Last checked at 30 Sep 2009 07:00
PAN PACIFIC AGGREGATES PLC
HALF-YEARLY UNAUDITED CONSOLIDATED RESULTS
FOR THE SIX MONTHS ENDED 30 JUNE 2009
Pan Pacific Aggregates plc ("PPA" or the "Group"), the British Columbia based aggregates company announces its half-yearly results for the six months ended 30 June 2009.
Financial highlights
Loss before tax of £1,076,000 (2008: £1,016,000)
Loss per share of 0.3p per share (2008: 1.0p loss)
Balance of loan notes outstanding £5,165,000 (2008: £4,019,000)
Fundraising of £577,500 during the period
Cash reserves of £383,000 (2008: £54,000). At end of September £550,000
Operational highlights
Operating permit granted on 14 September 2009
Pumptown Quarry to re-open by 31 October 2009
New Management Team appointed
William Voaden, Chairman, commented:
"The first half of the year at PPA was one of enormous challenge which affected all levels of the organization. The restructuring has now been completed, we have secured the requisite permits to allow Pumptown quarry to re-open and we are operating in a positive environment. Once Pumptown is operational it should provide us with a positive cash contribution. The local market is buoyant and we believe that we can build upon this."
Enquiries:
| Pan Pacific Aggregates plc | Tel: +44 (0) 20 7096 9580 |
| William Voaden | |
| Dowgate Capital Advisers Limited | Tel: +44 (0) 20 7492 4777 |
| Aaron Smyth | |
| VSA Capital Limited | Tel: +44 (0) 20 7096 9589 |
| Paul Backhouse | |
| Lothbury Financial Limited | Tel: +44 (0) 20 7011 9411 |
| Michael Padley / Libby Moss |
MANAGING DIRECTOR'S STATEMENT
1. Introduction
The first half of the year at PPA has been one of enormous challenge which affected all levels of the organisation.
Since the restructuring was announced in June, it was imperative to ensure it worked and it is this transition which has been the focus of intense work since March this year.
The Group has taken steps to divest its non-core assets with the marketing of the property at Wood Bay on the Sechelt Peninsular of British Columbia. The Board expects to complete this sale in 2010.
The first half of the year was spent negotiating terms of settlement with HSBC and RAB Special Situations (Master) Fund Limited to strengthen the Group balance sheet position. We also settled other creditors and liabilities in our subsidiary Pumptown Quarry Inc to provide a firm base for the re-commencement of operations at the quarry.
It is PPA's intention to have Pumptown Quarry in development and production by the end of October 2009.
2. Financial Performance
The results for the period reflect the costs associated with maintaining quarry operations and associated finance costs, without corresponding revenue. In the period to 30 June 2009, we were able to significantly reduce our administrative expenses as compared to the same period in 2008. The increase in financial expense relates to the mortgage on the Pumptown Quarry which was acquired in June 2008 and a 0.5% increase in the RAB loan note for the period 1 January 2009 to 21 May 2009. From 22 May 2009 the RAB loan note rate of interest was reduced to 6% per annum.
Revenue for the period was £nil (2008: £104,000) and the loss before tax was £1,076,000 (2008: £1,016,000).
Loss per share, basic and diluted, was 0.3p (2008: 1.0p loss).
Cash used in operations in the period was £354,000 (2008: £437,000).
Total capital and reserves attributable to equity shareholders of PPA at the period end were £841,000 (2008: £2,555,000).
During the period we raised £577,500 for working capital purposes during very difficult market conditions.
Our interest costs are expected to reduce further over the next 12 months following the repayment of outstanding loan notes due to RAB Special Situations (Master) Fund Limited.
We are pleased to report that significant progress has been made during the past nine months and the City of Abbotsford have now agreed to allow a by-pass road to be built over City of Abbotsford property.
3. Balance Sheet
The financial position of the Company has greatly improved over the last nine months. In July and August we raised, in aggregate, £785,000 (satisfied by the issue of 327,063,491 ordinary shares). The Board continues to focus on control over working capital and, going forward, closely monitoring restrictions on capital expenditure to ensure we place the Company in a sound position to allow for future acquisitive growth opportunities as they arise.
