Interim Unaudited Financial Statements

RNS Number : 2764Y

Reconstruction Capital II Ltd

20 August 2018

 

20 August 2018

Reconstruction Capital II Limited (the "Company")

Interim Unaudited Financial Statements

for the six months ended 30 June 2018

Reconstruction Capital II Limited ("RC2", the "Company" or the "Group"), a closed-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 2018.

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

Financial highlights

On 30 June 2018, Reconstruction Capital II Limited ("RC2") had a total unaudited net asset value ("NAV") of €35.7m or €0.2463 per share, which represents a 1.61% fall since the beginning of the year.

At a general meeting of shareholders held on 21 February 2018 a decision was made to acquire 22% of the issued share capital of Reconstruction Capital Plc (RC) for €1.6m and 10% of the issued share capital of The Romanian Investment Fund Limited (RIF) for €1.7m. Both funds are Romanian-focused and have as their main underlying asset a 60% shareholding in Policolor SA in which RC2 already owns the balance of 40%. RC2 now has a further 15.36% indirect shareholding as a result of these acquisitions. To date, only part of the acquisition has been settled for €1.1m, the balance of €2.1m being due once the vendors have resolved certain technical issues for settlement.

As at 30 June 2018, RC2 had cash and cash equivalents of approximately €4.6m while its wholly-owned subsidiary RC2 Cyprus Ltd had cash and cash equivalents of €2.3m. As at 30 June 2018, RC2 had sundry liabilities of €2.3m, including the €2.1m due for the settlement of the acquisitions of shares in RC and RIF.

Operational highlights

In May, Policolor signed an amendment to the sales contract with the buyers of its main site in Bucharest, bringing forward the sale of 4.4ha of its remaining 7.6ha from 2019 to 2018. The land being sold in 2018 has been divided into three plots, with the first plot already having been sold in May generating cash proceeds of €1.4m. A second plot of land was sold in July, generating proceeds of €1.5m, and a further 2.2ha is due to be sold in the autumn, generating cash proceeds of €3m. In May, Policolor also signed the contract for the construction of its new Bucharest plant, which is due to be completed in the spring of 2019 and to become operational in the summer of that year.

Operationally, the Policolor Group had a reasonable first half of the year with sales marginally ahead of the same period last year at €33.3m (cf. 2017 €32.9m), whilst EBITDA fell by 10.6% to €1.95m compared to the same period of the previous year.

The fair value of the investments held under the Private Equity Programme increased by €3.4m to €33.6m during the period, primarily due to the acquisition of the shares in RC and RIF detailed above.

For further information, please contact:

Reconstruction Capital II Limited

Cornelia Oancea / Anca Moraru

Tel: [phone]

Grant Thornton UK LLP

(Nominated Adviser)

Philip Secrett
Tel: [phone]

finnCap Limited

(Broker)

William Marle / Giles Rolls

Tel: [phone]

 

ADVISER'S REPORT

For the six months ended 30 June 2018

On 30 June 2018, Reconstruction Capital II Limited ("RC2") had a total unaudited net asset value ("NAV") of €35.7m or €0.2463 per share, which represents a 1.61% fall since the beginning of the year.

At a general meeting of shareholders held on 21 February 2018 a decision was made to acquire 22% of the issued share capital of Reconstruction Capital Plc (RC) for €1.6m and 10% of the issued share capital of The Romanian Investment Fund Limited (RIF) for €1.7m. Both funds are Romanian-focused and have as their main underlying asset a 60% shareholding in Policolor SA in which RC2 already owns the balance of 40%. RC2 now has a further 15.36% indirect shareholding as a result of these acquisitions. To date, only part of the acquisition has been settled for €1.1m, the balance of €2.1m being due once the vendors have resolved certain technical issues for settlement.

As at 30 June 2018, RC2 had cash and cash equivalents of approximately €4.6m while its wholly-owned subsidiary RC2 Cyprus Ltd had cash and cash equivalents of €2.3m. As at 30 June 2018, RC2 had sundry liabilities of €2.3m, including the €2.1m due for the settlement of the acquisitions of shares in RC and RIF.

In May, Policolor signed an amendment to the sales contract with the buyers of its main site in Bucharest, bringing forward the sale of 4.4ha of its remaining 7.6ha from 2019 to 2018. The land being sold in 2018 has been divided into three plots, with the first plot already having been sold in May generating cash proceeds of €1.4m. A second plot of land was sold in July, generating proceeds of €1.5m, and a further 2.2ha is due to be sold in the autumn, generating cash proceeds of €3m. In May, Policolor also signed the contract for the construction of its new Bucharest plant, which is due to be completed in the spring of 2019 and to become operational in the summer of that year.

Operationally, the Policolor Group had a reasonable first half of the year with sales marginally ahead of the same period last year at €33.3m (cf. 2017 €32.9m), whilst EBITDA fell by 10.6% to €1.95m compared to the same period of the previous year.

The fair value of the investments held under the Private Equity Programme increased by €3.4m to €33.6m during the period, primarily due to the acquisition of the shares in RC and RIF detailed above.

