Phoenix Digital - Interim Results
27/09/2024 07:00
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RNS Number : 9005F Phoenix Digital Assets PLC 27 September 2024
This announcement contains information which, prior to its disclosure, was
inside information as stipulated under Regulation 11 of the Market Abuse
(Amendment) (EU Exit) Regulations 2019/310 (as amended). Upon the publication
of this announcement via a Regulatory Information Service, this inside
information is now considered to be in the public domain.
27 September 2024
Phoenix Digital Assets PLC
("Phoenix" or the "Company")
Interim results
Phoenix Digital Assets PLC (AQSE: PNIX) announces its unaudited results for
the six months ended 30 June 2024.
Comments from Jonathan Bixby, Executive Chairman of Phoenix:
I am delighted to report the Company's interim results for the six months
ended 30 June 2024.
The Company had a net asset value of £23.360 million (5.07p per share) as at
30 June 2024.
I am extremely proud of the fact that we returned £33.688 million (5.39p per
share) through a share tender offer as a result of our prudent investment
thesis through the crypto winter of 2022/23.
The market has gone through a large consolidation phase and we remain very
bullish on the crypto market well into 2025. We have re-aligned our portfolio
of liquid assets to best take advantage of what we believe is the coming
crypto bull market.
I would like to take this opportunity to thank all our shareholders for their
ongoing support.
Jonathan Bixby, Executive Chairman
The Directors of Phoenix accept responsibility for this announcement. For
further information please contact:
Phoenix Digital Assets PLC
Jonathan Bixby +44 7876 888 011
Executive Chairman
First Sentinel Corporate Finance Limited
Corporate Adviser +44 7858 888 007
Brian Stockbridge
About Phoenix
Phoenix Digital Assets PLC invests in a diversified portfolio of
cryptocurrency, and/or in companies or funds which have exposure to NFT or
blockchain technology. The Company's leadership team have an extensive track
record in the cryptocurrency sector and previously founded Argo Blockchain
PLC, a global crypto miner. Phoenix is headquartered in London, UK, and its
shares are listed on the Aquis Stock Exchange Growth Market under the ticker
symbol PNIX. https://www.getphoenix.co.uk (https://www.getphoenix.co.uk)
Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2024
Unaudited Audited
Six months ended 30 June Year ended 31 December
Note 2024 2023 2023
£ £ £
Revenue - - -
Profit/(loss) on disposal of digital assets and tokens 20,557,482 (25,554) (8,260)
Fair value movements (including impairment and exchange differences) in 2,134 (318,593) (2,381,246)
investments
Fair value movements in digital assets and tokens (797,649) 10,082,738 25,271,943
19,761,967 9,738,591 22,882,437
Share based payment 3 - (262,600) (153,184)
Administrative expenses (1,096,243) (805,286) (2,530,188)
Impairment of intangible asset - - (62,500)
Operating Profit 18,665,724 8,670,705 20,136,565
Finance income 16,599 - -
Profit before taxation 18,682,323 20,136,565
8,670,705
Taxation (5,219,718) - (2,570,736)
Profit after taxation and total 13,462,605 8,670,705 17,565,829
comprehensive profit for the period
Earnings per ordinary share:
Basic earnings per share 4 1.40 0.86 1.75
Diluted earnings per share 4 1.35 0.86 1.66
Consolidated Statement of Financial Position
For the six months ended 30 June 2024
Unaudited Audited
Year ended 31 December
Six months ended 30 June
Note 2024 2023 2023
£ £ £
Non-Current Assets
Intangible assets 5 29,284,717 27,786,002 43,873,668
Investments 6 1,537,074 3,372,592 1,534,940
Deferred tax asset 216,818 - -
Total non-current assets 31,038,609 31,158,594 45,408,608
Current Assets
Trade and other receivables 11,480 128,265 1,284
Cash and cash equivalents 408,963 2,782,870 695,760
Total current assets 420,443 2,911,135 697,044
Total assets 31,459,052 34,069,729 46,105,652
Shareholders' equity
Share capital 460,875 1,007,000 1,009,000
Share premium 709,875 33,359,133 18,000
Share based payments reserve 826,520 3,188,508 3,049,183
Distributable reserve 296,633 - 33,359,133
Retained earnings 21,066,549 (3,570,952) 5,381,281
Total shareholders' equity 23,360,452 33,983,689 42,816,597
Non-Current Liabilities
Deferred tax - - 2,543,536
liabilities
Total non-current liabilities - - 2,543,536
Current Liabilities
Trade and other 118,528 86,040 745,519
payables
Income tax payable 7,980,072 - -
Total current liabilities 8,098,600 86,040 745,519
Total liabilities 8,098,600 86,040 3,289,055
Total equity and liabilities 31,459,052 34,069,729 46,105,652
Company Statement of Financial Position
For the six months ended 30 June 2024
Unaudited Audited
Year ended 31 December
Six months ended 30 June
