REG - Hawkwing PLC - Interim Results
30/09/2022 18:00
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RNS Number : 4330B Hawkwing PLC 30 September 2022
30 September 2022
Hawkwing plc
("Hawkwing" or the "Company")
Unaudited interim results for the six months ended 30 June 2022
Hawkwing (LSE: HNG) announces its unaudited interim results for the six months
ended 30 June 2022.
Financial Highlights
· Operating loss before tax of £0.2 million (H1 2021 loss: £0.2
million)
· Loss before tax £0.5 million (H1 2021 loss: £0.2 million)
· Loss per share from continuing operations of £0.91 pence (H1 2021
loss: £0.38 pence)
· Cash at 30 June 2022 of £2.03 million (H1 2021: £0.88 million)
Keith Sadler, Senior Independent Non-Executive Director, commented: "We are
progressing discussions with Internet Fusion Group ("IFG") in respect to our
secured loan of £13.7 million, together with associated costs, interest and
redemption premium, that we made as part of the proposed Reverse Takeover of
IFG and we will issue a detailed update once these discussions have been
concluded."
Enquiries:
Hawkwing plc
Keith Sadler Senior Independent Non-Executive Director +44 (0)20 4582 3500
Gracechurch Group
Harry Chathli, Alexis Gore +44 (0)20 4582 3500
About Hawkwing plc
For more information, please refer to the Company's website: www.hawkwing.co
(http://www.hawkwing.co)
Interim Management Report
Overview
The Company is a cash shell, whose principal activity is to identify potential
acquisition opportunities. Once the Company has resolved matters with IFG, it
will continue to consider such opportunities, targeting acquisitions in
industries such as digital marketing, medical applications, business and
financial services and the sports sector.
On 12 July 2021, the Company announced the signing of a non-binding agreement
to potentially acquire IFG. In connection with this potential acquisition,
Hawkwing raised £16.5 million on 12 August 2021 through the issue of
Convertible Unsecured Loan Stock ("CULS"), of which the Company has loaned
£13.7 million to IFG (SPP) Limited (in anticipation of the Reverse Takeover
of IFG). This loan is secured against the assets of Northcore Limited and
Shade Limited (t/a Shade Station) and guaranteed by IFG. In December 2021, IFG
terminated discussions in respect of the heads of terms announced in July
2021. The Company remain in discussions with IFG in respect of its secured
loan, associated costs, interest and redemption premium ("IFG liability"),
until these discussions have been concluded it is not possible to ascertain if
all of the IFG liability will be recoverable.
The Company will update the market as and when appropriate.
Headline results
For the six-month period to 30 June 2022 2021 Change
£000's £000's
Revenue -
- 22
Operating income -
- -
Headline EBITDA 5.2%
(200) (190)
Headline loss before tax (200) (190) 5.2%
Headline loss per share (pence) (0.91) (0.38) (0.35) pence
Cash flow and net debt
As at 30 June 2022, the Company's cash balance was £2.03 million (H1 2021:
£0.88 million) and it had £16.5 million of CULS outstanding.
Dividend
The Directors have not declared an interim dividend for the six months ended
30 June 2022. The Directors will continue to review the Company's dividend
policy.
Risks and uncertainties
The Directors do not consider that the Company's principal risks and
uncertainties have changed since the publication of its annual report and
accounts for the financial year ended December 2021 on 6 June 2022, which
contains a detailed explanation of the risks relevant to the Company on Pages
3 and 4 and is available at
https://hawkwing.co/wp-content/uploads/2022/06/Hawkwing-Annual-Report-2021-FINAL.pdf
(https://hawkwing.co/wp-content/uploads/2022/06/Hawkwing-Annual-Report-2021-FINAL.pdf)
Statement of directors' responsibilities in respect of the condensed interim
report and consolidated financial statement
The Directors; being Keith Sadler; Ken Wotton; Ian Robinson and Dwight Mighty
(all Non-Executive) confirm that the condensed set of interim financial
statements has been prepared in accordance with international Accounting
Standard 34 "interim financial reporting", as adopted by the European Union
and that interim report includes a fair review of the information required by
DTR 4.2.7R and DTR 4.2.8R, namely an indication of important events that have
occurred during the first six months of the financial year; material related
party transactions in the first six months, and any material changes in the
related party transactions described in the last annual report.
By order of the Board
Keith Sadler
Senior Independent Non-Executive Director
Condensed Income statement (unaudited)
For the six month period to 30 June 2022
6-month period to 6-month period to Year ended
30 June 2022
30 June 2021
31 December 2021
£000's £000's (Audited)
£'000's
Revenue - 22 22
Cost of sale - - -
Operating income - - -
Administrative expenses (200) (212) (910)
Operating loss (200) (190) (388)
Headline EBITDA (200) (190) (388)
Exceptional costs - - -
Operating loss (200) (190) (388)
Note
Other gains and losses 591 1,029
4
Finance (938) (731)
costs.
