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AFRI - Afriag Global News Story

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Sector
Industrials
Size
Micro Cap
Market Cap £1.90m
Enterprise Value £667k
Revenue £n/a
Position in Universe 1758th / 1816

AfriAg Global Plc: Interim Results to 30 June 2019

Thu 26th September, 2019 7:00am
For immediate release   26 September 2019 

AfriAg Global PLC
(“AfriAg Global”, the “Group” or the “Company”)

Unaudited Interim Results for the six months to 30 June 2019

AfriAg Global PLC (NEX: AFRI), today announces its interim results for the
6-month period ended 30 June 2019.

Investment policy change to include Medical Cannabis investments:

On 12 September 2018, shareholder approval was obtained at a general meeting
for the expansion of the Company’s investment strategy to include medicinal
cannabis. The Company has now expanded its existing investment strategy to
also include investments in companies, projects or products that are
progressing research in and development of medicinal cannabis and its
derivatives, producing or cultivating medicinal cannabis, producing or
supplying products derived from or related to cannabis (including, but not
limited to, hemp and cannabidiol products); and/or commercialising or
marketing medicinal cannabis and its derivatives. The Company sees tremendous
opportunities in the sector.

The Company has already made a number of investments into this medical
cannabis sector and going forward, the Company is likely to increase its
exposure in this sector by looking to acquire control of certain target
companies, although it may also consider acquiring non-controlling
shareholdings in legal medical cannabis companies.

Future investments to be considered by the Company may be in either quoted or
unquoted securities and may be made by direct acquisition of an interest in
companies, partnerships or joint ventures, or direct interests in projects and
these investments can be at any stage of development. Accordingly, the
Company’s proposed future equity interests in proposed investments may range
from a minority position all the way up to 100 percent ownership. The
Directors primary objective is to achieve the best possible value over time
for Shareholders, primarily through capital growth.

The Company’s Medical Cannabis Investments:

During the period the Company announced it had agreed with Apollon Formularies
Ltd (“AFL” or “Investee”) a UK incorporated company, to: (1) subscribe
for 1.2 million shares in AFL at a price per share of £0.25 representing
approximately 0.71 per cent. of AFL’s issued share capital for an aggregate
investment amount of £300,000; and (2) subscribe for 2.8 million shares at a
price per share of £0.25 representing approximately 1.63 per cent. of AFL’s
issued share capital for an aggregate investment amount of £700,000, which
investment was approved by shareholders at the General Meeting on 19 June 2019
(the “Investments”).

The Company raised £1.25m during the period to assist with the acquisition of
this Investment and now owns a total of 4.0 million shares in AFL,
representing circa 2.325 per cent. of AFL’s issued share capital.

The Company is working diligently with its legal advisors on the complicated
and necessary due diligence to potentially acquire all of AFL. Further
announcements will be made with respect to this as legal and accounting work
progresses. As previously announced to shareholders, the Company is in
detailed discussions and negotiations with the major shareholders of AFL, with
which it has been granted a right of first refusal to acquire all the issued
and outstanding shares owned by those shareholders in consideration for the
issue and allotment to those shareholders of new ordinary shares in the
capital of the Company at a price of 0.1 pence per new ordinary share
(“ Right of First Refusal ”) which values the transaction at circa
£40,000,000.

Following exercise of the Right of First Refusal, which will be subject to
approvals from (as applicable) (1) all the necessary government authorities,
including the Cannabis Licencing Authority (in Jamaica ); (2) all necessary
regulatory authorities; (3) the necessary approvals from the Company’s
shareholders; and (4) approvals from the shareholders of AFL, the existing
shareholders of AFL will hold circa 93.54 per cent. of the issued share
capital of the Company. Following completion of the Investments and should the
Company exercise the Right of First Refusal, the resulting enlarged group will
be a vertically integrated medicinal cannabis group with operations
in Jamaica and with plans to expand elsewhere throughout the world.

Agriculture Investments:

Sadly, the market has not considered what has been achieved with our
investments in the agricultural sector well, even though these investments
continue to perform in a difficult global environment. We, as a Company, will
assess whether further or continued investment in the sector is warranted, as
we move towards the medical cannabis focus. To this extent, the Company has
decided that no further investment will be made in to our current
agri-logistics investments as we now move our investment focus to the legal
medical cannabis sector.

Financial Results:

During the period, the Company generated revenues to £1,323,000 (6 months
ended 30 June 2018: £1,501,000) and made a gross profit of £163,000 (6
months ended 30 June 2018: £38,000). The operating loss for the period was
£30,000 (6 months ended 30 June 2018: loss £118,000). Loss before tax was
£867,000 (6 months ended 30 June 2018: loss £97,000) mainly attributable to
the impairment of associate of £850,000.

There was a weighted loss per share of 0.047p (30 June 2018: loss per share
0.007p).

The unaudited interim results to 30 June 2019 have not been reviewed by the
Company’s auditor.

