Half-year Report

RNS Number : 3541A

Dolphin Capital Investors Limited

29 September 2020

 

29 September 2020

DOLPHIN CAPITAL INVESTORS LIMITED

("DCI" or "Dolphin" or the "Company"

and together with its subsidiaries the "Group")

Half Year Results for the six months ended 30 June 2020 and

Trading Update

Summary

· Total Group Net Asset Value ("NAV") of €174 million and €164 million before and after Deferred Tax Liabilities ("DTL"). This represents a decrease of €6.3 million and €5.6 million (3.5% and 3.3%) respectively compared to 31 December 2019. NAV reduction principally due to operational, finance, corporate and management expenses, together with a €2.1 million reduction in the value of investment property.

· Sterling NAV per share as at 30 June 2020 stood at 18p before DTL and 17p after DTL, versus 17p and 16p, a 3.1% and 3.3% increase before and after DTL respectively, compared to 31 December 2019. The increase in Sterling NAV has resulted from the 6.9% depreciation of Sterling versus the Euro during the period that has fully offset the decrease in Euro NAV.

· Total Debt of €6.6 million with a Group total debt to gross asset ratio of 3% as at 30 June 2020 (31 December 2019: 3%). DCI itself does not have any borrowings. Operating expenses for the period have declined by €0.7 million (17%) compared for the same period of 2019.

· The COVID-19 pandemic impact is ongoing across all our business activities, restricting our ability to market and sell plots and villas in our development projects, and Aristo. It has also dampened investor interest in the acquisition of large-scale greenfield development projects in the residential/hospitality sector, consequently pushing back potential portfolio asset disposals. Nevertheless, we have engaged advisers to identify potential purchasers of the Company's key projects.

· After a pause due to lock-down measures imposed in mid-March 2020, construction works at One&Only at Kea Island ("OOKI") resumed on 25 May. To date, all internal roads have been constructed, site infrastructure has advanced, and approximately 25% of the concrete works is complete. In addition, the resort mock-up room is progressing at an accelerated pace to be completed within Q4 2020. Following discussions with our partners at One&Only, we have decided, in light of both the construction delays and the expected time lag before hospitality market conditions return to normal, to target the commencement of resort operations for the 2022 season. Meanwhile, through dedicated social media campaigns and related PR activities in co-operation with One&Only, demand for the Private Homes is very encouraging. We have already signed two sales reservations on an off-plan basis and we are in advanced discussions with several other potential purchasers.

· Following the Kilada ground-breaking ceremony which was held on-site on 19 June 2020, earthworks continue as scheduled. A tender process is under way to select contractors to progress to the next phase of the works, which includes site and residential infrastructure works, golf course and country club construction. A full rebranding of the project was completed during Q2 2020. Following the project's website ( www.mykilada.com ) going live, selective advertising was conducted in the UK and Greece. This resulted in a number of enquiries for homes and plots at Kilada. Additionally, on 11 June 2020, we executed the sale of a land plot which fell outside the project development perimeter at a price of €1.5 million.

· On 9 June 2020 an agreement was announced between the governments of the United Kingdom and Cyprus regulating development in the non-military Sovereign Base Areas ("SBA"), which includes the largest part of Apollo Heights. The period for the filing of environmental related objections in the public consultation process has now expired. During Q4 2020, the Company will be lodging its formal comments and proposals for the improvement of the provisional zoning granted and will seek to increase the overall buildable capacity of the project. The final SBA zoning is expected to be published, after consideration of comments filed by land owners within the area, in early 2021.

· On 3 September 2020, the Company realized the sale a c. 11,000 m² land plot in the northern border of the LaVanta project to a local investor for €0.8 million.

· Gross sales of Aristo Developers Ltd ("Aristo"), a 47.9% DCI affiliate, d uring the six months to June 2020 declined by 69% compared to the 2019 corresponding period, primarily due to the worldwide travel restrictions imposed following the COVID-19 pandemic which made it impossible for Chinese and other Asian purchasers (Aristo's core client market) to travel to Cyprus . Since July, we have seen an improvement in the situation with some international flights resuming.

Andrew Coppel CBE, Chairman of Dolphin Capital Investors, commented:

" The travel restrictions and border closures put in place due to the COVID-19 pandemic, have had an adverse impact on our ability to achieve all our business goals within the first six months of the year. In particular, this affected our sales efforts both on a project and on a retail basis at Aristo and hindered our development works in OOKI and Kilada. We are delighted that there has since been a full resumption of works at OOKI as well as that construction has commenced at Kilada. In parallel we have continued working towards the implementation of the Company's divestment strategy and have engaged advisors to assist us in this process on an asset by asset basis. "

Miltos Kambourides, Founder of Dolphin and Managing Partner of Dolphin Capital Partners, commented:

"Our ability to execute two off-plan residential sales at OOKI despite adverse market conditions validates both the potential of the project as well as the resilience of our integrated hospitality and residential project portfolio composition. In the new social-distancing and remote working landscape that prevails after the COVID-19 outbreak, we have witnessed that the demand for quality second-homes remains healthy, as affluent and increasingly mobile individuals are looking for fully serviced properties, offering privacy and longer term use potential. We believe that this trend will continue and enable us to monetize our project portfolio in accordance with our divestment strategy."

For further information, please contact:

Dolphin Capital Investors Andrew M Coppel, CBE	[phone]
Dolphin Capital Partners Miltos E Kambourides	[e-mail]
Panmure Gordon (Broker) Dominic Morley	[phone]
Grant Thornton UK LLP (Nominated Adviser) Philip Secrett	[phone]
Instinctif (PR Communications Adviser) Mark Garraway	[phone]

 

A. Chairman's Statement

I am pleased to report Dolphin's interim financial results for the six months ended 30 June 2020, and to provide a trading update.

During the first half year, the Board and the Investment Manager have focused their efforts on resuming and progressing construction at OOKI, commencing works at Kilada and dealing with the effects of the COVID-19 outbreak in our business. This resulted in deferment of ongoing asset-disposal discussions, delays across all our permitting activities, weaker Aristo sales, as well as the need to redefine our sales and marketing strategy in view of the lock-down measures and travel restrictions.

The loss after tax for the period ended 30 June 2020, attributable to owners of the Company, amounted to €5.4 million, of which €2.1 million was due to the write down in value of property, compared to a loss of €4.9 million for the period ended 30 June 2019.

Despite the adverse market conditions, we were able to execute two off-plan residential sales reservations at OOKI on an off-plan basis and advance several other discussions.

Furthermore, we achieved to sell two land plots outside the project perimeters at Kilada and LaVanta for an aggregate consideration of €2.3 million.

Aristo's new sales in 2020 have been significantly impacted by COVID-19. As its main market is China, it has felt the impact of the pandemic from the beginning of the year due to travel restrictions imposed on Chinese residents which further culminated in the global inbound travel ban enacted by the Cyprus government from March onwards. This resulted into a 69% drop in sales revenue on a year-on-year basis. Since July, we have seen an improvement in the situation with some international flights resuming. The 3-month lockdown also caused delays in construction. However from May onwards, Aristo has been able to complete and deliver a number of already sold units thus becoming entitled to the corresponding delivery payments from purchasers. We are monitoring the Aristo financial and cashflow situation closely and working with Aristo management to ensure that we take advantage to the fullest extent possible of the policy measures introduced by the Cyprus government and meet the operational challenges faced by the business on a day-to-day basis.

We are encouraged by the agreement of the governments of the United Kingdom and Cyprus on regulating development in the non-military SBAs on the island, which has already resulted in provisional zoning permissions granted to our Apollo Heights project. We will be filing our formal comments, seeking to improve these provisional zoning entitlements, by the end of the year. In all cases the final zoning permissions, which are expected to be granted to the project in early 2021 following the conclusion of the consultation period, would increase both its value as well as its short-term sale potential.

