M&L Property & Assets Plc
Interim Report
For the six months ended
30th June 2015
(Unaudited)
Key Highlights for the Period
Chairman's Statement
Following the approval at the 2015 Annual General Meeting, the
Company has now changed its name from Pactolus Hungarian Property
plc to M&L Property & Assets plc.
During the period to 30th June
2015, the Group has managed to reduce its administrative
expenses by 2 per cent to €94,527 compared to €96,119 reported in
last year’s interim report.
Hungary’s residential property market has marginally recovered
since 2014 however the outlook remains unclear to us.
The Group has seen an increase in rental income of 0.4 per cent
relative to the same six monthly period in 2014, benefitting from
an improved rent book in the second quarter of 2015.
As mentioned in previous reports, reduced revenue income as the
Group sells further properties, coupled with relatively fixed
direct costs makes it difficult for the group to make a positive
contribution.
We have diversified from our main Hungarian property agent and
are working with a further two agents, thus aiming to maximise the
returns from our portfolio.
Working alongside more agents, we successfully completed the
sale of seven properties in the 6 months to 30th
June 2015.
Reported net assets as at 30th June 2015 were €5.1m, which equates to
35 pence per share. This figure
has been depreciated predominantly by the strengthening of
Sterling.
Our strategy for the remainder of the year is to continue to
work on reducing the Group’s costs and to sell further properties
from the portfolio, using the sales proceeds to reduce debt.
B. Miller
Non–Executive Chairman
16th September
2015.
Condensed Consolidated Income
Statement
|
|
6
months to 30th June
2015
€
Unaudited |
6
months to 30th June
2014
€
Unaudited |
Year
ended
31st December 2014
€
Audited |
Continuing operations |
|
|
|
|
Rental
income and related fees |
|
248,361 |
247,406 |
493,473 |
Direct
operating expenses |
|
(105,949) |
(88,756) |
(236,090) |
Gross
profit |
|
142,412 |
158,650 |
257,383 |
Administrative expenses |
|
(94,527) |
(96,119) |
(177,140) |
Operating profit |
|
47,885 |
62,531 |
80,243 |
Finance
income |
|
125 |
237 |
412 |
Finance
costs |
|
(37,369) |
(60,804) |
(115,896) |
Profit on
disposal of investment properties |
|
1,886 |
- |
- |
Profit on
disposal of listed investment |
|
12 |
967 |
967 |
Gain on
revaluation of investment properties |
|
963 |
- |
26,458 |
Unrealised
profit on listed investment |
|
152 |
- |
(99) |
|
|
|
|
|
|
|
|
|
|
Profit/(loss) from continuing operations |
13,654 |
2,931 |
(7,915) |
Exceptional items |
|
- |
- |
- |
Profit/(loss) before taxation |
|
13,654 |
2,931 |
(7,915) |
Tax
expense |
|
- |
- |
(802) |
Net
profit/(loss) attributable to equity shareholders |
|
13,654 |
2,931 |
(8,717) |
|
|
|
|
|
Other
comprehensive loss |
|
|
|
|
Exchange
differences on translating foreign operations |
(6,200) |
(35,578) |
(62,316) |
Total comprehensive
profit/(loss) for the period |
|
7,454 |
(32,647) |
(71,033) |
|
|
|
|
|
Profit/(loss) attributable to equity shareholders |
13,654 |
2,931 |
(8,717) |
Total
comprehensive profit/(loss) attributable to equity
shareholders |
7,454 |
(32,647) |
(71,033) |
Profit/(loss) per ordinary Share |
|
0.13
cent |
0.03
cent |
(0.08)
cent |
Weighted average number of shares |
|
10,316,624 |
10,316,624 |
10,316,624 |
|
|
|
|
|
|
Condensed Consolidated Statement of
Financial Position
|
|
As at
30th June
2015 |
|
As at
30th June
2014 |
|
As at
31st December
2014 |
|
|
€ |
|
€ |
|
€ |
|
Notes |
Unaudited |
|
Unaudited |
|
Audited |
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
Investment properties |
|
4,858,111 |
|
6,773,004 |
|
5,355,611 |
Property under development |
|
317,804 |
|
317,804 |
|
317,804 |
Property, plant & equipment |
|
20,300 |
|
28,420 |
|
24,360 |
Listed investment |
|
906 |
|
- |
|
904 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,197,121 |
|
7,119,228 |
|
5,698,679 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Investment properties |
|
615,625 |
|
171,315 |
|
1,615,166 |
Trade and other receivables |
|
146,613 |
|
108,929 |
|
61,775 |
Cash and cash equivalents |
|
742,831 |
|
183,403 |
|
233,906 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,505,069 |
|
463,647 |
|
1,910,847 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
6,702,190 |
|
7,582,875 |
|
7,609,526 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Trade and other payables |
|
352,938 |
|
229,083 |
|
257,187 |
Secured loan |
|
- |
|
1,150,000 |
|
- |
Other loans |
5 |
1,274,360 |
|
1,097,968 |
|
2,284,901 |
|
|
1,627,298 |
|
2,477,051 |
|
2,542,088 |
