REG - ARGO Group Limited - Half-year Report
29/07/2024 17:30
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RNS Number : 2768Y ARGO Group Limited 29 July 2024
Argo Group Limited
("Argo" or the "Company")
Interim Results for the six months ended 30 June 2024
Change of name of nominated adviser and broker
Argo today announces its interim results for the six months ended 30 June
2024.
Key highlights for the six months period ended 30 June 2024
This report sets out the results of Argo Group Limited (the "Company") and its
subsidiaries (collectively "the Group" or "Argo") covering the six months
ended 30 June 2024.
- Revenues US$4.6 million (six months to 30 June 2023: US$1.5 million)
- Operating profit US$2.4 million (six months to 30 June 2023:
operating loss US$0.7 million)
- Profit before tax US$2.5 million (six months to 30 June 2023: profit
before tax US$0.1 million)
- Net assets US$7.3 million (31 December 2023: US$5.1 million)
Commenting on the results and outlook, Kyriakos Rialas, Chief Executive of
Argo said:
"We are pleased with the results of the Argo Group for the first six months of
2024 which were boosted by positive performance of The Argo Fund Limited as
well as fee income from the management of a Romanian shopping mall that
enabled Argo Property Management Srl to repay a previously fully provided loan
to its parent. The months of May and June 2024 were subdued with
outperformers such as Argentina giving back some of the earlier months'
profit. The Argo Fund Limited is currently trading near its high watermark
and as stated before, if this is maintained until year end some performance
fees may also crystallise."
Change of Name of Nominated Adviser and Broker
The Company also announces that its Nominated Adviser and Broker has changed
its name to Panmure Liberum Limited following completion of its own corporate
merger.
Enquiries
Argo Group Limited
Andreas Rialas
020 7016 7660
Panmure Liberum Limited
Atholl Tweedie
020 7886 2500
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) No 596/2014 as it forms part of UK domestic
law by virtue of the European Union (Withdrawal) Act 2018.
CHAIRMAN'S STATEMENT
Key highlights for the six months ended 30 June 2024
This report sets out the results of Argo Group Limited (the "Company") and its
subsidiaries (collectively "the Group" or "Argo") covering the six months
ended 30 June 2024.
- Revenues US$4.6 million (six months to 30 June 2023: US$1.5 million)
- Operating profit US$2.4 million (six months to 30 June 2023:
operating loss US$0.7 million)
- Profit before tax US$2.5 million (six months to 30 June 2023: profit
before tax US$0.1 million)
- Net assets US$7.3 million (31 December 2023: US$5.1 million)
The Group and its investment objective
Argo's investment objective is to provide investors with absolute returns in
the funds that it manages by investing in multi strategy investments in
emerging markets.
Argo was listed on the AIM market in November 2008 and has a performance track
record dating back to 2000.
Business and operational review
For the six months ended 30 June 2024 the Group generated revenues of US$4.6
million (six months to 30 June 2023: US$1.5 million) with management fees
accounting for US$1.0 million (six months to 30 June 2023: US$1.1 million).
During the period the Group earned a one-off bonus fee of US$3.2 million upon
the sale of an asset in Romania.
Total operating costs for the period, ignoring bad debt provisions, are US$2.0
million compared to US$1.8 million for the six months to 30 June 2023. The
Group has provided against management fees of US$0.2 million due from the
Designated share class in The Argo Fund ("TAF") (six months to 30 June 2023:
US$0.4 million). In the Directors' view, these amounts are fully recoverable.
However, the Directors have concluded that it would only be appropriate to
recognise income without provision from these investment management services
once a liquidity event occurs in this share class.
Overall, the financial statements show an operating profit for the period of
US$2.4 million (six months to 30 June 2023: operating loss US$0.7 million) and
a profit before tax of US$2.5 million (six months to 30 June 2023: profit
before tax of US$0.1 million). Net profit on investments was US$0.1 million
(six months to 30 June 2023: net profit on investments US$0.3 million) and
interest income was US$0.00 million (six months to 30 June 2023: US$0.5
million).
