Half-year Report & Trading Update

RNS Number : 2509T

St James House PLC

24 March 2021

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF REGULATION 11 OF THE MARKET ABUSE (AMENDMENT) (EU EXIT) REGULATIONS 2019/310.

St James House PLC

("SJH" or the "Company" or the "Group")

Trading Update, Half-Yearly Report for the period ended 31 July 2020

& Return from Suspension

24 March 2021

Trading Update

Payment Services

For the period 25 February 2021 to 22 March 2021 growth has continued in the payments division, with GBP:USD FX pair transactions growing an additional 14% in volume compared to the period 27 January to 25 February 2021. The Group saw further improvements in transaction activity in both Euro and GBP, increasing 168% and 82% respectively, driven by continuing up take of services rolled out to existing customers.

The customers using Prepaid Cards following the relaunch has been consistent with previous usage, with the revamped prepaid services being integrated to the Banking as a Services ("BaaS") offering that is now ready for launch and the planned marketing campaigns will see renewed growth on customer acquisitions on Cards and Accounts through 2021.

The merchant services group is working with the two international payment service providers previously announced developing and integrating the appropriate suite of services to meet their needs.

Lottery Services

Entries into the lotteries administered by Prize Provision Services Ltd remain steady as the country prepares for COVID-19 restrictions to be eased. Easing of restrictions is regarded as positive as clients will be able to promote their lotteries with face-to-face interaction.

Legal Services

St Frances House Ltd has a current workload of 263 cases and a further 27 cases have reached settlement stage in the period from 25 February to 22 March, and 22 new cases have been added. Current data shows that the average time for a case to reach settlement once it has been added is 66 days.

St Frances House Ltd is actively investigating the required steps to access a broader range of cases and will run a small pilot in the coming weeks sourcing and working with other case types.

Group

Following the publication of the Company's audited financial statements for the year to 31 January 2020 yesterday, along with the half-yearly financial statements for the period to 31 July 2020 that are set out below, the Company has requested that trading in its ordinary shares of 1 pence each ("Ordinary Shares") resumes on AIM at 0730 today.

The Company is in advanced discussions with an external investor to provide a working capital facility for the Company, and expects to complete arrangements shortly, at which time a further announcement will be made.

Graeme Paton, Chief Executive, commented, "We are delighted that trading in our Ordinary Shares is being restored today.  This has been a difficult year for the Company, but we can now see positive signs on both the operational and financial fronts."

Half-Yearly Report

For the half year to 31 July 2020 (the " Period ") the Group has seen an improvement in performance resulting in a loss before tax of £567,000 (H1 19: £1.318m loss) (year to 31 January 2020: £4.266m loss). As a result of the disposal of Market Access Ops Ltd on 28 February 2020 the Group made a profit of £192,000 for the Period including discontinued operations.

The technology advancements and structural changes within the payments division of the past year are beginning to show positive results in terms of increase in transactions driving an increased contribution to revenue and gross profit.

The Period saw an increase in clients using the GBP and EUR services, a development that continues to date.

Pre-paid card issuing grew steadily during the Period, both in number of cards being used and the volume of transactions successfully processed, despite the impact of Covid-19, resulting in the payments business bringing about much needed improvements.

While Covid-19 affected many businesses, Prize Provision Services Limited (" PPSL "), the Group's lottery management business, saw stability in the number of weekly entries into the lotteries it administers and despite ongoing COVID-19 restrictions, the overall number of lines played during June 2020 was on a par with June 2019.

Lottery fundraising itself has been shown to be an excellent method of fundraising during the pandemic thanks to the subscription model employed, and PPSL demonstrated the robust nature of lottery fundraising across its client base.

Roger Matthews

Chairman

(The key financial information for the Period is set out below.)

For further information, contact:

St James House PLC 020 3655 5000

Roger Matthews, Chairman

Website www.sjhplc.com

Allenby Capital Limited (Nomad & Broker) 

John Depasquale/Nick Harriss   020 3328 5656

Notes to editors:

St James House PLC (AIM: SJH) is an AIM quoted lottery, software, gaming and leisure company.

