REG - Black Sea Property - Half-year Report
30/09/2022 11:15
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RNS Number : 3470B Black Sea Property PLC 30 September 2022
Friday 30 September, 2022
Black Sea Property
Half-year Report
BLACK SEA PROPERTY PLC
("Black Sea Property" or the "Company")
Half-yearly report for the period ended 30 June 2022
The Board of Black Sea Property PLC is pleased to announce its interim report
for the six-month period ended 30 June 2022.
Electronic copies of the interim report will be available at the Company's
website http://www.blackseapropertyplc.com
(http://www.blackseapropertyplc.com/)
BLACK SEA PROPERTY PLC simon.hudd@d3ainvestments.com (mailto:simon.hudd@d3ainvestments.com)
Simon Hudd, Chairman
PETERHOUSE CAPITAL LIMITED +44 (0) 20 7469 0930
AQSE Corporate Adviser
Heena Karani and Duncan Vasey
Market Abuse Regulation (MAR) Disclosure
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation EU 596/2014 as it forms part of retained EU law
(as defined in the European Union (Withdrawal) Act 2018).
Black Sea Property PLC
HALF-YEARLY REPORT
FOR THE SIX MONTH PERIOD ENDED
30 JUNE 2022
Contents
Chairman's Statement
Consolidated Statement of Comprehensive Income.....4
Consolidated Statement of Financial Position.............. 5
Consolidated Statement of Changes in Equity ..................6
Consolidated Statement of Cash Flows........................7
Notes to the Financial Statements................................8
Chairman's Statement
As at 30 June 2022, the significant shareholders of Black Sea Property Plc
("the Company") were as follows:
Beneficial shareholder Holding Percentage
Neo London Capital Plc 515,126,806 28.41%
Compass Capital JSC 304,354,182 16.78%
Mamferay Holdings Limited 449,957,562 24.81%
Capman AM 92,000,000 5.07%
Interfund Investments Plc 89,500,000 4.94%
The shareholder structure as at 31 December 2021 is the following:
Beneficial shareholder Holding Percentage
Neo London Capital Plc 515,126,806 28.41%
Compass Capital JSC 304,354,182 16.78%
Mamferay Holdings Limited 449,957,562 24.81%
Capman AM 92,000,000 5.07%
Interfund Investments Plc 89,500,000 4.94%
Chairman's statement
I am pleased to present the unaudited interim financial statements of the
Company for the six months ended 30 June 2022.
The unaudited net asset value as at 30 June 2022 was €24.3 million or 1.34
cents per share (30 December 2021: €24.9 million or 1.37 cents per share).
During the period, the Company generated revenues of €152,646 (June 2020:
€207,147) which resulted in a loss before taxation of €553,150 (June 2021:
€593,746). The results reflected other income of €106,798 (June 2021:
€213,543), property operating expenses of €132,856 (June 2020:
€271,863), other operating expenses of €458,473 (June 2021: €278,605)
and interest payable and other charges of €215,287 (June 2020:
€390,939). Loss per share amounted to €0.03 cents (June 2021: €0.03
cents).
Camping South Beach EOOD ("CSB")
Throughout 2022 CSB continued operating in the challenging environment marked
by the far-reaching economic consequences of the war in Ukraine, as well as
post Covid implications.
The company struggled to preserve its position as a destination for luxury
camping holidays and beach houses in the significant political and economic
uncertainty created by the Ukraine conflict, just when the COVID-19 pandemic
started to recede.
Following the trend from the previous years, during the period CSB relied to a
great extent on domestic demand for high-end luxury camping holidays. It has
to be noted that, due to the relaxation of travelling Covid restrictions, many
domestic tourists have chosen overseas holiday destinations which negatively
influenced the expected occupancy levels.
Camping South Beach achieved occupancy levels of around 44% in July and 50% in
August 2022. The occupancy levels reflect the overall economic uncertainty,
the rapidly rising inflation levels due to energy and raw materials price
increase.
Nevertheless, CSB has continued to provide hospitality services at highest
standards in a safe environment.