As at the end of September 2009, there was approximately £550,000 of cash in the Company.
4. Operational review
The more material changes and achievements, in addition to those noted above, are:
Establishment of a new management team; and
Implementation of a clear operational strategy and targets.
Following the recapitalisation of the Company, it is now moving into its second strategic phase in the upstream aggregates sector. In this regard, the Company is in the final stages of the design and planning for the build and re-commissioning of the Pumptown Quarry on the Sechelt Peninsula, British Columbia.
5. Board Changes
On 27 July 2009, William Voaden was appointed interim Executive Chairman and on 1 September 2009, the Board appointed Thomas Masney as Finance Director. The appointment of Thomas strengthens our board and delivers on a commitment to shareholders to strengthen the Group's financial and reporting functions.
6. Outlook
The Company's operational focus is to start up the Pumptown Quarry and develop and consolidate aggregate businesses in the Fraser Valley, as well as utilising our existing small producer permit at Sechelt (Caren Ridge) to give additional cashflow. Once the Pumptown quarry is operational it should provide us with a healthy positive cash contribution. In addition, we also plan to undertake a further fundraising in the near term to provide us with additional working capital.
We are in preliminary discussions to acquire a sand and gravel quarry in the Fraser Valley (which would be the subject of a separate operating permit application). A further announcement will be made in this regard in due course.
William Voaden
Managing Director
29 September 2009
Pan Pacific Aggregates Plc
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six months ended 30 June 2009
| Unaudited | Unaudited | Audited | ||
| Six month ended | Six month ended | Year ended | ||
| 30 June 2009 | 30 June 2008 | 31 Dec 2008 | ||
| Note | £'000 | £'000 | £'000 | |
| Revenue | - | 104 | 184 | |
| Cost of sales | - | (79) | (252) | |
| Gross profit/(loss) | - | 25 | (68) | |
| Administrative expenses | (400) | (586) | (2,179) | |
| Loss from operations | (400) | (561) | (2,247) | |
| Financial expense | (677) | (466) | (1,085) | |
| Financial income | 1 | 11 | 15 | |
| Loss before taxation | (1,076) | (1,016) | (3,317) | |
| Taxation credit | - | - | 7 | |
| Loss for the period/year | (1,076) | (1,016) | (3,310) | |
| Attributable to: | ||||
| Equity holders of the parent | (1,075) | (1,015) | (3,310) | |
| Minority interest | (1) | (1) | - | |
| Loss for the period/year after taxation | (1,076) | (1,016) | (3,310) | |
| Total comprehensive income for the period/year | (1,076) | (1,016) | (3,310) | |
| Loss per ordinary share | ||||
| Basic and diluted (pence) | 4 | (0.3) | (1.0) | (1.8) |
Pan Pacific Aggregates Plc
UAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2009
| Unaudited | Unaudited | Audited | ||
| At 30 June | At 30 June | At 31 December | ||
| 2009 | 2008 | 2008 | ||
| Note | £'000 | £'000 | £'000 | |
| Assets: | ||||
| Non-current assets | ||||
| Intangible assets | 3,862 | 4,220 | 3,835 | |
| Property, plant and equipment | 3,809 | 3,325 | 3,821 | |
| Total non current assets | 7,671 | 7,545 | 7,656 | |
| Current assets | ||||
| Inventories | 118 | 72 | 126 | |
| Receivables | 3 | 276 | 40 | |
| Cash and cash equivalents | 383 | 54 | 238 | |
| Total current assets | 504 | 402 | 404 | |
| Total assets | 8,175 | 7,947 | 8,060 | |
| Liabilities: | ||||
| Current liabilities | ||||
| Loan Notes | 5,165 | 4,019 | 4,571 | |
| Trade payables | 519 | 459 | 438 | |
| Other loans & payables | 837 | 914 | 894 | |
| 6,521 | 5,392 | 5,903 | ||
| Non-current liabilities | ||||
| Deferred tax | 813 | - | 813 | |
| Total liabilities | 7,334 | 5,392 | 6,716 | |
| Total net assets | 841 | 2,555 | 1,344 | |
| Capital and reserves attributable | ||||
| to equity holders of the company | ||||
| Called up share capital | 3 | 686 | 187 | 288 |
| Share premium account | 3 | 8,798 | 7,788 | 8,681 |
| Foreign exchange reserve | (396) | (295) | (453) | |
| Reserve for options granted | 86 | 933 | 86 | |
| Reserve for warrants granted | 72 | 113 | 72 | |
