TIDMRDP
RNS Number : 8345P
Radicle Projects Plc
31 March 2009
31 March 2009
RADICLE PROJECTS PLC
Unaudited Interim Results for the Six Months Ended 31 December 2008
The results for the six months to 31 December 2008 set out below reflect the
generally lower levels of activity that we report at this time of year. Your
Board is concentrating on implementing cost reductions and developing strategies
to bring our portfolio of agricultural assets through to production as quickly
as possible so as to increase cash flow. An up to date review of these assets is
set out below.
HIGHLIGHTS
* Loss before interest and tax of GBP2,247,933 (2007: loss GBP764,237)
* Net assets of GBP6,573,247 including GBP1,852,708 in cash
* Net debt as at 31 December 2008 was GBP12,519,822
For further information please contact:
+--------------------------------------------------+-------------------+
| Radicle Projects PLC | 020 7016 5300 |
+--------------------------------------------------+-------------------+
| Tim Bennett | +61 (0) 3 8611 |
| | 6711 |
+--------------------------------------------------+-------------------+
| | |
+--------------------------------------------------+-------------------+
| Charles Stanley Securities - Nominated Advisor | 020 7149 6000 |
| and Broker | |
+--------------------------------------------------+-------------------+
| Russell Cook / Ben Johnston | |
+--------------------------------------------------+-------------------+
| | |
+--------------------------------------------------+-------------------+
| Bishopsgate Communications Ltd | 020 7562 3350 |
+--------------------------------------------------+-------------------+
| Maxine Barnes / Siobhra Murphy | |
+--------------------------------------------------+-------------------+
Results
For the six months to 31 December 2008 the Group reported a loss before interest
and tax of GBP2,247,933 (2007: loss GBP764,237) and an increased loss before tax
of GBP2,873,936 (2007: loss GBP1,077,348).
As previously reported, the Group's results are second-half weighted due to the
annual contribution to income and profit resulting from the uplift in value of
the Group's biological assets (as a result of growth or maturating trees or
vines). The annual asset revaluation is conducted for the purposes of preparing
the annual report for the year to June 2008 each year. No asset revaluation is
calculated at the half year stage.
The pre-tax loss is due to various factors including but not limited to:
* A significant increase in operating expenses. Radicle has a number of
operational costs directly related to farm management, labour, agricultural
inputs and management fees paid to others on a contractual basis. The addition
of the apple and wheat projects to the Group portfolio at the very end of June
2008, has been the primary reason for additional operating expenses;
* A full interest charge of GBP698,040 (2007: GBP599,911) payable in respect of
the Convertible Bond;
* The Group has reported a small foreign exchange loss of GBP9,960 this period,
compared with a gain of GBP98,092 in the same period last year; and
* Further abort transaction costs of GBP128,885 relating to the Timber Fund
The Group ended the interim period with the balance sheet, showing net assets of
GBP6,573,247 including GBP1,852,708 in cash. Net debt as at 31 December 2008 was
GBP12,519,822.
Dividend
Radicle's Board is not in a position to declare an interim dividend. The Board
will review our dividend policy following the year end revaluation of assets as
at 30 June 2009 and the cash generation of the Group in the second half of year
to 30 June 2009.
Operational Review
The Group is a participant in various projects which are growing the following
crops:
Adelaide Hills Vineyard Trust ("Gumeracha Vineyard"), Adelaide Hills (South
Australia)
As at 31 December 2008, the 2009 vintage was not complete. At the current time,
the 2009 vintage is nearing completion, with yields expected to be slightly down
on last year's result due to extremely high temperatures. At this stage
approximately 30 tonnes (less than 5 per cent) of the grapes remain unsold.
Once again the Adelaide Hills has proven to be a reliable and high quality
producer of wine grapes and our major contracted buyer, Southcorp (Penfolds) who
owns other wine labels including Lindemans and Rosemont Estate has upgraded our
grapes on most of the blocks from D to B grade. This is an excellent result and
reflects quality management, a good site and ability to deliver to market
specification.
Olives
The Olive harvest in the south western Victoria olive production region has
progressed well despite high temperatures and limited water.
Almonds
Our almond orchards experienced similar conditions to that of our olive
orchards. Our almond developments have produced well despite high temperatures
and limited water. Yields are satisfactory and prices are expected to remain
strong as a result of reduced production from farms unable to purchase
additional water. However, additional water purchased for our properties is
expected to show a normal size crop of good quality, but input costs will be
higher than originally budgeted to cover the cost of buying additional water.
Citrus
Radicle owns a small financial interest in a citrus project in the Riverland
region of South Australia. At the present time the agronomic outlook for citrus
production is satisfactory but the returns from citrus fruit sales are not
sufficiently attractive to warrant further investment in these projects.
Forestry
Our forestry assets are primarily the Paulownia hardwood plantations in
Queensland. Unlike recent years, we have had excellent rainfall on the
Queensland sites and, as a result, there has been significant growth in the
trees.
No additional water expenses have been incurred to water these trees. The health
of the plantations has improved and we remain positive about the progress of
this asset. We are now focussing our attention on the marketing and sale of
timber from our maturing plantations and expect to begin thinning harvests
within the next six months.
Bioforests
The Bioforests project is not anticipated to produce substantial cash flows in
the next few years, but we anticipate strong value growth as a result of good
site selection, operational management and continuing demand for species being
produced.
