RNS Number : 6042A
Black Sea Property PLC
30 September 2020
BLACK SEA PROPERTY PLC
("Black Sea Property" or the "Company")
Half-yearly report for the period ended 30 June 2020
The Board of Black Sea Property PLC is pleased to announce its interim report for the six-month period ended 30 June 2020.
Electronic copies of the interim report will be available at the Company's website http://www.blackseapropertyplc.com
BLACK SEA PROPERTY PLC Alex Borrelli - Chairman
+44(0) 774 702 0600
PETERHOUSE CAPITAL LIMITED AQSE Corporate Adviser Heena Karani and Duncan Vasey
+44 (0) 207 469 0930
Chairman's Statement
I am pleased to present the unaudited interim financial statements of the Company for the six months ended 30 June 2020.
The unaudited net asset value as at 30 June 2020 was €21.9 million or 1.21 cents per share (31 December 2019: €16.1 million or 1.27 cents per share).
During the period, the Company generated revenues of €129,476 (2019: €312,459) which resulted in a loss before taxation of €72,420 (2019: €2.526 million which included a loss on revaluation of investment properties of €1.897 million). The results reflect other income of €911,705, which relates to cash received against the receivable included in the acquisition of Camping South Beach EOOD (previously written off) and interest income accrued on this receivable (2019: €8,082) (note 11). The results also reflect property operating expenses of €381,301 (2019: €294,481), other operating expenses of €457,688 (2019: €386,472) and interest payable and other charges of €274,612 (2019: €317,964). Loss per share amounted to €0.01 cents (2019: €0.20 cents).
The impact of Covid-19 has adversely affected our operations during the period. The holiday season only started at the beginning of July, after the beaches on the Black Sea coast were opened in June, and occupancy levels at Camping South Beach have not reached expected levels. We are commencing our development of the Byala plots into a further camping operation. We are considering development proposals for Ivan Vazov 1 Building which we expect will enhance its value significantly.
In February 2020, we successfully completed the acquisition of European Convergence Development (Cayman) Limited and ECD Management (Cayman) Limited, both subsidiaries of European Convergence Development Company PLC ("ECDC"), for €3,582,638. We also signed agreements for the acquisition of 29.85% of ECDC at a price per share equal to the net asset value of the shares equivalent to €44,855. We paid €1 for the loan granted by ECDC to ECD Cayman of €122,221,701.
The main rationale for the acquisition of interests in ECDC Group includes: the opportunity to add two development plots suitable for logistics/industrial development (the site in Plovdiv) and residential, commercial or hospitality development (the site in Kraimorie), thus diversifying our portfolio. Both ECD Cayman and ECDC have established structures in place that will save time and costs for future investments.
In January 2020, we completed a share placing and simultaneous 'debt to equity' conversion. The overall amount raised before expenses was €4,585,682, through a placement of 416,880,162 new ordinary shares of nil par value at a price of €0.011 per Ordinary Share. In addition, Mamferay Holdings Limited ("Mamferay") converted all of its outstanding loans, including interest totalling €1,394,958 into 127,035,545 ordinary shares at €0.011 per share. Following this conversion, Mamferay, now has a 26.94% shareholding in the Company.
We are not yet able to assess fully the impact of the current restrictions on the results for the year ending 31 December 2020 as a result of the continuing impact of Covid-19 but, in the meantime, we are managing closely our cash flow and cost base. We believe that the potential for our camping operations with the refurbishment of the Ivan Vazov 1 will add significant value in due course.