Note 2024 2023 2023
£ £ £
Non-Current Assets
Intangible assets 5 29,284,717 27,786,002 43,873,668
Investments 6 1,537,075 3,372,593 1,534,941
Deferred tax asset 216,818 - -
Total non-current assets 31,038,610 31,158,595 45,408,609
Current Assets
Trade and other receivables 51,023 1,910,337 388,356
Cash and cash equivalents 369,419 1,000,797 308,687
Total current assets 420,442 2,911,134 697,043
Total assets 31,459,052 34,069,729 46,105,652
Shareholders' equity
Share capital 460,875 1,007,000 1,009,000
Share premium 709,875 33,359,133 18,000
Share based payments reserve 826,520 3,188,508 3,049,183
Distributable reserve 296,633 - 33,359,133
Retained earnings 21,066,549 (3,570,952) 5,381,281
Total shareholders' equity 23,360,452 33,983,689 42,816,597
Non-Current Liabilities
Deferred tax - - 2,543,536
liabilities
Total non-current liabilities - - 2,543,536
Current Liabilities
Trade and other 118,528 86,040 745,519
payables
Income tax payable 7,980,072 - -
Total current liabilities 8,098,600 86,040 745,519
Total liabilities 8,098,600 86,040 3,289,055
Total equity and liabilities 31,459,052 34,069,729 46,105,652
Consolidated and Company Statement of Changes in Equity
As at 30 June 2024
Share-based payments reserve
Share capital Share Premium Retained earnings Distributable
reserve Total
£ £ £ £ £ £
Unaudited
Six months ended 30 June 2024
At 1 January 2024 1,009,000 18,000 5,381,281 3,049,183 33,359,133 42,816,597
Profit for the period and total comprehensive profit - - 13,462,605 - - 13,462,605
Shares issued during the period 76,875 691,875 - - - 768,750
Repurchase of shares(2) (625,000) - - - (33,062,500) (33,687,500)
Warrants exercised in the period - - 1,716,417 (1,716,417) - -
Lapse of warrants - - 506,246 (506,246) - -
460,875 709,875 21,066,549 826,520 296,633 23,360,452
At 30 June 2024
Unaudited
Six months ended 30 June 2023
At 1 January 2023 1,003,000 33,323,133 (12,241,657) 2,925,908 - 25,010,384
Profit for the period and total comprehensive profit - - 8,670,705 - - 8,670,705
Shares issued during the period 4,000 36,000 - - - 40,000
Share based payments - - - 262,600 - 262,000
At 30 June 2023 1,007,000 33,359,133 (3,570,952) 3,188,508 - 33,983,689
Audited
Year ended 31 December 2023
At 1 January 2023 1,003,000 33,323,133 (12,241,657) 2,925,908 - 25,010,384
Profit for the year and total comprehensive profit - - 17,565,829 - - 17,565,829
Shares issued in the year 6,000 54,000 - - - 60,000
Share based payments - - - 153,184 - 153,184
Deferred tax on share based payments - - - 27,200 - 27,200
Warrants exercised in the year - - 57,109 (57,109) - -
Cancellation of share premium - (33,359,133) - 33,359,133 -
account
At 31 December 2023 1,009,000 18,000 5,381,281 3,049,183 33,359,133 42,816,597
(1) There were no transactions in the Subsidiary and thus no impact on the
Statement of Changes in Equity
(2) During the period the Company repurchased 625,000 shares which were
subsequently cancelled
Consolidated Statement of Cash Flows
For the six months ended 30 June 2024
Audited
Unaudited
Six months ended 30 June Year ended 31 December
2024 2023 2023
£ £ £
Operating activities
Profit for the period 13,462,605 8,670,705 17,565,829
Adjustments:
(20,557,482) 25,554 8,260
(Profit)/loss on disposal of digital assets and tokens
(Profit)/loss on revaluation of digital assets and tokens 797,649 (11,235,686) (26,150,407)
Loss on valuation of investments - 2,258,239 711,109
Impairment of investments - - 1,491,767
Impairment of intangible assets - - 62,500
Amortisation of software development costs - 28,750 -
Share based payments - 262,600 153,184
Foreign exchange (2,134) (1,051,158) 1,056,834
Finance Income (16,599) - -
Income tax expense 5,219,718 - 2,570,736
Working capital adjustments:
(Increase)/decrease in trade and other receivables (10,197) (2,500) 124,481
(Decrease)/increase in trade and other payables (626,991) (16,183) 643,296
Net cash used in operating activities (1,733,431) (1,059,679) (1,762,411)
Investing activities
Purchase of digital assets and tokens (26,311,483) (3,174,552) (4,697,212)
Sale of digital assets and tokens 60,660,268 1,129,827 1,248,109
Interest received 16,599 - -
Net cash from/(used in) investing activities 34,365,384 (2,044,725) (3,449,103)
Financing activities
Share issue 768,750 40,000 60,000
Repurchase of shares (33,687,500) - -
Net cash (used in)/from financing activities (32,918,750) 40,000 60,000
Net decrease in cash and cash equivalents (286,797) (3,064,404) (5,151,514)
Cash and cash equivalents at start of year 695,760 5,847,274 5,847,274
Cash and cash equivalents at end of year 408,963 2,782,870 695,760
Company Statement of Cash Flows
For the six months ended 30 June 2024
Audited
Unaudited
Six months ended 30 June Year ended 31 December
2024 2023 2023