Apples
Radicle's project interests in Organic apples and Early Season apples (both in
South Australia) are growing very well. At 31 December 2008 the trees had only
been planted for about 7 months, but are nonetheless doing well. We anticipate
first commercial yields of apples from these trees in the 2010 financial year,
with some earlier income relating to dividend income from the landowning company
for the early season project, of which Radicle owns 19.9 per cent. On a
financial year basis this project is expected to be cash generative in the 2010
year.
Wheat
At 31 December 2008 the harvest for the wheat project was in full swing. Results
appear to have been positive. We anticipate full accounts on the wheat season
harvest and sales in April 2009 but we understand the yields were within our
budgeted range and prices may have exceeded our budgeted range of a significant
proportion of the crop. We await final results for the 2008-09 harvest and will
report to the market in due course.
Outlook
Management's primary focus in the current period is cost reduction and
consolidation. We intend to improve net cash earnings by continuing to manage
carefully the Company's costs base and working with management to improve
valuations on all projects, and bring forward cash flows wherever possible.
Radicle has a number of developments in progress which we believe will
contribute to higher profits. We will report to the market as these initiatives
come to fruition.
Despite the current world economic climate, agricultural products are very much
in demand and Radicle is well placed to capitalise on its strength in this area.
We look forward to making further significant advances in the business and to
providing increased shareholder value.
Myles Stewart-Hesketh Timothy Bennett
ChairmanChief Executive
31 March 2009
CONSOLIDATED INCOME STATEMENT
For the six months ended 31 December 2008
+------------------------------------------------------------+-------------------+-----------------+-----------------+
| | 6 months to | 6 months to | Year ended 30 |
| | 31 Dec | 31 Dec | June |
| | 2008 | 2008 | 2008 |
| | GBP | GBP | GBP |
| | | | |
+------------------------------------------------------------+-------------------+-----------------+-----------------+
| Continuing Operations | | | |
+------------------------------------------------------------+-------------------+-----------------+-----------------+
| Revenue | 252,049 | 129,449 | 1,126,392 |
| (Loss)/gain arising from changes in fair value of | | | (1,751,099) |
| biological assets | | | (2,642,206) |
| Operating expenses | - | - | |
| Other operating income | (2,342,204) | (991,778) | - |
| Exchange (loss)/gain | | | 115,173 |
| Investment income | - | - | 539,251 |
| Finance costs | (9,960) | 98,092 | (1,332,841) |
| Loss on disposal of Investments | 72,036 | 286,800 | (144,961) |
| Aborted transaction costs | (698,040) | (599,911) | (427,091) |
| Impairment of available for sale investment | | | |
| | - | - | - |
| | (128,885) | | |
| | (18,932) | - | |
| | | | |
| | | - | |
+------------------------------------------------------------+-------------------+-----------------+-----------------+
| | ________ | ________ | ________ |
| | | | |
+------------------------------------------------------------+-------------------+-----------------+-----------------+
| (Loss)/profit on ordinary activities before taxation | (2,873,936) | (1,077,348) | (4,517,382) |
| | | | |
+------------------------------------------------------------+-------------------+-----------------+-----------------+
| Taxation | | | 1,089,365 |
| | - | - | |
+------------------------------------------------------------+-------------------+-----------------+-----------------+
| | ________ | ________ | ________ |
| | | | |
+------------------------------------------------------------+-------------------+-----------------+-----------------+
| (Loss)/profit for the period | (2,873,936) | (1,077,348) | (3,428,017) |
+------------------------------------------------------------+-------------------+-----------------+-----------------+
| | | | |
+------------------------------------------------------------+-------------------+-----------------+-----------------+
| | ======== | ======== | ======== |
+------------------------------------------------------------+-------------------+-----------------+-----------------+
| Loss)/earnings per share: Basic | (15.07)p | (5.65)p | (17.97)p |
| Fully diluted | (15.07)p | (5.65)p | (17.97)p |
| | | | |
+------------------------------------------------------------+-------------------+-----------------+-----------------+
CONSOLIDATED BALANCE SHEET
As at 31 December 2008
+------------------------------------------------------------+-----------------+----------------+------------------+
| | As at | As at | As at |
| | 31 Dec | 31 Dec | 30 June |
| | 2008 | 2007 | 2008 |
| | GBP | GBP | GBP |
| | | | |
+------------------------------------------------------------+-----------------+----------------+------------------+
| Non-current assets | | | |
| Property, plant & equipment | 2,267,137 | 208,108 | 2,329,491 |
| Available for sale investments | 1,890,371 | 353,049 | 1,931,493 |
| Biological assets | 12,011,883 | 10,911,680 | 11,759,621 |
+------------------------------------------------------------+-----------------+----------------+------------------+
| | __________ | __________ | __________ |
| | | | |
+------------------------------------------------------------+-----------------+----------------+------------------+
| | 16,169,391 | 11,472,837 | 16,020,605 |
+------------------------------------------------------------+-----------------+----------------+------------------+
| | __________ | __________ | __________ |
+------------------------------------------------------------+-----------------+----------------+------------------+
| Current assets | | | |
| Biological assets | 3,568,364 | | 3,602,888 |
| Inventories | 97,731 | - | 98,676 |
| Trade & other receivables | 639,183 | 89,885 | 1,385,434 |
| Cash & cash equivalents | 1,852,708 | 255,383 | 7,723,115 |
| | | 14,140,052 | |
+------------------------------------------------------------+-----------------+----------------+------------------+
| | __________ | __________ | __________ |
