REG - ARGO Group Limited - Final Results <Origin Href="QuoteRef">ARGOA.L</Origin> - Part 2
30/03/2016 07:07
- Part 2: For the preceding part double click ID:nRSd4710Ta
(1,836)
Group revenues 7,465
Profit or loss
Total loss for reportable segments (2,012)
Elimination of total intersegment losses 9
Other unallocated amounts 29
Loss on ordinary activities before taxation (1,974)
Assets
Total assets for reportable segments 27,974
Elimination of intersegment receivables (1,605)
Group assets 26,369
Liabilities
Total liabilities for reportable segments 2,054
Elimination of intersegment payables (1,680)
Group liabilities 374
4. EMPLOYEE COSTS
Year ended Year ended
31 December 31 December
2015 2014
US$'000 US$'000
Wages and salaries 1,911 2,636
Social security costs 179 229
Other 65 70
2,155 2,935
5. KEY MANAGEMENT PERSONNEL REMUNERATION
Included in employee costs are payments to the following:
Year ended Year ended
31 December 31 December
2015 2014
US$'000 US$'000
Directors and key management personnel 1,047 1,286
The remuneration of the Directors of the Company for the year was as follows:
Year ended Year ended
Salaries Fees Benefits Cash bonus 31 December2015 31 December2014
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Executive Directors
Kyriakos Rialas 202 - - - 202 240
Andreas Rialas 221 - 4 - 225 242
Non-Executive Directors
Michael Kloter - 80 - - 80 84
David Fisher - 54 - - 54 58
Ken Watterson - 55 - - 55 59
6. OPERATING PROFIT/(LOSS)
Operating profit/(loss) is stated after charging:
Year ended Year ended
31 December 31 December
2015 2014
US$'000 US$'000
Auditors' remuneration 105 122
Depreciation 46 98
Directors' fees 963 1,079
Operating lease payments 199 243
7. TAXATION
Taxation rates applicable to the parent company and the Cypriot, UK,
Luxembourg and Romanian subsidiaries range from 0% to 20.25% (2014: 0% to
21.5%).
Income Statement
Year ended Year ended
31 December 31 December
2015 2014
US$'000 US$'000
Taxation charge for the year on Group companies 250 39
Tax on loss on ordinary activities 250 39
The tax charge for the year can be reconciled to the loss on ordinary
activities before taxation shown in the Consolidated Statement of
Comprehensive Income as follows:
Year ended Year ended
31 December 31 December
2015 2014
US$'000 US$'000
Loss before tax (2,928) (1,974)
Applicable Isle of Man tax rate for Argo Group Limited of 0% - -
Timing differences 5 2
Non-deductible expenses 7 14
Other adjustments (66) (50)
Tax effect of different tax rates of subsidiaries operating inother jurisdictions 304 73
Tax charge 250 39
Balance Sheet
At 31 December At 31 December
2015 2014
US$'000 US$'000
Corporation tax payable 58 53
8. EARNINGS PER SHARE
The Company presents basic and diluted earnings per share (EPS) data for its
ordinary shares. Basic EPS is calculated by dividing the profit or loss
attributable to ordinary shareholders of the Company by the weighted average
number of ordinary shares outstanding during the period. Diluted EPS is
determined by dividing the profit or loss attributable to ordinary
shareholders of the Company by the weighted average number of ordinary shares
outstanding, adjusted for the effects of all dilutive potential ordinary
shares (see note 21).
