Interim Report 2016

Highway Capital

30/11/2016 12:00

RNS Number : 5625Q

Highway Capital PLC

30 November 2016

HIGHWAY CAPITAL PLC

INTERIM REPORT 2016

Chairman's Statement

Dear Shareholders

In line with the new strategy of Highway Capital, of which the general outline was presented through the Chairman's statement in the latest Annual Report, the first half of 2016 was marked with intense efforts aimed at strengthening of the business position of the Company.

The Company's directors have been seeking to identify profitable potential transactions on the one hand, and to seek reliable sources of financing on the other. A number of possible deals have been considered in respect of both of these aspects and we continue to investigate further opportunities.

The decision was taken in May 2016 to provide finance of approximately 89,000 by way of a loan to Mylux, a Cypriot SPV. Mylux utilised the proceeds of the loan to acquire a 48% interest in a new payment services company in Poland known as Multipay. A further loan of 120,000 was advanced to Mylux in June 2016 in order to acquire a minority investment in a medical technology company.

Although neither loan constituted an acquisition for the purposes of the Listing Rules under which the Company operates, the UK Listing Authority informed the directors in September 2016 that they considered that making the loans fundamentally changed the strategic direction of the business away from its stated aim to find an acquisition that would enhance shareholder value. As a result, the Company's shares were suspended from trading on 22 September pending the completion of the "reverse" procedure required to resume trading.

Rather than invest the significant time and expense in changing the scope of the Company's business activities to encompasses the short term loans extended to Mylux, the directors are working towards securing an acquisition which will constitute a reverse and for which they will seek readmission of the Company to the Official List and to trading on the London Stock Exchange. Whilst there can be no certainty whether such a transaction can be achieved, nor when, the board believe that the volume of opportunities presented to them will ultimately result in a successful outcome and further announcements will be made in due course.

Dr L Sobolewski

Chairman

30 November 2016

Statement of comprehensive income
Notes
6 months ended
31 August 2016
(unaudited)
'000
6 months ended
31 August 2015
(unaudited)
'000
Year ended
29 February 2016
(audited)
'000
Management fees
-
-
-
Administrative expenses
(106)
(65)
(132)
Operating loss
2
(106)
(65)
(132)
Interest receivable
4
-
-
Loss on ordinary activities before taxation
(102)
(65)
(132)
Tax credit on loss on ordinary activities
-
-
-
Loss for financial period and total comprehensive income
(102)
(65)
(132)
Basic and diluted loss per share
3
(1.17)p
(0.74)p
(1.51)p
Basic and diluted loss per share from continuing operations
3
(1.17)p
(0.74)p
(1.51)p

Statement of financial position
Notes
31 August 2016
(unaudited)
'000
31 August 2015
(unaudited)
'000
29 February 2016
(audited)
'000
Fixed assets
Investments
221
-
-
Current assets
Debtors
23
14
4
Cash at bank and in hand
12
16
1
35
30
5
Creditors: amounts falling due within one year
(194)
(83)
(125)
Net current assets/(liabilities)
(159)
(53)
(120)
Total assets less current liabilities
62
(53)
(120)
Creditors: amounts falling due after more than one year
5
(434)
(150)
(150)
Net assets/(liabilities)
(372)
(203)
(270)
Capital and reserves
Share capital
6
175
175
175
Share premium
368
368
368
Profit and loss account
(915)
(746)
(813)
Total equity shareholders' funds/(deficit)
(372)
(203)
(270)

Statement of changes in Equity
6 months ended
31 August 2016
(unaudited)
'000
6 months ended
31 August 2015
(unaudited)
'000
Year ended
29 February 2016
(audited)
'000
Loss attributable to ordinary shareholders
(102)
(65)
(132)
Issue of new ordinary shares less costs
-
-
-
Net decrease in shareholders' funds
(102)
(65)
(132)
Opening Shareholders' funds/(deficit)
(270)
(138)
(138)
Closing Shareholders' funds/(deficit)
(372)
(203)
(270)


