REG-Everest Global Plc: Half-year Report
31/07/2023 07:15
The Board of Everest is pleased to announce its unaudited results for the six
months ended 30 April 2023.
31 July
2023
Everest Global plc
(“Everest” or the “Company”)
Unaudited interim results for the six months ended 30 April 2023
The Board of Everest is pleased to announce its unaudited results for the six
months ended 30 April 2023.
Chief Executive Officer’s Report
I am pleased to report our unaudited results for the six months ended 30 April
2023.
To repeat for those new to the Company, on 3 October 2022, prior to the
previous year-end, the Company announced a number of important events
including the recapitalisation of the Company through a subscription by Golden
Nice International Limited of 13 million new Ordinary Shares in the Company
for £650,000 and its purchase of 65% of the outstanding convertible loan
notes, with the remainder of the convertible loan notes (35%) being converted
by the note holders into Ordinary Shares in the Company.. The Company also
changed its name to Everest Global Plc, both Andrew Monk and Matt Bonner
resigned from the Board and Simon Grant-Rennick and I were appointed to the
Board. .
During the current reporting period, on the 24 January 2023, the Company
announced a subscription for 12,726,000 new Ordinary Shares raising net
proceeds totalling £699,930 at a subscription price of 5.5 pence per Ordinary
Share. In addition, on 25 January 2023, the convertible loan note holder,
Golden Nice International Limited converted £300,000 of its debt to 6,000,000
new Ordinary Shares.
Due to the number of new shares issued in the period under review and on 3
October 2022, in order to comply with Prospectus Regulation Rule 1.2.4, which
prohibits the admission of more than 20% of the number of securities already
admitted to trading on the Main Market of the London Stock Exchange without a
prospectus, the Company is working towards publishing a prospectus in relation
to the issue of the these shares, by 2 October 2023, in order to enable them
to be admitted to trading on the Main Market of the London Stock Exchange in
accordance with Listing Rule 14.3.4.
This has been the first reporting period that the Company is operating as
Everest Global Plc with the new reconstituted board for the full period and I
am pleased to announce that the board is working very well together despite
the head winds. The board is clear on its mandate and strategy and is working
towards achieving this.
Post period end, the Company announced on the 4 July 2023, that it had
invested £200,000 by way of a loan into Precious Link (UK) Limited, a wine
retailer, located within the Southeast of England. The Board believes that
Precious Link operates in a complementary sector and that the loan could
assist the Company in expanding its activities into the wider food and
beverage sector.
As mentioned in the Annual Financial Statements for the year ended 31 October
2022, and simultaneous to the investment by Golden Nice International Limited,
Dynamic Intertrade (Pty) Limited (“Dynamic”) issued shares to K2 Spice
Limited (previously VSA NEX Investments Limited) (“K2”), for consideration
of ZAR10,982, such that Everest Global retains 51% interest in Dynamic and K2
now holds 49% of Dynamic. Further, the Company granted K2 a put option for £1
to acquire the remaining 51% once certain conditions have been met. In
addition, certain debts owing by Dynamic to the Company and certain other
parties were also assigned to K2 in consideration for K2 paying to the Company
£100,001 and agreeing to fund Dynamic so as to enable Dynamic to carry on its
business in the ordinary course until such time as the Company ceases to hold
any further shares in Dynamic.
The Company’s present primary operations and source of revenue remains its
51% holding in Dynamic, our Cape Town based spice blender and trader. The
underlying Company was still loss making for the year ended 31 October 2022
(see Note 4 for a full explanation) but has since improved its performance
during the six-months ended 30 April 2023. Group turnover increased by 20.98%
(6 months to 30 April 2022: a reduction of 13.5%). Group operating losses
amounted to £1,380,631 (6 months to 30 April 2022: £11,176) for the current
period.
During the period our previous auditor resigned as they were no longer in a
position to audit Public Interest Entity (“PIE”) companies and due to
capacity constraints with many other auditors there was a delay in appointing
a PIE registered auditor. As a result, the Company could not complete their
statutory audit, publication of results or statutory filing at Companies House
on time. As such, trading in the Company’s Ordinary Shares and its listing
on the Official List of the Financial Conduct Authority was suspended. The
Company was granted an extension of its filing obligations by Companies House.
