Last checked at 29 Sep 2023 09:01
Thalassa Holdings Ltd (THAL) Thalassa Holdings Ltd: Interim Results (30 June 2023) 29-Sep-2023 / 09:00 GMT/BST
Thalassa Holdings Limited
Thalassa Holdings Ltd (Reuters: THAL.L, Bloomberg: THAL:LN) ("Thalassa", "THAL" or the "Company") Interim Results for the period ended 30 June 2023
The Company is pleased to announce its results for the six months ended 30 June 2023. The interim results have been submitted to the FCA and will shortly be available on the Company’s website: www.thalassaholdingsltd.com Highlights for the 6 months ended 30 June 2023 GROUP RESULTS 1H 2023 versus 1H 2022, unless otherwise stated (Unaudited)
2023 Observations Short Term US Interest rates have climbed from just above 0% and now stand at 5.28% for one month T-Bills and 5.42% for three-month T-Bills…https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_bill_rates&field_tdr_date_value=2023 Through 7 September 2023, the tech-heavy NASDAQ Composite (CCMP) has risen ~32% whilst the NASDAQ 100 (NDX) has risen ~39% led by AAPL, NVDA, TSLA et al., which have accounted for 60% of this year’s performance. As an example of the madness of crowds, we have chosen TSLA. TSLA, and the ~51 Wall Street Analysts (on Bloomberg) who cover TSLA, would, apparently, like investors to believe that TSLA is a tech company, not a car company; in the end analysis, if logic prevails, it doesn’t actually make any difference because if TSLA is a tech company, then so are all the other new EV car manufacturers. Logically, therefore, as with every industry, it will come down to who survives and how much money they make…the answer, in our view is that margins will shrink as competition intensifies, and many will go bust before there is a clear winner. Ultimately, however, the transportation industry has never yielded above average long term returns…and we don’t think this time is any different…even if Mr Musk and his groupies believe we are no longer driving cars but tech-platforms on wheels…call them what you want, but at some point it will invariably come down to ‘Free Cash Flow’, not a new paradigm to describe an old industry. For those who don’t agree, they may want to cast an eye over the graphic and price chart below which highlights the insanity of TSLA’s recent $777 billion market value. The left-hand column shows the Market Cap of 12 international ‘car’ manufacturers vs. TSLA, whilst the right-hand column shows the combined number of cars sold by the twelve vs. TSLA. Go figure?!
TSLA 5 Year Share Price Chart
Chairman’s Statement Macro H1 2023 was all about Big Tech, the magnificent seven as they are now referred to, META, GOOG(L), MSFT, AMZN, NVDA, AAPL, TSLA, which now represent more than 40% of US Large Cap Active Managers’ Assets, compared with 12% last year. (Source: Bank of America). There is always a problem in the making when stock market leadership narrows to the point of stupidity…just as with the timeless children’s game of musical chairs…at some point there will be nowhere to sit, and when investors decide that NVDA may not be worth 41x Revenues or that Apple, Amazon Meta, Alphabet and Microsoft are in fact mature companies, valuations will compress and the price of these shares will fall dramatically (read plummet). For those die-hard believers that the above ‘Famous Five’ are still growth stock, the chart below courtesy of StoneX Financial graphically shows what Momentum and Quant investors simply ignore, namely the fact that Revenues of the above 5 companies barely keep up with US nominal gross domestic product and their collective net income fell to $263 billion in the past four quarters, down 9% from $289 billion the year before. As Vincent Deluard of StoneX points out “If stock prices are the net present value of their future cash flows, higher rates should penalize growth stocks, (or perceived growth stocks), which derive most of their profits from distant profits.” These ‘mega’ companies should clearly weather an economic slowdown or recession better than more cyclical companies…but they are not immune! Where next? The US Govt. is famous (in old Westerns!) for speaking with a forked tongue…on the one hand the FED is raising interest rates, and reversing quantative easing, whilst on