Last checked at 
30 Sep 2022 07:00
GRIT Investment Trust plc
'GRIT' or 'the Company'
Half-year results for the six months ended 30 June 2022
Chairman's statement
The economic uncertainties
The economic uncertainties in global capital markets largely associated with the Russia-Ukraine conflict have presented a challenging back drop to the Company's plans to re-launch as a natural resources investment trust.
Set out below is the interim statement covering the six months ended 30 June 2022. A loss of £89,000 is being reported for the six months ended 30 June 2022 compared to a profit of £366,000 for the six months ended 30 June 2021.The prior profit was achieved largely as a result of the profit on the sale of the Company's stake in Siberian Goldfields Limited.
Salient events
Convertible Loan Notes Final Redemption Date Extension
In July 2022 the Company announced that it has agreed with the holders of the outstanding £599,201 convertible loan notes dated 30 July 2021, to extend the final repayment date from 31 July 2022 to 30 September 2022. However, with the withdrawal of its prospectus application as referred to below, it has been unable to date to proceed with the conversion of the outstanding convertible loan notes. However, the Company remains fully committed to doing so and is seeking a further short extension to provide sufficient time to consider the options available.
Anglo African Minerals plc
As anticipated, the military coup in Guinea last September has disrupted the realisation of any of the Company's investment in Anglo African Mining plc ('AAM') and endorses the directors' decision to make full provision against it in the accounts.
Strategy of the new Board
On 22nd October 2021, the Company announced the new board appointments of myself and Malcolm Burne, both fund managers with proven experience and extensive track records in the natural resources sector. Since our appointment to the Board, the Company has been progressing a possible issue of new shares to finance its ongoing investment policy as an investment trust. This process involved seeking regulatory approval for the publication of a prospectus and also the internal authorisation as, or the external appointment of, an Alternative Investment Fund Manager (''AIFM''). However, after considerable time and effort, the Board has regrettably reached the conclusion that due to difficulties completing this process and the prevailing lack of positive sentiment towards the resource sector, the planned re-establishment of the Company as an active resource focused investment trust has become unachievable. Therefore, as announced on 16 September 2022, the Company has withdrawn both its AIFM and prospectus applications.
In an effort to return value for shareholders, the Company will now seek a ''Reverse Takeover'' (RTO) by the acquisition of a business which enables the Company to achieve an appropriate relisting on a public market. It is envisaged that the announcement of any such proposed transaction will result in the suspension of the Company's shares from trading on the Official List. If the Company is successful in announcing an acquisition in the form of a ''RTO'' the Board believes it will provide the best outcome for shareholders and provide a platform for the future growth of the Company.
Richard Lockwood
Chairman
30 September 2022
Enquiries:
GRIT Investment Trust plc
Martin Lampshire
Tel: +44 (0)20 3198 2554
Peterhouse Capital Limited
Lucy Williams/Duncan Vasey
Tel: +44 (0)20 7469 0930
Income Statement
Revenue | Capital | Total | ||||||
Unaudited | Unaudited | Unaudited | ||||||
Notes | £'000 | £'000 | £'000 | |||||
Six months ended 30 June 2022 |
| |||||||
Profit on disposal of investments | - | - | - | |||||
Other income | 96 | - | 96 | |||||
Other expenses | (153) | - | (153) | |||||
Net return before finance costs and taxation | (57) | - | (57) | |||||
Interest payable and similar charges | (32) | - | (32) | |||||
Net return on ordinary activities before taxation | (89) | - | (89) | |||||
Tax on ordinary activities | - | - | - | |||||
Net return attributable to equity shareholders | (89) | - | (89) | |||||
|
|
| ||||||
Profit (loss) per ordinary share | 3 | (1.77p) | - | (1.77p) | ||||
|
| |||||||
Six months ended 30 June 2021 |
| |||||||
Profit on disposal of investments | - | 488 | 488 | |||||
Other income | - | - | - | |||||
Other expenses | (122) | - | (122) | |||||
Net return before finance costs and taxation | (122) | 488 | 366 | |||||
Interest payable and similar charges | - | - | - | |||||
Net return on ordinary activities before taxation | (122) | 488 | 366 | |||||
Tax on ordinary activities | - | - | - | |||||
Net return attributable to equity shareholders | (122) | 488 | 366 | |||||
|
|
| ||||||
Profit (loss) per ordinary share | 3 | (2.42p) | 9.7p | 7.3p | ||||
|
| |||||||
Year ended 31 December 2021 |
| |||||||
Profit on disposal of investments | - | 488 | 488 | |||||
Income | - | - | - | |||||
Other expenses | (391) | - | (391) | |||||
Net return before finance costs and taxation | (391) | 488 | 97 | |||||
Interest payable and similar charges | - | - | - | |||||
Net return on ordinary activities before taxation | (391) | 488 | 97 | |||||
Tax on ordinary activities | - | - | - | |||||
Net return attributable to equity shareholders | (391) | 488 | 97 | |||||
|
|
|
| |||||
Gain per ordinary share | 3 | (8.6p) | 10.8p | 2.2p | ||||
The 'total' column of this statement represents the Company's profit and loss account, prepared in accordance with IFRS. All revenue and capital items in this statement derive from continuing operations. All of the profit for the period is attributable to the owners of the Company.