Dynamic Intertrade (“Dynamic”)
For the 6-month period ending 30 April 2023, Dynamic recorded revenue of R30.8
million (30 April 2022, R14.04 million, and 31 October 2022, R34.8 million)
representing a 119% increase. This increase in revenue resulted in gross
profit of R9.28 million (representing a gross margin of 30%). This is a 50%
improvement in the margin from the 20% for the six months ended 30 April 2022
and the 24.74% for the full year ended 31 October 2022. Operating expenses
have increased by 11% to R4.9 million from R4.4 million for the period to 30
April 2022. EBITDA was R4.6 million (31 October 2022: Loss – R11.2 million).
While a pleasing improvement it has put pressure on the working capital
requirements which we are expecting K2 to assist with under an agreement
signed on 3 October 2022.
DI has maintained its FSSC22000 certification which is important when dealing
with blue chip food manufacturing companies.
Dynamic Intertrade Agri (“DIA”)
As stated on 20 July 2023, the Company’s 46.8% share in DIA was disposed of
to Athena Trading Worldwide Limited for a consideration of £15,384.62.
Group Results for the period
Group turnover increased to £1,434,073 for the six months ended 30 April 2023
from the £681,761 for the comparative period ended 30 April 2022, and is only
15,6% lower than the turnover for the full year ended 31 October 2022 of
£1,698,839. The Group made an operating profit of £476,634 for the six
months to 30 April 2023 (30 April 2022: loss of £11,176, 31 October 2022:
loss of £1,152,170). This has primarily been the result of an improvement in
the exchange rates as evidenced by the gain on foreign exchange of £383,990
and the increase in revenue mentioned above.
At the end of the period under review the Company had cash and cash
equivalents of £1,405,609 (30 April 2022: £503,399, 31 October 2022:
£925,814).
Outlook
While the world economy is uncertain with the war in the Ukraine, inflation,
high interest rates and, uncertain demand and supply we believe we will steady
the Company and give it a solid foundation for future growth.
The unaudited interim report for the 6 months ended 30 April 2023 is
available on the Company's website at: www.everestglobalplc.com and in
hard copy form at the Company's registered office at 48 Chancery Lane, London
WC2A 1JF.
It will also shortly be available for inspection at:
www.fca.org.uk/markets/primary-markets/regulatory-disclosures/national-storage-mechanism.
Prior to publication, the information contained within this announcement was
deemed by the Company to constitute inside information for the purposes of
Article 7 of EU Regulation 596/2014 (which forms part of domestic UK law
pursuant to the European Union (Withdrawal) Act 2018). With the publication of
this announcement, this information is now considered to be in the public
domain.
The Directors of the Company accept responsibility for the content of this
announcement.
For further information please contact the following:
Everest Global plc
Andy Sui, Chief Executive Officer Rob Scott, Non-Executive Director +44 (0) 776 775 1787 +27 (0)84 6006 001
Cairn Financial Advisers LLP
Jo Turner / Emily Staples +44 (0) 20 7213 0885 / +44 (0)20 7213 0897
Caution regarding forward looking statements
Certain statements in this announcement, are, or may be deemed to be, forward
looking statements. Forward looking statements are identified by their use of
terms and phrases such as ''believe'', ''could'', "should" ''envisage'',
''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect",
''will'' or the negative of those, variations or comparable expressions,
including references to assumptions. These forward-looking statements are not
based on historical facts but rather on the Directors' current expectations
and assumptions regarding the Company's future growth, results of operations,
performance, future capital and other expenditures (including the amount,
nature and sources of funding thereof), competitive advantages, business
prospects and opportunities. Such forward looking statements reflect the
Directors' current beliefs and assumptions and are based on information
currently available to the Directors.
Principal Risks and uncertainties for the remaining 6 months of the financial
year
The Directors consider the following risk factors to be of relevance to the
Group’s activities for the remaining 6 months of the financial year. It
should be noted that the list is not exhaustive and that other risk factors
not presently known or currently deemed immaterial may apply:
i. Development Risk
The Group’s development will be, in part, dependent on the ability of the
Directors to continue to improve the current business, to identify suitable
investment opportunities and to implement the Group’s strategy. There is no
assurance that the Group will be successful in acquiring suitable investments.
ii. Sector Risk
The agriculture and agri-processing sectors are highly competitive markets and
many of the competitors will have greater financial and other resources than
the Company and as a result may be in a better position to compete for
opportunities.
The development of these enterprises involves significant uncertainties and
risks including unusual climatic conditions such as drought, improper use of
pesticides, availability of labour and seasonality of produce, any one of
which could result in security of supply, damage to, or destruction of crops,
environmental damage or pollution. Each of these could have a material adverse
impact on the business, operations and financial performance of the Group.