the other, the Federal Government continues to spend, like money grows on trees, which if you oversee the printing press, it clearly does. Exactly one year ago, President Biden signed the Inflation Reduction Act, meant in large part to deliver on the administration’s climate goals. The law provides for $369 billion in new spending to help accelerate renewable energy projects in the US, increase EV auto manufacturing and spur electric everything adoption. This latest ‘give away’ follows the $1.9 trillion January 2021 Economic Rescue Plan, which augmented the $3 trillion coronavirus relief bill from March 2020, and the $900 billion legislation from December 2020, which was scaled back to garner support from Senate Republicans. Clearly, some (read a lot) of this money has flowed into the stock market and consequently ramped-up prices. Stock markets are driven by sentiment, by a feeling of well-being and, lest we forget, by greed. For the past nine months, experienced commentators, including Jeremy Grantham, founder of GMO, have warned of the dangers of a 3 Sigma Bubble and the devastating impact that a massive correction in stocks, bonds and real estate will have on personal and corporate wealth. Few, very few have listened and the ‘smart money’ managers that shared Jeremy’s point of view and took on large short positions have been flattened by the magnitude of the increase in share prices in 2023…led by the Magnificent 7. Like it or not, the Board of THAL believe that sentiment and by consequence, money flows, have already changed direction and the combination of higher interest rates, spiking energy prices and Apple’s Black Swan(?) moment following the Chinese Govt. ban on the use of Apple’s I-Phones has finally forced even the most ardent believers of ‘to infinity and beyond’ valuations, to the need for earnings and free cash flow. We believe that the S&P 500 (SPX), the NASDAQ Composite (CCMP) and the NASDAQ 100 (NDX) have already begun a correction which coupled with declining economic activity and reduced earnings could evolve into a perfect storm which could in turn result in a decline in the S&P well below fair value (estimated at about -20% below current levels) as a correction overshoots. To this end, a small portion of the Company’s assets have again been invested in various SPX, QQQ,VIX and TSLA hedges. Holdings - There was little or no movement in our positions in H1 2023.
Real Estate - The Real Estate owned by the Chairman, but pledged to the Company, is currently let until September 2024. Planning permission has and is being sought for certain developments, which it is hoped will increase the value of the property. It is anticipated that the sales process will begin in Q4 2023.and that a sale can be completed in Q4 2023/Q1 2024.
Janzz - https://janzz.technology/ Janzz recently closed a strategic investment by subsidiary of major Japanese industry market-leader
ALNA - https://www.alina-holdings.com/ Please refer to Alina website
AMOI - https://anemoi-international.com/ Please refer to Anemoi website
NWT - https://newmarksecurity.com/ Share price performance of NWT continued to recover slowly through H1 2023. We still believe that, given the age of its chairman and the fact that he has three children, two of whom are not involved in the company, that NWT will, in due course, be sold. We are patient investors and will continue to hold our position.
Conclusion We anticipate a further correction to US and European Stock Markets, and remain cautious on the macro-economic outlook, which we believe could deteriorate significantly this winter.
Duncan Soukup Chairman Thalassa Holdings Ltd 28 September 2023
Responsibility Statement 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 profit or loss of the Company and the undertakings included in the consolidation as a whole as required by DTR 4.2.4 R; the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties’ transactions and changes therein).
Cautionary statement This Interim Management Report (IMR) has been prepared solely to provide additional information to shareholders to assess the Company’s strategies and the potential for those strategies to succeed. The IMR should not be relied on by any other party or for any other purpose.