At the period end, the Group had net assets of US$7.3 million (31 December
2023: US$5.1 million) and net current assets of US$7.0 million (31 December
2023: US$4.8 million) including cash reserves of US$5.1 million (31 December
2023: US$1.3 million).
Net assets include investments in The Argo Fund ("TAF") at fair value of
US$2.7 million (31 December 2023: US$3.7 million).
At the period end TAF owed the Group total fees of US$2.9 million (31 December
2023: US$2.8 million). At 30 June 2024, a provision for US$2.8 million was
made against this amount as the timing of the receipt of the fees from the
designated share class in TAF is unknown.
TAF ended the period with Assets under Management ("AUM") at US$100.1 million
(31 December 2023: US$102.0 million). The current level of AUM remains below
that required to ensure sustainable profits on a recurring management fee
basis, in the absence of performance fees. This has necessitated an ongoing
review of the Group's cost basis. Nevertheless, the Group has ensured that the
operational framework remains intact and that it retains the capacity to
manage additional fund inflows as and when they arise.
The average number of permanent employees of the Group for the six months to
30 June 2024 was 20 (30 June 2023: 20).
Fund performance
The Argo Funds
Fund Launch 30 June 30 June 2023 Since inception Annualised performance Sharpe
date 2024 2023 year ratio Down
6 months 6 months total months
% % % % CAGR %
The Argo Fund - A class Oct-00 1.42 1.46 7.83 244.68 6.13 0.38 98 of 285
The Argo Fund - X2 class Feb-21 9.08 -1.16 30.34 32.25 8.53 0.35 15 of 41
The Argo Fund - Designated Investment Class Jan-20 -7.08 1.96 -35.84 12.77 N/A N/A N/A
The global outlook has improved in the first half of 2024 despite some
disappointing news along the way. Real GDP growth expectations for the United
States have increased and the jobs market has remained robust, but inflation
has been stickier than previously expected as nominal wage growth remained
brisk. China took additional, albeit still insufficient, steps to address the
residential real estate crisis that has sapped consumer confidence. The
Eurozone appears to have stabilised whilst Japan surprised on the upside, with
higher-than-expected wage increases potentially signalling the beginning of a
virtuous domestic wage-price feedback loop. This positive trend has been
sustained despite ongoing crises in Ukraine and the Middle East and trade
tensions between the West and China. There were also elections held in the
first half of 2024 in a number of key emerging markets namely India, South
Africa, Mexico and Indonesia and of course there is the US presidential vote
to look forward to in November.
Equity markets delivered broad-based gains. The US advance has been narrowly
led by a short list of AI and tech beneficiaries; the S&P 500 Index rose
by 15% in the six months to end-June, but the median stock is up just 4%, and
a single stock, Nvidia, accounted for about a third of the year-to-date
S&P 500 Index rise. Other international stocks also performed well, with
the MSCI World Index increasing by 10.8% and the MSCI Emerging Markets Index
rising by 6.1%.
US Treasury 10-year yields started the period under review at 3.9%, peaked at
4.7%, but fell to 4.4% at end-June as weaker inflation numbers triggered hopes
for earlier rate cuts, reflecting data variability and market dynamics. The
rate cut cycle is seen as postponed rather than cancelled. Other major
markets' 10-year yields were mostly unchanged, except Japan's, which rose to
1% for the first time in 11 years as the Bank of Japan (BOJ) gradually exits
negative interest rates. The first week of June saw central bank divergence,
with several banks beginning their easing cycles while the Fed is expected to
remain on hold. The Bank of Canada, European Central Bank, and Swiss National
Bank each cut rates by 25 bps, citing an improved inflation outlook.
The policy divergence has continued to support the U.S. dollar. The Japanese
yen significantly underperformed, exceeding 161 against the dollar for the
first time since 1986, driven by the BOJ's reluctance to tighten monetary
policy. At the same time, a number of central banks in emerging market
economies remain cautious in regard to cutting rates owing to external risks
triggered by changes in interest rate differentials and associated
depreciation of those economies' currencies against the dollar.
