REG - Dolphin Capital Inv - Half-year Report
30/09/2022 09:00
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RNS Number : 3231B Dolphin Capital Investors Limited 30 September 2022
30 September 2022
DOLPHIN CAPITAL INVESTORS LIMITED
("DCI", "Dolphin" or the "Company"
and together with its subsidiaries the "Group")
Half Year Results for the six months ended 30 June 2022 and
Trading Update
Financial Highlights:
· At 30 June 2022, the total Group Net Asset Value ("NAV") was €122.7
million and €116.1 million before and after Deferred Tax Liabilities ("DTL")
respectively. This represents a decrease of €3.0 million (2.5%) compared to
31 December 2021. The NAV reduction is principally due to operating, finance,
corporate and management expenses.
· Sterling NAV per share as at 30 June 2022 stood at 11.7p and 11.1p,
before and after DTL respectively and remained unchanged compared to 31
December 2021. The Sterling NAV per share remained stable as the operating and
other expenses were offset by the 2.8% depreciation in Sterling against the
Euro during the period.
· Aggregate Group debt was €18.3 million, a Group total debt to gross
asset ratio of 9.7% as at 30 June 2022 (31 December 2021: 9.2%).
Finance and Realisations Highlights:
· In accordance with the Company's announcement released on 29
September 2022, DCI has reached a preliminary agreement to sell its indirect
equity interest held in the One&Only at Kea Island project ("OOKI").
Dolphin is the owner of 66.7% of Single Purpose Vehicle Ten Ltd ("SPV10")
which, in turn, indirectly owns 50.0% of OOKI, thereby providing DCI with an
effective equity interest of 33.3%. On 28 September 2022, SPV10 received a
notice from the project's minority shareholder that it had reached a binding
agreement for the sale of its 40.0% effective equity ownership interest in
OOKI. Pursuant to the Shareholders' Agreement dated 27 May 2019, SPV10 is
entitled to exercise a tag-along right to sell its interest in OOKI
simultaneously with the proposed transfer of the minority shareholder's
interest for a proportionate consideration. SPV10 intends to exercise its
tag-along right to sell all of its effective equity interest in OOKI for a
proportionate cash consideration of €26.9 million. The pro-rata
consideration attributable to Dolphin's stake in SPV10 amounts to €17.9
million and represents a premium of 17.0% over the valuation of Dolphin's
investment in OOKI disclosed in the Company's financial statements as at 31
December 2021. The completion of the disposal remains subject to the execution
of a share purchase agreement and the fulfilment of the terms and conditions
precedent set out therein, which is expected to conclude during Q4 2022. Given
the completion uncertainties and that the tag-along notice was received
following period end, the valuation of the OOKI investment as at 30 June 2022
has not been adjusted to reflect the agreed sale price. The disposal proceeds
will first be applied towards the repayment in full of the existing loan
facility that Dolphin drew down on 7 June and 16 July 2021, of which €12.8
million was outstanding on 31 August 2022. The remaining proceeds are expected
to be retained by Dolphin to meet its current liabilities and working capital
requirements. Dolphin Capital Partners Ltd will retain its role as OOKI's
development and asset manager and has informed the Company that it does not
intend to sell its shareholding stake in the project. One&Only will also
continue to operate the OOKI Resort and Private Homes through the existing
long-term management and branding agreements.
· At our Kilada Country Club, Golf and Residences development
("Kilada"), construction works continued. Earthworks have been completed on 13
of the 18 fairways and the first hydroseed grassing in certain completed areas
has commenced. The irrigation lake has been filled to the level required for
the watering needs of the grassed areas, with water that is sourced from the
upgraded municipal wastewater treatment plant. The infrastructure works are
also progressing. A continuing significant risk factor for the project timing
remains the ongoing archaeological investigations, which are taking place in
parallel with the construction works. We continue to co-operate with the
Ministry of Culture in order to accelerate the investigations, with additional
specialist archaeologists and longer working hours.
From a project financing perspective, the sale of the 24 founder land plots to
the owner of the Amanzoe resort in return for an aggregate consideration of
€10.0 million has been substantially delayed by the purchaser. With no
immediate resolution in sight, we are working on fallback financial solutions,
including the possibility of a loan facility from an institutional private
credit provider. The conclusion of such a loan, together with the third party
€12.0 million preferred equity investment that has been fully drawn down and
the €6.0 million Greek state subsidy, which was awarded to the project in
November 2021, would ensure that Kilada's first phase development costs are
fully financed.
The Kilada product offering has been substantially enhanced to include
apartments and family units. These have been introduced to the market through
a series of promotional efforts, including targeted social media and real
estate agency campaigns, advertising and participation in international real
estate fairs. New sales material has been prepared, a dedicated Kilada sales
office near the site has opened and new signage has been erected. During the
period, three new reservation agreements and one pre-contract for the sale of
a residential plot were concluded. Numerous site visits over the summer by
potential buyers have also resulted in a solid pipeline of potential new sales
leads.
· The Company has mandated AXIA Ventures Group Limited to undertake a
formal sales process starting Q4 2022 for the sale of its shareholding in
Aristo Developers Ltd ("Aristo"). Gross sales of Aristo, a 47.9% DCI
affiliate, during the six months to June 2022 increased by 65.8% compared to
the 2021 corresponding period, with Cypriot and other European Union buyers
representing 41.6% of sales.
· There has been no progress in selling the Livka Bay Project to the
interested buyers.
For further information, please contact:
Dolphin Capital Investors Via FIM Capital Limited
Martin Adams
Dolphin Capital Partners miltos@dolphincp.com (mailto:miltos@dolphincp.com)
Miltos E Kambourides
finnCap (Nominated Adviser & Broker)
William Marle / Jonny Franklin-Adams / Edward Whiley / Milesh Hindocha
(Corporate Finance)
+44 (0) 20 7220 0500
Mark Whitfeld / Pauline Tribe (Sales)
FIM Capital Limited (Administrator) llennon@fim.co.im (mailto:llennon@fim.co.im) / gdevlin@fim.co.im
(mailto:gdevlin@fim.co.im)
Lesley Lennon / Grainne Devlin (Corporate Governance)
DOLPHIN CAPITAL INVESTORS LIMITED ("DCI", "Dolphin" or the "Company" and
together with its subsidiaries the "Group")
Unaudited Interim Financial Report For the Six Months Ended 30 June 2022
A. Chairman's Statement
Dear Shareholder,
Overview
Progress continues in the implementation of Dolphin's realisation strategy. In
particular:
· we have received a tag-along notice to sell our equity interest in
the One&Only at Kea Island project ("OOKI") at a premium to our last
carrying valuation and we intend to exercise our respective tag-along right;
and
· together with the controlling shareholder, we have appointed AXIA
Ventures Group Limited to market the sale of Aristo Developers Ltd ("Aristo").
Further details are provided below and in the Investment Manager's Report in
section B.
Once the sale of our equity in OOKI has been completed, the bulk of the
disposal proceeds will be applied towards the repayment in full of DCI's
existing loan facility. This will de-risk the Company's financial position as
it will have no direct indebtedness, leaving at a Group level, only the
limited recourse loan to the Livka Bay project ("Livka Bay"). The remaining
cash will be sufficient to finance operations for the foreseeable future.
Meanwhile, progress continues with the construction at OOKI and Kilada Country
Club, Golf and Residences development ("Kilada") and resolving the various
issues impacting Dolphin's other investments.