SJH has a range of ecommerce products that suit all merchants' and customers' needs enabling secure payments. The Company works within both regulated frameworks and in regions where traditional partners struggle to offer safe, secure services.

In addition, SJH operates the Weather Lottery, which has been in operation since 2002 and the Company holds one of the limited number of UK external lottery manager's licences.  Over £5.4 million has been raised to date for good causes and the lottery has paid over £4.9 million in prizes to winners.

SJH also has a joint venture agreement via Soccerdome Ltd operating a five a side football complex in Nottingham.

Consolidated Statement of Profit and Loss and Other Comprehensive Income
for the half year ended 31 July 2020		6 month		12 month		6 month		12 month
		31-Jul		31-Jan		31-Jul		31-Jan
		2020		2020		2019		2019
		(unaudited)		(audited)		(restated)		(restated)
	Notes	£'000		£'000		£'000		£'000
Continuing Operations:
Revenue		641		989		422		938
Cost of Sales		(334)		(662)		(176)		(252)
Gross Profit		307		327		246		686
Administrative expenses		(874)		(2,745)		(1,564)		(3,052)
Impairment of Intangible assets		-		(785)		-		(440)
Impairment of Financial assets		-		(1,059)		-		-
Operating loss		(567)		(4,262)		(1,318)		(2,806)
Finance expenses		-		(4)		-		(3)
Loss before taxation		(567)		(4,266)		(1,318)		(2,809)
Loss for the period from continuing operations		(567)		(4,266)		(1,318)		(2,809)
Profit for the period from discontinued operations	4	759		-		-		2,416
Revaluation of equity investment		-		(213)		-		(9)
Total comprehensive income		192		(4,479)		(1,318)		(402)
PROFIT/(LOSS) PER SHARE
Basic (loss)/profit per ordinary share	2	6p		(138p)		(42p)		(14p)
Fully diluted (loss)/profit per ordinary share		(18p)		(138p)		(42p)		(103p)

Consolidated Balance Sheet
At 31 July 2020		As at		As at		As at		As at
		31-Jul		31-Jan		31-Jul		31-Jan
		2020		2020		2019		2019
		(unaudited)		(audited)		(restated)		(restated)
	Notes	£'000		£'000		£'000		£'000
ASSETS
Non-current assets
Property, plant and equipment		8		8		8		3
Goodwill		158		158		572		158
Intangible assets		23		23		1,174		1,009
Investments in equity instruments		-		-		213		213
10-year loan notes		1,124		1,124		1,003		1,003
		1,313		1,313		2,970		2,386
Current assets
Trade and other receivables		1,286		1,160		1,543		1,449
Cash and cash equivalents		1,239		336		317		371
		2,525		1,496		1,860		1,820
Total Assets		3,838		2,809		4,830		4,206
LIABILITIES
Current liabilities
Trade and other payables		4,833		4,411		2,891		1,939
Bank and other borrowings		6		6		6		6
		4,839		4,417		2,897		1,945
Non-current liabilities		725		310		690		-
Total Assets/(Liabilities)		(1,726)		(1,918)		1,243		2,261
EQUITY
Called up share capital	3	3,116		3,116		3,116		2,816
Share premium account		3,020		3,020		3,020		3,020
Merger reserve		-		-		999		999
Revaluation reserve		-		-		213		213
Retained earnings		(7,862)		(8,054)		(6,105)		(4,787)
Total equity		(1,726)		(1,918)		1,243		2,261