| | | | |
+------------------------------------------------------------+-----------------+----------------+------------------+
| | 6,157,986 | 14,485,320 | 12,810,113 |
+------------------------------------------------------------+-----------------+----------------+------------------+
| | __________ | __________ | __________ |
+------------------------------------------------------------+-----------------+----------------+------------------+
| | | 25,958,157 | |
| Total assets | 22,327,377 | | 28,830,718 |
+------------------------------------------------------------+-----------------+----------------+------------------+
| | __________ | __________ | __________ |
+------------------------------------------------------------+-----------------+----------------+------------------+
| Current liabilities | | | |
| Trade & other payables | 1,156,136 | 317,725 | 3,899,510 |
| Current tax | 95,471 | 362,277 | 95,471 |
| Finance lease obligations | 2,756 | 2,341 | 2,783 |
| Loans | - | - | |
| | | | - |
+------------------------------------------------------------+-----------------+----------------+------------------+
| | __________ | __________ | __________ |
| | | | |
+------------------------------------------------------------+-----------------+----------------+------------------+
| | 1,254,363 | 682,343 | 3,997,764 |
+------------------------------------------------------------+-----------------+----------------+------------------+
| | __________ | __________ | __________ |
| | | | |
+------------------------------------------------------------+-----------------+----------------+------------------+
| Net current assets/(liabilities) | 4,903,623 | 13,802,977 | 8,812,349 |
+------------------------------------------------------------+-----------------+----------------+------------------+
| | __________ | __________ | __________ |
| | | | |
+------------------------------------------------------------+-----------------+----------------+------------------+
| Non Current Liabilities | | | |
| Finance lease obligations | 9,339 | 9,458 | 9,429 |
| Borrowings | 14,360,435 | 14,153,267 | 14,870,395 |
| Deferred tax liabilities | 129,993 | 769,186 | 131,251 |
+------------------------------------------------------------+-----------------+----------------+------------------+
| | __________ | __________ | __________ |
| | | | |
+------------------------------------------------------------+-----------------+----------------+------------------+
| | 14,499,767 | 14,931,911 | 15,011,075 |
+------------------------------------------------------------+-----------------+----------------+------------------+
| | __________ | __________ | __________ |
| | | | |
+------------------------------------------------------------+-----------------+----------------+------------------+
| Total liabilities | 15,754,130 | 15,614,254 | 19,008,839 |
+------------------------------------------------------------+-----------------+----------------+------------------+
| | __________ | __________ | __________ |
| | | | |
+------------------------------------------------------------+-----------------+----------------+------------------+
| Net assets | 6,573,247 | 10,343,903 | 9,821,879 |
+------------------------------------------------------------+-----------------+----------------+------------------+
| | ========== | ========= | ========== |
+------------------------------------------------------------+-----------------+----------------+------------------+
| Equity | | | |
| Share capital | 578,219 | 578,219 | 578,219 |
| Share premium account | 9,370,827 | 9,370,827 | 9,370,827 |
| Share based payment reserve | 90,880 | 72,870 | 87,975 |
| Own shares held | (151,241) | (151,241) | (151,241) |
| Fair value reserve | 1,071,357 | - | 1,075,566 |
| Translation reserve | 1,332,498 | 395,697 | 1,705,890 |
| Convertible bond | 284,165 | 284,165 | 284,165 |
| Retained earnings | (6,003,458) | (206,634) | (3,129,522) |
+------------------------------------------------------------+-----------------+----------------+------------------+
| | __________ | __________ | __________ |
| | | | |
+------------------------------------------------------------+-----------------+----------------+------------------+
| Total Equity | 6,573,247 | 10,343,903 | 9,821,879 |
+------------------------------------------------------------+-----------------+----------------+------------------+
| | ========== | ========= | ========== |
+------------------------------------------------------------+-----------------+----------------+------------------+
CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 31 December 2008
+------------------------------------------------------------+---------------------+------------------+-------------------+
| | 6 months to 31 | 6 months to | Year ended 30 |
| | Dec | 31 Dec | June |
| | 2008 | 2008 | 2008 |
| | GBP | GBP | GBP |
| | | | |
+------------------------------------------------------------+---------------------+------------------+-------------------+
| Operating activities | | (1,077,348) | (4,517,382) |
| (Loss)/profit for the period before taxation | (2,873,936) | | |
+------------------------------------------------------------+---------------------+------------------+-------------------+
| Adjustments for: | | | |
| Depreciation of property, plant and equipment | 41,240 | 14,687 | 78,704 |
| Amortisation of costs of issue on convertible bond | | 71,067 | |
| Investment income | - | (286,800) | - |
| Finance costs | (72,036) | 599,911 | (539,251) |
| Foreign exchange (gain)/loss | 698,040 | (98,092) | 1,332,841 |
| Increase in inventories | 9,960 | | (115,173) |
| Decrease/(increase) in trade and other receivables | | - | |
| Increase/(decrease) in payables | - | (76,894) | - |
| Change in net value of biological assets | 746,251 | (16,808) | (1,197,204) |
| Increase in share based payment reserve | (2,743,374) | | 785,706 |
| Loss on disposal of investment | | - | 1,751,099 |
| Impairment of available for sale investment | - | 15,271 | 30,376 |
| | 2,905 | | 144,961 |
| | | - | |
| | - | | - |
| | 18,932 | - | |
+------------------------------------------------------------+---------------------+------------------+-------------------+
| | __________ | __________ | __________ |
| | | | |