Summary of Financial Performance
At 30 June 2022, the Group Net Asset Value ("NAV") after Deferred Tax
Liability ("DTL") was €116.1 million, representing a 2.5% decrease compared
to 31 December 2021. The NAV decline reflects operating and other expenses of
€1.9 million (30 June 2021: €3.8 million). In the first half of 2022, DCI
advanced to Dolphin Capital Partners Limited ("DCP" or the "Investment
Manager") €1.2 million against future incentive fees, compared with
investment management fees of €1.8 million paid during the first half of
2021. The net loss after tax attributable to the owners of the Company was
€3.0 million, as at 30 June 2022 and 30 June 2021.
In sterling terms, DCI's NAV was unchanged at 11.1p per Share on 30 June 2022
and on 31 December 2021. At 30 June 2022, DCI had a market capitalisation of
approximately £28.0 million, compared with the Company's NAV of £105.8
million before DTL and £100.1 million after DTL, respectively.
Investment Portfolio
Following the period end, the Company in principle intends to sell its
effective 33.3% stake in OOKI for a consideration of €17.92 million,
representing a 17.0% premium to the valuation of OOKI included in DCI's
financial statements at 30 June 2022 and 31 December 2021. The valuation had
increased by 18.0% between 31 December 2020 and 31 December 2021. The disposal
is subject to execution of a share purchase agreement and fulfilment of
certain conditions precedent, expected to be concluded in Q4 2022.
Although DCI's strategy had been to sell the OOKI investment following
completion of construction and opening of the first phase of the development,
the Board and DCP decided that it would be in the Company's best interests to
take advantage of the opportunity to sell the equity at a premium to valuation
through exercise of the tag-along provision in the shareholders' agreement,
together with other minority shareholders. The sale of DCI's interest in OOKI
advances the Company's Investing Policy and Realisation Strategy and avoids
the future potential cost and difficulty of selling an effective minority
interest at a time of deteriorating economic conditions in the European Union
("EU").
The sale of the Company's equity interest in OOKI, permits the Company's
financial resources and DCP's investment team to focus on the Kilada and
Aristo investments in the short term.
Construction of the centrepiece Jack Niklaus Signature Golf Course at Kilada
continues to progress, despite delays caused by archaeological works and
findings. The first villa plots have been pre-sold and a sales campaign for
multi-family town houses and apartments is underway. As Greece's first project
to receive 'Strategic Investment' status, Kilada's application for €6.0
million of state subsidies was awarded to the project in Q4 2021, which may be
drawn in stages, subject to construction milestones being met. The completion
of the golf course, scheduled for late 2023, will be a key attraction for
individual property buyers.
The Company's and DCP's principal focus for the remainder of 2022 is centred
on securing the development funds required for the completion of the first
phase of Kilada's development. We have entered into preliminary discussions
with an institutional private credit fund to secure a loan of up to €10.0
million. We expect the loan to be concluded during Q4 2022, thereby providing
us with flexibility regarding the delay by the buyer of the 24 founder plots
to provide the funds required for the completion of the first phase of
Kilada's development plan.
In relation to our investment in Aristo, one of Cyprus' principal residential
property developers, together with the controlling shareholder, we have
engaged AXIA Ventures Group Limited, to identify potential buyers of Aristo
through a formal sales process, which will commence during Q4 2022.
It is disappointing to report that there has been no progress in selling the
Livka Bay investment to the interested buyers. Following a recent site visit
and discussions with the various contracted service providers, the Board and
DCP will be reassessing the Company's options in the coming months.
The legal dispute which emerged in 2021 between the Greek Church and the Greek
State in relation to the title to the Lavender Bay Resort Project ("Lavender"
or "Lavender Bay") land purchased by DCI, makes this investment unmarketable
for the time being. DCP continues to engage constructively with the Greek
Church in an endeavour to reach an amicable solution.
It remains the intention of the Board and the Investment Manager to dispose
all of the Company's remaining investments by the end of 2024, consistent with
the new Investing Policy and Realisation Strategy.
Corporate Governance
The Company's new Memorandum and Articles of Association approved and adopted
at the 2021 Extraordinary General Meeting ("EGM") require the Company to hold
Annual General Meetings ("AGM"s). The Company's first AGM will be held on 18
October 2022, at which Shareholders will be requested inter alia to adopt the
Annual Report & Accounts for 2021 and re-elect all the current Directors
of the Company. Notice of the AGM has been communicated to Shareholders.
Prospects
The Board intends to apply the net proceeds from the sale of the Company's
stake in OOKI to repay the outstanding balance of the term loan facility.
After repaying the loan, the remaining cash will be retained to meet the
Company's other accrued liabilities and cover its reasonable working capital
requirements.
The Board and the Investment Manager will continue their efforts to realise
the Company's other assets. After the sale of our interest in OOKI has
completed and the financing of the Kilada development has been secured, it is
the intention to distribute substantially all further realisation proceeds to
shareholders. Greek tourism and visitor arrivals have been buoyant in 2022,
however, given the increasing economic headwinds we are witnessing in the EU,
which affects all of our assets in Greece, Cyprus and Croatia, the pricing and
terms of disposals of the remaining investments remains unpredictable and thus
the timing and quantum of distributions to shareholders cannot be determined
with any certainty.
Subject to regulatory constraints, the Board and DCP remain open to
discussions with Shareholders at any time. We are most appreciative of your
continuing patience and support.
On behalf of the Board
Dolphin Capital Investors
30 September 2022
B. Investment Manager's Report
B.1. Business Overview
During the first nine months of 2022 we focused on enhancing the value of our
portfolio assets and pursuing divestment opportunities for all of our assets
other than Kilada and OOKI, while addressing the day-to-day challenges
presented mainly by the significant inflationary effects on development costs,
as well as the effects of the conflict in Ukraine. Our focus was on:
· progressing construction works at OOKI and Kilada;
· adjusting our retail and project sales and marketing strategies;
· securing liquidity at the DCI level to meet all our operational
expenses in the medium-term;
· making permitting advances across our asset portfolio; and
· monitoring our operational budgets and reducing overhead costs.
B.2. Major Assets Review
· Kilada Country Club, Golf and Residences, Greece - www.mykilada.com
(http://www.mykilada.com)
o Construction works continue on the golf course site, with 13 of the 18
fairways having been excavated through rough shaping. Further the irrigation
and drainage works have advanced in those fairways, with sanding works also
progressing on which the grass planting with hydroseeding commenced in
September 2022. The irrigation lake has been partially filled, using recycled
water from the upgraded municipal wastewater treatment plant and bore holes in
accordance with the environmental requirements of the project, so as to cover
the watering needs of the first grassed areas. The roads site infrastructure
works for the first phase have significantly advanced, with only the
electrical works pending, whereas the club house excavation commenced, but was
suspended due to archaeological findings.
o Delays driven by unexpected archaeological findings continue to affect the
progress of the works. The project management team remains in continuous
communication with the antiquities department to accelerate the ongoing
archaeological investigation in affected areas of the project, with longer
working hours and additional resources.
o The preferred equity co-investor, has contributed to date €12.0 million
into the project, fully meeting his commitment.
o During the period, three new reservation agreements and one pre-contract for
the sale of residential plots have been concluded. The new family style units
have been designed, new signage was created on site, and a dedicated Kilada
sales office has been created. A targeted social media campaign has been
underway during the summer months, alongside PR activities and advertising
campaigns in international media. We also participated in international real
estate affairs and a series of events in collaboration with PGA. Sales
meetings and promotional events are planned for the UK in September.
· Lavender Bay Resort Project
o The Greek Council for Public Properties issued an Opinion on 29 September
2021 claiming that the land that was sold to Golfing Developments S.A.
