REG - Bay Capital PLC - Interim Report
24/09/2024 07:00
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RNS Number : 2834F Bay Capital PLC 24 September 2024
24 September 2024
BAY CAPITAL PLC
("Bay" or the "Company")
Interim Results for the six months ended 30 June 2024
Bay Capital Plc (LSE: BAY) announces its unaudited condensed interim results
for the six months to 30 June 2024 (the "Interim Report").
Peter Tom CBE, Chairman, said:
"During the financial year we have continued to evaluate acquisition
opportunities from our M&A pipeline, particularly within those industrial
and construction sectors that remain fragmented and ripe for consolidation.
"A number of active discussions with high quality businesses continue, and
while the prevailing economic environment remains challenging, we are positive
about the strategic opportunity for Bay and its shareholders, and will update
in due course as our plans develop."
Strategy
The Company was established in 2021 to pursue opportunities in the industrial,
construction and business services sectors.
The Company has a flexible approach, enabling it to deploy capital in
minority, majority or outright ownership investments across the UK and
internationally. The Directors aim to identify fundamentally sound assets,
where tangible opportunities exist to drive strategic, operational and
performance improvements.
The Company is the parent company of Bay Capital Subco Limited (a private
limited company under the laws of Jersey with registered number 134744) and
together will be referred to as the "Group" in these accounts.
Results and developments in the six month period to 30 June 2024
The Group's loss after taxation was £283,896 (six month period to 30 June
2023: £171,789), principally reflecting operating expenses incurred as a
listed business and acquisition activities of £304,310 (six month period to
30 June 2023: £199,010).
The Group generated a loss per share of 0.4 pence (six month period to 30 June
2023: loss per share of 0.2 pence).
As at 30 June 2024, the Group's cash balance was £4,893,053 (31 December
2023: £6,067,461).
On 18 June 2024, the Company held its Annual General Meeting at which all
resolutions were unanimously passed.
Risks
As the Company has yet to complete an investment or acquisition, it has
limited financial statements, historical financial data and trading history.
As such, during the period the Group and Company were subject to the risks and
uncertainties associated with those of an early-stage acquisition company.
The Directors are of the opinion that these risks, which were detailed in
Bay's published final results for the financial year ended 31 December 2023,
remain applicable to the Group and Company.
Dividend
At this point in the Company's development, it does not anticipate declaring
any dividends in the foreseeable future. The Directors will determine an
appropriate dividend policy for the Company following its inaugural investment
or acquisition.
Outlook
During the period, and post period end, Bay has continued to pursue its
investment and acquisition strategy and is currently assessing opportunities
across the industrial and construction sectors. The Directors have identified,
and continue to evaluate, a number of successful companies with high quality
management teams that are seeking to partner with, and leverage the benefits
of, the Board's experience and that of the wider Bay team. The Directors look
forward to updating shareholders on progress in due course.
Statement of Directors' responsibilities
The Directors confirm that these condensed interim financial statements have
been prepared in accordance with UK adopted International Accounting Standard
34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency
Rules sourcebook of the United Kingdom's Financial Conduct Authority and that
the interim management report includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8, namely:
· an indication of important events that have occurred during the
first six months and their impact on the condensed set of financial
statements, and a description of the principal risks and uncertainties for the
remaining six months of the financial year; and
· material related-party transactions in the first six months and any
material changes in the related-party transactions described in the last
annual report.
By order of the Board
Peter Tom CBE
Chairman
24 September 2024
Enquiries:
Bay Capital Plc
Peter Tom CBE, Chairman
David Williams, Director
c/o Tessera
Tessera - Strategic Adviser
Tony Morris +44 (0) 77 4218 9145
INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2024
Note Six months ended 30 June 2024 Six months ended 30 June 2023
Unaudited Unaudited
£ £
Administrative expenses (304,310) (199,010)
Operating loss (304,310) (199,010)
Interest receivable 5 20,414 27,221
Loss on ordinary activities before taxation (283,896) (171,789)
Taxation charge - -
Loss and total comprehensive loss for the period (283,896) (171,789)
Loss per share
Basic & diluted 10 (£0.004) (£0.002)
Loss attributable to:
Owners of the parent company (283,896) (171,789)
The Group has no items of other comprehensive income in either the current or
prior period. All activities in both the current and the prior period relate
to continuing operations.