Emerging market fundamentals remain resilient against a backdrop of firm
global growth, but uncertainty over the timing of easing cycles may limit the
performance of EM assets. While Asian growth is projected to be healthy,
growth is picking up from a low base in Latin America, and in Europe, the
Middle East and Africa (EMEA).
The NAV of the Class A shares of the TAF increased by 1.42 % in the first half
of 2024, broadly similar to the same period last year. The fund benefited from
the renewed confidence in Argentina following the election of President Milei,
though the sovereign bonds ended the period off their recent highs and have
remained volatile. There were also positive contributions from long positions
in other sovereign dollar bonds including Zambia, which has just completed a
debt restructuring. The main detractors were the macro strategies and in
particular the rates trades in Brazil and Mexico. Class A shares issued by TAF
continue to be invested in diversified sovereign and corporate debt and macro
positions which seek to capture alpha through long and short investment. In
addition, there are other share classes within the TAF master/feeder structure
which offer investors exposure to a distressed debt portfolio (Class X2, which
gained 9% in the first half); macro strategies (Class X3) and also special
situations where the timeline to investment realisation is likely to be
longer.
Dividends and share purchase programme
The Group did not pay a dividend during the current or prior period. The
Directors intend to restart dividend payments as soon as the Group's
performance provides a consistent track record of profitability.
Outlook
The Board remains optimistic about the Group's prospects based on the
transactions in the pipeline and the Group's initiatives to increase AUM. A
significant increase in AUM is still required to ensure sustainable profits on
a recurring management fee basis and the Group is well placed with capacity to
absorb such an increase in AUM with negligible impact on operational costs.
Boosting AUM will be Argo's top priority in the next six months. The Group's
marketing efforts continue to focus on TAF which has a 23-year track record as
well as identifying acquisitions that are earnings enhancing.
Over the longer term, the Board believes there is significant opportunity for
growth in assets and profits and remains committed to ensuring the Group's
investment management capabilities and resources are appropriate to meet its
key objective of achieving a consistent positive investment performance in the
emerging markets sector.
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2024
Six months Six months
Ended ended
30 June 30 June
2024 2023
Note US$'000 US$'000
Management fees 990 1,111
Performance fees - -
Other income 3,646 400
Revenue 4,636 1,511
Legal and professional expenses (115) (119)
Management fees payable (147) (141)
Operational expenses (417) (402)
Employee costs (1,271) (1,108)
Bad debt provision 9, 10 (201) (367)
Foreign exchange (loss)/profit (11) (9)
Depreciation 7 (50) (48)
Operating profit/(loss) 2,424 (683)
Interest income 8 496
Realised and unrealised gain on investments 86 308
Profit on ordinary activities before taxation 2,518 121
Taxation 5 (350) -
Profit/(loss) for the period after taxation attributable to members of the 6 2,168 121
Company
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations (24) 6
Total comprehensive income for the period 2,144 127
Six months Six months
Ended Ended
30 June 30 June
2024 2023
US$ US$
Earnings per share (basic) 6 0.056 0.003
Earnings per share (diluted) 6 0.051 0.003
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024
30 June 31 December
2024 2023
Note US$'000 US$'000
Assets
Non-current assets
Land, fixtures, fittings and equipment 7 468 526
Loans and advances receivable 10 89 98
Total non-current assets 557 624
Current assets
Financial assets at fair value through profit or loss 8 2,729 3,711
Loan and advances receivable 10 9 -
Trade and other receivables 9 289 400
Cash and cash equivalents 5,092 1,333
Total current assets 8,119 5,444
Total assets 8,676 6,068
Equity and liabilities
Equity
Issued share capital 11 390 390
Share premium 25,353 25,353
Retained earnings (15,239) (17,407)
Foreign currency translation reserve (3,242) (3,218)
Total equity 7,262 5,118
Current liabilities
Trade and other payables 15 1,084 618
Total current liabilities 1,084 618
Non-current liabilities
Trade and other payables 15 330 332
Total non-current liabilities 330 332
Total equity and liabilities 8,676 6,068