+------------------------------------------------------------+---------------------+------------------+-------------------+
| Cash used in operations | (4,172,018) | (855,006) | (2,245,323) |
| | | | |
+------------------------------------------------------------+---------------------+------------------+-------------------+
| | | | |
+------------------------------------------------------------+---------------------+------------------+-------------------+
| Interest paid | (1,208,000) | (637,556) | (638,647) |
| | | | |
+------------------------------------------------------------+---------------------+------------------+-------------------+
| Taxation paid | | (323,439) | (671,712) |
| | - | | |
+------------------------------------------------------------+---------------------+------------------+-------------------+
| | __________ | __________ | __________ |
| | | | |
+------------------------------------------------------------+---------------------+------------------+-------------------+
| Net cash used in operating activities | (5,380,018) | (1,816,001) | (3,555,682) |
+------------------------------------------------------------+---------------------+------------------+-------------------+
| | | | |
+------------------------------------------------------------+---------------------+------------------+-------------------+
| Investing activities | | | |
| Purchase of biological assets | (366,941) | (408,346) | (2,405,252) |
| Interest received | 72,036 | 286,800 | 529,512 |
| Purchase of investments | | (1,666) | (153,384) |
| Purchases of property, plant & equipment | - | (56,919) | (2,070,422) |
| | (1,151) | | |
| Proceeds on disposal of property, plant and equipment | | - | - |
| | - | | |
+------------------------------------------------------------+---------------------+------------------+-------------------+
| | __________ | __________ | __________ |
| | | | |
+------------------------------------------------------------+---------------------+------------------+-------------------+
| Net cash used in investing activities | (296,056) | (180,131) | (4,099,546) |
+------------------------------------------------------------+---------------------+------------------+-------------------+
| | __________ | __________ | __________ |
| | | | |
+------------------------------------------------------------+---------------------+------------------+-------------------+
| Financing activities | | | |
| Repayments of borrowing | (90) | (1,290) | (1,319) |
| Proceeds from issue of share capital (net of costs) | - | | |
| Proceeds from issue of convertible bonds (net of | - | - | - |
| costs) | - | (56,357) | |
| Dividends paid | | | - |
| | | - | (572,219) |
+------------------------------------------------------------+---------------------+------------------+-------------------+
| | __________ | __________ | _________ |
| | | | |
+------------------------------------------------------------+---------------------+------------------+-------------------+
| Net cash from financing activities | (90) | (57,647) | (573,538) |
+------------------------------------------------------------+---------------------+------------------+-------------------+
| | __________ | __________ | _________ |
| | | | |
+------------------------------------------------------------+---------------------+------------------+-------------------+
| Net (decrease)/increase in cash and cash equivalents | (5,676,164) | (2,053,779) | (8,228,766) |
+------------------------------------------------------------+---------------------+------------------+-------------------+
| Cash and cash equivalents at beginning of period | 7,723,115 | 16,104,982 | 16,104,982 |
+------------------------------------------------------------+---------------------+------------------+-------------------+
| Effect of foreign exchange rate changes | (194,243) | 88,849 | (153,101) |
| | | | |
+------------------------------------------------------------+---------------------+------------------+-------------------+
| | __________ | __________ | _________ |
| | | | |
+------------------------------------------------------------+---------------------+------------------+-------------------+
| Cash and cash equivalents at end of period | 1,852,708 | 14,140,052 | 7,723,115 |
+------------------------------------------------------------+---------------------+------------------+-------------------+
| | ========== | ========= | ========== |
+------------------------------------------------------------+---------------------+------------------+-------------------+
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 DECEMBER 2008
+----------------------------------+--------------+--------------+---------------+-----------------+------------------+-----------------+--------------------+---------------+--------------+
| | | Share | | | | Share Based | | Own | |
| | Share | Premium | Retained | Fair Value | Translation | Payment | Convertible | Shares | Total |
| Six months ended 31 December | Capital | Account | Earnings | Reserve | Reserve | Reserve | Bond | Held | Equity |
| 2008 | GBP | GBP | GBP | GBP | GBP | GBP | GBP | GBP | GBP |
+----------------------------------+--------------+--------------+---------------+-----------------+------------------+-----------------+--------------------+---------------+--------------+
| | | | | | | | | | |
| Balance at 1 July 2008 | 578,219 | 9,370,827 | (3,129,522) | 1,075,566 | 1,075,890 | 87,975 | 284,165 | (151,241) | 9,821,879 |
| | | | | | | | | | |
+----------------------------------+--------------+--------------+---------------+-----------------+------------------+-----------------+--------------------+---------------+--------------+
| Foreign exchange differences on | | | | | | | | | |
| translating foreign operations | - | - | - | - | (373,392) | - | - | - | (373,392) |
| | | | | | | | | | |
+----------------------------------+--------------+--------------+---------------+-----------------+------------------+-----------------+--------------------+---------------+--------------+
| Decrease in fair value of | | | | | | | | | |
| available for sale investments | - | - | - | (4,209) | - | - | - | - | (4,209) |
| | | | | | | | | | |
