REG - Minoan Group PLC - Interim Results <Origin Href="QuoteRef">MIN.L</Origin>

MinoanAnnouncement

31/07/2015 07:00

RNS Number : 6415U
Minoan Group PLC
31 July 2015
31 July 2015
Interim Results Announcement
Minoan Group Plc 
(the "Group" or the "Company" or "Minoan") 
announces its unaudited interim results for the 6 months ended 30 April 2015
HIGHLIGHTS
Financials (comparisons to the six months ending 30 April 2014)
 Group total transaction value of  28.7m, up 18.6% from 24.2m
 T&L Gross Profit of 2.98m, up 19.4% from 2.49m
 Operating loss of 584,000, down 1.7% from 594,000
Operational 
 Underlying performance of the Group's travel division has continued to improve 
 Gross Sales, Commissions and EBITDA have all increased compared to 1H2014
 T&L division's PBT shows a small decline entirely as a result of an increased depreciation and amortisation charge
 As previously announced, issues relating to the Group's back office, which will have a one-off impact on H2 performance, have been resolved 
 Draft Presidential Decree received unanimous support by Plenum of the Greek Council of State and has been signed off by the President of the Council of State
Christopher Egleton, Minoan Chairman, said:
"The Group has seen improved growth in the first half, with the travel division benefitting from the strength of the pound and the UK's continuing economic recovery. Trading remains strong with the business in robust shape to move forward over the rest of this year and management continue to examine earnings enhancing strategic acquisitions to further improve the travel and leisure division's performance.
The approval of the Itanos Gaia luxury resort project in Crete is nearing its final stages. The recent Parliamentary decision in favour of a renewed agreement with creditors should stabilise government procedures and allow the Presidential Decree to be signed. In anticipation of this, the management team has been strengthened with the appointment of experienced property and construction consultant Nicholas Day as a director of Loyalward Limited to help the Group realise the full benefits of the Itanos Gaia project.
Given the positive performance over the past six months, the Group looks forward to building on the progress made, delivering further improvements in trading performance and increasing shareholder value over the rest of this year."
The Company's unaudited interim results for the 6 months ended 30 April 2015 can be viewed on Minoan's website, www.minoangroup.com, with effect from 31 July 2015.
For further information visit www.minoangroup.comor contact: 
Minoan Group Plc

Christopher Egleton 
christopher.egleton@minoangroup.com
Duncan Wilson
0141 226 2930
Bill Cole
020 8253 4305


WH Ireland Limited
020 7220 1666
Adrian Hadden/Mark Leonard



Throgmorton Street Capital
020 7071 0808
Forbes Cutler



Morgan Rossiter 
020 3195 3240
Richard Morgan Evans/James Rossiter

Chairman's Statement 
Introduction
Since my last Statement, accompanying the Report and Financial Statements for the year ended 31 October 2014, the situation in Greece, following the change of Government in January this year has been characterised as a series of crises. However, the recent approval by the Greek Parliament of the various legislative measures requested by the Country's creditors is expected to begin to lead to a normalisation of Government procedures.
The underlying performance of the Group's travel division has continued to improve notwithstanding a number of general difficulties experienced in the sector, most notably the problems in Greece as well as, more recently, the tragic events in Tunisia. Nevertheless, in the half year results Total transaction value and Gross profit have increased by 18.6% and 19.4% respectively. 
Greece
The political and financial situation in Greece has been documented in detail throughout the British and International media. Although the worst of the crisis seems to have passed, and the recent Parliamentary votes have been in favour of the new agreement with creditors, it is possible that there may be further hitches before final agreement on the detail is forthcoming.
In the meantime the Government is making major efforts to secure new investment in the country and various Ministers have stated publicly that foreign investment is a priority. 
The fact that the Group's project has the unanimous approval of the Draft Presidential Decree by a Plenum of the Greek Council of State should not be forgotten. Given this, and once normal Government activities resume, I expect to be able to confirm progress with the granting of the Presidential Decree. 
As soon as possible after this I will give shareholders a more detailed update on the Group's plans.
Travel and Leisure ("T&L") 
In the six months ended 30 April 2015, Gross Sales, Commissions and EBITDA have increased over the comparative period last year. The T&L division's profit before tax shows a small decline, entirely as a result of an increased charge for depreciation and amortisation. As announced in the trading update on 14 July 2015, the division's results for the full year will be affected by a number of "one off" impacts resulting from a dispute with the provider of back office services. This has now been successfully resolved.
The first six months saw the "specialist" sector, which includes Golf, Santa and Canada among others, do particularly well. Gross sales increased by over 35% and commission by 27%. This, together with the overall improvement, reflects the continuing effect of the successful integration of earlier acquisitions. 
Notwithstanding the effect of the dispute referred to above, which restricted our ability to expand more rapidly in certain areas, the underlying trading performance of the division continues to improve with July already being the best trading month of the year. In addition, we are examining a number of significant transactions to expand this division, not least through acquisitions which will be earnings enhancing.
Chairman's Statement (continued) 
Outlook
As the political picture in Greece becomes more stable and Government procedures are less impacted by the macro economic problems I expect to be able to update shareholders with positive news.
In the travel division, underlying performance continues to improve and, in due course, I hope to be able to announce significant progress. 
Christopher W Egleton
Chairman
31 July 2015
Unaudited Consolidated Statement of Comprehensive Income
6 months ended 30 April 2015

