Interim Unaudited Consolidated Financial Statement

RNS Number : 0392G

Reconstruction Capital II Ltd

02 August 2016

 

2 August 2016

Reconstruction Capital II Limited (the "Company")

Interim Unaudited Consolidated Financial Statements

for the six months ended 30 June 2016

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 2016.

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

Financial highlights

·    The net asset value as at 30 June 2016 was EUR 0.4212 per share on an undiluted basis (EUR 0.3736 per share as at 31 December 2015).  The corresponding net asset value per share on a fully diluted basis was EUR 0.3118 (EUR 0.2847 per share as at 31 December 2015).

·    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. 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 46.5m at the end of June, up 4.5% since the 2015 year-end audit report, primarily due to the effect of an increase in the Albalact SA share price.

Trading Programme

As at 30 June 2016, RC2's listed equities held under the Trading Programme had a total market value of EUR 0.21m, a 22.4% decrease over the first half of the year, due to the disposal of one of the holdings and a partial disposal of another.  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 / Carolyn Sansom

Tel: [phone]

ADVISER'S REPORT

As at 30 June 2016, Reconstruction Capital II Limited ("RC2" or the "Fund") had a total unaudited net asset value ("NAV") of EUR38.7m, or EUR0.4212 per share on an undiluted basis which represents a 12.7% increase compared to the audited NAV per share at the end of December 2015. The fully diluted NAV per share increased by 9.5% from EUR0.2847 to EUR0.3118 in the corresponding period.

The increase in NAV is primarily due to the growth in the share price of Albalact, which was driven by the announcement of RC2 and the Ciurtin family's agreement to sell their shares in the company to Lactalis, a world-leading French dairy company, subject to a number of conditions precedent, the last of which were fulfilled in July 2016.

As at 30 June 2016, RC2 had cash and cash equivalents of approximately EUR1.1m, borrowings of EUR9.5m, and EUR0.2m of accrued liabilities to its service providers.

Private Equity Programme

The investments held under the Private Equity Programme had a fair value of EUR46.5m as at 30 June 2016, an increase of 4.5% over the period. This was due to a combination of an increase in the market value of the holding in Albalact SA (EUR4.1m), offset by a write down of the investments in Glasro Holdings Limited (EUR2.0m) and Top Factoring SRL (EUR0.1m) to reflect the payment of dividends during the period.

Trading Programme

As at 30 June 2016, RC2's listed equities held under the Trading Programme had a total market value of EUR0.21m, a 22.4% decrease over the first half of 2016, due to the disposal of one of its holdings and a partial disposal of another. 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 2016

		30 June 2016	30 June 2015	31 December 2015
		EUR	EUR	EUR
		Unaudited	Unaudited	Audited
Investment income
Gain/(loss) on revaluation of investments
at fair value through profit or loss		2,042,263	235,864	(148,934)
Gain on disposal of investments		16,737	-	176,627
Interest income		-	49,348	99,583
Dividend income		2,101,970	1,700,000	2,404,456
Other income		12,103	-	29,232
Total investment income		4,173,073	1,985,212	2,560,964
Expenses
Impairment on loan receivables		-	-	(892,639)
Operating expenses		(588,931)	(560,946)	(1,058,837)
Total expenses		(588,931)	(560,946)	(1,951,476)
Operating profit		3,584,142	1,424,266	609,488
Financial expenses		(525,698)	(488,132)	(977,294)
Profit/(loss) before taxation		3,058,444	936,134	(367,806)
Income tax expense		(79)	-	(697)
Profit/(loss) from continuing operations		3,058,365	936,134	(368,503)
Loss from discontinued operations		-	-	(43,104)
Profit/(loss) for the period/year		3,058,365	936,134	(411,607)
Other comprehensive income
Amounts that may be reclassified to profit or loss
Exchange differences on translating
foreign operations		-	28,283	-
Total comprehensive income/(loss) for the period/year		3,058,365	964,417	(411,607)
Profit/(loss) for the period/year attributable to:
- Equity holders of the parent		3,058,365	936,134	(371,941)
- Non-controlling interest		-	-	(39,666)
		3,058,365	936,134	(411,607)

