REG - Minoan Group PLC - Results for the year ended 31 October 2023
01/05/2024 07:00
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RNS Number : 7086M Minoan Group PLC 01 May 2024
The information contained within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulation (EU) No.
596/2014. Upon the publication of this announcement, this inside information
is now considered to be in the public domain
1 May 2024
Minoan Group Plc
("Minoan", the "Group" or the "Company")
Results Announcement
Minoan Group Plc announces its results for the year ended 31 October 2023
Project highlights
· Project moving ahead on the base of the existing Contract.
· Commercial relationships enhanced.
· Major Hotel Group signed collaboration agreement for one or more
hotels.
Financial highlights
· Major reduction in loss before taxation to £529,000 (2021/22:
£1,065,000) due to reduced loan interest charges and a reduction in the fair
value of warrants.
· Operating costs slightly decreased to £536,000 (2021/22:
£541,000).
· Net assets decreased to £42,190,000 (2021/22: £42,689,000).
Christopher Egleton, Chairman of Minoan, said:
"I am pleased that the Company's discussions and negotiations with the
Foundation continue to move forward and that the Greek Ministry of National
Economy and Finance is assisting the process. In the meantime, following the
signing of a collaboration agreement with a major International Luxury Hotel
Group, the Company continues to progress the commercial aspects of the Project
and I look forward to being able to report further progress on this as well as
significant management changes which will, I believe, enable shareholders to
have a clear view of the future."
Minoan Group Plc's Report and Financial Statements for the year ended 31
October 2023 can be viewed on the Company's website with effect from 1 May
2024.
For further information visit www.minoangroup.com or contact:
Minoan Group
Plc
mail@minoangroup.com
W H Ireland
Limited
020 7220 1666
Antonio Bossi / Andrew Andrade
Peterhouse Capital Limited
020 7469 0930
Duncan Vasey
Chairman's Statement
Introduction
I have pleasure in presenting the financial statements for the year ended 31
October 2023 together with my report for the year and, particularly, the
period since the year end.
During 2023 the Company indicated that it would be moving ahead with its
Itanos Gaia Project at Cavo Sidero in Crete (the "Project") on the basis of
the existing contract and associated documentation. As a result of this
approach and past legislative changes, the contract ("Contract") between the
Company and the Public Welfare Ecclesiastical Foundation Panagia Akrotiriani
(the "Foundation") will be updated to accord with the current legal framework.
The Company and the Foundation are progressing the detailed negotiations via
an institutional process conducted through the Ministry of National Economy
and Finance, the supervising authority for all Foundations in Greece.
The finalisation of the updated Contract will significantly enhance our
ability to accelerate numerous financial and commercial arrangements already
in progress as well as to enter into new arrangements. To this end, especially
since the year end and as the 'updating' negotiations have moved forward, the
Company has continued to deepen its commercial relationships especially within
Greece. This has involved discussions with major banks, finance houses,
financial advisory groups, as well as sales agents and contractors. In
partnership with a lead banking partner, the Company intends to apply for the
various packages of assistance available for developments of the nature of the
Project. The final result, we believe, will deliver an outstanding financial
package to partners as we move toward delivery of the Itanos Gaia Project.
While the updated Contract is being completed dialogue continues at an
increased pace with the Foundation concerning the strategic objective to allow
Epifania (equivalent to a 99 year ground lease) as the underlying title of the
Project. The Company has continued to grow its financial and commercial
relationships whilst making further progress in appointing its external Greek
advisory team. Demonstrating this and the attractiveness of the Project, the
Company signed a collaboration agreement with a major international luxury
hotel group in respect of one or more of the hotels on the site.
Although most shareholders are almost certainly aware of the key points of the
Project it is worth reminding those that are not entirely familiar with them
of the unique nature of both the site and the Project itself. The site is one
of the largest private estates in the Eastern Mediterranean on the Cavo Sidero
peninsula. The development site covers an area of over 20 square kilometres
and has over 20 kilometres of coastline with numerous secluded coves and bays
in an area of outstanding natural beauty with spectacular views. The site is
endowed naturally with a history spanning the Minoan, Hellenistic, Venetian
and Byzantine periods, Cavo Sidero is famed as the birthplace of Europa and
where the Greek gods would go to celebrate their victories and for rest and
relaxation.
The equivalent of outline planning consent for the development was granted
through a Presidential Decree. The permitted build space, 30 minutes from
Sitia International airport, consists of 108,000 square metres with up to five
distinctive locations for hotels and resorts.