6 months ended 30.04.15
 '000
6 months ended 30.04.14
 '000
Year ended 31.10.14
 '000
Total transaction value
28,723
24,215
50,757




Revenue
2,981
2,496
5,932
Cost of sales
-
-
(252)
Gross profit
2,981
2,496
5,680




Operating expenses
(3,011)
(2,665)
(5,306)




Other operating expenses



Corporate development costs
(244)
(262)
(501)
Charge in respect of share-based payments
(310)
(163)
(639)
Operating loss
(584)
(594)
(766)




Finance costs
(175)
(100)
(270)
Loss before taxation
(759)
(694)
(1,036)




Taxation 
-
-
-
Loss for period attributable to equity holders of the Company
(759)
(694)
(1,036)




Loss per share attributable to equity holders of 



the Company: Basic and diluted
(0.43)p
(0.42)p
(0.61)p




Unaudited Consolidated Statement of Changes in Equity
6 months ended 30 April 2015
6 months ended 30 April 2015
Share capital
'000
Share premium
'000
Merger
reserve
'000
Retained earnings
'000
 Total
equity
'000
Balanceat1November 2014
14,843
30,261
9,349
(11,955)
 42,498
Loss for the period
-
-
-
 (759)
(759)
Netproceedsfromsharesissued
 80
531
-
 -
 611
Share-based payments:
Current period charges
-
-
-
 310
 310
Balance at 30 April 2015
14,923
30,792
9,349
(12,404)
 42,660
6 months ended 30 April 2014
Share capital
'000
Share premium
'000
Merger
reserve '000
Retained earnings '000
Non-controlling interest
'000
 Total
equity
'000
Balance at 1 November 2013
14,693
28,781
9,349
(11,997)
 919
41,745
Loss for the period
-
-
-
 (694)
 -
(694)
Net proceeds from shares issued
 56
498
-
 -
 -
 554
Acquisition of non-controllinginterest
 -
-
-
 -
 (919)
 (919)
Share-based payments:
Current period charges
-
-
-
 163
 -
 163
Settlement of liabilities
-
-
-
 439
 -
 439
Balance at 30 April 2014
14,749
29,279
9,349
(12,089)
 -
 41,288
Year ended 31 October 2014
Share capital
'000
Share premium
'000
Merger
reserve '000
Retained earnings '000
Non-controlling interest
'000
 Total
 equity '000
Balance at 1 November 2013
14,693
28,781
9,349
(11,997)
 919
 41,745
Loss for the year
-
-
-
(1,036)
 -
 (1,036)
Net proceeds from shares issued
150
1,480
-
 -
 -
 1,630
Acquisition of non-controllinginterest
-
-
-
-
  (919)
 (919)
Share-based payments:
Current year charges
-
-
-
 639
 -
 639
Settlement of liabilities
-
-
-
 439
 -
 439
Balance at 31 October 2014
14,843
30,261
9,349
 (11,955)
 -
 42,498
Unaudited Consolidated Balance Sheet as at 30 April 2015

