plc Registered Office 71 - 75 Shelton Street London WC2H 9JQ Contact - M Simon, Non Executive Director Tel. - 07887  628152 Email - [e-mail] Website - www.ross-group.co.uk

 

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