TIDMOCT
RNS Number : 4693L
Octagonal PLC
13 January 2021
13 January 2021
Octagonal plc
("Octagonal" or the "Company")
Interim Results
Octagonal (AIM: OCT), announces its unaudited half-year results
for the six months to 30 September 2020. These include the trading
results for the Company's principal trading subsidiary Global
Investment Strategy UK Ltd (GIS) which are being announced along
with the consolidated figures for Octagonal's group.
Summary of Octagonal PLC Financial highlights for the six months
to 30 September 2020
-- Unaudited revenues for the six months to 30 September 2020
were GBP4.79 million ("m") (September 2019: GBP3.31m).
-- Unaudited operating profit for the group for six months to 30
September 2020 was GBP1.86m (September 2019: GBP1.12m)
-- Net Assets as at 30 September 2020 were GBP10.14m (September 2019: GBP10.19m)
-- Group cash balance as at 30 September 2020 was GBP6.84m (September 2019: GBP6.08m)
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014.
For further information please visit www.octagonalplc.com or
contact:
+44 (0) 20 7048
Octagonal Plc 9400
John Gunn, Chairman
Beaumont Cornish Limited (Nominated Adviser
and Broker) +44 (0) 20 7628
James Biddle / Roland Cornish 3396
www.beaumontcornish.com
Chairman Statement and update on group activities
Global Investment Strategy UK Ltd (GIS)
GIS delivered strong earnings for the half year as markets
remained active through the summer months against traditional
trends, and our balanced business model continued to deliver
consistent returns. GIS reported unaudited revenues of GBP4.79m and
profit before taxation of GBP2.082m for the 6 months to 30
September 2020. This was an increase of 42.7% in revenue and 41.2%
in profit compared with the corresponding period last year (revenue
of GBP3.359m and profit before taxation of GBP1.475m for the 6
months to 30 September 2019).
Synergis Capital Plc (Synergis)
Discussions continue with the FCA as regards Synergis' activity
and the business is undergoing an evaluation process with our
regulator and we believe we have made good progress in
demonstrating the business' robust processes and controls that are
essential for its intended specialist lending activity.
Global Investment Strategy HK Limited (GIS HK)
Our Hong Kong subsidiary remains fully operational and continues
to build on its network of Asia Pacific relationships to offer
services to both its London based parent and regional clients. The
HK office has contributed income to GIS, but we hope the year ahead
will see it demonstrate its fiscal autonomy as a stand-alone
entity, working in cooperation with its parent, but also servicing
Asia based clients looking for a global service offering.
Outlook
Whilst trading continues in line with the board's expectations,
the result for the year may be impacted by any effect of the
recently announced SEC complaint against GIS in the US, the outcome
of which cannot yet be determined with any certainty.
Dividend
On 17th December 2020, the Company declared a dividend of 0.1
pence per share which was paid on 12th January 2021.
John Gunn
Chairman
Unaudited Group Income Statement and statement of comprehensive
income
For the 6 months ended 30 September 2020
Unaudited Unaudited Audited
----------------------- ----------------------- ----------
30-Sep-20 30-Sep-19 31-Mar-20
--------------------------------------
GBP'000 GBP'000 GBP'000
-------------------------------------- ----------------------- ----------------------- ----------
Revenue 4,796 3,315 5,752
Cost of sales (1,131) (710) (1,447)
Gross profit 3,665 2,605 4,305
Administrative expenses (1,809) (1,482) (3,576)
Share based payment expense
-------------------------------------- ----------------------- ----------------------- ----------
Operating profit 1,856 1,123 729
Other gains and losses - - (135)
-------------------------------------- ----------------------- ----------------------- ----------
Profit before tax 1,856 1,123 594
Taxation - 82 (302)
-------------------------------------- ----------------------- ----------------------- ----------
Profit for the year 1,856 1,205 292
-------------------------------------- ----------------------- ----------------------- ----------
Attributable to:
Shareholders in the Parent Company 1,862 1,220 343
Non-controlling Interests (6) (15) (51)
1,856 1,205 292
-------------------------------------- ----------------------- ----------------------- ----------
Earnings per share attributable to
owners of the parent company
Basic and diluted (pence per share)
From continuing and total operations 0.328 0.215 0.060
Fully diluted 0.320 0.210 0.060
-------------------------------------- ----------------------- ----------------------- ----------
Unaudited Group Statement of Financial Position
As at 30 September 2020
Unaudited Unaudited Audited
---------- ---------- ----------
30-Sep-20 30-Sep-19 31-Mar-20
----------------------------------
GBP'000 GBP'000 GBP'000
---------------------------------- ---------- ---------- ----------
Non-Current assets
Goodwill 2,869 2,869 2,869
Other Intangibles 856 723 805
Property, plant and equipment 43 44 39
Deferred Tax asset -
3,768 3,636 3,713
---------------------------------- ---------- ---------- ----------
Current assets
Available for sale investments 225 266 225