("Golfing"), our wholly owned subsidiary that owns the Lavender Bay
investment, belonged to the Greek State and not the Archdiocese of Dimitriada
(the "Greek Church") which had sold the property to us in 2006 and 2007. This
Opinion was adopted by the Ministry of Finance in Q1 2022, who has since taken
steps to register the property in the name of the Greek State at the local
land registries.
o In view of these developments, we have entered into negotiations with the
Greek Church with a view to ensuring that no additional funds will be paid to
them under our sale and purchase contracts until the resolution of this legal
dispute with the Greek State, and to reduce the overall quantum of our
deferred liabilities to them. We have had a series of constructive discussions
with the Greek Church during Q3 2022 on the subject matter and currently
expect to reach an amicable resolution of this matter by the end of the year.
o In parallel, we are working with the Greek Church's legal counsels to
prepare our case against the Greek State to the competent courts, so that the
matter can be finally judicially resolved.
· Aristo Developers Limited (a 47.9% affiliate) -
www.aristodevelopers.com (http://www.aristodevelopers.com)
o 44 homes and plots were sold during the first six months of 2022,
representing total sales of €13.9 million, up 65.8% compared to €8.4
million for the same period in 2021.
o 63 homes and plots were sold in total up to the end of August 2022,
representing total sales of €19.3 million, up 71.7% compared to €11.3
million for the same period in 2021.
o The main nationality of clients was Cypriots & Russians during 2022,
representing c. 32% and 26% of sales, respectively.
RETAIL SALES Six months Six months Eight months Eight months
to 30 June 2022 to 30 June 2021 to 31 August 2022 to 31 August 2021
New sales booked €13.9m €8.4m €19.3m €11.3m
% change 65.8% 71.7%
Units sold 44 41 63 48
% change 7.3% 31.6%
CLIENT ORIGIN
Cyprus & Other EU 41.6% 80.7% 32.2% 69.6%
Russia 24.8% -- 25.7% 7.7%
China & Other Asia 22.9% 9.9% 23.9% 10.3%
UK 4.1% 5.6% 8.3% 4.2%
MENA 6.6% 3.8% 6.6% 6.4%
Other -- -- 3.3% 1.8%
C. Group Assets
A summary of Dolphin's current investments is presented below.
PROJECT Landsite DCI's Debit Real estate value (€m) Loan to real estate asset value (%) Net Asset Value
(hectares) stake (€m) (% of total)
GREECE
1 OOKI 65 33.3% --
2 Kilada 224 85.0% --
3 Scorpio Bay 172 100.0% --
4 Lavender Bay 310 100.0% --
5 Plaka Bay 442 100.0% --
TOTAL GREECE 1,213 -- 114.0* -- 51.4%
OTHER
6 Apollo Heights (CY) 447 100.0% --
7 Livka Bay (CR) 63 100.0% 4.7
8 Aristo (CY) 472 47.9% --
TOTAL OTHER 982 -- 70.8* 6.6% 48.6%
GRAND TOTAL 2,195 4.7 184.8* 2.5% 100.0%
*Total real estate value includes equity investments in OOKI and Aristo.
D. Outlook
The Company's main objectives for the remainder of 2022 remain to:
1. complete the sale of DCI's 33.3% stake at OOKI;
2. secure adequate working capital liquidity for DCI;
3. execute further portfolio asset disposals;
4. progress construction at Kilada and generate plot/villa sales; and,
5. progress planning and permitting selectively for the remaining
portfolio.
Miltos Kambourides
Managing Partner
Dolphin Capital Partners
30 September 2022
E. Financial results for the first half of 2022
E.1. Consolidated statement of profit or loss for the first half of 2022
Financial Results
Loss after tax for the periods ended 30 June 2022 and 30 June 2021
attributable to owners of the Company amounted to €3.0 million. Loss per
share was €0.003 compared to €0.003 in the same period last year.
Consolidated statement of profit or loss and other comprehensive income
For the six-month period ended 30 June 2022
From 1 January 2022 From 1 January 2021
to 30 June 2022 to 30 June 2021
€'000 €'000
CONTINUING OPERATIONS
Revenue 55 3,049
Cost of sales - (2,046)
Gross profit 55 1,003
Change in valuations - (228)
Investment Manager remuneration - (1,800)
Directors' remuneration (100) (194)
Depreciation charge (38) (38)
Professional fees (1,049) (907)
Administrative and other expenses (684) (655)
Total operating and other expenses (1,871) (3,822)
Results from operating activities (1,816) (2,819)
Finance income 1 112
Finance costs (1,290) (819)
Share of (losses)/profits of equity-accounted investees, net of tax (275) 12
Loss before taxation (3,380) (3,514)
Taxation (2) 360
Loss (3,382) (3,154)
OTHER COMPREHENSIVE INCOME
Items that are or may be reclassified subsequently to profit or loss
Share of revaluation on equity-accounted investees - 6
Foreign currency translation differences (24) (886)
Other comprehensive income, net of tax (24) (880)
TOTAL COMPREHENSIVE LOSS (3,406) (4,034)
Loss attributable to:
Owners of the Company (2,972) (3,007)
Non-controlling interests (410) (147)
(3,382) (3,154)
Total comprehensive income attributable to:
Owners of the Company (2,996) (3,889)
Non-controlling interests (410) (145)
(3,406) (4,034)
Loss per share
Basic and diluted loss per share (€) (0.003) (0.003)
Further analysis of individual revenue and expense items is provided below.
Professional Fees
The charge for the period was €1.0 million (30 June 2021: €0.9 million)
and comprises the following:
H1 2022 H1 2021
€ million € million
Legal fees 0.3 0.3
Auditors' remuneration 0.1 0.1
Accounting expenses 0.1 0.1
Project design and development fees 0.2 0.2
Consultancy fees 0.0 0.1
Administrator fees 0.2 0.0
Other professional fees 0.1 0.1
TOTAL 1.0 0.9
Administrative and other expenses
The administrative and other expenses amounted to €0.7 million (30 June
2021: €0.7 million) and are analysed as follows:
H1 2022 H1 2021
€ million € million
Personnel expenses 0.3 0.3
Immovable property tax and other taxes 0.1 0.0
Other 0.3 0.4
TOTAL 0.7 0.7
E.2. Consolidated statement of financial position as at 30 June 2022
30 June 31 December
2022 2021
€'000 €'000
Assets
Property, plant and equipment 10,733 9,069
Investment property 52,298 52,188
Equity-accounted investees 65,280 65,555
Non-current assets 128,311 126,812
Trading properties 56,516 56,516
Receivables and other assets 1,844 1,092
Other Investments - 99
Cash and cash equivalents 3,112 4,575
Current assets 61,472 62,282
Total assets 189,783 189,094
Equity
Share capital 9,046 9,046
Share premium 569,847 569,847
Retained deficit (463,362) (460,390)
Other reserves 560 584
Equity attributable to owners of the Company 116,091 119,087
Non-controlling interests 9,153 8,942
Total equity 125,244 128,029
Liabilities
Loans and borrowings 10,028 20,125
Lease liabilities 3,343 3,331
Deferred tax liabilities 6,607 6,609
Trade and other payables 19,940 20,089
Non-current liabilities 39,918 50,154
Loans and borrowings 18,320 4,743
Lease liabilities 88 89
Trade and other payables 6,213 6,079
Current liabilities 24,621 10,911
Total liabilities 64,539 61,065
Total equity and liabilities 189,783 189,094
Net asset value ('NAV') per share (€) 0.13 0.13
The reported NAV as at 30 June 2022 is presented below:
As at As at Variation since
30 June 2022 31 December 2021 31 December 2021
€ £ € £ €% £%
Total NAV before DTL (million) 122.7 105.8 125.7 105.5 (2.4) (0.3)
Total NAV after DTL (million) 116.1 100.1 119.1 100.0 (2.5) (0.2)
NAV per share before DTL 0.14 0.12 0.14 0.12 (2.4) (0.3)
NAV per share after DTL 0.13 0.11 0.13 0.11 (2.5) (0.2)
€%
£%
Total NAV before DTL (million)
122.7
105.8
125.7
105.5
(2.4)
(0.3)
Total NAV after DTL (million)
116.1
100.1
119.1
100.0
(2.5)
(0.2)
NAV per share before DTL
0.14
0.12
0.14
0.12
(2.4)
(0.3)
NAV per share after DTL
0.13
0.11
0.13
0.11
(2.5)
(0.2)
___________
Notes:
1. Euro/GBP rate 0.86258 as at 30 June 2022 and 0.83939 as at 31 December
2021.
