TIDMCHA
RNS Number : 8002Z
Concha plc
17 March 2017
For Immediate Release 17 March 2017
Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR).
Concha PLC
("Concha" or "the Company")
Interim Report for the six months ended 31 December 2016
Introduction
Over the course of the last few days there have been a number of
developments at Ve Interactive Limited ("Ve"), a business which
represents Concha's principal investment in which it invested GBP4m
at a GBP930m valuation (representing 0.43% of the issued share
capital) during March 2016 and so the timing of the release of this
interim statement provides an expedient opportunity to provide an
update as to the status and performance of this key investment.
As I stated in my previous Chairman's Statement in December
2016, we had been encouraged by the November announcement of the
appointment of Stuart Chambers as Chairman designate of Ve and the
governance changes which immediately followed provided comfort that
the business was being prepared for the next stage of its strategic
development, including an anticipated round of institutional
funding. We had, as I have previously stated made a number of
introductions to global investment banking institutions which by
its nature had afforded us closer ties with the company's executive
management team and a greater insight in to the company's trading
performance.
Over the course of the last six months, the disconnect between
Ve's aggressive programme to extend its geographical reach and the
required access to working capital has widened. This, coupled with
revenue growth which has fallen behind Ve management's near term
expectation, has placed significant strain on both Ve's operations
and heightened frustrations amongst shareholders and other
stakeholders alike. Earlier this month, a consortium of experienced
long-term shareholders of Ve, advanced a number of funding
proposals which will not only provide Ve with the access to capital
required to fund its near-term operations but also to fund its
longer-term growth aspirations. Consideration for the initial
tranche of funding has largely been satisfied by the transfer of
existing Ve equity from management, the effect of which has
minimised the dilutive effect on the equity interests of the
existing shareholder base. It is anticipated that further funds
will be secured by way of a rights issue and that this process is
expected to conclude in the near future.
In addition to the provision of funding, the consortium has also
sought to introduce a number of experienced executives to steward
the business through this period of transition. The introduction of
a new CEO and interim Chairman, together with a professional
multi-disciplined team will supplement the existing talent present
within the business. Over the course of the next three months, this
new team intends to commence and conclude a process of
re-organisation, rationalisation and revenue growth, the latter
resulting from a number of identified revenue opportunities which
will allow Ve's portfolio of offerings, including the optimisation
of its mobile browsing services to improve both market share and
yield. Significant reductions to its operating cost base will see
the business exit from smaller markets, centralise its global
finance function and drive growth from three core geographical hubs
(EMEA, Americas and Asia) which in combination will support the new
management team's plans to secure a position of being cash
break-even by the end of 2017.
Our initial view of Ve and its potential remain the same. The
technology that underpins its business is proven and its vision to
use technology to overcome the common challenge faced by all online
businesses in respect of expanding and converting customers without
flaw. However, in order to scale effectively it must now shed its
"start-up" culture, rationalise its operating base and focus on the
introduction of a number of identified revenue enhancing "martech"
and advertising product initiatives that are intended to drive the
business to break even during 2017. Whilst recent events will no
doubt impact the perception of the investment opportunity Ve
represents, the Board believes that this decisive action will
accelerate Ve's timetable to profitability and in turn provide an
earlier exit opportunity than would otherwise have been possible.
However, the vision proposed is not without its challenges. The
business will need to restructure both its short and long-term
liability base as well as secure the support of the shareholders,
many of whom will have invested at valuations significantly higher
than the implied valuation now placed upon the business.
The current funding proposals are still being negotiated and may
therefore be subject to change. We will however, ensure that our
shareholders are kept abreast of developments at Ve as it begins a
new phase in the development of its business and make further
announcements as appropriate.
Unaudited Interim Results
Whilst your Board has closely monitored the developments of Ve
outlined above, it has also continued to evaluate the merits of
other investment opportunities. Whilst we have not supplemented our
investment portfolio during the period, the reported loss before
exceptional items of GBP0.28m for the period (2015: Loss GBP0.39m)
reflects the costs associated with pursuing discussions with target
investee opportunities and preserving Concha's status as an AIM
quoted entity. In addition, and in the light of recent events at
Ve, your Board has also sought to impair the carrying value of its
investment in Ve to more fairly reflect the valuation of recent
transactions at Ve, which indicates a current valuation of Ve of
GBP300m, the impact of which has been to further increase the loss
for the year by GBP2.71m as a result of impairing the investment
via the inter-company loan, resulting in a retained loss of the
period of GBP2.99m (2015: Loss GBP0.38m).
Your Board will continue its process of review and will update
the market further as and when it is appropriate to do so.