Chairman's Statement (continued)
2022 marked the second active season under the Concession Agreement for the
beach in front of the location, adding value to the property and enabling
synergy with the camp site. The term of the Concession Agreement is 20 years.
According to the Concession Agreement, the investment requirements for 2022
amount to EUR 76 182 and have been successfully fulfilled.
Though the outcome for 2023 is unclear due to the severe international
political situation, CSB will strive to strengthen its position and will
benefit from its competitive advantage due to its prime location at the
beachfront of one of the widest and most beautifully-preserved beaches on the
Black Sea coast.
Ivan Vazov 1 Building
In April 2022 the company started reconstruction works for the historic Ivan
Vazov building in central Sofia that is planned to be completed by the end of
Q2 2023.
The building consists of a basement floor, five floors and an attic floor with
total build-up area of 9 107 m2. The attic floor will be converted into a
mansard floor with the reconstruction of the roof.
As the building is a historical monument (according to the National Institute
of Cultural Monuments) not only the outside, but also the inside of the
building with elements such as the columns, the profiled cornices, the figures
of Atlanteans and the mask of Goddess on the façade and the iron ornamental
wrought of the entrance doors will be renovated.
The Company is carrying out all of the works in line with the applicable
regulations.
In parallel to the reconstruction process the renting out process of the
premises will proceed.
Byala Plots of Land ("Byala")
The public procedure for the Urban Master Plan of Byala municipality region by
the authorities has commenced, but the approval process is not yet finished.
The Company is planning the development of plots of land at Byala as a camping
site with luxury bungalows, which is anticipated to be complementary to
existing investments at CSB. The project will add value to the portfolio of
the Company reflecting the high demand of close-to-nature camp sites offering
a safe and secure environment for visitors.
Events after reporting date
Acquisition of Star Mil
Black Sea Property PLC, through its subsidiary has completed the purchase of a
100% stake in Star Mil EOOD, and acquired all outstanding loans due to its
previous parent company, on 18 July 2022. The total consideration paid for
Star Mil is approximately € 5.15 million. Star Mil owns the Black Sea Star
hotel complex, located in a prime location on the Black Sea Coast, behind the
Company's existing site at Camping Gradina. The rationale behind the
investment is the opportunity for synergy and economy of scale with the joint
development and management of Camping Gradina and Black Sea Star.
Chairman's Statement (continued)
The acquisition was partialy financed through a loan from a leading Bulgarian
commercial bank amounting to approximately € 4.2 million for the acquisition
of all receivables of Star Mil. The funding was secured by a commercial
mortgage on the property of Star Mil and the Company agreed to provide
additional security to the bank in accordance with normal commercial practice.
The Company financed the outstanding € 1 million of the consideration by way
of cash.
Outlook
The impact of the severe political and economic situation due to the war in
Ukraine, just when the Covid-19 pandemic started to recede will affect
negatively all economic segments.
Energy and raw material prices have risen sharply, further accelerating
inflationary pressures.
The Directors are taking cautious measures to diminish and manage the cash
flow and cost base of the Company and are confident that the business is well
equipped to withstand this near-term uncertainty.
The Company will follow its strategy to invest in real estate assets in
Bulgaria and to develop and maintain its portfolio.
The Directors of the Company are responsible for the contents of this
announcement.