The accompanying notes form part of these interim condensed consolidated
financial statements.
INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2024
Note As at As at
30 June 2024 31 December 2023
Unaudited Audited
£ £
Current assets
Cash and cash equivalents 8 4,893,053 6,067,461
Trade and other receivables 7 7,350 8,079
Total current assets 4,900,403 6,075,540
Total assets 4,900,403 6,075,540
Current liabilities
Trade and other payables 9 61,943 958,674
Total current liabilities 61,943 958,674
Total liabilities 61,943 958,674
Total net assets 4,838,460 5,116,866
Equity
Share capital 12 700,000 700,000
Share premium 13 6,258,748 6,258,748
Capital redemption reserve 13 2 2
Share-based payment reserve 13 30,697 25,207
Retained deficit 13 (2,150,987) (1,867,091)
Total equity attributable to equity holders of the Company 4,838,460 5,116,866
The accompanying notes form part of these interim condensed consolidated
financial statements.
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2023 (Unaudited)
Share capital Share premium Capital redemption reserve Share-based payment reserve Retained Total
deficit Equity
£ £ £ £ £ £
Balance as at 31 December 2022 700,000 6,258,748 2 14,228 (560,405) 6,412,573
Loss for the period - - - - (171,789) (171,789)
Share-based payment charge - - - 5,489 - 5,489
Balance as at 30 June 2023 700,000 6,258,748 2 19,717 (732,194) 6,246,273
For the six months ended 30 June 2024 (Unaudited)
Share capital Share premium Capital redemption reserve Share-based payment reserve Retained Total
deficit Equity
£ £ £ £ £ £
Balance as at 31 December 2023 700,000 6,258,748 2 25,207 (1,867,091) 5,116,866
Loss for the period - - - - (283,896) (283,896)
Share-based payment charge - - - 5,490 - 5,490
Balance as at 30 June 2024 700,000 6,258,748 2 30,697 (2,150,987) 4,838,460
The accompanying notes form part of these interim condensed consolidated
financial statements.
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 June 2024
Six months ended 30 June 2024 Six months ended 30 June 2023
Unaudited Unaudited
£ £
Cash flows from operating activities
Loss before income tax (283,896) (171,789)
Adjustments for:
Share-based payment charge 5,490 5,489
Interest receivable (20,414) (27,221)
Operating cash flows before changes in working capital (298,820) (193,521)
Decrease in trade and other receivables 729 517
(Decrease)/increase in trade and other payables (896,731) 62,081
Net cash used in operating activities (1,194,822) (130,923)
Interest received 20,414 15,298
Net cash inflow from financing activities 20,414 15,298
Net decrease in cash and cash equivalents (1,174,408) (115,625)
Cash and cash equivalents at beginning of period 6,067,461 6,458,073
Cash and cash equivalents at end of period 4,893,053 6,342,448
The accompanying notes form part of these interim condensed consolidated
financial statements.
NOTES TO THE GROUP FINANCIAL INFORMATION
1. General information
The Company is a public limited company incorporated and domiciled in Jersey,
whose shares are publicly traded on the Main Market of the London Stock
Exchange. The Company is the parent company of Bay Capital Subco Limited (a
private limited company under the laws of Jersey with registered number
134744).
The address of its registered office is 28 Esplanade, St. Helier, Channel
Islands, JE2 3QA, Jersey.
The Company has been incorporated for the purpose of identifying suitable
acquisition opportunities in accordance with the Group's investment and
acquisition strategy with a view to creating shareholder value. The Group will
retain a flexible investment and acquisition strategy which will, subject to
appropriate levels of due diligence, enable it to deploy capital in target
companies by way of minority or majority investments, or full acquisitions
where it is in the interests of shareholders to do so. This will include
transactions with target companies located in the UK and internationally.
2. Basis of preparation
These interim condensed consolidated financial statements and accompanying
notes have neither been audited nor reviewed by the Company's auditor.
The unaudited interim financial statements in this report have been prepared
using accounting policies consistent with International Financial Reporting
Standards ("IFRS") as adopted by the UK. The accounting policies adopted in
the interim financial statements are consistent with those adopted in the
Group's last annual report for the year ended 31 December 2023 with regards to
the measurement and recognition of each type of asset, liability, income and
expense presented. The Group has not early adopted any standard,
interpretation or amendment that has been issued but is not yet effective.