Concha PLC
18 Buckingham Gate, London, SW1E 6LB
Enquiries:
Concha PLC
Chris Akers, Chairman chris.akers@srgplc.com
SPARK Advisory Partners Limited (Nominated Adviser) 020 3368 3550
Sean Wyndham-Quin
Mark Brady
Buchanan 020 7466 5000
Richard Oldworth
CONCHA PLC
INTERIM STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD FROM 1 JULY 2016 TO 31 DECEMBER 2016
Half year Half year Year Ended
to to
31.12.2016 31.12.2015 30.06.2016
(Unaudited) (Unaudited) (Audited)
Notes GBP000's GBP000's GBP000's
Revenue 2 8 8 15
----------- ------------- ------------
Gross profit 8 8 15
General & administrative expenses (285) (397) (1,006)
----------- ------------- ------------
Loss from operations before exceptional
items (277) (389) (991)
Impairment of amounts recoverable
from subsidiary (2,710) - -
----------- ------------- ------------
Loss from operations (2,987) (389) (991)
Investment income 1 5 7
----------- ------------- ------------
Loss before tax (2,986) (384) (984)
Tax - - -
----------- ------------- ------------
Retained Loss after tax for the
period (2,986) (384) (984)
_____ ______ ______
Retained loss attributable to:
Owners of the company (2,986) (384) (984)
----------- ------------- ------------
Loss for period (2,986) (384) (984)
_____ ______ ______
Total comprehensive loss attributable
to:
Owners of the company (2,986) (384) (984)
----------- ------------- -------------
Total comprehensive loss for the
period (2,986) (384) (984)
_____ ______ ______
Loss per share
Basic and diluted 3 - - -
_____ ______ ______
CONCHA PLC
INTERIM STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2016
As at As at As at
31.12.2016 31.12.2015 30.06.2016
(Unaudited) (Unaudited) (Audited)
Notes GBP000's GBP000's GBP000's
ASSETS
Non-current assets
Investments 514 500 514
----------- ------------- -------------
514 500 514
----------- ------------- -------------
Current assets
Trade and other receivables 1,827 263 4,509
Cash and cash equivalents 940 5,618 1,255
----------- ------------- -------------
2,767 5,881 5,764
----------- ------------- -------------
TOTAL ASSETS 3,281 6,381 6,278
====== ======= =======
EQUITY
Share capital 4 1,623 1,553 1,623
Deferred share capital 1,795 1,795 1,795
Share premium reserve 21,563 21,433 21,563
Warrant reserve 583 314 583
Retained loss (22,353) (18,767) (19,367)
------------------- ------------------- -------------------
TOTAL EQUITY 3,211 6,328 6,197
========= ========= ==========
CURRENT LIABILITIES
Trade and other payables 70 53 81
TOTAL EQUITY AND LIABILITIES 3,281 6,381 6,278
========= ========= ==========
CONCHA PLC
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD FROM 1 JULY 2015 TO 31 DECEMBER 2016
Deferred Share
Share share premium Warrant Retained Total
capital capital account reserve loss
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
Balance at 1 July 2016 1,623 1,795 21,563 583 (19,367) 6,197
Loss for the period - - - - (2,986) (2,986)
Total comprehensive income
for the period - - - - (2,986) (2,986)
--------- --------- --------- --------- --------- ---------
Share capital issued - - - - - -
Share based payments - - - - - -
Balance at 31 December
2016 1,623 1,795 21,563 583 (22,353) 3,211
========= ========= ========= ========= ========= =========
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
Balance at 1 July 2015 1,478 1,795 21,043 314 (18,383) 6,247
Loss for the year - - - - (384) (384)
Total comprehensive income
for the period - - - - (384) (384)
--------- --------- --------- --------- --------- ---------
Share capital issued 75 - 390 - - 465
Share based payments - - - (42) 42 -
Balance at 31 December
2015 1,553 1,795 21,433 314 (18,767) 6,328
========= ========= ========= ========= ========= =========
CONCHA PLC
INTERIM STATEMENT OF CASH FLOW
FOR THE PERIOD FROM 1 JULY 2015 TO 31 DECEMBER 2016
Half Year Half Year to Year Ended
to
31.12.2016 31.12.2015 30.06.2016
GBP000's GBP000's GBP000's
(Unaudited) (Unaudited) (Audited)
Cash flow from operating activities
Loss for the period (2,986) (384) (984)
Share based payment - - 269
Impairment of amounts recoverable from
subsidiary 2,710 - -
Investment income (1) (5) (7)
------------- -------------- ----------------
Operating cash flows before movements
in working Capital (277) (389) (722)
Increase in receivables (3) (9) (115)
(Decrease) / increase in payables (11) (1) 27
------------- -------------- ----------------
(14) (10) (88)
Investment income 1 5 7
------------- -------------- ----------------
Net cash outflow from operating activities (290) (394) (803)
Cash flow from investing activities
Purchase of investments - - (4,154)
------------- -------------- ----------------
Net cash outflow from investing activities - - (4,154)
Cash flow from financing activities
Net proceeds from issue of share capital - 465 665
Loans advanced (25) - -
------------- -------------- ----------------
Net cash flow from financing activities (25) 465 665
Net cash outflow for the period (315) 71 (4,292)
-------------- ---------------- -------------
Cash and cash equivalents at start of
period 1,255 5,547 5,547
-------------- ---------------- -------------
Cash and cash equivalents at end of
period 940 5,618 1,255
======= ====== ======
CONCHA PLC
NOTES TO THE UNAUDITED INTERIM REPORT
FOR THE PERIODING 31 DECEMBER 2016
1. BASIS OF PREPARATION
The interim financial statements have been prepared on a going
concern basis and in accordance with the recognition and
measurement principles of International Financial Reporting
Standards adopted for use in the European Union ("IFRS"). The
accounting policies are unchanged from the financial statements for
the year ended 30 June 2016.