The Project is supported by the Municipality of Sitia, 28 unions and trade
associations in addition to the Church and the Foundation and will contribute
a significant number of jobs and economic benefits to the local area.
At home, the Company has reduced and extended its only secured debt until the
end of 2024 and continues in its exercise to reduce balance sheet liabilities
by converting some of its old debt to equity or, in some cases, to convertible
debt.
Financial Review
Operating costs for the year were in line with the previous year at £536,000
compared to £541,000 for the year to 31 October 2022. The loss before
taxation for the year was £529,000 compared to £1,065,000 recorded for the
year to 31 October 2022 due to reduced loan interest charges and a reduction
in the fair value of warrants.
Chairman's Statement (continued)
The Company's net assets at 31 October 2023 decreased to £42,190,000 from
£42,689,000. Capitalised project costs, being costs associated with acquiring
and developing the site in Crete, planning and other design costs, increased
by £607,000 to £47,995,000.
As announced in August last year, the Company's only secured debt (the "Loan")
with DAGG LLP ("DAGG") was extended and reduced. At 31 October 2023, the Loan
stood at £1,509,113. After the balance sheet date an amount of £707,231 was
redeemed by the issue to the members of DAGG of 70,723,100 new ordinary shares
in Minoan ("Ordinary Shares") at 1p per Ordinary Share, a premium to the
mid-market price of the Company's shares. The Loan and the 35,000,000 warrants
were extended until 31 December 2024 for a fee of £175,000.
As previously advised, we are endeavouring to reduce the balance sheet
liabilities. This has taken a little longer than we had hoped but is
progressing well and we expect to be reporting to shareholders before the end
of June 2024.
Board and Management
In March of this year Professor George Mergos stepped down as a Director of
Minoan and Chairman of Loyalward Limited, the Group's wholly owned subsidiary.
Professor Mergos joined the Board in February 2022 and played an important
role pushing forward the contract discussions with the Foundation.
As previously advised, the Company has appointed a new external Greek advisory
team and additional legal support to complete the negotiations with the
Foundation in preparation for the next stage in the development of the
Project. As shareholders will be aware, the Company has yet to appoint a
replacement Chairperson for Loyalward Limited nor, as yet, made the board
changes expected to be made within Minoan. It is clear that the skill set
required of the management team will change significantly as we move towards
construction and development and in the management of high end complex
resorts.
The Board therefore believes that it would be appropriate to delay these
appointments and other board changes until the Company has a better view as to
the skill sets required. Nevertheless, we are already preparing a structure
for the implementation of these changes, part of which will depend on the
result of discussions already underway with construction and other partners
and the role being undertaken by each.
Outlook
I am pleased that the Company's discussions and negotiations with the
Foundation continue to move forward and that the Greek Ministry of National
Economy and Finance is assisting the process. In the meantime, following the
signing of a collaboration agreement with a major International Luxury Hotel
Group, the Company continues to progress the commercial aspects of the Project
and I look forward to being able to report further progress on this as well as
significant management changes which will, I believe, enable shareholders to
have a clear view of the future.