Consolidated Statement of Changes in Equity
	Share	Share	Merger	Revaluation	Retained
	Capital	Premium	Reserve	Reserve	Earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 February 2019	2,816	3,020	999	213	(4,787)	2,261
Issue of new shares in the period	300	-	-	-	-	300
Loss for the period from continuing operations	-	-	-	-	(1,318)	(1,318)
Balance at 31 July 2019	3,116	3,020	999	213	(6,105)	1,243
Issue of new shares in the period	-	-	-	-	-	-
Revaluation of assets	-	-	(999)	(213)	-	(1,212)
Loss for the period from continuing operations	-	-	-	-	(1,949)	(1,949)
Balance at 31 January 2020	3,116	3,020	-	-	(8,054)	(1,918)
Issue of new shares in period	-	-	-	-	-	-
Loss for the period from continuing operations	-	-	-	-	(567)	(567)
Profit for the period from discontinued operations	-	-	-	-	759	759
Balance at 31 July 2020	3,116	3,020	-	-	(7,862)	(1,726)

Consolidated Cash Flow Statement
for the half year ended 31 July 2020		6 month		12 month		6 month		12 month
		31-Jul		31-Jan		31-Jul		31-Jan
		2020		2020		2019		2019
		(unaudited)		(audited)		(restated)		(restated)
	Notes	£'000		£'000		£'000		£'000
Net cash generated from/ (used in) continuing operations	5	903		(38)		71		(1,123)
Interest and financing costs		-		(4)		-		(3)
Tax paid		-		-		-		-
Net cash (used by)/generated from operating activities		903		(42)		71		(1,126)
Net cash (used by)/generated from discontinued operating activities		-		-		-		(430)
Net cash (outflow) from operating activities		903		(42)		71		(1,556)
Cash flow from investing activities:
Acquisition of property plant and equipment		-		(1)		(5)		(1)
Purchase of intangible assets		-		(37)		(165)		(90)
Repayment of loan notes		-		-		-		19
Net cash on acquisition/(disposal) of subsidiary		-		45		45		(152)
Net cash (used in) investing activities		-		7		(125)		(224)
Net cash from financing activities		-		-		-		-
(Decrease)/increase in cash and cash equivalents:
(Decrease)/increase in cash and cash equivalents		903		(35)		(54)		(1,780)
Cash and cash equivalents at beginning of period		336		371		371		2,151
Cash and cash equivalents at end of period		1,239		336		317		371
Comprising of:
Cash and cash equivalents per the balance sheet		1,239		336		317		371
Less:
Bank overdraft		-		-		-		-
Cash and cash equivalents for cash flow statement purposes		1,239		336		317		371

NOTES TO THE INTERIM FINANCIAL REPORT

1.  Accounting policies

Basis of Accounting and Preparation

These interim results for the six months ended 31 July 2020 have been prepared using the historical cost and fair value conventions on the basis of the accounting policies set out below. This interim report has been prepared in accordance with International Financial Reporting Standards as adopted by the EU ("Adopted IFRSs"), it is not in accordance with IAS 34 and therefore is not fully compliant with IFRS.

These interim results have been prepared under the historical cost convention. Areas where other bases are applied are identified in the accounting policies below.

The financial information set out in this interim report does not constitute statutory accounts as defined in the Companies Act 2006. The Company's statutory financial statements for the year ended 31 January 2020 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified with a material uncertainty relating to going concern.

This announcement contains certain forward-looking statements with respect to the operations, performance and financial position of the Group. By their nature, these statements involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. The forward-looking statements reflect knowledge and information available at the date of the preparation of this announcement and the Company undertakes no obligation to update these forward-looking statements. Nothing in this Interim Financial Report should be construed as a profit forecast.

The results for the six months ended 31 July 2020 were approved by the Board on 22 March 2021.

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 31 January and 31 July each year. Control is achieved where the Company has the power to govern the financial and operating policies so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the Financial Statements of subsidiaries to bring the accounting policies used into line with those used by the Group.

Business combinations

All business combinations are accounted for by applying the acquisition method. Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group.

The Group measures goodwill at the acquisition date as:

the fair value of the consideration transferred; plus

the recognised amount of any non-controlling interests in the acquiree; plus

the fair value of the existing equity interest in the acquiree; less

the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

Costs related to the acquisition, other than those associated with the issue of debt or equity securities, are expensed as incurred.

Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss.

Where fair values are estimated on a provisional basis they are finalised within 12 months of acquisition with consequent changes to the amount of goodwill.

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated. Unrealised gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group's interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

Intangible assets

Expenditure on research activities is recognised in the income statement as an expense as incurred.

Expenditure on development activities is capitalised if the product or process is technically and commercially feasible and the Group intends to and has the technical ability and sufficient resources to complete development, future economic benefits are probable and if the Group can measure reliably the expenditure attributable to the intangible asset during its development. Development activities involve a plan or design for the production of new or substantially improved products or processes.  The expenditure capitalised includes the cost of materials, direct labour and an appropriate proportion of overheads and capitalised borrowing costs. Other development expenditure is recognised in the income statement as an expense as incurred. Capitalised development expenditure is stated at cost less accumulated amortisation and less accumulated impairment losses.

Expenditure on internally generated goodwill and brands is recognised in the income statement as an expense as incurred.

Other intangible assets that are acquired by the Group are stated at cost less accumulated amortisation and accumulated impairment losses.

Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of intangible assets unless such lives are indefinite. Intangible assets with an indefinite useful life and goodwill are systematically tested for impairment at each balance sheet date. Other intangible assets are amortised from the date they are available for use. The estimated useful lives are as follows:

Licences, patents and trademarks  25 years 

Software    3 to 10 years

Financial instruments

Financial assets and financial liabilities are recognised on the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument.

Goodwill

Goodwill arising on consolidation represents the excess cost of acquisition over the Group's interest in the fair value of the identifiable assets and liabilities of a subsidiary at the date of acquisition. Goodwill is initially recognised as an asset and reviewed for impairment at least annually. Any impairment is recognised immediately in the income statement and is not subsequently reviewed.

Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortised but is tested annually for impairment. In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment in the investee.

Financial assets (including receivables)

In accordance with IFRS 9 impairment of financial assets is based on an expected credit loss ('ECL') model. The ECL model requires the Group to account for ECLs and changes in those ECLs at each reporting date to reflect changes in credit risk since initial recognition of the financial assets. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected, IFRS 9 also requires current and future events to be considered when making an impairment assessment.

IFRS 9 requires the Group to measure the loss allowance for a financial instrument at an amount equal to the lifetime ECLs if the credit risk on that financial instrument has increased significantly since initial recognition, or if the financial instrument is a purchased or originated credit ‑ impaired financial asset.

However, if the credit risk on a financial instrument has not increased significantly since initial recognition (except for a purchased or originated credit ‑ impaired financial asset), the Group is required to measure the loss allowance for that financial instrument at an amount equal to 12 ‑ months ECL. IFRS 9 also requires a simplified approach for measuring the loss allowance at an amount equal to lifetime ECL for trade receivables, contract assets and lease receivables in certain circumstances.

The carrying amounts of the Group's non-financial assets, other than investment property, inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. For goodwill, and intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable amount is estimated each year at the same time.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Revenue recognition

Revenue is recognised when the performance obligations have been met:

• Lottery business revenue represents takings received for entry into the lottery prize draws. Revenue is recognised on the date that the draw takes place.  Revenue in relation to performance obligations that are delivered over the life of a contract are recognised on a pro rata basis.

• Payment processing revenue represents the consideration received or receivable from the merchants for services provided. Key revenue streams the Company reports are transaction service charges that relate to services provided to process transactions between the customer and an acquiring bank, which is a bank that accepts card payments from the card-issuing banks. Revenue is recognised when the transactions are successfully processed and is recognised per transaction. Process fees are charged per transaction for providing gateway services.