The interim condensed consolidated financial statements have been prepared on
a going concern basis.
The interim condensed consolidated financial statements do not include all the
information and disclosures required in the annual financial statements and
should be read in conjunction with the Group's annual report as at 31 December
2023, which is available on the Company's website.
These interim financial statements present selected explanatory notes to
explain events and transactions that are significant to an understanding of
the changes in the Group's financial position and performance since 31
December 2023.
The interim condensed consolidated financial statements are presented in £
and rounded to the nearest £ unless otherwise stated.
These interim condensed consolidated financial statements were approved by the
Board of Directors on 24 September 2024.
Comparative figures
Comparative figures which have been presented cover the six month period ended
30 June 2023. The statement of financial position comparative figures are
shown as at 31 December 2023.
Statutory accounts
Financial information contained in this document does not constitute statutory
accounts within the meaning of the Companies (Jersey) Law 1991. The statutory
accounts for the year ended 31 December 2023 have been filed with the
Registrar of Companies. The report of the auditors on those statutory accounts
was unqualified and did not draw attention to any matters by way of emphasis.
3. Significant accounting policies
The interim condensed consolidated financial statements are based on the
following policies which have been consistently applied:
Basis of consolidation
The interim condensed consolidated financial statements present the results of
the Company and its subsidiaries (the "Group") as if they formed a single
entity. Intercompany transactions and balances between Group companies are
therefore eliminated in full.
Where the Group has control over a Company, it is classified as a subsidiary.
The Group controls a company if all three of the following elements are
present: power over the Company, exposure to variable returns from the
Company, and the ability of the Group to use its power to affect those
variable returns. Control is reassessed whenever facts and circumstances
indicate that there may be a change in any of these elements of control.
The interim condensed consolidated financial statements incorporate the
results of business combinations using the acquisition method. In the interim
consolidated statement of financial position, the acquiree's identifiable
assets, liabilities and contingent liabilities are initially recognised at
their fair values at the acquisition date. The acquisition related costs are
included in the consolidated statement of comprehensive income on an accruals
basis. The results of acquired operations are included in the consolidated
statement of comprehensive income from the date on which control is obtained.
Functional and presentational currency
The Group's functional and presentational currency for these financial
statements is the pound sterling.
Interest receivable
Interest receivable is recognised on a time-proportion basis using the
effective interest rate method.
Employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis
and are expensed as the related service is provided. A liability is
recognised for the amount expected to be paid under short-term cash bonus or
profit-sharing plans if the Group has a present legal or constructive
obligation to pay this amount as a result of past service provided by the
employee and the obligation can be estimated reliably.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and short-term deposits with
an original maturity of three months or less from inception, held for meeting
short term commitments.
Equity
Equity comprises of share capital, share premium, capital redemption reserve,
share based payment reserve, and retained deficit.
Share capital is measured at the par value.
Share premium and retained deficit represent balances conventionally
attributed to those descriptions. The transaction costs relating to the issue
of shares was deducted from share premium.
The Capital redemption reserve is made up on amounts arising from the
cancellation of the deferred shares.
Share-based payment reserve includes the cumulative share-based payment
charged to equity.
Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax
is recognised in the income statement except to the extent that it relates to
items recognised in other comprehensive income or directly in equity, in which
case it is recognised in other comprehensive income or equity respectively.
Current tax is the expected tax payable or receivable on the taxable income or
loss for the year, using tax rates and laws enacted or substantively enacted
at the statement of financial position date.
Deferred tax is provided on temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts
used for taxation purposes. The following temporary differences are not
provided for: the initial recognition of goodwill; the initial recognition of
assets or liabilities that affect neither accounting nor taxable profit other
than in a business combination, and differences relating to investments in
subsidiaries to the extent that they will probably not reverse in the
foreseeable future. The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the carrying amount of assets
and liabilities, using tax rates and laws enacted or substantively enacted at
the statement of financial position date.
A deferred tax asset is recognised only to the extent that it is probable that
future taxable profits will be available against which the temporary
difference can be utilised.
Financial assets and liabilities
The Group's financial assets and liabilities comprise of cash and cash
equivalents, accruals and payroll related creditors. Financial assets are
stated at amortised cost less provision for expected credit losses. Financial
liabilities are stated at amortised cost.
