REG - Highway Capital PLC - Half-year Report

Highway CapitalAnnouncement

30/11/2020 15:21

RNS Number : 9593G
  
Highway Capital PLC
  
30 November 2020
  
 

 
HIGHWAY CAPITAL PLC
 
INTERIM REPORT 2020
 
Chairman's Statement
 
 
Dear Fellow Shareholder
 
2020 has had a difficult start to the year but the Board has expended considerable time and effort on seeking to ensure the continuation of the business after lockdown.  Based on discussions with potential acquisition targets over the summer, the Board is optimistic that the Company's shares will be relisted on a public market shortly and will keep shareholders informed on developments. 
 
The results for the six months ended 31 August 2020 showed a loss before tax of £148,000 (six months ended 31 August 2019: £127,000 loss; year ended 29 February 2020: £293,000 loss). 
 
No dividend has been declared.
 
 
L Sobolewski
Chairman
 
30 November 2020
 
 
Update on Capital Structure
 
The Board of Highway Capital Plc ("HWC" or "Company") announces the following update on its share capital and convertible loans. 
 
Shares in issue:
 
There are currently 11,490,201 ordinary shares of 2p each in issue. 
 
Convertible Loan Notes - As at 29 February 2020
 
The Company has received the request from the holder of the £70,000 loan issued on 18 December 2018 to alter the terms. The loan note holder has agreed to alter the terms of the loan, so that it is now convertible into ordinary shares of the Company at the conversion price of £0.05. 
 
The Altered Loan Note issued on 23 February 2020 is unsecured, has a term of 5 years and pays interest at the rate of 5% per annum. The note holder may convert the Altered Loan Note at any time six months after the date of issue, or following the completion of an investment by the Company to a value in excess of 50% of the net asset value of the Company.
 
The Lender's conversion rights are limited to the extent that the Company has adequate shareholders' and other regulatory authority to issue shares in the Company.
 
As at the financial year ending 29 February 2020, the latest year end, the Company had outstanding Convertible Loan Notes as follows:
 
 
 
Convertible Loan Notes - Current Financial Year
 
Between 12 May 2020 and 14 July 2020 the Company completed a placing of £230,000 Convertible Loan Notes for working capital purposes. The notes have a term of 5 years, attract 5% interest per annum and are convertible into new shares in the company. 
 
The convertible loan note issued 24 June 2020 for the amount of £80,000 to unconnected investor has a conversion price of 10p per new ordinary share. 
 
The convertible loan notes issued between 10 July and 14 July 2020 for a total amount of £100,000 to two unconnected investors have a conversion price of 5p per new ordinary share. 
 
The note holders may convert the Convertible Loan Note at any time six months after the date of issue or following the completion of an investment by the Company to a value in excess of 50% of the net asset value of the Company.  The Lender's conversion rights are limited to the extent that the Company has adequate shareholders' and other regulatory authority to issue shares in the Company.
 
A separate Convertible Loan Note for the amount of £50,000 to an unconnected investor was issued on 12 May 2020 and repaid on 2 July 2020.
 
Directors Loans
 
The Company received the following loan from the Director of the Company:
 
Maciej Szytko, a director of the Company, provided loans of £3,900 and €10,000 on 19 March 2020 and 14 April 2020 respectively. These loans have now been repaid, as well as the 15 March 2019 loan of £5,000.
 
 
 
 



Statement of comprehensive income


 
 
 
Notes


6 months ended
31 August 2020
(unaudited)
£'000


6 months ended
31 August 2019
(unaudited)
£'000


Year ended
29 February 2020
(audited)
£'000




Management fees






-


-


-




Administrative expenses






(148)


(127)


(293)




Operating loss


2


(148)


(127)


(293)




Interest receivable






-


-


-




Amounts written back/(off) investments and loans






 
-


 
-


 
-




Profit/(loss) on ordinary activities before taxation






(148)


(127)


(293)




Tax on profit or loss on ordinary activities






-


-


-




Profit/(loss) for financial period and total comprehensive income






(148)


(127)


(293)


























Basic profit/(loss) per share


3


(1.29)p


(1.32)p


(2.54)p




Diluted profit/(loss) per share


3


(1.29)p


(1.32)p


(2.54)p




Basic profit/(loss) per share from continuing operations


 
3


 
(1.29)p


 
(1.32)p


 
(2.54)p




Diluted profit/(loss) per share from continuing operations


 
3


 
(1.29)p


 
(1.32)p


 
(2.54)p



 
 
 



Statement of financial position


 
 
Notes


31 August 2020
(unaudited)
£'000


31 August 2019
(unaudited)
£'000


29 February 2020
(audited)
£'000




Fixed assets






-


-


-




Investments






-


-


-




Current assets




















Debtors






11


210


7




Cash at bank and in hand






75


1


-












86


211


7




Creditors: amounts falling due within one year






 
(759)