Simon Hudd
Chairman
29 September 2022
Consolidated Statement of Comprehensive Income
for the period ended 30 June 2022
(Unaudited) (Unaudited) (Audited)
6 months to 6 months to Year ended
30 June 2022 30 June 2021 31 December 2021
Notes € € €
Total revenue
Revenue 152,646 207,147 1,246,616
Property operating expenses (132,856) (271,863) (568,559)
Net rental and related income 19,790 (64,716) 678,057
(Loss)/gain on revaluation of investment properties (3,430) (60,674) 554,443
Net (loss)/gain on investment property (3,430) (60,674) 554,443
Administration and other expenses 6 (458,473) (278,605) (858,290)
Total operating (loss)/profit (442,113) (403,995) 374,210
Operating (loss)/profit before interest and tax
Other income 7 106,798 213,543 1,287,782
Losses from investments accounted for using the equity method (2,548) (12,355) (14,765)
Profit from disposal of subsidiary - - 1,718,367
Interest payable and similar charges (215,287) (390,939) (825,739)
(Loss)/profit before tax (553,150) (593,746) 2,539,855
Tax expense (62,266) - (53,471)
(Loss)/profit and total comprehensive income for the period (615,416) (593,746) 2,486,384
(Loss)/Profit and total comprehensive income attributable to the:
- shareholders of the parent company (615,416) (552,335) 2,537,817
- non-controlling interest - (41,411) (51,433)
(Loss)/earnings per share
Basic & Diluted(loss)/earnings per share (cents) 8 (0,03) (0,03) 0,14
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 2022
and were signed on their behalf by:
Chairman
Director
Simon
Hudd
Ventsislava Altanova
Consolidated Statement of Financial Position at 30 June 2022
(Unaudited) (Audited)
30 June 31 December
2022
2021
Notes € €
Non-current assets
Investment properties 10 38,211,523 38,144,730
Intangible assets 11 606,685 513,377
Property, plant and equipment 31,477 24,883
Trade and other receivables 12 806,600 -
Investment in associate - 2,548
Total non-current assets 39,656,285 38,685,538
Current assets
Trade and other receivables 12 5,803,160 4,906,752
Cash and cash equivalents 1,508,693 326,188
Total current assets 7,311,853 5,232,940
Total assets 46,968,138 43,918,478
Equity and liabilities
Issued share capital 70,699,442 70,699,442
Retained deficit (44,851,522) (44,236,106)
Foreign exchange reserve (1,533,086) (1,533,086)
Total equity 24,314,834 24,930,250
Non-current liabilities
Bank loans 14 14,702,657 14,521,076
Trade payables 15 550,680 560,615
Deferred tax liability 9 1,949,249 1,944,802
Total non-current liabilities 17,202,586 17,026,493
Current liabilities
Bank loans 14 2,009,388 1,768,735
Related party payables 16 2,520,518 -
Trade payables 15 920,812 193,000
Total current liabilities 5,450,718 1,961,735
Total liabilities 22,653,304 18,988,228
Total equity and liabilities 46,968,138 43,918,478
Number of ordinary shares in issue 1,813,323,603 1,813,323,603
NAV per ordinary share (cents) 17 1.34 1.37
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 2022
and were signed on their behalf by:
Chairman
Director
Simon
Hudd
Ventsislava Altanov
Consolidated Statement of Changes in Equity for the period ended 30 June 2022
Share capital Retained earnings Foreign currency translation reserve Total equity attributable to the parent company Non-controlling interests Total
€ € € € € €
At 1 January 2021 70,699,442 (46,773,922) (1,533,086) 22,392,434 (3,065,234) 19,327,199
Profit for the period - (552,335) - (552,335) (41,411) (593,746)
Total comprehensive income - (552,335) - (552,335) (41,411) (593,746)
At 30 June 2021 (unaudited) 70,699,442 (47,326,257) (1,533,086) 21,840,099 (3,106,645) 18,733,454
At 1 January 2021 70,699,442 (46,773,922) (1,533,086) 22,392,434 (3,065,234) 19,327,199
Business disposal - - - - 3,116,667 3,116,667
Transactions with owners - - - - 3,116,667 3,116,667