As at 30.04.15
'000
As at 30.04.14
'000
As at 31.10.14
'000
Assets



Non-current assets



Intangible assets
9,568
8,979
9,414
Property, plant and equipment 
718
745
717
Total non-current assets
10,286
9,724
10,131




Current assets



Inventories
40,607
39,017
40,042
Receivables
1,916
922
1,592
Cash and cash equivalents
539
73
127
Total current assets
43,062
40,012
41,761




Total assets
53,348
49,736
51,892




Equity



Share capital
14,923
14,749
14,843
Share premium account
30,792
29,279
30,261
Merger reserve account
9,349
9,349
9,349
Retained earnings
(12,404)
(12,089)
(11,955)
Total equity
42,660
41,288
42,498




Liabilities



Non-current liabilities
4,000
2,542
3,500
Current liabilities
6,688
5,906
5,894
Total liabilities
10,688
8,448
9,394




Total equity and liabilities
53,348
49,736
51,892
Unaudited Consolidated Cash Flow Statement
6 months ended 30 April 2015

6 months ended 30.04.15
'000
6 months ended 30.04.14
'000
 Year ended 31.10.14
'000




Cash flows from operating activities



Net cash inflow/(outflow) from continuing operations (note 1)
396
(909)
(2,138)
Finance costs
(175)
(100)
(270)
Net cash generated from/(used in) operating activities 
221
(1,009)
(2,408)




Cash flows from investing activities



Purchase of property, plant and equipment 
(64)
(81)
(122)
Purchase of intangible assets
(256)
(246)
(713)
Non cash movement in intangible assets
-
(100)
(153)
Acquisition of shares in subsidiary company
-
(430)
(430)
Net cash used in investing activities
(320)
(857)
(1,418)




Cash flows from financing activities



Net proceeds from the issue of ordinary shares
11
-
667
Loans received
500
1,701
3,081
Payments of hire purchase liabilities
-
(33)
(66)
Net cash generated from financing activities
511
1,668
3,682




Net increase/(decrease) in cash
412
(198)
(144)




Cash at beginning of period
127
271
271
Cash at end of period
539
73
127




Notes to the Unaudited Consolidated Cash Flow Statement
6 months ended 30 April 2015
1 Cash flows from operating activities

