Interim Results

RNS Number : 3432N
Reconstruction Capital II Ltd
27 September 2012
 

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

 

27 September 2012

 Interim Unaudited Consolidated Financial Statements

for the six months ended 30 June 2012

 

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 2012.

Financial highlights

·      Net asset value, excluding non-controlling interest, as at 30 June 2012 was EUR 77.64m, representing EUR 0.7764 per share, a 4.24% fall since the beginning of the year;

·      As at 30 June 2012 the Company's market capitalisation was approximately EUR 56.12m, and 100m shares were in issue with a closing share price of EUR 0.56 per share;

·      Loss before taxation for the period ended 30 June 2012 was EUR 3.18m (restated loss of EUR 1.1m for the period ended 30 June 2011);

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

Operational highlights

·     In February 2012, RC2 completed the final step of the asset swap with the founding shareholders of East Point Holdings Ltd ("EPH"), thereby increasing its shareholding in EPH from 59.0% to 63.0%. Because the asset swap was substantially accomplished in 2011, the transaction had already been accounted for in RC2's 2011 audited accounts.

·     In April 2012, RC2 sold 7.7% of its shareholding in Glasro Holdings Limited ("Glasro") to the CEO of Top Factoring SRL for a total consideration of EUR 5,000. The sale took place in order to replicate the shareholding structure of Top Factoring where RC2 also owns  92.3%. Glasro and Top Factoring operate together as a group.

·     In the first half of 2012, RC2 continued to sell down its listed equities held under the Trading Programme, thereby generating EUR €1.3m of cash proceeds. At the end of June 2012, RC2's listed equities held under the Trading Programme had a total market value of EUR 0.5m.

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 2012.

 

The interim report of the Group for the six months ended 30 June 2012 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: +44 (0) 20 7244 0088

 

Grant Thornton Corporate Finance (Nominated Adviser)

Philip Secrett, David Hignell

Tel: +44 (0) 20 7383 5100

 

LCF Edmond de Rothschild Securities (Broker)

Hiroshi Funaki

Tel: +44 (0) 20 7845

 

 

 

 

 

 

 

 

 

 

 

 

 

INVESTMENT MANAGER AND INVESTMENT ADVISORS' REPORT

 

Dear Shareholders,

On 30 June 2012, Reconstruction Capital II Limited ("RC2" or the "Group") had a total unaudited net asset value ("NAV") of EUR 77.64m after deducting non-controlling interests, or EUR 0.7764 per share, which represents a decrease of EUR 3.4m, or 4.24%, since the beginning of the year.

By comparison, as at 30 June 2012, the published NAV per share was EUR 0.8873, with the difference of EUR 0.1109 deriving from the effects of consolidating Mamaia Hotels SRL and Top Factoring SRL ("Top Factoring"). Both investments are booked at fair value when computing RC2's published net asset value per share.

In February 2012, RC2 completed the final step of the asset swap with the founding shareholders of East Point Holdings Ltd ("EPH"), thereby increasing its shareholding in EPH from 59.0% to 63.0%. Because the asset swap was substantially accomplished in 2011, the transaction had already been accounted for in RC2's 2011 audited accounts.

In April 2012, RC2 sold 7.7% of its shareholding in Glasro Holdings Limited ("Glasro") to the CEO of Top Factoring SRL for a total consideration of EUR 5,000. The sale took place in order to replicate the shareholding structure of Top Factoring where RC2 also owns  92.3%. Glasro and Top Factoring operate together as a group.

In the first half of 2012, RC2 continued to sell down its listed equities held under the Trading Programme, thereby generating EUR €1.3m of cash proceeds. At the end of June 2012, RC2's listed equities held under the Trading Programme had a total market value of EUR 0.5m.

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 2012




30-Jun-12

30-Jun-11

31-Dec-11





As Restated





EUR

EUR

EUR




Unaudited

Unaudited

Audited







Continuing Operations






Revenue



3,530,592

1,886,594

5,735,892

Gross Profit



3,530,592

1,886,594

5,735,892







Investment (loss) / income






(Loss) / Gain on investments at fair value through profit or loss



(2,164,847)

467,038

 

(10,373,504)

Interest income



1,515

18,793

34,290

Dividend income



1,278

30,123

35,354

Other investment income



108,099

135,533

320,320

Total investment (loss) / income



(2,053,955)

651,487

(9,983,540)







Expenses






Operating expenses



4,276,225

3,121,592

9,617,491

Total expenses



4,276,225

3,121,592

9,617,491






Operating (loss)