2. NAV per share has been calculated on the basis of 904,626,856 issued
shares as at 30 June 2022 and as at 31 December 2021.
Total Group NAV as at 30 June 2022 was €122.7 million and €116.1 million
before and after DTL respectively. This represents a decrease of €3.0
million (2.4)% and €3.0 million (2.5)% respectively, from the 31 December
2021 figures. Given that no independent valuation of the Company's portfolio
took place as at 30 June 2022, the NAV reduction is mainly due to Dolphin's
regular operational, corporate, finance and management expenses.
Sterling NAV per share as at 30 June 2022 was 11.7p before DTL and 11.1p after
DTL and remained unchanged compared to 31 December 2021. The Sterling NAV per
share remained stable due to 2.8% depreciation of the Sterling versus the Euro
during the period, which was counterbalanced by the factors mentioned above.
The Company's consolidated assets of €189.8 million include €119.6 million
of real estate assets, €65.3 million of equity-accounting investees (which
reflects our 33.3% shareholding in OOKI as well as the Company's 47.9%
interest in Aristo), €1.8 million of trade and other receivables, and €3.1
million in cash.
The figure of €119.6 million of real estate assets (property, plant and
equipment, trading properties and investment property) represents the fair
market valuations conducted as at 31 December 2021 for both freehold and long
leasehold interests.
The Company's consolidated liabilities (excluding DTL) total €57.9 million
and comprise €26.1 million of trade and other payables as well as €31.8
million of interest-bearing loans and finance lease obligations. Trade and
other payables comprise mainly €20.8 million of option contracts to acquire
land in Lavender Bay. The Company is in negotiations with the original vendor
with a view to ensuring that no additional deferred payments are made to them
under the relevant sale and purchase contracts until the resolution of this
legal dispute with the Greek State.
Condensed consolidated interim statement of financial position
As at 30 June 2022
30 June 2022 31 December 2021
Note €'000 €'000
Assets
Property, plant and equipment 14 10,733 9,069
Investment property 15 52,298 52,188
Equity-accounted investees 16 65,280 65,555
Non-current assets 128,311 126,812
Trading properties 17 56,516 56,516
Receivables and other assets 18 1,844 1,092
Other investments - 99
Cash and cash equivalents 3,112 4,575
Current assets 61,472 62,282
Total assets 189,783 189,094
Equity
Share capital 19 9,046 9,046
Share premium 19 569,847 569,847
Retained deficit (463,362) (460,390)
Other reserves 560 584
Equity attributable to owners of the Company 116,091 119,087
Non-controlling interests 9,153 8,942
Total equity 125,244 128,029
Liabilities
Loans and borrowings 20 10,028 20,125
Lease liabilities 3,343 3,331
Deferred tax liabilities 21 6,607 6,609
Trade and other payables 22 19,940 20,089
Non-current liabilities 39,918 50,154
Loans and borrowings 20 18,320 4,743
Lease liabilities 88 89
Trade and other payables 22 6,213 6,079
Current liabilities 24,621 10,911
Total liabilities 64,539 61,065
Total equity and liabilities 189,783 189,094
Net asset value ('NAV') per share (€) 23 0.13 0.13
Condensed consolidated interim statement of profit or loss and other
comprehensive income
For the six-month period ended 30 June 2022
From 1 January 2022 From 1 January 2021
to 30 June 2022 to 30 June 2021
Note €'000 €'000
Continuing operations
Revenue 6 55 3,049
Cost of sales 7 - (2,046)
Gross profit 55 1,003
Change in valuations 8 - (228)
Investment Manager remuneration 24.2 - (1,800)
Directors' remuneration 24.1 (100) (194)
Depreciation charge (38) (38)
Professional fees 10 (1,049) (907)
Administrative and other expenses 11 (684) (655)
Total operating and other expenses (1,871) (3,822)
Results from operating activities (1,816) (2,819)
Finance income 1 112
Finance costs (1,290) (819)
Share of (losses)/profits of equity-accounted investees (275) 12
Loss before taxation (3,380) (3,514)
Taxation 12 (2) 360
Loss (3,382) (3,154)
Other comprehensive income
Items that are or may be reclassified subsequently to profit or loss
Share of revaluation on equity-accounted investees - 6
Foreign currency translation differences (24) (886)
Other comprehensive income net of tax (24) (880)
Total comprehensive income (3,406) (4,034)
Loss attributable to:
Owners of the Company (2,972) (3,007)
Non-controlling interests (410) (147)
(3,382) (3,154)
Total comprehensive income attributable to:
Owners of the Company (2,996) (3,889)
Non-controlling interests (410) (145)
(3,406) (4,034)
Loss per share
Basic and diluted loss per share (€) 13 (0.003) (0.003)
Condensed consolidated interim statement of changes in equity
For the six-month period ended 30 June 2022
Attributable to owners of the Company
Share Share Translation Revaluation Retained Non-controlling Total
capital premium reserve Reserve deficit Total interests equity
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
Balance at 1 January 2021 9,046 569,847 8,337 465 (439,047) 148,648 6,523 155,171
TOTAL COMPREHENSIVE INCOME
Loss - - - - (3,007) (3,007) (147) (3,154)
Other comprehensive income
Share of revaluation on equity accounted investees - - - 6 - 6 2 8
Foreign currency translation differences - - (886) - - (886) - (886)
Total other comprehensive income - - (886) 6 - (880) 2 (878)
Total comprehensive income - - (886) 6 (3,007) (3,887) (145) (4,032)
TRANSACTIONS WITH OWNERS OF THE COMPANY
Changes in ownership interests in subsidiaries
Disposal of interests without a change in control - - - - - - 517 517
Total transactions with owners of the Company - - - - - - 517 517
Balance at 30 June 2021 9,046 569,847 7,451 471 (442,054) 144,761 6,895 151,656
Balance at 1 January 2022 9,046 569,847 305 279 (460,390) 119,087 8,942 128,029
TOTAL COMPREHENSIVE INCOME
Loss - - - - (2,972) (2,972) (410) (3,382)
Other comprehensive income
Share of revaluation on equity accounted investees - - - - - - - -
Foreign currency translation differences - - (24) - - (24) - (24)
Total other comprehensive income - - (24) - - (24) - (24)
Total comprehensive income - - (24) - (2,972) (2,996) (410) (3,406)
TRANSACTIONS WITH OWNERS OF THE COMPANY
Changes in ownership interests in subsidiaries
Disposal of interests without a change in control - - - - - - 621 621
Total transactions with owners of the Company - - - - - - - -
Balance at 30 June 2022 9,046 569,847 281 279 (463,362) 116,091 9,153 125,244
Condensed consolidated interim statement of cash flows
For the six-month period ended 30 June 2022
From 1 January 2022 From 1 January 2021
to 30 June 2022 to 30 June 2021
€'000 €'000
CASH FLOWS FROM OPERATING ACTIVITIES
Loss (3,382) (3,154)
Share of losses / (profits) in equity-accounted investees 275 (12)
Other adjustments 1,305 (594)
(1,802) (3,760)
Changes in:
Receivables (752) 159
Payables 14 792
Trading properties -- 2,100
Deferred revenue -- 4
Cash used in operating activities (2,540) (705)
Tax paid (52) (3)
Net cash used in operating activities (2,592) (708)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from other investments 99 --
Net acquisitions of investment property (145) (23)
Net acquisitions of property, plant and equipment (1,702) (1,047)
Net cash used in investing activities (1,748) (1,070)
CASH FLOWS FROM FINANCING ACTIVITES
Repayment of loans and borrowings -- (250)
New loans 810 1,750
Proceeds from issue of redeemable preference shares 3,000 2,500