Year ended Year ended
31 December 31 December
2015 2014
US$'000 US$'000
Loss for the year after taxation attributable to members (3,178) (2,013)
No. of shares No. of shares
Weighted average number of ordinary shares for basic earnings per share 67,428,494 67,428,494
Effect of dilution (note 21) 4,090,000 4,090,000
Weighted average number of ordinary shares for diluted earnings per share 71,518,494 71,518,494
Year ended Year ended
31 December 31 December
2015 2014
US$ US$
Earnings per share (basic) (0.05) (0.03)
Earnings per share (diluted) (0.04) (0.03)
9. FIXTURES, FITTINGS AND EQUIPMENT
Fixtures, fittings & equipment
US$'000
Cost
At 1 January 2014 408
Additions 38
Disposals (161)
Foreign exchange movement (31)
At 31 December 2014 254
Additions 8
Foreign exchange movement (17)
At 31 December 2015 245
Accumulated Depreciation
At 1 January 2014 231
Depreciation charge for period 98
Disposals (159)
Foreign exchange movement (23)
At 31 December 2014 147
Depreciation charge for period 46
Foreign exchange movement (12)
At 31 December 2015 181
Net book value
At 31 December 2014 107
At 31 December 2015 64
10. INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
31 December 31 December
2015 2015
Holding Investment in management shares Total cost Fair value
US$'000 US$'000
10 The Argo Fund Ltd - -
100 Argo Distressed Credit Fund Ltd - -
1 Argo Special Situations Fund LP - -
1 Argo Local Markets Fund - -
- -
Holding Investment in ordinary shares Total cost Fair value
US$'000 US$'000
51,261 The Argo Fund Ltd* 11,159 10,230
10,899,021 Argo Real Estate Opportunities Fund Ltd 988 119
115 Argo Special Situations Fund LP 115 17
2,117 Argo Local Markets Fund Limited* 1,700 1,666
40,272 Sudan Recovery Fund Limited 4,760 4,760
18,722 16,792
31 December 31 December
2014 2014
Holding Investment in management shares Total cost Fair value
US$'000 US$'000
10 The Argo Fund Ltd - -
100 Argo Distressed Credit Fund Ltd - -
1 Argo Special Situations Fund LP - -
1 Argo Local Markets Fund - -
- -
Holding Investment in ordinary shares Total cost Fair value
US$'000 US$'000
75,165 The Argo Fund Ltd 16,343 18,165
10,899,021 Argo Real Estate Opportunities Fund Ltd 988 199
115 Argo Special Situations Fund LP 115 71
17,446 18,435
*Classified as current in the Statement of Financial Position
During the period TAF made a distribution which was settled as a dividend in
specie of Sudan Recovery Fund ("SRF") shares. This election was made on 29
December 2015 and the shares in SRF were allotted on 8 January 2016.
The SRF invests solely in Sudan Sovereign debt which is in default and is
highly illiquid. The valuation of the underlying debt is based on a number of
assumptions including the expected recoverable amount of the Highly Indebted
Poor Countries Initiative (HIPC) debt forgiveness programme that both
multilateral and commercial creditors could potentially provide to Sudan. No
active market or quoted prices for financial instruments exists. Had an active
market existed the fair value of this position may have been significantly
different to that which has been reported in these financial statements. No
current audited financial statements for the Sudan Recovery Fund were
available. These represent inherent uncertainties to the recoverable value of
the investment.
On 3 March 2014 Argo Real Estate Opportunities Fund Limited ("AREOF") delisted
from AIM as a result of default notices on its loans creating uncertainty. The
prevailing equity price of AREOF shares at the time of the suspension in
August 2013 was 2.0 euro cents. The valuation of Argo Group Limited's
investment in AREOF and that of the Argo funds was 1.0 euro cent as at 31
December 2015. This investment is classified as level 3 under IFRS fair value
hierarchy reflecting the non-market observable inputs to its valuation. The
audit report in respect of AREOF for the year ended 30 September 2015 was
modified in respect of going concern and investment property valuations. Since
the year end the Group has redeemed its investment in ALMF for US$1.6
million.
11. TRADE AND OTHER RECEIVABLES
At 31 December At 31 December
2015 2014
US$ '000 US$ '000
Trade receivables 829 2,359
Other receivables 66 65
Prepayments and accrued income 71 93
966 2,517
The directors consider that the carrying amount of trade and other receivables
approximates their fair value. All trade receivable balances are recoverable
within one year from the balance sheet date. Since the year end the Group
received US$480,000 as part settlement of these trade receivables.
The Group has provided Argo Real Estate Opportunities Fund Limited ("AREOF")
with a notice of deferral in relation to the amounts due from the provision of
investment management services, under which it will not demand payment of such
amounts until the Group judges that AREOF is in a position to pay the
outstanding liability. These amounts accrued or receivable at 31 December 2015
total US$Nil (2014:Nil) after a bad debt provision of US$7,164,702
(E6,569,505) (2014: US$5,554,234 (E4,569,505)). AREOF continues to meet part
of this obligation to the Argo Group as and when liquidity allows.
In November 2013 AREOF offered Argo Group Limited additional security for the
continued support in the form of debentures and guarantees by underlying
intermediate companies. In the Directors' view these amounts are fully
recoverable although they have concluded that it would not be appropriate to
continue to recognise income from these investment management services going
forward, as the timing of such receipts may be outside the control of the
Company and AREOF.