COVID-19 added a material headwind to the already challenging markets for greenfield real estate developments in Greece, Cyprus, Croatia and Turkey. We have been able to address the fundamental operational challenges that the pandemic caused to our developments in OOKI and Kilada as well as generate actionable sales leads during the lockdown period by refocusing our sales and marketing strategy. Importantly, we are now, in parallel, actively exploring available options to achieve the disposal of our portfolio assets to both real estate and private equity investors and have engaged advisers to assist us throughout the process on a project by project basis. We are acutely aware of the time limitations set in our disposal strategy and are working with the Investment Manager and the Company's advisers to achieve tangible divestment results.

Andrew M Coppel CBE

Chairman

Dolphin Capital Investors

29 September 2020

 

B. Investment Manager's Report

B.1.  Business Overview

During the first nine months of 2020 we focused on enhancing the value of our portfolio assets, while addressing the day-to-day challenges of COVID-19:

· progressing construction works at OOKI and Kilada;

· refocusing our sales and marketing strategy at a time of travel restrictions and social distancing measures;

·making permitting advances across our asset portfolio, including the improvement of zoning conditions at Apollo Heights;

· monitoring our operational budgets and reducing overhead costs where possible; and,

· re-activating divestment discussions which were deferred due to COVID-19 and engaging advisers to generate new leads for the sale of our portfolio assets.

We continue to focus on the implementation of the Company's strategy to realise the value of our diverse asset portfolio in order to maximise cash returns for our shareholders.

B.2.  Portfolio Review

· One&Only at Kea Island, Greece

o Following the COVID-19 outbreak, the Greek government enforced drastic measures to mitigate the virus risk on all island destinations, which included the complete lockdown of all island hotels and restaurants as well as restrictions on inbound and outbound transportation to islands, which was limited to permanent residents only. These measures were lifted on 25 May 2020, at which point we were able to resume the project construction.

o Due to the pandemic related construction delays as well as the uncertainty over the hospitality industry performance in 2021, the project shareholders decided to postpone the OOKI resort opening until the 2022 season.

o The OOKI project will comprise 75 standalone hotel guest rooms with private pools, two restaurants, an extensive beach club, spa facilities, a yacht pier as well as a number of private homes, which will be sold on an off-plan basis.

o During the lockdown period we created dedicated social media campaigns, alongside PR activities, and undertook online actions jointly with the One&Only marketing teams to generate awareness of the residential offering of the project. Leveraging on these initiatives, and in spite of the practical travelling difficulties caused by the COVID-19 measures, we have been able to close during this summer two off-plan villa sales at OOKI with an aggregate value in line with the project sales budget.

· Kilada, Greece (www.mykilada.com) 

o Following the issuance on 1 November 2019 of the final construction permit for the first phase of this project in the Porto Heli area, which includes the 18-hole Jack Nicklaus Signature Golf Course, the Kilada country club and infrastructure for the first 90 residential lots, earthworks have commenced on-site.

o A tendering process is underway for the other key components of the project which include site and residential infrastructure works as well as the golf course and country club construction which are scheduled to commence once the earthworks have advanced. The finalization of the tenders through the award of these construction contracts to individual contractors is expected within Q4 2020, while the completion of the first phase of Kilada is expected in the second half of 2022.

o To mark the progress in development a ground-breaking ceremony was held on-site on 19 June 2020, which was attended by a number of senior government and municipal officials due to the project's Strategic Investment status.

o In parallel we have completed the full rebranding of the project and, following the launch of a dedicated website (www.mykilada.com), we have conducted a marketing campaign in the UK and Greece through a number of media outlets which resulted to a significant number of sales leads.

o On 11 June 2020, we achieved the sale of a 49,682 m² land site, located outside the project perimeter for €1.5 million which was fully paid in cash on closing.

· La Vanta, Turkey

o A c. 11,000 m² land plot on the northern part of LaVanta was sold on 3 September 2020, for €0.8 million which was fully paid in cash on closing.

· Aristo (a 47.9% affiliate)

o The travel restrictions imposed in both China and Cyprus in the aftermath of the COVID-19 breakout created a major obstacle to Aristo's sales efforts and resulted in a drastic reduction of its 2020 sales.

o 34 homes and plots were sold during the first six months of 2020, representing total sales of €10.5 million, down 69.38% compared to €34 million for the same period in 2019.

o 43 homes and plots were sold in total up to the end of August 2020, representing total sales of €14 million, down 67% compared to €42.5 million for the same period in 2019.

	Six months to 30 June 2020	Six months to 30 June 2019	Eight months to 31 August 2020	Eight months to 31 August 2019
RETAIL SALES
New sales booked	€10.5m	€34.2m	€13.9m	€42.5m
% change	(69)%		(67)%
Units sold	34	62	43	76
% change	(45)%		(43)%
CLIENT ORIGIN
China & Other Asia	76%	72%	82%	74%
MENA	17%	26%	12%	22%
Russia	7%	--	5%	--
Cyprus & Other EU	--	4%	--	4%

o The substantial majority of Aristo's sales continue to be under the Cyprus citizenship investment programme, which offers Cypriot citizenship to foreign nationals investing at least €2 million in real estate. Consequently, the bulk of the relevant sales proceeds remains in blocked or escrow accounts until the citizenship is awarded to the applying customer and /or the construction of the relevant property progresses (for off-plan sales). Aristo had a total of €15 million in blocked/escrowed funds as at 30 June 2020 (€18.8 million at YE 2019). As the relevant applications mature and properties are delivered, its available cash balances are expected to increase. However, both Aristo's capacity to complete and deliver homes and the purchasers' ability to travel to Cyprus and take delivery of their properties have been materially impaired due to the COVID-19 related lockdowns, travel bans and quarantine measures imposed both in Cyprus and in Aristo's key markets. As such, the timely release of escrowed funds, which was key to the company's cashflow generation, was also adversely impacted. As the travel restrictions began to ease from July onwards, the Aristo management expects that the orderly completion of sold properties and cash collection will progressively ensue.

o DCI has received during the period €0.5 million from the deferred consideration due to it, from the sale of its Venus Rock related preferred shares to Aristo Ktimatiki (an entity controlled by Theodore Aristodemou, Chairman of Aristo) which was executed on 23 August 2019. The pending consideration of €3.5 million is expected to be settled within Q4 2020.

 

C. Group Assets

A summary of Dolphin's current investments is presented below.

	PROJECT	Land site (hectares)	DCI's stake	Debt (€m) *	Real estate value (€m)	Loan to real estate asset value (%)
1	OOKI	65	33%	--
2	Kilada	230	97%	--
3	Scorpio Bay	172	100%	--
4	Lavender Bay	310	100%	--
5	Plaka Bay	442	100%	--
6	Apollo Heights	447	100%	--
7	Livka Bay	63	100%	6.6
8	LaVanta	7	100%	--
	TOTAL	1,736		6.6	172	4%
	Aristo	473	47.9%	--	43
	Itacaré	n/a	13%	--	1
	GRAND TOTAL	2,209		6.6	216**	3%

*Further information on debt maturities are set out under note 22 of the financial statements.

**Total real estate value includes equity investment in OOKI, Aristo and Itacare.

A breakdown of Dolphin's portfolio, as at 30 June 2020, for certain key metrics is provided below:

	COUNTRY	Land size (hectares)	Debt (€ million)	Real Estate Value (€ million)	% Loan to real estate asset value	Net Asset Value
1	Greece	1,219	--	124	--	52%
2	Cyprus***	920	--	63	--	36%
3	Other	70	6.6	29	23%	12%
	Grand Total	2,209	6.6	216	3%	100%

***DCI's portfolio in Cyprus includes its equity investment in Aristo Developers Ltd, which owns assets in Cyprus that are subject to Aristo's debt and other obligations.

D. Market Dynamics

The COVID-19 has had a major impact on the travel, real estate and hospitality industries. We have witnessed a significant reduction in international travel, governmental lock-down measures imposed on hotels and resorts in Greece and Cyprus and supply chain delays which impacted our ongoing development activities as well as our portfolio divestment initiatives.

