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30 Sep 2011 15:42
Reconstruction Capital II Limited ("RC2" or the "Company")
30 September 2011
Interim Unaudited Consolidated Financial Statements
for the six months ended 30 June 2011
Reconstruction Capital II Ltd ("RC2" or the "Company"), a closed-end investment company admitted to trading on the AIM market of the London Stock Exchange, today announces its interim results for the six months ended 30 June 2011.
Financial highlights
·; Net asset value, excluding non-controlling interest, as at 30 June 2011 was EUR 92.3m, representing EUR 0.9227 per share, a 1.29% fall since the beginning of the year;
·; As at 30 June 2011 the Company's market capitalisation was approximately EUR 74.3m, and 100m shares were in issue with a closing share price of EUR 0.7428 per share;
·; Loss before taxation for the period ended 30 June 2011 was EUR 0.2m ( profit of EUR 8.2m for the period ended 30 June 2010);
·; The Directors do not recommend the payment of a dividend.
Operational highlights
·; In April 2011, RC2 sold its shareholding in East Point Metals Ltd ("EPM") back to EPH, and in return it received non-core real estate assets from EPH which it is in the process of swapping with the founding shareholders of EPH for additional shareholding in EPH. By the end of June 2011, RC2 had increased its shareholding in EPH from 42.0% to 51.6%.
·; Under its Trading Programme, RC2 continued to reduce its exposure to listed markets in the region, and continued to refocus the Group towards its Private Equity Programme by exiting certain listed positions, thereby realising EUR 0.5m in cash proceeds
The financial information has been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted in the European Union. The financial information set out above does not constitute the Company's statutory accounts for the period ended 30 June 2011.
The interim report of the Group for the six months ended 30 June 2011 has been posted to shareholders. Extracts of the financial statements appear below and the full version is available on the Company's website - www.reconstructioncapital2.com
For further information, please contact:
Reconstruction Capital II Limited
Ion Florescu, Ivanka Ivanova
Tel: +44 (0) 20 7244 0088
Grant Thornton Corporate Finance (Nominated Adviser)
Philip Secrett, David Hignell
Tel: +44 (0) 20 7383 5100
LCF Edmond de Rothschild Securities (Broker)
Hiroshi Funaki
Tel: +44 (0) 20 7845 5960
INVESTMENT MANAGER AND INVESTMENT ADVISORS REPORT
Dear Shareholders,
On 30 June 2011, Reconstruction Capital II Limited ("RC2" or the "Group") had a total unaudited net asset value ("NAV") of EUR 92.3m after deducting non-controlling interest, or EUR 0.9227 per share, which represents a decrease of EUR 0.0121, or 1.29%, since the beginning of the year.
By comparison, as at 30 June 2011, the published NAV per share was EUR 1.0645, with the difference of EUR 0.1418 deriving from the effects of consolidating Mamaia Hotels SRL, Top Factoring SRL and East Point Holdings Limited ("EPH"). All three investments are booked at fair value when computing RC2's published net asset value per share.
In April 2011, RC2 sold its shareholding in East Point Metals Ltd ("EPM") back to EPH, and in return it received non-core real estate assets from EPH which it is in the process of swapping with the founding shareholders of EPH for additional shareholding in EPH. By the end of June 2011, RC2 had increased its shareholding in EPH from 42.0% to 51.6%. Consequently EPH is now consolidated in the accounts of RC2 (note 8).
Under its Trading Programme, RC2 continued to reduce its exposure to listed markets in the region, and continued to refocus the Group towards its Private Equity Programme by exiting certain listed positions, thereby realising EUR 0.5m in cash proceeds.