Trade and other receivables 1,067 853 489
Cash and cash equivalents 6,838 6,076 5,463
8,130 7,195 6,177
TOTAL ASSETS 11,898 10,831 9,890
Current liabilities
Trade and other payables 1,123 457 942
Current tax liabilities 632 182 632
Borrowings - - -
1,755 639 1,574
---------------------------------- ---------- ---------- ----------
NET ASSETS/(LIABILITIES) 10,143 10,193 8,316
---------------------------------- ---------- ---------- ----------
Equity
Share capital 285 285 285
Share premium account 171 171 171
Reverse acquisition reserve 679 679 679
Foreign currency reserve 16 - 45
Share option and warrant reserve 162 162 162
Retained earnings 8,841 8,814 6,979
---------------------------------- ---------- ---------- ----------
Equity attributable to owners of
the company 10,154 10,111 8,321
Non- Controlling interests (11) 81 (5)
---------------------------------- ---------- ---------- ----------
Total Equity 10,143 10,193 8,316
---------------------------------- ---------- ---------- ----------
Unaudited Group Statement of Changes in Equity
For the 6 months ended 30 September 2020
Share Share Reverse Share Foreign Retained Equity Non-controlling Total
capital Premium acquisition option Currency earnings attributable interests equity
reserve reserve Reserve to owners
of the
Company
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- -------- -------- ------------ -------- --------- --------- ------------- ---------------- --------
Balance at 31
March
2018 284 171 679 99 - 6,972 8,205 208 8,413
Total
comprehensive
income for the
year - - - - - 1,060 1,060 (134) 926
Dividend paid - - - - - (568) (568) - (568)
Share issues 1 - - - - 1 - 1
Share based
payment
expense - - - 63 - - 63 - 63
Adjustment
arising
from change in
non-controlling
interest - - - - - 94 94 (16) 78
Balance at 31
March
2019 285 171 679 162 - 7,558 8,855 58 8,913
- - - - - (191) (191) - (191)
- - - - - (162) (162) (12) (174)
----------------- -------- -------- ------------ -------- --------- --------- ------------- ---------------- --------
Balance at 1
April
2019 restated * 285 171 679 162 - 7,205 8,502 46 8,548
Profit for the
year - - - - - 343 343 (51) 292
Exchange
differences
on translation
of foreign
operations - - - - 45 - 45 - 45
Dividend paid - - - - (569) (569) - (569)
----------------- -------- -------- ------------ -------- --------- --------- ------------- ---------------- --------
Balance at 31
March
2020 285 171 679 162 45 6,979 8,321 (5) 8,316
Profit for the
year - - - - 1,862 1,862 (6) 1,856
Exchange
differences
on translation
of foreign
operations - - - - (29) - (29) - (29)
----------------- -------- -------- ------------ -------- --------- --------- ------------- ---------------- --------
285 171 679 162 16 8,841 10,154 (11) 10,143
----------------- -------- -------- ------------ -------- --------- --------- ------------- ---------------- --------
*Please refer to Note 4 of the Company's audited financial
statements for the period ended 31 March 2020
Unaudited Group Statement of Cash flows
For the 6 months ended 30 September 2020
Unaudited Unaudited Audited
---------- ---------- ----------
30-Sep-20 30-Sep-19 31-Mar-20
GBP'000 GBP'000 .
------------------------------- ---------- ---------- ----------
OPERATING ACTIVITIES
Profit/(loss) for the year
before taxation 1,856 1,123 594
Adjusted for:
Share based payment - - -
Depreciation 7 7 14
Amortisation of intangibles 27
Investment impairment - - 135
Operating cash flows before
movements in working capital 1,863 1,130 770
(Increase)/Decrease in
trade and other receivables (578) (145) 44
Increase/(Decrease) in
trade and other payables 181 (76) 407
Other movement 21
------------------------------- ---------- ---------- ----------
Net cash from / (used in)
operating activities 1,466 909 1,242
Tax paid (28) (262) (191)
Net cash used in operating
activities 1,438 647 1,051
------------------------------- ---------- ---------- ----------
INVESTING ACTIVITIES
Purchase of property, plant
and equipment (12) (4) (13)
Development costs (51) (66) (174)
Purchase of investments - - (302)
Related party repayment
of loan (9)
------------------------------- ---------- ---------- ----------
Net cash from/(used in)
investing activities (63) (70) (498)
------------------------------- ---------- ---------- ----------
FINANCING ACTIVITIES
Non-controlling interest
investment - 33 14
Dividend paid - - (569)
------------------------------- ---------- ---------- ----------
Net cash from/ (used in)
financing activities - 33 (555)
------------------------------- ---------- ---------- ----------
Net (decrease)/increase
in cash and cash equivalents 1,375 610 (3)
Cash and cash equivalents
at beginning of the period 5,463 5,466 5,466
Cash and cash equivalents
at end of the period 6,838 6,076 5,463
------------------------------- ---------- ---------- ----------
Notes to the interim statement
For the 6 months ended 30 September 2020
1. General information
Octagonal plc is a company incorporated in the England and Wales
with number 6214926, and whose registered office is: 2(nd) Floor, 2
London Wall Buildings, London EC2M 5PP, under the Companies Act
2006. The Company's main activity is that of a financial services
business offering a wide range of services to institutional, family
office and high net worth clients.
