Last checked at 30 Jun 2009 07:00
MINOAN GROUP PLC
30 June 2009
Interim Financial Statements
Minoan Group Plc ("Minoan or "the Company"), the AIM-quoted leisure resort developer, presents its unaudited interim financial statements for the 6 months ended 31 March 2009
Chairman's Statement
In my last statement on 25 February this year I brought you up to date with details of the issues facing your Company in Greece at that time. This statement deals with progress on the main issues as we move forward.
Cavo Sidero (the "Project")
Planning Approval
The appeal against the Greek Government's approval of the Company's Environmental Impact Assessment ("EIA") continues to make its way through the highest administrative court of Greece, the Conseil d'État. In my last statement, I described the conduct of the hearing on 7 November 2008. The Court has since met in camera and, although rumours have circulated in the Greek media, we will not be able to interpret the findings of the Court until its judgement is published. As soon as the decision is available I will write to you setting out the main points of the judgement as they affect the development at Cavo Sidero.
Special Land Plan for Tourism
I am very pleased to inform you that the Special Land Plan for Tourism and Sustainable Development was passed into law on 11 June 2009. This Plan gives clear guidelines as to the nature of the various forms of tourism which may be developed in different areas of Greece including North Eastern Crete.
The passing into law of this Plan, together with the previous plans for energy and industry, completes the framework of the National Plan launched in 2007. Greece now has, for the first time, the legislation in place to give an overall planning structure for the development of the country.
Sustainability
In line with the ambitions of the Company to achieve sustainability of the Project, we have been continuing to examine, inter alia, ways of reducing the Project's carbon footprint. In addition to the extensive measures included in the EIA, the Company has identified ways of using renewable energy sources to enable it to achieve carbon neutrality.
Financial Results
The unaudited interim results for the 6 months ended 31 March 2009 are set out below and are in line with the Board's expectations.
The period of 18 months ended 30 September 2008 was the first period in which IFRSs and IFRIC interpretations were adopted. As a consequence, comparatives have been restated from UK GAAP to IFRS. The only adjustment to previously reported numbers relates to the requirement under IFRS not to amortise goodwill but instead to test it annually for impairment. All other changes arising from the transition to IFRS are presentational only (see Note 2).
The Consolidated Unaudited Income Statement includes a charge in respect of share based payments as required under IFRS 2. This charge, which arises from the Company's Long Term Incentive Plan, does not involve any cash payment (see Note 3).
The Future
In the current financial climate and whilst awaiting the decision referred to above, the Company continues to reduce current and future cash operating costs, wherever possible, both in Greece and the UK.
It remains the Company's intention that future capital will be raised on a staged basis as required. Discussions continue with a number of parties interested either in investing in Minoan or in participating directly in the Project and I will inform shareholders of any developments.
As I mentioned in my last report, the Company has been exploring opportunities to add a new, compatible activity to support the Cavo Sidero Project. Progress is being made and I expect to be able to announce the details and benefits of this business in the coming months.
Conclusion
My fellow directors and I remain fully committed to the success of the Company and continue to believe that, in due course, Cavo Sidero will take its place as a major, internationally acclaimed resort with leading sustainability credentials. The Board also believes that the addition of the new business referred to above, when realised, will provide an income stream and additional long term value for shareholders.
Christopher W Egleton
Chairman30 June 2009
MINOAN GROUP PLC
Unaudited Consolidated Income Statement
6 months ended 31 March 2009
| 6 months ended 31 March 2009 £ | 6 months ended 31 March 2008 £ | 18 months ended 30 September 2008 £ | ||
| Revenue | - | - | - | |
| Cost of sales | - | - | - | |
| Gross profit | - | - | - | |
| Operating expenses | (301,240) | (341,660) | (1,422,176) | |
| Charge in respect of share based payments | (373,916) | (400,975) | (1,175,730) | |
| Operating loss | (675,156) | (742,635) | (2,597,906) | |
| Finance income | 1,637 | 31,814 | 104,325 | |
| Finance costs | - | - | - | |
| Loss before taxation | (673,519) | (710,821) | (2,493,581) | |
| Taxation expense | - | - | - | |
| Loss for the period attributable to equity holders of the Company | (673,519) | (710,821) | (2,493,581) | |
| Loss per share attributable to equity holders of | ||||
| the Company | (1.24)p | (1.44)p | (5.00)p | |
| Loss per share attributable to equity holders of | ||||
| the Company (excluding the charge in respect of | ||||
| share based payments) | (0.55)p | (0.63)p | (2.64)p | |
All of the above arises from continuing activities.
The notes on pages 7 to 9 form an integral part of these unaudited interim financial statements.