In Conclusion:

We have a very unique ability, being one of the few companies listed in London
and indeed Europe, to actually undertake investments in the fast-growing legal
medical cannabis sector. It has taken a great deal of management and legal
work to achieve this, and this will be a big focus for the management over the
coming year. Having recently completed our initial investment in Apollon
Formularies Ltd, we are actively pursuing to further increase our stake in
this key investment further as discussed above. We fully appreciate that time
is of the essence, and your board, its lawyers and indeed the AFL team are
working tirelessly to wrap up this transaction as soon as possible.

The Board would like to take this opportunity to thank our shareholders, staff
and consultants for their continued support and I look forward to reporting
further significant progress over the next period and beyond.

The directors of the Company accept responsibility for the contents of this
announcement.

David Lenigas
Executive Chairman
26 September 2019

For further information, please contact:

AfriAg Global plc:             +44 (0) 20 7440 0640
David Lenigas

Corporate Adviser and Broker:
Peterhouse Capital Limited       +44 (0) 20 7469 0930
Guy Miller / Allie Feuerlein

Condensed Consolidated Statement of Comprehensive Income (unaudited)
for the 6 months ended 30 June 2019

                                                                                                                                      
                                                                                                6 months to  6 months to   Year ended 
                                                                                                    30 June      30 June  31 December 
                                                                                                       2019         2018         2018 
                                                                                                  Unaudited    Unaudited      Audited 
                                                                                          Note      GBP’000      GBP’000      GBP’000 
                                                                                                                                      
                                                                                                                                      
 Revenue                                                                                              1,323        1,501        2,236 
 Cost of sales                                                                                      (1,160)      (1,463)      (2,170) 
 Gross Profit                                                                                           163           38           66 
                                                                                                                                      
 Administration expenses                                                                              (193)        (156)        (430) 
 Share Based Payment Charge                                                                               -            -            - 
                                                                                                                                      
 Operating (loss)                                                                                      (30)        (118)        (364) 
                                                                                                                                      
 Share of associate result                                                                               12           19           97 
 Impairment of associate                                                                              (850)            -            - 
 Investment income                                                                                        1            2         (51) 
                                                                                                                                      
 (Loss) before tax                                                                                    (867)         (97)        (318) 
 Tax                                                                                                      -            -            - 
                                                                                                                                      
 Retained (loss) for the period                                                                       (867)         (97)        (318) 
                                                                                                                                      
 Other comprehensive income                                                                                                           
 Transfer to income statement                                                                             -           22           22 
 Translation exchange gain/(loss)                                                                         2          (7)         (51) 
 Total comprehensive income                                                                               2           15         (29) 
 Total comprehensive (loss) for the period attributable to equity holders of the parent               (865)         (82)        (347) 
                                                                                                                                      
 (Loss) per share (pence)                                                                    2                                        
 Basic                                                                                              (0.047)      (0.007)      (0.017) 
 Diluted                                                                                            (0.047)      (0.007)      (0.017) 

All of the revenues and loss above derived from continuing operations.

Condensed Consolidated Statement of Financial Position (unaudited)
At 30 June 2019

                                 30 June 2019  30 June 2018  31 December 2018 
                                    Unaudited     Unaudited           Audited 
                                      GBP’000       GBP’000           GBP’000 
                                                                              
 Non-current assets                                                           
 Property, plant & equipment                4             8                 5 
 Investments in associates                848         1,609             1,687 
 Total non-current assets                 852         1,617             1,692 
                                                                              
 Current assets                                                               
 Inventory                                  3             -                 - 
 Trade and other receivables            1,659           866               925 
 Available for sale assets              1,030             -                30 
 Cash and cash equivalents                487           246               101 
 Total current assets                   3,179         1,112             1,056 
                                                                              
                                                                              
 Total assets                           4,031         2,729             2,748 
                                                                              
 Current liabilities                                                          
 Trade and other payables             (1,806)         (842)             (844) 
 Total current liabilities            (1,806)         (842)             (844) 
                                                                              
                                                                              
 Net current assets                     1,373           270               213 
                                                                              
 Net assets                             2,225         1,887             1,904 
                                                                              
 Equity                                                                       
 Share capital                          3,011         1,461             1,761 
 Share premium account                  8,566         8,648             8,630 
 Share based payment reserve              279           279               279 
 Foreign currency reserve                (15)            27              (17) 
 Retained earnings                    (9,616)       (8,528)           (8,749) 
                                                                              
 Total equity                           2,225         1,887             1,904 

Condensed Consolidated Statement of Changes in Equity (unaudited)
for the 6 months ended 30 June 2019

                                                                    Share capital  Share premium  Share based payment reserve  Foreign currency reserve  Revaluation reserves  Retained earnings    Total    
                                                                           GBP’000        GBP’000                      GBP’000                   GBP’000               GBP’000            GBP’000    GBP’000 
 At 31 December 2017                                                         1,461          8,648                          279                        34                  (22)            (8,431)      1,969 
                                                                                                                                                                                                             