The market price of agricultural products and crops is volatile and affected
by numerous factors which are beyond the Group’s control. These include
international supply and demand, the level of consumer product demand,
international economic trends, currency exchange rate fluctuations, the level
of interest rates, the rate of inflation, global or regional political events,
as well as a range of other market forces. Sustained downward movements in
agricultural prices could render less economic, or un-economic, any
development or investing activities to be undertaken by the Group. Certain
agricultural projects involve high capital costs and associated risks. Unless
such projects enjoy long term returns, their profitability will be uncertain
resulting in potentially high investment risk.
iii. Political and Regulatory Risk
African countries experience varying degrees of political instability. There
can be no assurance that political stability will persist in those countries
where the Group may have operations going forward. In the event of political
instability or changes in government policies in those countries where the
Group may operate, the operations and financial condition of the Group could
be adversely affected.
iv. Environmental Risks and Hazards
All phases of the Group’s operations are subject to environmental regulation
in the areas in which it operates. Environmental legislation is evolving in a
manner that may require stricter standards and enforcement, increased fines
and penalties for non-compliance, more stringent environmental assessments of
proposed projects and a heightened degree of responsibility for companies and
their officers, Directors and employees.
There is no assurance that existing or future environmental regulation will
not materially adversely affect the Group’s business, financial condition
and results of operations. Environmental hazards may exist on the properties
on which the Group holds interests that are unknown to the Group at present.
The Board manages this risk by working with environmental consultants and by
engaging with the relevant governmental departments and other concerned
stakeholders.
v. Internal Control and Financial Risk Management
The Board has overall responsibility for the Group’s systems of internal
control and for reviewing their effectiveness. The Group maintains systems
which are designed to provide reasonable but not absolute assurance against
material loss and to manage rather than eliminate risk.
The key features of the Group’s systems of internal control are as follows:
* Management structure with clearly identified responsibilities;
* Production of timely and comprehensive historical management information
presented to the Board;
* Detailed budgeting and forecasting;
* Day to day hands on involvement of the Executive Director and Senior
Management; and
* Regular Board meetings and discussions with the Non-Executive Directors.
The Group’s activities expose it to several financial risks including cash
flow risk, liquidity risk and foreign currency risk.
vi. Environmental Policy
The Group is aware of the potential impact that its subsidiary and associate
companies may have on the environment. The Group ensures that it complies with
all local regulatory requirements and seeks to implement a best practice
approach to managing environmental aspects.
The subsidiary, Dynamic Intertrade operates a Food Safety System
Certification (“FSSC”) compliant facility in Cape Town. The FSSC provides
a framework for effectively managing the organisation's food safety
responsibilities and is fully recognized by the Global Food Safety Initiative
and is based on existing ISO Standards.
vii. Health and Safety
The Group’s aim is to achieve and maintain a high standard of workplace
safety. In order to achieve this objective, the Group provides ongoing
training and support to employees and sets demanding standards for workplace
safety.
viii. Financing Risk
The development of the Group’s business may depend upon the Group’s
ability to obtain financing primarily through the raising of new equity
capital or debt. The Group’s ability to raise further funds may be affected
by the success of existing and acquired investments. The Group may not be
successful in procuring the requisite funds on terms which are acceptable to
it (or at all) and, if such funding is unavailable, the Group may be required
to reduce the scope of its investments or the anticipated expansion. Further,
Shareholders’ holdings of Ordinary Shares may be materially diluted if debt
financing is not available.
ix. Credit Risk
The Directors have reviewed the forecasts prepared by both the Company and
Dynamic and believe that Dynamic has adequate resources available to meet its
obligations to the Company and its lenders.
x. Liquidity Risk
The Directors have reviewed the working capital requirements of the Company
and Dynamic and believe that, following stress tests and variance analysis on
the forecasts, there is sufficient working capital to fund the business while
expanding turnover. The Directors further highlight the inherent uncertainties
involved in making the assessment that the entity is a going concern.
xi. Capital Risk
The Group manages its capital resources to ensure that entities in the Group
will be able to continue as a going concern, while maximising shareholder
return.
The capital structure of the Group consists of equity attributable to
shareholders, comprising issued share capital and reserves. The availability
of new capital will depend on many factors including a positive operating
environment, positive stock market conditions, the Group’s track record, and
the experience of management. There are no externally imposed capital
requirements. The Directors are confident that adequate cash resources exist
or will be made available to finance operations and controls over expenditure
are carefully managed.
To manage the above risks, management are in regular contact with our
customers and are actively exploring new markets and customers in order to
diversify these risks.