Unaudited Consolidated Statement of Changes in Equity
6 months ended 31 March 2009
| Share Capital £ | Share Premium £ | Merger reserve £ | Retained earnings £ | Total equity £ | |
| Balance at 1 October 2008 | 13,578,674 | 19,181,032 | 9,348,724 | (7,814,910) | 34,293,520 |
| Loss for the period | - | - | - | (673,519) | (673,519) |
| Total recognised income for the period ended 31 March 2009 | 13,578,674 | 19,181,032 | 9,348,724 | (8,488,429) | 33,620,001 |
| Net proceeds from shares issued (see note below) | (30,303) | 105,303 | - | - | 75,000 |
| Share based payments | - | - | - | 373,916 | 373,916 |
| Balance at 31 March 2009 | 13,548,371 | 19,286,335 | 9,348,724 | (8,114,513) | 34,068,917 |
Note: Share Capital has been adjusted to reflect changes in loans to be settled by the issue of shares,
which have been treated as equity in accordance with IAS 32.
6 months ended 31 March 2008
| Share Capital £ | Share Premium £ | Merger reserve £ | Retained earnings £ | Total equity £ | |
| Balance at 1 October 2007 | 12,333,011 | 18,953,148 | 9,348,724 | (7,193,438) | 33,441,445 |
| Loss for the period | - | - | - | (710,821) | (710,821) |
| Total recognised income for the period ended 31 March 2008 | 12,333,011 | 18,953,148 | 9,348,724 | (7,904,259) | 32,730,624 |
| Net proceeds from shares issued | - | - | - | - | - |
| Share based payments | - | - | - | 400,975 | 400,975 |
| Balance at 31 March 2008 | 12,333,011 | 18,953,148 | 9,348,724 | (7,503,284) | 33,131,599 |
Unaudited Consolidated Balance Sheet as at 31 March 2009
| 31 March 2009 £ | 31 March 2008 £ | 30 September 2008 £ | |
| Assets | |||
| Non-current assets | |||
| Intangible assets | 3,572,776 | 3,572,776 | 3,572,776 |
| Property, plant and equipment | 195,610 | 182,127 | 175,795 |
| Total non-current assets | 3,768,386 | 3,754,903 | 3,748,571 |
| Current assets | |||
| Inventories | 32,872,302 | 30,680,835 | 31,974,563 |
| Receivables | 24,689 | 34,214 | 63,911 |
| Cash and cash equivalents | 44,972 | 682,314 | 575,199 |
| Total current assets | 32,941,963 | 31,397,363 | 32,613,673 |
| Total assets | 36,710,349 | 35,152,266 | 36,362,244 |
| Equity | |||
| Capital and reserves attributable to equity holders of the Company | |||
| Share capital | 13,548,371 | 12,333,011 | 13,578,674 |
| Share premium account | 19,286,335 | 18,953,148 | 19,181,032 |
| Merger reserve account | 9,348,724 | 9,348,724 | 9,348,724 |
| Retained earnings | (8,114,513) | (7,503,284) | (7,814,910) |
| Total equity | 34,068,917 | 33,131,599 | 34,293,520 |
| Liabilities | |||
| Current liabilities | |||
| Trade and other payables | 1,010,157 | 542,058 | 644,242 |
| Social security and other taxes | 56,419 | 51,087 | 31,899 |
| Provisions for other liabilities and charges | 1,574,856 | 1,427,522 | 1,392,583 |
| Total liabilities | 2,641,432 | 2,020,667 | 2,068,724 |
| Total equity and liabilities | 36,710,349 | 35,152,266 | 36,362,244 |
Unaudited Consolidated Cash Flow Statement
6 months ended 31 March 2009
| 6 months ended 31 March 2009 £ | 6 months ended 31 March 2008 £ | 18 months ended 30 September 2008 £ | |
| Cash flows from operating activities | |||
| Net cash used in continuing operations | (606,864) | (1,350,815) | (4,460,148) |
| Net cash used in operating activities | (606,864) | (1,350,815) | (4,460,148) |
| Cash flows from investing activities | |||
| Purchase of property, plant and equipment | (-) | (14,806) | (26,005) |
| Net cash used in investing activities | (-) | (14,806) | (26,005) |
| Cash flows from financing activities | |||
| Interest received | 1,637 | 31,814 | 104,325 |
| Interest paid | - | - | - |
| Net proceeds from the issue of ordinary shares | 75,000 | - | 1,145,910 |
| Net cash generated from financing activities | 76,637 | 31,814 | 1,250,235 |
| Net decrease cash | (530,227) | (1,333,807) | (3,235,918) |
| Cash at beginning of period | 575,199 | 2,016,121 | 3,811,117 |
| Cash at end of period | 44,972 | 682,314 | 575,199 |
Notes to the unaudited interim financial statements
6 months ended 31 March 2009
1. General information
The Company is a public limited company incorporated in the UK and quoted on the Alternative Investment Market of the London Stock Exchange. The Company's principal activity is the design, creation, development and management of its luxury resort development at Cavo Sidero in North East Crete.
2. Basis of preparation
The interim financial statements for the 6 months ended 31 March 2009 comprise a Consolidated Income Statement, Consolidated Statement of Changes in Equity, Consolidated Balance Sheet and Consolidated Cash Flow statement plus relevant notes.
