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First Sentinel Plc (FSEN)

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Friday 27 September, 2019

First Sentinel Plc

Half Year Results

This announcement contains inside information for the purposes of the Market Abuse Regulation (EU No. 596/2014) ("MAR"). Upon the publication of this announcement, this inside information is now considered to be in the public domain and shall therefore cease to be inside information


 

First Sentinel plc
(“First Sentinel” or the “Company”)
Interim results for the period ended 30 June 2019
 

First Sentinel is pleased to announce its interim accounts for the six months ended 30 June 2019.  
 

The interim accounts are set out below and a copy is available on the Company’s website, www.first-sentinel.com.
 

-END-
 

For further corporate information, please contact:
 

Mr. Brian Stockbridge
Chief Executive Officer
First Sentinel Plc
Tel: + 44 (0) 7876 888 011
Email:[email protected]

NEX Corporate Advisor
Beaumont Cornish Limited
James Biddle / Roland Cornish
Tel: +44 (0)20 7628 3396



First Sentinel PLC

Interim report for the six months ended 30 June 2019

The Chairman’s Report

I am delighted to present the results for First Sentinel plc, for the six months ended 30 June 2019. The Group raised £1,210,545 to complete the £4m fundraise under its NEX listed bond, the proceeds of which were used to finance the invoice purchasing activities of our subsidiary in Australia, Perennial Enterprise PTY Ltd.  The business in Australia continues to progress well and First Sentinel plc voluntarily redeemed £550k of Bonds from investors after the period end which remain available for new investors.  During the period, First Sentinel plc also set up Capable Finance Limited as a 50.01% subsidiary to focus on UK supply chain finance activities.  The Group raised £0.8m shortly after the period end under a £7m Euronext listed bond to finance these activities and, additionally raised £309,000 in equity for investment and working capital purposes.  The loss of £137,000 for the period demonstrates that the business still needs to attract some scale and the directors believe that the progress made to date will position the group for further growth.

Outlook

The Six months to 30 June 2019 has continued to be a very successful period for First Sentinel. The success of the fund raising, investments made and the establishment of supply chain finance operations in the UK has positioned the Group very well for the next stage of its development. Our short-term strategy remains at increasing value by providing growth capital for public and private company investments and, in particular, by significantly growing the invoice purchasing activities in Australia and the supply chain finance operations in the UK. The Directors are very optimistic about the Group’s growth potential and we look to the future with significant confidence.




Interim Condensed Statement of Comprehensive Income




Notes
6 months Ended
30 June
2019
Unaudited
6 months Ended
30 June
2018
Unaudited
Year ended 31 December 2018
Audited
£’000 £’000 £’000
Revenue 710 963 1,453
Cost of sales (185) (403) (503)
Gross profit 525 560 950
Administrative expenses 4 (591) (515) (1,381)
Other Income/ (Losses) 21 (68) 134
Operating profit / (loss) (45) (23) (297)
Finance Costs (326) (23) (611)
Finance Income 257 - 298
Profit / (loss) on ordinary activities before taxation (114) (46) (610)
Tax on loss on ordinary activities (24) (53) (90)
Profit / (loss) after taxation (137) (99) (700)
Other comprehensive income - - -
Total comprehensive profit / (loss) for the period (137) (99) (700)
Profit / (loss) and total comprehensive attributable
the owners of the company (137) (99) (793)
Non-controlling interests - - 93
(137) (99) (700)
Basic and diluted Profit / (loss) per share (expressed in pence per share) 5 (0.90p) (0.71p) (4.71p)




Interim Condensed Statement of Changes in Equity

Share  Capital Share Premium Accumulated Deficit Share Based Payment Non-Controlling interest Foreign Exchange Difference Total Equity
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Balance at 30 June 2018 151 1,444 (310) 13 (43) (11) 1,244
Issue of shares 1 - - - - - 1
Cost of issue of shares - 5 - - - - 5
Share based payment Reserve - - - 13 - - 13
Non-controlling interest - - - - 152 - (68)
Foreign Exchange Difference - - - - - (100) 120
Loss and total comprehensive loss for the period - - (644) - - - (644)
Balance at 31 December 2018 152 1,449 (954) 26 109 (111) 671
Issue of shares - - - - - - -
Share issue costs - - - - - - -
Non-Controlling Interest - - - - 45 - 45
Foreign Exchange Difference - - - - - (2) (2)
Loss and total comprehensive loss for the period (138) -  -  - (138)
Balance at 30 June 2019 152 1,449 (1,092) 26 154 (113) 576

Share capital is the amount subscribed for shares at nominal value.
Share premium is the amount subscribed for shares in excess of nominal value.
Accumulated deficit represents the cumulative loss of the Group attributable to equity shareholders.