Profit for the year - 2,537,817 - 2,537,817 (51,433) 2,486,384
Total comprehensive income - 2,537,817 - 2,537,817 (51,433) 2,486,384
At 31 December 2021 (audited) 70,699,442 (44,236,106) (1,533,086) 24,930,250 - 24,930,250
At 1 January 2022 70,699,442 (44,236,106) (1,533,086) 24,930,250 - 24,930,250
Profit for the period - (615,416) - (615,416) - (615,416)
Total comprehensive income - (615,416) - (615,416) - (615,416)
At 30 June 2022 (unaudited) 70,699,442 (44,851,522) (1,533,086) 24,314,834 - 24,314,834
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 2022
and were signed on their behalf by:
Chairman
Director
Simon
Hudd
Ventsislava Altanova
Consolidated Statement of Cash Flows
for the period ended 30 June 2022
(Unaudited) (Unaudited) (Audited)
6 months to 6 months to Year ended
30 June 2022 30 June 2021 31 December 2021
€ € €
Operating activities
(Loss)/profit before tax (553,150) (593,746) 2,539,855
Profit from disposal of subsidiaries - - (1,718,367)
Loss from disposal of investment property - - 192,788
Loss/(gain) on revaluation of investment properties 3,430 60,674 (554,443)
Loss from investments accounted for using the equity method 2,548 12,355 14,765
Impairment of intangible fixed assets (142,499) - 142,499
Amortization of intangible fixed assets 49,191 - -
Depreciation of property, plant and equipment 1,586 - 2,899
Other income (94,882) (213,543) (1,277,756)
Finance expense 215,288 390,939 825,739
Changes in the working capital (518,488) (343,321) 167,979
Decrease/(increase) in receivables (254,811) 19,310 (238,422)
(Decrease)/increase in payables 715,094 226,315 (940,143)
Cash used in operation (58,205) (97,696) (1,010,586)
Net cash outflow from operating activities (58,205) (97,696) (1,010,586)
Investing activities
Investment property additions and acquisitions (1,526,600) (294,298) (673,764)
Proceeds from sale of investment property - 1,000,000 1,270,800
Loans granted (29,235) (89,936) -
Loan repayments 38,244 153,259 -
Interest received 84,466 208,660 1,277,756
Cash held by the (disposed)/acquired subsidiary - - (32,923)
Net cash (outflow)/ from investing activities (1,433,125) 977,685 1,841,869
Financing activities
Interests paid and other charges (215,943) (316,333) (575,027)
Loans received 2,939,083 400,000 -
Loan repayment - (407,363) (272,286)
Other flows from financing activities (49,305) (5,348) (27,979)
Net cash inflow/(outflow) from financing activities 2,673,835 (329,044) (875,292)
Net increase/(decrease) in cash and cash equivalents 1,182,505 550,945 (44,009)
Cash and cash equivalents at beginning of period 326,188 370,197 370,197
Cash and cash equivalents at end of period 1,508,693 921,142 326,188
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 2022
and were signed on their behalf by:
Chairman
Director
Simon
Hudd
Ventsislava Altanova
Notes to the Financial Statements for the period ended 30 June 2022
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 2021.
The consolidated financial statements of the Group as at and for the year
ended 31 December 2021 are available upon request from the Company's
registered office at 6th Floor, Victory House, Prospect Hill, Douglas, Isle of
Man or at www.blackseapropertyplc.com.
These interim consolidated financial statements were approved by the Board of
Directors on 29 September 2022.
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
2021.
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 2021.
5. Disposal of ECDC group
On 30 September 2021, the Company successfully completed the disposal of 100%
of European Convergence Development (Cayman) Limited ("ECD Cayman") and ECD
Management (Cayman) Limited ("ECD Management"). The consideration receivable
for ECD Cayman and ECD Management in total is €4,500,000. Both companies
were subsidiaries of Black Sea Property PLC.