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2024
Foreign currency translation reserve
Issued share capital
Share premium Retained earnings
Total
2023 2023 2023 2023 2023
US$'000 US$'000 US$'000 US$'000 US$'000
As at 1 January 2023 390 25,353 (2,977) (3,209) 19,557
Total comprehensive income
Profit for the period after taxation - - 121 - 121
Other comprehensive income - - - 6 6
As at 30 June 2023 390 25,353 (2,856) (3,203) 19,684
Foreign currency translation reserve
Issued share capital
Share premium Retained earnings
Total
2024 2024 2024 2024 2024
US$'000 US$'000 US$'000 US$'000 US$'000
As at 1 January 2024 390 25,353 (17,407) (3,218) 5,118
Total comprehensive income
Profit for the period after taxation - - 2,168 - 2,168
Other comprehensive income - - - (24) (24)
As at 30 June 2024 390 25,353 (15,239) (3,242) 7,262
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2024
Six months ended Six months ended
30 June 30 June
2024 2023
Note US$'000 US$'000
Net cash inflow/(outflow) from operating activities 12 2,787 (387)
Cash flows used in investing activities
Interest received on cash and cash equivalent 8 -
Purchase of fixtures, fittings and equipment 7 - (3)
Disposal of financial assets at fair value through profit or loss 8 1,068 -
Net cash generated/(used) from investing activities 1,076 (3)
Cash flows from financing activities
Payment of lease liabilities (74) -
Net cash used in financing activities (74) -
Net increase/(decrease) in cash and cash equivalents 3,789 (390)
Cash and cash equivalents at 1 January 2024 and 1,333 1,642
1 January 2023
Foreign exchange loss on cash and cash equivalents (30) (11)
Cash and cash equivalents as at 30 June 2024 and 30 June 2023 5,092 1,241
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the six months ended 30 June 2024
1. CORPORATE INFORMATION
The Company is domiciled in the Isle of Man under the
Companies Act 2006. Its registered office is at 33-37 Athol Street, Douglas,
Isle of Man, IM1 1LB. The condensed consolidated interim financial statements
of the Group as at and for the six months ended 30 June 2024 comprise the
Company and its subsidiaries (together referred to as the "Group").
The consolidated financial statements of the Group as at and
for the year ended 31 December 2023 are available upon request from the
Company's registered office or at www.argogrouplimited.com.
The principal activity of the Company is that of a holding
company and the principal activity of the wider Group is that of an investment
management business. The functional currency of the Group undertakings are US
dollars, Sterling and Romanian Lei. The presentational currency is US dollars.
Wholly owned
subsidiaries Principal
activity Country of incorporation
Argo Capital Management Limited Investment United Kingdom
management
Argo Property Management Srl Property Romania
management
2. ACCOUNTING POLICIES
(a) Basis of preparation
These condensed consolidated interim financial statements
have been prepared in accordance with IAS 34 Interim Financial Reporting. They
do not include all the information required for full annual financial
statements and should be read in conjunction with the consolidated financial
statements of the Group as at and for the year ended 31 December 2023.
The accounting policies applied by the Group in these
condensed consolidated interim financial statements are the same as those
applied by the Group in its consolidated financial statements as at and for
the year ended 31 December 2023.
These condensed consolidated interim financial statements
were approved by the Board of Directors on 29 July 2024.
b) Financial instruments and fair value hierarchy
The following represents the fair value hierarchy of financial instruments
measured at fair value in the Condensed Consolidated Statement of Financial
Position. The hierarchy groups financial assets and liabilities into three
levels based on the significance of inputs used in measuring the fair value of
the financial assets and liabilities. The fair value hierarchy has the
following levels:
Level 1: quoted prices (unadjusted) in active markets for identical assets or
liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices); and
Level 3: inputs for the asset or liability that are not based on observable
market data (unobservable inputs).
The level within which the financial asset or liability is classified is
determined based on the lowest level of significant input to the fair value
measurement.
3. SEGMENTAL ANALYSIS
The Group operates as a single asset management business.