We have tried to tackle these operational challenges in all the countries where the DCI group operates. We are working closely with our partners, contractors and key stakeholders to find actionable ways enabling us to push forward the development of our ongoing projects, enhance the digitization of our sales and marketing efforts which was needed to remain relevant in a social distancing environment, and engage key advisers whom we expect to source new leads for the disposal of our asset portfolio.

However, beyond the immediate challenges, the pandemic is likely to create transformative and lasting changes in our industry. The hospitality and real estate sectors were already materially impacted during 2020 and the persistence of travel restrictions may permanently affect demand for hospitality assets going forward. On the other hand, we have seen that the affluent investors' demand for quality second homes during this crisis has remained resilient, if not enhanced, helped by remote-working arrangements and social distancing considerations.

Notwithstanding the above, the uncertainty created by the COVID-19 outbreak has not as yet faded and the disruption that it will cause to our disposal efforts and our development, permitting and sales activities cannot be quantified at this juncture. We are constantly reviewing our actions and strategies to adapt to this new landscape and attain the divestment strategy objectives for the benefit of our shareholders.

E. Outlook

The Company's main objectives for the remainder of 2020 remain to:

1.  Execute portfolio asset disposals;

2.  Progress construction at OOKI and achieve more residential sales;

3.  Progress construction at Kilada and generate plot / villa sales;

4.  Progress planning and permitting selectively for the remaining portfolio to maximize sales proceeds and expedite divestments; and

5.  Effectively manage COVID-19 related challenges.

Miltos Kambourides Managing Partner Dolphin Capital Partners 29 September 2020

Pierre Charalambides Founding Partner Dolphin Capital Partners 29 September 2020

 

F. Financial results for the first half of 2020

F.1. Consolidated statement of profit or loss for the first half of 2020

Financial Results

Loss after tax for the period ended 30 June 2020 attributable to owners of the Company amounted to €5.4 million (H1 2019: loss of €4.9 million). Loss per share was €0.006 compared to €0.005 in the same period last year.

Consolidated statement of profit or loss and other comprehensive income

For the six-month period ended 30 June 2020 

		From 1 January 2020 to 30 June 2020	From 1 January 2019 to 30 June 2019
		€'000	€'000
CONTINUING OPERATIONS
Continuing operations
Revenue		2,007	382
Cost of sales		(1,697)	(14)
Gross profit		310	368
Disposal of investments in subsidiaries		336	630
Change in valuations		(2,144)	90
Investment Manager remuneration		(1,800)	(2,000)
Directors' remuneration		(205)	(246)
Depreciation charge		(19)	(19)
Professional fees		(1,061)	(1,542)
Administrative and other expenses		(505)	(532)
Total operating and other expenses		(5,398)	(3,619)
Results from operating activities		(5,088)	(3,251)
Finance costs		(623)	(789)
Share of losses of equity-accounted investees, net of tax		(515)	(751)
Loss before taxation		(6,226)	(4,791)
Taxation		641	(2)
Loss		(5,585)	(4,793)
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss
Foreign currency translation differences		(271)	364
Other comprehensive income, net of tax		(271)	364
Total comprehensive income		(5,856)	(4,429)
Loss attributable to:
Owners of the Company		(5,375)	(4,940)
Non-controlling interests		(210)	147
		(5,585)	(4,793)
Total comprehensive income attributable to:
Owners of the Company		(5,646)	(4,576)
Non-controlling interests		(210)	147
		(5,856)	(4,429)
Loss per share
Basic and diluted loss per share (€)		(0.006)	(0.005)

Further analysis of individual revenue and expense items is provided below.

 

Revenue

Revenues of €2.0 million (31 June 2019: €0.4 million), were derived from the following sources:

	H1 2020 € million	H1 2019 € million
Sale of trading & investment properties	1.5	--
Other income	0.5	0.4
TOTAL	2.0	0.4

Sale of trading & investment properties is attributable to a sale of a land plot located outside the Kilada development perimeter at a price of €1.5 million.

Other income in H1 2020 consists of €0.5 million proceeds from the sale of Venus Rock related preferred shares to Aristo Ktimatiki.

Cost of sales

Cost of sales comprises the following:

	H1 2020 € million	H1 2019 € million
Cost of sales related to:
Sales of trading and investment properties	1.7	0.0
TOTAL	1.7	0.0

Professional Fees

The charge for the period was €1.1 million (H1 2019: €1.6million) and comprises the following:

	H1 2020 € million	H1 2019 € million
Legal & Administrator fees	0.3	0.3
Auditors' remuneration	0.1	0.1
Accounting expenses	0.1	0.1
Project design and development fees	0.4	0.8
Consultancy fees	0.1	0.1
Other professional fees	0.1	0.2
TOTAL	1.1	1.6

Administrative and other expenses

The administrative and other expenses amounted to €0.5 million (H1 2019: €0.5 million) and are analysed as follows:

	H1 2020 € million	H1 2019 € million
Marketing and advertising expenses	0.1	--
Personnel expenses	0.2	0.2
Other	0.2	0.3
TOTAL	0.5	0.5

 

F.2. Consolidated statement of financial position as at 30 June 2020

		30 June 2020	30 June 2019
		€'000	€'000
Assets
Property, plant and equipment		3,351	2,647
Investment property		92,392	96,601
Equity-accounted investees		59,428	59,943
Other investments		913	-
Non-current assets		156,084	159,191
Trading properties		60,826	60,826
Receivables and other assets		1,308	1,452
Cash and cash equivalents		2,460	2,854
Assets held for sale		-	2,139
Current assets		64,594	67,271
Total assets		220,678	226,462
Equity
Share capital		9,046	9,046
Share premium		569,847	569,847
Retained deficit		(423,280)	(417,905)
Other reserves		8,288	8,559
Equity attributable to owners of the Company		163,901	169,547
Non-controlling interests		5,885	5,681
Total equity		169,786	175,228
Liabilities
Loans and borrowings		1,558	-
Lease liabilities		3,036	3,028
Deferred tax liabilities		10,341	11,027
Trade and other payables		20,483	20,529
Deferred income		619	433
Non-current liabilities		36,037	35,017
Loans and borrowings		6,630	6,644
Lease liabilities		8	8
Trade and other payables		8,175	6,289
Deferred income		42	-
Liabilities held for sale		-	3,276
Current liabilities		14,855	16,217
Total liabilities		50,892	51,234
Total equity and liabilities		220,678	226,462
Net asset value ('NAV') per share (€)		0.18	0.19

The reported NAV as at 30 June 2020 is presented below:

	As at 30 June 2020		As at 31 December 2019		Variation since 31 December 2019
	€	£	€	£	%	%
Total NAV before DTL (million)	174	159	181	154	(3.5%)	3.2%
Total NAV after DTL (million)	164	150	170	145	(3.3%)	3.3%
NAV per share before DTL	0.19	0.18	0.20	0.17	(3.5%)	3.2%
NAV per share after DTL	0.18	0.17	0.19	0.16	(3.3%)	3.3%

___________

Notes:

1.  Euro/GBP rate 0.91263 as at 30 June 2020 and 0.85369 as at 31 December 2019.

2.  NAV per share has been calculated on the basis of 904,626,856 issued shares as at 30 June 2020 and as at 31 December 2019.

Total Group NAV as at 30 June 2020 was €174 million and €164 million before and after DTL respectively. This represents a decrease of €6.3 million (3.5%) and €5.6 million (3.3%) respectively, from the 31 December 2019 figures. Given that no valuation of the Company's portfolio took place as at 30 June 2020, apart from the Livka Bay investment property, for which the fair value was adjusted downwards by €2.1 million due to market conditions prevailing in the property market of Croatia, the NAV reduction is mainly due to Dolphin's regular operational, corporate, finance and management expenses.

