24 Nov 2017 07:00
24 November 2017
Octagonal plc
("Octagonal" or the "Company")
Unaudited Half-Year Results for the Six Months to 30 September 2017
Octagonal (AIM: OCT), announces its unaudited half-year results for the six months to 30 September 2017
Summary of Financial highlights for the six months to 30 September 2017
· Unaudited revenues increased by 17.4% to £3.3m in the reporting period (September 2016: £2.9m and audited 12 months to 31 March 2017 £5.6m)
· Synergis Capital Plc, 72.4% owned subsidiary of the Group raised external funding of over £1m during the period.
· Unaudited adjusted operating profit excluding Synergis Capital plc consolidated costs and like for like basis comparison was £1.5m (2016: £1m and audited 31 March 2017 £1.9m).
· Unaudited operating profit including additional consolidated cost of £482,000 in relation to the new business start up - Synergis Capital Plc was £1.1m (September 2016: £1.1m and audited 31 March 2017: £1.9m)
· Net Assets £8.2m (September 2016: £6.1m and 31 March 2017: £6.6m)
· Cash balance of £5.3m (September 2016: £2.6m and audited 31 March 2017: £3.8m)
Interim period trading highlights:
· Cost efficiencies and margin improvement continues within Global Investment Strategy UK Ltd ("GIS") Significant work continues being undertaken to improve processing efficiencies, client reporting and reducing frictional costs; as a result net margins have improved from 40% to 47.5% over the comparable period.
· Additional services to clients - Asset Management and enhanced FX, Futures and Options trading services made a positive contribution in the period. This continues the Company's strategy of organically growing, offering a broader range of services to clients where it sees long term value.
· Corporate finance activities made a positive contribution in the period for the first time.
Business Overview
Trading results
The revenue for the six months to 30 September 2017 from continuing operations was £3.3m (September 2016: £2.9m), a 17.4% increase on a like for like basis. Operating profit amounted to £1.1m with additional consolidated cost of £482,000 in Synergis Capital Plc ("Synergis), compared with £1m in the same period last year. Gross profit margins remain strong at 78% (September 2016: 68%) with operating profit margins reduced to 31% due to the additional consolidated Synergis costs (September 2016: 38%).
In addition Net assets and Cash rose to £8.2m million (September 2016: £6.1m) and £5.3m (September 2016: £2.6m and audited 31 March 2017: £3.8m), respectively
Included in the operating profit above were consolidated 'PLC' costs for the interim period that remained low at £65,000, and pre revenue start-up cost for Synergis for the period were £482,000.
Synergis Capital Plc is 72.4% owned subsidiary of the group and it raised external funding of over £1m during the period.
Board Changes
On 7th June 2017, the Company announced that Grant Roberts, Non Executive Chairman stepped down from the board due to increased demand from his other business commitments and John Gunn was appointed Chairman initially on an interim basis.
Other activities post reporting period:
On 31st October 2017, the Company announced that the Court approved the capital reduction of the Company. As a result, all issued deferred shares in the capital of the Company and the Company's share premium account were all cancelled. The effect of these actions had been to eliminate the deficit on distributable reserves enabling the Company to declare dividends.
On 21 November 2017, the company announced the soft launch of the "SynerGIS" bond offering through its subsidiary GIS and was available for pre-registration.
Dividend
On 7th November 2017, the Company declared a dividend of 0.1 pence per share payable on 15th December 2017.
John Gunn, CEO and Chairman, reports:
"This is a good set of results for the half year and this reflects the work done by the team to improve processing efficiencies and increasing margins.
We also managed to improve revenues and profits in spite of the negative impact of a slightly strengthened pound as our revenues are by majority USD and to a lesser extent Euro and GBP denominated.
This was the first time we have seen our corporate finance activities beginning to make a positive contribution to revenues and profits. We will naturally continue to develop these opportunities, although there is no certainty of maintaining these levels of revenue, which were below 10% of total revenues for the period.
Whilst our business remains subject to fluctuations in global markets, we continue to be confident in the outlook for the remainder of the year.
Our application for our Hong Kong license continues and we'll update shareholders when there are meaningful developments.
Finally I am please to announce that the company soft launched the SynerGIS Bond offering inviting depositors to pre register.'