The Company's functional currency is Sterling. The Company's
financial statements are presented in Sterling, which is the
Company's presentational currency.
2. Basis of preparation
The financial information set out in this interim report for the
six months ended 30 September 2020 is unaudited and does not
constitute statutory accounts as defined in Section 434 of
Companies Act (2006).
The Company's statutory financial statements for the period
ended 31 March 2020, prepared under IFRS, have been filed with the
Registrar of Companies. The auditor's report on those financial
statements was unqualified and did not contain a statement under
section 498 (2) or (3) of the Companies Act 2006.
These financial statements have been prepared on a going concern
basis under the historical cost convention. The Directors believe
that the going concern basis is appropriate for the preparation of
these interim financial statements as the Company is in a position
to meet all its liabilities as they fall due. These interim
financial statements for the six months to 30 September 2020 were
approved by the Board on 11 January 2020.
3. Earnings per share
The basic earnings per share is based on the profit for the year
divided by the weighted average number of shares in issue during
the year. The weighted average number of ordinary shares for the
period ended year ended 30 September 2020 assumes that all shares
have been included in the computation based on the weighted average
number of days since issue.
Unaudited Unaudited Audited
------------ ------------ ------------
30-Sep-20 30-Sep-19 31-Mar-20
------------------------------
GBP GBP GBP
------------------------------ ------------ ------------ ------------
Profit attributable to
owners of the Group 1,862,332 1,220,000 343,000
------------------------------ ------------ ------------ ------------
Weighted average number
of ordinary shares in issue
for basic 568,576,886 568,576,886 568,576,886
------------------------------ ------------ ------------ ------------
Weighted average number
of ordinary shares in issue
for fully diluted earnings 581,880,940 582,326,886 581,880,940
------------------------------ ------------ ------------ ------------
Earnings per share (pence
per share)
Basic 0.328 0.215 0.06
Fully diluted 0.320 0.210 0.06
------------------------------ ------------ ------------ ------------
4. Dividend and post balance sheet events
Post year-end GIS, has seen increased market volatility and
uncertainty as a result of the impact of Covid-19. This has been
the greatest challenge to the financial service industry since the
financial crisis of 2008. During these periods of increased
volatility, the board of GIS took steps to limit client exposure to
riskier assets and strengthen our liquidity resources. The strategy
in which we chose to navigate the period, given the conditions, is
a testament to the strength of our business model. Our investments
in technology has enabled us to continue to serve our clients
around the World, with all employees working from home, offering
clients a seamless 24-hour 5 day a week service from London, Mumbai
and Hong Kong. The Board is proud of the hard work and
conscientiousness of the team, with many facing personal challenges
given the impact of the Covid-19 lockdown. Whilst largely relating
to the pre-crisis period, the 2020 results demonstrate the
stability of our business model and protection of our stakeholders'
interests. Our balance sheet, capital and liquidity position remain
strong and we remain well positioned to facilitate client activity
during these uncertain times. For now, our focus remains on the
welfare of our employees and the financial soundness of the
business.
In December 2020, GIS declared and paid a dividend of
GBP1,200,000 to its parent Company Octagonal plc. This dividend
received by Octagonal plc created sufficient distributable reserves
for Octagonal Plc to pay the interim dividend to its members on 12
January 2021.
The Board concluded that there is no need to continue with the
cost, management time and the legal and regulatory obligations
associated with maintaining the Company's listing as long as
Shareholders interests are protected and that there is no risk of
Shareholders losing any tax advantages. The Company has not raised
any funds since the listing in 2015. Should the Company need to
raise funds in the future, the Board believe that the Private
Equity market would value the Company based on enterprise
value.
The Company published an announcement on 17(th) December 2020
stating that it will distribute to shareholders a circular
containing details of the proposed cancellation and to seek the
approval of shareholders to the proposed cancellation of the
admission of its ordinary shares to trading on AIM at a General
Meeting.
5. Distribution
The half yearly report for the six-month period ended 30
September 2020 will shortly be available on the Company's website (
www.octagonalplc.com ) or directly from the Company at its
registered address.
-ends-
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END
IR EAFFAFAEFEAA
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January 13, 2021 02:00 ET (07:00 GMT)
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