The operating results of the companies are regularly reviewed by the Directors
of the Group for the purposes of making decisions about resources to be
allocated to each company and to assess performance. The following summary
analyses revenues, profit or loss, assets and liabilities:
Six months ended
Argo Group Ltd Argo Capital Management Ltd Argo Property Management 30 June
Srl
2024 2024 2024 2024
US$'000 US$'000 US$'000 US$'000
Total revenues for reportable segments customers - 990 3,646 4,636
Intersegment revenues - - -
-
Total profit/(loss) for reportable segments (48) (692) 2,908 2,168
Intersegment loss - - - -
Total assets for reportable segments assets 5,919 1,953 804 8,676
Total liabilities for reportable segments 5 481 928 1,414
Revenues, profit or loss, assets and liabilities may be reconciled as follows: Six months
Ended
30 June 2024
US$'000
Revenues
Total revenues for reportable segments 4,636
Elimination of intersegment revenues -
Group revenues 4,636
Profit or loss
Profit for reportable segments 5,085
Elimination of intersegment loss (2,917)
Other unallocated amounts -
Profit on ordinary activities before taxation 2,168
Assets
Total assets for reportable segments 8,676
Elimination of intersegment receivables -
Group assets 8,676
Liabilities
Total liabilities for reportable segments 1,706
Elimination of intersegment payables (292)
Group liabilities 1,414
Six months ended
Argo Group Ltd Argo Capital Management Ltd Argo Property Management 30 June
Srl
2023 2023 2023 2023
US$'000 US$'000 US$'000 US$'000
Total revenues for reportable segments customers - 1,111 400 1,511
Intersegment revenues - - -
-
Total profit/(loss) for reportable segments 687 (602) 36 121
Intersegment loss - - - -
Total assets for reportable segments assets 19,059 1,428 241 20,728
Total liabilities for reportable segments 6 675 363 1,044
Revenues, profit or loss, assets and liabilities may be reconciled as follows: Six months
Ended
30 June 2023
US$'000
Revenues
Total revenues for reportable segments 1,511
Elimination of intersegment revenues -
Group revenues 1,511
Profit or loss
Profit for reportable segments 121
Elimination of intersegment loss -
Other unallocated amounts -
Loss on ordinary activities before taxation -
Assets
Total assets for reportable segments 20,728
Elimination of intersegment receivables -
Group assets 20,728
Liabilities
Total liabilities for reportable segments 4,321
Elimination of intersegment payables (3,277)
Group liabilities 1,044
4. SHARE-BASED INCENTIVE PLANS
To incentivise personnel and to align their interests with those of the
shareholders of Argo Group Limited, Argo Group Limited has granted share
options to directors and employees under The Argo Group Limited Employee Stock
Option Plan. The options are exercisable within 10 years of the grant date.
The fair value of the options granted during the period 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 are:
Exercise price (pence) 21.0/24.0
Weighted average share price at grant date (pence) 19.0
Average option life at date of grant (years) 10.0
Expected volatility (% p.a.) 15.0
Dividend yield (% p.a.) 10.0
Risk-free interest rate (% p.a.) 2
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 (2023: £nil).
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 21.2p 3,895,998
Granted during the period - -
Forfeited during the period - -
Outstanding at end of period 21.2p 3,895,998
Exercisable at end of period 21.2p 3,895,998
Outstanding share options are contingent upon the option holder remaining an
employee of the Group.
The weighted average fair value of the options issued during the period was
£Nil (2023: £Nil).
No share options were issued during the period.
5. TAXATION
Taxation rates applicable to the parent company and the UK
and Romanian subsidiaries range from 0% to 25% (2023: 0% to 25%).