New Europe Capital SRL

STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 June 2018

		30 June		30 June		31 December
		2018	2017		2017
		EUR		EUR		EUR
		Unaudited		Unaudited		Audited
Revenue
Fair value loss on financial assets at
fair value through profit or loss		(2,077,374)	(4,011,373)		(10,981,533)
Recovery of previously written off
receivable		-	-		189,000
Interest income		2,153,054	2,146,080		4,334,820
Dividend income		-	3,500,000		7,619,610
Other income		10	-		-
Total revenue		75,690	1,634,707		1,161,897
Expenses
		(126,000)	-		-
Impairment on trade and other receivables
Operating expenses		(534,322)	(1,096,874)		(1,619,749)
Financial expenses		(721)	(200)		(188)
Total expenses		(661,043)	(1,097,074)		(1,619,937)
Profit for the period/year		(585,353)	537,633		(458,040)
Other comprehensive income		-	-		-
Total comprehensive income for
		(585,353)	537,633		(458,040)
the period/year

Earnings Per Share attributable to
the owners of the Company
Basic and diluted earnings per share	(0.0040)	0.0037	(0.0031)

STATEMENT OF FINANCIAL POSITION

As at 30 June 2018

			30 June		30 June		31 December
			2018	2017		2017
			EUR		EUR		EUR
			Unaudited		Unaudited		Audited
ASSETS
Non-current assets
Financial assets at fair value through
profit or loss			33,568,867	34,804,972		30,143,162
Total non-current assets			33,568,867	34,804,972		30,143,162
Current assets
Trade and other receivables			18,281	50,564		136,439
Cash and cash equivalents			4,567,668	3,028,792		6,439,763
Total current assets			4,585,949	3,079,356		6,576,202
TOTAL ASSETS			38,154,816	37,884,328		36,719,364
LIABILITIES
Current liabilities
Trade and other payables			2,451,315	335,779		430,510
TOTAL LIABILITIES			2,451,315	335,779		430,510
NET ASSETS			35,703,501	37,548,549		36,288,854
EQUITY ATTRIBUTABLE TO OWNERS
Share capital			1,449,460	1,465,223		1,449,460
Share premium			110,581,355	110,829,614		110,581,355
Retained deficit			(76,327,314)	(74,746,288)		(75,741,961)
TOTAL EQUITY			35,703,501	37,548,549		36,288,854

Net Asset Value per share
Basic and diluted net asset value per
share		0.2463	0.2563	0.2504

STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 June 2018

					Retained		Equity
			Share		(deficit)/		component of
	Share capital		premium		earnings		loan notes		Total
	EUR		EUR		EUR		EUR		EUR
Balance at 1 January 2017	1,476,223	127,991,989		(75,283,921)		-		54,184,291
Profit for the period	-	-		537,633		-		537,633
Other comprehensive income	-	-		-		-		-
Total comprehensive income for the period	-	-		537,633		-		537,633
Issue of B shares	16,997,375	(16,997,375)		-		-		-
Redemption of B shares	(16,997,375)	-		-		-		(16,997,375)
Repurchase and cancellation of own shares	(11,000)	(165,000)		-		-		(176,000)
Transactions with owners	(11,000)	(17,162,375)		-		-		(17,173,375)
Balance at 30 June 2017
	1,465,223	110,829,614		(74,746,288)		-		37,548,549
Loss for the period	-	-		(995,673)		-		(995,673)
Other comprehensive income	-	-		-		-		-
Total comprehensive income for the period	-	-		(995,673)		-		(995,673)
Repurchase and cancellation of own shares	(15,763)	(248,259)		-		-		(264,022)
Transactions with owners	(15,763)	(248,259)		-		-		(264,022)
Balance at 31 December 2017
	1,449,460	110,581,355		(75,741,961)		-		36,288,854
Profit for the period	-	-		(585,353)		-		(585,353)
Other comprehensive income	-	-		-		-		-
Total comprehensive income for the period	-	-		(585,353)		-		(585,353)
Balance at 30 June 2018
	1,449,460	110,581,355		(76,327,314)		-		35,703,501

CASH FLOW STATEMENT

For the six months ended 30 June 2018

	30 June		30 June		31 December
	2018	2017		2017
	EUR		EUR		EUR
	Unaudited		Unaudited		Audited
Cash flows (used in)/generated from operating
activities	(585,353)	537,633		(458,040)
Profit/(loss) before taxation
Adjustments for:
Fair value loss on financial assets at fair value	2,077,374	4,011,373		10,981,533
through profit or loss
Impairment on trade and other receivables	126,000	-		-
Reversal of loan impairment	-	-		(189,000)
Interest income	(2,153,054)	(2,146,080)		(4,334,820)
Dividend income	-	(3,500,000)		(7,619,610)
Net loss on foreign exchange	721	200		188
Net cash outflow before changes in working
	(534,312)	(1,096,874)		(1,619,749)
capital
(Increase)/decrease in trade and other receivables	(7,842)	(32,773)		7,352
(Decrease)/increase in trade and other payables	(83,686)	43,377		138,108
Purchase of financial assets	(1,224,079)	(370,000)		(370,000)
Disposals and repayments of financial assets	-	-		63,000
Dividends received	-	3,500,000		7,500,000
Net cash (used in)/generated from operating
	(1,849,919)	2,043,730		5,718,711
activities
Cash flows used in financing activities
	-	(176,000)		(440,022)
Payments to purchase own shares
Redemptions of B shares	(21,455)	(16,842,979)		(16,842,979)
Net cash flow used in financing activities	(21,455)	(17,018,979)		(17,283,001)
Net decrease in cash and cash equivalents
	(1,871,374)	(14,975,249)		(11,564,290)
before currency adjustment
Effects of exchange rate differences on cash and	(721)	(200)		(188)
cash equivalents
Net decrease in cash and cash equivalents after
	(1,872,095)	(14,975,449)		(11,564,478)
currency adjustment
Cash and cash equivalents at the beginning of the	6,439,763	18,004,241		18,004,241
period/year
Cash and cash equivalents at the end of the
	4,567,668	3,028,792		6,439,763
period/year

 

END

 

 

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