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (continued)

For the six months ended 30 June 2016

	30 June 2016	30 June 2015	31 December 2015
	EUR	EUR	EUR
	Unaudited	Unaudited	Audited
Total comprehensive income/(loss) attributable to: - Equity holders of the parent	3,058,365	938,256	(371,941)
- from continuing operations	3,058,365	938,256	(368,503)
- from discontinued operations	-	-	(3,438)
- Non-controlling interest	-	26,161	(39,666)
- from continuing operations	-	26,161	-
- from discontinued operations	-	-	(39,666)
	3,058,365	964,417	(411,607)
Total comprehensive income/(loss) from: - Continuing operations	3,058,365	964,417	(368,503)
- Discontinued operations	-	-	(43,104)
	3,058,365	964,417	(411,607)

Total Earnings Per Share attributable to the equity shareholders of the Company
Basic undiluted earnings per share		0.0314	0.0094	(0.0037)
Fully diluted earnings per share		0.0224	0.0086	0.0036
Continuing operations Earnings Per Share attributable to the equity shareholders of the Company
Basic undiluted earnings per share		0.0314	0.0094	(0.0037)
Fully diluted earnings per share		0.0224	0.0086	0.0036
Discontinued operations Earnings Per Share attributable to the equity shareholders of the Company
Basic undiluted earnings per share		-	-	(0.00003)
Fully diluted earnings per share		-	-	(0.00002)

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2016

		30 June 2016	30 June 2015	31 December 2015
		EUR Unaudited	EUR Unaudited	EUR Audited
ASSETS
Non-current assets Property, plant and equipment		-	11,509	-
Financial assets at fair value through profit or loss		46,459,213	44,833,347	44,455,046
Loans receivable		616,709	1,459,113	616,709
Total non-current assets		47,075,922	46,303,969	45,071,755
Current assets
Financial assets at fair value through profit or loss		208,502	350,013	268,591
Trade and other receivables		30,815	299,418	37,462
Cash and cash equivalents		1,077,611	1,097,293	1,083,954
Total current assets		1,316,928	1,746,724	1,390,007
TOTAL ASSETS		48,392,850	48,050,693	46,461,762
LIABILITIES
Current liabilities Trade and other payables		210,467	569,710	123,725
Loans and borrowings		-	45,331	46,490
Corporation tax payable		-	2,418	-
Total current liabilities		210,467	617,459	170,215
Non-current liabilities Convertible loan notes		9,459,742	8,446,199	8,934,201
Total non-current liabilities		9,459,742	8,446,199	8,934,201
TOTAL LIABILITIES		9,670,209	9,063,658	9,104,416
NET ASSETS		38,722,641	38,987,035	37,357,346

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)

As at 30 June 2016

		30 June 2016	30 June 2015	31 December 2015
		EUR	EUR	EUR
		Unaudited	Unaudited	Audited
CAPITAL AND RESERVES ATTRIBUTABLE TO EQUITY HOLDERS
Share capital		919,378	1,000,000	1,000,000
Share premium		111,742,914	121,900,310	121,900,310
Retained deficit		(74,569,096)	(84,822,361)	(86,172,409)
Equity component of convertible loan notes		629,445	629,445	629,445
Foreign exchange reserve		-	(24,123)	-
		38,722,641	38,683,271	37,357,346
Non-controlling interests		-	303,764	-
TOTAL EQUITY		38,722,641	38,987,035	37,357,346

		30 June 2016	30 June 2015	31 December 2015
		EUR	EUR	EUR
		Unaudited	Unaudited	Audited
Net Asset Value per share
Basic undiluted net asset value per share		0.4212	0.3868	0.3736
Fully diluted net asset value per share		0.3118	0.2898	0.2847