Interim Condensed Statement of the Financial Position


Notes
6 months Ended
30 June
2019
Unaudited
6 months Ended
30 June
2018
Unaudited
Year ended 31 December 2018
Audited
£’000 £’000 £’000
Assets
Non-Current Assets
Intangible Asset 51 145 51
Property, Plant & equipment 79 5 24
Goodwill 88 88
Total non-Current Assets 218 150 163
Current assets
Trade Receivables 5,112 2,997 4,279
Other Receivables 9 203 -
Other investment - 50 -
Financial assets at fair value through profit or loss 6 662 1,003 584
Cash and Cash Equivalents 1,790 805 826
 Total Current Assets 7,573 5,058 5,689
Total Assets 7,791 5,208 5,852
Equity and Liabilities
Share Capital 7 152 151 152
Share Premium 7 1,449 1,444 1,449
Share based payment reserve 26 13 26
Non-controlling interest 154 (43) 109
FX Reserve (113) (11) (111)
Accumulated deficit (1,092) (310) (954)
Total Equity 576 1,244 671
Current Liabilities
Accounts Payable 1,383 7 252
Accruals 31 36 34
Directors Loan 38 67 57
Tax and other social security - 110 110
Borrowings - - -
Other Payables 76 212 6
Total Current Liabilities 1,528 432 459
Non-current Liabilities
Borrowings 5,687 3,532 4,722
Total non-current Liabilities 5,687 3,532 4,722
Total Liabilities 7,215 3,964 5,181
Total Equity and Liabilities 7,791 5,208 5,852




Interim Condensed Cash Flow Statement




Notes
6 months Ended
30 June
2019
Unaudited
6 Months Ended
30 June 2018
Unaudited
Year ended
31 December 2018
Audited
£’000 £’000 £’000
Cash flows from operating activities
Operating profit/(loss) (45) (23) (297)
Changes in working capital
(Increase) / decrease in receivables (843) (2,214) (3,591)
Increase / (decrease) in payables 1,142 (204) 58
Other adjustments (172) - -
Depreciation - 5 5
Fair value adjustments - 68 292
Share based payment - 75 88
Interest Received (257) - 298
Interest Paid - (23) (611)
Net cash flow from operating activities (175) (2,316) (3,758)
Investing Activities
Decrease  / (Increase) in financial assets 150 (137) (2)
Acquisition of subsidiary 6 - - -
Net Proceeds from transactions of financial assets at fair value through profit or loss - - 304
Decrease  / (Increase) in Loans  6 - - -
Net cash flow from investing activities 150 (137) 302
Cash flows from financing activities:
Net proceeds from issue of shares 7 - 144 64
Net Proceeds from issue of financial liabilities at amortised cost – bonds - - 2,788
Increase / (repayments) of Loans 965 2,817 1,223
Net cash flow from financing activities 965 2,961 4,075
Taxation 24 - (90)
Net cash flow for the period 964 508 529
Opening Cash and cash equivalents 826 297 297
Closing Cash and cash equivalents 1,790 805 826




Notes to the Interim Condensed Financial Statements
 

1.         General Information

First Sentinel plc (‘the Company’) is an investment company incorporated in the United Kingdom with company number 10183367 and quoted on the NEX Exchange Growth Market.

2.         Basis of Preparation

The annual financial statements of the Company and its subsidiaries (together referred to as the “Group”) are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. The condensed set of financial statements included in this interim financial report has been prepared in accordance with IAS 34 ‘Interim Financial Reporting’, as adopted by the European Union. The accounting policies and methods of computation used are consistent with those used in the Group’s latest audited financial statements for the year ended 31 December 2018.

A copy of the statutory accounts for the year ended 31 December 2018 has been delivered to the Registrar of Companies. The auditor’s report on these accounts was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

3.            Segmental Reporting

The Group’s management has determined the operating segments based on the reports reviewed by the executive directors that are used to make strategic decisions. They consider the business from a geographical perspective and the group has two reportable segments, the UK and Australia. The Group’s main lines of business are that of making investments and invoice purchasing.