Responsibility Statement
The Directors, whose names and functions are set out under the ‘Directors
and Advisers’ section of this report with registered office located at 48
Chancery Lane, London WC2A 1JF, accept responsibility for the information
contained in this set of interim results for the six month period ended 30
April 2023.
To the best of the knowledge of the Directors:
• The condensed set of financial statements are prepared in
accordance with the applicable set of accounting standards (with IAS 34
‘Interim Financial Reporting’ as contained in UK-adopted IFRS), give a
true and fair view of the assets, liabilities, financial position and profit
or loss of Everest Group Plc and the undertakings included in the
consolidation taken as a whole; and
• the interim management report, titled ‘Chief
Executive’s Report’ includes an indication of important events that have
occurred during the first six months of the financial year, and their impact
on the condensed set of financial statements, and a description of the
principal risks and uncertainties for the remaining six months of the
financial year.
• the interim management report includes a fair review of
the information required by DTR 4.2.8R (disclosure of related parties’
transactions and changes therein).
Everest Group Plc acknowledges that it is responsible for all information
drawn up and made public in this set of interim results for the period ended
30 April 2023.
Andy Sui
Chief Executive Officer
31 July 2023
Interim Condensed Consolidated Statement of Comprehensive Income
6 Months ended Year ended 6 Months ended
30 April 31 October 30 April
2023 2022 2022
(Unaudited) (Audited) (Unaudited)
Notes £ £ £
Turnover 1,434,073 1,698,839 681,761
Cost of sales (1,002,206) (1,278,471) (545,163)
Gross profit 431,867 420,368 136,598
Other Income 383,990 1,264 315,495
Administrative expenses 4 (339,223) (1,573,802) (463,269)
Operating profit / (loss) 476,634 (1,152,170) (11,176)
Finance costs (117,548) (3,418,549) (125,403)
Finance income 20,377 157 -
Profit / (loss) before taxation 379,463 (4,570,562) (136,579)
Tax on Profit / (loss) on ordinary activities - - -
Profit / (loss) after taxation 379,463 (4,570,562) (136,579)
Other Comprehensive Income - - -
Total comprehensive income / (loss) for the year from continuing operations 379,463 (4,570,562) (136,579)
Total comprehensive income / (loss) attributable to ordinary shareholders 137,570 (4,571,084)
Total comprehensive income / (loss) attributable to non-controlling interests 241,893 522
Total comprehensive income / (loss) for the period 379,463 (4,570,562) (136,579)
Basic and diluted earnings per share 5 1.15p (17.79p) (0.62p)
Interim Condensed Consolidated Statement of Changes in Equity
Share Share Premium Share Based Payments Reserve Equity Portion of Convertible Loan Notes Retained Earnings Total Oustide Shareholder's Interest Total
Capital Equity Equity
£ £ £ £ £ £ £ £
Balance at 31 October 2021 439,322 2,571,247 83,377 74,935 (4,416,527) (1,247,646) - (1,247,646)
Share Issue 76,473 76,473 - - - 152,946 - 152,946
Loss for the period - - - - (136,579) (136,579) - (136,579)
Balance at 30 April 2022 515,795 2,647,720 83,377 74,935 (4,553,106) (1,231,279) - (1,231,279)
Shares issued 260,000 390,000 650,000 - 650,000
Shares issued on conversion of convertible loan notes 147,463 221,194 368,657 - 368,657
Extension of date of conversion of the convertible loan notes - - - (32,396) (32,396) - (32,396)
Warrants issued during the year - (218,799) 218,799 - - - -
Loss attributable to non-controlling interest on disposal of 49% of subsidiary - - - - 2,305,905 2,305,905 (2,305,905) -
Loss for the year - - - - (4,434,505) (4,434,505) 522 (4,433,983)
Balance at 31 October 2022 923,258 3,040,115 302,176 42,539 (6,681,706) (2,373,618) (2,305,383) (4,679,001)
Share Issue 254,520 445,410 - - - 699,930 - 699,930
Conversion of convertible loan notes to equity 120,000 180,000 - - - 300,000 - 300,000
Warrants issued during the period - (48,573) 48,573 - - - - -
Loss for the period - - - - 137,570 137,570 241,893 379,463
Balance at 30 April 2023 1,297,778 3,616,952 350,749 42,539 (6,544,136) (1,236,118) (2,063,490) (3,299,608)
Share capital is the amount subscribed for shares at nominal value.
Retained losses represent the cumulative loss of the Group attributable to
equity shareholders.
Share-based payments reserve relate to the charge for share-based payments in
accordance with IFRS 2.
