TIDMARGP
29 September 2016
Alpha Returns Group Plc
("Alpha Returns" or "the Company")
Unaudited Interim Results for the Six Months Ended 30 June 2016
Alpha Returns Group Plc today announces its unaudited interim results
for the six months ended 30 June 2016.
Director's Statement
Review of the Six Month Period ended 30 June 2016
Alpha Returns is an investment company which operates in the Asia
Pacific (APAC) region and is based in Hong Kong. The Company aims to
create long-term shareholder value through early stage investments in
high-growth Asian economies.
The Company's Investing Policy is set out in full at the end of this
statement in Note 5 and on the Company's website at alpharet.com/rule26.
Financial Review
The unaudited results for the six month period ended 30 June 2016 show a
profit on continuing operations after taxation of GBP423,923 (30 June
2015: GBP54,914), after including a gain on the disposal of the
Company's investment in Riche Bright Securities Ltd. ("RBSL") of
GBP665,035. The profit per share was 0.06p (30 June 2015: loss 0.02p)
from continuing operations. After a gain on translation of foreign
subsidiaries of GBP204,219 (2015: loss GBP61,379) and loss from
discontinued operations of GBP220,633 (2015: nil), profits after tax was
GBP407,509 (2015: loss GBP6,645) of which GBP263,192 (2015: loss
GBP94,536) was attributable to equity holders of the Company.
Total revenue was GBP1,005,068 (30 June 2015: GBP1,728,423).
During the period the Company issued 32,142,857 new ordinary shares to
complete the acquisition of a 30% interest in Oriental Ventures Limited.
At the end of the period under review net assets were GBP4,377,100, of
which GBP4,210,525 were attributable to equity shareholders of the
Company (31 December 2015: GBP4,222,435, attributable GBP3,049,490 and
30 June 2015: GBP4,624,679, attributable GBP3,689,050) giving net assets
attributable to equity shareholders of approximately 0.6p per share.
Included in this amount are cash and cash equivalents of GBP2,159,193,
an increase of over GBP1.75 million from that available at 31 December
2015.
Review of Operations
On 31 May 2016 the Company, through its then 70 per cent. owned
joint-venture investment vehicle Riche Bright Group Limited ("RBG"),
completed the disposal of its shareholding in RBSL for a total cash
consideration of HK$33.17 million.
RBG subsequently repurchased its own shares from its 30% minority
shareholders at attributable net asset value, thereby becoming a wholly
owned subsidiary available for use as an intermediate bare holding
company for future investments in accordance with the Company's
investing policy.
The Company's investment portfolio presently includes a 52.5% interest
in Singapore based Telistar, a 30% investment in PRC based Maxlife, and
a conditional 50% investment in PRC based Jesoft.
Telistar has continued to perform to expectations and is on track to
grow revenues and profits from the previous year. Since the adoption of
its new business model, Maxlife has been renamed Shenzhen Maxlife
Lifestyle Commerce Co., Ltd. Maxlife continues grow its e-commerce
platform through the expansion of product and service offerings.
The Company announced in July its intention to terminate the investment
in Jesoft following the non-satisfaction of conditions precedent past
the extended long-stop date. The Directors expect to conclude a
termination agreement with the vendor in the near future with the return
of 17,394,054 ordinary shares previously issued to the vendor as initial
consideration.
Post Period Events
After the end of the period, on 31 August 2016, the Company's wholly
owned subsidiary ARGP Investments Limited acquired a 6.67% interest in
New Trend Lifestyle Group PLC (AIM: NTLG) for GBP100,000 at a price of
1.2p per share.
Board Changes
During the period non-executive director Eric Leung resigned to focus on
other commitments and post period end the resolution to re-appoint Tony
Drury was not passed by shareholders. The Board thanks them both for
their contributions and continues to search for suitable replacements.
Corporate Governance
The Company operates Audit, AIM Compliance, Nominations and Remuneration
committees. The roles and composition of these committees are kept under
regular review.
Risk Assessment
The Directors consider that the main risk is a loss of some or all value
at one or more of its investee companies. The Executive Directors
maintain a close liaison with the management of each company to limit,
as far as possible, this exposure to risk, whilst not themselves being
involved in the day-to-day operations of investee companies.
Outlook
Following UK's historic EU referendum, we have seen a sharp drop in the
value of sterling which resulted in a boost in the value of the
Company's assets which are mainly denominated in foreign currencies but
are reported in sterling. Whilst we expect to see continued global
uncertainty and market volatility, the Board believes that Alpha Returns
will be able to continue to identify high quality investments in the
Asia Pacific region.