Yours truly,
New Europe Capital SRL
New Europe Capital DOO
New Europe Capital Limited
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2011
| Six months | Six months | Year ended | ||
30-Jun-11 | 30-Jun-10 | 31-Dec-10 | |||
EUR | EUR | EUR | |||
Revenue | 30,334,857 | 2,056,398 | 4,631,539 | ||
Cost of Sales | (26,020,344) | - | - | ||
Gross Profit | 4,314,513 | 2,056,398 | 4,631,539 | ||
Investment income | |||||
(Loss) / Gain on investments at fair value through profit or loss | (7,184,966) | 9,719,750 | 11,954,421 | ||
Interest income | 18,793 | 22,422 | 18,237 | ||
Dividend income | 30,123 | 4,041 | 4,082 | ||
Other investment income | 353,339 | 118,856 | 503,154 | ||
Total investment income | (6,782,711) | 9,865,069 | 12,479,894 | ||
Expenses | |||||
Gain arising on acquisition of controlling interest in subsidiary | (16,112,647) | - | - | ||
Administrative expenses | 10,822,622 | 3,704,199 | 10,955,345 | ||
Selling expenses | 1,817,780 | - | - | ||
Total expenses | (3,472,245) | 3,704,199 | 10,955,345 | ||
Operating profit | 1,004,047 | 8,217,268 | 6,156,088 | ||
Share of profit of associates | 17,732 | - | - | ||
Interest expense | (1,233,519) | - | - | ||
Profit before taxation | (211,740) | 8,217,268 | 6,156,088 | ||
Income tax expense | (608,000) | (199,146) | 491,582 | ||
Net loss / profit for the period | (819,740) | 8,416,414 | 6,647,670 | ||
Other comprehensive income | |||||
Exchange differences on translating foreign operations | 1,357,286 | (493,300) | 87,787 | ||
Total comprehensive income for the period | 537,546 | 7,923,114 | 6,735,457 | ||
Net profit for the period attributable to: | |||||
- Equity holders of the parent | 3,469,459 | 8,483,235 | 6,731,609 | ||
- Non-controlling interest | (4,289,199) | (66,821) | (83,939) | ||
(819,740) | 8,416,414 | 6,647,670 | |||
Total comprehensive income attributable to: | |||||
- Equity holders of the parent | 4,826,745 | 7,989,935 | 6,819,396 | ||
- Non-controlling interest | (4,289,199) | (66,821) | (83,939) | ||
537,546 | 7,923,114 | 6,735,457 | |||
Basic and diluted earnings per share | 0.0347 | 0.0848 | 0.0673 | ||
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 30 JUNE 2011
30-Jun-11 | 30-Jun-10 | 31-Dec-10 | |||
EUR | EUR | EUR | |||
Unaudited | Unaudited | Audited | |||
Assets | |||||
Non-current assets | |||||
Property, plant and equipment | 142,925,210 | 13,923,286 | 11,588,403 | ||
Financial assets at fair value through profit or loss | 43,442,739 | 77,227,760 | 83,387,381 | ||
Available for sale financial assets | 515,873 | - | - | ||
Investment properties | 6,067,947 | - | - | ||
Other receivables | 2,030,192 | - | - | ||
Investments in associates | 721,818 | - | - | ||
Goodwill | 1,257,153 | 1,257,153 | 1,257,153 | ||
Total non-current assets | 196,960,932 | 92,408,199 | 96,232,937 | ||
Current assets | |||||
Financial assets at fair value through profit or loss | 3,063,735 | 8,850,105 | 3,711,882 | ||
Other financial assets | 3,965,211 | - | - | ||
Inventories | 35,766,855 | 244,619 | 181,000 | ||
Trade and other receivables | 73,946,530 | 1,403,573 | 6,607,316 | ||
Cash and cash equivalents | 16,337,677 | 3,680,088 | 812,543 | ||
133,080,008 | 14,178,385 | 11,312,741 | |||
Non current assets held for sale | 4,439,000 | - | - | ||
Total current assets | 137,519,008 | 14,178,385 | 11,312,741 | ||
Total assets | 334,479,940 | 106,586,584 | 107,545,678 | ||
Liabilities | |||||
Current liabilities | |||||
Trade and other payables | 23,251,817 | 1,913,945 | 2,380,538 | ||
Loans and borrowings | 110,079,842 | 943,165 | 2,924,754 | ||
Corporation tax payable | 359,767 | 50,293 | 9,925 | ||
Total current liabilities | 133,691,426 | 2,907,403 | 5,315,217 | ||
Non-current liabilities | |||||
Deferred tax | 10,987,769 | 967,102 | 621,000 | ||
Provision - employee retirement | 758,926 | - | - | ||
Loans and borrowings | 25,997,895 | 1,076,709 | 1,290,000 | ||
Total non-current liabilities | 37,744,590 | 2,043,811 | 1,911,000 | ||
Total liabilities | 171,436,016 | 4,951,214 | 7,226,217 | ||
Total net assets | 163,043,924 | 101,635,370 | 100,319,461 |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 30 JUNE 2011 (continued)
Capital and reserves attributable to equity holders | |||||
Share capital | 1,000,000 | 1,000,000 | 1,000,000 | ||
Share premium reserve | 121,900,310 | 121,900,310 | 121,900,310 | ||
Retained deficit | (25,194,314) | (24,796,845) | (26,548,471) | ||
Foreign exchange reserve | (5,439,872) | (3,457,656) | (2,876,569) | ||
Total equity and reserves | 92,266,124 | 94,645,809 | 93,475,270 | ||
| |||||
Non-controlling interest |
| 70,777,800 | 6,989,561 | 6,844,191 | |
Total equity | 163,043,924 | 101,635,370 | 100,319,461 | ||
