Interim Unaudited Consolidated Financial Statement

RNS Number : 6699W

Reconstruction Capital II Ltd

20 August 2015

 



20 August 2015

Reconstruction Capital II Limited (the "Company")

Interim Unaudited Consolidated Financial Statements

for the six months ended 30 June 2015

Reconstruction Capital II Ltd ("RC2", the "Company" or the "Group"), a close-end investment company incorporated in the Cayman Islands admitted to trading on the AIM market of the London Stock exchange, today announces its results for the six months ended 30 June 2015.

Copies of the company's interim financial statements will today be posted to shareholders.  The annual reports is also available on the Company's website http://www. reconstructioncapital2.com/.

Financial highlights

·     The net asset value as at 30 June 2015 was EUR 0.3868 per share on an undiluted basis (EUR 0.3775 per share as at 31 December 2014).  The corresponding net asset value per share on a fully diluted basis is EUR 0.2898 (EUR 0.2812 per share as at 30 December 2014).

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

Operational highlights

Private Equity Programme

RC2 did not make any new investments under its Private Equity Programme, save for the acquisition of a 7.7% shareholding in Glasro Holdings Limited, the sister company of Top Factoring SRL, from the minority shareholder.  The Company continued to pursue a number of exits, both from its investee companies as well as from certain assets held by them.  The investments held under the Private Equity Programme had a fair value of EUR 44.8m at the end of June, up 1.7% since the 2014 year-end audit report, primarily due to the effect of an increase in the Albalact SA share price.

Trading Programme

As at 30 June 2015, RC2's listed equities held under the Trading Programme had a total market value of EUR 0.35m, up 2.3% over the first half of the year, due to higher market prices of these investments on the local stock exchange, partly offset by a partial disposal of one investment.  All the investments held under the Trading Programme were in Romanian equities.

For further information, please contact:

Reconstruction Capital II Limited

Ion Florescu / Anca Moraru

Tel:  [phone]

Grant Thornton UK LLP (Nominated Adviser)

Philip Secrett / Harrison Clarke

Tel: [phone]

ADVISER'S REPORT

On 30 June 2015, Reconstruction Capital II Limited ("RC2" or the "Fund") had a total unaudited net asset value ("NAV") of EUR 38.7m or EUR 0.3868 per share on an undiluted basis, a 2.5% increase compared to the audited NAV at the end of December 2014. The fully diluted NAV per share increased by 3.0% from EUR 0.2812 to EUR 0.2898 in the corresponding period.

The increase in the NAV is primarily a result of an increase in the share price of Albalact SA as well as the receipt of dividends from Top Factoring Group of EUR 1.7m.

At the end of June 2015, RC2 had cash and cash equivalents of approximately EUR 1.1m, borrowings of EUR 8.5m, and another EUR 0.6m of accrued liabilities to its service providers.

Private Equity Programme

The equity investments held under the Private Equity Programme had a fair value of EUR 44.8m at 30 June 2015, an increase of 1.7% over the semester. This was due to a combination of an increase in the market value of the holding in Albalact SA (EUR 0.9m) and the valuation of Glasro Holdings Limited (EUR 0.3m) offset by a write down of the investment in Klas Doo (EUR 0.5m). 

The increase in the valuation of Glasro Holdings Limited, sister company of Top Factoring SRL, resulted from the acquisition of the minority stake of 7.7% in Glasro Holdings Limited for EUR 0.54m in June 2015.

Pursuant to marketing efforts by the local management team and appointed real estate agents, the investment in Klas Doo was written down by 19.6% to EUR 2.1m following a reappraisal of the expected sale proceeds of its former main site in central Belgrade, which is expected to be sold as real estate.

Trading Programme

As at 30 June 2014, RC2's listed equities held under the Trading Programme had a total market value of EUR 0.35m, a 2.3% increase over the first half of 2015 due to higher prices on the local stock exchange offset by a partial disposal of one of its holdings held under this programme. All the investments held under the Trading Programme were in Romanian equities.

