Interim Results for 30 June 2011

RNS Number : 3415P

Reconstruction Capital II Ltd

30 September 2011

 



Reconstruction Capital II Limited ("RC2" or the "Company")

30 September 2011

Interim Unaudited Consolidated Financial Statements

for the six months ended 30 June 2011

Reconstruction Capital II Ltd ("RC2" or the "Company"), a closed-end investment company admitted to trading on the AIM market of the London Stock Exchange, today announces its interim results for the six months ended 30 June 2011.

Financial highlights

·      Net asset value, excluding non-controlling interest, as at 30 June 2011 was EUR 92.3m, representing EUR 0.9227 per share, a 1.29% fall since the beginning of the year;

·      As at 30 June 2011 the Company's market capitalisation was approximately EUR 74.3m, and 100m shares were in issue with a closing share price of EUR 0.7428 per share;

·      Loss before taxation for the period ended 30 June 2011 was EUR 0.2m ( profit of EUR 8.2m for the period ended 30 June 2010);

·      The Directors do not recommend the payment of a dividend. 

Operational highlights

·      In April 2011, RC2 sold its shareholding in East Point Metals Ltd ("EPM") back to EPH, and in return it received non-core real estate assets from EPH which it is in the process of swapping with the founding shareholders of EPH for additional shareholding in EPH. By the end of June 2011, RC2 had increased its shareholding in EPH from 42.0% to 51.6%.

·      Under its Trading Programme, RC2 continued to reduce its exposure to listed markets in the region, and continued to refocus the Group towards its Private Equity Programme by exiting certain listed positions, thereby realising EUR 0.5m in cash proceeds

The financial information has been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted in the European Union. The financial information set out above does not constitute the Company's statutory accounts for the period ended 30 June 2011.

The interim report of the Group for the six months ended 30 June 2011 has been posted to shareholders. Extracts of the financial statements appear below and the full version is available on the Company's website - www.reconstructioncapital2.com 

For further information, please contact:

Reconstruction Capital II Limited

Ion Florescu, Ivanka Ivanova

Tel: [phone]

Grant Thornton Corporate Finance (Nominated Adviser)

Philip Secrett, David Hignell

Tel: [phone]

LCF Edmond de Rothschild Securities (Broker)

Hiroshi Funaki

Tel: [phone]

INVESTMENT MANAGER AND INVESTMENT ADVISORS REPORT

Dear Shareholders,

On 30 June 2011, Reconstruction Capital II Limited ("RC2" or the "Group") had a total unaudited net asset value ("NAV") of EUR 92.3m after deducting non-controlling interest, or EUR 0.9227 per share, which represents a decrease of EUR 0.0121, or 1.29%, since the beginning of the year.

By comparison, as at 30 June 2011, the published NAV per share was EUR 1.0645, with the difference of EUR 0.1418 deriving from the effects of consolidating Mamaia Hotels SRL, Top Factoring SRL and East Point Holdings Limited ("EPH"). All three investments are booked at fair value when computing RC2's published net asset value per share.

In April 2011, RC2 sold its shareholding in East Point Metals Ltd ("EPM") back to EPH, and in return it received non-core real estate assets from EPH which it is in the process of swapping with the founding shareholders of EPH for additional shareholding in EPH. By the end of June 2011, RC2 had increased its shareholding in EPH from 42.0% to 51.6%. Consequently EPH is now consolidated in the accounts of RC2 (note 8).  

Under its Trading Programme, RC2 continued to reduce its exposure to listed markets in the region, and continued to refocus the Group towards its Private Equity Programme by exiting certain listed positions, thereby realising EUR 0.5m in cash proceeds.