No operations were acquired or discontinued in the year.
A Statement of Total Recognised Gains and Losses is not required as all gains and losses of the Company have been reflected in the above Income Statement.
Balance Sheet
As at 30 June 2022 | As at 31 December 2021 | As at 30 June 2021 | ||
Unaudited | Audited | Unaudited | ||
Notes | £'000 | £'000 | £'000 | |
Fixed assets |
|
|
| |
Investments | - | - | - | |
- | - | - | ||
Current assets | ||||
Investments | - | - | - | |
Debtors | 137 | - | - | |
Cash at bank and on deposit | 187 | 488 | 30 | |
324 | 488 | 30 | ||
Creditors: amounts falling due within one year | ||||
Other creditors | (330) | (437) | (338) | |
Net current (liabilities) assets | (6) | 51 | (308) | |
Creditors: amounts falling due after one year | ||||
Convertible unsecured loan notes | (692) | (660) | (100) | |
Net (liabilities) assets | (698) | (609) | (408) | |
Capital and reserves | ||||
Called up share capital | 504 | 504 | 504 | |
Share premium | 36,922 | 36,922 | 36,922 | |
Capital reserve | (32,697) | (32,697) | (32,697) | |
Revenue reserve | (5,495) | (5,406) | (5,137) | |
Other reserve | 68 | 68 | - | |
Equity shareholders' funds | (698) | (609) | (408) | |
|
|
| ||
Net asset value per share | 4 | (13.86p) | (12.1p) | (8.1p) |
Statement of Changes in Equity | Share capital | Share premium account | Capital reserve | Revenue reserve | Other reserve | Total | |
£'000 | £'000 | £'000 | £'000 | £'000 | £'000 | ||
| For the 6 months to 30 June 2022 (unaudited) | ||||||
Balance at 31 December 2021 | 504 | 36,922 | (32,697) | (5,406) | 68 | (609) | |
Issue of shares | - | - | - | - | - | - | |
Return on ordinary activities after taxation | - | - | - | (89) | - | (89) | |
Balance at 30 June 2022 | 504 | 36,922 | (32,697) | (5,495) | 68 | (698) | |
For the 6 months to 30 June 2021 (unaudited) | |||||||
Balance at 31 December 2020 | 420 | 36,880 | (33,185) | (5,015) | (900) | ||
Issue of shares | 84 | 42 | - | - | 126 | ||
Return on ordinary activities after taxation | - | - | 488 | (122) | 366 | ||
Balance at 30 June 2021 | 504 | 36,922 | (32,697) | (5,137) |
| (408) | |
The revenue reserve represents the amount of the Company's reserves distributable by way of dividend.