Consolidated statement of profit or loss Six months Six months
ended Ended
30 June 30 June
2024 2023
US$'000 US$'000
Taxation charge for the period on Group companies 350 -
The charge for the period can be reconciled to the profit shown on the
Condensed Consolidated Statement of profit or loss as follows:
Argo Argo Argo
Group Capital Property Six
Limited Management Management Months
Limited Srl Ended
30 June 30 June 30 June 30 June
2024 2024 2024 2024
US$'000 US$'000 US$'000 US$'000
Profit/(loss) before tax (48) (692) 3,258 2,518
Applicable tax rate 0% 25% 16%
Tax at applicable rate - (173) 521 348
Current period tax losses - 173 - 173
Losses from prior periods - - (171) (171)
Tax charge - - 350 350
Argo Argo Argo
Group Capital Property Six
Limited Management Management Months
Limited Srl Ended
30 June 30 June 30 June 30 June
2023 2023 2023 2023
US$'000 US$'000 US$'000 US$'000
Profit/(loss) before tax 687 (602) 36 121
Applicable tax rate 0% 25% 16%
Tax at applicable rate - (151) 6 (145)
Current period tax losses - 151 - 151
Losses from prior periods - - (6) (6)
Tax charge - - - -
Consolidated statement of financial position
30 June 31 December
2024 2023
US$'000 US$'000
Corporation tax payable - -
6. EARNINGS PER SHARE
Earnings per share is calculated by dividing the net profit
for the period by the weighted average number of shares outstanding during the
period.
Six months Six months
ended Ended
30 June 30 June
2024 2023
US$'000 US$'000
Net profit for the period after taxation attributable to members 2,168 121
No. of shares No. of shares
Weighted average number of ordinary shares for basic earnings per share 38,959,986 38,959,986
Effect of dilution (Note 4) 3,895,998 3,895,998
Weighted average number of ordinary shares for diluted earnings per share 42,855,984 42,855,984
Six months Six months
Ended ended
30 June 30 June
2024 2023
US$ US$
Earnings per share (basic) 0.056 0.003
Earnings per share (diluted) 0.051 0.003
7. LAND, FIXTURES, FITTINGS AND EQUIPMENT
Fixtures, fittings and equipment
Right
of use Total
assets Land
USD'000000 US$'000 US$'000 US$'000
Cost
At 1 January 2023 455 188 172 815
Additions - 6 - 6
Disposals - (20) - (20)
Foreign exchange movement 24 (5) (6) (13)
At 31 December 2023 479 169 166 814
Additions - - - -
Disposals - - - -
Foreign exchange movement (4) (2) (5) (11)
At 30 June 2024 475 167 161 803
Accumulated Depreciation
At 1 January 2023 207
30 177 -
Depreciation charge for period 93 4 - 97
Disposals - (20) - (20)
Foreign exchange movement 5 (1) - 4
At 31 December 2023 128 160 - 288
Depreciation charge for period 47 3 - 50
Disposals - - - -
Foreign exchange movement (1) (2) - (3)
At 30 June 2024 174 161 - 335
Net book value
At 31 December 2023 351 9 166 526
At 30 June 2024 301 6 161 468
8. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
30 June 2024 30 June 2024
Holding Investment in management shares Total cost Fair value
US$'000 US$'000
10 The Argo Fund Ltd - -
- -
Holding Investment in ordinary shares Total cost Fair value
US$'000 US$'000
7,920 The Argo Fund Ltd* 2,176 2,729
2,176 2,732
31 December 31 December
2023 2023
Holding Investment in management shares Total cost Fair value
US$'000 US$'000
10 The Argo Fund Ltd - -
- -
Holding Investment in ordinary shares Total cost Fair value
US$'000 US$'000
10,920 The Argo Fund Ltd* 3,000 3,711
3,000 3,711
*Classified as current in the consolidated statement of Financial Position
9. TRADE AND OTHER RECEIVABLES
At 30 June 2024 At 31 December 2023
US$ '000 US$ '000
Trade receivables - Gross 3,009 2,947
Less: provision for impairment of trade receivables (2,875) (2,676)
Trade receivables - Net 134 271
Other receivables 33 44
Prepayments and accrued income 122 84
289 399
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 reporting date except as disclosed below.
The movement in the Group's provision for impairment of trade
and loan receivables is as follow:
At 30 June 2024 At 31 December 2023
US$ '000 US$ '000
As at 1 January 2,676 1,980
Bad debt recovered - -
Charged during the period 201 686
Foreign exchange movement (2) 10
Closing balance 2,875 2,676
10. LOANS AND ADVANCES RECEIVABLE
At 30 June At 31 December
2024 2023
US$'000 US$'000
Deposits on leased premises - current 9 -
Deposits on leased premises - non-current (see below) 89 98
9
Other loans and advances receivable - non-current (note 14) - -
98 98
The deposits on leased premises relate to the Group's offices in London and
Romania.