Transaction costs related to loans and borrowings (165) (339)
Payment of lease liabilities -- (14)
Interest paid (768) (5)
Net cash from financing activities 2,877 3,642
Net (decrease)/increase in cash and cash equivalents (1,463) 1,864
Cash and cash equivalents at the beginning of the period 4,575 1,661
Cash and cash equivalents at the end of the period 3,112 3,525
For the purpose of the condensed consolidated interim statement of cash flows,
cash and cash equivalents consist of the following:
Cash in hand and at bank 3,112 3,525
Cash and cash equivalents at 30 June 3,112 3,525
Notes to the condensed consolidated interim financial statements
For the six-month period ended 30 June 2022
1. REPORTING ENTITY
Dolphin Capital Investors Limited (the 'Company') was incorporated and
registered in the British Virgin Islands ('BVIs') on 7 June 2005. The Company
is a real estate investment company focused on the early-stage, large-scale
leisure-integrated residential resorts in south-east Europe. The Company is
managed by Dolphin Capital Partners Limited (the 'Investment Manager' or
'DCP'), an independent private equity management firm that specialises in real
estate investments, primarily in south-east Europe. The shares of the Company
were admitted to trading on the AIM market of the London Stock Exchange
('AIM') on 8 December 2005.
The condensed consolidated interim financial statements of the Company as at
and for the six-month period ended 30 June 2022 comprise the financial
statements of the Company and its subsidiaries (together referred to as the
'Group') and the Group's interests in associates. These interim financial
statements have not been subject to an audit.
2. Basis of preparation
(a) Statement of compliance
These condensed consolidated interim financial statements for the six-month
period ended 30 June 2022 have been prepared in a form consistent with that
which will be adopted in the Company's annual accounts having regard to the
accounting standards applicable to such annual accounts namely International
Financial Reporting Standards ('IFRS') as adopted by the European Union ('EU')
and should be read in conjunction with the Group's last annual consolidated
financial statements as at and for the year ended 31 December 2021 ('last
annual financial statements'). They do not include all of the information
required for a complete set of financial statements prepared in accordance
with IFRS Standards. However, selected explanatory notes are included to
explain events and transactions that are significant to an understanding of
the changes in the Group's financial position and performance since the last
annual financial statements. They are presented in euro (€), rounded to the
nearest thousand.
These condensed consolidated interim financial statements were authorised for
issue by the Board of Directors on 29 September 2022.
(b) Basis of preparation
The condensed consolidated interim financial statements of the Company for the
six-month period ended 30 June 2022 have been prepared on a going concern
basis, which assumes that the Group will be able to discharge its liabilities
in the normal course of business.
The Group's cash flow forecasts for the foreseeable future involve
uncertainties related primarily to the exact disposal proceeds and timing of
disposals of the assets expected to be disposed of. Management believes that
the proceeds from forecast asset sales will be sufficient to maintain the
Group's cash flow at a positive level. Should the need arise, management will
take actions to reduce costs and is confident that it can secure additional
loan facilities and/or obtain repayment extension on existing ones, until
planned asset sales are realised and proceeds received.
If, for any reason, the Group is unable to continue as a going concern, then
this could have an impact on the Group's ability to realise assets at their
recognised values and to extinguish liabilities in the normal course of
business at the amounts stated in the condensed consolidated interim financial
statements.
Based on these factors, management has a reasonable expectation that the Group
has and will have adequate resources to continue in operational existence for
the foreseeable future.
3. SIGNIFICANT ACCOUNTING POLICIES
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
2021. A number of new standards are effective from 1 January 2022, but they do
not have a material effect on the Group's financial statements.
Where necessary, comparative figures have been adjusted to conform to changes
in presentation in the current period.
4. USE OF JUDGEMENTS AND ESTIMATES
The preparation of interim financial statements requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expense. Actual results may differ from these estimates.
In preparing these condensed consolidated interim financial statements, the
significant judgements made by the management in applying the Group's
accounting policies and the key sources of estimation and uncertainty were the
same as those applied to the consolidated financial statements as at and for
the year ended 31 December 2021.
5. PRINCIPAL SUBSIDIARIES
As at 30 June 2022, the Group's most significant subsidiaries were the
following:
Country of Shareholding
Name Project incorporation interest
Scorpio Bay Holdings Limited Scorpio Bay Resort Cyprus 100%
Scorpio Bay Resorts S.A. Scorpio Bay Resort Greece 100%
Xscape Limited Lavender Bay Resort Cyprus 100%
Golfing Developments S.A. Lavender Bay Resort Greece 100%
MindCompass Overseas One Limited ('MCO 1') Kilada Hills Golf Resort Cyprus 85%
MindCompass Overseas S.A. Kilada Hills Golf Resort Greece 85%
MindCompass Overseas Two S.A. Kilada Hills Golf Resort Greece 100%
MindCompass Parks S.A. Kilada Hills Golf Resort Greece 100%
Dolphin Capital Greek Collection Limited Kilada Hills Golf Resort Cyprus 100%
DCI Holdings One Limited ('DCI H1')* Aristo Developers BVIs 100%
D.C. Apollo Heights Polo and Country Resort Limited Apollo Heights Resort Cyprus 100%
Symboula Estates Limited ('Symboula') Apollo Heights Resort Cyprus 100%
Azurna Uvala D.o.o. ('Azurna') Livka Bay Resort Croatia 100%
Eastern Crete Development Company S.A. Plaka Bay Resort Greece 100%
Single Purpose Vehicle Ten Limited ('SPV 10')** One&Only Kea Resort Cyprus 67%
The above shareholding interest percentages are rounded to the nearest
integer.
*This entity holds 48% shareholding interest in DCI Holdings Two Ltd ('DCI H
2' owner of Aristo Developers Ltd)
** This entity holds 50% shareholding interest in Single Purpose Vehicle
Fourteen Limited ('SPV 14' owner of OOKI)
6. revenue
From 1 January 2022 From 1 January 2021
to 30 June 2022 to 30 June 2021
€'000 €'000
Sale of trading and investment properties - 3,000
Other income 55 49
Total 55 3,049
7. COST OF SALES
From 1 January 2022 From 1 January 2021
to 30 June 2022 to 30 June 2021
€'000 €'000
Cost of sales related to:
Sales of trading and investment properties - 2,046
Total - 2,046
8. chANGE IN VALUATIONS
From 1 January 2022 From 1 January 2021
to 30 June 2022 to 30 June 2021
€'000 €'000
Net change in fair value of other investments - (228)
Total - (228)
9. SEGMENT REPORTING
Operating segments
As at 30 June 2022 and 30 June 2021, the Group is not considered to have
reportable operating segments that require disclosure. The Group has one
business segment, focusing on achieving capital growth through investing in
residential resort developments primarily in south-east Europe.
