27 Sep 2012 14:07
Reconstruction Capital II Limited ("RC2" or the "Company")
27 September 2012
Interim Unaudited Consolidated Financial Statements
for the six months ended 30 June 2012
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 2012.
Financial highlights
·; Net asset value, excluding non-controlling interest, as at 30 June 2012 was EUR 77.64m, representing EUR 0.7764 per share, a 4.24% fall since the beginning of the year;
·; As at 30 June 2012 the Company's market capitalisation was approximately EUR 56.12m, and 100m shares were in issue with a closing share price of EUR 0.56 per share;
·; Loss before taxation for the period ended 30 June 2012 was EUR 3.18m (restated loss of EUR 1.1m for the period ended 30 June 2011);
·; The Directors do not recommend the payment of a dividend.
Operational highlights
·; In February 2012, RC2 completed the final step of the asset swap with the founding shareholders of East Point Holdings Ltd ("EPH"), thereby increasing its shareholding in EPH from 59.0% to 63.0%. Because the asset swap was substantially accomplished in 2011, the transaction had already been accounted for in RC2's 2011 audited accounts.
·; In April 2012, RC2 sold 7.7% of its shareholding in Glasro Holdings Limited ("Glasro") to the CEO of Top Factoring SRL for a total consideration of EUR 5,000. The sale took place in order to replicate the shareholding structure of Top Factoring where RC2 also owns 92.3%. Glasro and Top Factoring operate together as a group.
·; In the first half of 2012, RC2 continued to sell down its listed equities held under the Trading Programme, thereby generating EUR €1.3m of cash proceeds. At the end of June 2012, RC2's listed equities held under the Trading Programme had a total market value of EUR 0.5m.
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 2012.
The interim report of the Group for the six months ended 30 June 2012 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
INVESTMENT MANAGER AND INVESTMENT ADVISORS' REPORT
Dear Shareholders,
On 30 June 2012, Reconstruction Capital II Limited ("RC2" or the "Group") had a total unaudited net asset value ("NAV") of EUR 77.64m after deducting non-controlling interests, or EUR 0.7764 per share, which represents a decrease of EUR 3.4m, or 4.24%, since the beginning of the year.
By comparison, as at 30 June 2012, the published NAV per share was EUR 0.8873, with the difference of EUR 0.1109 deriving from the effects of consolidating Mamaia Hotels SRL and Top Factoring SRL ("Top Factoring"). Both investments are booked at fair value when computing RC2's published net asset value per share.
In February 2012, RC2 completed the final step of the asset swap with the founding shareholders of East Point Holdings Ltd ("EPH"), thereby increasing its shareholding in EPH from 59.0% to 63.0%. Because the asset swap was substantially accomplished in 2011, the transaction had already been accounted for in RC2's 2011 audited accounts.
In April 2012, RC2 sold 7.7% of its shareholding in Glasro Holdings Limited ("Glasro") to the CEO of Top Factoring SRL for a total consideration of EUR 5,000. The sale took place in order to replicate the shareholding structure of Top Factoring where RC2 also owns 92.3%. Glasro and Top Factoring operate together as a group.
In the first half of 2012, RC2 continued to sell down its listed equities held under the Trading Programme, thereby generating EUR €1.3m of cash proceeds. At the end of June 2012, RC2's listed equities held under the Trading Programme had a total market value of EUR 0.5m.
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 2012
30-Jun-12 | 30-Jun-11 | 31-Dec-11 | |||
As Restated | |||||
EUR | EUR | EUR | |||
Unaudited | Unaudited | Audited | |||
Continuing Operations | |||||
Revenue | 3,530,592 | 1,886,594 | 5,735,892 | ||
Gross Profit | 3,530,592 | 1,886,594 | 5,735,892 | ||
Investment (loss) / income | |||||
(Loss) / Gain on investments at fair value through profit or loss | (2,164,847) | 467,038 |
(10,373,504) | ||
Interest income | 1,515 | 18,793 | 34,290 | ||
Dividend income | 1,278 | 30,123 | 35,354 | ||
Other investment income | 108,099 | 135,533 | 320,320 | ||
Total investment (loss) / income | (2,053,955) | 651,487 | (9,983,540) | ||
Expenses | |||||
Operating expenses | 4,276,225 | 3,121,592 | 9,617,491 | ||