In the audited financial statements of AREOF at 30 September 2015 a material
uncertainty surrounding the refinancing of bank debts was referred to in
relation to the basis of preparation of the financial statements. In the view
of the directors of AREOF, discussions with the banks are continuing
satisfactorily and they have therefore concluded that it is appropriate to
prepare those financial statements on a going concern basis.
At the year end Argo Special Situations Fund LP owed the Group total
management fees of US$689,310 (2014: US$436,838). This Fund is currently
facing liquidity issues due to the debt financing arrangement put in place in
2014 however management continue to work to remedy this and the Directors are
confident that these fees may be recovered in the future. Since the year end
the Group received US$350,000 as part settlement of these management fees.
12. CASH AND CASH EQUIVALENTS
Included in cash and cash equivalents is a balance of US$30,000 (2014:
US$79,000) which represents a bank guarantee in respect of credit cards issued
to Argo Capital Management Property Limited. Due to the nature of this balance
it is not freely available.
13. LOANS AND ADVANCES RECEIVABLE
At 31 December At 31 December
2015 2014
US$'000 US$'000
Deposits on leased premises - current - 6
Deposits on leased premises - non-current 90 96
Other loans and advances receivable - current - 126
Other loans and advances receivable - non-current (see below) 1,693 2,261
1,783 2,489
The non-current other loans and advances receivable comprise:
At 31 December At 31 December
2015 2014
US$'000 US$'000
Loan to Bel Rom Trei (see note (a) below) 1,437 1,456
Loan to AREOF (see note (b) below) 24 552
Loan to The Argo Fund Limited (see note (c) below) 22 150
Loans to other AREOF Group entities (see note (d) below) 208 102
Other loans 2 1
1,693 2,261
The deposits on leased premises are retained by the lessor until vacation of
the premises at the end of the lease term as follows:
At 31 December At 31 December
2015 2014
US$'000 US$'000
Current:
Lease expiring within one year - 6
At 31 December At 31 December
2015 2014
US$'000 US$'000
Non-current:
Lease expiring in second year after balance sheet date 78 -
Lease expiring in third year after balance sheet date - 96
Lease expiring in fourth year after balance sheet date 12 -
90 96
(a) In 2013 Argo Group advanced US$1,090,600 (E1,000,000) to Bel Rom Trei
("Bel Rom"), an AREOF Group entity based in Romania that owns Sibiu Shopping
City, in order to assist with its operational cash requirements. Challenging
trading conditions have impacted Bel Rom's cash flow and its ability to meet
payments due to lending banks as and when they fall due. The situation is
being remedied by way of discussions with the lending banks with a view to
restructuring these loans. While these discussions are on-going to find an
agreeable solution for both parties, Bel Rom continues to enjoy the support of
its banks. The loan is repayable on demand and accrues interest at 12%. The
full amount of the loan and accrued interest amounting to US$1,437,321
(E1,317,918) remains outstanding at the year end. The Directors consider this
loan to be fully recoverable on the basis that conditional offers to buy the
centre have been received that indicate a value in excess of the debt attached
to the project. Notwithstanding its repayable on demand terms, the Directors
have classified this amount as non-current within the financial statements as
it is not their intention to demand repayment in the immediate future and it
is unlikely that Bel Rom will repay the amount in the next 12 months even if
it were demanded. Refer to notes 10 and 11 for further information regarding
the financial position of AREOF.
(b) On 21 November 2013 the Argo Group provided a loan of US$424,200
(E388,960) to AREOF at a rate of 10% per annum to enable the company to
service interest payments under a bank loan agreement. A bad debt provision
has been raised against the full amount of the loan and accrued interest
amounting to US$513,804 (E471,120).
The Argo Group provided a further loan of US$24,211 (E22,200) to AREOF to
assist with its operational cash requirements. The loan is interest free and
repayable on demand. The full amount of the loan remains outstanding at the
year end.
(c) On 5 December 2014 the Argo Group provided a loan of US$150,000 to The
Argo Fund Limited to assist with its operational cash requirements. This loan
with interest accrued at 5% was repaid in October 2015. During the year a
further loan of US$22,203 (£15,000) was provided to The Argo Fund Limited
which is interest free and repayable on demand.
(d) The Argo Group has provided total loans of US$207,412 (E190,182) to
various AREOF Group entities to assist those entities with their operational
cash requirements. The loans are interest free and repayable on demand. The
full amount of these loans remains outstanding at the year end.
14. SHARE CAPITAL
The Company's authorised share capital is unlimited ordinary shares with a
nominal value of US$0.01.