The interim financial statements for the period ended 31
December 2016 have not been audited and do not constitute statutory
accounts within the meaning of Section 434 of the Companies Act
2006. Statutory accounts for the year ended 30 June 2016, prepared
in accordance with IFRS, have been filed with the Registrar of
Companies. The Auditors' report on these accounts was unmodified,
did not include any matters to which the Auditors drew attention by
way of emphasis of matter without qualifying their report and did
not contain any statements under section 498 of the Companies Act
2006.
This Interim Financial Report was approved by the Board of
Directors on 16 March 2017.
Statement of compliance
These condensed interim financial statements have been prepared
in accordance with International Accounting Standard ('IAS') 34 -
Interim Financial Reporting as adopted by the European Union.
Accordingly, the interim financial statements do not include all of
the information or disclosures required in the annual financial
statements and should be read in conjunction with the Company's
2016 annual financial statements.
2. TURNOVER AND SEGMENTAL ANALYSIS
All of the Company's activity and income and expenses in the
periods ended 31 December 2016 and 31 December 2015 and for the
year ended 30 June 2016 were incurred in the United Kingdom, and
relate to Concha's ongoing investment activities.
3. LOSS PER SHARE
The calculation of the basic and diluted earnings per share is
based on the following data:
Half year Half year Year ended
to to
31.12.2016 31.12.2015 30.6.2016
Earnings
Earnings for the purposes of basic earnings
per share net loss for the
period attributable to equity holders
of the company (GBP000's) (2,986) (384) (984)
Number of shares
Weighted average number of ordinary shares
in issue (millions) 1,623.1 1,547.8 1,573.9
Weighted average number of dilutive shares
under options (millions) 160.0 287.0 206.9
Weighted average number of shares incl.
dilutive warrants (millions) 1,783.1 1,834.8 1,780.8
The denominator for the purpose of calculating the basic
earnings per share has been adjusted to reflect all capital
raisings. Due to the loss incurred in the period, there is no
dilutive effect resulting from the issue of share options, warrants
and shares to be issued.
CONCHA PLC
NOTES TO THE UNAUDITED INTERIM REPORT
FOR THE PERIOD ENDING 31 DECEMBER 2016
4. SHARE CAPITAL Number of Nominal value
shares GBP000's
a) Issued and Fully Paid:
As at 1 July 2016 and 31 December
2016 1,623,056,912 1,623
----------------------------- ------------------
b) Deferred shares
As at 1 July 2016 and 31 December
2016 181,303,419 1,795
----------------------------- ------------------
c) Total warrants in issue
During the half year, no warrants were issued (2015: Nil)
and none were exercised (2015: 75,000,000) and 95,000,000
were cancelled (2015: Nil).
As at 31 December 2016 the warrants in issue were:
Exercise price Expiry date Warrants in Issue 31
December 2016
0.35p 01/03/2018 49,525,702
0.35p 03/06/2018 25,000,000
---------------------------
74,525,702
--------------------------
d) Total options in issue
During the half year, 30,000,000 options were issued (2015:
Nil) and none were exercised (2015: Nil) and none were cancelled
(2015: Nil).
As at 31 December 2016 the options in issue were:
Exercise price Expiry date Options in Issue 31 December
2016
1.18p 07/01/2019 115,000,000
---------------------------
5. POST BALANCE SHEET EVENTS
As a result of the current financial position of Ve as outlined
above, the year-end carrying value of Ve via the inter-company
investment has been impaired in these interim results by
GBP2.71m.
6. AVAILABILITY OF INTERIM RESULTS
Copies of the Interim Results for the six months to 31 December
2016 are available from the Company's registered address and will
be available on the Company's website, www.concha-plc.com, later
today.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR JRMLTMBABMIR
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