Sterling NAV per share as at 30 June 2020 was 0.18p before DTL and 0.17p after DTL and increased by 3.2% and 3.3% before and after DTL respectively, compared to the 31 December 2019 figures. The depreciation of Sterling versus the Euro during the period of approximately 6.9% has fully offset the Euro decrease in NAV.

The Company's consolidated assets of €221 million include €157 million of real estate assets, €60 million of equity-accounting investees (which reflects our 33% shareholding in OOKI as well as the Company's 47.9% interest in Aristo), €1 million of trade and other receivables, €1 million of other investments (which represents the Company's investment in Itacare) and €2 million in cash.

The figure of €157 million of real estate assets (property, plant and equipment, trading properties and investment property) represents the fair market valuations conducted as at 31 December 2019 for both freehold and long leasehold interests.

The Company's consolidated liabilities (excluding DTL) total €41 million and mainly comprise €29 million of trade and other payables as well as €11 million of interest bearing loans and finance lease obligations. All loans are held by Group subsidiaries and are non-recourse to Dolphin. Trade and other payables comprise mainly €21 million of option contracts to acquire land in the Company's Lavender Bay project.

The consolidated financial statements have been reviewed by KPMG in accordance with the International Standard on Review Engagements 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity'.

 

Condensed consolidated interim statement of financial position

As at 30 June 2020

		30 June 2020	31 December 2019 (Restated)
	Note	€'000	€'000
Assets
Property, plant and equipment	14	3,351	2,647
Investment property	15	92,392	96,601
Equity-accounted investees	17	59,428	59,943
Other investments	16	913	-
Non-current assets		156,084	159,191
Trading properties	18	60,826	60,826
Receivables and other assets	19	1,308	1,452
Cash and cash equivalents	20	2,460	2,854
Assets held for sale	16	-	2,139
Current assets		64,594	67,271
Total assets		220,678	226,462
Equity
Share capital	21	9,046	9,046
Share premium	21	569,847	569,847
Retained deficit		(423,280)	(417,905)
Other reserves		8,288	8,559
Equity attributable to owners of the Company		163,901	169,547
Non-controlling interests		5,885	5,681
Total equity		169,786	175,228
Liabilities
Loans and borrowings	22	1,558	-
Lease liabilities	23	3,036	3,028
Deferred tax liabilities	24	10,341	11,027
Trade and other payables	25	20,483	20,529
Deferred income		619	433
Non-current liabilities		36,037	35,017
Loans and borrowings	22	6,630	6,644
Lease liabilities	23	8	8
Trade and other payables	25	8,175	6,289
Deferred income		42	-
Liabilities held for sale	16	-	3,276
Current liabilities		14,855	16,217
Total liabilities		50,892	51,234
Total equity and liabilities		220,678	226,462
Net asset value ('NAV') per share (€)	26	0.18	0.19

 

Condensed consolidated interim statement of profit or loss and other comprehensive income

For the six-month period ended 30 June 2020

		From 1 January 2020 to 30 June 2020	From 1 January 2019 to 30 June 2019
	Note	€'000	€'000
Continuing operations
Revenue	6	2,007	382
Cost of sales	7	(1,697)	(14)
Gross profit		310	368
Disposal of investments in subsidiaries	8A	336	630
Change in valuations	8B	(2,144)	90
Investment Manager remuneration	27.2	(1,800)	(2,000)
Directors' remuneration	27.1	(205)	(246)
Depreciation charge		(19)	(19)
Professional fees	10	(1,061)	(1,542)
Administrative and other expenses	11	(505)	(532)
Total operating and other expenses		(5,398)	(3,619)
Results from operating activities		(5,088)	(3,251)
Finance costs		(623)	(789)
Share of losses of equity-accounted investees, net of tax		(515)	(751)
Loss before taxation		(6,226)	(4,791)
Taxation	12	641	(2)
Loss		(5,585)	(4,793)
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss
Foreign currency translation differences		(271)	364
Other comprehensive income, net of tax		(271)	364
Total comprehensive income		(5,856)	(4,429)
Loss attributable to:
Owners of the Company		(5,375)	(4,940)
Non-controlling interests		(210)	147
		(5,585)	(4,793)
Total comprehensive income attributable to:
Owners of the Company		(5,646)	(4,576)
Non-controlling interests		(210)	147
		(5,856)	(4,429)
Loss per share
Basic and diluted lossper share (€)	13	(0.006)	(0.005)

 

Condensed consolidated interim statement of changes in equity

For the six-month period ended 30 June 2020

	Attributable to owners of the Company
	Share	Share	Translation	Revaluation	Retained		Non-controlling	Total
	capital	premium	reserve	reserve	deficit	Total	interests	equity
	€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000
Balance at 1 January 2019	9,046	569,847	7,566	279	(422,222)	164,516	5,752	170,268
TOTAL COMPREHENSIVE INCOME
(Loss)/profit	-	-	-	-	(4,940)	(4,940)	147	(4,793)
Other comprehensive income
Foreign currency translation differences	-	-	364	-	-	364	-	364
Total other comprehensive income	-	-	364	-	-	364	-	364
Total comprehensive income	-	-	364	-	(4,940)	(4,576)	147	(4,429)
Balance at 30 June 2019	9,046	569,847	7,930	279	(427,162)	159,940	5,899	165,839
Balance at 1 January 2020	9,046	569,847	8,233	326	(417,905)	169,547	5,681	175,228
TOTAL COMPREHENSIVE INCOME
Loss	-	-	-	-	(5,375)	(5,375)	(210)	(5,585)
Other comprehensive income
Foreign currency translation differences	-	-	(271)	-	-	(271)	-	(271)
Total other comprehensive income	-	-	(271)	-	-	(271)	-	(271)
Total comprehensive income	-	-	(271)	-	(5,375)	(5,646)	(210)	(5,856)
TRANSACTIONS WITH OWNERS OF THE COMPANY
Changes in ownership interests in subsidiaries
Disposal of interests without a change in control	-	-	-	-	-	-	414	414
Total transactions with owners of the Company	-	-	-	-	-	-	414	414
Balance at 30 June 2020	9,046	569,847	7,962	326	(423,280)	163,901	5,885	169,786

 

Condensed consolidated interim statement of cash flows

For the six-month period ended 30 June 2020

		From 1 January 2020 to 30 June 2020	From 1 January 2019 to 30 June 2019 (Restated)
		€'000	€'000
Cash flows from operating activities
Loss		(5,585)	(4,793)
Net change in fair value of investment property		2,144	(90)
Gain on disposal of investment in subsidiaries		(336)	(630)
Share of losses in equity-accounted investees		515	751
Other adjustments		(256)	652
		(3,518)	(4,110)
Changes in:
Receivables		144	1,460
Payables		157	(112)
Prepayments from clients		228	-
Cash used in operating activities		(2,989)	(2,762)
Tax paid		(46)	(11)
Net cash used in operating activities		(3,035)	(2,773)
Cash flows from investing activities
Proceeds from disposal of subsidiaries, net of cash disposed of		(1)	3,577
Net change in net assets held for sale		-	537
Net disposals of investment property		1,602	-
Net acquisitions of property, plant and equipment		(723)	(82)
Net change in trading properties		-	(11)
Net cash from investing activities		878	4,021
Cash flows from financing activities
Change in loans and borrowings		1,925	(1,600)
Change in lease liabilities		8	7
Interest paid		(170)	(155)
Net cash from/(used in) financing activities		1,763	(1,748)
Net decrease in cash and cash equivalents		(394)	(500)
Cash and cash equivalents at the beginning of the period		2,854	8,294
Cash and cash equivalents at the end of the period		2,460	7,794
For the purpose of the condensed consolidated interim statement of cash flows, cash and cash equivalents consist of the following:
Cash in hand and at bank		2,460	7,794
Cash and cash equivalents at the end of the period		2,460	7,794

Notes to the condensed consolidated interim financial statements

For the six-month period ended 30 June 2020

1. REPORTING ENTITY

Dolphin Capital Investors Limited (the 'Company') was incorporated and registered in the British Virgin Islands ('BVIs') on 7 June 2005. The Company is a real estate investment company focused on the early-stage, large-scale leisure-integrated residential resorts in south-east Europe and managed by Dolphin Capital Partners Limited (the 'Investment Manager'), an independent private equity management firm that specialises in real estate investments, primarily in south-east Europe. The shares of the Company were admitted to trading on the AIM market of the London Stock Exchange ('AIM') on 8 December 2005.