The fair value of assets and liabilities disposed were as follows:
€
Investment properties 3,585,404
Trade and other receivables 723,333
Cash and cash equivalents 32,923
Trade payables (20,224)
Loan payables (4,632,418)
Net identifiable assets (310,982)
Notes to the Financial Statements for the period ended 30 June 2022
(continued)
5. Disposal of ECDC group (continued)
The profit on disposal of the ECD Cayman group is presented as follows:
€
Net identifiable assets (310,982)
FX differences on disposal (24,052)
Non-controlling interest 3,116,667
Consideration receivable (4,500,000)
1,718,367
6. Administration and other expenses
(Unaudited) (Unaudited) (Audited)
6 months to 6 months to Year ended
30 June 30 June 31 December
2022
2021
2021
€ € €
Directors' remuneration 27,818 23,595 62,101
Investment advisory fees 107,358 107,136 214,272
Legal and professional fees 309,746 106,815 378,988
Other administration and sundry expenses 13,551 41,059 202,929
458,473 278,605 858,290
7. Other income
(Unaudited) (Unaudited) (Audited)
6 months to 6 months to Year ended
30 June 30 June 31 December
2022
2021
2021
€ € €
Interest income - receivable balances 94,882 113,371 1,277,756
Reversal of fair value adjustment of CSB acquisition receivable balance - 96,223 -
Reintegration of expected credit losses - 3,950 -
Others 11,916 - 10,026
106,798 213,543 1,287,782
Notes to the Financial Statements for the period ended 30 June 2022
(continued)
8. (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)
6 months to 6 months to Year ended
30 June 30 June 31 December
2022
2021
2021
€ € €
(Loss)/earnings attributable to owners of parent € (615,416) (552,335) 2,537,871
Weighted average number of ordinary shares in issue 1,813,323,603 1,813,323,603 1,783,601,434
Basic (loss)/earnings per share (cents) (0.03) (0.03) 0.14
The Company has no potential dilutive ordinary shares; the diluted
(loss)/earnings per share is the same as the basic (loss)/earnings per share.
9. Taxation
Isle of Man
There is no taxation payable on the Company's or its Jersey subsidiaries'
results as they are based in the Isle of Man and in Jersey respectively where
the Corporate Income Tax rates for resident companies are 0% (2021: 0%).
Additionally, neither the Isle of Man nor Jersey levies tax on capital gains.
Consequently, shareholder's resident outside of the Isle of Man and Jersey
will not incur any withholding tax in those jurisdictions on any distributions
made to them.
Bulgaria
Subsidiaries of the Company incorporated in Bulgaria are taxed in accordance
with the applicable tax laws of Bulgaria. The Bulgarian corporate tax rate for
the year was 10% (2021: 10%).
No deferred tax assets are recognised on trading losses in the subsidiary
companies as there is significant uncertainty as to whether sufficient future
profits will be available in order to utilise these losses.
A reconciliation of the tax charge for the year to the standard rate of
corporation tax for the Isle of Man of 0% (2021: 0%) is shown below.
Notes to the Financial Statements for the period ended 30 June 2022
(continued)
9. Taxation (continued)
(Unaudited) (Audited)
30 June
31 December 2021
2021 €
€
(Loss)/Profit before tax (553,150) 2,539,855
Profit on ordinary activities multiplied by the standard rate in the Isle of - -
Man of 0% (2021: 0%)
Effect of different tax rates in different countries 57,819 50,468
Deferred tax liability movement 4,447 3,003
Current charge for the year 62,266 53,471
Bulgarian tax losses brought-forward at 10% (183,943) (190,958)
Tax losses utilised in the year - 7,015
Bulgarian tax losses carried-forward at 10% (183,943) (183,943)
Deferred tax liability
Opening deferred tax liability balance 1,944,802 1,941,799
Deferred tax liability on fair value uplift of investment property on - (34,860)
Acquisition/(disposal) of a subsidiary
Bulgarian deferred tax liability charge 4,447 3,063
Deferred tax liability on fair value uplift of investment property - 34,800
Closing deferred tax liability balance 1,949,249 1,944,802
10. Investment properties
(Unaudited) (Audited)
30 June 31 December 2021
2022
€ €
Beginning of year 38,144,730 42,360,142
Additions 70,223 66,287
Disposals - (4,836,142)
Fair value adjustment (3,430) 554,443
Total investment property 38,211,523 38,144,730
Ivan Vazov 1 Building 11,251,523 11,184,730
Camp South Beach 16,230,000 16,230,000
Byala Land 10,730,000 10,730,000
Total investment property 38,211,523 38,144,730
The Directors confirm that there are no material changes in the valuation of
investments as of 30 June 2022.