Interim Condensed Consolidated Statement of the Financial Position
6 Months ended Year ended 6 Months ended
30 April 31 October 30 April
2023 2022 2022
(Unaudited) (Audited) (Unaudited)
Notes £ £ £
Assets
Non-current assets
Property, plant and equipment 6 25,632 13,884 11,266
Right of use asset 11 204,809 250,446 327,829
Total Non-Current Assets 230,441 264,330 339,095
Current assets
Investment in associate - (held for sale) 8 6,154 6,154 6,154
Inventories 211,983 175,875 34,847
Trade and other receivables 489,713 282,529 327,299
Cash and cash equivalents 1,405,609 925,814 503,399
Total current assets 2,113,459 1,390,372 871,699
Total assets 2,343,900 1,654,702 1,210,794
Equity and liabilities
Share capital 9 1,297,778 923,258 515,795
Share premium 9 3,616,952 3,040,115 2,647,720
Share-based payments reserve 350,749 302,176 83,377
Equity portion of convertible loan notes 42,539 42,539 74,935
Retained earnings (6,544,136) (6,681,706) (4,553,107)
Total owner's equity (1,236,118) (2,373,618) (1,231,280)
Non-controlling interests (2,063,490) (2,305,383) -
Total equity (3,299,608) (4,679,001) (1,231,280)
Non-current liabilities
Non-current lease liabilities 10 120,167 166,070 242,796
Borrowings 4,322,281 4,732,492 791,472
Convertible loan notes 450,802 710,274 778,065
Total non-current liabilities 4,893,250 5,608,836 1,812,333
Current liabilities
Current lease liabilities 10 101,110 100,485 87,866
Trade and other payables 649,148 624,382 542,326
Total current liabilities 750,258 724,867 630,192
Total equity and liabilities 2,343,900 1,654,702 1,210,794
Interim Condensed Consolidated Statement of Cash Flows
6 Months ended Year ended 6 Months ended
30 April 31 October 30 April
2023 2022 2022
(Unaudited) (Audited) (Unaudited)
Notes £ £ £
Cash flows from operating activities
Operating loss 476,634 (1,152,170) (11,176)
Add: Depreciation 45,369 84,960 37,547
Add: unrealised foreign exchange (gain) / loss (41,293) (26,728)
Add: (Profit)/loss on disposal of property, plant and equipment - - 1,256
Finance costs 61,809 (124,889) (185,777)
Interest received 20,377 157 -
Profit on disposal of loans receivable - 1
Changes in working capital
(increase) / decrease in inventories (36,108) (133,193) (5,720)
(increase) / decrease in receivables (207,184) 15,271 44,257
(Decrease) / increase in payables 24,766 (538,038) (715,968)
Net cash flow from operating activities 385,663 (1,889,194) (862,309)
Investing Activities
Acquisition of property, plant and equipment (28,287) (5,541) (257)
Disposal of property, plant and equipment - - 1,303
Foreign exchange movements 2,103 (7) (19,593)
Net cash flow from investing activities (26,184) (5,548) (18,547)
Cash flows from financing activities:
Net proceeds from issue of shares 9 699,930 650,000 -
(Decrease) / Increase in borrowings (527,815) 1,134,015 348,503
Foreign exchange movements - (23,095)
Capital repayments of lease liability (51,799) (73,233) (50,863)
Net cash flow from financing activities 120,316 1,710,782 274,545
Net cash flow for the period 479,795 (183,960) (606,311)
Opening Cash and cash equivalents 925,814 1,109,774 1,109,774
Foreign exchange movements - (64)
Closing Cash and cash equivalents 1,405,609 925,814 503,399
Notes to the Interim Condensed Consolidated Financial Statements
1. General Information
Everest Global plc is a company incorporated in the United Kingdom. Details of
the registered office, the officers and advisers to the Company are presented
on the Directors and Advisers page at the end of this report. The Company is
admitted to the Official List (by way of a Standard Listing under Chapter 14
of the Listing Rules) and to trading on the London Stock Exchange’s Main
Market for listed securities. The information within these Interim condensed
consolidated financial statements and accompanying notes must be read in
conjunction with the audited annual financial statements that have been
prepared for the year ended 31 October 2022.
2. Basis of Preparation
These unaudited condensed consolidated interim financial statements for the
six months ended 30 April 2023 have been prepared in accordance with
International Accounting Standard No34, Interim Financial Reporting, as
contained in International Financial Reporting Standards as adopted by the
United Kingdom (IFRS as adopted by the UK), were approved by the board and
authorised for issue on 31 July 2023.