The condensed consolidated interim financial statements of the Company as at and for the six-month period ended 30 June 2020 comprise the financial statements of the Company and its subsidiaries (together referred to as the 'Group') and the Group's interests in associates.

2. Basis of preparation

(a) Statement of compliance

These condensed consolidated interim financial statements have been prepared in accordance with IAS 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 Group as at and for the year ended 31 December 20 19 . They are presented in euro (€), rounded to the nearest thousand.

These condensed consolidated interim financial statements were authorised for issue by the Board of Directors on 28 September 2020.

(b) Basis of preparation

The condensed consolidated interim financial statements of the Company for the six-month period ended 30 June 2020 have been prepared taking into account the Company's intention to dispose of all of its assets by 31 December 2021, as further explained below. The basis of preparation used continues to be in accordance with IAS 34.

Based on the Company's asset strategy, the Company's objective is to dispose of all of the Company's assets by 31 December 2021. The allocation of any additional capital investment into any of the Company's projects will be substantially sourced from third party capital providers and with the sole objective of enhancing the respective asset's realisation potential until 31 December 2021. The Board expects to return the proceeds from asset disposals to shareholders as the orderly realisation of the Company's assets progresses after taking into account the Company's liquidity position and working capital requirements. In the event that any assets are still held by the Company shortly before 31 December 2021, the Board will convene a shareholders' meeting at which appropriate resolutions for the future of the Company will be proposed.

3. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2019. A number of new standards are effective from 1 January 2020, but they do not have a material effect on the Group's financial statements.

Comparatives

Comparative figures have been reclassified to reflect the required changes in presentation in relation to the reclassification of Azurna Uvala D.o.o (owner of 'Livka Bay') in Croatia and DCI Holdings Two Limited (owner of 'Aristo') out of disposal groups held for sale (see note 16).

4. USE OF JUDGEMENTS AND ESTIMATES

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation and uncertainty were the same as those applied to the consolidated financial statements as at and for the year ended 31 December 2019.

Going concern assumptions

The Group's cash flow forecasts for the foreseeable future involve uncertainties related primarily to the exact disposal proceeds and timing of disposals of the assets expected to be disposed of. Management believes that the proceeds from forecast asset sales will be sufficient to maintain the Group's cash flow at a positive level. Should the need arise, management is confident that it can secure additional banking facilities and/or obtain waivers on existing ones, until planned asset sales are realised and proceeds received.

As stated in note 9, the slowdown in economic activity and transportation restrictions in all the countries where the Group operates due to COVID-19 outbreak, is expected to have a significant impact on both its ability to complete the construction of its ongoing projects in a timely manner as well as hinder its efforts to realise transactions for the disposal of its portfolio assets.

If for any reason the Group is unable to continue as a going concern, then this could have an impact on the Group's ability to realise assets at their recognised values and to extinguish liabilities in the normal course of business at the amounts stated in the condensed consolidated interim financial statements.

5. PRINCIPAL SUBSIDIARIES

As at 30 June 2020, the Group's most significant subsidiaries were the following:

		Country of	Shareholding
Name	Project	incorporation	interest
Scorpio Bay Holdings Limited	Scorpio Bay Resort	Cyprus	100%
Scorpio Bay Resorts S.A.	Scorpio Bay Resort	Greece	100%
Xscape Limited	Lavender Bay Resort	Cyprus	100%
Golfing Developments S.A.	Lavender Bay Resort	Greece	100%
MindCompass Overseas S.A.	Kilada Hills Golf Resort	Greece	97%
MindCompass Overseas Two S.A.	Kilada Hills Golf Resort	Greece	100%
MindCompass Parks S.A.	Kilada Hills Golf Resort	Greece	100%
Dolphin Capital Greek Collection Limited	Kilada Hills Golf Resort	Cyprus	100%
DCI Holdings One Limited ('DCI H1')	Aristo Developers	BVIs	100%
D.C. Apollo Heights Polo and Country Resort Limited	Apollo Heights Resort	Cyprus	100%
Symboula Estates Limited ('Symboula')	Apollo Heights Resort	Cyprus	100%
Azurna Uvala D . o . o . (' Azurna ')	Livka Bay Resort	Croatia	100%
Eastern Crete Development Company S.A.	Plaka Bay Resort	Greece	100%
DolphinLux 2 S.a.r.l.	La Vanta	Luxembourg	100%
Kalkan Yapi ve Turizm A.S. ('Kalkan')	La Vanta	Turkey	100%
Single Purpose Vehicle Ten Limited ('SPV 10')	One&Only Kea Resort	Cyprus	67%

The above shareholding interest percentages are rounded to the nearest integer.

6. revenue

	From 1 January 2020 to 30 June 2020	From 1 January 2019  to 30 June 2019
	€'000	€'000
Sale of trading and investment properties	1 ,500	-
Rental income	7	6
Other income	500	376
Total	2,007	382

7. COST OF SALES

	From 1 January 2020 to 30 June 2020	From 1 January 2019 to 30 June 2019
	€'000	€'000
Cost of sales related to:
Sales of trading and investment properties	1,697	-
Other operating expenses	-	14
Total	1, 697	14

8. INCOME AND EXPENSES

Α . Disposal of investments in subsidiaries

	Note	From 1 January 2020 to 30 June 2020	From 1 January 2019 to 30 June 2019
		€'000	€'000
Gain on disposal of investment in subsidiaries	28	336	630
Total		336	630

Β. Change in valuations

	From 1 January 2020 to 30 June 2020	From 1 January 2019 to 30 June 2019
	€'000	€'000
Net change in fair value of investment property	(2,144)	90
Total	(2,144)	90

9. SEGMENT REPORTING

Operating segments

As at 30 June 2020 and 30 June 2019, due to the latest disposals that took place in its asset portfolio, the Group is not considered to have reportable operating segments that require disclosure.

Country risk developments

The general economic environment prevailing in the south-east Europe area and internationally may affect the Group's operations. Factors such as inflation, unemployment, public health crises, international trade and development of the gross domestic product directly impact the economy of each country. Variations in those factors and the economic environment in general affect the Group's performance to a certain extent.

On 11 March 2020, the World Health Organisation declared the Coronavirus COVID-19 outbreak to be a pandemic in recognition of its rapid spread across the globe. Many governments are taking increasingly stringent steps to help contain, and in many jurisdictions, now delay, the spread of the virus, including: requiring self-isolation/ quarantine by those potentially affected, implementing social distancing measures, and controlling or closing borders and 'locking-down' cities/regions or even entire countries.

The COVID-19 outbreak is already having a major effect on the travel, real estate and hospitality industry. The Group has witnessed a significant reduction in foreign travel intent, complied with governmental lock-down measures imposed on hotels and resorts in Greece and been affected by supply chain delays which have impacted the Group' s ongoing construction activities.

The slowdown in economic activity and transportation restrictions in all the countries where the Group operates is expected to have a significant impact on both its ability to complete the construction of its ongoing projects in a timely manner as well as hinder its efforts to realise transactions for the disposal of its portfolio assets.

The size of the impact cannot be fully quantified at this stage and will depend on how quickly the outbreak fades and normal conditions resume. The situation is being closely monitored and strategies will be adjusted including implementation of any emergency measures needed.