5
Loss before taxation (547) (190) (90)
Taxation 90 - -
Loss after taxation for the period (457) (190) (90)
Loss for the period is entirely attributable to the owners of the Company.
Note
Basic (pence) 2 (0.91) (0.38) (0.0004)
Diluted (pence) 2 (0.91) (0.38) (0.0004)
Condensed Balance Sheet (unaudited)
30 June 2022 30 June 2021 31 December 2021
£000's £000's £000's
(Audited)
Non-current assets
Investment in financial assets 14,461 14,414
Current assets
Trade and other receivables 2,154 34 1,577
Cash and cash equivalents 2,029 887 2,311
Total current assets 4,183 921 3,888
Current liabilities
Trade and other payables (41) (41) (90)
Net current assets 4,412 880 3,798
Non-current liabilities
Convertible loan notes (16,221) - (15,283)
Deferred tax liabilities (327) - (417)
_______________ ______________ ______________
(16,548 - (15,700)
_______________ ______________ ______________
Net assets 2,055 880 2,512
Equity
Share capital 3,731 3,731 3,731
Share premium 30,056 30,056 30,056
Option premium reserve 1,461 - 1,461
Merger reserve 251 251 251
Retained loss (33,444) (33,158) (32,987)
Equity attributable to owners of the Company 2,055 880 2,512
Condensed Statement of Cash Flows (unaudited)
For the six-month period to 30 June 2022
Note 6-month period to 6-month period to Year ended
30 June 2022
30 June 2021
31 December 2021
£000's £000's £000's
Net cash outflow from operating activities 6 (282) (173) (1,549)
Investing activities
Advance of loan receivables - - (13,700)
______________ ______________ ______________
- - (13,700)
Financing activities
Proceeds on issue of convertible loans - - 16,500
Net decrease in cash and cash equivalents (282) (173) 1,251
Cash and cash equivalents at beginning of period 2,311 1,060 1,060
Cash and cash equivalents at end of period 2,029 887 2,311
Condensed Statement of Changes in Equity (unaudited)
For the six-month period to 30 June 2022
Share Capital Share Premium Merger reserve Option Premium reserve Retained Loss Total
£000's £000's £000's £000's £000's £000's
Balance as at 1 January 2021 3,731 30,056 251 - (32,967) 1,071
Total comprehensive income for period
- - - - (190) (190)
Balance as at 30 June 2021 3,731 30,056 251 - (33,157) 881
Balance as at 1 January 2022 3,731 30,056 251 1,461 (32,987) 2,512
Total comprehensive income for period
- - - - (457) (457)
Balance as at 30 June 2022 3,731 30,056 251 1,461 (33,444) 2,055
Notes to the Interim Report
General information
Hawkwing plc (the "Company") is incorporated and domiciled in the United
Kingdom. The Company is listed on the Standard Segment of the Official List
market of the London Stock Exchange. The registered address is 25 Walbrook,
London EC4N 8AF.
Basis of preparation
The condensed financial statements have been prepared in accordance with IAS
34 "Half Year Financial Reporting" as adopted by the European Union and the
Disclosure and Transparency Rules of the Financial Conduct Authority. These
condensed financial statements do not comprise statutory accounts within the
meaning of section 434 of the Companies Act 2006, do not include all the notes
of the type normally included in an annual financial report and have not been
audited or reviewed by the auditors pursuant to the Financial Reporting
Council guidance on Review of Interim Financial Information. Accordingly, this
report should be read in conjunction with the annual report for the year ended
31 December 2021 (the "Annual Financial Statements"), which has been prepared
in accordance with International Financial Reporting Standards as adopted by
the European Union ("IFRS"). The Annual Financial Statements constitute
statutory accounts as defined in section 434 of the Companies Act 2006 and a
copy these statutory accounts has been delivered to the Registrar of
Companies. The auditor's report on those statutory accounts was unqualified
and did not contain a statement under 498(2) or 498(3) of the Companies Act
2006.
The accounting policies adopted in the preparation of the condensed financial
statements are consistent with those used to prepare the financial statements
for the year ended 31 December 2021 and those applicable for the year ended 31
December 2022. The preparation of the condensed 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 financial statements, the significant
judgements made by management in applying the accounting policies and the key
sources of estimation uncertainty were the same as those that applied to the
Annual Financial Statements described above. The condensed financial
statements have been prepared on a going concern basis, under the historical
cost convention.
The reporting currency of the Company is GBP, unless stated otherwise.