Christopher W Egleton
Chairman
30 April 2024
Consolidated Statement of Comprehensive Income
Year ended 31 October 2023
2023 2022
£'000 £'000
Revenue - -
Cost of sales - -
Gross profit - -
- -
Operating expenses (536) (541)
Other operating expenses:
Corporate development costs - -
Operating loss (536) (541)
Finance costs 7 (524)
Loss before taxation (529) (1,065)
Taxation - -
Loss after taxation (529) (1,065)
Other Comprehensive income for the year - -
Total Comprehensive income for the year (529) (1,065)
Loss for year attributable to equity holders of the Company (529) (1,065)
Loss per share attributable to equity holders of
the Company: Basic and diluted (0.07)p (0.16)p
Consolidated Statement of Changes in Equity
Year ended 31 October 2023
Year ended 31 October 202
Share capital Share premium Merger Warrant Retained earnings £'000 Total equity £'000
£'000 £'000 reserve £'000 Reserve
£'000
Balance at 1 November 2022 20,321 36,583 9,349 2,619 (26,183) 42,689
Loss for the year - - - - (529) (529)
Issue of ordinary shares at par 188 - - - - 188
Decrease in Warrant Reserve - - - (158) - (158)
20,509 36,583 9,349 2,461 (26,712) 42,190
Balance at 31 October 2023
Year ended 31 October 2022
Share capital Share premium Merger Warrant Retained earnings £'000 Total equity
£'000
£'000 £'000 reserve £'000 Reserve
£'000
Balance at 1 November 2021 19,021 36,583 9,349 2,571 (25,118) 42,406
Loss for the year - - - - (1,065) (1,065)
Issue of ordinary shares at par 1,300 - - - - 1,300
Increase in Warrant Reserve - - - 48 - 48
20,321 36,583 9,349 2,619 (26,183) 42,689
Balance at 31 October 2022
Consolidated Statement of Financial Position as at 31 October 2023
2023 2022
£'000
£'000
Assets
Non-current assets
Intangible assets 3,583 3,583
Property, plant and equipment 157 157
Total non-current assets 3,740 3,740
Current assets
Inventories 47,995 47,388
Receivables 117 167
Cash and cash equivalents 17 130
Total current assets 48,129 47,685
Total assets 51,869 51,425
Equity
Share capital 20,509 20,321
Share premium account 36,583 36,583
Merger reserve account 9,349 9,349
Warrant reserve 2,461 2,619
Retained earnings (26,712) (26,183)
Total equity 42,190 42,689
Liabilities
Current liabilities 9,679 8,736
Total equity and liabilities 51,869 51,425
Consolidated Cash Flow Statement
Year ended 31 October 2023
2023 2022
£'000 £'000
Cash flows from operating activities
Loss before taxation (529) (1,065)
Finance costs (7) 524
Increase in inventories (606) (630)
Decrease / (increase) in receivables 50 (5)
Increase in current liabilities 591 370
Net cash (outflow) from operations (501) (806)
Finance costs (151) (476)
Net cash used in operating activities (652) (1,282)
Cash flows from investing activities
Purchase of property, plant and equipment - -
Net cash used in investing activities - -
Cash flows from financing activities
Net proceeds from the issue of ordinary shares 188 1,300
Loans received 351 92
Net cash generated from financing activities 539 1,392
Net (decrease) / increase in cash (113) 110
Cash at beginning of year 130 20
Cash at end of year 17 130
Notes to the Financial Statements
Year ended 31 October 2022
1 General information
The financial information set out in this announcement does not constitute
statutory financial statements for the year ended 31 October 2023 or 31
October 2022. The report of the auditors on the statutory financial statements
for the year ended 31 October 2023 and 31 October 2022 was not qualified.
The report of the auditors on the statutory financial statements for each of
the years ended 31 October 2023 and 31 October 2022 did not contain statements
under section 498(2) or (3) of the Companies Act 2006. The statutory financial
statements for the year ended 31 October 2022 have been delivered to the
Registrar of Companies. The financial statements for the year ended 31 October
2023 will be delivered to the Registrar of Companies following the Company's
Annual General Meeting.
The Company is a public limited company incorporated in England and Wales. The
Company's principal activity in the year 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 plus the provision of general management services.
2 Accounting policies
Basis of preparation
The financial statements are prepared under the historical cost convention
except for where financial instruments are stated at fair value.
Adoption of new and revised Standards
The International Accounting Standards Board and IFRIC have issued the
following new and revised standards and interpretations with an effective date
after the date of these financial statements, which have been endorsed and
issued by the United Kingdom at 31 October 2023:
Standard Details of amendment Effective date
IAS 1 Presentation of Financial statements IFRS 18 Presentation and Disclosure in Financial Statements issued, which will 1 January 2027
supersede IAS 1 as of 1 January 2027
IAS7 Presentation of Financial statements Amended by IFRS 18 Presentation and Disclosure in Financial Statements 1 January 2027
IFRS16 Leases Amended by Lease Liability in a Sale and Leaseback (Amendments to IFRS 16) 1 January 2024
IFRS18 Presentation and Disclosure in Financial Statements IFRS 18 Presentation and Disclosure in Financial Statements issued 1 January 2027
Going concern
The directors have considered the financial and commercial position of the
Group in relation to its project in Crete (the "Project"). In particular, the
directors have reviewed the matters referred to below.
Following the unanimous approval of a Plenum of the Greek Council of State,
the highest court in Greece, the Presidential Decree granting land use
approval for the Project was issued on 11 March 2016 and was published in the
Government Gazette. The planning rules for the Project are now enshrined in
law. The appeals lodged against the Presidential Decree have been rejected by
the Greek Supreme Court. Accordingly, the directors consider that they will
conclude further Project joint venture agreements in the near term.