Notes to the Financial Statements for the period ended 30 June 2022
(continued)
10. Investment properties (continued)
With the prior year sale of the ECD group, the group disposed of the three plots in Plovdiv (through European Convergence Development (Malta) Limited) and the two plots in Burgas with a fair value of €4,836,142.
The valuations of the other Group properties at 31 December 2021 were based on the most recent independent valuation received for each property. The valuations were performed by external accredited independent valuers with recognised professional qualifications and with recent experience in the location and category of the investment properties being valued.
The fair value of completed investment property has been determined on a market value basis in accordance with the RICS "Red Book". In arriving at their estimates of market values, the valuers have used their market knowledge and professional judgement, historical transactional comparables and discounted cash flow forecasts. The highest and best use of the investment properties is not considered to be different from its current use.
The cost of the investment properties comprises their purchase price and directly attributable expenditure. Directly attributable expenditure includes professional fees for legal services and stamp duty land tax.
11. Intangible assets
At the end of 2020, after participating in an open concession award procedure,
the Group through Camping South Beach received the concession rights over the
sea beach "Camping Gradina". During the active summer season of 2021, the
beach is managed by CSB under the terms of a lease agreement. The concession
agreement enters into force on 17.10.2020, and at the beginning of 2021 the
handover of the sea beach by the grantor Ministry of Tourism to the
concessionaire was carried out. The term of the contract is 20 years. The
concession contract of CSB grants the right to operate the sea beach,
performing alone or through subcontractors providing visitors to the sea beach
of the following services: beach services, including the provision of
umbrellas and sunbeds, services in fast food restaurants, sports and
entertainment services, water attraction services, health and rehabilitation
services and other events, after prior agreement with the grantor. A condition
for operation of the concession site is the implementation of mandatory
activities, which include provision of water rescue activities, security of
the adjacent water area, health and medical services for beach users, sanitary
and hygienic maintenance of the beach, maintenance for use of the elements of
the technical infrastructure, the temporary connections, the movable objects,
the facilities and their safe functioning.
In 2020 the Group has paid the first due concession fee, which provides the
period from the date of entry into force of the concession agreement until the
end of the same calendar year and the period from January 1 of the last
calendar year in which the concession agreement is valid until the date upon
expiration of the contract.
According to the financial model presented by the Company, which is accepted
by the grantor and is an integral part of the concession agreement, for the
concession period the Group will make additional investments related to the
implementation of mandatory activities and investments to improve access to
the beach. After the expiration of the concession contract, all constructed
sites remain the property of the grantor. The activities related to the
operation of the concession site are performed by the concessionaire at his
risk and at his expense. The cost of the acquired intangible assets was
€655,876 and no amortization expenses were recognized in 2020. During the
prior year, the acquired intangible asset was impaired by €142,499 however
the impairment of €142,499 was fully reversed in the current period. The
acquired intangible asset was amortized by €49,191 in the current period.
Notes to the Financial Statements for the period ended 30 June 2022
(continued)
12. Trade and other receivables
Non-current trade and other receivables can be presented as follows:
(Unaudited) (Audited)
30 June 31 December 2021
2022
€ €
Trade receivables* 806,600 -
806,600 -
The current trade and other receivables can be presented as follows:
(Unaudited) (Audited)
30 June 31 December 2021
2022
€ €
Trade receivables* 1,285,750 406,729
Amount receivable from the sale of the ECDC group 4,500,000 4,500,000
Prepayments 17,410 23
5,803,160 4,906,752
*All amounts are due within one year. The expected credit losses (ECL) for
this amount is nil.
13. Issued share capital
(Unaudited) (Audited)
Authorised As at As at
30 June 2022 31 December 2021
Founder shares of no par value 10 10
Founder shares of no par value Unlimited Unlimited
Issued and fully paid € €
2 Founders shares of no par value (2021: 2) - -
1,813,323,603 ordinary shares of no par value (2021: 1,813,323,603) 70,699,442 70,699,442
The Founders shares do not carry any rights to dividends or profits and on
liquidation they will rank behind Shares for the return of the amount paid up
on each of them. The shares carry the right to receive notice of and attend
general meetings, but carry no right to vote thereat unless there are no
Participating Shares in issue.