Application of new standards in issue
In the current period, no new or amended standards have been adopted for the
period commencing on or after 1 January 2022 have had any impact on these
financial statements.
Going concern
The Company raised £1.3m, before costs, in September 2020 from an issue of
shares, and issued convertible loan notes for proceeds of £16.5 million in
August 2021. After an onward secured loan of £13.7m in September 2021 the
Company has £2.3 million in cash on its balance sheet at 30 June 2022. The
directors are in discussion with IFG in respect of its secured loan,
associated costs, interest and redemption premium ("IFG liability"), until
these discussions have been concluded it is not possible to ascertain if all
of the IFG liability will be recoverable. The Company has minimal ongoing
costs which reflect the costs of administrating its listing on the London
Stock Exchange.
Based on the current cash availability, predicted expenditure levels, and the
anticipated continued CULS holders support, the directors believe the
Company's resources are sufficient to allow the Company to meet its
obligations as they fall due for the foreseeable future, and as a minimum for
a period of at least 12 months from the date of approval of these financial
statements. Consequently, the Directors will continue to prepare the financial
statements on a going concern basis.
1. Segmental Analysis
The Company's single reporting segment is that of its activities as an
investment holding company. This activity takes place wholly in the United
Kingdom.
2. Loss per share
Basic and diluted loss per share attributable to ordinary shareholders:
6-month period
to 30 June 2022 6-month period to 30 June 2021
pence per share pence per share
Basis loss per share (0.91) (0.38)
Diluted loss per share (0.91) (0.38)
The calculation of loss per share per share is based on the following data:
6-month period 6-month period to 30 June 2021
to 30 June 2022 £000's
£000's
Loss for the purposes of basic earnings per share being net loss attributable (457) (190)
to owners of the Company
Number of Shares Number of Shares
Weighted average number of shares in issue: 50,288,019 50,288,019
3. Taxation
6 month period to 30 June 2022 6 month period to 30 June 2021
Current taxation
UK corporation tax - -
Deferred tax
Origination and reversal of timing differences 90 -
________ _______
Total tax credit 90 -
________ _______
The charge for the year can be reconciled to the income statement as follows:
Loss before tax (547) (190)
Tax credit at the UK corporation tax rate of 19% (2021: 19%) (104) (36)
Effects of:
Losses (utilised)/not recognised (19) 36
Adjustment for changes in tax rate 33 -
_______ _______
Tax (credit) / charge for the period (90) -
_______ _______
The Company has tax losses carried forward of £1,121,316 (2021 £1,475,181)
in respect of which no deferred tax asset has been recognised due to
uncertainty of the Company's expected future profitability.
4. Other gains and losses
6 month period to 30 June 2022 6 month period to 30 June 2021
Net gain on financial assets measured at FVTPL 591 -
On 16 September 2021 the Company issued a three-year term loan, on which
interest is charged at 8%, which may be capitalised in year one (the IFG
loan). The loan is secured on the assets of the borrower and its group.
The loan carries a redemption premium upon repayment. The premium is 5% for
repayments up to 15 September 2022, 10% for repayments between 16 September
2022 and 15 September 2023 and 15% thereafter.
The contractual terms of this financial instrument are such that the repayment
and redemption premium do not meet the conditions to be measured at amortised
cost, and the instrument is consequently measured at fair value through profit
or loss (FVTPL).
The net gain on financial assets measured at FVTPL comprises an increase in
fair value of £714,000 and interest of £315,000.
5. Finance
6 month period to 30 June 2022 6 month period to 30 June 2021
Interest cost on convertible loan notes 938 -
6. Notes to the Statement of Cash Flow
6 month period to 30 June 2022 6 month period to
30 June 2022
Loss for the year before taxation (547) (191)
Adjustments for:
Other gains & losses 891 -
________ ________
Operating cash flows before movements in working capital 344 (191)
(Increase)/Decrease in receivables (576) 9
Increase/(Decrease) in payables (50) 9
________ _________
Cash (used in) / generated by operations (282) (173)
Income taxes - -
Net cash flows from operating activities ________ (282) _________
(173)
________ _________
6. Notes to the Statement of Cash Flow (continued
Cash and cash equivalents comprise cash and short-term bank deposits with an
original maturity of three months or less. The carrying amount of these assets
is approximately equal to their fair value.
The Company's net cash has moved as follows during the year:
1 January 2022 Cash flow Non-cash movement 30 June 2022
£000's £000's £000's £000's
Cash and bank balances 2,311 (282) - 2,029
Net cash 2,311 (282) - 2,029
7. Interim accounts
This interim statement will be available of the Company's investor relations
website at www.hawkwing.co (http://www.hawkwing.co)
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