For further information please visit www.octagonalplc.com or contact:
Octagonal Plc | +44 (0) 20 7048 9400 |
John Gunn, CEO |
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Beaumont Cornish Limited (Nominated Adviser and Broker) James Biddle / Roland Cornish | +44 (0) 20 7628 3396 |
www.beaumontcornish.com |
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Unaudited Group Income Statement and statement of comprehensive income
For the 6 months ended 30 September 2017
| Unaudited | Unaudited | Audited |
| 30 September 2017 | 30 September 2016 | 31 March 2017 |
£'000 | £'000 | £'000 | |
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Revenue | 3,348 | 2,853 | 5,596 |
Cost of sales | (745) | (907) | (1,617) |
Gross profit | 2,603 | 1,946 | 3,979 |
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Administrative expenses | (1,556) | (875) | (2,053) |
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Operating profit | 1,047 | 1,071 | 1,926 |
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Other gains and losses | - | (168) | (613) |
Finance income | - | - | - |
Finance costs | - | (1) | - |
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Profit before tax | 1,047 | 902 | 1,313 |
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Taxation | (220) | (195) | (311) |
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Profit for the year | 827 | 707 | 1,002 |
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Attributable to: |
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Shareholders in the Parent Company | 932 | 707 | 1,035 |
Non-controlling Interests | (105) | - | (33) |
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| 827 | 707 | 1,002 |
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Earnings per share attributable to owners of the parent company |
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Basic and diluted (pence per share) |
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From continuing and total operations | 0.166p | 0.126p | 0.185p |
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Unaudited Group Statement of Financial Position
As at 30 September 2017
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| Un audited | Un audited | Audited |
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| 30 September 2017 | 30 September 2016 | 31 March 2017 |
£'000 | £'000 | £'000 | ||
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Non-Current assets |
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Goodwill |
| 2,869 | 2,869 | 2,869 |
Other Intangibles |
| 169 |
| 50 |
Property, plant and equipment |
| 77 | 66 | 62 |
Deferred Tax asset |
| 67 | - | 65 |
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| 3,182 | 2,935 | 3,046 |
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Current assets |
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Available for sale investments |
| 108 | 579 | 126 |
Trade and other receivables |
| 574 | 644 | 327 |
Cash and cash equivalents |
| 5,349 | 2,628 | 3,813 |
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| 6,031 | 3,851 | 4,266 |
TOTAL ASSETS |
| 9,213 | 6,786 | 7,312 |
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Current liabilities |
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Trade and other payables |
| 309 | 345 | 286 |
Current tax liabilities |
| 681 | 350 | 389 |
Borrowings |
| - | - | - |
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| 990 | 695 | 675 |
Non-Current liabilities |
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Borrowings |
| - | - | - |
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NET ASSETS/(LIABILITIES) |
| 8,223 | 6,091 | 6,637 |
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Equity |
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Share capital |
| 1,104 | 1,104 | 1,104 |
Share premium account |
| 3,669 | 3,669 | 3,669 |
Reverse acquisition reserve |
| 679 | 679 | 679 |
Retained earnings |
| 2,518 | 639 | 1,148 |
Equity attributable to owners of the company |
| 7,970 | 6,091 | 6,660 |
Non- Controlling interests |
| 253 | - | 37 |
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Total Equity |
| 8,223 | 6,091 | 6,637 |
Unaudited Group Statement of Changes in Equity
For the 6 months ended 30 September 2017
| Share capital | Share Premium | Reverse acquisition reserve | Retained earnings | Equity attributable to owners of the Company | Non-controlling interests | Total equity |
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| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
Balance at 1 April 2015 | 2,613 | - | - | (670) | 1,943 | - | 1,943 |
Total comprehensive income for the year | - | - | - | 603 | 603 | - | 603 |
Adjustment for reverse acquisition | (1,552) | 2,109 | 679 | - | 1,236 | - | 1,236 |
Proceeds of share issues | 43 | 1,657 | - | - | 1,700 | - | 1,700 |
Share issue costs | - | -97 | - | - | (97) | - | (97) |
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Balance at 31 March 2016 | 1,104 | 3,669 | 679 | (67) | 5,385 | - | 5,385 |
Total comprehensive income for the year | - | - | - | 1,035 | 1,035 | (33) | 1,002 |
Adjustment arising from change in non-controlling interest | - | - | - | 180 | 180 | 70 | 250 |