New Europe Capital SRL

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2015

		30 Jun 2015	30 Jun 2014	31 Dec 2014
		EUR	EUR	EUR
		Unaudited	Unaudited	Audited
Investment income
Gain on investments at fair value
through profit and loss		235,864	1,950,240	4,747,123
Interest income		49,348	54,324	104,949
Dividend income		1,700,000	1,527,107	1,527,111
Other income		-	35,986	140,883
Total investment income		1,985,212	3,567,657	6,520,066
Expenses
Operating expenses		(560,946)	(603,632)	(1,405,276)
Total operating expenses		(560,946)	(603,632)	(1,405,276)
Operating profit		1,424,266	2,964,025	5,114,790
Financial expenses		(488,132)	(441,697)	(889,739)
Profit before taxation		936,134	2,522,328	4,225,051
Withholding tax expense		-	(404)	-
Income tax expense		-	-	(14,713)
Profit for the period/year		936,134	2,521,924	4,210,338
Other comprehensive income
Amounts that may be reclassified to profit or loss Exchange differences on translating foreign operations		28,283	13,102	19,129
Total comprehensive income for the period/year		964,417	2,535,026	4,229,467
Net income for the period/year attributable to:
- Equity holders of the parent		936,134	2,551,095	4,241,776
- Non-controlling interest		-	(29,171)	(31,438)
		936,134	2,521,924	4,210,338
Total comprehensive income attributable to:
- Equity holders of the parent		938,256	2,551,018	4,243,209
- Non-controlling interest		26,161	(15,992)	(13,742)
Total comprehensive income for the period/year		964,417	2,535,026	4,229,467

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED 30 JUNE 2015 (Continued)

		30 Jun 2015	30 Jun 2014	31 Dec 2014
		EUR	EUR	EUR
		Unaudited	Unaudited	Audited
Earnings Per Share attributable to the equity shareholders of the Company
Basic undiluted earnings per share		0.0094	0.0255	0.0424
Fully diluted earnings per share		0.0086	0.0255	0.0261

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2015

		30 Jun 2015	30 Jun 2014	31 Dec 2014
		EUR	EUR	EUR
		Unaudited	Unaudited	Audited
Assets
Non-current assets
Property, plant and equipment		11,509	10,215	10,518
Financial assets at fair value through profit or loss		44,833,347	41,281,075	44,085,288
Loans receivable		1,459,113	-	1,409,796
Total non-current assets		46,303,969	41,291,290	45,505,602
Current assets
Financial assets at fair value through profit or loss		350,013	347,525	342,696
Trade and other receivables		299,418	414,027	276,274
Loans receivable		-	1,359,834	-
Cash and cash equivalents		1,097,293	534,824	768,606
Total current assets		1,746,724	2,656,210	1,387,576
Total assets		48,050,693	43,947,500	46,893,178
Liabilities
Current liabilities
Trade and other payables		569,710	2,280,790	847,194
Loans and borrowings		45,331	5,870,917	44,190
Corporation tax payable		2,418	4,469	2,211
Total current liabilities		617,459	8,156,176	893,595
Non-current liabilities
Loans and borrowings		-	43,031	-
Convertible loan notes		8,446,199	-	7,976,965
Total non-current liabilities		8,446,199	43,031	7,976,965
Total liabilities		9,063,658	8,199,207	8,870,560
Total net assets		38,987,035	35,748,293	38,022,618

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2014 (Continued)

		30 Jun 2015	30 Jun 2014	31 Dec 2014
		EUR	EUR	EUR
		Unaudited	Unaudited	Audited
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		(84,822,361)	(87,449,176)	(85,758,495)
Equity component of convertible loan notes		629,445	-	629,445
Foreign exchange reserve		(24,123)	(27,755)	(26,245)
Total equity and reserves		38,683,271	35,423,379	37,745,015
Non-controlling interests		303,764	324,914	277,603
Total equity		38,987,035	35,748,293	38,022,618

		30 Jun 2015	30 Jun 2014	31 Dec 2014
		EUR	EUR	EUR
		Unaudited	Unaudited	Audited
Net Asset Value per share
Basic undiluted net asset value per share		0.3868	0.3542	0.3775
Fully diluted net asset value per share		0.2898	0.3542	0.2812