Capital management
The Directors consider capital to be the net assets of the Group. The capital
of the Company will be managed in accordance with the Investment Strategy
documented on the Company's website.
Notes to the Financial Statements for the period ended 30 June 2022
(continued)
14. Bank Loans
(Unaudited) (Audited)
30 June 31 December 2021
2022
€ €
Loan from UniCredit (a & b) 7,421,345 7,016,178
Central Cooperative Bank (c) 9,290,700 9,273,633
16,712,045 16,289,811
Long term bank loans 14,702,657 14,521,076
Current bank loans 2,009,388 1,768,735
Reconciliation of bank loans
Beginning of year (gross loan) 16,289,811 17,385,138
Bank loan arrangement fees (49,305) -
Interest charged 248,399 541,883
Loan received 439,083 -
Principal repayments - (1,062,183)
Interest payments (215,943) (575,027)
Total bank loans 16,712,045 16,289,811
a) In October 2017, the Company entered into a secured debt funding of
€7 million from UniCredit Bulbank AD ("UniCredit"), a leading Bulgarian
commercial bank which was used to complete the acquisition of the Ivan Vazov 1
Building. The debt funding from UniCredit is secured by a commercial mortgage
on the property valued at €11,251,523 (see note 10). The term of the debt
funding is thirty-six months from date of execution of the loan documentation.
The repayment shall be made as a one-off payment on the repayment deadline.
The company renegotiated the terms of the loan, extending the repayment period
until 30 November 2033 and changed the margin to the interest rate to 2%.
b) In November 2021, the Company entered into a secured debt funding of
up to €2.3 million from UniCredit Bulbank AD ("UniCredit"), a leading
Bulgarian commercial bank which was used to partly finance the construction
costs for the planned renovation of the roof and overhaul of the
administrative building known as the Ivan Vazov 1 Building. The secured debt
funding is made up of an investment limit of up to €1.8 million and a
revolving limit of up to €0.5 million. The debt funding from UniCredit is
secured by a commercial mortgage on the property valued at €11,251,523 (see
note 10). The debt funding is also secured by a first rank pledge of all the
receivables, claims, rights and interests, both current and future, of the
company along with a second ranking registered pledge of the commercial
enterprise of the company and a second ranking pledge of 100% of the shares of
the capital of the company. The utilization deadline of €1.5 million of the
investment limit is no later than 30 November 2023 while the utilization
deadline of the remaining €0.3 million is no later than 30 November 2024.
There is a grace period on the repayment of the principal amount due until 30
November 2023. After this date the principal will be
Notes to the Financial Statements for the period ended 30 June 2022
(continued)
14. Bank Loans (continued)
repaid in equal monthly instalments. Interest is also repayable monthly with
no grace period agreed. The repayment period is up until 30 November 2033. The
utilization deadline of €0.5 million of the revolving limit is no later than
30 November 2023.The repayment of the revolving limit is made within 6 months
of each utilized amount and the repayment period is up until 30 May 2024.
The interest on the loan is the average deposit interest of the bank plus
2.00% (2021: 2.00%).
a) Central Cooperative bank loan and overdraft
(Unaudited) (Audited)
30 June 31 December 2021
2022
€ €
Central Cooperative Bank overdraft (i) 665,381 662,737
Central Cooperative Bank overdraft (ii) 7,073,251 6,938,614
Central Cooperative Bank investment loan (ii) 1,552,068 1,672,282
9,290,700 9,273,633
(i) This is an overdraft with Central Cooperative Bank. The
interest on the account is 4% and was repayable on 24 June 2020 however the
terms of the contract were extended to 24 June 2021. At the date these
financial statements were signed the Company made an extension of the credit
repayment period by 12 months.5
(i) The interest rate on the overdraft and the investment loan
is 3.6%. The maturity date for both the overdraft and the investment loan is
21 January 2028.
In March 2020, the Group successfully negotiated reduction of the interest
rates on the loans due to Central Cooperative Bank to 2.8%. The loan is
secured by the commercial property of South Beach (Gradina) Camp which
includes all the tangible fixed assets of the property along with the mortgage
on the land.