The geographic information analyses the Group's non-current assets by the
Company's country of domicile. In presenting the geographic information,
segment assets were based on the geographic location of the assets.
Non-current assets
30 June 31 December 2021
2022
€'000 €'000
Greece 57,468 55,935
Croatia 18,448 18,482
Cyprus 52,395 52,395
At end of period/year 128,311 126,812
Country risk developments
Greek tourism is heading for an excellent year, supporting public revenue,
despite inflationary pressures worldwide and the environment of high
uncertainty that has emerged following the energy crisis. High-frequency
indicators confirm the expected solid outlook for tourism in 2022 and remain
in line with the projections of a full return to pre-pandemic levels by 2023.
According to Alpha Bank's bulletin Greek tourism revenue in 2022 is expected
to reach €20 billion, exceeding the amount generated by tourism in 2019
(€18.2 billion). 8 million travellers from abroad visited Greece in the
first half of 2022 with travel receipts amounting to €5.1 billion. Compared
to the January-June 2019 period, this year's tourism figures were down by 15 %
and 5.3% respectively. Meanwhile, the average expenditure per trip increased
by 12.6 % compared to the January-July 2019 period.
Travel receipts during the first half of 2022 boosted state revenue, which
amounted to €41.8 billion compared to €35.3 billion in the same period of
2021, registering an increase of 18.5%. The Bank of Greece has revised its GDP
growth forecast upwards and now expects that the economy will grow 4.2% in
2022 and 3.1% in 2023 versus 3.2% and 4.1% respectively expected previously,
driven by strong tourism performance. Greece's exit from the enhanced
surveillance regime on August 20, 2022 is also another positive aspect.
In Cyprus, tourist arrivals in the first half of 2022 exceeded 1.22 million
which correspond to 74.9% of the respective period of 2019, which was an
historic record year. The 1.22 million arrivals also mark 63.2% of those of
the whole of last year, according to data released by the Statistical Service
of Cyprus.
The Cyprus property market continues to recover after falling prices in 2021.
In the first quarter of 2022, the number of real estate transactions increased
for the first time in 14 years. In the second quarter of 2022, it remains
high, according to the Cyprus Land Registry. Buyers are especially interested
in land and luxury real estate.
Management continues to closely monitor developments in this sphere and will
adjust its operational processes and divestment strategies accordingly so that
it can successfully navigate the business through the coming months.
10. PROFESSIONAL FEES
From 1 January 2022 From 1 January 2021
to 30 June 2022 to 30 June 2021
€'000 €'000
Legal fees 318 295
Auditors' remuneration 80 143
Accounting expenses 99 81
Project design and development fees 207 192
Consultancy fees 63 68
Administrator fees 186 29
Other professional fees 96 99
Total 1,049 907
11. ADMINISTRATIVE AND OTHER EXPENSES
From 1 January 2022 From 1 January 2021
to 30 June 2022 to 30 June 2021
€'000 €'000
Personnel expenses (see below) 274 331
Travelling and accommodation 28 9
Insurance 35 34
Repairs and maintenance 3 4
Marketing and advertising expenses 30 19
Rents 41 32
Immovable property and other taxes 78 22
Other 195 204
Total 684 655
Personnel expenses
From 1 January 2022 From 1 January 2021
to 30 June 2022 to 30 June 2021
€'000 €'000
Wages and salaries 188 243
Compulsory social security contributions 68 83
Other personnel costs 18 5
Total 274 331
The average number of employees during the period was 23 30
12.Taxation
From 1 January 2022 From 1 January 2021
to 30 June 2022 to 30 June 2021
€'000 €'000
Income tax - 3
Net deferred tax 2 (363)
Total 2 (360)
13. LOSS per share
Basic loss per share
Basic loss per share is calculated by dividing the loss attributable to owners
of the Company by the weighted average number of common shares outstanding
during the period.
From 1 January 2022 From 1 January 2021
to 30 June 2022 to 30 June 2021
'000 '000
Loss attributable to owners of the Company (€) (2,972) (3,007)
Number of weighted average common shares outstanding 904,627 904,627
Basic loss per share (€) (0.003) (0.003)
Weighted average number of common shares outstanding
From 1 January 2022 From 1 January 2021
to 30 June 2022 to 30 June 2021
'000 '000
Outstanding common shares at the beginning and end of the period 904,627 904,627
Diluted loss per share
Diluted loss per share, is calculated by adjusting the loss attributable to
owners and the number of common shares outstanding to assume conversion of all
dilutive potential shares. As of 30 June 2022 and 30 June 2021, the diluted
loss per share is the same as the basic loss per share, due to the fact that
no dilutive potential ordinary shares were outstanding during these periods.
14. Property, plant and equipment
Under construction Land and buildings
€'000 €'000 Other Total
€'000 €'000
30 June 2022
Cost or revalued amount
At beginning of period 5,683 20,445 411 26,539
Direct acquisitions 1,685 10 7 1,702
At end of period 7,368 20,455 418 28,241
Depreciation and impairment losses
At beginning of period - 17,080 390 17,470
Depreciation charge for the period - 36 2 38
At end of period - 17,116 392 17,508
Carrying amounts 7,368 3,339 26 10,733
Under construction Land and buildings
€'000 Other Total
€'000 €'000 €'000
31 December 2021
Cost or revalued amount
At beginning of year 2,054 20,445 400 22,899
Direct acquisitions 3,629 6 16 3,651
Disposals through subsidiary disposal - (6) (5) (11)
At end of year 5,683 20,445 411 26,539
Depreciation and impairment losses
At beginning of period - 17,665 379 18,044
Depreciation charge for the year - 36 12 48
Disposals through subsidiary disposal - (6) (3) (9)
Reversal of impairment loss - (615) - (615)
Exchange Difference - - 2 2
At end of year - 17,080 390 17,470
Carrying amounts 5,683 3,365 21 9,069
Fair value hierarchy
The fair value of land and buildings has been categorised as a Level 3 fair
value based on the inputs to the valuation techniques used.
Valuation techniques and significant unobservable inputs
The valuation techniques used in measuring the fair value of land and
buildings, as well as the significant unobservable inputs used, are the same
as those used as at 31 December 2021.
15. Investment property
30 June 2022 31 December 2021
€'000 €'000
At beginning of period/year 52,188 76,303
Net direct additions 145 21
Fair value adjustment - (24,240)
Exchange differences (35) 104
At end of period/year 52,298 52,188
Fair value hierarchy
The fair value of investment property has been categorised as a Level 3 fair
value based on the inputs to the valuation techniques used.
Valuation techniques and significant unobservable inputs
The valuation techniques used in measuring the fair value of investment
property, as well as the significant unobservable inputs used, are the same as
those used as at 31 December 2021.