| Retained deficit | (8,406) | (6,172) | (7,331) | |
| 840 | 2,554 | 1,343 | ||
| Minority Interest | 1 | 1 | 1 | |
| Total equity | 841 | 2,555 | 1,344 |
Pan Pacific Aggregates Plc
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
Six months ended 30 June 2009
| Unaudited | Unaudited | Audited | |||
| Six month ended | Six month ended | Year ended | |||
| 30 June 2009 | 30 June 2008 | 31 December 2008 | |||
| Operating activities | £'000 | £'000 | £'000 | ||
| Loss before taxation | (1,076) | (1,016) | (3,317) | ||
| Adjustments for | |||||
| Depreciation and amortization | 13 | 10 | 44 | ||
| Impairment of investment | - | - | 628 | ||
| Interest receivable | - | - | (15) | ||
| Interest payable or capitalized | 583 | 455 | 1,085 | ||
| Share based payment expense | - | 111 | 419 | ||
| 596 | 576 | 2,161 | |||
| Cash outflows from operating activities before | (480) | (440) | (1,156) | ||
| changes in working capital and provisions | |||||
| Decrease/ (increase) in trade and other receivables | 37 | (155) | 41 | ||
| Decrease /(increase) in inventories | 8 | 80 | (54) | ||
| Increase in trade and other payables | 81 | 78 | 49 | ||
| 126 | 3 | 36 | |||
| Cash outflows from operating activities | (354) | (437) | (1,120) | ||
| Investing activities | |||||
| Interest received | 1 | 11 | 15 | ||
| Purchase of property, plant and equipment | - | - | (24) | ||
| Acquisition of subsidiary | - | (237) | (212) | ||
| Purchase of intangible assets | - | (25) | (52) | ||
| 1 | (251) | (273) | |||
| Cash flows from investing activities | |||||
| Financing activities | |||||
| Interest paid | (83) | - | (67) | ||
| Issue of ordinary share capital | 581 | - | 954 | ||
| Cash flows from financing activities | 498 | - | 887 | ||
| Increase/(decrease) in cash | 145 | (688) | (506) | ||
| Cash and equivalents at beginning of the period | 238 | 742 | 742 | ||
| Exchange gain on cash and equivalents | - | - | 2 | ||
| Cash and equivalents at end of the period | 383 | 54 | 238 | ||
NOTES TO THE FINANCIAL INFORMATION
1. Accounting policies
Basis of preparation
The condensed interim financial information for the period 1 January 2009 to 30 June 2009 is neither audited nor reviewed by the auditors of Pan Pacific Aggregates Plc. In the opinion of the Directors, the condensed interim financial information for the period presents fairly the financial position, and the results from operations and cash flows for the period are in conformity with generally accepted accounting principles consistently applied. The financial statements incorporate comparative figures for the interim period 1 January 2008 to 30 June 2008 and the audited financial year to 31 December 2008.
The financial information contained in this interim report does not constitute statutory accounts as defined by section 435 of the Companies Act 2006.
The comparatives for the full year ended 31 December 2008 are not the Group's full statutory accounts for that year. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified; however it did include references to matters to which the auditors drew attention by way of emphasis without qualifying their report. The auditors' report did not contain a statement under section 237(2)-(3) of the Companies Act 1985.
2. AIM Compliance Committee
In accordance with AIM Rule 31 the Company is required to have in place sufficient procedures, resources and controls to enable its compliance with the AIM Rules; seek advice from its nominated adviser ("Nomad") regarding its compliance with the AIM Rules whenever appropriate and take that advice into account; provide the Company's Nomad with any information it requests in order for the Nomad to carry out its responsibilities under the AIM Rules for Companies and the AIM Rules for Nominated Advisers; ensure that each of the Company's directors accepts full responsibility, collectively and individually, for compliance with the AIM Rules; and ensure that each director discloses without delay all information which the Company needs in order to comply with AIM Rule 17 (Disclosure of Miscellaneous Information) insofar as that information is known to the director or could with reasonable diligence be ascertained by the director.