Alex Borrelli
Chairman
29 September 2020
Consolidated Statement of Comprehensive Income
for the period ended 30 June 2020
(Unaudited)
(Unaudited)
(Audited)
6 months to
6 months to
Year to
30 June 2020
30 June 2019
31 December 2019
Notes
€
€
€
Total revenue
Revenue
129,476
312,459
671,030
Property operating expenses
(381,301)
(294,481)
(468,514)
Net rental and related income
(251,825)
17,978
202,516
(Loss)/gain on revaluation of investment properties
-
(1,896,721)
4,564,767
Net (loss)/gain on investment property
-
(1,896,721)
4,564,767
Operating expenses
Other operating expenses
7
(457,688)
(386,472)
(977,728)
Total operating (loss)/profit
(709,513)
(2,265,215)
3,789,555
Operating loss before interest and tax
Other income
11
911,705
8,082
1,318,513
Interest payable and similar charges
(274,612)
(317,964)
(652,436)
(Loss)/profit before tax
(72,420)
(2,575,097)
4,455,632
Tax expense
-
49,310
(391,178)
(Loss)/profit and total comprehensive income attributable to shareholders
(72,420)
(2,525,787)
4,064,454
(Loss)/earnings per share
Basic & Diluted(loss)/earnings per share (cents)
12
(0.01)
(0.20)
0.32
The notes form an integral part of these financial statements.
Consolidated Statement of Financial Position
at 30 June 2020
(Unaudited)
(Unaudited)
(Audited)
30 June 2020
30 June 2019
31 December 2019
Notes
€
€
€
Non-current assets
Investment properties
8
39,655,103
27,566,766
35,986,000
Investment in associate
5
46,626
-
-
39,701,729
27,566,766
35,986,000
Current assets
Other receivables
347,846
1,304,568
351,367
Related party loan
10
196,000
-
-
Cash and cash equivalents
948,275
978,406
717,945
1,492,121
2,282,974
1,069,312
Total assets
41,193,850
29,849,740
37,055,312
Equity and liabilities
Issued share capital
6
70,699,442
64,774,886
64,774,886
Retained deficit
(47,247,377)
(53,765,198)
(47,174,957)
Foreign exchange reserve
(1,533,086)
(1,533,086)
(1,533,086)
Total equity
13
21,918,979
9,476,602
16,066,843
Non-current liabilities
Bank loans
9
17,217,366
16,576,585
8,326,534
Deferred tax liability
1,903,784
1,466,552
1,903,784
19,121,150
18,043,137
10,230,318
Current liabilities
Trade payables
153,721
587,532
496,684
Shareholder loan
6
-
150,000
1,394,958
Bank loans
9
-
1,592,469
8,866,509
153,721
2,330,001
10,758,151
Total equity and liabilities
41,193,850
29,849,740
37,055,312
Number of ordinary shares in issue
13
1,813,323,603
1,269,407,896
1,269,407,896
NAV per ordinary share (cents)
13
1.21
0.75
1.27
The notes form an integral part of these financial statements.
The financial statements were approved and authorised for issue by the Board of Directors on 29 September 2020 and were signed on their behalf by:
Chairman Director
Alex Borrelli Ventsislava Altanova
Consolidated Statement of Changes in Equity
for the period ended 30 June 2020
Share capital
Retained deficit
Foreign exchange reserve
Total
€
€
€
€
At 1 January 2019
64,774,886
(51,239,411)
(1,533,086)
12,002,389
-
Loss for the six-month period
-
(2,525,787)
-
(2,525,787)
At 30 June 2019 (unaudited)
64,774,886
(53,765,198)
(1,533,086)
9,476,602
At 1 January 2019
64,774,886
(51,239,411)
(1,533,086)
12,002,389
Profit for the year
-
4,064,454
-
4,064,454
At 31 December 2019 (audited)
64,774,886
(47,174,957)
(1,533,086)
16,066,843
At 1 January 2020
64,774,886
(47,174,957)
(1,533,086)
16,066,843
Transactions with shareholders:
Conversion of shareholder loan to equity
4,585,682
-
-
4,585,682
Share capital issue
1,397,391
-
-
1,397,391
Less: share issue costs
(58,517)
-
-
(58,517)
5,924,556
-
-
5,924,556
Loss for the six-month period
-
(72,420)
-
(72,420)
At 30 June 2020 (unaudited)
70,699,442
(47,247,377)
(1,533,086)
21,918,979
The notes form an integral part of these financial statements.