Statement of cash flows
6 months ended
31 August 2016
(unaudited)
'000
6 months ended
31 August 2015
(unaudited)
'000
Year ended
29 February 2016
(audited)
'000
Cash flows from operating activities
Loss for the financial period
(102)
(65)
(132)
Adjustments for:
Interest receivable
(4)
-
-
Changes in:
Trade and other debtors
(15)
(8)
2
Trade and other creditors
69
(43)
(1)
Net cash from operating activities
(52)
(116)
(131)
Cash flows from investing activities
Purchase of investments
(11)
-
-
Loans made
(210)
-
-
Interest received
-
-
-
Net cash used in investing activities
(221)
-
-
Cash flows from financing activities
Proceeds from loans
284
120
120
Net cash from financing activities
284
120
120
Net increase/(decrease) in cash and cash equivalents
11
4
(11)
Cash and cash equivalents at beginning of period
1
12
12
Cash and cash equivalents at end of period
12
16
1

Notes to the Interim Report

1. Basis of preparation of the interim report

The condensed set of financial statements for the six months ended 31 August 2016 has been prepared on a basis consistent with the financial statements for the year ended 29 February 2016.

The condensed set of financial statements for the six months ended 31 August 2016 has not been audited or reviewed by the auditors pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information.

The comparative financial information for the year ended 29 February 2016 has been extracted from the audited financial statements, on which the auditors issued an unqualified audit report, and which have been delivered to the Registrar of Companies.

The financial information contained in the interim statement does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.

There are no acquired or discontinued operations in the relevant financial periods.

There are no recognized gains or losses other than the profit or loss for the relevant financial periods.

Highway Capital plc is a stand-alone company and does not prepare consolidated accounts. It has therefore continued to prepare its accounts in accordance with UK rather than international accounting standards, as permitted under EC Regulation 1606/2002.

2. Operating loss

This is stated after charging:
6 months ended
31 August 2016
(unaudited)
'000
6 months ended
31 August 2015
(unaudited)
'000
Year ended
29 February 2016
(audited)
'000
Directors' remuneration
- salaries and fees
32
22
48
Auditors' remuneration
- audit services
5
5
10
- other services
-
-
-

3. Loss per share

The loss per ordinary share calculation has been based on the loss attributable to ordinary shareholders of 102,000 (August 2015: 65,000; February 2016: 132,000), divided by 8,740,201 (August 2015: 8,740,201; February 2016: 8,740,201) being the weighted average number of ordinary shares in issue during the period. There is no difference between the basic and the diluted loss per ordinary share.

There are no discontinued operations in the periods and, therefore the basic and the diluted loss per ordinary share from continuing operations are the same as the basic and the diluted loss per ordinary share.

4. 2016 interim dividend

No interim dividend has been declared.

5. Creditors: due after more than one year

The creditor due after more than one year of 434,000 (August 2015: 150,000; February 2016: 150,000), is made up of the following: (a) loans of 250,000 from Wildman Asset Management SA which are unsecured, repayable after 2 years and bearing interest at a rate of 5% per annum; (b) loans of 30,000 from M Szytko, a director and shareholder, which are unsecured, repayable after 2 years and bearing interest at a rate of 5% per annum, and (c) loans of 127,000 from M Szytko and 27,000 from D Zych, a director, which are unsecured, repayable after 5 years and convertible at the holder's request into new ordinary shares in the company at a price of 10 pence per share; in the event that the loans are not repaid or converted prior to their maturity date then they will attract accrued interest at a rate of 5% per annum.

6. Share capital

31 August 2016
(unaudited)
31 August 2015
(unaudited)
29 February 2016
(audited)
Ordinary shares of 2p each
Allotted, called-up, fully paid
Number of shares
8,740,201
8,740,201
8,740,201
Nominal value
174,804
174,804
174,804

7. Related party transactions

As at the balance sheet date, there are loans of 157,000 to the company from M Szytko, a director and shareholder of the company; and loans of 27,000 to the company from Dariusz Zych, a director of the company. The terms of these loans are set out in note 5 above.

8. Responsibility statement

We confirm that to the best of our knowledge:

(a) the condensed set of financial statements has been prepared in accordance with FRS 104 Interim Financial Reporting issued by the Financial Reporting Council;

(b) the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and their impact on the financial statements and description of principal risks and uncertainties for the remaining six months of the year); and

(c) the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related party transactions and changes therein).

By order of the Board

Dr L Sobolewski  M Szytko

Chairman Non-Executive Director

9. Publication

Copies of this statement will be available on the company's website at www.highwaycapital.co.uk.

This information is provided by RNS

The company news service from the London Stock Exchange

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