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2015

	Share Capital	Share Premium	Foreign Exchange Reserve	Retained (Deficit)/ Earnings	Equity Component of Loan Notes	Subtotal	Non-Controlling Interest	Total
	EUR	EUR	EUR	EUR	EUR	EUR	EUR	EUR
Balance at 1 January 2014	1,000,000	121,900,310	(27,678)	(90,000,271)	-	32,872,361	388,209	33,260,570
Profit/(loss) for the period	-	-	-	2,551,095	-	2,551,095	(29,171)	2,521,924
Other comprehensive (loss)/income	-	-	(77)	-	-	(77)	13,179	13,102
Total comprehensive (loss)/income for the period	-	-	(77)	2,551,095	-	2,551,018	(15,992)	2,535,026
Dividends paid to non-controlling interests	-	-	-	-	-	-	(47,303)	(47,303)
Balance at 30 June 2014	1,000,000	121,900,310	(27,755)	(87,449,176)	-	35,423,379	324,914	35,748,293
Profit/(loss) for the period	-	-	-	1,690,681	-	1,690,681	(31,438)	1,659,243
Other comprehensive income	-	-	1,510	-	-	1,510	4,517	6,027
Total comprehensive income/(loss) for the period			1,510	1,690,681	-	1,692,191	(26,921)	1,665,270
Issuance of convertible loan notes (equity portion)	-	-	-	-	629,445	629,445	-	629,445
Dividends paid to minorities	-	-	-	-	-	-	(49,561)	(49,561)
Contributions by the owners recognised directly in equity	-	-	-	-	629,445	629,445	(49,561)	579,884
Balance at 31 December 2014	1,000,000	121,900,310	(26,245)	(85,758,495)	629,445	37,745,015	277,603	38,022,618
Profit for the period	-	-	-	936,134	-	936,134	-	936,134
Other comprehensive income	-	-	2,122	-	-	2,122	26,161	28,283
Total comprehensive (loss)/income for the period	-	-	2,122	936,134	-	938,256	26,161	964,417
Balance at 30 June 2015	1,000,000	121,900,310	(24,123)	(84,822,361)	629,445	38,683,271	303,764	38,987,035

Share premium is stated net of share issue costs and is not distributable by way of dividend.

CONSOLIDATED CASH FLOW STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2015

		30 Jun 2015	30 Jun 2014	31 Dec 2014
		EUR	EUR	EUR
		Unaudited	Unaudited	Audited
Cash flows from operating activities
Net profit/(loss) before tax		936,134	2,522,328	4,225,051
Adjustments for:
Depreciation and amortisation		-	1,932	2,588
Gain on financial assets at FVTPL		(235,864)	(1,950,240)	(4,747,123)
Interest income		(49,348)	(54,535)	(104,949)
Interest expense		488,132	441,697	889,739
Dividend income		(1,700,000)	(1,527,107)	(1,527,111)
Net cash outflow before changes in working capital		(560,946)	(565,925)	(1,261,805)
(Increase)/decrease in trade and other receivables		(833)	(33,273)	68,870
(Decrease) in trade and other payables		(305,878)	(2,463,675)	(3,990,128)
Purchase of financial assets		(535,000)	-	-
Sale of financial assets		16,204	-	-
Interest income received		44	208	387
Dividends received		1,700,000	1,523,077	1,526,708
Cash generated from/(used in) operating activities		313,591	(1,539,588)	(3,655,968)
Income tax paid		-	-	(14,666)
Net cash generated from/(used in) operating activities		313,591	(1,539,588)	(3,670,634)
Cash flows from investing activities
Purchase of property, plant and equipment		-	(1,440)	(2,059)
Proceeds of loans granted to unconsolidated subsidiaries		-	-	594,943
Proceeds from loans granted to unconsolidated subsidiaries		-	598,719	-
Net cash flow generated from investing activities		-	597,279	592,884
Cash flows from financing activities
Repayments of loans granted by related parties		-	(3,550,000)	(4,256,045)
Dividends paid to non-controlling interests		-	(47,303)	(96,864)
Proceeds from loans granted by related parties		-	5,750,000	-
Proceeds from the issuance of convertible loan notes		-	-	8,449,999
Interest paid on loans		-	(1,032,284)	(622,255)
Net cash generated from financing activities		-	1,120,413	3,474,835
Increase in cash and cash equivalents		313,591	178,104	397,085
Cash and cash equivalents at beginning of the period/year		768,606	350,142	350,142
Effect of changes in foreign exchange rates		15,096	6,578	21,379
Cash and cash equivalents at end of the period/year		1,097,293	534,824	768,606

 

END

 

 

IR PMMITMBJTBIA