Christopher Neo
Executive Director
29 September 2016
A copy of this interim report will shortly be available on the Company's
website at alpharet.com/rule26
For further information please call:
Alpha Returns Group Plc
Christopher Neo, Executive Director 0203 286 6388
ZAI Corporate Finance
Peter Trevelyan-Clark / Tim Cofman 0207 060 2220
Peterhouse Corporate Finance (Broker)
Duncan Vasey / Lucy Williams 0207 220 9797
Statement of Comprehensive Income
For the six months ended 30 June 2016
Unaudited Unaudited Audited
6 Months
to 30 6 Months to 12 months
June 30 June to Dec
2016 2015 2015
Note GBP GBP GBP
Continuing operations
Revenue 1,005,068 1,728,423 2,256,770
Cost of sales (666,172) (754,136) (1,388,507)
Gross profit 338,896 974,287 868,263
Administration costs (575,280) (1,010,609) (1,251,988)
Share based payments (6,241) (67,000) (134,000)
Other income 53 201,224 28,880
Other losses - - (37,000)
Operating profit/(loss) (242,572) 97,902 (525,845)
Gain on disposal of investments 665,035 - -
Profit/(loss) before financing 422,463 97,902 (525,845)
Finance cost - - (1)
Finance income 236 5 6
Investment income 58 226 6,515
Gain on foreign exchange 6,506 1,895 3,167
Profit/(loss) on continuing operations before taxation 429,263 100,028 (516,158)
Taxation (5,340) (45,114) (6,193)
Profit/(loss) on continuing operations after taxation 423,923 54,914 (522,351)
Gain on translation of foreign subsidiaries 204,219 (61,379) 19,689
Discontinued operations
(Loss)/profit from operations reclassified as held
for sale (220,633) - 5,258
Profit/(loss) after taxation and total comprehensive
income/(expense) 407,509 (6,465) (497,404)
Attributable to:
Equity holders of the company 263,192 (94,536) (554,320)
Non- controlling interests 144,317 88,071 56,916
Basic and diluted profit/(loss) per share
- Basic and diluted - continuing operations 3 0.06p (0.02p) (0.09p)
- Basic and diluted - operations reclassified as held
for sale (0.03p) 0.00p 0.00p
- Total basic and diluted profit/(loss) per share
0.03p (0.02p) (0.09p)
Statement of Financial Position
As at 30 June 2016
Unaudited Unaudited Audited
30 June 30 June 31 December
2016 2015 2015
GBP GBP GBP
Assets
Non-Current Assets
Property, plant and equipment 120,119 131,103 107,477
Intangible assets 638,780 1,317,457 1,276,407
Investments 1,243,785 581,586 790,883
Investments in associate - 295,699 -
2,002,684 2,325,845 2,174,767
Current Assets
Trade and other receivables 492,743 1,937,290 620,260
Financial assets available for sale - 111,379 1,860,773
Cash and cash equivalents 2,159,193 1,280,138 394,963
2,651,936 3,328,807 2,875,996
Total Assets 4,654,620 5,654,652 5,050,763
Liabilities
Liabilities of disposal group classified
as held for sale - - 107,926
Trade and other payables 277,520 1,029,973 720,402
277,520 1,029,073 828,328
Total Liabilities 277,520 1,029,973 828,328
Net Assets 4,377,100 4,624,679 4,222,435
Equity
Share capital 1,354,838 1,351,624 1,351,624
Share premium 7,516,010 7,069,224 7,069,224
Revaluation reserve 11,176 - 8,275
Share option reserve 267,999 194,758 261,758
Foreign currency translation reserve 343,510 33,896 109,975
Profit and loss account (5,283,008) (4,960,452) (5,751,366)
Attributable to equity holders of the
company 4,210,525 3,689,050 3,049,490
Non-controlling interests 166,575 935,629 1,172,945
Total equity 4,377,100 4,624,679 4,222,435
Statement of Changes in Equity
For the six months ended 30 June 2016
Profit
Revalua- Share Foreign and Non-
Share Share tion option currency loss Total controlling
capital premium reserve reserve reserve account equity interest Total
GBP GBP GBP GBP GBP GBP GBP GBP GBP
Balance at 1
Jan 2015 1,348,580 6,525,522 - 127,758 87,870 (4,987,944) 3,101,786 1,166,658 4,268,444
Shares issued
in year 3,044 543,702 - - - - 546,746 - 546,746
Share based
payment
charge - - - 67,000 - - 67,000 - 67,000
Foreign
Currency
reserve - - - - (53,974) (53,974) (7,405) (61,379)
Acquisitions
during the
year - - - - - 68,054 68,054 (319,100) (251,046)
Profit for the
6 months to
30 June 2015 - - - - - (40,562) (40,562) 95,476 54,914
-
Balance at 30
June 2015 1,351,624 7,069,224 - 194,758 33,896 (4,960,452) 3,689,050 935,629 4,624,679
Balance at 1
Jan 2015 1,348,580 6,525,522 - 127,758 87,870 (4,987,944) 3,101,786 1,166,658 4,268,444
Prior year
adjustment - - - - - (255,050) (255,050) 255,050 -
Shares issued