(2,799,588)

(583,511)

(13,865,139)







Interest expense



(377,430)

(477,204)

(217,892)

(Loss) before taxation



(3,177,018)

(1,060,715)

(14,083,031)







Income tax expense



(42,550)

(590,826)

326,079

Net (loss) for the period from continuing operations



(3,219,568)

(1,651,541)

(13,756,952)







Discontinued operations






(Loss) for the period on operations acquired with a view to sell



-

-

(2,364,295)

Net (loss) for the period



(3,219,568)

(1,651,541)

(16,121,247)







Other comprehensive (loss) /  income






Exchange differences on translating foreign operations 

(132,543)

878,698

53,420







Total comprehensive (loss) for the period



(3,352,111)

(772,843)

(16,067,827)







Net (loss) / profit for the period attributable to:






  - Equity holders of the parent



(3,102,823)

(2,084,625)

(15,734,573)

  - Non-controlling interest



(116,745)

433,084

(386,674)




(3,219,568)

(1,651,541)

(16,121,247)







 

Total comprehensive (loss)/ income attributable to:




  - Equity holders of the parent



(3,227,383)

(1,036,602)

(15,737,942)

  - Non-controlling interest



(124,728)

263,759

(329,885)




(3,352,111)

(772,843)

(16,067,827)







Earnings / (Loss) Per Share attributable to the equity shareholders of the Company


 

 










From continuing operations



(0.0310)

(0.0208)

(0.1337)

Basic and diluted earnings / (loss) per share












From continuing and discontinued operations





Basic and diluted earnings / (loss) per share



(0.0310)

(0.0208)

(0.1573)

 

 



 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 30 JUNE 2012

 




30-Jun-12

30-Jun-11

31-Dec-11





As Restated





EUR

EUR

EUR




Unaudited

Unaudited

Audited

Assets






Non-current assets






Property, plant and equipment



9,178,667

11,738,536

9,494,417

Financial assets at fair value through profit or loss                                                                                  



31,431,278

41,737,826

33,480,715

Goodwill



1,257,153

1,257,153

1,257,153

Total non-current assets



41,867,098

54,733,515

44,232,285







Current assets






Financial assets at fair value through profit or loss                                                 



500,360

3,063,735

1,970,473

Inventories



47,000

121,254

27,000

Trade and other receivables



7,468,773

2,830,196

5,209,555

Cash and cash equivalents



1,822,642

1,030,187

497,325




9,838,775

7,045,372

7,704,353







Assets of disposal group classified as held for sale



123,801,246

128,725,761

123,801,246







Total assets



175,507,119

190,504,648

175,737,884







Liabilities






Current liabilities






Trade and other payables



4,687,809

2,848,724

2,695,704

Loans and borrowings



4,874,284

1,059,452

3,642,240

Corporation tax payable



76,283

44,545

104,625

Total current liabilities



9,638,376

3,952,721

6,442,569







Liabilities of disposal group classified as held for sale



 

81,304,970

85,871,323

83,503,970







Non-current liabilities






Deferred tax



6,000

(123,023)

27,000

Leases



53,367

-

48,432

Loans and borrowings



3,863,256

1,431,132

1,647,400

Total non-current liabilities



3,922,623

1,308,109

1,722,832







Total liabilities



94,865,969

91,132,153

91,669,371







Total net assets



80,641,150

99,372,495

84,068,513

 







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



(43,496,149)

 (26,524,234)

(40,174,182)

Foreign exchange reserve



(1,767,539)

 (591,587)

(1,642,979)

Total equity and reserves



77,636,622

95,784,489

81,083,149


                                                          





Non-Controlling Interests

                                                          


3,004,528

3,588,006

2,985,364

Total equity



80,641,150

99,372,495

84,068,513

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS OF 30 JUNE 2012

 


Share
Capital

Share
Premium

Foreign

exchange

reserve

Retained

(Deficit)/
Earnings

Sub-total

Non-

controlling

Interest

Total


EUR

EUR

EUR

EUR

EUR

EUR

EUR









Balance at 1 January 2011 - as previously reported

1,000,000

121,900,310

 (2,876,569)

 (26,548,471)

93,475,270

6,844,191

100,319,461

Prior year adjustment 

-

-

1,236,959

2,108,862

3,345,821

(3,345,821)

-

Balance at 1 January 2011 - as restated

1,000,000 

121,900,310 

(1,639,610) 

(24,439,609) 

96,821,091 

3,498,370 

100,319,461









(Loss) / Profit for the period - as restated

-

-

-

(2,084,625)