Yours truly,

New Europe Capital SRL

New Europe Capital DOO

New Europe Capital Limited

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2011

			Six months	Six months	Year ended
			30-Jun-11	30-Jun-10	31-Dec-10
			EUR	EUR	EUR
Revenue			30,334,857	2,056,398	4,631,539
Cost of Sales			(26,020,344)	-	-
Gross Profit			4,314,513	2,056,398	4,631,539
Investment income
(Loss) / Gain on investments at fair value through profit or loss			(7,184,966)	9,719,750	11,954,421
Interest income			18,793	22,422	18,237
Dividend income			30,123	4,041	4,082
Other investment income			353,339	118,856	503,154
Total investment income			(6,782,711)	9,865,069	12,479,894
Expenses
Gain arising on acquisition of controlling interest in subsidiary			(16,112,647)	-	-
Administrative expenses			10,822,622	3,704,199	10,955,345
Selling expenses			1,817,780	-	-
Total expenses			(3,472,245)	3,704,199	10,955,345
Operating profit			1,004,047	8,217,268	6,156,088
Share of profit  of associates			17,732	-	-
Interest expense			(1,233,519)	-	-
Profit before taxation			(211,740)	8,217,268	6,156,088
Income tax expense			(608,000)	(199,146)	491,582
Net loss / profit for the period			(819,740)	8,416,414	6,647,670
Other comprehensive income
Exchange differences on translating foreign operations			1,357,286	(493,300)	87,787
Total comprehensive income for the period			537,546	7,923,114	6,735,457
Net profit for the period attributable to:
- Equity holders of the parent			3,469,459	8,483,235	6,731,609
- Non-controlling interest			(4,289,199)	(66,821)	(83,939)
			(819,740)	8,416,414	6,647,670
Total comprehensive income attributable to:
- Equity holders of the parent			4,826,745	7,989,935	6,819,396
- Non-controlling interest			(4,289,199)	(66,821)	(83,939)
			537,546	7,923,114	6,735,457
Basic and diluted earnings per share			0.0347	0.0848	0.0673

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 30 JUNE 2011

			30-Jun-11	30-Jun-10	31-Dec-10
			EUR	EUR	EUR
			Unaudited	Unaudited	Audited
Assets
Non-current assets
Property, plant and equipment			142,925,210	13,923,286	11,588,403
Financial assets at fair value through profit or loss			43,442,739	77,227,760	83,387,381
Available for sale financial assets			515,873	-	-
Investment properties			6,067,947	-	-
Other receivables			2,030,192	-	-
Investments in associates			721,818	-	-
Goodwill			1,257,153	1,257,153	1,257,153
Total non-current assets			196,960,932	92,408,199	96,232,937
Current assets
Financial assets at fair value through profit or loss			3,063,735	8,850,105	3,711,882
Other financial assets			3,965,211	-	-
Inventories			35,766,855	244,619	181,000
Trade and other receivables			73,946,530	1,403,573	6,607,316
Cash and cash equivalents			16,337,677	3,680,088	812,543
			133,080,008	14,178,385	11,312,741
Non current assets held for sale			4,439,000	-	-
Total current assets			137,519,008	14,178,385	11,312,741
Total assets			334,479,940	106,586,584	107,545,678
Liabilities
Current liabilities
Trade and other payables			23,251,817	1,913,945	2,380,538
Loans and borrowings			110,079,842	943,165	2,924,754
Corporation tax payable			359,767	50,293	9,925
Total current liabilities			133,691,426	2,907,403	5,315,217
Non-current liabilities
Deferred tax			10,987,769	967,102	621,000
Provision - employee retirement			758,926	-	-
Loans and borrowings			25,997,895	1,076,709	1,290,000
Total non-current liabilities			37,744,590	2,043,811	1,911,000
Total liabilities			171,436,016	4,951,214	7,226,217
Total net assets			163,043,924	101,635,370	100,319,461

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 30 JUNE 2011 (continued)

Capital and reserves attributable to equity holders
Share capital			1,000,000	1,000,000	1,000,000
Share premium reserve			121,900,310	121,900,310	121,900,310
Retained deficit			(25,194,314)	(24,796,845)	(26,548,471)
Foreign exchange reserve			(5,439,872)	(3,457,656)	(2,876,569)
Total equity and reserves			92,266,124	94,645,809	93,475,270
Non-controlling interest			70,777,800	6,989,561	6,844,191
Total equity			163,043,924	101,635,370	100,319,461