+----------------------------------+--------------+--------------+---------------+-----------------+------------------+-----------------+--------------------+---------------+--------------+
| Profit for the period | - | - | (2,873,936) | - | - | - | - | - | (2,873,936) |
| | | | | | | | | | |
+----------------------------------+--------------+--------------+---------------+-----------------+------------------+-----------------+--------------------+---------------+--------------+
| | ________ | ________ | ________ | ________ | ________ | ________ | ________ | ________ | ________ |
+----------------------------------+--------------+--------------+---------------+-----------------+------------------+-----------------+--------------------+---------------+--------------+
| Total recognised income and | | | | | | | | | |
| expense for the period | - | - | (2,873,936) | (4,209) | (373,392) | - | - | - | (3,251,537) |
| | | | | | | | | | |
+----------------------------------+--------------+--------------+---------------+-----------------+------------------+-----------------+--------------------+---------------+--------------+
| Share based payments | - | - | - | - | - | 2,905 | - | - | 2,905 |
| | | | | | | | | | |
+----------------------------------+--------------+--------------+---------------+-----------------+------------------+-----------------+--------------------+---------------+--------------+
| Dividends paid | - | - | - | - | - | - | - | - | - |
| | | | | | | | | | |
+----------------------------------+--------------+--------------+---------------+-----------------+------------------+-----------------+--------------------+---------------+--------------+
| | ________ | ________ | ________ | ________ | ________ | _________ | _________ | _________ | _________ |
+----------------------------------+--------------+--------------+---------------+-----------------+------------------+-----------------+--------------------+---------------+--------------+
| Balance at 31 December 2008 | 578,219 | 9,370,827 | (6,003,458) | 1,071,357 | 1,332,498 | 90,880 | 284,165 | (151,241) | 6,573,247 |
+----------------------------------+--------------+--------------+---------------+-----------------+------------------+-----------------+--------------------+---------------+--------------+
| | ======== | ======== | ======== | ======== | ======== | ======== | ======== | ======== | ======== |
+----------------------------------+--------------+--------------+---------------+-----------------+------------------+-----------------+--------------------+---------------+--------------+
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 DECEMBER 2008
+-----------------------------------+--------------+--------------+---------------+-----------------+-----------------+-----------------+--------------------+---------------+--------------+
| | | Share | | | | Share Based | | Own | |
| | Share | Premium | Retained | Fair Value | Translation | Payment | Convertible | Shares | Total |
| Six months ended 31 December 2007 | Capital | Account | Earnings | Reserve | Reserve | Reserve | Bond | Held | Equity |
| | GBP | GBP | GBP | GBP | GBP | GBP | GBP | GBP | GBP |
+-----------------------------------+--------------+--------------+---------------+-----------------+-----------------+-----------------+--------------------+---------------+--------------+
| | | | | | | | | | |
| Balance at 1 July 2007 | 578,219 | 9,370,827 | 870,714 | - | 39,066 | 57,599 | 284,165 | (151,241) | 11,049,349 |
| | | | | | | | | | |
+-----------------------------------+--------------+--------------+---------------+-----------------+-----------------+-----------------+--------------------+---------------+--------------+
| Foreign exchange differences on | | | | | | | | | |
| translating foreign operations | - | - | - | - | 356,631 | - | - | - | 356,631 |
| | | | | | | | | | |
+-----------------------------------+--------------+--------------+---------------+-----------------+-----------------+-----------------+--------------------+---------------+--------------+
| Increase in fair value of | | | | | | | | | |
| available for sale investments | - | - | - | - | - | - | - | - | - |
| | | | | | | | | | |
+-----------------------------------+--------------+--------------+---------------+-----------------+-----------------+-----------------+--------------------+---------------+--------------+
| Loss for the period | - | - | (1,077,348) | - | - | - | - | - | (1,077,348) |
| | | | | | | | | | |
+-----------------------------------+--------------+--------------+---------------+-----------------+-----------------+-----------------+--------------------+---------------+--------------+
| | ________ | ________ | ________ | ________ | ________ | ________ | ________ | ________ | ________ |
+-----------------------------------+--------------+--------------+---------------+-----------------+-----------------+-----------------+--------------------+---------------+--------------+
| Total recognised income and | | | | | | | | | |
| expense for the period | - | - | (1,077,348) | - | 356,631 | - | - | - | (720,717) |
| | | | | | | | | | |
+-----------------------------------+--------------+--------------+---------------+-----------------+-----------------+-----------------+--------------------+---------------+--------------+
| Issue of new ordinary shares | - | - | - | - | - | - | - | - | - |
| | | | | | | | | | |
| Costs set against share premium | - | - | - | - | - | - | - | - | - |
| | | | | | | | | | |
+-----------------------------------+--------------+--------------+---------------+-----------------+-----------------+-----------------+--------------------+---------------+--------------+
| Share based payments | - | - | - | - | - | 15,271 | - | - | 15,271 |
| | | | | | | | | | |
+-----------------------------------+--------------+--------------+---------------+-----------------+-----------------+-----------------+--------------------+---------------+--------------+
| Dividends paid | - | - | - | - | - | - | - | - | - |
| | | | | | | | | | |
+-----------------------------------+--------------+--------------+---------------+-----------------+-----------------+-----------------+--------------------+---------------+--------------+
| | ________ | ________ | ________ | ________ | ________ | _________ | _________ | _________ | _________ |