The movement in the Group's expected credit loss on loan receivables is as
follows:
At 30 June At 31 December
2024 2023
US$ '000 US$ '000
As at 1 January 26,224 12,570
Expected credit loss recognized during the year - 13,320
Foreign exchange movement (320) 334
Closing balance 25,904 26,224
11. SHARE CAPITAL
The Company's authorised share capital is unlimited with a nominal value
of US$0.01.
30 June 30 June 31 December 31 December
2024 2024 2023 2023
No. US$'000 No. US$'000
Issued and fully paid
Ordinary shares of US$0.01 each 38,959,986 390 38,959,986 390
38,959,986 390 38,959,986 390
The Directors did not recommend the payment of a final dividend for the year
ended 31 December 2023 and do not recommend an interim dividend in respect of
the current period.
12. RECONCILIATION OF NET CASH INFLOW/(OUTFLOW) FROM OPERATING
ACTIVITIES TO PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION
Six months ended Six months ended
30 June 2024 30 June 2023
US$'000 US$'000
Profit on ordinary activities before taxation 2,518 121
Interest income (8) (496)
Depreciation on fixtures, fittings and equipment 3 2
Depreciation on right of use asset 47 46
Realised and unrealised profit on investments (86) (308)
Net foreign exchange loss 11 9
Increase in payables 205 136
Decrease in receivables, loans and advances 111 103
Corporation tax paid (14) -
Net cash inflow/(outflow) from operating activities 2,787 (387)
13. FAIR VALUE HIERARCY
The table below analyses financial instruments measured at fair value at the
end of the reporting period by the level of the fair value hierarchy (note
2b).
At 30 June 2024
Level 1 Level 2 Level 3 Total
US$ '000 US$ '000 US$ '000 US$ '000
Financial assets at fair value through profit or loss 2,729 - 2,729
-
At 31 December 2023
Level 1 Level 2 Level 3 Total
US$ '000 US$ '000 US$ '000 US$ '000
Financial assets at fair value through profit or loss
- 3,711 - 3,711
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
For the six months ended 30 June 2024 (continued)
14. RELATED PARTY TRANSACTIONS
All of the Group revenues derive from The Argo Fund in which two of the
Company's directors, Kyriakos Rialas and Kenneth Watterson, have influence
through directorships and the provision of investment management services.
At the reporting date the Company holds investments in The Argo Fund Limited.
These investments are reflected in the accounts at fair value of US$2.7
million (31 December 2023: $3.7 million).
In February 2020, the Group granted a loan to Argo Real Estate Limited
Partnership "ARE LP", an entity that is 100% owned by Andreas Rialas of
US$11.0 million (€10.2 million). In March 2023, ARE LP assigned its loan
receivable from Novi Biznes Poglyady LLC to Argo Group Limited in exchange for
the cancellation of its loan payable to Argo Group Limited. Interest of 9.25%
per annum is receivable on this loan. As this loan is exposed to the
performance of an investment property in Ukraine, further to an independent
valuation of the property and taking into consideration the seniority of the
loan, an expected credit loss allowance to the full loan balance was
recognised during 2023. No further interest is currently recorded until the
situation in Ukraine improves and the recoverability of the loan becomes more
certain.
The Group also has a balance receivable for US$12.0 million (€11.2 million)
from ARE LP that was assigned from Argo Real Estate Opportunities Fund Limited
during 2021. The carrying value of this balance is $nil.
15. TRADE AND OTHER PAYABLES
At 30 June At 31 December
2024 2023
US$ '000 US$ '000
Trade creditors 67 16
Other creditors and accruals 1,017 602
Total current trade and other payables 1,084 618
Trade creditors are normally settled on 30-day terms.
At 30 June At 31 December
2024 2023
US$ '000 US$ '000
Other creditors and accruals 330 332
Total non-current trade and other payables 330 332
Total trade and other payables 1,414 950
16. EVENTS AFTER THE REPORTING PERIOD
There were no material events after the reporting period, which have a bearing
on the understanding of the consolidated financial statements.
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