The basis of preparation and accounting policies set out in the Annual Report
and Accounts for the year ended 31 October 2022 have been applied in the
preparation of these condensed consolidated interim financial statements.
These interim financial statements have been prepared in accordance with the
recognition and measurement principles of the International Financial
Reporting Standards (“IFRS”) as endorsed by the UK that are expected to be
applicable to the consolidated financial statements for the year ending 31
October 2023 and on the basis of the accounting policies expected to be used
in those financial statements.
The figures for the six months ended 30 April 2023 and 30 April 2022 are
unaudited and do not constitute full accounts. The comparative figures for the
year ended 31 October 2022 are extracts from the 2022 audited accounts. The
independent auditor’s report on the 2022 accounts was qualified on the basis
that they were appointed after the year and could not verify the value of the
inventory on hand by the subsidiary at the year end, and it included a
material uncertainty in respect of going concern.
3. Segmental Reporting
In the opinion of the Directors, the Group has one class of business, being
the trading of agricultural materials. The Group’s primary reporting format
is determined by the geographical segment according to the location of its
establishments. There is currently only one geographic reporting segment,
which is South Africa. All revenues and costs are derived from the single
segment. Historically this segment has experienced a high demand for its
products in the months of July to December with a lower-than-average demand in
the months of January to March.
4. Company Result for the period
The Company has elected to take the exemption under section 408 of the
Companies Act 2006 not to present the parent Company income statement account.
The operating profit of the Group for the six-month period ended 30 April 2023
was £476,634 (30 April 2022: loss of £11,176, year end 31 October 2022:
loss of £1,152,170). The operating loss incorporated the following main
items:
6 Months ended Year ended 6 Months ended
30 April 31 October 30 April
2023 2022 2022
(Unaudited) (Audited) (Unaudited)
£ £ £
Accounting and administration fees 16,626 39,338 24,413
Brokership fees 2,473 15,000 -
Legal and professional fees 57,514 (269,522) 32,164
Registrar fees 2,493 3,034 1,767
Personnel expenses 133,121 232,273 105,709
Finance charges associated with disposal of intercompany loan to VSA NEX Investments Limited - 3,131,890 -
As set in the annual financial statements for the year ended 31 October 2022,
on 3 October 2022, the Company and K2 Spice Limited (previously VSA NEX
Investments Limited) (“K2”), entered into certain related party
arrangements in relation to Dynamic Intertrade (Pty) Ltd (“Dynamic”). K2
was a 100% subsidiary of VSA Capital. At the time the arrangements were
entered into Andrew Monk was a director of the Company, VSA Capital and K2 and
is deemed to have significant influence over VSA Capital and K2. Pursuant to
the arrangements, K2 subscribed for such number of new shares in the capital
of Dynamic resulting in K2 holding 49% of the enlarged issued share capital of
Dynamic for a consideration of ZAR10,982; the Company agreed to assign certain
debts owing by Dynamic, amounting to £4.2 million which had been fully
impaired in prior years, to the Company and certain other parties to K2 in
consideration for K2 paying to the Company £100,001 and agreeing to fund
Dynamic so as to enable Dynamic to carry on its business in the ordinary
course until such time as the Company ceases to hold any further shares in
Dynamic. This assignment agreement resulted in K2 having a non-controlling
interest in Dynamic and as such its share of the current year profits amounted
to £522, its share of accumulated losses prior to acquisition amounted to
£3,131,890. Additionally, the assignment of the loans resulted in the Group
incurring a finance charge on consolidation of £2.9 million. K2 has signed a
subordination agreement in relation to the loans due by Dynamic to K2 with an
expiry date of 31 October 2023. Should K2 choose to request the repayment of
the loans due by Dynamic this will severely impact the Company's ability to
continue as a going concern. Under a put and call option agreement the Company
granted to K2 the option to acquire 11,430 shares in Dynamic Intertrade, being
the remaining 51% of Dynamic held by the Company, subject to the satisfaction
of certain conditions and subject to certain time restrictions for £1.
5. Earnings per Share
Earnings per share data is based on the Group result for the six months and
the weighted average number of ordinary shares in issue.