• Payment solutions revenue is recognised at the point when a chargeable transaction occurs. A handling fee is charged as a percentage of the value of the transaction as contractually agreed with the customer and the revenue is recognised at the point of that transaction. Where a Customer has a foreign exchange requirement revenue is recognised when the transaction occurs and is calculated as the net margin between the agreed exchange rate charged to the Customer and the exchange rate incurred from any third party provider for undertaking the transaction. 

Taxation

Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected

manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and any recognised accumulated impairment losses. Useful lives are reviewed annually by the Directors.

Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.

Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. The estimated useful lives are as follows:

· office equipment  4 years

· vehicles  5 years

Depreciation methods, useful lives and residual values are reviewed at each balance sheet date.

Leased assets

Payments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease. Lease incentives received are recognised in the income statement as an integral part of the total lease expense. 

Financing income and expenses

Financing expenses comprise interest payable and finance charges recognised in profit or loss using the effective interest method, unwinding of the discount on provisions, and net foreign exchange losses that are recognised in the income statement (see foreign currency accounting policy. Financing income comprise interest receivable on funds invested, dividend income, and net foreign exchange gains.

Interest income and interest payable is recognised in profit or loss as it accrues, using the effective interest method. Dividend income is recognised in the income statement on the date the entity's right to receive payments is established.  Foreign currency gains and losses are reported on a net basis.

Impairment of tangible and intangible assets excluding goodwill

The carrying amounts of the Group's non-financial assets, other than investment property, inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. For goodwill, and intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable amount is estimated each year at the same time.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Foreign currencies

The individual financial statements of each Group company are prepared in the currency of the primary economic environment in which it operates (its functional currency). For the purposes of the consolidated financial statements, the results and financial position of each Group company are expressed in Pounds Sterling, which is the functional currency of the parent company, and the presentational currency for the consolidated Financial statements.

Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional currency at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the income statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are retranslated to the functional currency at foreign exchange rates ruling at the dates the fair value was determined.

Share based payments

Share-based payment arrangements in which the Group receives goods or services as consideration for its own equity instruments are accounted for as equity-settled share-based payment transactions, regardless of how the equity instruments are obtained by the Group.

The grant date fair value of share-based payment awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the awards.  The fair value of the options granted is measured using an option valuation model, taking into account the terms and conditions upon which the options were granted.  The amount recognised as an expense is adjusted to reflect the actual number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that do meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

Share-based payment transactions in which the Group receives goods or services by incurring a liability to transfer cash or other assets that is based on the price of the Group's equity instruments are accounted for as cash-settled share-based payments.  The fair value of the amount payable to employees is recognised as an expense, with a corresponding increase in liabilities, over the period in which the employees become unconditionally entitled to payment. The liability is remeasured at each balance sheet date and at settlement date. Any changes in the fair value of the liability are recognised as personnel expense in profit or loss.

Other than for business combinations, the only share based payments of the Group are equity settled share options and certain liability settlements. The Group has applied the requirements of IFRS 2 - Share-based Payments.

For share options granted, an option pricing model is used to estimate the fair value of each option at grant date. That fair value is charged on a straight-line basis over the vesting period as an expense in the income statement, with a corresponding increase in equity.

For shares issued in settlement of fees and/or liabilities, the Directors estimate the fair value of the shares at issue date and that value is charged on a straight line basis as an expense in the income statement (for fees) or reduction in the balance sheet liability (for liabilities) with a corresponding increase in equity.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management are included as a component of cash and cash equivalents for the purpose only of the cash flow statement.

Trade receivables

Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit and loss when there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the effective interest rate compound at initial recognition.

Trade receivables are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts.

Investments in debt and equity securities

Investments in debt and equity securities held by the Group are classified as either fair value through profit or loss (FVTPL) or fair value through other comprehensive income (FVTOCI) and are stated at fair value. Any resultant gain or loss is recognised in the Statement of Profit and Loss or directly in equity respectively, except for impairment losses and, in the case of monetary items such as debt securities, foreign exchange gains and losses. When these investments are derecognised, the cumulative gain or loss previously recognised directly in equity is recognised in profit or loss.