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS OF 30 JUNE 2011

	Share Capital	Share Premium	Foreign exchange reserve	Retained Deficit	Sub-total	Non- controlling interest	Total
	EUR	EUR	EUR	EUR	EUR	EUR	EUR
Balance at 1 January 2010	1,000,000	121,900,310	(2,964,356)	(33,280,080)	86,655,874	7,103,139	93,759,013
Net profit for the period	-	-	-	8,483,235	7,989,935	(66,821)	7,923,114
Other comprehensive income	-	-	(493,300)	-	-	-	-
Total comprehensive income	-	-	(493,300)	8,483,235	7,989,935	(66,821)	7,923,114
Dividends paid to non -controlling interests	-	-	-	-	-	(46,757)	(46,757)
Balance at 30 June 2010	1,000,000	121,900,310	(3,457,656)	(24,796,845)	94,645,809	6,989,561	101,635,370
Net profit for the period	-	-	-	(1,751,626)	(1,751,626)	(17,118)	(1,768,744)
Other comprehensive income	-	-	581,087	-	581,087	-	581,087
Total comprehensive income	-	-	581,087	(1,751,626)	(1,170,539)	(17,118)	1,187,657
Dividends paid to non -controlling interests	-	-	-	-	-	(128,252)	(128,252)
Balance at 31 December 2010	1,000,000	121,900,310	(2, 876,569)	(26,548,471)	93,475,270	6,844,191	100,319,461
Net profit for the period	-	-	-	3,469,459	3,469,459	(4,289,199)	(819,740)
Other comprehensive income	-	-	1,357,286	-	1,357,286	-	1,357,286
Total comprehensive income	-	-	1,357,286	3,469,459	4,826,745	(4,289,199)	537,546
Acquisition of additional interest in subsidiaries	-	-	-	-	-	68,396,929	68,396,929
Disposal of interests in subsidiaries to non -controlling interests	-	-	(3,920,589)	(2,115,302)	(6,035,891)	-	(6,035,891)
Dividends paid to minorities	-	-	-	-	-	(174,121)	(174,121)
Balance at 30 June 2011	1,000,000	121,900,310	(5,439,872)	(25,194,314)	92,266,124	70,777,800	163,043,924

Share premium is stated net of share issue costs.

 

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 30 JUNE 2011

 

		30-Jun-11	30-Jun-10	31-Dec-10
		EUR	EUR	EUR
Cash flows from operating activities
Net profit before tax		(211,740)	8,217,268	6,156,088
Adjustments for:
Depreciation and amortisation		695,145	469,928	210,991
Impairment		-	-	2,738,000
Gain on financial assets at fair value through profit or loss		7,184,542	(9,612,548)	(11,954,421)
Profit on sale of financial asset		-	-	50,670
Gain on acquisition of subsidiary		(16,112,647)	-	-
(Gain)/ loss on foreign exchange		3,405,193	(212,286)	268,314
Reversal of impairment loss of fixed assets		-	(795,642)	-
Share of profit of associates		(17,732)	-	-
Interest income		(372,132)	(22,422)	(18,237)
Interest expense		1,233,519	-	-
Dividend income		(30,123)	(4,041)	(4,082)
Net cash outflow before changes in working capital		(4,225,975)	(1,959,743)	(2,552,677)
Increase in trade and other receivables		2,939,555	(174,633)	(5,382,625)
Increase/ (decrease) in trade and other payables		(1,602,731)	627,302	1,140,946
(Increase)/ decrease in inventories		2,521,181	(217,619)	(154,000)
Decrease in provision		(40,698)	-	-
Interest received		19,038	22,763	18,957
Dividend received		4,389	48,553	52,466
Payments for purchase of financial assets		-	(2,886,235)	(229,995)
Net proceeds from sale of financial assets		-	3,509,930	5,467,342
Net cash (used in)/ generated by operating activities		(385,241)	(1,029,682)	(1,639,586)
Income tax paid		(58,227)	-	(107,439)
Cash flows from investing activities
Cash acquired on acquisition of subsidiary		15,307,490	-	-
Sale of property, plant and equipment		-	-	167,741
Purchase of property, plant and equipment		-	(82,779)	(1,086,963)
Purchase of financial assets		(427,907)	(1,559,883)	(8,671,500)
Sale of financial assets		1,494,644	-	3,764,880
		15,930,759	(2,672,344)	(7,572,867)
Cash flows from financing activities
Dividends paid to minorities		(174,123)	(46,757)	(175,009)
Proceeds from loan		3,951,536	2,019,874	4,527,329
Payments of loan		(4,183,038)	(638,146)	(984,369)
Decrease in cash and cash equivalents		15,525,134	(1,337,373)	(4,204,916)
Cash at beginning of period/ year		812,543	5,017,461	5,017,459
Cash at end of period/ year		16,337,677	3,680,088	812,543

 

END

 

 

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