Basic loss per share is calculated by dividing the loss attributable to equity
shareholders by the weighted average number of Ordinary Shares in issue during
the period:
6 Months ended Year ended 6 Months ended
30 April 31 October 30 April
2023 2022 2022
(Unaudited) (Audited) (Unaudited)
£ £ £
Profit / (loss) after tax 379,463 (4,570,562) (136,579)
Weighted average number of ordinary shares in issue 33,023,894 25,690,228 21,966,077
Basic earnings / (loss) per share (pence) 1.15p (17.79p) (0.62p)
Diluted earnings / (loss) per share (pence) 0.36p (17.79p) (0.62p)
For the comparative figures as at 31 October 2022 and 30 April 2022, the basic
and diluted earnings per share are the same, since where a loss is incurred
the effect of outstanding share options and warrants is considered
anti-dilutive and is ignored for the purpose of the loss per share
calculation. As at 30 April 2023 there were 42,922,767 Ordinary Shares and
38,363,171 share warrants outstanding (31 October 2022: 24,196,767 Ordinary
shares and 38,363,171 share warrants outstanding, 30 April 2022 there were
26,148,289 Ordinary shares and 897,809 share warrants outstanding).
6. Property, Plant and Equipment
Depreciation on property, plant and equipment is calculated using the
straight-line method to write off their cost over their estimated useful lives
at the following annual rates:
Furniture and fixtures 17%
Leasehold improvements 33%
Plant and equipment 20% and 33%
Useful lives and depreciation method are reviewed and adjusted if appropriate,
at the end of each reporting period.
An item of property, plant and equipment is derecognised upon disposal or when
no future economic benefits are expected to arise from the continued use of
the asset. Any gain or loss arising on the disposal or retirement of an item
of property, plant and equipment is determined as the difference between the
sales proceeds and the carrying amount of the relevant asset and is recognised
in profit or loss in the year in which the asset is derecognised.
Group Leasehold property Furniture and fixtures Plant and equipment Total
£ £ £ £
Cost
As at 31 October 2021 19,746 4,356 279,382 303,484
Exchange difference 979 216 13,844 15,039
Additions - - 257 257
Disposals - - (5,088) (5,088)
As at 30 April 2022 20,725 4,572 288,395 313,692
Exchange difference (1,173) (272) (43,830) (45,275)
Additions - - 10,372 10,372
Disposals - - - -
As at 31 October 2022 19,552 4,300 254,937 278,789
Exchange difference - (350) (32,380) (32,730)
Additions - - 28,287 28,287
Disposals - - - -
As at 30 April 2023 19,552 3,950 250,844 274,346
Accumulated depreciation
As at 31 October 2021 19,720 4,060 265,935 289,715
Exchange difference 977 205 13,298 14,480
Charge for the year 25 98 3,196 3,319
Released on disposal - - (5,088) (5,088)
As at 30 April 2022 20,722 4,363 277,341 302,426
Exchange difference (1,172) (245) (38,205) (39,622)
Charge for the year - 75 2,026 2,101
Released on disposal - - - -
As at 31 October 2022 19,550 4,193 241,162 264,905
Exchange difference - (353) (30,274) (30,627)
Charge for the year - 50 14,386 14,436
Released on disposal - - - -
As at 30 April 2023 19,550 3,890 225,274 248,714
Net Book Value
As at 30 April 2022 3 209 11,054 11,266
As at 31 October 2022 2 107 13,775 13,884
As at 30 April 2023 2 60 25,570 25,632
The holding company held no tangible fixed assets at 30 April 2023, 31 October
2022 and 30 April 2022.
7. Subsidiaries
Everest Global plc holds investments in the following subsidiary undertakings
as at 30 April 2023, which principally affected the profits, losses and net
assets of the Group.
Name of companies Principal activities Country of incorporation and place of business Proportion (%) of equity interest at 30 April 2023 Proportion (%) of equity interest at 30 April 2022
Dynamic Intertrade (Pty) Limited Value added agricultural products South Africa 51% 100%
Subsidiaries are all entities over which the Group has the power to govern the
financial and operating policies generally accompanying a shareholding of more
than one half of the voting rights. Subsidiaries are consolidated, using the
acquisition method, from the date that control is gained and are stated at
cost less, where appropriate, provisions for impairment. Entities that do not
comply with this policy, but over which the Group has a shareholding of
between 20 and 50 percent of the voting rights are equity accounted from the
date of acquisition and are stated at cost and adjusted for the results of
these entities for the accounting period.
The remaining 49%, a non-controlling interest, is held by K2 Spice Limited,
formerly VSA NEX Investments Limited. The circumstances surrounding this
dilution of the Company’s holding in Dynamic is explained in the annual
financial statements for the year ended 31 October 2022.