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Balance at 31 March 2017 | 1,104 | 3,669 | 679 | 1,148 | 6,600 | 37 | 6,637 |
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Total comprehensive income for the year | - | - | - | 932 | 932 | (106) | 826 |
Adjustment arising from change in non-controlling interest | - | - | - | 438 | 438 | 322 | 760 |
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Balance at 31 March 2017 | 1,104 | 3,669 | 679 | 2,329 | 7,969 | 254 | 8,223 |
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Unaudited Group Statement of Cash flows
For the 6 months ended 30 September 2017
| Unaudited | Unaudited | Audited |
| 30 September 2017 | 30 September 2016 | 31 March 2017 |
| £'000 | £'000 | £'000 |
OPERATING ACTIVITIES |
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Profit/(loss) for the year before taxation | 1,047 | 902 | 1,313 |
Adjusted for: |
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Finance expense | - | - | - |
Finance income | - | - | - |
Depreciation | 7 | 7 | 21 |
Investment impairment | 18 | 168 | 613 |
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Operating cash flows before movements in working capital | 1,072 | 1,077 | 1,947 |
(Increase)/Decrease in trade and other receivables | (247) | 61 | 167 |
Increase/(Decrease) in trade and other payables | 22 | (75) | 149 |
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Net cash from /(used in) operating activities | (225) | (14) | 2,263 |
Tax paid |
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Net cash used in operating activities | 847 | 1,063 | 2,063 |
INVESTING ACTIVITIES |
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Purchase of property, plant and equipment | (14) | (11) | (28) |
Development costs | (119) |
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Purchase of investments | - | - | (50) |
Related party repayment of loan | - | 25 | 76 |
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Net cash from/(used in) investing activities | (133) | 14 | (52)) |
FINANCING ACTIVITIES |
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Non-controlling interest investment | 821 | - | 250 |
Interest paid | - | (1) | - |
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Net cash from/(used in) financing activities | 821 | (1) | 250 |
Net (decrease)/increase in cash and cash equivalents | 1,535 | 1,076 | 2,261 |
Cash and cash equivalents at beginning of year | 3,813 | 1,552 | 1,552 |
Cash and cash equivalents at end of year | 5,348 | 2,628 | 3,813 |
Notes to the interim statement
For the 6 months ended 30 September 2017
1. General information
Octagonal plc is a company incorporated in the England and Wales with number 6214926, and whose registered office is: 2nd Floor, 2 London Wall Buildings, London EC2M 5PP, under the Companies Act 2006. The Company's main activity is that of a financial services business offering a wide range of services to institutional, family office and high net worth clients.
The Company's functional currency is Sterling. The Company's financial statements are presented in Sterling, which is the Company's presentational currency.
2. Basis of preparation
The financial information set out in this interim report for the six months ended 30 September 2017 is unaudited and does not constitute statutory accounts as defined in Section 434 of Companies Act (2006).
The Company's statutory financial statements for the period ended 31 March 2017, prepared under IFRS, have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
These financial statements have been prepared on a going concern basis under the historical cost convention. The Directors believe that the going concern basis is appropriate for the preparation of these interim financial statements as the Company is in a position to meet all its liabilities as they fall due. These interim financial statements for the six months to 30 September 2017 were approved by the Board on
22 November 2017.
3. Earnings per share
The basic earnings per share is based on the profit for the year divided by the weighted average number of shares in issue during the year. The weighted average number of ordinary shares for the period ended year ended 30 September 2017 assumes that all shares have been included in the computation based on the weighted average number of days since issue.
| Unaudited | Unaudited | Audited |
| 30 September 2017 £'000 | 30 September 2016 £'000 | 31 March 2017 £'000 |
Profit attributable to owners of the Group | £932,279 | £707,000 | £1,035,000 |
Weighted average number of ordinary shares in issue for basic and fully diluted earnings | 560,893,552 | 560,226,886 | 560,226,886 |
Earnings per share (pence per share) |
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Basic and fully diluted: | 0.166p | 0.126p | 0.185p |
4. Dividend
On 7th November 2017, the Company declared a dividend of 0.1 pence per share payable on 15th December 2017.
5. Distribution
The half yearly report for the six-month period ended 30 September 2017 will shortly be available on the Company's website (www.octagonalplc.com) or directly from the Company at its registered address.
-ends-