£ £ £
Operating activities
Profit for the period 13,462,605 8,670,705 17,565,829
Adjustments:
- 25,554 8,260
(Profit)/loss on disposal of digital assets and tokens
(Profit)/loss on revaluation of digital assets and tokens (20,557,482) (11,235,686) (26,150,407)
Loss on valuation of investments 797,649 2,258,239 711,109
Impairment of investments - - 1,491,767
Impairment of intangible assets - - 62,500
Amortisation of software development costs - 28,750 -
Share based payments - 262,600 153,184
Foreign exchange (2,134) (1,051,158) 1,056,834
Finance Income (16,599) - -
Income tax expense 5,219,718 - 2,570,736
Working capital adjustments:
(Increase)/decrease in trade and other receivables 337,332 (1,752,500) (230,519)
(Decrease)/increase in trade and other payables (626,991) (16,183) 643,296
Net cash used in operating activities (1,385,902) (2,809,679) (2,117,411)
Investing activities
Purchase of digital assets and tokens (26,311,483) (3,174,552) (4,697,212)
Sale of digital assets and tokens 60,660,268 1,129,827 1,248,109
Interest received (16,599) - -
Net cash from/(used in) investing activities 34,365,384 (2,044,725) (3,449,103)
Financing activities
Share issue 768,750 40,000 60,000
Repurchase of shares (33,687,500) - -
Net cash (used in)/from financing activities (32,918,750) 40,000 60,000
Net decrease in cash and cash equivalents 60,732 (4,814,404) (5,506,514)
Cash and cash equivalents at start of year 308,687 5,815,201 5,815,201
Cash and cash equivalents at end of year 369,419 1,000,797 308,687
Notes to the Interim Financial Statements
1. Basis of preparation
The interim results of Phoenix Digital Assets PLC are prepared in accordance
with the requirements of IAS 34 Interim Financial Reporting and are prepared
in accordance with the accounting policies set out in the last financial
statements for the year ended 31 December 2023. Phoenix Digital Assets PLC
expects to apply the same policies in its financial statements for the year
ending 31 December 2024.
The financial information for the six months ended 30 June 2024 and for the
six months ended 30 June 2023 have neither been audited nor reviewed by the
Company's auditors. The comparative financial information for the year ended
31 December 2023 has been derived from the audited financial statements for
that period.
Basis of Consolidation
Where the Company has control over an investee, it is classified as a
subsidiary. The Company controls an investee if all three of the following
elements are present: power over the investee, exposure to variable returns
from the investee, and the ability of the investor to use its power to affect
those variable returns. Control is reassessed whenever facts and circumstances
indicate that there may be a change in any of these elements of control.
The consolidated financial statements present the results of the Company and
its subsidiaries as if they formed a single entity. Intercompany transactions
and balances between group companies are therefore eliminated in full. All
subsidiaries have a reporting date of December.
The consolidated financial statements incorporate the results of business
combinations using the acquisition method. In the statement of financial
position, the acquiree's identifiable assets, liabilities and contingent
liabilities are initially recognised at their fair values at the acquisition
date. The results of acquired operations are included in the consolidated
statement of comprehensive income from the date on which control is obtained.
They are deconsolidated from the date on which control ceases.
On consolidation, the results of overseas operations are translated into
pounds sterling at rates approximating to those ruling when the transactions
took place. All assets and liabilities of overseas operations, including
goodwill arising on the acquisition of those operations, are translated at the
rate ruling at the reporting date.
Exchange differences arising on translating the opening net assets at opening
rate and the results of overseas operations at actual rate are recognised in
other comprehensive income and accumulated in the foreign exchange reserve.
Exchange differences recognised in profit or loss in Group entities' separate
financial statements on the translation of long-term monetary items forming
part of the Group's net investment in the overseas operation concerned are
reclassified to other comprehensive income and accumulated in the foreign
exchange reserve on consolidation.
On disposal of a foreign operation, the cumulative exchange differences
recognised in the foreign exchange reserve relating to that operation up to
the date of disposal are transferred to the consolidated statement of
comprehensive income as part of the profit or loss on disposal.