31 December 31 December 31 December 31 December
2015 2015 2014 2014
No. US$'000 No. US$'000
Issued and fully paid
Ordinary shares of US$0.01 each 67,428,494 674 67,428,494 674
67,428,494 674 67,428,494 674
The directors do not recommend the payment of a final dividend for the year
ended 31 December 2015 (31 December 2014: Nil). Going forward, the Company
intends, subject to its financial performance, to pay a final dividend each
year.
15. TRADE AND OTHER PAYABLES
At 31 December At 31 December
2015 2014
US$ '000 US$ '000
Trade and other payables 32 91
Other creditors and accruals 204 230
236 321
Trade and other payables are normally settled on 30-day terms.
16. OBLIGATIONS UNDER OPERATING LEASES
Operating lease payments represent rentals payable by the Group for certain of
its business premises. The leases have no escalation clauses or renewal or
purchase options and no restrictions imposed on them.
As at the balance sheet date, the Group had outstanding future minimum lease
payments under non-cancellable operating leases, which fall due as follows:
At 31 December At 31 December
2015 2014
US$ '000 US$ '000
Operating lease liabilities:
Within one year 203 234
In the second to fifth years inclusive 279 565
Present value of minimum lease payments 482 799
17. RECONCILIATION OF NET CASH OUTLOW FROM OPERATING ACTIVITIES TO
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION
Year ended Year ended
31 December 31 December
2015 2014
US$ '000 US$ '000
Loss on ordinary activities before taxation (2,928) (1,974)
Interest income (190) (218)
Depreciation 46 98
Loss on disposal of fixed assets - 2
Decrease in payables (85) (67)
Decrease in receivables 2,257 618
Decrease in fair value of current asset investments 3,342 985
Net foreign exchange gain (69) (24)
Income taxes paid (245) (50)
Net cash inflow/(outflow) from operating activities 2,128 (630)
18. RELATED PARTY TRANSACTIONS
All Group revenues derive from funds or entities in which two of the Company's
directors, Andreas Rialas and Kyriakos Rialas, have an influence through
directorships and the provision of investment advisory services.
At the balance sheet date the Company holds investments in The Argo Fund
Limited, Argo Real Estate Opportunities Fund Limited ("AREOF"), Argo Special
Situations Fund LP, Argo Local Markets Fund Limited and Sudan Recovery Fund
Limited. These investments are reflected in the accounts at a fair value of
US$10,230,308, US$118,865, US$16,849, US$1,666,102 and US$4,760,264
respectively.
The Group has provided AREOF with a notice of deferral in relation to the
amounts due from the provision of investment management services, under which
it will not demand payment of such amounts until the Group judges that AREOF
is in a position to pay the outstanding liability. These amounts accrued or
receivable at 31 December 2015 total US$Nil (2014:Nil) after a bad debt
provision of US$7,164,702 (E6,569,505) (2014: US$5,554,234 (E4,569,505)).
AREOF continues to meet part of this obligation to the Argo Group as and when
liquidity allows. In November 2013 AREOF offered Argo Group Limited additional
security for the continued support in the form of debentures and guarantees by
underlying intermediate companies. The AREOF management contract has a fixed
term expiring on 31 July 2018.
On 21 November 2013 the Argo Group provided a loan of US$424,200 (E388,960) to
AREOF at a rate of 10% per annum to enable the company to service interest
payments under a bank loan agreement. A bad debt provision has been raised
against the full amount of the loan and accrued interest amounting to
US$513,804 (E471,120).
At the year end Argo Group was owed US$1,437,321 (E1,317,918) including
interest of US$346,721 (E317,917) by Bel Rom Trei Srl, an AREOF Group entity
based in Romania that owns Sibiu Shopping City. The loan is repayable on
demand and accrues interest at 12%.
At the year end Argo Group was owed a total balance of US$231,624 (E212,381)
by other AREOF Group entities. This balance comprises various loans that are
all unsecured, interest free and repayable on demand.
At the year end the Argo Group was owed US$22,203 (£15,000) by The Argo Fund
Limited. The loan is interest free and repayable on demand.
In addition to the above the Argo Group is owed a further US$1,055,549
(E967,861) by AREOF Group entities against which a bad debt provision has been
raised.