in year 3,044 543,702 - - - - 546,746 - 546,746
Share based
payment
charge - - - 134,000 - - 134,000 - 134,000
Revaluation of
investment - - 8,275 - - - 8,275 - 8,275
Foreign
Currency
reserve - - - - 22,105 - 22,105 13,421 35,526
Acquisitions
during the
year - - - - - 65,637 65,637 (319,100) (253,463)
Loss for the
year - - - - - (574,009) (574,009) 56,916 (517,093)
Balance at 31
Dec 2015 1,351,624 7,069,224 8,275 261,758 109,975 (5,751,366) 3,049,490 1,172,945 4,222,435
Shares issued
in the
period 3,214 446,786 - - - - 450,000 - 450,000
Share based
payment
charge - - 6,241 - - 6,241 - 6,241
Revaluation of
investment - - 2,901 - - - 2,901 - 2,901
Foreign
Currency
reserve - - - - 233,535 - 233,535 (29,316) 204,219
Share buyback - - - - - (23,900) (23,900) (973,795) (997,695)
Profit for the
period and
total
comprehensive
income - - - - - 492,258 492,258 (3,259) 488,999
Balance at 30
June 2016 1,354,838 7,516,010 11,176 267,999 343,510 (5,283,008) 4,210,525 166,575 4,377,100
Statement of Cash Flow
For the six months ended 30 June 2016
Unaudited Unaudited Audited
6 Months 6 Months 12 months
to June to June to December
2016 2015 2015
GBP GBP GBP
Cash flows from operating activities
Loss after taxation 423,923 54,914 (435,100)
Adjustments for:
Depreciation and amortisation 6,172 9,489 20,451
Profit on sale of property, plant and equipment - - 3,854
Share based payments 6,241 67,000 134,000
(Gain)/Loss on disposal of investment (665,035) - 37,000
Dividend income - - (88,383)
(Increase)/Decrease in trade and other receivables 789,411 (77,054) 951,826
Increase/(Decrease) in trade and other payables (849,031) (482,364) (815,618)
Foreign exchange differences (86,406) 5,423 (24,982)
Taxation 5,340 45,114 43,293
Income tax paid (8,867) (24,902) (14,844)
Net cash used in operating activities (378,252) (402,380) (188,503)
Cash flows from investing activities
Purchase of property, plant and equipment (4,675) (38,010) (80,576)
Disposal of property, plant and equipment - - 102,221
Purchase of investments - - (75,617)
Disposal of investments 2,709,678 - -
Purchase of financial assets - (114,907) -
Net cash used in investing activities 2,705,003 (152,917) (53,972)
Cash flows from financing activities
Net proceeds from issue of share capital - 847 -
Share buyback (808,811) - -
Net cash generated from financing activities (808,811) 847 -
Net increase/(decrease) in cash and cash equivalents 1,517,940 (554,450) (242,475)
Cash and cash equivalents at beginning of period 394,963 1,848,183 1,848,183
Cash and cash equivalents in disposal group at beginning
of period 15,950 - (1,287,573)
Effect of foreign exchange rate changes on cash and
cash equivalents 230,340 (13,595) 76,828
Cash and cash equivalents at end of period 2,159,193 1,280,138 394,963
Notes to the Interim Results
For the six months ended 30 June 2016
1. General information
The financial information set out in this consolidated interim report
for the six months ended 30 June 2016 and the comparative figures for
the six months ended 30 June 2015 are unaudited. The financial
information for the six months ended 30 June 2016 does not constitute
statutory accounts as defined in Section 434 of the Companies Act 2006.
The Group's statutory financial statements for the year ended 31
December 2015, prepared under International Financial Reporting
Standards (IFRS), received an unmodified audit report, did not contain
statements under sections 498(2) or section 498(3) of the Companies Act
2006 and have been filed with the Registrar of Companies.
1. Basis of Preparation
The 30 June 2016 consolidated interim financial statements of Alpha
Returns Group Plc are for the six months ended 30 June 2016. 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 Group prepared under IFRS for the year ended
31 December 2015.
The comparative figures for the six months ended 30 June 2015 have been
extracted from the accounting records of the Group and were prepared on
a consistent basis with the results presented for the year ended 31
December 2015 and have been neither reviewed nor audited by the Group's
auditors.
The accounting policies applied are consistent with those of the
financial statements for the year ended 31 December 2015, as described
in those financial statements and as expected to be adopted in the
financial statements for the year ended 31 December 2016.