Duncan Soukup Chairman Thalassa Holdings Ltd 28 September 2023 Financial Review Continuing Operations Total revenue from operations for the period to 30 June 2023 was £0.1m (1H22: £0.1m). Net financial loss from investment operations was £0.04m (1H22: income £0.56m), Cost of Sales was of £0.007m (1H22: nil) comprising development costs (net of capitalised costs) at ARL, resulting in a Gross Profit of £0.07m (1H22: gross profit £0.68m). Administration expenses were £0.43m (1H22: £0.33m). Depreciation costs were £0.16m (1H22: £0.15m). Operating Loss was therefore £0.36m (1H22 Profit: £0.35m). Loss before tax was £0.5m (1H22 profit: £0.2m). Net assets at 30 June 2023 amounted to £9.6m (1H22: £11.9m). Net cash (being cash balances less borrowings) was £0.6m as at 30 June 2023 (1H22: £0.8m). Net cash outflow from operating activities amounted to £0.1m compared to an inflow of £0.18m in 1H22. Net cash inflow from investing activities amounted to £0.39m, compared to 1H22 outflow of £0.26m. Net cash outflow from financing activities amounted to £0.14m (1H22: outflow £3.89m). Interim Condensed Consolidated Statement of Income For the six months ended 30 June 2023
The notes on pages 14 to 19 form an integral part of this consolidated interim financial information. Interim Condensed Consolidated Statement of Comprehensive Income For the six months ended 30 June 2023
The notes on pages 14 to 19 form an integral part of this consolidated interim financial information.
Interim Condensed Consolidated Statement of Financial Position As at 30 June 2023
The notes on pages 14 to 19 form an integral part of this consolidated interim financial information. These financial statements were approved by the board on 28 September 2023. Signed on behalf of the board by:
Duncan Soukup Interim Condensed Consolidated Statement of Cash Flows For the six months ended 30 June 2023
The notes on pages 14 to 19 form an integral part of this consolidated interim financial information. Interim Condensed Consolidated Statement of Changes in Equity For the six months ended 30 June 2023
The notes on pages 14 to 19 form an integral part of this consolidated interim financial information.
Notes to the Interim Condensed Consolidated Financial Information 1. General information Thalassa Holdings Ltd (the “Company”) is a British Virgin Island (“BVI”) International business company (“IBC”), incorporated and registered in the BVI on 26 September 2007. The Company is a holding company with various interests across a number of industries. Autonomous Robotics Limited (“ARL” – formerly GO Science 2013 Ltd) is a wholly owned subsidiary of Thalassa and is an Autonomous Underwater Vehicle (”AUV”) research and development company. Apeiron Holdings (BVI) Ltd is a BVI registered company and is wholly owned by Thalassa. It owns 100% of Alfalfa Holdings AG which is a company registered in Switzerland. WGP Geosolutions Limited is a wholly owned subsidiary of Thalassa currently non-operational. 2. Significant Accounting policies The Company prepares its accounts in accordance with applicable UK Adopted International Accounting Standards. The accounting policies applied by the Company in this unaudited consolidated interim financial information are the same as those applied by the Company in its consolidated financial statements as at and for the period ended 31 December 2022 except as detailed below. The financial information has been prepared under the historical cost convention, as modified by the accounting standard for financial instruments at fair value. 2.1. Basis of preparation The condensed consolidated interim financial information for the six months ended 30 June 2023 has been prepared in accordance with International Accounting Standard No. 34, ‘Interim Financial Reporting’. They do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Company as at and for the year ended 31 December 2022. These condensed interim financial statements for the six months ended 30 June 2023 and 30 June 2022 are unaudited and do not constitute full accounts. The comparative figures for the period ended 31 December 2022 are extracted from the 2022 audited financial statements. The independent auditor’s report on the 2022 financial statements was not qualified. All intra-company transactions, balances, income and expenses are eliminated in full on consolidation. 2.2. Going concern The financial information has been prepared on the going concern basis as management consider that the Company has sufficient cash to fund its current commitments for the foreseeable future. Notes to the Interim Condensed Consolidated Financial Information Continued 3. Earnings per share
4. Intangible assets
The intangible assets held by the Company increased as a result of capitalising the development costs of Autonomous Robotics Ltd (“ARL”).