Total expenses | 4,276,225 | 3,121,592 | 9,617,491 | ||
Operating (loss) | (2,799,588) | (583,511) | (13,865,139) | ||
Interest expense | (377,430) | (477,204) | (217,892) | ||
(Loss) before taxation | (3,177,018) | (1,060,715) | (14,083,031) | ||
Income tax expense | (42,550) | (590,826) | 326,079 | ||
Net (loss) for the period from continuing operations | (3,219,568) | (1,651,541) | (13,756,952) | ||
Discontinued operations | |||||
(Loss) for the period on operations acquired with a view to sell | - | - | (2,364,295) | ||
Net (loss) for the period | (3,219,568) | (1,651,541) | (16,121,247) | ||
Other comprehensive (loss) / income | |||||
Exchange differences on translating foreign operations | (132,543) | 878,698 | 53,420 | ||
Total comprehensive (loss) for the period | (3,352,111) | (772,843) | (16,067,827) | ||
Net (loss) / profit for the period attributable to: | |||||
- Equity holders of the parent | (3,102,823) | (2,084,625) | (15,734,573) | ||
- Non-controlling interest | (116,745) | 433,084 | (386,674) | ||
(3,219,568) | (1,651,541) | (16,121,247) | |||
Total comprehensive (loss)/ income attributable to: | ||||||
- Equity holders of the parent | (3,227,383) | (1,036,602) | (15,737,942) | |||
- Non-controlling interest | (124,728) | 263,759 | (329,885) | |||
(3,352,111) | (772,843) | (16,067,827) | ||||
Earnings / (Loss) Per Share attributable to the equity shareholders of the Company |
| |||||
From continuing operations | (0.0310) | (0.0208) | (0.1337) | |||
Basic and diluted earnings / (loss) per share | ||||||
From continuing and discontinued operations | ||||||
Basic and diluted earnings / (loss) per share | (0.0310) | (0.0208) | (0.1573) | |||
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 30 JUNE 2012
30-Jun-12 | 30-Jun-11 | 31-Dec-11 | |||
As Restated | |||||
EUR | EUR | EUR | |||
Unaudited | Unaudited | Audited | |||
Assets | |||||
Non-current assets | |||||
Property, plant and equipment | 9,178,667 | 11,738,536 | 9,494,417 | ||
Financial assets at fair value through profit or loss | 31,431,278 | 41,737,826 | 33,480,715 | ||
Goodwill | 1,257,153 | 1,257,153 | 1,257,153 | ||
Total non-current assets | 41,867,098 | 54,733,515 | 44,232,285 | ||
Current assets | |||||
Financial assets at fair value through profit or loss | 500,360 | 3,063,735 | 1,970,473 | ||
Inventories | 47,000 | 121,254 | 27,000 | ||
Trade and other receivables | 7,468,773 | 2,830,196 | 5,209,555 | ||
Cash and cash equivalents | 1,822,642 | 1,030,187 | 497,325 | ||
9,838,775 | 7,045,372 | 7,704,353 | |||
Assets of disposal group classified as held for sale | 123,801,246 | 128,725,761 | 123,801,246 | ||
Total assets | 175,507,119 | 190,504,648 | 175,737,884 | ||
Liabilities | |||||
Current liabilities | |||||
Trade and other payables | 4,687,809 | 2,848,724 | 2,695,704 | ||
Loans and borrowings | 4,874,284 | 1,059,452 | 3,642,240 | ||
Corporation tax payable | 76,283 | 44,545 | 104,625 | ||
Total current liabilities | 9,638,376 | 3,952,721 | 6,442,569 | ||
Liabilities of disposal group classified as held for sale |
81,304,970 | 85,871,323 | 83,503,970 | ||
Non-current liabilities | |||||
Deferred tax | 6,000 | (123,023) | 27,000 | ||
Leases | 53,367 | - | 48,432 | ||
Loans and borrowings | 3,863,256 | 1,431,132 | 1,647,400 | ||
Total non-current liabilities | 3,922,623 | 1,308,109 | 1,722,832 | ||
Total liabilities | 94,865,969 | 91,132,153 | 91,669,371 | ||
Total net assets | 80,641,150 | 99,372,495 | 84,068,513 |
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 | (43,496,149) | (26,524,234) | (40,174,182) | ||
Foreign exchange reserve | (1,767,539) | (591,587) | (1,642,979) | ||
Total equity and reserves | 77,636,622 | 95,784,489 | 81,083,149 | ||
| |||||
Non-Controlling Interests |
| 3,004,528 | 3,588,006 | 2,985,364 | |
Total equity | 80,641,150 | 99,372,495 | 84,068,513 | ||
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS OF 30 JUNE 2012
ShareCapital | SharePremium | Foreign exchange reserve | Retained (Deficit)/Earnings | Sub-total | Non- controlling Interest | Total | |
EUR | EUR | EUR | EUR | EUR | EUR | EUR | |
Balance at 1 January 2011 - as previously reported | 1,000,000 | 121,900,310 | (2,876,569) | (26,548,471) | 93,475,270 | 6,844,191 | 100,319,461 |
Prior year adjustment | - | - | 1,236,959 | 2,108,862 | 3,345,821 | (3,345,821) | - |