In addition to specific Project related matters as noted above, and as has
been the case in the past, the Group continues to need to raise capital in
order to meet its existing finance and working capital requirements. While the
directors consider that any necessary funds will be raised as required, the
ability of the Company to raise these funds is, by its nature, uncertain.
Notes to the Financial Statements (continued)
Year ended 31 October 2022
2 Accounting policies (continued)
Going concern (continued)
Having taken these matters into account, the directors consider that the going
concern basis of preparation of the financial statements is appropriate.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the Company and all its subsidiaries as at 31 October 2023 using uniform
accounting policies. The Group's policy is to consolidate the result of
subsidiaries acquired in the year from the date of acquisition to the Group's
next accounting reference date. Intra-group balances are eliminated on
consolidation.
Acquisitions of subsidiaries and businesses are accounted for using the
acquisition method. The consideration for each acquisition is measured at the
aggregate of the fair values of the assets given, liabilities incurred and
equity instruments issued by the Group in exchange for control of the acquired
business. Acquisition related costs are recognised in the consolidated
statement of comprehensive income as incurred.
Critical accounting estimates and judgements
The preparation of the financial statements in accordance with generally
accepted financial accounting principles requires the directors to make
critical accounting estimates and judgements that affect the amounts reported
in the financial statements and accompanying notes. The estimates and
assumptions that have a significant risk of causing material adjustments to
the carrying value of assets and liabilities within the next financial year
are discussed below:
· in capitalising the costs directly attributable to the Project
(see inventories below), and continuing to recognise goodwill relating to the
Project, the directors are of the opinion that the Project will be brought to
fruition and that the carrying value of inventories and goodwill is
recoverable; and
· as set out above, the directors have exercised judgement in
concluding that the Company and Group is a going concern.
Goodwill
Goodwill arising on acquisitions represents the difference between the fair
value of the net assets acquired and the consideration paid and is recognised
as an asset.
Goodwill arising on acquisition is allocated to cash-generating units. The
recoverable amount of the cash-generating unit to which goodwill has been
allocated is tested for impairment annually, or on such other occasions that
events or changes in circumstances indicate that it might be impaired. Any
impairment is recognised immediately as an expense and is not subsequently
reversed.
Property, plant and equipment
Property, plant and equipment is stated at historical cost less accumulated
depreciation and any recognised impairment loss.
Depreciation is provided in order to write off the cost of each asset, less
its estimated residual value, over its estimated useful life on a straight
line basis as follows:
Plant and equipment:
3 to 5 years
Fixtures and fittings:
3 years
Where the carrying amount of an asset is greater than its estimated
recoverable amount, it is written down immediately to its recoverable amount.
Investments
Investments in subsidiaries are stated at cost less any impairment deemed
necessary.
Notes to the Financial Statements (continued)
Year ended 31 October 2022
2 Accounting policies (continued)
Inventories
Inventories represent the actual costs of goods and services directly
attributable to the acquisition and development of the Project and are stated
at the lower of cost and net realisable value.
Foreign currency
A foreign currency transaction is recorded, on initial recognition in
Sterling, by applying to the foreign currency amount the spot exchange rate
between the functional currency and the foreign currency at the date of the
transaction.
At the end of the reporting period:
· foreign currency monetary items are translated using the closing
rate;
· non-monetary items that are measured in terms of historical cost in
a foreign currency are translated using the exchange rate at the date of the
transaction; and
· non-monetary items that are measured at fair value in a foreign
currency are translated using the exchange rates at the date when the fair
value was determined.
Exchange differences arising on the settlement of monetary items or on
translating monetary items at rates different from those at which they were
translated on initial recognition during the period or in previous annual
financial statements are recognised in profit or loss in the period in which
they arise.
When a gain or loss on a non-monetary item is recognised to other
comprehensive income and accumulated in equity, any exchange component of that
gain or loss is recognised to other comprehensive income and accumulated in
equity. When a gain or loss on a non-monetary item is recognised in profit or
loss, any exchange component of that gain or loss is recognised in profit or
loss.
Cash flows arising from transactions in a foreign currency are recorded in
Sterling by applying to the foreign currency amount the exchange rate between
the Sterling and the foreign currency at the date of the cash flow.