Consolidated Statement of Cash Flows
for the period ended 30 June 2020
(Unaudited)
(Unaudited)
(Audited)
6 months to
6 months to
Year to
30 June 2020
30 June 2019
31 December 2019
€
€
€
Operating activities
(Loss)/profit before tax
(72,420)
(2,575,097)
4,455,632
Gain/(loss) on revaluation of investment properties
-
1,896,721
(4,564,767)
Other income
(911,705)
-
(1,318,513)
Finance expense
274,612
317,964
652,436
Movement in net cash outflow from operating activities
(709,513)
(360,412)
(775,212)
Decrease/(increase) in receivables
3,521
(695,342)
(659,493)
(Decrease)/increase in payables
(510,218)
353,271
265,256
(506,697)
(342,071)
(394,237)
Withholding tax paid
-
6,089
-
Net cash outflow from operating activities
(1,216,210)
(696,394)
(1,169,449)
Investing activities
Acquisition of subsidiary, net of cash acquired
(3,032,745)
-
-
Investment property additions
(469,103)
(1,896,721)
(3,854,467)
Investment in associate
(46,626)
-
-
Related party loan granted
(196,000)
-
-
Interest received
911,705
-
1,318,513
Net cash (outflow)/ from investing activities
(2,832,769)
(2,593,115)
(2,535,954)
Financing activities
Proceeds from share capital issued
4,585,682
-
-
Conversion of shareholder loan to equity
1,397,391
-
-
Loans and interest repaid
(274,612)
(317,964)
(669,849)
Bank loan received
-
41,246
-
Shareholder loans (converted to equity net of interest)/received
(1,394,958)
150,000
1,394,958
Share capital issue costs
(58,517)
-
-
Bank loans repaid
24,323
-
-
Net cash inflow/(outflow) from financing activities
4,279,309
(126,718)
725,109
Net increase/(decrease) in cash and cash equivalents
230,330
(2,719,833)
(2,980,294)
Cash and cash equivalents at beginning of period
717,945
3,698,239
3,698,239
Cash and cash equivalents at end of period
948,275
978,406
717,945
The notes form an integral part of these financial statements.
Notes to the Financial Statements for the period ended 30 June 2020
1. General information
Black Sea Property Plc (the Company) is a company incorporated and domiciled in the Isle of Man whose shares are publicly traded on the Aquis Stock Exchange in London.
2. Statement of compliance
These interim consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all of 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 2019.
The consolidated financial statements of the Group as at and for the year ended 31 December 2019 are available upon request from the Company's registered office at 55 Athol Street, Douglas, Isle of Man or at www.blackseapropertyplc.com.
These interim consolidated financial statements were approved by the Board of Directors on 29 September 2020.
3. Significant accounting policies
The accounting policies applied in these interim financial statements, except for the ones listed below, are the same as those applied in the Group's consolidated financial statements as at and for the year ended 31 December 2019.
4. Financial risk management policies
The principal risks and uncertainties are consistent with those disclosed in preparation of the Group's annual financial statements for the year ended 31 December 2019.
5. Acquisition of ECDC Group
On 21 February 2020, the Company successfully completed the acquisition of 100% of European Convergence Development (Cayman) Limited ("ECD Cayman") and ECD Management (Cayman) Limited ("ECD Management"). The consideration paid for ECD Cayman and ECD Management in total was €3,582,638. Both companies were subsidiaries of European Convergence Development Company PLC, Isle of Man ("ECDC").
The Company also signed agreements for the acquisition of 29.85% of ECDC at a price per share equal to the net asset value of the shares of €0.00168 or a total of €44,855. The total cost net of share transaction fees was €46,626. €1 was paid for the loan granted by ECDC to ECD Cayman of €122,221,701.
The main rationale for the acquisition of interests in ECDC Group includes: the opportunity to add two development plots suitable for logistics/industrial development (the site in Plovdiv) and residential, commercial or hospitality development (the site in Kraimorie), thus diversifying BSP portfolio. Both ECD Cayman and ECDC have established structures in place that will save time and costs for future investments.
The fair value of assets and liabilities acquired are as follows:
(Unaudited)
21 Feb 2020
€
Investment property
3,200,000
Cash
549,893
Trade payables
(167,255)
3,582,638
6. Cash placing and debt to equity conversion
On 20 January 2020 the Company performed a share placing and simultaneous debt to equity conversion. The overall amount raised before expenses was €4,585,682, through a placement of 416,880,162 new ordinary shares of nil par value (the "Placing Shares") at a price of €0.011 per Ordinary Share (the "Placing").