+-----------------------------------+--------------+--------------+---------------+-----------------+-----------------+-----------------+--------------------+---------------+--------------+
| Balance at 31 December 2007 | 578,219 | 9,370,827 | (206,634) | - | 395,697 | 72,870 | 284,165 | (151,241) | 10,343,903 |
+-----------------------------------+--------------+--------------+---------------+-----------------+-----------------+-----------------+--------------------+---------------+--------------+
| | ======== | ======== | ======== | ======== | ======== | ======== | ======== | ======== | ======== |
+-----------------------------------+--------------+--------------+---------------+-----------------+-----------------+-----------------+--------------------+---------------+--------------+
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 DECEMBER 2008
+----------------------------------+--------------+--------------+---------------+----------------------+-----------------+-----------------+--------------------+---------------+--------------+
| | | Share | | | | Share Based | | Own | |
| | Share | Premium | Retained | Fair Value | Translation | Payment | Convertible | Shares | Total |
| | Capital | Account | Earnings | Reserve | Reserve | Reserve | Bond | Held | Equity |
| Year ended 30 June 2008 | GBP | GBP | GBP | GBP | GBP | GBP | GBP | GBP | GBP |
+----------------------------------+--------------+--------------+---------------+----------------------+-----------------+-----------------+--------------------+---------------+--------------+
| | | | | | | | | | |
| Balance at 1 July 2007 | 578,219 | 9,370,827 | 870,714 | - | 39,066 | 57,599 | 284,165 | (151,241) | 11,049,349 |
| | | | | | | | | | |
+----------------------------------+--------------+--------------+---------------+----------------------+-----------------+-----------------+--------------------+---------------+--------------+
| Foreign exchange differences on | | | | | | | | | |
| translating foreign operations | - | - | - | - | 1,666,824 | - | - | - | 1,666,824 |
| | | | | | | | | | |
+----------------------------------+--------------+--------------+---------------+----------------------+-----------------+-----------------+--------------------+---------------+--------------+
| Increase in fair value of | | | | | | | | | |
| available for sale investments | - | - | - | 1,536,523 | - | - | - | - | 1,536,523 |
| | | | | | | | | | |
+----------------------------------+--------------+--------------+---------------+----------------------+-----------------+-----------------+--------------------+---------------+--------------+
| Deferred tax on increase in fair | | | | | | | | | |
| value of available sale | | | | | | | | | |
| investments | - | - | - | (460,957) | - | | | | (460,957) |
| | | | | | | | | | |
+----------------------------------+--------------+--------------+---------------+----------------------+-----------------+-----------------+--------------------+---------------+--------------+
| Loss for the period | - | - | (3,428,017) | - | - | - | - | - | (3,428,017) |
| | | | | | | | | | |
+----------------------------------+--------------+--------------+---------------+----------------------+-----------------+-----------------+--------------------+---------------+--------------+
| | ________ | ________ | ________ | ________ | ________ | ________ | ________ | ________ | ________ |
+----------------------------------+--------------+--------------+---------------+----------------------+-----------------+-----------------+--------------------+---------------+--------------+
| Total recognised income and | | | | | | | | | |
| expense for the year | - | - | (3,428,017) | 1,075,566 | 1,666,824 | - | - | - | (685,627) |
| | | | | | | | | | |
+----------------------------------+--------------+--------------+---------------+----------------------+-----------------+-----------------+--------------------+---------------+--------------+
| Issue of new ordinary shares | - | - | - | - | - | - | - | - | - |
| | | | | | | | | | |
| Costs set against share premium | - | - | - | - | - | - | - | - | - |
| | | | | | | | | | |
+----------------------------------+--------------+--------------+---------------+----------------------+-----------------+-----------------+--------------------+---------------+--------------+
| Convertible bond - equity | - | - | - | - | - | - | - | - | - |
| Cost of issue | - | - | - | - | - | - | - | - | - |
| Share based payments | - | - | - | - | - | 30,376 | - | - | 30,376 |
| | | | | | | | | | |
+----------------------------------+--------------+--------------+---------------+----------------------+-----------------+-----------------+--------------------+---------------+--------------+
| Dividends paid | - | - | (572,219) | - | - | - | - | - | (572,219) |
| | | | | | | | | | |
+----------------------------------+--------------+--------------+---------------+----------------------+-----------------+-----------------+--------------------+---------------+--------------+
| | ________ | ________ | ________ | ________ | ________ | _________ | _________ | _________ | _________ |
+----------------------------------+--------------+--------------+---------------+----------------------+-----------------+-----------------+--------------------+---------------+--------------+
| Balance at 30 June 2008 | 578,219 | 9,370,827 | (3,129,522) | 1,075,566 | 1,705,890 | 87,975 | 284,165 | (151,241) | 9,821,879 |
+----------------------------------+--------------+--------------+---------------+----------------------+-----------------+-----------------+--------------------+---------------+--------------+
| | ======== | ======== | ======== | ======== | ======== | ======== | ======== | ======== | ======== |
+----------------------------------+--------------+--------------+---------------+----------------------+-----------------+-----------------+--------------------+---------------+--------------+
NOTES TO THE UNAUDITED INTERIM ACCOUNTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2008
1.This half-yearly financial report for the six months ended 31 December 2008 is
unaudited. The financial information set out above does not constitute statutory
accounts within the meaning of S435 of the Companies Act 2006.