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 June 2016

					Foreign exchange		Retained (deficit)/		Equity component of				Non- controlling
	Share capital		Share premium		reserve		earnings		loan notes		Subtotal		interest		Total
	EUR		EUR		EUR		EUR		EUR		EUR		EUR		EUR
Balance at 1 January 2015	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 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
Loss for the period	-		-		-		(1,308,075)		-		(1,308,075)		(39,666)		(1,347,741)
Other comprehensive loss	-		-		(2,122)		-		-		(2,122)		(26,161)		(28,283)
Total comprehensive loss for the period	-		-		(2,122)		(1,308,075)		-		(1,310,197)		(65,827)		(1,376,024)
Discontinued operations - share of non-
controlling interest	-		-		26,245		(41,973)		-		(15,728)		(237,937)		(253,665)
Transactions with owners	-		-		26,245		(41,973)		-		(15,728)		(237,937)		(253,665)
Balance at 31 December 2015	1,000,000		121,900,310		-		(86,172,409)		629,445		37,357,346		-		37,357,346
Profit for the period	-		-		-		3,058,365		-		3,058,365		-		3,058,365
Other comprehensive income	-		-		-		-		-		-		-		-
Total comprehensive income for the period	-		-		-		3,058,365		-		3,058,365		-		3,058,365
Repurchase and cancellation of own shares	(80,622)		(10,157,396)		-		8,544,948		-		(1,693,070)		-		(1,693,070)
Transactions with owners	(80,622)		(10,157,396)		-		8,544,948		-		(1,693,070)		-		(1,693,070)
Balance at 30 June 2016	919,378		111,742,914		-		(74,569,096)		629,445		38,722,641		-		38,722,641

CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 30 June 2016

	30 June 2016	30 June 2015	31 December 2015
	EUR	EUR	EUR
	Unaudited	Unaudited	Audited
Cash flows from operating activities
Profit/(loss) for the period/year	3,058,365	936,134	(411,607)
Adjustments for:
(Gain)/loss on revaluation of investments at fair value
through profit or loss	(2,042,263)	(235,864)	148,934
(Gain)/loss on disposal of investments	(16,737)	-	(176,627)
Loss for the period/year from discontinued operations	-	-	43,104
Impairment on loans receivable	-	-	892,639
Interest income	-	(49,348)	(99,583)
Financial expenses	525,698	488,132	977,294
Dividend income	(2,101,891)	(1,700,000)	(2,403,759)
Net loss on foreign exchange	60	-	5,200
Net cash outflow before changes in working capital	(576,768)	(560,946)	(1,024,405)
Decrease/(increase) in trade and other receivables	7,365	(833)	2,043
Increase/(decrease) in trade and other payables	86,742	(305,878)	(391,140)
Purchase of financial assets	-	(535,000)	(535,000)
Sale of financial assets	114,922	16,204	267,040
Interest income received	-	44	45
Dividends received	2,101,173	1,700,000	2,403,759
Net cash flows from continuing activities	1,733,434	313,591	722,342
Net cash flows from discontinued activities	-	-	20,296
Net cash generated from operating activities	1,733,434	313,591	742,638
Cash flows from financing activities
Repayment of loan granted by related party	(40,000)	-	-
Interest paid	(6,647)	-	(237,274)
Payments to purchase own shares	(1,693,070)	-	-
Net cash flow used by financing activities	(1,739,717)	-	(237,274)
Net (decrease)/increase in cash and cash equivalents
before currency adjustment	(6,283)	313,591	505,364
Effects of exchange rate differences on cash and cash
equivalents	(60)	15,096	(67,877)
Net (decrease)/increase in cash and cash equivalents
after currency adjustment	(6,343)	328,687	437,487
Cash and cash equivalents at the beginning of the
period/year	1,083,954	768,606	768,606
Cash and cash equivalents included in discontinued
operations	-	-	(122,139)
Cash and cash equivalents at the end of the
period/year	1,077,611	1,097,293	1,083,954

 

END

 

 

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