 (Loss) for the period                                                           -              -                            -                         -                     -                 (9      (318) 
 Currency translation (loss)                                                     -              -                            -                      (51)                     -                  -       (51) 
 Transfer to income statement                                                    -              -                            -                         -                    22                  -         22 
 Total Comprehensive Income                                                      -              -                            -                      (51)                    22              (318)      (347) 
 Shares issued                                                                 300              -                            -                         -                     -                  -        300 
 Share issue costs                                                               -           (18)                            -                         -                     -                  -       (18) 
 Total contributions by and distributions to owners of the Company             300           (18)                            -                         -                     -                  -        282 
 At 31 December 2018                                                         1,761          8,630                          279                      (17)                     -            (8,749)      1,904 
                                                                                                                                                                                                             
 (Loss) for the period                                                           -              -                            -                         -                     -              (867)      (867) 
 Currency translation gain                                                       -              -                            -                         2                     -                  -          2 
 Transfer to income statement                                                    -              -                            -                         -                     -                  -          - 
 Total Comprehensive Income                                                      -              -                            -                         2                     -              (867)      (865) 
 Share issues                                                                1,250              -                            -                         -                     -                  -      1,250 
 Shares issue costs                                                              -           (64)                            -                         -                     -                  -       (64) 
 Total contributions by and distributions to owners of the Company           1,250           (64)                            -                         -                     -                  -      1,186 
 At 30 June 2019                                                             3,011          8,566                          279                      (15)                     -            (9,616)      2,225 

Condensed Consolidated Statement of Cash Flows (unaudited)
for the 6 months ended 30 June 2019

                                                            6 months to   6 months to        Year ended 
                                                           30 June 2019  30 June 2018  31 December 2018 
                                                              Unaudited     Unaudited           Audited 
                                                                GBP’000       GBP’000           GBP’000 
                                                                                                        
 Cash flows from operations                                                                             
 Operating (loss)                                                  (30)         (118)             (364) 
 (Increase)/decrease in inventories                                 (3)             3                 3 
 (Increase)/decrease in trade & other receivables                 (734)          (20)                38 
 Increase/(decrease) in trade & other payables                      962          (77)              (75) 
 Depreciation                                                         2             -                 3 
 Share option charge                                                  -             -                 - 
 Net cash used in operating activities                              197         (212)             (395) 
                                                                                                        
 Investing activities                                                                                   
 Investment income                                                    1             2                 3 
 Loan advanced to related party                                       -             -             (117) 
 Receipts on sale of AFS investments                                  -             1                 1 
 Payments on purchase of AFS investment                         (1,000)             -              (62) 
 Payments for PPE assets                                              -           (3)               (3) 
 Net cash from investing activities                               (999)             -             (178) 
                                                                                                        
 Financing activities                                                                                   
 Issue of share capital                                           1,250             -               300 
 Issue costs                                                       (64)             -              (18) 
 Net cash from financing activities                               1,186             -               282 
                                                                                                        
 Net increase/(decrease) in cash and cash equivalents               384         (212)             (291) 
 Cash and cash equivalents at the beginning of period               101           443               443 
 Effect of foreign exchange on cash and cash equivalents              2            15              (51) 
 Cash and cash equivalents at the end of period                     487           246               101 

Notes to the Condensed Consolidated Interim Financial Information (unaudited)

1.General information

The condensed consolidated interim financial information for the period ended
30 June 2019 has not been audited or reviewed in accordance with the
International Standard on Review Engagements 2410 issued by the Auditing
Practices Board. The figures were prepared using applicable accounting
policies and practices consistent with those adopted in the statutory accounts
for the period ended 31 December 2018. The figures for the period ended 31
December 2018 have been extracted from these accounts, which have not been
required to be delivered to the Isle of Man Registrar of Companies and do
however contained an unqualified audit report.

The condensed consolidated interim financial information contained in this
document does not constitute statutory accounts. In the opinion of the
directors the financial information for this period fairly presents the
financial position, result of operations and cash flows for this period.

The Condensed Consolidated Interim Financial Information was approved by the
Board of Directors on 26 September 2019.

Statement of compliance

These condensed consolidated interim financial statements have been prepared
in accordance with International Financial Reporting Standards (IFRS) as
adopted by the European Union with the exception of International Accounting
Standard (‘IAS’) 34 – Interim Financial Reporting. 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 Group’s 2018 annual financial statements.

2.(Loss) per share

The calculation of the (loss) per share is based on the (loss) attributable to
ordinary shareholders divided by the weighted average number of shares in
issue during the period.

                                                        6 months to  6 months to         Year 
                                                            30 June      30 June  31 December 
                                                               2019         2018         2018 
                                                          Unaudited    Unaudited      Audited 
                                                            GBP’000      GBP’000      GBP’000 
 (Loss) attributable to equity holders of the Group           (867)         (97)        (318) 
                                                                                              
 Weighted average number of ordinary shares (‘000s)       1,835,863    1,461,001    1,592,510 
                                                                                              
 (Loss) per share – basic                                   (0.047)      (0.007)      (0.017) 
 (Loss) per share – diluted                                 (0.047)      (0.007)      (0.017) 

3.Events after the end of the reporting period

On 9 August 2019, the Company announced Mr Anthony Samaha had resigned as a
Director of the Company.

4.A copy of this interim financial statement is available on the Company’s
website: www.afriagglobal.com.



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