This half-yearly financial report, which includes a condensed set of financial
statements of the Company and its subsidiary undertakings ("the Group") has been
prepared in accordance with International Financial Reporting Standards
("IFRS"), including IAS 34 'Interim Financial Reporting', as adopted by the
European Union ("EU").
The financial statements for the year ended 30 June 2008 have been delivered to
the Registrar of Companies. The report of the auditors in respect of the year
ended 30 June 2008 was (i) unqualified, (ii) did include a reference to going
concern to which the auditors drew attention by way of emphasis without
qualifying the report and (iii) did not contain a statement under Section 237
(2) or (3) of the Companies Act 1985 (which then applied). The financial
information for the six months ended 31 December 2008 and 31 December 2007 is
unaudited.
The Company is listed on AIM, the Alternative Investment Market of the London
Stock Exchange.
This interim report, including the consolidated financial information was
authorised for issue by the Board of Directors on 31 March 2008.
The accounting policies applied in the preparation of these interim consolidated
financial statements have been consistently applied to all the periods
presented, except that biological assets are only revalued at the Company's year
end. The significant accounting policies are set out below.
2.There is no liability for corporation taxation arising in the period.
3.The calculations of earnings per share is based on the loss of GBP2,873,936
for the six months to 31 December 2008 (31 December 2007: GBP1,077,348; 30 June
2008: GBP3,428,017) and on the weighted average of 19,073,971 (31 December 2007:
19,073,971; 30 June 2008: 19,073,971) ordinary shares in issue during the
period, after deduction of own shares held.
There were no potential dilutive ordinary shares outstanding during the period
to 31 December 2008 due to the loss for the period (31 December 2007: nil). The
conversion of the convertible bond, and the outstanding share options are
anti-dilutive.
4.Biological Assets
Biological assets comprise of timber plantations (woodlots), olive groves,
almond groves, apple orchards, wine grape vineyards, grain and mango
(horticultural crops).
Biological assets are owned by the Group through investments in managed
investment schemes or through direct investment in agricultural assets.
In accordance with IAS 41 biological assets are measured on initial recognition
and at each balance sheet date at fair value less estimated point of sale costs.
The gain or loss in fair value of these biological assets is presented in the
income statement.
The fair values of the biological assets represent the net present values of
estimated future cash flows relating to the biological assets owned by the
entity, determined by application of assumptions made by independent valuation
experts to cash flow models. The valuers visit the sites as required and inspect
operations, plant and equipment, interview management and take measurements of
plants to confirm model assumptions and growth trends.
Cashflows are gross of income tax and are expressed in real terms.
Significant assumptions made in determining the fair value of the biological
assets at 30 June 2008 were:
(i)Timber plantations are valued based on expected volumes of merchantable
timber that could be obtained from existing plantations, given current
management strategies and legislative and other externally imposed restrictions.
(ii)The limit of the cash flow analysis is the expected rotation period for the
current timber plantations which ranges from 3 years to 20 years.
(iii)The ongoing costs of growing the trees are deducted in determining the net
cash flows. In some projects producing processed products, harvest and milling
costs are also included.
(iv)Costs, prices, growth yields and sawn timber recovery rates are based on
actual and expected rates.
(v)The valuations assume that all biological assets will be appropriately
managed in the future to best siviculture, forestry and agricultural practices.
(vi)Nominal pre tax discount rates of 9%-17% per annum are applied to the
estimated cash flows. The discount rates take into account the risk associated
with future cash flows associated with each project and are based on cost of
capital calculations, with reference to industry standards.
The discount rates in respect of each group are as follows:
Woodlots - Paulownia:9%
Woodlots - BioForest Dual Income Project 2006:15%
Vineyards - Adelaide Hills Vineyard Project:12.1%
Woodlots - Timbercorp Eucalypt:10% to 14%
Olive groves - Timbercorp:15% to 17%
Almond groves - Timbercorp:15% to 17%
AHM Early Season Apples:15%
AHM Organic Apples:
15%
Gumeracha Vineyards:
15%
2008 Grain Co Production Units:15%
(vii) Continued water availability for projects exposed to high risk water
catchments.
(viii) A stable market environment throughout the life of each project.
(ix) A continued high level of management quality for investments in
biological assets.
(x) The productive life of the asset.
(i)The period over which the asset will mature.
(ii)The expected future sales price. Expected future sales prices for all
biological assets are based on average current prices increased for inflation.
(iii)The costs expected to arise throughout the life of the asset, which are
based on average costs throughout the period, increased for inflation.
(iv)Inflation rates are estimated by the independent valuation experts, based on
bank rates and economic indicators. The estimates used range from 2.8% to 5%.
Additional assumptions have been made in determining the fair value of the
Paulownia woodlots, which are:
(i)The continued ability of management to grow Paulownia, and also harvest,
process and market Paulownia products.
(ii)Current market prices for Paulownia are maintained.
(iii) Operational costs in future years are in line with the Directors'
forecasts.