In the prior year investments in equity securities were classified as being available-for-sale and are stated at fair value, with any resultant gain or loss being recognised directly in equity (in the revaluation reserve), except for impairment losses and, in the case of monetary items such as debt securities, foreign exchange gains and losses. When these investments and derecognised, the cumulative gain or loss previously recognised directly in equity is recognised in profit or loss.

The Company has taken the exemption available to it under IFRS 9 not to restate the prior period figures.

Financial instruments held for trading or designated upon initial recognition are stated at fair value, with any resultant gain or loss recognised in profit or loss.

Investments in debt and equity securities whose fair value cannot be reliably measured are stated at amortised cost less impairment. 

Financial liability and equity

Financial liabilities are classified according to the substance of the contractual agreements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments are recognised at the amount of proceeds received net of costs directly attributable to the transaction. To the extent that those proceeds exceed the par value of the shares issued they are credited to a share premium account.

Trade payables

Trade and other payables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the effective interest method.

Provisions

A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, that can be reliably measured and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects risks specific to the liability .

2.  Earnings per ordinary share

The calculation of basic earnings per share and diluted earnings per share is based on the results and weighted average number of ordinary shares as follows:

		6 month	12 month	6 month	12 month
		Period ended	Period ended	Period ended	ended
		31-Jul	31-Jan	31-Jul	31-Jan
		2020	2020	2019	2019
		(unaudited)	(audited)	(restated)	(restated)
Attributable to equity £000's		192	(4,226)	(1,318)	(393)
Weighted average number of ordinary shares:
Basic		3,090,830	3,090,830	3,090,830	2,734,996

3.  Share capital

		As at		As at		As at
		31-Jul		31-Jul		31-Jan
		2020		2019		2020
		£'000		£'000		£'000
Issued and fully paid:		3,116		3,116		3,116

4.  Profit and loss of discontinued operations

		Period ended		Period ended		Period ended
		31-Jul		31-Jul		31-Jan
		2020		2019		2020
		£'000		£'000		£'000
Revenue		-		-		104
Cost of Sales		-		-		-
Gross Profit		-		-		-
Administrative expenses		-		-		-
Operating profit before exceptional items		-		-		-
		-		-
Finance expenses/(interest income)		-		-		-
(Loss) before and after taxation		-		-		-
Gain on sale of discontinued operations		759		-		-
Profit for the period from discontinued operations		759		-		-

5.  Cash used in continuing operations 

		Period ended		Period ended		Period ended
		31-Jul		31-Jul		31-Jan
		2020		2019		2020
		£'000		£'000		£'000
Profit/(Loss) attributable to equity holders		(567)		(1,318)		(4,266)
Finance costs		-		-		4
Finance income		-		-		(4)
Depreciation, amortisation and impairment		-		86		347
Impairments		-		-		1,843
Fair value adjustments		-		-		(121)
Loss on disposal of fixed assets		-		-		10
Decrease/(increase) in debtors		633		351		(210)
(Decrease)/increase in creditors		837		952		2,355
Cash generated from/ (used in) continuing operations		903		71		(42)

6.  Transactions with related parties 

The transactions set out below took place between the Group and certain related parties.

On 30 June 2020 the company announced that in order to replace the proposed investment from AIS that it had entered into an agreement with a number of individuals including existing shareholders entering into an unsecured convertible loan note for a total amount of £415,000 to improve the working capital position of the Company.

Included within the subscriptions for the Convertible Loan notes are the following related party and Persons Discharging Managerial Responsibilities:

1.  £110,000 by Philip Jackson a member of the operations committee

2.  £75,000 by First Hartford Trust, a family trust of Mr John Botros, a subsidiary director

3.  £20,000 by Daniel Pym, finance director

4.  £20,000 by James Rose, a subsidiary director

5.  £10,000 by Tilly Beazeley a person closely associated with Philip Jackson, member of the operations committee

6.  £5,000 by Roger Matthews, the Chairman

7.  £5,000 by Arno Rudolf, a Non-Executive Director

8.  £5,000 by Tim Razzall, who was Chairman until 31 July 2019.