Net assets |
|
5,074,892 |
|
5,105,824 |
|
5,067,438 |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Share capital |
6 |
150,226 |
|
150,226 |
|
150,226 |
Capital redemption reserve |
|
222,715 |
|
222,715 |
|
222,715 |
Share premium |
|
1,046,894 |
|
1,046,894 |
|
1,046,894 |
Merger reserve |
|
(109,193) |
|
(109,193) |
|
(109,193) |
Translation reserve |
|
(1,584,718) |
|
(1,551,780) |
|
(1,578,518) |
Retained earnings |
|
5,348,968 |
|
5,346,962 |
|
5,335,314 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity |
|
5,074,892 |
|
5,105,824 |
|
5,067,438 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value per share |
|
49.2 cents |
|
49.5 cents |
|
49.1 cents |
Number of ordinary
shares |
|
10,316,624 |
|
10,316,624 |
|
10,316,624 |
Condensed Consolidated Statement of
Changes in Equity
Unaudited |
Six
months ended 30th June 2015 |
|
|
|
|
|
|
|
|
|
Share |
Capital |
Share |
Merger |
Translation |
Retained |
|
|
Capital |
Redemption |
Premium |
Reserve |
Reserve |
Earnings |
Total |
|
€ |
€ |
€ |
€ |
€ |
€ |
€ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at
1st January 2015 |
150,226 |
222,715 |
1,046,894 |
(109,193) |
(1,578,518) |
5,335,314 |
5,067,438 |
Changes in equity
for 2015 |
|
|
|
|
|
|
|
Profit for the
period |
- |
- |
- |
- |
- |
13,654 |
13,654 |
Exchange difference on translating
foreign operations |
- |
- |
- |
- |
(6,200) |
- |
(6,200) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,226 |
222,715 |
1,046,894 |
(109,193) |
(1,584,718) |
5,348,968 |
5,074,892 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited |
Six
months ended 30th June 2014 |
|
|
|
|
|
|
|
|
|
Share |
Capital |
Share |
Merger |
Translation |
Retained |
|
|
Capital |
Redemption |
Premium |
Reserve |
Reserve |
Earnings |
Total |
|
€ |
€ |
€ |
€ |
€ |
€ |
€ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as at 1st
January 2014 |
150,226 |
222,715 |
1,046,894 |
(109,193) |
(1,516,202) |
5,344,031 |
5,138,471 |
Changes in equity
for 2014 |
|
|
|
|
|
|
|
Profit for the
period |
- |
- |
- |
- |
- |
2,931 |
2,931 |
Exchange difference on translating
foreign operations |
- |
- |
- |
- |
(35,578) |
- |
(35,578) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,226 |
222,715 |
1,046,894 |
(109,193) |
(1,551,780) |
5,346,962 |
5,105,824 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audited |
Year
ended 31st December 2014 |
|
|
|
|
|
|
|
|
|
Share |
Capital |
Share |
Merger |
Translation |
Retained |
|
|
Capital |
Redemption |
Premium |
Reserve |
Reserve |
Earnings |
Total |
|
€ |
€ |
€ |
€ |
€ |
€ |
€ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
as at 1st January 2014 |
150,226 |
222,715 |
1,046,894 |
(109,193) |
(1,516,202) |
5,344,031 |
5,138,471 |
Changes
in equity for 2014 |
|
|
|
|
|
|
|
Loss for
the year |
- |
- |
- |
- |
- |
(8,717) |
(8,717) |
Exchange
difference on translating foreign operations |
- |
- |
- |
- |
(62,316) |
- |
(62,316) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150,226 |
222,715 |
1,046,894 |
(109,193) |
(1,578,518) |
5,335,314 |
5,067,438 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Cash Flow
Statement
|
|
6
months to to |
6
months to |
Year
ended |
|
|
30th June |
30th June |
31st December |
|
|
2015 |
2014 |
2014 |
|
|
€ |
€ |
€ |
|
|
Unaudited |
Unaudited |
Audited |
Cash flows from
operating activities |
|
|
|
|
Net profit/(loss) |
|
13,654 |
2,931 |
(8,717) |
Adjusted for: |
|
|
|
|
Profit on sale of
investment properties |
|
(1,886) |
- |
- |
Unrealised gain on
investment property |
|
(963) |
- |
(26,458) |
Profit on sale of
listed investment |
|
(12) |
(967) |
(967) |
Unrealised gain on
listed investment |
|
(152) |
- |
99 |
Depreciation and
impairment |
|
4,060 |
4,060 |
8,120 |
Interest income |
|
(125) |
(237) |
(412) |
Bank loan interest
expense |
|
- |
29,666 |
56,180 |
Other loans interest
expense |
|
37,369 |
31,138 |
59,716 |
Foreign exchange
(losses)/gains |
|
(2,376) |
2,189 |
(28,825) |
Income tax
expense |
|
- |
- |
802 |
(Increase)/decrease in
receivables |
|
(84,837) |
(10,341) |
36,813 |
Increase/(decrease) in
payables |
|
52,570 |
14,171 |
58,116 |
Cash generated from
operating activities |
|
17,302 |
72,610 |
154,467 |
Interest paid |
|
- |
(29,742) |
(57,950) |
Income taxes
refunded/(paid) |
|
5,812 |
1,619 |
(2,142) |
Net
cash generated from operating activities |
23,114 |
44,487 |
94,375 |
|
|
|
|
|
Cash flows from
investing activities |
|
|
|
|
Net
receipts from sales of investment properties |
1,499,890 |
- |
- |
Purchase
of listed investments |
- |
(8,155) |
(9,513) |
Receipt
from sale of listed investments |
161 |
9,122 |
9,477 |
Bank interest
received |
|
125 |