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS OF 30 JUNE 2011
ShareCapital | SharePremium | Foreign exchange reserve | Retained Deficit | Sub-total | Non- controlling interest | Total | |
EUR | EUR | EUR | EUR | EUR | EUR | EUR | |
Balance at 1 January 2010 | 1,000,000 | 121,900,310 | (2,964,356) | (33,280,080) | 86,655,874 | 7,103,139 | 93,759,013 |
Net profit for the period | - | - | - | 8,483,235 | 7,989,935 | (66,821) | 7,923,114 |
Other comprehensive income | - | - | (493,300) | - | - | - | - |
Total comprehensive income | - | - | (493,300) | 8,483,235 | 7,989,935 | (66,821) | 7,923,114 |
Dividends paid to non -controlling interests | - | - | - | - | - | (46,757) | (46,757) |
Balance at 30 June 2010 | 1,000,000 | 121,900,310 | (3,457,656) | (24,796,845) | 94,645,809 | 6,989,561 | 101,635,370 |
Net profit for the period | - | - | - | (1,751,626) | (1,751,626) | (17,118) | (1,768,744) |
Other comprehensive income | - | - | 581,087 | - | 581,087 | - | 581,087 |
Total comprehensive income | - | - | 581,087 | (1,751,626) | (1,170,539) | (17,118) | 1,187,657 |
Dividends paid to non -controlling interests | - | - | - | - | - | (128,252) | (128,252) |
Balance at 31 December 2010 | 1,000,000 | 121,900,310 | (2, 876,569) | (26,548,471) | 93,475,270 | 6,844,191 | 100,319,461 |
Net profit for the period | - | - | - | 3,469,459 | 3,469,459 | (4,289,199) | (819,740) |
Other comprehensive income | - | - | 1,357,286 | - | 1,357,286 | - | 1,357,286 |
Total comprehensive income | - | - | 1,357,286 | 3,469,459 | 4,826,745 | (4,289,199) | 537,546 |
Acquisition of additional interest in subsidiaries | - | - | - | - | - | 68,396,929 | 68,396,929 |
Disposal of interests in subsidiaries to non -controlling interests | - | - | (3,920,589) | (2,115,302) | (6,035,891) | - | (6,035,891) |
Dividends paid to minorities | - | - | - | - | - | (174,121) | (174,121) |
Balance at 30 June 2011 | 1,000,000 | 121,900,310 | (5,439,872) | (25,194,314) | 92,266,124 | 70,777,800 | 163,043,924 |
Share premium is stated net of share issue costs.
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 30 JUNE 2011
30-Jun-11 | 30-Jun-10 | 31-Dec-10 | ||
EUR | EUR | EUR | ||
Cash flows from operating activities | ||||
Net profit before tax | (211,740) | 8,217,268 | 6,156,088 | |
Adjustments for: | ||||
Depreciation and amortisation | 695,145 | 469,928 | 210,991 | |
Impairment | - | - | 2,738,000 | |
Gain on financial assets at fair value through profit or loss | 7,184,542 | (9,612,548) | (11,954,421) | |
Profit on sale of financial asset | - | - | 50,670 | |
Gain on acquisition of subsidiary | (16,112,647) | - | - | |
(Gain)/ loss on foreign exchange | 3,405,193 | (212,286) | 268,314 | |
Reversal of impairment loss of fixed assets | - | (795,642) | - | |
Share of profit of associates | (17,732) | - | - | |
Interest income | (372,132) | (22,422) | (18,237) | |
Interest expense | 1,233,519 | - | - | |
Dividend income | (30,123) | (4,041) | (4,082) | |
Net cash outflow before changes in working capital | (4,225,975) | (1,959,743) | (2,552,677) | |
Increase in trade and other receivables | 2,939,555 | (174,633) | (5,382,625) | |
Increase/ (decrease) in trade and other payables | (1,602,731) | 627,302 | 1,140,946 | |
(Increase)/ decrease in inventories | 2,521,181 | (217,619) | (154,000) | |
Decrease in provision | (40,698) | - | - | |
Interest received | 19,038 | 22,763 | 18,957 | |
Dividend received | 4,389 | 48,553 | 52,466 | |
Payments for purchase of financial assets | - | (2,886,235) | (229,995) | |
Net proceeds from sale of financial assets | - | 3,509,930 | 5,467,342 | |
Net cash (used in)/ generated by operating activities | (385,241) | (1,029,682) | (1,639,586) | |
Income tax paid | (58,227) | - | (107,439) | |
Cash flows from investing activities | ||||
Cash acquired on acquisition of subsidiary | 15,307,490 | - | - | |
Sale of property, plant and equipment | - | - | 167,741 | |
Purchase of property, plant and equipment | - | (82,779) | (1,086,963) | |
Purchase of financial assets | (427,907) | (1,559,883) | (8,671,500) | |
Sale of financial assets | 1,494,644 | - | 3,764,880 | |
15,930,759 | (2,672,344) | (7,572,867) | ||
Cash flows from financing activities | ||||
Dividends paid to minorities | (174,123) | (46,757) | (175,009) | |
Proceeds from loan | 3,951,536 | 2,019,874 | 4,527,329 | |
Payments of loan | (4,183,038) | (638,146) | (984,369) | |
Decrease in cash and cash equivalents | 15,525,134 | (1,337,373) | (4,204,916) | |
Cash at beginning of period/ year | 812,543 | 5,017,461 | 5,017,459 | |
Cash at end of period/ year | 16,337,677 | 3,680,088 | 812,543 | |
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