10. PROFESSIONAL FEES

	From 1 January 2020 to 30 June 2020	From 1 January 2019 to 30 June 2019
	€'000	€'000
Legal fees	231	281
Auditors' remuneration (see below)	125	113
Accounting expenses	106	109
Project design and development fees	37 3	756
Consultancy fees	60	91
Administrator fees	29	28
Other professional fees	137	164
Total	1,061	1,542

	From 1 January 2020 to 30 June 2020	From 1 January 2019 to 30 June 2019
	€'000	€'000
Auditors' remuneration comprises the following fees:
Audit and other audit related services	105	113
Tax and advisory	20	-
Total	125	113

11.   ADMINISTRATIVE AND OTHER EXPENSES

	From 1 January 2020 to 30 June 2020	From 1 January 2019 to 30 June 2019
	€'000	€'000
Personnel expenses (see below)	22 9	151
Travelling and accommodation	26	45
Insurance	17	19
Repairs and maintenance	3	5
Marketing and advertising expenses	72	44
Rents	3 2	30
Other	126	238
Total	505	532

Personnel expenses

	From 1 January 2020 to 30 June 2020	From 1 January 2019 to 30 June 2019
	€'000	€'000
Wages and salaries	178	131
Compulsory social security contributions	45	15
Other personnel costs	6	5
Total	22 9	151
The average number of employees during the period was	16	5

12. Taxation

	From 1 January 2020 to 30 June 2020	From 1 January 2019 to 30 June 2019
	€'000	€'000
Income tax	2	2
Net deferred tax	(643)	-
Total	(6 41 )	2

13. LOSS per share

Basic loss per share

Basic loss per share is calculated by dividing the loss attributable to owners of the Company by the weighted average number of common shares outstanding during the period.

	From 1 January 2020 to 30 June 2020	From 1 January 2019 to 30 June 2019
	'000	'000
Loss attributable to owners of the Company (€)	(5 , 375 )	(4,940)
Number of weighted average common shares outstanding	904,627	904,627
Basic loss per share (€)	(0.006)	(0.005)

Weighted average number of common shares outstanding

	From 1 January 2020 to 30 June 2020	From 1 January 2019 to 30 June 2019
	'000	'000
Outstanding common shares at the beginning and end of the period	904,627	904,627

Diluted loss per share

Diluted loss per share is calculated by adjusting the loss attributable to owners and the number of common shares outstanding to assume conversion of all dilutive potential shares. As of 30 June 2020 and 30 June 2019, the diluted loss per share is the same as the basic loss per share, due to the fact that no dilutive potential ordinary shares were outstanding during these periods.

14. Property, plant and equipment

	Land and buildings €'000	Other €'000	Total €'000
30 June 2020
Cost or revalued amount
At beginning of period	20,181	386	20,567
Direct acquisitions	721	2	723
At end of period	20,9 02	388	21, 290
Depreciation and impairment losses
At beginning of period	17,550	370	17,920
Depreciation charge for the period	16	3	19
At end of period	17,566	373	17,939
Carrying amounts	3,336	15	3,351

	Land &  buildings €'000	Other €'000	Total €'000
31 December 201 9
Cost or revalued amount
At beginning of year	19,975	384	20,359
Direct acquisitions	117	2	119
Recognition of right-of-use asset on initial application of IFRS16	89	-	89
At end of year	20,181	386	20,567
Depreciation and impairment losses
At beginning of year	7,720	366	8,086
Depreciation charge for the year	34	4	38
I mpairment loss	9,796	-	9,796
At end of year	17,550	370	17,920
Carrying amounts	2,631	16	2, 647

Fair value hierarchy

The fair value of land and buildings has been categorised as a Level 3 fair value based on the inputs to the valuation techniques used.

Valuation techniques and significant unobservable inputs

The valuation techniques used in measuring the fair value of land and buildings, as well as the significant unobservable inputs used , are the same as those used as at 31 December 2019.

 

15. Investment property

		30 June 2020	31 December 2019 (Restated)
	Note	€'000	€'000
At beginning of period/year		96,601	145,356
Net direct disposals		(1,602)	(671)
Transfers to trading properties	18	-	(56,516)
Fair value adjustment		(2,144)	8,528
Exchange differences		(463)	(96)
At end of period/year		92,392	96,601

Fair value hierarchy

The fair value of investment property has been categorised as a Level 3 fair value based on the inputs to the valuation techniques used.

Valuation techniques and significant unobservable inputs

The valuation techniques used in measuring the fair value of investment property, as well as the significant unobservable inputs used, are the same as those used as at 31 December 2019, apart from the investment property held by Azurna (Croatia), for which the fair value was adjusted downwards.

16. DISPOSAL GROUPS HELD FOR SALE

In 2019, the Group completed the sale of six out of seven Seafront Villas in Greece (owned by the Collection Group) and was in the process of finalising the sale of the one remaining Villa. Accordingly, the remaining assets and liabilities of the Collection Group as at 31 December 2019, were presented as a disposal group held for sale. As shown in note 28, the Group as of 30 June 2020 has completed the disposal of the one remaining Seafront Villa.

As at 31 December 2019, Azurna (owner of 'Livka Bay') in Croatia and DCI Holdings Two Limited ('DCI H2') (owner of 'Aristo') were also presented as held for sale, but as the disposals did not materialise, they were classified out of held for sale as of 30 June 2020.

Impairment losses relating to the disposal group

No impairment losses have been recognised during the period ended 30 June 2020 and 30 June 2019 for write-downs of the disposal groups to the lower of their carrying amount and their fair value less costs to sell.

Assets and liabilities of disposal group held for sale

As at 31 December 2019, the disposal groups comprised the following assets and liabilities:

		Collection disposal group	Total
(Restated)		€'000	€'000
Trading properties		1,124	1,124
Trade and other receivables		110	110
Cash and cash equivalents		54	54
		1,288	1,288
Other investments			851
Assets held for sale			2,139
Trade and other payables		3,276	3,276
Liabilities held for sale		3,276	3,276

Other investments

Other investments consists of the valuation of the Company's holding of 9.6 million shares, equivalent to 13% of Itacare's share capital. Itacare is a real estate investment company formerly listed on AIM. Itacare's shareholders have decided to dispose of all its assets and after a series of asset sales/swaps, Itacare now owns two development sites which it is seeking to sell. Itacare was presented as held for sale as at 31 December 2019, but as the disposal did not materialise, as of 30 June 2020 it was classified out of held for sale.

 

Cumulative income or expenses included in other comprehensive income

No cumulative income or expenses relating to the disposal groups is included in other comprehensive income (30 June 2019: Νil).

17. equity-accounted investees

30 June 2020			Single PurposeVehicle
		DCI H2	Fourteen Limited ('SPV 14')	Total
		€'000	€'000	€'000
Balance as at 1 January 2020		42,694	17,249	59,943
Share of losses, net of tax		-	(515)	(515)
Balance as at 30 June 2020		42,694	16,734	59,428

31 December 2019
(Restated)		DCI H2	SPV 14	Total
	Note	€'000	€'000	€'000
Balance as at 1 January 2019		42,694	-	42,694
Additions	28	-	18,655	18,655
Share of losses, net of tax		-	(1,478)	(1,478)
Share of revaluation surplus		-	72	72
Balance as at 31 December 2019		42,694	17,249	59,943

SPV14

As stated in note 28, in 2019, SPV 10 entered into a joint venture agreement pursuant to which the Group's shareholding interest in SPV 14 (owner of 'One&Only Kea Resort') was decreased from 67% to 33%, as a result of dilution. The Group accounted for the remaining 33% interest as an equity-accounted investee.

DCI H2

As at 30 June 2020 and 31 December 2019, the Company's holding of 47.9% in DCI H2, has been classified as an equity accounted investee (as already stated in note 16). Pursuant to the terms of the transaction executed in August 2019, for the sale of 37 hectares in the area referred to as 'Atlantis', in the north of the Venus Rock project which was formerly owned by Aristo, to Aristo Ktimatiki (an entity controlled by Mr. Theodoros Aristodemou, chairman of Aristo), the Company as of 30 June 2020 received €0.5 million (31 December 2019: €5 million) cash consideration from Aristo Ktimatiki. The remaining €3.5 million that was due by 30 June 2020 is expected to be received during the fourth quarter of 2020. The corresponding preferred shares are being transferred by the Company to Aristo Ktimatiki on a prorated basis in line with the receipt of the commensurate instalment.