In the audited financial statements of AREOF at 30 September 2015 a material
uncertainty surrounding the refinancing of bank debts was referred to in
relation to the basis of preparation of the financial statements. In the view
of the directors of AREOF, discussions with the banks are continuing
satisfactorily and they have therefore concluded that it is appropriate to
prepare those financial statements on a going concern basis.
David Fisher, a non-executive director of the Company, is also a non-executive
director of AREOF.
19. FINANCIAL INSTRUMENTS RISK MANAGEMENT
(a) Use of financial instruments
The wider Group has maintained sufficient cash reserves not to use alternative
financial instruments to finance the Group's operations. The Group has various
financial assets and liabilities such as trade and other receivables, loans
and advances, cash, short-term deposits, and trade and other payables which
arise directly from its operations.
The Group's non-subsidiary investments in funds were entered into with the
purpose of providing seed capital, supporting liquidity and demonstrating the
commitment of the Group towards its fund investors.
(b) Market risk
Market risk is the risk that a decline in the value of assets adversely
impacts on the profitability of the Group, either as a result of an asset not
meeting its expected value or through the decline of assets under management
generating lower fees. The principal exposures of the Group are in respect of
its seed investments in its own funds (refer to note 10). Lower management fee
and incentive fee revenues could result from a reduction in asset values.
(c) Capital risk management
The primary objective of the Group's capital management is to ensure that the
Company has sufficient cash and cash equivalents on hand to finance its
ongoing operations. This is achieved by ensuring that trade receivables are
collected on a timely basis and that excess liquidity is invested in an
optimum manner by placing fixed short-term deposits or using interest bearing
bank accounts.
At the year-end cash balances were held at Royal Bank of Scotland, Bank of
Cyprus and Bancpost.
(d) Credit/counterparty risk
The Group will be exposed to counterparty risk on parties with whom it trades
and will bear the risk of settlement default. Credit risk is concentrated in
the funds under management and in which the Group holds significant
investments as detailed in notes 10, 11 and 13. As explained within these
notes the Group is experiencing collection delays with regard to management
fees receivable and monies advanced. Some of the investments in funds under
management (note 10) are illiquid and may be subject to events materially
impacting recoverable value.
The Group's principal financial assets are bank and cash balances, trade and
other receivables and investments held at fair value through profit or loss.
These represent the Company's maximum exposure to credit risk in relation to
financial assets and are represented by the carrying amount of each financial
asset in the balance sheet.
At the reporting date, the financial net assets past due but not impaired
amounted to US$2,148,606 (2014:US$4,465,756).
e) Liquidity risk
Liquidity risk is the risk that the Group may be unable to meet its payment
obligations. This would be the risk of insufficient cash resources and liquid
assets, including bank facilities, being available to meet liabilities as they
fall due.
The main liquidity risks of the Group are associated with the need to satisfy
payments to creditors. Trade payables are normally on 30-day terms (note 15).
As disclosed in note 2(a), Accounting Convention: Going Concern, the Group has
performed an assessment of available liquidity to meet liabilities as they
fall due during the forecast period. The Group has concluded that it has
sufficient resources available to manage its liquidity risk during the
forecast period.
(f) Foreign exchange risk
Foreign exchange risk is the risk that the Group will sustain losses through
adverse movements in currency exchange rates.
The Group is subject to short-term foreign exchange movements between the
calculation date of fees in currencies other than US dollars and the date of
settlement. The Group holds cash balances in US Dollars, Sterling, Romanian
Lei and Euros with carrying amounts as follows: US dollar - US$2,275,000,
Sterling - US$693,000, Euros - US$123,000 and Romanian Lei - US$35,000.
If there was a 5% increase or decrease in the exchange rate between the US
dollar and the other operating currencies used by the Group at 31 December
2015 the exposure would be a profit or loss to the Consolidated Statement of
Comprehensive Income of approximately US$43,000 (2014: US$40,000).
(g) Interest rate risk
The interest rate profile of the Group at 31 December 2015 is as follows:
Total as per balance sheet Variable interest rate instruments* Fixed interest rate instruments Instruments on which no interest is receivable
US$ '000 US$ '000 US$ '000 US$ '000
Financial Assets
Financial assets at fair value through profit or loss 16,792 - - 16,792
Loans and receivables 2,749 - 1,437 1,312
Cash and cash equivalents 3,126 602 2,274 250
22,667 602 3,711 18,354
Financial liabilities
Trade and other payables 236 - - 236
* Changes in the interest rate may cause movements.
The average interest rate at the year end was 0.01%. Any movement in interest
rates would have an immaterial effect on the profit/(loss) for the period.