Balance at 1 January 2011 - as restated | 1,000,000 | 121,900,310 | (1,639,610) | (24,439,609) | 96,821,091 | 3,498,370 | 100,319,461 |
(Loss) / Profit for the period - as restated | - | - | - | (2,084,625) | (2,084,625) | 433,084 | (1,651,541) |
Other comprehensive income / (loss) - as restated | - | - | 1,048,023 | - | 1,048,023 | (169,325) | 878,698 |
Total comprehensive income / (loss) for the period - as restated | - | - | 1,048,023 | (2,084,625) | (1,036,602) | 263,759 | (772,843) |
Dividends paid to non-controlling interests | - | - | - | - | - | (174,123) | (174,123) |
Balance at 30 June 2011 - as restated | 1,000,000 | 121,900,310 | (591,587) | (26,524,234) | 95,784,489 | 3,588,006 | 99,372,495 |
(Loss) / Profit for the period | - | - | - | (13,649,948) | (13,649,948) | (819,758) | (14,469,706) |
Other comprehensive (loss) / income | - | - | (1,051,392) | - | (1,051,392) | 226,114 | (825,278) |
Total comprehensive (loss) / income for the year | - | - | (1,051,392) | (13,649,948) | (14,701,340) | (593,644) | (15,294,984) |
Dividends paid to non-controlling interests | - | - | - | - | - | (8,998) | (8,998) |
Balance at 31 December 2011 | 1,000,000 | 121,900,310 | (1,642,979) | (40,174,182) | 81,083,149 | 2,985,364 | 84,068,513 |
(Loss) / Profit for the period | - | - | - | (3,102,823) | (3,102,823) | (116,745) | (3,219,568) |
Other comprehensive (loss) / income | - | - | (124,560) | - | (124,560) | (7,983) | (132,543) |
Total comprehensive (loss) / income for the period | - | - | (124,560) | (3,102,823) | (3,227,383) | (124,728) | (3,352,111) |
Disposal of interest in subsidiary to non-controlling interests (Note 8) | - | - | - | (219,144) | (219,144) | 219,144 | - |
Dividends paid to non-controlling interests | - | - | - | - | - | (75,252) | (75,252) |
Balance at 30 June 2012 | 1,000,000 | 121,900,310 | (1,767,539) | (43,496,149) | 77,636,622 | 3,004,528 | 80,641,150 |
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED 30 JUNE 2012
30-Jun-12 | 30-Jun-11 | 31-Dec-11 | ||
As Restated | ||||
EUR | EUR | EUR | ||
Unaudited | Unaudited | Audited | ||
Cash flows from operating activities | ||||
Net profit before tax | (3,177,018) | (1,060,715) | (14,083,031) | |
Adjustments for: | ||||
Depreciation and amortisation | 179,143 | 164,865 | 295,636 | |
Impairment / revaluation of fixed assets | - | (191,059) | 2,087,000 | |
(Gain)/ loss on financial assets at fair value through profit or loss | 2,164,847 | (467,038) | 10,373,504 | |
Interest income | (1,515) | (18,793) | (34,290) | |
Dividend income | (1,278) | (30,123) | (35,354) | |
Net cash outflow before changes in working capital | (835,821) | (1,602,863) | (1,396,535) | |
(Increase) / decrease in trade and other receivables | (4,202,739) | 3,802,987 | 1,397,761 | |
Increase/ (decrease) in trade and other payables | 1,968,699 | 468,186 | 458,299 | |
(Increase)/ decrease in inventories | (20,000) | 59,747 | 154,000 | |
Decrease in provision | - | - | - | |
Interest received | 1,515 | 18,661 | 34,290 | |
Dividend received | 1,278 | 4,389 | 35,354 | |
Net proceeds from sale of financial assets | 1,349,264 | - | 815,336 | |
Cash (used in)/ generated by operating activities | (1,737,804) | 2,751,107 | 1,498,505 | |
Income tax paid | (63,550) | (58,227) | (267,921) | |
Net cash (used in)/ generated by operating activities | (1,801,354) | 2,692,880 | 1,230,584 | |
Cash flows from investing activities | ||||
Sale of property, plant and equipment | - | - | 5,911 | |
Purchase of property, plant and equipment | (130,825) | - | (226,776) | |
Purchase of financial assets | - | (713,862) | (589,500) | |
Sale of financial assets | - | 500,222 | 211,933 | |
Net Cash flow used in investing activities | (130,825) | (213,640) | (598,432) | |
Cash flows from financing activities | ||||
Dividends paid to non-controlling interests | (75,252) | (174,123) | (183,121) | |
Proceeds from loans | 3,889,240 | 688,534 | 3,613,609 | |
Payments of loans | (696,820) | (2,412,709) | (4,338,783) | |
Net Cash flow used in financing activities | 3,117,168 | (1,898,298) | (908,295) | |
(Decrease)/increase in cash and cash equivalents | 1,184,989 | 580,942 | (276,143) | |
Cash at beginning of period/ year | 497,325 | 812,543 | 812,543 | |
Effect of foreign exchange rate changes | 140,328 | (363,298) | (39,075) | |
Cash at end of period/ year | 1,822,642 | 1,030,187 | 497,325 | |