As of 30 June 2020, the Group has not recognised losses totaling €2,420 thousand (2019: €239 thousand profit) in relation to its interest in DCI H2, as the investment in DCI H2 is already impaired and is presented at its recoverable amount €42.7 million (2019: €42.7 million).

The recoverable amount of DCI H2 was based on its fair value less cost of disposal. Following the impairment loss recognised in 2016, the recoverable amount is equal to the carrying amount.

The details of the above investments are as follows:

				Shareholding interest
Name	Country of incorporation	Principal activities		30 June 2020	31 December 2019
SPV 14	Cyprus	Development of Kea Resort (Greece)		33%	33%
DCI H2	BVIs	Acquisition and holding of real estate investments in Cyprus		48%	48%

The above shareholding interest percentages are rounded to the nearest integer.

As at 30 June 2020, SPV 14 had €35,892 thousand (31 December 2019: €38,292 thousand) contractual capital commitments on property, plant and equipment. Also, as at 30 June 2020, DCI H2 had €3,500 thousand (31 December 2019: €3,500 thousand) contractual capital commitments on investment property.

 

Summary of financial information for equity-accounted investees as at 30 June 2020 and 31 December 2019, not adjusted for the percentage of ownership held by the Group:

		DCI H2	SPV 14	Total
30 June 2020		€'000	€'000	€'000
Current assets		145,970	9,119	155,089
Non-current assets		224,480	26,976	251,456
Total assets		370,450	36,095	406,545
Current liabilities		121,792	711	122,503
Non-current liabilities		51,055	1,916	52,971
Total liabilities		172,847	2,627	175,474
Net assets		197,603	33,468	231,071
Carrying amount of interest in investee		42,694	16,734	59,428
Revenues		8,127	-	8,127
Loss		(5,052)	(1,030)	(6,082)
Other comprehensive income		-	-	-
Total comprehensive income		(5,052)	(1,030)	(6,082)
Group's share of loss and total comprehensive income		(2,420)	(515)	(2,935)

		DCI H2	SPV 14	Total
31 December 2019 (Restated)		€'000	€'000	€'000
Current assets		147,531	11,692	159,223
Non-current assets		224,293	24,981	249,274
Total assets		371,824	36,673	408,497
Current liabilities		121,285	258	121,543
Non-current liabilities		48,092	1,916	50,008
Total liabilities		169,377	2,174	171,551
Net assets		202,447	34,499	236,946
Carrying amount of interest in investee		42,694	17,249	59,943
Revenues		50,574	-	50,574
Profit / (loss)		501	(1,831)	(1,330)
Other comprehensive income		-	139	139
Total comprehensive income		501	(1,692)	(1,191)
Group's share of profit /(loss) and total comprehensive income		239	(1,406)	(1,167)

 

18. Trading properties

		30 June 2020	31 December 2019
	Note	€'000	€'000
At beginning of period/year		60,826	4,699
Net direct acquisitions		-	424
Net transfers from investment property	15	-	56,516
Impairment loss		-	(813)
At end of period/year		60,826	60,826

19. RECEIVABLES AND OTHER ASSETS

	30 June 2020	31 December 2019 (Restated)
	€'000	€'000
Trade receivables	76	75
VAT receivables	746	1,215
Other receivables	471	141
Total trade and other receivables	1,293	1,431
Prepayments and other assets	15	21
Total	1,308	1,452

20. Cash and cash equivalents

	30 June 2020	31 December 2019 (Restated)
	€'000	€'000
Bank balances	2,451	2,846
Cash in hand	9	8
Total	2,460	2,854

During the period, the Group had no fixed deposits.

21. CAPITAL AND RESERVES

Capital

Authorised share capital

	30 June 2020			31 December 2019
	'000 of shares	€'000		'000 of shares	€'000
Common shares of €0.01 each	2,000,000	20,000		2,000,000	20,000

Movement in share capital and premium

	Shares in issue	Share capital	Share premium
	'000	€'000	€'000
Capital at 1 January 2019 and 30 June 2020	904,627	9,046	569,847

Reserves

Translation reserve

Translation reserve comprises all foreign currency differences arising from the translation of the interim financial statements of foreign operations. 

Revaluation reserve

Revaluation reserve relates to the revaluation of property, plant and equipment from both subsidiaries and equity-accounted investees, net of any deferred tax.

 

22. LOANS AND BORROWINGS

	Total					Within one year					Within two to five years
	30 June	31 December			30 June		31 December			30 June		31 December
	2020	2019			2020		2019			2020		2019
		(Restated)					(Restated)					(Restated)
	€'000	€'000			€'000		€'000			€'000		€'000
Loans in Euro	6,630	6,644			6,630		6,644			-		-
Redeemable preference shares	1,558	-			-		-			1,558		-
Total	8,188	6,644			6,630		6,644			1,558		-

As of 30 June 2020, there were no significant changes in terms and conditions of the outstanding loans, compared to 31 December 2019.

On 18 December 2019, the Company signed an agreement with an international investor for a €12 million investment in the Kilada Hills Project. The investor has agreed to subscribe for both common and preferred shares. The total €12 million investment is payable in 24 monthly instalments of €500 thousand each. Under the terms of the agreement, the investor will be entitled to a priority return of the total investment amount from the net disposal proceeds realised from the project and will retain a 15% shareholding stake in Kilada. As of 30 June 2020, 2.8% of the ordinary shares have been transferred to the investor.

As of 30 June 2020, 2,000 redeemable preference shares were issued as fully paid with value of €1,000 per share (2019: nil). The redeemable preference shares are issued with a zero-coupon rate and are discounted with a 0.66% effective monthly interest rate, do not carry the right to vote and are redeemable when net disposal proceeds are realised from the Project. As at 30 June 2020 the fair value of the redeemable preference shares was €1,558 thousand.

	1 January 2020	New issues	Capital repayments	Interest paid	Other movements	30 June 2020
	€'000	€'000	€'000	€'000	€'000	€'000
Loans in Euro	6,644	-	-	(170)	156	6,630
Redeemable preference shares	-	2,000	-	-	(442)	1,558
Total	6,644	2,000	-	(170)	(286)	8,188

Securities

As at 30 June 2020, the Group's loans and borrowings were secured as follows:

· Mortgage against the immovable property of the Croatian subsidiary, Azurna, with a carrying amount of €23.2 million (2019: €25.8 million), two promissory notes, a debenture note and a letter of support from its parent company Single Purpose Vehicle Four Limited.

· Upon transfer of the entire amount of €12 million from the investor in accordance with the terms of the agreement, a mortgage will be set against the immovable property of the Kilada Hills Project, in the amount of €15 million (2019: nil).

23. lease LIABILITIES

	30 June 2020				31 December 2019
	Future minimum lease payments	Interest	Present value of minimum lease payments		Future minimum lease payments	Interest	Present value of minimum lease payments
	€'000	€'000	€'000		€'000	€'000	€'000
Less than one year	32	24	8		8	-	8
Between two and five years	423	117	306		245	5	240
More than five years	3,732	1,002	2,730		3,963	1,175	2,788
Total	4,187	1,143	3,044		4,216	1,180	3,036

The major lease liabilities comprise leases in Greece with 99-year lease terms.