16. equity-accounted investees
30 June 2022 DCI H2 SPV 14 Total
€'000 €'000 € '000
Balance as at 1 January 2022 42,694 22,861 65,555
Share of profits/ (losses), net of tax 669 (275) 394
Impairment Loss (669) - (669)
Balance as at 30 June 2022 42,694 22,586 65,280
31 December 2021 DCI H2 SPV14 Total
€'000 €'000 €'000
Balance as at 1 January 2021 42,694 17,980 60,674
Share of revaluation surplus - (278) (278)
Share of profits, net of tax 814 5,159 5,973
Impairment Loss (814) - (814)
Balance as at 31 December 2021 42,694 22,861 65,555
DCI H2
As at 30 June 2022 and 31 December 2021, the investment in DCI H2 is presented
at its recoverable amount of €42.7 million. The recoverable amount is
calculated based on the NAV of DCI H2 group at the reporting date adjusted by
approximately 30% discount on the DCI H2 group's real estate properties. The
fair value of the investment in DCI H2 has been categorised as a Level 3 fair
value based on the inputs to the valuation techniques used.
The details of the above investments are as follows:
Shareholding interest
Name Country of incorporation Principal activities 30 June 2022 31 December 2021
SPV 14 Cyprus Development of OOKI (Greece) 33%* 33%*
DCI H2 BVIs Acquisition and holding of real estate investments in Cyprus 48% 48%
The above shareholding interest percentages are rounded to the nearest
integer.
*This represents the indirect shareholding % in SPV14. The Group has 67%
shareholding interest in its subsidiary SPV 10 which owns 50% shareholding
interest in SPV 14.
17. Trading properties
30 June 2022 31 December 2021
€'000 €'000
At beginning of period/year 56,516 59,769
Disposals - (3,253)
At end of period/year 56,516 56,516
18. RECEIVABLES AND OTHER ASSETS
30 June 2022 31 December 2021
€'000 €'000
Trade receivables 142 45
VAT receivables 231 859
Other receivables 1,460 176
Total trade and other receivables 1,833 1,080
Prepayments and other assets 11 12
Total 1,844 1,092
19. CAPITAL AND RESERVES
Capital
Authorised share capital 30 June 2022 31 December 2021
'000 of shares €'000 '000 of shares €'000
Common shares of €0.01 each 2,000,000 20,000 2,000,000 20,000
Movement in share capital and premium Shares in issue Share capital Share premium
'000 €'000 €'000
Capital at 1 January 2021 and 30 June 2022 904,627 9,046 569,847
Reserves
Translation reserve
Translation reserve comprises all foreign currency differences arising from
the translation of the interim financial statements of foreign operations.
Revaluation reserve
Revaluation reserve relates to the revaluation of property, plant and
equipment from both subsidiaries and equity-accounted investees, net of any
deferred tax.
20. LOANS AND BORROWINGS
Total Within one year Within two to five years
30 June 31 December 30 June 31 December 30 June 31 December
2022 2021 2022 2021 2022 2021
€'000 €'000 €'000 €'000 €'000 €'000
Loans in Euro 18,320 17,391 18,320 4,743 - 12,648
Redeemable preference shares 10,028 7,477 - - 10,028 7,477
Total 28,348 24,868 18,320 4,743 10,028 20,125
Loans in Euro
On 3 June 2021 the Company entered into a €15.0 million senior secured term
loan facility agreement ("senior loan facility") with two institutional
private credit providers acting on behalf of their managed and advised funds.
The nominal interest rate is 12.5% and the initial maturity date falls 18
months from the loan draw-down and is subject to a six-month extension at
Company's option with a 2.0% interest step-up. The facility agreement includes
mandatory prepayment clauses with regard to revenues realised by the Company
from the disposal of its assets, as well as standard event of default
provisions including, inter alia, borrower change of control, termination of
investment management agreement and cancelation of existing borrower
securities listing. As of 31 December 2021, an amount of €14.1 million had
been drawn down and arrangement and commitment fees amounting to €0.7
million had been prepaid. €0.8 million was drawn down on 4 March 2022 and
transferred to an interest reserve account less any arrangement fees.
Redeemable Preference Shares
On 18 December 2019, the Company signed an agreement with an international
investor for a €12.0 million investment in Kilada. The investor agreed to
subscribe for both common and preferred shares. The total €12.0 million
investment is payable in 24 monthly instalments of €0.5 million each. Under
the terms of the agreement, the investor will be entitled to a priority return
of the total investment amount from the net disposal proceeds realised from
the project and will retain a 15% shareholding stake in Kilada. As of 30 June
2022, 15% (31 December 2021: 11.58%) of the ordinary shares have been
transferred to the investor.
As of 30 June 2022, 12,000 redeemable preference shares (31 December 2021:
9,000) were issued as fully paid with value of €1,000 per share. The
redeemable preference shares are issued with a zero-coupon rate and are
discounted with a 0.66% effective monthly interest rate, do not carry the
right to vote and are redeemable when net disposal proceeds are realised from
the Project. As at 30 June 2022, the fair value of the redeemable preference
shares was €10.0 million (31 December 2021: €7.5 million).
Terms and conditions of the Loans
As of 30 June 2022, there were no significant changes in terms and conditions
of the outstanding loans, compared to 31 December 2021.
Security given to lenders
As at 30 June 2022, the Group's loans and borrowings were secured as follows:
· Regarding the senior term loan facility, fixed and floating
charges over all of the Company's assets including all of the shares in DCI
Holdings One Limited, fixed charge over the interest reserve account, pledges
over the shares of DolphinCI Twenty-Four Limited and the subsidiaries in
Kilada and Apollo Project and assignments and charges over intercompany loans.
· With regard to the Kilada subscription agreement, upon transfer
of the entire amount of €12.0 million from the investor in accordance with
the terms of the agreement, a mortgage will be set against the immovable
property of the Kilada Project, in the amount of €15.0 million.
· With respect to Azurna loan, mortgage against the immovable
property of the Croatian subsidiary, Azurna (the owner of the 'Livka Bay'),
with a carrying value of €17.0 million (2021: €17.0 million), two
promissory notes, a debenture note and a letter of support from its parent
company Single Purpose Vehicle Four Limited.
21. Deferred tax liabilities
30 June 2022 31 December 2021
€'000 €'000
Balance at the beginning of the period/year 6,609 8,000
Recognised in profit or loss (2) (1,399)
Exchange differences - 8
Balance at the end of the period/year 6,607 6,609
Deferred tax liabilities are attributable to the following:
30 June 2022 31 December 2021
€'000 €'000
Investment property 2,245 2,247
Trading properties 4,299 4,299
Property, plant and equipment 63 63
Total 6,607 6,609
22. Trade and other payables
30 June 2022 31 December 2021
€'000 €'000
Land creditors 20,752 20,752
Investment Manager fees (Note 24.2) 1,300 1,301
Other payables and accrued expenses 4,101 4,115
Total 26,153 26,168
30 June 2022 31 December 2021
€'000 €'000
Non-current 19,940 20,089
Current 6,213 6,079
Total 26,153 26,168
Land creditors relate to contracts in connection with the purchase of land at
Lavender Bay. The above outstanding amount bears an annual interest rate equal
to the inflation rate, which cannot exceed 2.0%. Full settlement is due on 31
December 2025.
There is currently a dispute regarding the ownership rights of the land sold
to Golfing Developments S.A. ('Golfing' - our wholly owned subsidiary that
owns the Lavender Bay investment). Golfing is in negotiations with the
original vendor with a view to ensuring that no additional deferred payments
will be made to them under the relevant sale and purchase contracts until the
resolution of this legal dispute with the Greek State. Following a series of
constructive discussions during Q3, an amicable resolution to this matter with
the Greek Church is expected by the end of the year.
23. NAV per share
30 June 2022 31 December 2021
'000 '000
Total equity attributable to owners of the Company (€) 116,091 119,087
Number of common shares outstanding at end of period/year 904,627 904,627
NAV per share (€) 0.13 0.13
24. Related party transactions
24.1 Directors' interest and remuneration
Directors' interest
Miltos Kambourides is the founder and managing partner of the Investment
Manager.