Directors' fees and consultancy services

Lord E T Razzall

Lord E T Razzall, a director, charged the Group £8,000 (six months ended Jul 2019: £20,754; twelve months ended Jan 2020: £43,755) in the period, for directorship services provided, via an entity trading as R T Associates. At the period end R T Associates was owed £35,600 (Jul 2019: £nil; Jan 2020: £27,600).

Arno Rudolf

Arno Rudolf, a director, charged the Group £10,000 (six months ended Jul 2019 £10,000; twelve months ended Jan 2020: £20,000) in the period, for directorship services. At the period end, Mr Rudolf was owed £36,667 (six months ended Jul 2019 £16,667; twelve months ended Jan 2020: £26,667).

Kathy Cox

Kathy Cox, a director, charged the Group £12,000 (six months ended Jul 2019 £nil; twelve months ended Jan 2020: £12,359) in the period, for directorship services. At the period end, Kathy Cox was owed £26,830 (six months ended Jul 2019 £nil; twelve months ended Jan 2020: £14,830).

Jacques Leuba

Jacques Leuba, a director, charged the Group £12,000 (six months ended Jul 2019 £nil; twelve months ended Jan 2020: £12,667) in the period, for directorship services. At the period end, Mr Leuba was owed £24,667 (six months ended Jul 2019 £nil; twelve months ended Jan 2020: £12,667).

Roger Matthews

Roger Matthews, a director, charged the Group £15,000 (six months ended Jul 2019 £nil; twelve months ended Jan 2020: £17,261) in the period, for directorship services. At the period end, Mr Matthews was owed £32,261 (six months ended Jul 2019 £nil; twelve months ended Jan 2020: £17,261).

John M Botros

John M Botros is a director of Timegrand Limited, Soccerdome Limited, Barrington Lewis Limited and company Secretary of Prize Provision Services Limited.

John Botros charged the Group £36,000 (six months ended Jul 2019 £18,000; twelve months ended Jan 2020: £101,000) in the period, for directorship and company secretarial services provided, via an entity Bluedale Corporate Limited ("BCL"). John Botros also charged the Group £nil (six months ended Jul 2019 £nil; twelve months ended Jan 2020 £3,447) for expenses incurred on the Group's behalf via an entity St James Chambers.

At the period end BCL was owed £50,000 (Jul 2019 £100,000.23 ; twelve months ended Jan 2020: £75,528).

James Rose

James Rose is a director of Prize Provision Services Limited ('PPSL'). During the period James Rose charged PPSL £30,000 (six months ended Jul 2019 £30,000; twelve months ended Jan 2020: £60,000) in the period, for directorship services. end Nineteen Twelve Management Limited was owed £79,745 (six months ended Jul 2019 £88,200; twelve months ended Jan 2020: £79,167).

Phillite D UK Limited

Included in trade debtors is an amount of £820,000 (Jul 2019: £1,234,452 and Jan 2020: £840,000 in trade receivables due from Phillite D UK Limited ("PDU"), a company in which John Botros is a director and Phil Jackson is the person with significant control.

7.  Organisational and Structural Changes During the six months to 31 July 2020

Disposal of subsidiary

MDC Nominees Limited

On 28 February 2020 the Group disposed of Market Access Ops Limited to MDC Nominees Limited, a company controlled by J M Botros for a consideration of £1.

8.  Interim Financial Report

The unaudited interim financial report, which is the responsibility of the directors and was approved by them on 22 March 2020, does not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006.

This report is available on St James House PLC's website at www.sjhplc.com. Copies are available from the Company at its registered office:

Gainsborough House, 59-60 Thames Street, Windsor, SL4 1TX, United Kingdom.

 

END

 

 

IR UOOWRAKUOUAR