24. Deferred tax liabilities

	30 June 2020	31 December 2019 (Restated)
	€'000	€'000
Balance at the beginning of the period/year	11,027	11,314
Recognised in profit or loss	(643)	(305)
Exchange differences	(43)	18
Balance at the end of the period/year	10,341	11,027

Deferred tax liabilities are attributable to the following:

	30 June 2020	31 December 2019 (Restated)
	€'000	€'000
Investment property	5,979	6,665
Trading properties	4,299	4,299
Property, plant and equipment	63	63
Total	10,341	11,027

25. Trade and other payables

	30 June 2020	31 December 2019 (Restated)
	€'000	€'000
Trade payables	11	19
Land creditors	20,688	20,740
Investment Manager fees	1,935	1,932
Other payables and accrued expenses	6,024	4,127
Total	28,658	26,818

	30 June 2020	31 December 2019  (Restated)
	€'000	€'000
Non-current	20,483	20,529
Current	8,175	6,289
Total	28,658	26,818

Land creditors relate to contracts in connection with the purchase of land at Lavender Bay. The above outstanding amount bears an annual interest rate equal to the inflation rate, which cannot exceed 2%. Full settlement is due on 31 December 2025.

26. NAV per share

	30 June 2020	31 December 2019
	'000	'000
Total equity attributable to owners of the Company (€)	163,901	169,547
Number of common shares outstanding at end of period/year	904,627	904,627
NAV per share (€)	0.18	0.19

27. Related party transactions 

27.1   Directors' interest and remuneration

Directors' interest

Miltos Kambourides is the founder and managing partner of the Investment Manager.

The interests of the Directors as at 30 June 2020, all of which are beneficial, in the issued share capital of the Company as at this date were as follows:

	Shares
	'000
Miltos Kambourides (indirect holding)	66,019
Mark Townsend	1,532
Andrew Coppel	942

 

Directors' remuneration

Save as disclosed, none of the Directors had any interest during the period in any material contract for the provision of services which was significant to the business of the Group.

	From 1 January 2020 to 30 June 2020	From 1 January 2019 to 30 June 2019
	€'000	€'000
Remuneration	205	246
Total remuneration	205	246

The Directors' remuneration details for the six-month periods ended 30 June 2020 and 30 June 2019 were as follows:

	From 1 January 2020 to 30 June 2020	From 1 January 2019 to 30 June 2019
	€'000	€'000
Andrew Coppel	96	117
Graham Warner	73	87
Mark Townsend	36	42
Total	205	246

Mr. Miltos Kambourides has waived his fees.

27.2   Investment Manager remuneration

	From 1 January 2020 to 30 June 2020	From 1 January 2019 to 30 June 2019
	€'000	€'000
Fixed management fee	1,800	2,000
Total remuneration	1,800	2,000

On 9 April 2019, the Company signed an Amended and Restated Investment Management Agreement ('IMA'), effective from 1 January 2019, as follows:

i. Fixed management fee

The annual management fees for the period from 1 January 2019 to 31 December 2019 were €4 million and have been further reduced to €3.6 million per annum for 2020 and 2021.

Additionally, the IMA will expire at the earlier of 31 December 2021 or the sale of all of the Company's assets. There will be no fixed management fee due after 31 December 2021.

ii. Variable management fee

The variable management fee for the period from 1 January 2020 to 31 December 2021 shall be equal to a percentage of the actual distribution made by the Company to its shareholders, as shown below:

Aggregate Shareholder Distributions		% applied on Distributions
Up to but excluding €30 million		Nil
€30 million up to but excluding €50 million		2.0%
€50 million up to but excluding €75 million		3.0%
€75 million up to but excluding €100 million		4.0%
€100 million up to but excluding €125 million		5.0%
€125 million or more		6.0%

The Investment Manager was entitled to a performance fee payable under the terms of the previous IMA. There is no change to this entitlement. However, any performance fees earned under this arrangement will be fully deducted from any future annual management fees and variable management fees payable over the term of the IMA.

27.3 Other related parties

During the period ended 30 June 2020 and 30 June 2019, the Group did not enter into any significant related party transactions.

28. Business combinations

On 30 January 2020, the Group finalised the sale of the one remaining Seafront Villa (owned by the Collection Group), creating a net gain on disposal of €336 thousand (see note 16).

			Collection
			€'000
Trading properties			(1,124)
Cash and cash equivalents			(1)
Trade and other payables			1,461
Net liabilities			336
Net assets disposed of - 100%			336
Net proceeds on disposal			-
Gain on disposal recognised in profit or loss			336
Cash effect on disposal:
Net proceeds on disposal			-
Cash and cash equivalents			(1)
Net cash outflow on disposal			(1)

On 11 December 2018, the Company entered into a binding agreement for the sale of its interest in five Seafront Villas (owned by the Collection group) for a gross consideration of €4.05 million. The Group received €3.4 million on 2 January 2019 whilst the balance has been retained in escrow to cover any potential and contingent liabilities of the respective companies. During 2019, the Group also completed the sale of another Seafront Villa for a cash consideration of €0.4 million.

On 1 November 2017, the Company along with the project's current minority shareholder entered into an agreement through its relevant project subsidiary companies, for a €16 million equity investment by One&Only Resorts Limited ('One&Only') in exchange for a 40% shareholding in SPV 14, 100% holding company of Kea Resort. The consideration will be deployed in the development of the Kea Resort, with the transaction including the operation of the Kea Resort and its residences by One&Only through long-term management and branding agreements. In May 2019, following the satisfaction of all relevant conditions precedent included in the One&Only at Kea Island ('OOKI') Subscription Agreement, the Group signed the completion documents with Kerzner International Management FZ LLC (current owner of 40% of the project) and Kea Assets Limited (current owner of 10% of the project). As a result, the Company's percentage holding in the project fell from 67% to 33%, which is retained as an equity-accounted investee (see note 17). The turn-key construction contract for the development of OOKI was executed on 9 August 2019.

	Collection	Kea	Total
	€'000	€'000	€'000
Investment property	-	(10,361)	(10,361)
Property, plant and equipment	-	(10,737)	(10,737)
Trading properties	(4,489)	-	(4,489)
Receivables and other assets	-	(28)	(28)
Cash and cash equivalents	(11)	(181)	(192)
Deferred tax liabilities	-	2,132	2,132
Trade and other payables	15	1,866	1,881
Net assets	(4,485)	(17,309)	(21,794)
Net assets disposed of - 100%	(4,485)	(17,309)	(21,794)
Net proceeds on disposal	3,769	-	3,769
Investment in equity-accounted investee (note 17)	-	18,655	18,655
(Loss)/ gain on disposal recognised in profit or loss	(716)	1,346	630
Cash effect on disposal:
Net proceeds on disposal	3,769	-	3,769
Cash and cash equivalents	(11)	(181)	(192)
Net cash inflow/(outflow) on disposal	3,758	(181)	3,577

 

29. FINANCIAL RISK MANAGEMENT

The Group's financial risks and risk management objectives and policies are consistent with those disclosed in the consolidated financial statements as at and for the year ended 31 December 2019.

Fair values

The fair values of the Group's financial assets and liabilities approximate their carrying amounts at the statement of financial position date.

30. Commitments

As of 30 June 2020, the Group had a total of €893 thousand contractual capital commitments on property, plant and equipment (31 December 2019: €45 thousand).

31. Contingent liabilities

Companies of the Group are involved in pending litigation. This principally relates to day-to-day operations as a developer of second-home residences and largely derives from certain clients and suppliers. Based on advice from the Group's legal advisers, the Investment Manager believes that there is sufficient defence against any claim and does not expect that the Group will suffer any material loss. All provisions in relation to these matters which are considered necessary have been recorded in these condensed consolidated interim financial statements.

In addition to the tax liabilities that have already been provided for in the condensed consolidated interim financial statements based on existing evidence, there is a possibility that additional tax liabilities may arise after the examination of the tax and other matters of the companies of the Group in the relevant tax jurisdictions.

The Group, under its normal course of business, guaranteed the development of properties in line with agreed specifications and time limits in favour of other parties.

32. SUBSEQUENT EVENTS

There were no material events after the reporting period which have a bearing on the understanding of the condensed consolidated interim financial statements as at 30 June 2020.

 

END

 

 

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