Hermes Pacific Inv - Half-year Report

Hermes Pacific Investments

20/12/2019 07:00

RNS Number : 5600X

Hermes Pacific Investments PLC

20 December 2019

 

HERMES PACIFIC INVESTMENTS PLC

(AIM: HPAC)

 

Unaudited interim results for the six months ended 30 September 2019

 

 

Chairman's Statement

I am pleased to report the results for Hermes Pacific Investments plc ("HPAC" or the "Company") for the six months ended 30 September 2019. During the period under review the Company made a loss on ordinary activities before taxation of £48,000 which is marginally more than the loss reported for the corresponding period in the previous year. The Company's financial performance is in line with our expectations. HPAC had no revenues and it continues to manage its costs effectively whilst restricting its spending to a minimum. The Company continues to consider possible investment opportunities which would be compatible with its investment strategy. As at 30 September 2019 the Company had net assets of £3,708,000 of which cash was £3,555,000.

Review of the Company's activities

Hermes Pacific Investments plc is an investing company with a focus on investing in the emerging markets of the Far East including South East Asia. There have been no changes in the Company's investments in the period and the value of the existing investments has increased in the period from £162,000 to £176,000. Future investments can be via an acquisition of an equity interest or direct interests in projects. Investments in these parts of the world can be volatile and higher risk but for long term investors the outlook can be promising. Underpinned by favourable demographics, rising domestic consumption and an increasingly wealthy middle class, this part of the world is packed with potential. Whilst growth rates in South East Asia have slowed down somewhat this is still comparatively an attractive region to invest in.

 

As 2020 approaches, many businesses are feeling anxious, with geopolitical tensions a primary source of their unease. From the US presidential election to trade negotiations and fiscal policy, choices will increasingly shape economic outcomes in 2020. In a globally interconnected world, businesses view the US-China trade conflict, and the 2020 US presidential election as the potentially threats to economic growth. With respect to the trade war negotiations are ongoing but have proven difficult. In December, USA and China announced a preliminary deal but some of the thorniest issues remain unresolved. Uncertainty surrounding the trade war has hurt businesses and weighed on the global economy.

 

The conservative party's recent landslide election win in the UK gives the economy a Brexit certainty boost. While the new government brings a modicum of certainty about the UK's direction of travel out of the EU its future beyond 2020 still remains somewhat uncertain as failure to agree a deal could bring back the prospect of no deal and World trade organisation tariff's into play. Securing a trade deal with the EU will be of utmost importance as prospects for investment will still depend on the final nature of Britain's trade agreement with the EU. Currency and stock markets have initially reacted positively to the election result. The new government clearly hopes that implementing a Brexit deal will encourage investment, which has been held back by uncertainty over Brexit. 

 

The Company intends to maintain a cautious approach to investment but expects that as global uncertainties diminish attractive investment opportunities should emerge. 

 

I would like to thank shareholders for their continued support.

 

 

 

 

 

Haresh Kanabar

Chairman

 

20 December 2019

 

 

Contacts:
Hermes Pacific Investments plc
www.hermespacificinvestments.com
Haresh Kanabar, Chairman
+44 (0) 7802858893
WH Ireland Limited
www.wh-ireland.co.uk
Mike Coe, Chris Savidge
+44 (0) 117 945 3470

 

Unaudited Income Statement for the year ended 30 September 2019

 

Note
Unaudited
6 Months
ended
30 September 2019
£'000
Unaudited
6 Months
ended
30 September 2018
£'000
Audited
Year ended
31 March 2019
£'000
Continuing activities
Revenue
-
-
-
Cost of sales
-
-
-
Gross loss/profit
-
-
-
Other operating income
-
-
-
Administrative expenses
(53)
(50)
(124)
Operating loss
(53)
(50)
(107)
Finance income
5
10
17
Finance costs
-
-
-
Loss on ordinary activities before taxation
(48)
(40)
(107)
Tax expense
-
-
-
Loss for the period from continuing activities
(48)
(40)
(107)
Other comprehensive income
Gain/(Loss) Loss arising in the year
14
(7)
(12)
Loss for the period
(34)
(47)
(119)
Basic and diluted loss per share
From continuing operations
3
(2.0)p
(1.7)p
(4.6)p


 

Unaudited Balance Sheet as at 30 September 2019   

 

Note
Unaudited
6 Months
ended
30 September 2019
£'000
Unaudited
6 Months
ended
30 September 2018
£'000
Audited
Year ended
31 March 2019
£'000
Assets
Non-current assets
Investments
176
167
162
176
167
162
Current assets
Trade and other receivables
4
1
1
Cash and cash equivalents
3,555
3,678
3,596
Total current assets
3,559
3,679
3,597
Total assets
3,735
3,846
3,759
Liabilities
Current liabilities
Trade and other Payables
(27)
(32)
(17)
Net assets
3,708
3,814
3,742
Equity
Share Capital
2,333
2,333
2,333
Deferred Share capital
1,243
1,243
1,243
Share premium account
5,781
5,781
5,781
Share Based payments reserves
Revaluation reserve
139
3
139
(6)
139
(11)
Retained losses
(5,791)
(5,676)
(5,743)
Equity attributable to equity holders of the parent
3,708
3,814
3,742


 

 

 

Unaudited Statement of Changes in Equity

 