Cash Flow Statement
| Six months ended 30 June | ||
| 2022 | 2021 | |
Unaudited | Unaudited | ||
£'000 | £'000 | ||
Operating activities |
|
|
|
(Loss)/profit before finance costs and taxation | (57) | 366 | |
(Profit) on disposal of investment | - | (488) | |
(Increase)/Decrease in other receivables | (137) | - | |
(Decrease)/increase in other payables | (107) | (562) | |
Net cash outflow from operating activities | (301) | (684) | |
Investing activities | |||
Proceeds from the sale of investment | - | 488 | |
Net cash inflow from investing activities | - | 488 | |
| |||
Financing activities | |||
Issue of shares | - | 126 | |
Issue of convertible unsecured loan notes | - | 100 | |
Net cash inflow from financing activities | - | 226 | |
| |||
Increase/(decrease) in cash and cash equivalents | (301) | 30 | |
Net cash at the start of the period | 488 | - | |
Net cash at the end of the period | 187 | 30 | |
The accompanying notes are an integral part of the financial statements.
Notes
1. Interim Results
These condensed financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS') and IAS 34 'Interim Financial Reporting' as adopted by the UK and the accounting policies set out in the statutory accounts of the Company for the year ended 31 December 2021. The condensed financial statements do not include all of the information required for a complete set of IFRS financial statements and should be read in conjunction with the financial statements of the Company for the year ended 31 December 2021, which were prepared in accordance with UK-adopted international accounting standards. There have been no significant changes to management judgements and estimates.
2. Going Concern Basis of Accounting
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
3. Return per Ordinary Share
The revenue loss per ordinary share for the six months ended 30 June 2022 is based on a net loss after taxation of £89,000 and on a weighted average of 5,035,741 ordinary shares in issue during the period.
The capital loss per ordinary share for the six months ended 30 June 2022 is based on a net capital profit after taxation of £Nil and on a weighted average of 5,035,741 ordinary shares in issue during the period.
All comparative profit/loss per share has been restated for the share consolidation of 10 Ordinary shares of 0.25p into 1 Ordinary share of 2.5p on 7 January 2022.
4. Net Asset Value per Ordinary Share
The net asset value per ordinary share is based on net liabilities of £698,000 (31 December 2021: net liabilities of £609,000) and on 5,035,741 (31 December 2021: 50,357,414) ordinary shares, being the number of ordinary shares in issue at the period end.
All comparative Net Asset Value per share has been restated for the share consolidation of 10 Ordinary shares of 0.25p into 1 Ordinary share of 2.5p on 7 January 2022.
5. Related Party Transactions
The Board of Directors is considered to be a related party. The Directors of the Company received fees for their services. Total fees for the six months to 30 June 2022 were £10,000 (six months ended 30 June 2021: £18,750) At 30 June 2022 directors were owed £60,370 (30 June 2021: £134,964).
5. Post Balance Sheet Events
Events since the balance sheet date are fully described in the outgoing Chairman's statement.
Interim Report Statement
The Company's auditor PKF Littlejohn LLP, has not audited or reviewed the Interim Report to 30 June 2022 pursuant to the Auditing Practices Board guidance on 'Review of Interim Financial Information'. These are not full statutory accounts in terms of Section 434 of the Companies Act 2006 and are unaudited. Statutory accounts for the year ended 31 December 2021, which received an unqualified audit report and which did not contain a statement under Section 498 of the Companies Act 2006, have been lodged with the Registrar of Companies. No full statutory accounts in respect of any period after 30 December 2021 have been reported on by the Company's auditor or delivered to the Registrar of Companies.
Directors' Statement of Principal Risks and Uncertainties
The risks, and the way in which they are managed, are described in more detail in the Strategic Report contained within the Annual Report and Financial Statements for the year ended 31 December 2021. In the opinion of the Directors the Company's principal risks and uncertainties have not changed materially since the date of that report and did not change materially for the rest of the Company's financial reporting period to 31 December 2022.
Statement of Directors' Responsibilities in Respect of the Interim Report
We confirm that to the best of our knowledge:
· the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting' and gives a true and fair view of the assets, liabilities, financial position and loss of the Company;
· the Chairman's Statement and Executive Director's Review (together constituting the Interim Management Report) include a fair review of the information required by the Disclosure Guidance and Transparency Rules ('DTR') 4.2.7R, being an indication of important events that have occurred during the first six months of the year and their impact on the financial statements; and
· other than directors' remuneration, there have been no related party transactions that materially affected the financial position or performance of the Company during the period.
On behalf of the Board
Richard Lockwood
Chairman
30 September 2022