The interest rate profile of the Group at 31 December 2014 is as follows:
Total as per balance sheet Variable interest rate instruments* Fixed interest rate instruments Instruments on which no interest is receivable
US$ '000 US$ '000 US$ '000 US$ '000
Financial Assets
Financial assets at fair value through profit or loss 18,435 - - 18,435
Loans and receivables 5,006 83 1,456 3,467
Cash and cash equivalents 2,821 160 2,011 650
26,262 243 3,467 22,552
Financial liabilities
Trade and other payables 321 - - 321
* Changes in the interest rate may cause movements.
The average interest rate at the year end was 0.02%. Any movement in interest
rates would have an immaterial effect on the profit/(loss) for the period.
(h) Fair value
The carrying values of the financial assets and liabilities approximate the
fair value of the financial assets and liabilities and can be summarised as
follows:
At 31 December At 31 December
2015 2014
US$ '000 US$ '000
Financial Assets
Financial assets at fair value through profit or loss 16,792 18,435
Loans and receivables 2,749 5,006
Cash and cash equivalents 3,126 2,821
22,667 26,262
Financial Liabilities
Trade and other payables 236 321
Financial assets and liabilities, other than investments, are either repayable
on demand or have short repayment dates. The fair value of investments is
stated at the redemption prices quoted by fund administrators and are based on
the fair value of the underlying net assets of the funds because, although the
funds are quoted, there is no active market for any of the investments held.
Fair value hierarchy
The table below analyses financial instruments measured at fair value at the
end of the reporting period by the level of the fair value hierarchy (note
2p).
At 31 December 2015
Level 1 Level 2 Level 3 Total
US$ '000 US$ '000 US$ '000 US$ '000
Financial assets at fair value through profit or loss - 11,896 4,896 16,792
At 31 December 2014
Level 1 Level 2 Level 3 Total
US$ '000 US$ '000 US$ '000 US$ '000
Financial assets at fair value through profit or loss - - 18,435 18,435
The following table shows a reconciliation from the opening balances to the
closing balances for fair value measurements in Level 3 of the fair value
hierarchy:
Unlisted closed ended investment fund Listed open ended investment fund Emerging markets
Real Estate Total
US$ '000 US$ '000 US$ '000
Balance as at 1 January 2015 199 18,236 18,435
Total losses recognized in profit or loss (80) (3,262) (3,342)
Purchases - 6,461 6,461
Sales - (4,762) (4,762)
Transfer to level 2 (11,896) (11,896)
Balance as at 31 December 2015 119 4,777 4, 896
20. EVENTS AFTER THE BALANCE SHEET DATE
The directors consider that there has been no event since the year end that
has a significant effect on the Group's position.
21. SHARE-BASED INCENTIVE PLANS
On 14 March 2011 the Group granted options over 5,900,000 shares to directors
and employees under The Argo Group Limited Employee Stock Option Plan. All
options are exercisable in four equal tranches over a period of four years at
an exercise price of 24p per share.
The fair value of the options granted was measured at the grant date using a
Black-Scholes model that takes into account the effect of certain financial
assumptions, including the option exercise price, current share price and
volatility, dividend yield and the risk-free interest rate. The fair value of
the options granted is spread over the vesting period of the scheme and the
value is adjusted to reflect the actual number of shares that are expected to
vest.
The principal assumptions for valuing the options were:
Exercise price (pence) 24.0
Weighted average share price at grant date 12.0
(pence)
Weighted average option life (years) 10.0
Expected volatility (% p.a.) 2.11
Dividend yield (% p.a.) 10.0
Risk-free interest rate (% p.a.) 5.0
The fair value of options granted is recognised as an employee expense with a
corresponding increase in equity. The total charge to employee costs in
respect of this incentive plan is nil due to the differential in exercise
price and share price.
The number and weighted average exercise price of the share options during the
period is as follows:
Weighted average exercise price No. of share options
Outstanding at beginning of period 24.0p 4,090,000
Granted during the period - -
Forfeited during the period 24.0p -
Outstanding at end of period 24.0p 4,090,000
Exercisable at end of period 24.0p 4,090,000
The options outstanding at 31 December 2015 have an exercise price of 24p and
a weighted average contractual life of 10 years, with the fourth and final
tranche of shares being exercisable on or after 1 May 2015.Outstanding share
options are contingent upon the option holder remaining an employee of the
Group. They expire after 10 years.
No share options were issued during the period.
This information is provided by RNS
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