237 |
412 |
Net
cash generated from investing activities |
1,500,176 |
1,204 |
376 |
|
|
|
|
|
Cash flows from
financing activities |
|
|
|
|
Bank loan
repayment |
|
- |
- |
(1,150,000) |
Other loans
(repaid)/received |
|
(1,010,541) |
- |
1,147,167 |
Net
cash used in financing activities |
(1,010,541) |
- |
(2,833) |
|
|
|
|
|
Net
increase in cash and cash equivalents |
512,749 |
45,691 |
91,918 |
Exchange movement on
foreign subsidiaries translation |
|
(3,824) |
(37,767) |
(33,491) |
Cash and
cash equivalents as at 1st January |
233,906 |
175,479 |
175,479 |
Cash
and cash equivalents as at period end |
742,831 |
183,403 |
233,906 |
Notes to the Interim Report
For the six months ended
30th June 2015
- Basis of preparation
These interim condensed consolidated
financial statements for the six months to 30th
June 2015 have not been audited or
reviewed and do not constitute statutory accounts within the
meaning of section 435 of the Companies Act 2006. They have
been prepared in accordance with the Group’s accounting policies as
set out in the Group’s latest annual financial statements for the
year ended 31st December
2014 and are in compliance with IAS 34 “Interim Financial
Reporting”. These accounting policies are drawn up in
accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union and the Isle of Man Companies Acts
1931 to 2004.
The comparative figures for the
financial year ended 31st December 2014 are not the statutory accounts for
that financial year but are a condensed version of those accounts
prepared under IFRS which have been reported on by the Group’s
auditors.
This interim report was approved for
issue by the Board of Directors on 16th September 2015.
2. Going concern
The directors are satisfied that the
Group has adequate resources in place to manage its risks after
having reviewed its financial position and cash flow
forecast. The impact of any potential tenancy failures and
the continued volatility in the economy has been taken into
account. The directors are satisfied that the Group will
continue in operational existence for the foreseeable future and
therefore continue to adopt the going concern basis in preparing
this interim report.
3. Operating segments
The Group operates in a single
reporting segment under the classification of properties held for
investment. The entire Group’s revenue and property assets
are derived from and located in a single geographical location,
Hungary.
The profit to 30th
June 2015 of €13,654 (2014: profit
€2,931) is materially all derived from the operations of managing
the Group’s investment properties. It is principally involved
in acquiring, developing, selling and letting investment property
under short to medium term contracts.
4. Material agreements
Midas Investment Management Ltd
(“MIM”) was appointed the Group's Asset Manager on 17 March 2006. The Asset Manager’s charges are
summarised as follows:
- A flat annual fee of €55,000 per annum plus VAT;
- A quarterly fee on all property rented out of 12 per cent of
the net rental income plus VAT; and
- A commission on sales of up to 4 per cent plus VAT of sales
proceeds. For the avoidance of doubt, MIM will only charge a
fee on sales if it is involved in procuring the buyer and only if
the commission charged by others when aggregated with MIM's
commission does not exceed 5 per cent plus VAT.
5. Other Loans
The Group's loan facility with
M&M Investment Company plc (its parent company) has reduced
from €2,284,901 to €1,274,360. The loan will be fully repaid once
further properties are sold in line with the Group’s strategy.
6. Share capital
Ordinary Shares of 1p each issued and fully paid |
|
Number |
2015 |
Number |
2014 |
|
of shares |
€ |
of shares |
€ |
Balance as at
1st January & 30th June |
10,316,624 |
150,226 |
10,316,624 |
150,226 |
The share buy back facility was
renewed at the Company’s annual general meeting on 25th
June 2015 giving the directors a new
authority to acquire up to a further 2,950,774 shares (29 per cent)
of the Company’s then issued share capital. There have been
no further acquisitions since the AGM date.
7. Events after the balance sheet
date
There has been no significant events
since the reporting period date.
Interim report
This Interim Report and Accounts will
be available from the Company’s registered address at Jubilee
Buildings, Victoria Street, Douglas,
Isle of Man, IM1 2SH and on the Company’s website
www.mandlpaplc.com.
For further information, please contact:
Asset Manager:
Midas Investment Management Limited
Tel: +44 (0) 161 228 1709
Nominated Adviser:
Liam Murray/Jo Turner
Cairn Financial Advisers LLP
Tel: +44 (0) 20 7148 7900