Ordinary share capital
Deferred share capital
Share premium
Share
Based
payments
reserves
Revaluation reserve
Retained earnings
Total
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Six months ended 30 September 2018
At 31 March 2018
2,333
1,243
5,781
139
1
(5,636)
3,861
Total comprehensive loss for the period
-
-
-
-
(7)
(40)
(47)
At 30 September 2018
2,333
1,243
5,781
139
(6)
(5,676)
3,814
Period ended 31 March 2019
At 30 September 2018
2,333
1,243
5,781
139
1
(5,636)
3,861
Total comprehensive loss for the period
-
-
-
-
(12)
(107)
(119)
At 31 March 2019
2,333
1,243
5,781
139
(11)
(5,743)
3,742
Six months ended 30 September 2019
At 31 March 2019
2,333
1,243
5,781
139
(11)
(5,743)
3,742
Total comprehensive gain/loss for the period
-
-
-
-
14
(48)
(34)
At 30 September 2019
2,333
1,243
5,781
139
3
(5,791)
3,708


 

 

Unaudited Cash Flow Statement for the Year ended 30 September 2019

 

Note
Unaudited
6 Months
ended
30 September 2019
£'000
Unaudited
6 Months
ended
30 September 2018
£'000
Audited
Year ended
31 March 2019
£'000
Cash outflow from operating activities
(46)
(57)
(146)
Net cash flow from operating activities
(46)
(57)
(146)
Cash flows from financing activities
Other income
5
10
17
Net cash used in financing activities-continuing operations
5
10
17
Net cash from financing activities
5
10
17
Decrease in cash and cash equivalents
(41)
(47)
(129)
Cash and cash equivalents at start of the period
3,596
3,725
3,725
Cash and cash equivalents at end of the period
3,555
3,678
3,596


 

 

Notes to the unaudited consolidated interim statement for the period ended 30 September 2019

 

1.    Basis of preparation

 

Hermes Pacific Investments plc. is a public limited company incorporated and domiciled in the United Kingdom. The Company is an AIM listed investment vehicle.

These Interim accounts have been prepared using the accounting policies to be applied in the annual report and accounts for the period ending 31 March 2020. These are consistent with those included in the previously published annual report and accounts for the period ended 31 March 2019, which have been prepared in accordance with IFRS as adopted by the European Union.

The preparation of the interim statement requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

 

The interim financial statements are unaudited and do not constitute statutory accounts as defined in section 434(3) of the Companies Act 2006. 

 

The figures for the year ended 31 March 2019 have been extracted from the audited annual report and accounts that have been delivered to the Registar of Companies. BSG Valentine, the Company's auditors, reported on those accounts. Their report was unqualified and did not contain a statement under section 498 of that Companies Act 2006.

 

2.    Accounting policies

 

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the company's financial statements.

 

Going concern

 

The financial statements have been prepared on a going concern basis as, after making appropriate enquiries, the Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future at the time of approving the financial statements. 

 

Critical accounting estimates and judgments

 

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of the company's accounting policies with respect to the carrying amounts of assets and liabilities at the date of the financial statements, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. The judgements, estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, including current and expected economic conditions. Although these judgements, estimates and associated assumptions are based on management's best knowledge of current events and circumstances, the actual results may differ. Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised and in any future years affected.

 

The judgements, estimates and assumptions which are of most significance to the Company are detailed below:

 

Valuation of share based payments

 

The charge for share based payments is calculated in accordance with the accounting policy as set out below.  The model requires highly subjective assumptions to be made including the future volatility of the Company's share price, expected dividend yield and risk-free interest rates.

 

 

 

 

 

 

 

Revenue recognition

Revenue represents the fair value of the consideration received or receivable, net of Value Added Tax, for goods sold and services provided to customers after deducting discounts.  Revenue is recognised when the significant risks and rewards of ownership are transferred.

 

Deferred taxation

Deferred taxation is provided in full using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred tax is determined using tax rates that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

 

Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

 

Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short term highly liquid funds with original maturities of three months or less and bank overdrafts. Bank overdrafts are shown within borrowing in current liabilities on the balance sheet.

 

Investments available for sale

Investments classified as available for sale are initially recorded at fair value including transaction costs.  Quoted investments are held at fair value and measured either at bid price or latest traded price, depending on convention of the exchange on which the investment is quoted.  Such instruments are subsequently measured at fair value with gains and losses being recognised directly in equity until the instrument is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is recycled to the income statement and recognised in profit or loss for the period.  Impairment losses are recognised in the Income Statement when there is objective evidence of impairment. 

 

Financial instruments

Financial assets and liabilities are recognised in the balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Trade and other receivables

Trade receivables are measured at cost less any provision necessary when there is objective evidence that the Company will not be able to collect all amounts due.

 

Trade and other payables

Trade and other payables are not interest bearing and are measured at original invoice amount.

 

3.    Loss per ordinary share

Unaudited
6 Months
ended
30 September 2019
£'000
Unaudited
6 Months
ended
30 September 2018
£'000
Audited
Year ended
31 March 2018
£'000
Basic
Loss from continuing activities
(48)
(40)
(107)
Total loss
(48)
(40)
(107)
Basic loss per share (pence)
From continuing operations
(2.0)p
(1.7)p
(4.6)p
(2.0)p
(1.7)p
(4.6)p
Weighted average number of shares
2,333,295
2,333,295
2,333,295


 

There was no dilutive effect from the share options outstanding during the period.

 

 

4.    Copies of this statement will be available on the Company's website www.hermespacificinvestments.com.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

 

END

 

 

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