Share-based payments
The Group operates an equity-settled share-based payment plan. The fair value
of the employee services received in exchange for the grant of options is
recognised as an expense over the vesting period, based on the Group's
estimate of awards that will eventually vest, with a corresponding increase in
equity as a share-based payment reserve.
This plan includes market-based vesting conditions for which the fair value at
grant date reflects and are therefore not subsequently revisited. The fair
value is determined using a binomial model.
Warrants
Warrants issued as part of share issues have been determined as equity
instruments under IAS 32. Since the fair value of the shares issued at the
same time as the warrants is equal to the price paid, these warrants, by
deduction, are considered to have been issued at fair value. No warrants have
been exercised in the period or recognised in these interim consolidated
financial statements. For further details of the warrants issued please refer
to the Group's latest annual report at 31 December 2023.
Related party transactions
The Group discloses transactions with related parties which are not wholly
owned with the same group. It does not disclose transactions with members of
the same group that are wholly owned.
Standards in issue but not yet effective
At the date of authorisation of these financial statements there were
amendments to standards which were in issue, but which were not yet effective,
and which have not been applied. The principal one was:
· Amendments to IAS 21 - The Effects of Changes in Foreign Exchange
Rates: Lack of exchangeability
The Directors do not expect the adoption of this amendment to standards to
have a material impact on the financial statements.
4. Critical accounting estimates and judgments
In preparing the interim condensed consolidated financial statements, the
Directors have to make judgments on how to apply the Group's accounting
policies and make estimates about the future. The Directors do not consider
there to be any critical judgments that have been made in arriving at the
amounts recognised in the interim condensed consolidated financial statements.
5. Interest receivable
Six months ended 30 June 2024 Six months ended 30 June 2023
Unaudited Unaudited
£ £
Bank interest receivable 20,414 27,221
6. Investments
Principal subsidiary undertakings of the Group
The Company directly owns the ordinary share capital of its subsidiary
undertakings as set out below:
Subsidiary Nature of business Country of incorporation Proportion of A ordinary shares held by Company Proportion of B ordinary shares held by Company
Bay Capital Subco Limited Intermediate holding company Jersey, Channel Islands 100 per cent. 0 per cent.
The address of the registered office of Bay Capital Subco Limited (the
"Subco") is 28 Esplanade, St. Helier, Channel Islands, JE2 3QA, Jersey. The
Subco was incorporated on 31 March 2021 and prepares its own financial
statements for the period ended 31 December each year.
The A ordinary shares have full voting rights, full rights to participate in a
dividend and full rights to participate in a distribution of capital. The B
ordinary shares have been issued pursuant to the Company's Subco Incentive
Scheme and hold no voting or dividend rights or rights to distribution.
7. Trade and other receivables
As at As at
30 June 2024 31 December 2023
Unaudited Audited
£ £
Prepayments 7,350 8,079
7,350 8,079
8. Cash and cash equivalents
As at As at
30 June 2024 31 December 2023
Unaudited Audited
£ £
Cash at bank and in hand 4,893,053 6,067,461
9. Trade and other payables
As at As at
30 June 2024 31 December 2023
Unaudited Audited
£ £
Accruals 51,906 948,263
Other tax and social security 7,762 8,136
Payroll related creditors 2,275 2,275
61,943 958,674
10. Earnings per share
Six months ended Six months ended
30 June 2024 30 June 2023
Unaudited Unaudited
£ £
Loss attributable to the equity holders of the Company (283,896) (171,789)
Weighted number of shares in issue 70,000,000 70,000,000
Loss per share (£) (0.004) (0.002)
11. Financial instruments
As at As at
30 June 2024 31 December 2023
Unaudited Audited
£ £
Financial assets
Cash and cash equivalents 4,893,053 6,067,461
4,893,053 6,067,461
As at As at
30 June 2024 31 December 2023
Unaudited Audited
£ £
Financial liabilities
Accruals 51,906 948,263
Payroll related creditors 2,275 2,275
54,181 950,538
Financial risk management objectives and policies
The Group's financial assets and liabilities comprise of cash and cash
equivalents, accruals and payroll related creditors. The carrying value of all
financial assets and liabilities equals fair value given their short-term
nature.