Biological assets
+----------------------------------------------------------------------------------+---------------+
| | GBP |
+----------------------------------------------------------------------------------+---------------+
| Group | |
| Carrying amount as at 1 July 2007 | 10,133,150 |
| Exchange difference | 1,803,610 |
| Increases due to purchases | 5,176,848 |
| Loss arising from changes in fair value less point of sale costs | (1,751,099) |
+----------------------------------------------------------------------------------+---------------+
| | __________ |
| | |
+----------------------------------------------------------------------------------+---------------+
| Carrying amount as at 30 June 2008 | 15,362,509 |
| Exchange difference | (149,203) |
| Increases due to purchases | 366,941 |
| Gain arising from changes in fair value less point of sale costs | - |
+----------------------------------------------------------------------------------+---------------+
| | __________ |
| | |
+----------------------------------------------------------------------------------+---------------+
| Carrying amount as at 31 December 2008 | 15,580,247 |
+----------------------------------------------------------------------------------+---------------+
| | ========= |
| | |
+----------------------------------------------------------------------------------+---------------+
The fair value of biological assets comprises the following elements:
+--------------------------------------------+----------------------+-----------------------+-----------------+
| | 31 December | 31 December | 30 June |
| | 2008 | 2007 | 2008 |
| | GBP | GBP | GBP |
| | | | |
+--------------------------------------------+----------------------+-----------------------+-----------------+
| Non-current assets | | | |
| Woodlots* | 6,568,598 | 9,456,494 | 6,632,149 |
| Vineyards | 724,510 | 808,187 | 731,520 |
| Olive groves | 128,990 | 58,839 | 102,822 |
| Almond groves | 1,717,631 | 588,160 | 1,502,757 |
| Apple orchards | 2,763,635 | | 2,790,373 |
| Mangos | 108,519 | - | |
| | | | - |
| | | - | |
+--------------------------------------------+----------------------+-----------------------+-----------------+
| | | | _________ |
| | _________ | _________ | |
+--------------------------------------------+----------------------+-----------------------+-----------------+
| | 12,011,883 | 10,911,680 | 11,759,621 |
+--------------------------------------------+----------------------+-----------------------+-----------------+
| Current assets: | | | |
| Wheat and barley | 3,568,364 | | 3,602,888 |
| | | - | |
+--------------------------------------------+----------------------+-----------------------+-----------------+
| | | | _________ |
| | _________ | _________ | |
+--------------------------------------------+----------------------+-----------------------+-----------------+
| | 15,580,247 | 10,911,680 | 15,362,509 |
+--------------------------------------------+----------------------+-----------------------+-----------------+
| | ========= | ========= | ========= |
+--------------------------------------------+----------------------+-----------------------+-----------------+
*Includes GBP5,102,198 (December 2007: GBP8,149,655) (June 2008:
GBP5,151,562) relating to Paulownia Woodlots.
Commitments
At the period end, the Group had not entered into commitments to acquire or
develop biological assets subsequent to the year end.
5.Critical accounting estimates and judgements
The Group makes estimates and assumptions concerning the future. The resulting
accounting estimates and assumptions will, by definition, seldom equal the
related actual results. The estimates and assumptions that have a significant
risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are discussed below.
Income taxes: Income tax estimates are based on the assumption that no adverse
change will occur in income tax legislation.
Biological assets: Please refer to the note on 'Biological assets' above.
Investments: Fair value of the unquoted Adelaide Hills and the unquoted
Riverland Land and Water investments have been assessed following independent
valuations provided by external valuers. Shares in Willmott Forests were
acquired, following their takeover of Bio-energy. These shares are listed on the
Australian Stock Exchange and have been valued based on their market value as at
31 December 2008. An impairment has been recognised in the income statement in
respect of this.
Allocation of purchase consideration for Gumeracha Vineyard: The purchase
consideration for the Gumeracha Vineyard property assets acquired by the
Adelaide Hills Vineyard Trust has been allocated based on reasonable estimates
of the Directors and management of the Gumeracha Vineyard property.
6.Share Capital
+-------------------------------------------------+------------------+---------------+----------------+
| | As at | As at | As at |
| | 31 December | 31 December | 30 June |
| | 2008 | 2007 | 2008 |
| | GBP | GBP | GBP |
| | | | |
+-------------------------------------------------+------------------+---------------+----------------+
| Authorised: | | | |
| 666,666,667 Ordinary Shares of 3p each | 20,000,000 | 20,000,000 | 20,000,000 |
+-------------------------------------------------+------------------+---------------+----------------+
| | ========= | ========= | ========= |
+-------------------------------------------------+------------------+---------------+----------------+
| Allotted, issued and fully paid | 578,219 | | |
| 19,273,971 Ordinary shares of 3p each | | 578,219 | 578,219 |
+-------------------------------------------------+------------------+---------------+----------------+
| | ========= | ========= | ========= |
+-------------------------------------------------+------------------+---------------+----------------+
The Company has not issued any new shares since the last report and accounts of
30 June 2008.
The Company holds 200,000 of its own shares. The consideration paid for these
shares was recognised as a deduction from shareholders' equity as a separate
reserve "own shares held".
7.Dividend
No dividend was paid in respect of the year ended 30 June 2008 (2007: dividend
of 3.0p per share as a final dividend for the year to 30 June 2007).
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ZFLFXKXBBBBF
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