(2,084,625)

433,084

(1,651,541)

 

Other comprehensive income / (loss)

                               - as restated

-

-

1,048,023

-

1,048,023

(169,325)

878,698

 

Total comprehensive income  / (loss) for the period                     - as restated

 -

 -

1,048,023

(2,084,625)

(1,036,602)

263,759

(772,843)

Dividends paid to non-controlling interests

 -

 -

-

-

-

(174,123)

(174,123)

Balance at 30 June 2011 - as restated

1,000,000

121,900,310

(591,587)

(26,524,234)

95,784,489

3,588,006

99,372,495









(Loss) / Profit for the period

-

-

-

(13,649,948)

(13,649,948)

(819,758)

(14,469,706)

Other comprehensive (loss) / income

-

-

(1,051,392)

-

(1,051,392)

226,114

(825,278)

 

Total comprehensive (loss) / income for the year

-

-

(1,051,392)

(13,649,948)

(14,701,340)

(593,644)

(15,294,984)

Dividends paid to non-controlling interests

-

-

-

-

-

(8,998)

(8,998)

Balance at 31 December 2011

1,000,000

121,900,310

(1,642,979)

(40,174,182)

81,083,149

2,985,364

84,068,513









(Loss) / Profit for the period

-

-

-

(3,102,823)

(3,102,823)

(116,745)

(3,219,568)

Other comprehensive (loss) / income

-

-

(124,560)

-

(124,560)

(7,983)

(132,543)

 

Total comprehensive (loss) / income for the period

-

-

(124,560)

(3,102,823)

(3,227,383)

(124,728)

(3,352,111)

 

Disposal of interest in subsidiary to non-controlling interests (Note 8)

-

-

-

(219,144)

(219,144)

219,144

-

Dividends paid to non-controlling interests

-

-

-

-

-

(75,252)

(75,252)









Balance at 30 June 2012

1,000,000

121,900,310

(1,767,539)

(43,496,149)

77,636,622

3,004,528

80,641,150

 

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 30 JUNE 2012

 



30-Jun-12

30-Jun-11

31-Dec-11




As Restated




EUR

EUR

EUR



Unaudited

Unaudited

Audited

Cash flows from operating activities





Net profit before tax


(3,177,018)

(1,060,715)

(14,083,031)

Adjustments for:





Depreciation and amortisation


179,143

164,865

295,636

Impairment / revaluation of fixed assets


-

(191,059)

2,087,000

(Gain)/ loss on financial assets at fair value through profit or loss


2,164,847

(467,038)

10,373,504

Interest income


(1,515)

(18,793)

 (34,290)

Dividend income


(1,278)

(30,123)

 (35,354)

Net cash outflow before changes in working capital

(835,821)

(1,602,863)

(1,396,535)






(Increase) / decrease in trade and other receivables


(4,202,739)

3,802,987

1,397,761

Increase/ (decrease) in trade and other payables


1,968,699

468,186

458,299

(Increase)/ decrease in inventories


(20,000)

59,747

154,000

Decrease in provision


-

-

-

Interest received


1,515

18,661

34,290

Dividend received


1,278

4,389

35,354

Net proceeds from sale of financial assets


1,349,264

-

815,336

Cash (used in)/ generated by operating activities


(1,737,804)

2,751,107

1,498,505






Income tax paid


(63,550)

(58,227)

 (267,921)






Net cash (used in)/ generated by operating activities


(1,801,354)

2,692,880

1,230,584






Cash flows from investing activities





Sale of property, plant and equipment


-

-

5,911

Purchase of property, plant and equipment


(130,825)

-

 (226,776)

Purchase of financial assets


-

(713,862)

 (589,500)

Sale of financial assets


-

500,222

211,933

Net Cash flow used in investing activities


(130,825)

(213,640)

(598,432)






Cash flows from financing activities





Dividends paid to non-controlling interests


(75,252)

(174,123)

 (183,121)

Proceeds from loans


3,889,240

688,534

3,613,609

Payments of loans


(696,820)

(2,412,709)

(4,338,783)  

Net Cash flow used in financing activities


3,117,168

(1,898,298)

(908,295)






(Decrease)/increase in cash and cash equivalents


1,184,989

580,942

(276,143)






Cash at beginning of period/ year


497,325

812,543

812,543

Effect of foreign exchange rate changes


140,328

(363,298)

(39,075)

Cash at end of period/ year


1,822,642

1,030,187

497,325

 


This information is provided by RNS
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