In addition to the Placing, Mamferay Holdings Limited ("Mamferay") agreed to convert all its outstanding loans, including interest totalling €1,394,958 into 127,035,545 ordinary shares at €0.011 per share (the "Loan Shares").
7. Other administration fees and expenses
(Unaudited)
(Unaudited)
(Audited)
6 months to
6 months to
Year to
30 June 2020
30 June 2019
31 December 2019
€
€
€
Directors' remuneration
49,847
40,547
81,039
Investment advisory fees
107,136
53,568
214,272
Legal and professional fees
120,506
55,828
123,232
Other administration and sundry expenses
180,199
236,529
559,185
457,688
386,472
977,728
8. Investment properties
(Unaudited)
(Unaudited)
(Audited)
30 June 2020
30 June 2019
31 December 2019
€
€
€
Beginning of year
35,986,000
27,566,766
27,566,766
Acquisition
3,200,000
-
1,065,723
Fair value adjustment
-
(1,896,721)
4,564,767
Additions
469,103
1,896,721
2,788,744
End of year
39,655,103
27,566,766
35,986,000
The Directors confirm that there are no material changes in the valuation of investments as of 30 June 2020.
9. Bank Loans
(Unaudited)
(Unaudited)
(Audited)
30 June 2020
30 June 2019
31 December 2019
€
€
€
Loan and interest accrued from UniCredit
6,976,847
7,066,023
6,980,477
Loan and interest accrued from Central Cooperative Bank
10,182,940
11,103,031
10,212,566
17,159,787
18,169,054
17,193,043
The Central Cooperative Bank debt funding provided to Camping South Beach EOOD was due to expire on 24 June 2020, however it has been agreed with the lender to postpone repayment until 24 June 2021.
The Unicredit debt funding provided to BSPF Bulgaria EAD was due to expire in October 2020, however it has been agreed with the lender to postpone repayment until 30 April 2021.
10. Related party loan
On 18 June 2020, a subsidiary of the Company, BSPF Project 1 EAD ("Project 1"), entered into a loan agreement with Phoenix Capital Holding AD. Project 1 lent Phoenix €196,000 at a fixed annual interest rate of 4.5%, with a repayable date of 18 June 2021. Phoenix Capital Holding AD owns 79.99% of the shares of Phoenix Capital Management JSC, the Company's investment adviser, and is also a subsidiary of Mamferay Holdings which owns 26.94% of the shares of Black Sea Property plc.
11. Other income
(Unaudited)
(Unaudited)
(Audited)
30 June 2020
30 June 2019
31 December 2019
€
€
€
Interest income - receivable balances
232,843
8,082
271,551
Reversal of fair value adjustment of CSB acquisition receivable balance
678,863
-
1,046,962
911,705
8,082
1,318,513
12. (Loss)/earnings per share
The basic (loss)/earnings per ordinary share is calculated by dividing the net (loss)/profit attributable to the ordinary shareholders of the Company by the weighted average number of ordinary shares in issue during the period.
(Unaudited)
(Unaudited)
(Audited)
30 June 2020
30 June 2019
31 December 2019
(Loss)/earnings attributable to owners of parent €
(72,420)
(2,525,787)
4,064,454
Weighted average number of ordinary shares in issue
1,287,431,251
1,269,407,896
1,269,407,896
Basic (loss)/earnings per share (cents)
(0.01)
(0.20)
0.32
The Company has no potential dilutive ordinary shares; the diluted (loss)/earnings per share is the same as the basic (loss)/earnings per share.
13. Net asset value per share
(Unaudited)
(Unaudited)
(Audited)
30 June 2020
30 June 2019
31 December 2019
Net assets attributable to owners of the parent (€)
21,918,979
9,476,602
16,066,843
Number of ordinary shares outstanding
1,813,323,603
1,269,407,896
1,269,407,896
Net Asset Value (cents)
1.21
0.75
1.27
14. Events after reporting date
There are no significant events after reporting date.
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