1. Earnings per share
The basic earnings/(loss) per share is calculated by dividing the
profit/(loss) attributable to equity shareholders by the weighted
average number of shares in issue.
In the six months to 30 June 2016, the exercise price of the options and
warrants exceeded the average market price of ordinary shares in the
period, thus there is no dilutive effect on the weighted average number
of ordinary shares or the diluted earnings per share.
Earnings per share Unaudited Unaudited Audited
12 months
6 Months to 6 Months to to December
June 2016 June 2015 2015
Net profit/(loss) for the period attributable to equity
owners of the parent 263,192 (94,536) (554,320)
Add: loss/(profit) from discontinued operations 220,633 - (5,258)
Non-controlling interest in discontinued operations (66,190) - 1,577
Net profit/(loss) for the period attributable to equity
owners of the parent from continuing operations 417,635 (94,536) (558,001)
Weighted average number of shares in issue 676,959,503 649,515,679 654,029,897
Basic and diluted earnings per share 0.06p (0.02p) (0.09p)
4. Investments held at fair value through profit and loss
Unaudited Unaudited Audited
6 Months to 6 Months to June 12 months to
June 2016 2015 December 2015
Non-current
portion
Fair value at 1
January 2016 790,883 583,720 583,720
Acquisitions 450,000 - 244,163
Net gain on
disposal of
investments - (2,134) -
Impairment review 2,902 - (37,000)
1,243,785 581,586 790,883
Current portion
Acquisitions - 111,379 -
Fair value at 30
June 2016 1,243,785 692,965 790,883
Categorised as:
Level 1 - quoted
investments 21,652 177,452 18,750
Level 3 - unquoted
investments 1,222,133 515,513 772,133
The table of investments sets out the fair value measurements using the
IFRS 7 fair value hierarchy. Categorisation within the hierarchy has
been determined on the basis of the lowest level of input that is
significant to the fair value measurement of the relevant asset as
follows:
Level 1 - valued using quoted prices in active markets for identical
assets.
Level 2 - valued by reference to valuation techniques using observable
inputs other than quoted prices included within Level 1.
Level 3 - valued by reference to valuation techniques using inputs that
are not based on observable market data.
5. Investing Policy
With its Asia-centric focus, Alpha Returns Group Plc will actively seek
to acquire and consolidate holdings in companies operating in
high-growth Asian economies, with the intention to create and sustain
long-term value. The Company may invest in any business sector within
its targeted geographic focus.
The Directors see Asia- Pacific as having considerable growth potential
for the foreseeable future and many of the prospects they have
identified are in this region. The Directors will focus on early stage
investments and the opportunities would be generally have some or all of
the following characteristics, namely:
-- A majority of their revenue derived from the Asia-Pacific, and strongly
positioned to benefit from the region's growth;
-- A trading history which reflects past profitability or potential for
significant capital growth going forward; and
-- Where all or part of the consideration could be satisfied by the issuance
of new Ordinary Shares or other securities in the Company. The Company
does not currently intend to fund any investments with debt or other
borrowings but may do so if appropriate.
continued.
5. Investing Policy (continued)
It is anticipated that the main driver of success for the Company will
be its focus, during the investment screening process, on the management
involved in the potential investee companies and the potential value
creation that the team of people is capable of realising. The Company
will identify and assess potential investment targets and where it
believes further investigation is required, intends to appoint
appropriately qualified advisers to assist in the due diligence process.
The Company intends to be an active investor, and the Directors will
seek representation on the board of the investee company where they feel
that an investee company would benefit from their skills and expertise.
Investments may be made in all types of assets falling within the remit
of the Investing Policy and there will be no sector-driven investment
restrictions. Investments may be made in either quoted or unquoted
companies and structured as a direct acquisition, joint venture or as a
direct interest in a project.
New investments will be held for the medium to longer term, although
shorter term disposal of any investments cannot be ruled out. There will
be no limit on the number of projects into which the Company may invest
and the Company's financial resources may be invested in a number of
propositions or in just one investment, which may be deemed to be
reverse takeover pursuant to Rule 14 of the AIM Rules. Where the Company
builds a portfolio of related assets it is possible that there may be
cross-holdings between such assets.
The Company intends to deliver Shareholder returns principally through
capital growth rather than capital distributions via dividends.
The Directors believe that their broad collective business and investing
experience in the areas of investment and trading natural resources will
assist in the identification and evaluation of suitable opportunities
and will enable the Company to achieve its investing objectives.
This announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Alpha Returns Group plc via Globenewswire
http://www.alpharet.com
(END) Dow Jones Newswires
September 29, 2016 07:36 ET (11:36 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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