15. Trade and other payables
Non-current trade and other payables can be presented as follows:
(Unaudited) (Audited)
30 June 31 December 2021
2022
€ €
Concession payable 550,680 560,615
550,680 560,615
Notes to the Financial Statements for the period ended 30 June 2022
(continued)
15. Trade and other payables (continued)
The current trade and other payables can be presented as follows:
(Unaudited) (Audited)
30 June 31 December 2021
2022
€ €
Trade creditors 57,394 23,074
Concession payable 23,365 23,008
Other payables 1,727,194 146,918
1,807,953 193,000
16. Related party transactions
In the current year, the Group obtained a short-term loan of € 2,500,000
from Neo London Capital AD at a fixed interest rate of 4.25% and due in
September 2022. At the end of the period the amount payable on the loan
amounted to €2,520,518 (2021: €nil).
In July 2017, the Company appointed Phoenix Capital Management JSC as its
investment adviser with responsibility for advising on the investment of the
Company's property portfolio. Phoenix Capital Holding Plc owns 79.99% of the
Phoenix Capital Management JSC shares. Phoenix Capital Holding Plc, through
its wholly owned subsidiary Mamferay Holdings Ltd, holds 24.81% (31.12.2020:
24.81%) of the issued share capital of the Company. Phoenix Capital Management
JSC received fees of €107,358 (2021: €214,272). The amount outstanding as
at 30.06.2022 is € 160,926 (31.12.2021: €53,568).
17. Net asset value per share
(Unaudited) (Unaudited)
30 June 30 June
2022
2021
€ €
Net assets attributable to owners of the parent (€) 24,314,834 24,930,250
Number of ordinary shares outstanding 1,813,323,603 1,813,323,603
Net Asset Value (cents) 1.34 1.37
18. Events after reporting date
Lending agreed for the acquisition of Star Mil EOOD, UIC
Black Sea Property PLC entered into lending terms with a leading Bulgarian
commercial bank for payment of part of the price for the acquisition of all
receivables of Star Mil EOOD, UIC ("Star Mil").
The bank agreed to lend the Company up to BGN 8,150,000 (approximately € 4.2
million) for payment of part of the price for the acquisition of all
receivables of Star Mil. The funding was secured by a commercial mortgage on
the property of Star Mil and the Company agreed to provide additional security
to the bank in accordance with normal commercial practice. The Company shall
further finance the acquisition of Star Mil by way of a cash investment
amounting to € 1 million.
Notes to the Financial Statements for the period ended 30 June 2022
(continued)
18. Events after reporting date (continued)
Acquisition of Star Mil EOOD, UIC
Black Sea Property PLC purchased 100% stake in Star Mil EOOD, UIC ("Star Mil")
and acquired all outstanding loans due to its previous parent company, on 18
July 2022. The total consideration paid for Star Mil was approximately €5.15
million. Star Mil owns the Black Sea Star hotel complex, located in a prime
location on the Black Sea Coast, behind the Company's existing site at Camping
Gradina. The Acquisition of Star Mil provides opportunities for synergies and
economies of scale with the joint development and management of Camping
Gradina and Black Sea Star.
The Acquisition was part financed through a loan from a leading Bulgarian
commercial bank amounting to BGN 8,150,000 (approximately € 4.2 million) for
the acquisition of all receivables of Star Mil. The Company financed the
outstanding € 1 million of the consideration by way of cash.
Renegotiation of terms with Neo London Capital AD
Black Sea Property PLC entered into discussions with Neo London Capital AD
with the aim of extending the terms of the loan agreement. The aim is to
extend the term of the loan from being repayable in September 2022 to being
repayable on or before 31 March 2023. The loan amount and fixed repayment rate
will not be changed. Black Sea Property PLC are in advanced stages of the
negotiations and the Directors are confident that a positive agreement will be
reached.
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