For the period ended 30 June 2019: UK Australia Total
£’000 £’000 £’000
Segment revenue and results
Reportable revenue 32 678 710
Revenue from external customers 32 678 710
Cost of Sales - - -
Unallocated corporate income and expenses (321) (259) (580)
Tax expense - (24) (24)
Profit/(Loss) 105
Segment assets and liabilities
Reportable segment assets 4,497 3,122 7,617
Goodwill 92 92
Consolidated total assets 7,710
Reportable segment liabilities 4,174 2,996 7,170
Consolidated total liabilities 7,170
Other segment information
Interest expense (152) (359) (511)
Interest Income 251 7 257
Depreciation - - -

 
For the period ended 31 December 2018: UK Australia Total
£’000 £’000 £’000
Segment revenue and results
Reportable revenue (192) 1,645 1,453
Revenue from external customers (192) 1,645 1,453
Cost of Sales - (503) (503)
Unallocated corporate income and expenses (918) (326) (1,244)
Tax expense - (90) (90)
Loss (1,110) 726 (384)
Segment assets and liabilities
Reportable segment assets 891 4,874 5,764
Goodwill 88
Consolidated total assets 5,852
Reportable segment liabilities 2,869 2,312 5,181
Consolidated total liabilities 5,181
Other segment information
Interest expense (141) (470) (611)
Interest Income 298 - 298
Depreciation - (3) (3)
For the period ended 30 June 2018: UK Australia Total
£’000 £’000 £’000
Segment revenue and results
Reportable revenue 42 921 963
Revenue from external customers 42 921 963
Cost of Sales - (403) (403)
Unallocated corporate income and expenses (231) (375) (606)
Tax expense - (53) (53)
Loss (99)
Segment assets and liabilities
Reportable segment assets 1,182 3,934 5,116
Goodwill 92
Consolidated total assets 5,208
Reportable segment liabilities 1,708 2,256 3,964
Consolidated total liabilities 3,964
Other segment information
Interest expense 21 2 23
Depreciation - 4 4


4.         Group Result for the period

The current period operating loss incorporated the following main items:

6 months Ended
30 June
2019
Unaudited
6 Months Ended
30 June 2018
Unaudited
Year ended
31 December 2018
Audited
£’000 £’000 £’000
Accounting and administration fees 17 36 63
Foreign exchange debits - 1 4
Directors’ remuneration and fees 152 61 385
Legal and professional fees 49 112 179
Other expenses 373 305 750
591 515 1,381

5.         Loss per Share

Loss per share data is based on the Group result for the nine months and the weighted average number of shares in issue.

Basic loss per share is calculated by dividing the loss attributable to equity shareholders by the weighted average number of ordinary shares in issue during the period:

         6 months Ended
30 June
2019
Unaudited
6 Months Ended
30 June 2018

Unaudited
Year ended 31 December 2018
Audited
£ £ £
Profit/(loss) after tax (137,000) (99,000) (699,967)
Weighted average number of ordinary shares in issue 15,228,089 13,992690 14,876,326
Basic and diluted Profit/(loss) per share (pence) (0.90p) (0.71p) (4.71p)

Basic and diluted earnings per share are the same, since where a loss is incurred the effect of outstanding share options and warrants is considered anti-dilutive and is ignored for the purpose of the loss per share calculation. There were 12,205,327 potential dilutive shares in issue during the period for share options and warrants.


6.         Financial assets

During the period the Group had the following movements in investments:

         30 June
2019
Unaudited
At
30 June 2018

Unaudited
Year ended 31 December 2018
Audited
£’000 £’000 £’000
Secured loan notes 222 203 72
Financial assets through profit and loss:
UK AIM listed equity securities
440 1,003
512
Total financial assets 662 1,206 584


7.         Share Capital

Ordinary shares are classified as equity. Proceeds from issuance of ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are deducted against share capital.

Allotted, called up and fully paid ordinary shares of 0.01p each Number of shares Share
Capital
Share Premium
£ £
Balance at 17 May 2016 100 1 -
Balance at 30 June 2016 100 1 -
Share issue at £0.10 – 15 March 2017 6,309,794 63,098 511,233
Share issue at £0.10 – 24 March 2017 50,000 500 4,500
Share issue at £0.10 – 18 April 2017 727,273 7,273 72,727
Balance at 30 June 2018 7,087,167 70,872 588,460
Share issue at £0.10 – 05 July 2017 6,363,636 63,636 636,364
Share issue at £0.10 – 04 December 2017 707,937 7,079 84,952
Balance at 31 December 2017 14,158,740 141,587 1,309,776
Share issue at £0.010 – 21 March 2018 192,308 1,923 23,077
Share issue at £0.010 – 21 March 2018 345,722 3,457 41,487
Share issue at £0.010 – 04 June 2018 500,000 5,000 70,000
Share issue at £0.010 – 15 November 2018 50,000 1000 4,000
Balance at 30 June 2019 15,246,770 152,467 1,448,340


8.         Events Subsequent to 30 June 2019

On the 9 August 2019 the company raised £365,000 by issuing 365,0000 Bonds a £1 per Bond.

On the 30 August 2019 the company raised £59,000 by issuing 421,429 new shares.

On the 23 September 2019 the company raised £250,000 by issuing 1,666,667 new shares.


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