Credit risk
The Group's credit risk is wholly attributable to its cash balance. All cash
balances are held at a reputable bank in Jersey. The credit risk from its cash
and cash equivalents is deemed to be low due to the nature and size of the
balances held.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its
financial obligations as they fall due.
The Group's approach to liquidity risk is to ensure that sufficient liquidity
is available to meet foreseeable requirements and to invest funds securely and
profitably.
12. Share capital
Allocated, called up and fully paid
As at As at As at As at
30 June 2024 30 June 2024 31 December 2023 31 December 2023
Unaudited Unaudited Audited Audited
Number £ Number £
Ordinary shares of 1p each 70,000,000 700,000 70,000,000 700,000
13. Reserves
Share premium and retained deficit represent balances conventionally
attributed to those descriptions. The transaction costs relating to the issue
of shares was deducted from share premium.
The Capital redemption reserve is made up on amounts arising from the
cancellation of the deferred shares.
Share-based payment reserve includes the cumulative share-based payment
charged to equity.
The Group having no regulatory or similar requirements, its primary capital
management focus is on maximising earnings per share and therefore shareholder
return.
14. Share incentive Plan
On 14 September 2021, the Group created a Subco Incentive Scheme within its
wholly owned subsidiary Bay Capital Subco Limited ("Subco"). Under the terms
of the Subco Incentive Scheme, scheme participants are only rewarded if a
predetermined level of shareholder value is created over a three to five year
period or upon a change of control of the Company or Subco (whichever occurs
first), calculated on a formula basis by reference to the growth in market
capitalisation of the Company, following adjustments for the issue of any new
Ordinary shares and taking into account dividends and capital returns
("Shareholder Value"), realised by the exercise by the beneficiaries of a put
option in respect of their shares in Subco and satisfied either in cash or by
the issue of new ordinary shares at the election of the Company.
Under these arrangements in place, participants are entitled to up to a share
of 15 percent of the Shareholder Value created, subject to such Shareholder
Value having increased by at least 10 percent. per annum compounded over a
period of between three and five years from admission or following a change of
control of the Company or Subco.
15. Share-based payments
The Subco Incentive Scheme detailed in Note 14 is an equity-settled share
option plan which allows employees and advisors of the Group to sell their B
shares to the Company in exchange for a cash payment or for shares in the
Company (at the Company's election) if certain conditions are met.
These conditions include good and bad leaver provisions and that growth in
Shareholder Value of 10 percent compound per annual is delivered over a three
to five year period for the scheme to vest. This second condition is therefore
a market condition which has been taken into account in the measurement at
grant date of the fair value of the options.
The weighted average exercise price of the outstanding B share options is
£0.10 which have a weighted average contractual life of 2 years 3 months. No
B share options were issued in the period, all of which were outstanding at
the period end. No B share options were exercised in the period. No B share
options have expired during the period.
The Group recognised £5,490 (six months ended 30 June 2023: £5,489) of
expenditure in the statement of total comprehensive income in relation to
equity-settled share-based payments in the period.
The fair value of options granted during the period was determined by applying
a binominal model. The expense is apportioned over the vesting period of the
option and is based on the number which are expected to vest and the fair
value of these options at the date of grant.
The inputs into the binomial model in respect of options granted in the period
are as follows:
Opening share price 10.0p
Expected volatility of share price 16.67%
Expected life of options 5 years
Risk-free rate 0.73%
Target increase in share price per annum 10%
Fair value of options 50.342p
Expected volatility was estimated by reference to the average 5-year
volatility of the FTSE SmallCap Index.
The target increase in Shareholder Value is laid out in the Articles of
Association of the Subco and represents the compounded target annual increase
in market capitalisation (adjusted for capital raises and dividends) that
needs to be met between the third and fifth anniversary of the Group's
admission onto the London Stock Exchange in order for the scheme to vest.
The Group did not enter into any share-based payment transactions with parties
other than employees and advisors during the current period.
16. Related party transactions
There are no related party transactions requiring disclosure.
17. Contingent liabilities
There are no contingent liabilities at the reporting date which would have a
material impact on the financial statements.
18. Events after the reporting date
There are no events subsequent to the reporting date which would have a
material impact on the financial statements.
19. Ultimate controlling party
In the opinion of the Directors, there is no single ultimate controlling
party.
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