6 months ended 30.04.15
 '000
6 months ended 30.04.14
 '000
Year ended 31.10.14
 '000
Loss before taxation
(759)
(694)
(1,036)
Finance costs
175
100
270
Depreciation
52
101
102
Amortisation
102
5
130
Exchange loss relevant to property, plant and equipment
11
5
22
Increase in inventories
(565)
(650)
(1,675)
Share-based payments 
310
602
1,078
Increase in receivables
(324)
(26)
(696)
Decrease in non-current liabilities
-
(100)
-
Increase/(decrease) in current liabilities
794
(636)
(126)
Non cash movement in current liabilities
-
(39)
 -
Non cash movement in equity
600
423
(207)
Net cash inflow/(outflow) from continuing operations
396
(909)
(2,138)
 Notes to the unaudited interim results 
6 months ended 30 April 2015 
1. General information
The Company is a public limited company incorporated in England and Wales and quoted on AIM. The Company's principal activity in the period under review was that of a holding and management company of a Group involved in the design, creation, development and management of environmentally friendly luxury hotels and resorts and in the operation of independent travel businesses, through which the Group provides a broad range of services including, inter alia, transportation, hotel and other accommodation and leisure services.
2. Basis of preparation
The interim financial statements are unaudited and do not constitute statutory accounts as defined in Section 434(3) of the Companies Act 2006. A copy of the audited Report and Financial Statements for the year ended 31 October 2014 has been delivered to the Registrar of Companies. The auditor's report on these accounts was unqualified and did not contain statements under s498(2) to s498(4) of the Companies Act 2006. The Report and Financial Statements for the year ended 31 October 2014 were approved by the Board on 30 March 2015.
The interim financial statements for the 6 months ended 30 April 2015 comprise an Unaudited Consolidated Statement of Comprehensive Income, Unaudited Consolidated Statement of Changes in Equity, Unaudited Consolidated Balance Sheet and Unaudited Consolidated Cash Flow statement plus relevant notes.
The interim financial statements are prepared in accordance with EU adopted International Financial Reporting Standards ("IFRS") and the International Financial Reporting Interpretations Committee ("IFRIC") interpretations and the Companies Act 2006 applicable to companies reporting under IFRS. 
The principal accounting policies adopted in the preparation of the interim financial statements are consistent with those adopted in the Report and Financial Statements for the year ended 31 October 2014.
Going concern
The interim unaudited financial statements have been prepared on the going concern basis.
The directors have considered the financial and commercial position of the Group in relation to its project in Crete (the "Project") and also in respect of its travel and leisure business. In particular, the directors have reviewed the matters referred to below.
A Plenum of the Greek Council of State, the highest court in Greece, has unanimously approved the draft presidential decree in respect of the Project with no dissenting opinions. The draft presidential decree approves the development plan and the strategic environmental impact study. The Company is awaiting the granting of the formal Presidential Decree. 
Accordingly, the directors consider it relevant that having completed financial joint venture agreements prior to the above, and any other consents, they will conclude further Project joint venture agreements in the near term. In addition, the directors are considering other options which would have a major beneficial impact on the Group's resources.
In addition to specific Project related matters as noted above, and as has been the case in the past, the Group continues to raise capital in order to meet its existing working capital requirements and the directors consider that any necessary funds will be raised as required.
Notes to the unaudited interim results (continued) 
6 months ended 30 April 2015
2. Basis of preparation (continued)
Going concern (continued)
With a number of acquisitions in the planned expansion of its Travel and Leisure business having been completed over a period of time, the Group is now generating profits and cash flow within this sector of its activities.
Having taken these matters into account, the directors consider that the going concern basis of preparation of the financial statements is appropriate.
3. Segmented information
The Group strategy and growth objectives necessitate the building of an associated infrastructure. The Group considers it appropriate to identify separately the corporate development division together with costs related to acquisitions. Accordingly, the Group is organised into three divisions both by business segment and geographical location:
 the luxury resorts division, currently being the development of a luxury resort in Crete, which includes the central administration costs of the Group; 
 the Travel and Leisure division (UK), being the operation and management of the travel businesses; and
 the corporate development division (UK) as described above.
Notes to the unaudited interim results (continued) 
6 months ended 30 April 2015
3. Segmented information (continued)
The information presented below is consistent with how information is presented to the Board, with the Group's accounting policies and with the geographical location of the relevant divisions.

6months ended 30 April 2015

Luxury Resorts 
Travel and Leisure
Corporate Development
Total

'000
'000
'000
'000
Total transaction value
 -
 28,723
-
 28,723





Revenue
-
2,981
-
 2,981 
Cost of sales
-
 - 
-
 -
Gross profit
-
 2,981 
-
 2,981 





Operating expenses
(173)
 (2,838)
(244)
 (3,255)

(173)
 143 
(244)
(274)
Charge in respect of share based payments
(310)
 -
-
(310)
Operating (loss)/profit
(483)
143
(244)
(584)
Finance costs
(144)
(31)
-
(175)
(Loss)/profit before taxation
(627)
112
(244)
(759)





Operating expenses include:




Depreciation and amortisation
-
154
-
 154 
Operating leases - plant and equipment
-
11
-
11 





Assets/liabilities




Goodwill
6,127
 2,451
-
 8,578
Other non-current assets
134
 1,574 
-
 1,708
Current assets
41,402
 1,660
-
 43,062
Total assets
47,663
 5,685 
-
 53,348





Non-current liabilities
4,000
 -
-
 4,000
Current liabilities
5,247
 1,441
-
 6,688
Total liabilities
9,247
1,441
-
 10,688





Notes to the unaudited interim results (continued) 
6 months ended 30 April 2015
3. Segmented information (continued)

6 months ended 30 April 2014

Luxury Resorts 
Travel and Leisure
Corporate Development
Total

'000
'000
'000
'000
Total transaction value
 -
 24,215
-
 24,215





Revenue
-
 2,496
-
 2,496 
Cost of sales
-
 - 
-
 -
Gross profit
-
 2,496 
-
 2,496 