On 30 June 2021, Mr. Martin Adams, Mr. Nicholas Paris and Mr. Nicolai Huls
joined the Board as non-executive Directors, with Mr. Martin Adams becoming
Chairman. On the same date, Mr. Andrew Coppel, Mr.Graham Warner and Mr. Mark
Townsend stepped down from the Board as non-executive Directors.
The interests of the Directors as at 30 June 2022, all of which are
beneficial, in the issued share capital of the Company as at this date were as
follows:
Shares
'000
Miltos Kambourides (indirect holding) 66,019
Nicolai Huls 775
Save as disclosed, none of the Directors had any interest during the period in
any material contract for the provision of services which was significant to
the business of the Group.
Directors' remuneration
From 1 January 2022 From 1 January 2021
to 30 June 2022 to 30 June 2021
€'000 €'000
Remuneration 100 194
Total remuneration 100 194
The Directors' remuneration details for the six-month period ended 30 June
2022 and 30 June 2021 were as follows:
From 1 January 2022 From 1 January 2021
to 30 June 2022 to 30 June 2021
€'000 €'000
Martin Adams 37 -
Nicholas Paris 33 -
Nicolai Huls 30 -
Andrew Coppel (stepped down on 30 June 2021) - 104
Graham Warner (stepped down on 30 June 2021) - 61
Mark Townsend (stepped down on 30 June 2021) - 29
Total 100 194
Mr. Miltos Kambourides has waived his fees.
24.2 Investment Manager remuneration
From 1 January 2022 From 1 January 2021
to 30 June 2022 to 30 June 2021
€'000 €'000
Fixed management fee - 1,800
Total remuneration - 1,800
With effect from 1 January 2022, a new Investment Management Agreement ('IMA')
came into force replacing the previous one which was effective from 1 January
2019.
Under the terms of the IMA, the Investment Manager is now entitled to fees as
follows:
An incentive becomes payable once shareholders have received aggregate
distributions of €40.0 million. Thereafter an incentive fee of 15% accrues
on all distributions up to €80.0 million paid to shareholders. Once €80.0
million has been distributed to Shareholders, a bonus of €1.0 million for
every €5.0 million of distributions will be payable until a total of
€100.0 million has been distributed.
To assist the Investment Manager in meeting its working capital commitments,
quarterly advances will be paid to the Investment Manager in the amounts of
€2.4 million in total for 2022, €2.3 million in 2023 and €1.3 million in
2024.
Any fees accruing to the Investment Manager under an asset management
agreement entered into under the terms of an agreement with the project
company for the OOKI investment will be offset against the accrued incentive
fee entitlement.
25% of any incentive fee entitlements payable to the Investment Manager under
the IMA will be held in escrow and released with the last distribution to
Shareholders after the last remaining investment has been sold.
Prior to 31 December 2021, the Investment Manger operated under an Investment
Management Agreement which was effective from 1 January 2019, as follows:
i. Fixed investment management fee
The annual investment management fees for 2021 were €3.6 million per annum.
ii. Variable investment management fee
The variable investment management fee for the period from 1 January 2020 to
31 December 2021 would have been equal to a percentage of the actual
distribution made by the Company to its shareholders, as shown below:
Aggregate Shareholder Distributions % applied
on Distributions
Up to but excluding €30 million Nil
€30 million up to but excluding €50 million 2.0%
€50 million up to but excluding €75 million 3.0%
€75 million up to but excluding €100 million 4.0%
€100 million up to but excluding €125 million 5.0%
€125 million or more 6.0%
The Investment Manager was entitled to a performance fee payable subject to
certain conditions, under the terms of the IMA. However, any performance fees
earned under this arrangement would have been fully deducted from any future
annual investment management fees and variable management fees payable over
the term of the IMA.
No performance fee was payable to the Investment Manager for the six-month
period ended 30 June 2022 (30 June 2021: € Nil).
At 30 June 2022, the advances made to the Investment Manager under the revised
IMA amounted to €1.2 million (31 December 2021: € Nil).
24.3 Other related party arrangements
DCP owns an effective 5% equity interest in SPV14 Ltd (an equity-accounted
investee and the holding company of the OOKI project). Under the relevant
shareholders agreement dated 27 May 2019, DCP, One&Only and Exactarea have
priority returns for an amount equal to 75% of their equity investment,
following the payment of which the Company becomes entitled to a priority
catch-up for the same amount. DCP is party to an asset management agreement
dated 1 November 2017 with OOKI and provided management services during the
period amounting to €0.04 million (30 June 2021: €0.12 million).
DCP retains an equity interest in AZOE Holdings Ltd, the company that owns
Amanzoe resort and it is counterparty to an asset management agreement dated 3
October 2018 related to the resort. On 2 August 2021, Amanzoe Resort S.A.
entered into a contract to buy 24 founder plots in the Company's Kilada
project for a price of €10 million payable in instalments subject to the
achievement of certain construction milestones.
AXIA Ventures Group Limited, which is 20% owned by an affiliate of DCP and on
whose Board of Directors Miltos Kambourides serves, was appointed by the
Company on 16 September 2022 to undertake a process for the sale of its
shareholding in Aristo but no transaction was concluded and therefore no fee
was due or paid.
25. FINANCIAL RISK MANAGEMENT
The Group's financial risks and risk management objectives and policies are
consistent with those disclosed in the consolidated financial statements as at
and for the year ended 31 December 2021.
Fair values
The fair values of the Group's financial assets and liabilities approximate
their carrying amounts at the statement of financial position date.
26. Contingent liabilities
Companies of the Group are involved in pending litigation. This principally
relates to day-to-day operations as a developer of second-home residences and
largely derives from certain clients and suppliers. Based on advice from the
Group's legal advisers, the Investment Manager believes that there is
sufficient defence against any claim and does not expect that the Group will
suffer any material loss. All provisions in relation to these matters which
are considered necessary have been recorded in these condensed consolidated
interim financial statements.
In addition to the tax liabilities that have already been provided for in the
condensed consolidated interim financial statements based on existing
evidence, there is a possibility that additional tax liabilities may arise
after the examination of the tax and other matters of the companies of the
Group in the relevant tax jurisdictions.
The Group, under its normal course of business, guaranteed the development of
properties in line with agreed specifications and time limits in favour of
other parties.
27. SUBSEQUENT EVENTS
On 28 September 2022, SPV10 (an entity owned 66.67% by DCI which, in turn,
indirectly owns 50% of the OOKI project), received a notice from the project's
minority shareholder, that it had reached a binding agreement for the sale of
its 40% effective equity ownership interest in OOKI. Pursuant to a
Shareholders' Agreement dated 27 May 2019, SPV10 is entitled to exercise a
tag-along right to sell its interest in OOKI simultaneously with the proposed
transfer of the minority shareholder's interest for a proportionate
consideration. SPV10 intends to exercise its tag-along right to transfer all
of its effective equity interest in OOKI for a proportionate cash
consideration of €26.88 million. The pro rata consideration for Dolphin's
stake in SPV10 amounts to €17.92 million and represents a premium of 17.0%
to the valuation of the Dolphin's investment in OOKI disclosed in the
Company's financial statements as at 31 December 2021. The conclusion of the
purchase and sale transaction remains subject to the execution of the final
documentation and the fulfilment of the terms and conditions set out therein,
which is expected to complete during the fourth quarter of 2022.
There were no material events after the reporting period which have a bearing
on the understanding of the condensed consolidated interim financial
statements as at 30 June 2022 other than as disclosed.
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