In order to ensure that these obligations are being discharged, the Board has established a committee of the Board (the "AIM Committee"), chaired by William Voaden, an executive director of the Company.
Having reviewed relevant Board papers and met with the Company's Executive Board and the Nomad to ensure that such is the case, the AIM Committee is satisfied that the Company's obligations under AIM Rule 31 have been satisfied during the period under review.
3. Share capital
| Allotted, called up and fully paid ordinary shares | Share | ||||
| Company | Authorised | of £0.001 each | Premium | ||
| Number | Number | £'000 | £'000 | ||
| As at 1 January 2008 | 100,000,000 | 64,136,765 | 64 | 5,342 | |
| Increase in authorised shares | 700,000,000 | ||||
| Conversion of debt | 42,451,082 | 42 | 1,039 | ||
| Issue of warrants | (72) | ||||
| Issue of shares | 80,000,000 | 80 | 1,520 | ||
| As at 30 June 2008 | 800,000,000 | 186,587,847 | 186 | 7,829 | |
| Issue of shares | 102,000,000 | 102 | 918 | ||
| Issue costs | (66) | ||||
| As at 31 December 2008 | 800,000,000 | 288,587,847 | 288 | 8,681 | |
| Increase in authorised shares |
400,000,000 | ||||
| Issue of shares | 398,166,665 | 398 | 186 | ||
| Issue costs | (69) | ||||
| As at 30 June 2009 | 1,200,000,000 | 686,754,512 | 686 | 8,798 | |
At a general meeting of shareholders held on 14 April 2009, a resolution proposing to increase the authorised number of ordinary shares from 800,000,000 to 1,200,000,000 of £0.001 each was approved.
On 14 April 2009 the Company completed the issue of 15,000,000 ordinary shares for a consideration of £0.0025 per ordinary share. In total £37,500 was raised for working capital purposes. The Company agreed an arrangement fee of £1,875 satisfied by the issue of 750,000 new ordinary shares. The share issue has been fully subscribed and paid.
In May and June 2009 the Company completed the issue of a further 359,999,999 ordinary shares for a consideration of £0.0015 per ordinary share. In total, £547,500 was raised for settlement of Pumptown Quarry debt and working capital purposes. The Company agreed an arrangement fee of £34,250 satisfied by the issue of 23,166,666 new ordinary shares. The share issue has been fully subscribed and paid.
4. Earnings per share
Basic earnings per share is calculated on the loss after taxation for the period attributable to equity holders of the Company of £1,076,000 (2008: £1,016,000) and on 356,872,000 (2008: 100,945,000) ordinary shares, being the weighted number in issue during the period.
Diluted earnings per share is calculated on the weighted number of ordinary shares in issue adjusted to reflect the potential effect of the exercise of share warrants. No adjustment is required in either period because the fair value of warrants was below the exercise price.
5. Post balance sheet events
At an annual general meeting of shareholders, held on 27 July 2009, a resolution proposing to increase the authorized number of ordinary shares from 1,200,000,000 to 5,000,000,000 of £0.001 each was approved.
On 31 July 2009, the Company completed the issue of 226,666,666 ordinary shares for a consideration of £0.00225 per ordinary share. In total £535,000 was raised for working capital purposes. The Company agreed an arrangement fee of £10,000 satisfied by the issue of 4,444,444 new ordinary shares. The share issue has been fully subscribed and paid.
On 28 August 2009, the Company completed the issue of a further 89,285,714 ordinary shares for a consideration of £0.0028 per ordinary share. In total, £250,000 was raised for working capital purposes. The share issue has been fully subscribed and paid.
6. Distribution of the Half-yearly Report
Copies of the Half-yearly Report will be available to the public from the Company website, www.panagg.com, and from the Company Secretary at the Company's registered address at 7 Devonshire Square, Cutlers Gardens, London, EC2M 4YH.