Operating expenses
(337)
 (2,328)
(262)
 (2,927)

(337)
 168
(262)
(431)
Charge in respect of share based payments
(163)
 -
-
(163)
Operating (loss)/profit
(500)
 168 
(262)
(594)
Finance costs
(81)
(19)
-
(100)
(Loss)/profit before taxation
(581)
149 
(262)
(694)





Operating expenses include:




Depreciation and amortisation
3
103
-
 106
Operating leases - plant and equipment
-
22
-
 22





Assets/liabilities




Goodwill
6,127
 2,159
-
8,286
Other non-current assets
159
 1,279
-
1,438
Current assets
39,151
 861
-
40,012
Total assets
45,437
 4,299
-
49,736





Non-current liabilities
2,500
42
-
2,542
Current liabilities
5,475
431
-
5,906
Total liabilities
7,975
473

8,448





Notes to the unaudited interim results (continued) 
6 months ended 30 April 2015
3. Segmented information (continued)

Year ended 31 October 2014

Luxury Resorts 
Travel and Leisure
Corporate Development
Total

'000
 '000
'000
 '000
Total transaction value
 -
 50,757
 -
 50,757





Revenue
 -
 5,932
 -
 5,932
Cost of sales
 -
 (252)
 -
 (252)
Gross profit
 -
 5,680
 -
 5,680





Operating expenses
(428)
 (4,878)
(501)
 (5,807)

(428)
 802 
(501)
(127)
Charge in respect of share-based payments
(639)
 -
 -
(639)
Operating (loss)/profit
(1,067)
 802
(501)
(766)
Contribution to central costs
 300
 (300)
 -
 -
Finance costs
(222)
(48)
 -
(270)
(Loss)/profit before taxation
(989)
 454
(501)
(1,036)
Taxation 
 -
 - 
 -
 -
(Loss)/profit after taxation
(989)
 454 
(501)
 (1,036)





Operating expenses include:




Depreciation and amortisation
 1
 231
 -
 232
Operating leases - plant and equipment 
 -
 49
 -
 49





Assets/liabilities




Goodwill
6,127
2,451
 -
 8,578
Other non-current assets
 146
1,407
 -
 1,553
Current assets
 40,457
1,304
 -
 41,761
Total assets
46,730
5,162
 -
 51,892





Non-current liabilities
3,500
 -
 -
 3,500
Current liabilities
4,862
1,032
 -
 5,894
Total liabilities
8,362 
1,032
 -
 9,394
4. Goodwill
Goodwill arising on acquisitions represents the difference between the fair value of the net assets acquired and the consideration paid and has been recognised as an asset.
Goodwill is tested annually for impairment. In particular, the directors have considered the current value of the Group's overall interest in the Project and its progress and are of the opinion that the Project site has longer term value in excess of the carrying value of inventories. 
The directors' opinion of the current value also takes into account the estimate dated 27 June 2011 of the development value of the Project site in the order of 100 million, which was included in the Company's AIM readmission document published on 30 September 2011 and which was reaffirmed in March 2012.
Notes to the unaudited interim results (continued) 
6 months ended 30 April 2015
4. Goodwill (continued)
In addition, the directors are of the opinion that the projected value of the Travel and Leisure business, which is treated as one cash generating unit, is in excess of the value of the amount of goodwill attributable to it. This opinion is arrived at on the basis of the good names of the businesses acquired and the fact that the establishment of business clusters affords the Company the opportunity to realise certain economies of scale thus improving cash flow and profitability.
5. Loss per share attributable to equity holders of the Company
Earnings per share are calculated by dividing the earnings attributable to the equity holders of a company by the weighted average number of ordinary shares in issue during the period. Diluted earnings per share are calculated by adjusting basic earnings per share to assume the conversion of all dilutive potential ordinary shares. There are no dilutive instruments in issue, therefore the basic loss per share and diluted loss per share are the same. The weighted average number of shares used in calculating basic and diluted loss per share for the 6 months ended 30 April 2015 was 177,502,922 (6 months ended 30 April 2014: 166,024,704, year ended 31 October 2014: 168,636,782).

This information is provided by RNS
The company news service from the London Stock Exchange
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