 
(416)


 
(783)




Net current assets/(liabilities)






(673)


(205)


(776)




Total assets less current liabilities






 
(673)


 
(205)


 
(776)




Creditors: amounts falling due after more than one year


5


 
(466)


 
(703)


 
(215)


























Net assets/(liabilities)






(1,139)


(908)


(991)




 
Capital and reserves




















Share capital


6


230


192


230




Share premium






475


430


475




Profit and loss account






(1,844)


(1,530)


(1,696)




Total equity shareholders' funds/(deficit)






(1,139)


(908)


(991)




Statement of changes in equity


 


6 months ended
31 August 2020
(unaudited)
£'000


6 months ended
31 August 2019
(unaudited)
£'000


Year ended
29 February 2020
(audited)
£'000


 




Profit/(loss) attributable to ordinary shareholders






 
(148)


 
(127)


 
(293)


 




Issue of new ordinary shares less costs






-


-


83


 




Net increase/(decrease) in shareholders' funds






 
(148)


 
(127)


 
(210)


 




Opening Shareholders' funds/(deficit)






(991)


(781)


(781)


 




Closing Shareholders' funds/(deficit)






(1,139)


(908)


(991)


 




















 
 



Statement of cash flows


 


6 months ended
31 August 2020
(unaudited)
£'000


6 months ended
31 August 2019
(unaudited)
£'000


Year ended
29 February 2020
(audited)
£'000




Cash flows from operating activities
Profit/(loss) for the period


 
 
 






 
 
(148)






 
 
(127)






 
 
(293)




Adjustments for:
































Interest receivable










-






-






-




Amounts written back on investments and loans










 
-






 
-






 
-




Amounts written off investments and loans










 
-






 
-






 
-




Changes in:
































Trade and other debtors










(4)






(204)






-




Trade and other creditors










(4)






(35)






8




Net cash from operating activities










(156)






(366)






(285)




Cash flows from investing activities
































Interest received










-






-






-




Net cash used in investing activities










-






-






-




Cash flows from financing activities
































Issue of new equity (net of costs)










-






-






83




Proceeds from loans to company










294






132






136




Repayment and conversion of loans to company










(63)






(10)






(180)




Net cash from financing activities










231






122






39






































Net increase/(decrease) in cash and cash equivalents










75






(244)






(246)




Cash and cash equivalents at beginning of period










(3)






243






243




Cash and cash equivalents at end of period










72






(1)






(3)



 
 
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 2020 has been prepared on a basis consistent with the financial statements for the year ended 29 February 2020.
 
The condensed set of financial statements for the six months ended 31 August 2020 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 2020 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.
 
 
2.         Operating loss
 



This is stated after charging:
























6 months ended
31 August 2020
(unaudited)
£'000


6 months ended
31 August 2019
(unaudited)
£'000


Year ended
29 February 2020
(audited)
£'000




Directors' remuneration
















     -  salaries and fees


48


48


96




Auditors' remuneration
















     -  audit services






6


6


13




     -  other services






-


-


-



 
 
3.         Profit/(loss) per share
 
The profit/(loss) per ordinary share calculation has been based on the loss attributable to ordinary shareholders of £148,000 (August 2019: loss £127,000; February 2020: loss £293,000), divided by 11,490,201 (August 2019: 9,590,201; February 2020: 11,490,201) 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, as any adjustment would be anti-dilutive.
 
There are no discontinued operations in the periods and, therefore the basic and the diluted profit/(loss) per ordinary share from continuing operations are the same as the basic and the diluted profit/(loss) per ordinary share.
 
4.         2020 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 £466,000 (August 2019: £703,000; February 2020: £215,000), is made up of the following: £31,000 from B Patnaik, a director, £70,000 from D Zych, a shareholder and former director, and £365,000 from outside investors. These loans are unsecured, repayable after five years, convertible at the holder's request into new ordinary shares in the company at a price of 5 or 10 pence per share; in the event that the loan is not repaid or converted prior to its maturity date then it will attract accrued interest at a rate of 5% per annum.
 
 
6.         Share capital











31 August 2020
(unaudited)


31 August 2019
(unaudited)


29 February 2020
(audited)




Ordinary shares of 2p each
















Allotted, called-up, fully paid
















      Number of shares


11,490,201


9,590,201


11,490,201




      Nominal value


£229,804


£191,804


£229,804



 
 
7.         Related party transactions
 
As at the balance sheet date, there are loans to the company of £31,000 from B Patnaik, a director of the company, and £255,000 from N Mayster, a director and shareholder of the company.  The terms of the loans are interest at 5% and this is considered reasonable.
 
No other related party transactions were undertaken as such that are required to be disclosed under FRS 102.
 
 
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
 
 
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.

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