The interim financial statements are unaudited and do not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. A copy of the audited Report and Financial Statements for the 18 months ended 30 September 2008 has been delivered to the Registrar of Companies. The Report and Financial Statements for the 18 months ended 30 September 2008 were approved by the Board on 25 February 2009.
These consolidated interim financial statements are prepared in accordance with EU Endorsed International Financial Reporting Standards ("IFRS") and IFRIC interpretations and the Companies Act 1985/2006 applicable to companies reporting under IFRS.
The principal accounting policies adopted in the preparation of these interim financial statements are set out below. These policies have been consistently applied to all the periods represented, unless otherwise stated.
The period of 18 months ended 30 September 2008 was the first period in which IFRSs and IFRIC interpretations were adopted, which represented a change in accounting policy. As a consequence, comparatives have been restated from UK GAAP to comply with IFRS. The only adjustment to previously reported numbers relates to the requirement under IFRS not to amortise goodwill and instead test it annually for impairment. All other changes arising from the transition to IFRS are presentational only.
| | IFRS | UK GAAP |
| | £ | £ |
| 6 months ended 31 March 2009 | | |
| Loss for period | (673,519) | (806,019) |
| Total assets | 36,710,349 | 35,915,349 |
| | | |
| 6 months ended 31 March 2008 | | |
| Loss for period | (710,821) | (843,321) |
| Total assets | 35,152,266 | 34,622,266 |
| | | |
| 18 months ended 30 September 2008 | | |
| Loss for period | (2,493,581) | (2,891,081) |
| Total Assets | 36,362,244 | 35,599,744 |
| | | |
Going concern
The interim financial statements have been prepared on the going concern basis.
The directors have considered the financial and commercial position of the Company in relation to its Project at Cavo Sidero together with its proposed new business and, in particular, have reviewed the matters referred to below.
The decision of the Greek Conseil d'Etat on the appeal lodged against the Greek Government's approval of the Company's Environmental Impact Assessment in respect of the Cavo Sidero Project is expected later in 2009. Should the appeal be dismissed, the Project will move to the next stage. Should the appeal be upheld, the directors have been advised and remain confident that, subject to receiving the detailed judgement of the Court, the Company will continue to be in a position to move forward, whether with the Project or with the other opportunities that it is considering.
As has been the case in the past, in order to meet ongoing working capital requirements, the Group is currently involved in discussions with its financial advisers and potential sources of finance. Having taken these matters into account, the directors consider that the going concern basis of preparation of the financial statements is appropriate.
Further comment on the above matters appears in the Chairman's Statement.
The interim financial statements do not include any adjustment that would be required if the Company were unable to continue as a going concern.
3. Charge in respect of share based payments
The Group has implemented a Long Term Incentive Plan ("LTIP") in which any director or employee selected by the remuneration committee may participate. Awards under the LTIP have been granted on the basis that certain performance conditions are met.
As required under IFRS 2, a charge has been made for the value of the LTIP using the Black-Scholes or Monte Carlo pricing models as appropriate and charged over the vesting periods. This charge, shown as a charge in respect of share based payments in the Unaudited Consolidated Income Statement, does not involve any cash payment.
An appropriate charge has been made in the income statements of earlier periods reflecting the fair value of the shares under option.
4. Loss per share attributable to equity holders of the Company
Earnings per share are calculated by dividing the earnings attributable to the equity holders of a company by the weighted average number of ordinary shares in issue during the period. Diluted earnings per share are calculated by adjusting basic earnings per share to assume the conversion of all dilutive potential ordinary shares. In the case of losses however, these shares are antidilutive and as such they are ignored in calculating diluted loss per share. Therefore the basic loss per share and diluted loss per share are the same. The weighted average number of shares used in calculating basic and diluted loss per share for the 6 months ended 31 March 2009 was 54,148,031 (6 months ended 31 March 2008: 49,332,042; 18 months ended 30 September 2008: 49,825,571).
5. Goodwill
As stated in note 2 above, IFRS require that goodwill be tested annually for impairment and not amortised. In the Group's case, the requirement to amortise goodwill ceased with effect from 31 March 2006. The most recent independent valuation of the land at Cavo Sidero, by AXIES S.A. on 27 April 2007, indicates a value of €170 million (approximately £150 million) with all relevant approvals in place. This valuation, plus the current progress of the Cavo Sidero Project, means that the directors are of the opinion that the project site has longer term value in excess of the value of both goodwill and inventories.
The directors consider that the business consists of one cash generating unit.
Minoan Group Plc's unaudited interim financial statements for the 6 months ended 31 March 2009 can be viewed on the Company's website, www.minoangroup.com, with effect from close of business on 30 June 2009.
For further information contact:
Christopher Egleton Minoan Group Plc
07808 722022
Bill Cole
Minoan Group Plc
01689 897397
Nicola Marrin
Seymour Pierce Limited
020 7107 8000
Nick Rome/Gemma O'Hara
Bishopsgate Communications Ltd
020 7562 3350