Notes to the Interim Condensed Consolidated Financial Information Continued 5. Property, plant and equipment
6. Securities
The Company classifies the following financial assets at fair value through profit or loss (FVPL):- Equity investments that are held for trading
Investments have been valued incorporating Level 1 inputs in accordance with IFRS7. For period ending 30 Jun 23, portfolio holdings cash balances have been reclassified to cash and cash equivalents.
Notes to the Interim Condensed Consolidated Financial Information Continued 7. Loans and holdings
The Loan is to the THAL Discretionary Trust, the terms of the loan are set with a 0% interest rate however interest has been accrued at 3% as per IFRS requirements, it is the intention of the Company to waive this interest upon repayment of the capital.
8. Investments in associated entities On 17 December 2021, the acquisition of id4 was complete by Anemoi International Ltd with consideration in the form of shares issued to Thalassa and its subsidiary Aperion BVI totaling 36.92% of the voting rights. The investment is recognised using the equity method as described in the financial statements for December 2022. During the period further shares were purchased to equal a total of 40.77% of the voting rights. Athenium Consultancy Ltd in which the Company owns 35% shares was incorporated on 12 October 2021. Movement on interests in associates can be summarised as follows:
There are no other entities in which the Company holds 20% or more of the equity, or otherwise exercises significant influence over the affairs of the entity.
Notes to the Interim Condensed Consolidated Financial Information Continued 9. Borrowings
The credit facilities outstanding as at 30 Jun 2022 consist of fixed term advances opened on in May 2022 for £461k, this advance was settled in July 2022. The settling of the facility outstanding at Dec ’21 was completed on the 9th April 2022. The credit facility was cancelled in December 2022. The lease liabilities comprise of amounts owed in relation to office leases held by ARL and Aperion AG. The lease held by Aperion Holdings AG was entered in to in Feb 2021.
10. Related party balances and transactions Under the consultancy and administrative services agreement initially entered into on 3 January 2011 and most recently updated 1 February 2018 with a company in which the Chairman has a beneficial interest, the Company accrued £130,362 (1H22: £225,145) for consultancy and administrative services provided to the Company. As at 30 June 2023 the amount owed to this company was £524,868 (1H22: £268,055). Athenium Consultancy Ltd, a company in which the Company owns shares invoiced the Company for financial and corporate administration services totalling £90,750 for the period (June 2022: £82,500). The Company was due £9,372 (June 2022: £25,988) from Anemoi International Ltd, a company in which through its subsidiary Apeiron Holdings BVI holds shares and is related by common control through the Chairman, Duncan Soukup. As at the period end the Company was due £49,887 (June 2022: £24,790) from Alina Holdings Limited, a company under common directorship. ARL owed rent of £5,000 during the period for trading premises from Eastleigh Court Limited. The beneficiaries of Eastleigh Court Ltd include D Soukup, a director during the period.
Notes to the Interim Condensed Consolidated Financial Information Continued 11. Share capital
The exchange rate used for conversion is the aggregate rate for the transactions as they occurred.
12. Subsequent events There were no reportable subsequent events
13. Copies of the Interim Report The interim report is available on the Company’s website: www.thalassaholdingsltd.com.
Dissemination of a Regulatory Announcement that contains inside information in accordance with the Market Abuse Regulation (MAR), transmitted by EQS Group. The issuer is solely responsible for the content of this announcement. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ISIN: | VGG878801114 |
| Category Code: | IR |
| TIDM: | THAL |
| LEI Code: | 2138002739WFQPLBEQ42 |
| OAM Categories: | 1.2. Half yearly financial reports and audit reports/limited reviews |
| Sequence No.: | 274671 |
| EQS News ID: | 1737045 |
| End of Announcement | EQS News Service |
UK Regulatory announcement transmitted by EQS Group AG. The issuer is solely responsible for the content of this announcement.