Cash and cash equivalents
Cash and cash equivalents include cash in hand and short-term deposits, with a
maturity of less than three months, held with banks.
Trade and other receivables
Trade and other receivables are recognised initially at fair value and shown
less any provision for amounts considered irrecoverable. They are subsequently
measured at an amortised cost using the effective interest rate method, less
irrecoverable provision for receivables.
Trade and other payables
Trade and other payables are recognised initially at fair value and
subsequently measured at amortised cost using the effective interest rate
method.
Loans
Loan borrowings are recognised initially at fair value net of transaction
costs incurred. Borrowings are subsequently stated at amortised cost and any
difference between the proceeds (net of transaction costs) and the redemption
value is recognised as a borrowing cost over the period of the borrowings
using the effective interest method.
Share-based payments
The Company has granted options and warrants to purchase Ordinary Shares. The
fair values of the options and warrants are calculated using the Black-Scholes
and Binomial option pricing models as appropriate at the grant date. The fair
value of the options is charged to profit or loss with a corresponding entry
recognised in equity. This charge does not involve any cash payment by the
Group.
Notes to the Financial Statements (continued)
Year ended 31 October 2022
2 Accounting policies (continued)
Share-based payments (continued)
Where warrants are issued in conjunction with a loan instrument, the fair
value of the warrants forms part of the total finance cost associated with
that instrument and is released to profit or loss through finance costs over
the term of that instrument using the effective interest method.
Taxation
Current taxes, where applicable, are based on the results shown in the
financial statements and are calculated according to local tax rules using tax
rates enacted, or substantially enacted, by the statement of financial
position date and taking into account deferred taxation. Deferred tax is
computed using the liability method. Under this method, deferred tax assets
and liabilities are determined based on temporary differences between the
financial reporting and tax bases of assets and liabilities and are measured
using enacted rates and laws that will be in effect when the differences are
expected to reverse. Deferred tax is not accounted for if it arises from
initial recognition of an asset or liability in a transaction that at the time
of the transaction affects neither accounting, nor taxable profit or loss.
Deferred tax assets are recognised to the extent that it is probable that
future taxable profits will arise against which the temporary differences will
be utilised.
Deferred tax is provided on temporary differences arising on investments in
subsidiaries except where the timing of the reversal of the temporary
difference is controlled by the Group and it is probable that the temporary
difference will not reverse in the foreseeable future. Deferred tax assets and
liabilities arising in the same tax jurisdiction are offset.
The Group is entitled to a tax deduction for amounts treated as compensation
on exercise of certain employee share options. As explained under "Share-based
payments" above, a compensation expense is recorded in the Group's statement
of comprehensive income over the period from the grant date to the vesting
date of the relevant options. As there is a temporary difference between the
accounting and tax bases a deferred tax asset is recorded. The deferred tax
asset arising is calculated by comparing the estimated amount of tax deduction
to be obtained in the future (based on the Company's share price at the
statement of financial position date) with the cumulative amount of the
compensation expense recorded in the statement of comprehensive income. If the
amount of estimated future tax deduction exceeds the cumulative amount of the
remuneration expense at the statutory rate, the excess is recorded directly in
equity against retained earnings.
3 Information regarding directors and employees
Directors' and key management remuneration
Costs taken to Costs taken to Total
inventories
profit or loss
£'000 £'000 £'000
Year ended 31 October 2023
Fees 95 90 185
Sums charged by third parties for - 95 95
directors' and key management services
95 185 280
Year ended 31 October 2022
Fees 65 90 155
Sums charged by third parties for - 85 85
directors' and key management services
65 175 240
Notes to the Financial Statements (continued)
Year ended 31 October 2022
3 Information regarding directors and employees (continued)
The total directors' and key management remuneration shown above includes the
following amounts in respect of the directors of the Company. No director has
a service agreement with a notice period that exceeds twelve months.
2023 2022
Fees/Sums charged by third parties Fees/Sums charged by third parties
£'000 £'000
C W Egleton (Chairman) 60 40
B D Bartman (Retired 15/2/22) - 10
G D Cook 35 35
T R C Hill 35 35
G Mergos 60 30
190 150
2023 2022
No. No.
Group monthly average number of persons employed
Directors 8 9
Management, administration and sales - -
4 Loss before taxation
The loss before taxation is stated after charging:
2023 2022
£'000 £'000
Depreciation - -
Auditor's remuneration 40 22
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