8. Investment in Associate
6 Months ended Year ended 6 Months ended
30 April 31 October 30 April
2023 2022 2022
(Unaudited) (Audited) (Unaudited)
£ £ £
Investment in Dynamic Intertrade Agri (Pty) Ltd 6,154 6,154 6,154
Equity accounted profit/ (loss) for the period - - -
Impairment of investment - - -
Carrying value 6,154 6,154 6,154
9. Share Capital
Ordinary Shares are classified as equity. Proceeds from issuance of Ordinary
Shares are classified as equity. Incremental costs directly attributable to
the issuance of new Ordinary Shares are deducted against share capital.
Allotted, called up and fully paid Ordinary Number of
Shares of 2.0p each shares Share Capital Share Premium
£ £
Balance at 31 October 2021 21,966,088 439,322 2,571,247
Share issue - 29 April 2022 3,823,627 76,473 76,473
Balance at 30 April 2022 25,789,715 515,795 2,647,720
Share issue on conversion of convertible loan notes 3 October 2022 7,373,140 147,463 221,194
Share issue 3 October 2022 13,000,000 260,000 390,000
Warrants issued - 3 October 2022 - - (218,799)
Balance at 31 October 2022 46,162,855 923,258 3,040,115
Share issue - 24 January 2023 12,726,000 254,520 445,410
Warrants issued - 24 January 2023 - -
Conversion of Convertible Loan Notes -
25 January 2023 6,000,000 120,000 180,000
Warrants issued - 24 January 2023 - -
Balance at 30 April 2023 64,888,855 1,297,778 3,665,525
10 Leases
Right of Use Asset and Liability
On adoption of IFRS 16, the Group recognised lease liabilities in relation to
leases which had previously been classified as 'operating leases' under the
principles of IAS 17 Leases. These liabilities were measured at the present
value of the remaining lease payments, discounted using the lessee's
incremental borrowing rate for comparable assets as of 1 November 2019. The
weighted average lessee's incremental borrowing rate for comparable mortgage
bonds applied to the lease liabilities on 1 November 2019 was 8.5%, being the
discount rate on the Group's borrowings. In the Directors opinion this is the
discount rate that the Group would obtain should it be purchasing land and
buildings. Without further security available the Group would be unlikely to
secure funding from other sources and therefore the Directors believe the 8.5%
rate applied is the most appropriate basis on which to base the IFRS 16
calculations.
For leases previously classified as finance leases the entity recognised the
carrying amount of the lease asset and lease liability immediately before
transition as the carrying amount of the right of use asset and the lease
liability at the date of initial application. The measurement principles of
IFRS 16 are only applied after that date.
6 Months ended Year ended 6 Months ended
30 April 31 October 30 April
2023 2022 2022
(Unaudited) (Audited) (Unaudited)
£ £ £
Lease liability recognised in the statement
of financial position at 31 October 2021 266,555 347,102 347,102
Foreign exchange movements (3,455) (7,313) 17,200
borrowing rate at date of initial application 9,975 - 17,223
Lease payments (51,799) (73,234) (50,863)
Lease liability recognised in the
statement of financial position 221,276 266,555 330,662
Of which:
Current lease liabilities 101,110 100,485 87,866
Non-current lease liabilities 120,167 166,070 242,796
221,277 266,555 330,662
Right-of use assets were measured at the amount equal to the lease liability,
adjusted by the amount of any prepaid or accrued lease payments relating to
that lease recognised in the statement of financial position as at 31 October
2022. There were no onerous lease contracts that would have required an
adjustment to the right-of-use assets at the date of initial application. The
recognised right of-use assets relate to the following types of assets:
6 Months ended Year ended 6 Months ended
30 April 31 October 30 April
2023 2022 2022
(Unaudited) (Audited) (Unaudited)
£ £ £
Properties 204,809 250,446 327,829
11 Events Subsequent to 30 April 2023
On 4 July 2023, the Company entered into an agreement to provide a loan to
Precious Link (UK) Limited (“Precious Link”), a wine retailer,
incorporated and registered in England and Wales, located within the Southeast
of England. The loan is for a sum of £200,000, is unsecured and attracts
interest at 10 per cent. per annum payable monthly in arrears. The loan is
repayable on demand by the Company and is repayable on 5 business days’
notice from Precious Link.
On 20 July 2023, the Company sold its 46.8% equity stake in Dynamic Intertrade
Agriculture (Pty) Ltd (“DIA”) to Athena Trading Worldwide Limited, a
private company, for a consideration of £15,384.62, payable in cash on
completion The contractual completion date is 31 July 2023. The investment in
DIA had been held in the balance sheet of the Group as an asset held for sale
since the decision to sell it had been made.
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