Profit/(loss) of Parent Company
As permitted by Section 408 of the Companies Act 2006, the statement of
comprehensive income of the Parent Company is not presented as part of these
financial statements. The Parent Company's profit for the financial period was
£13,462,605 (period ending 30 June 2023: £8,670,705 and year ended 31
December 2023: £17,565,829.
2. Critical accounting estimates and judgements
The preparation of the financial statements requires management to make
judgements, estimates and assumptions that affect the reported amounts in the
financial statements. Management continually evaluates its judgements and
estimates in relation to assets, liabilities, contingent liabilities, revenue
and expenses. Management bases its judgements, estimates and assumptions on
historical experience and on other various factors, including expectations of
future events, management believes to be reasonable under the circumstances.
The resulting accounting judgements and estimates will seldom equal the
related actual results. The judgements, estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are discussed below.
Investments
On acquisition, investments are valued at cost as this is deemed to be the
fair value. Subsequent to this, management uses valuation techniques and other
relevant information to determine the fair value of financial instruments
(where active market quotes are not available) and non-financial assets. This
involves developing estimates and assumptions consistent with how market
participants would price the instrument. Management bases its assumptions on
observable data as far as possible but this is not always available. In that
case management uses the best information available. Estimated fair values may
vary from the actual prices that would be achieved in an arm's length
transaction at the reporting date.
At each balance sheet date, a review of impairment in value is undertaken and
the Company follows the guidance of IFRS 9 to determine when a financial asset
is impaired. This determination requires significant judgement. In making this
judgement, management evaluates, among other factors, the duration and extent
to which the fair value of an investment is less than its cost, and the
financial health of, and short-term business outlook for, the investee,
including factors such as industry and sector performance, changes in
technology and operational, financing cash flow and proposed fundraising.
3. Share based payments
The Company operates a number of equity-settled, share-based compensation
plans, under which the entity receives services from employees as
consideration for equity instruments (options) of the Company. The fair value
of the employee services received in exchange for the grant of options is
recognised as an expense. The total amount to be expensed is determined by
reference to the fair value of the options granted:
• including any market performance
conditions;
• excluding the impact of any service and
non-market performance vesting conditions (for example, profitability, sales
growth targets and remaining an employee of the entity over a specified time
period); and
• excluding the impact of any non-vesting
conditions (for example, the requirement of employees to save).
Assumptions about the number of options that are expected to vest include
consideration of non-market vesting conditions. The total expense is
recognised over the vesting period, which is the period over which all of the
specified vesting conditions are to be satisfied. At the end of each reporting
period, the entity revises its estimates of the number of options that are
expected to vest based on the non-market vesting conditions. It recognises the
impact of the revision to original estimates, if any, in the Statement of
Comprehensive Income, with a corresponding adjustment to equity.
When the options are exercised, the Company issues new shares. The proceeds
received net of any directly attributable transaction costs are credited to
share capital (nominal value) and share premium when the options are
exercised.
4. Profit per ordinary share
The calculation of a basic profit per share is based on the profit for the
period attributable to equity holders of the Company and on the weighted
average number of shares in issue during the period.
Diluted profit per share is calculated adjusting the weighted average number
of ordinary shares outstanding to assume conversion of all dilutive potential
ordinary shares.
For the six months ended 30 June 2024, there were 42,125,000 share warrants in
issue which had a dilutive effect on the weighted average number of shares.
For the six months ended 30 June 2024, there was no difference between the
basic earnings per share and the diluted earnings per share.
For the year-ended 31 December 2023, there were 136,250,000 share warrants in
issue which had a dilutive effect on the weighted average number of shares
5. Intangible Assets
Group and Company
Digital assets and tokens Software development costs Total
£ £ £
Cost
Balance at 1 January 2024 43,873,668 - 43,873,668
Additions 26,311,483 - 26,311,483
Disposals (60,660,268) - (60,660,268)
Net gain for the period 19,759,834 - 19,759,834
As at 30 June 2024 29,284,717 - 29,284,717
Net book value as at 30 June 2024 29,284,717 - 29,284,717
Digital assets and tokens External software development costs Total
£ £ £
Cost
Balance at 1 January 2023 15,160,882 287,500 15 448 382
Additions 3,174 ,552 - 3,174 ,552
Disposals (1,129,827) - (1,129,827)
Accumulated amortisation - (28,750) (28,750)
Net gain for the period 10,321,645 10,321,645
As at 30 June 2023 27,527,252 258,750 27,786,002
Net book value as at 30 June 2023 27,527,252 258,750 27 786 002
Cost
Balance at 1 January 2023 15,160,882 287,500 15 448 382
Additions 4,697,212 - 4,697,212
Disposals (1,248,109) - (1,248,109)
Impairment - (62,500) (62,500)
Transfer to investments - (225,000) (225,000)
Net gain for the year 25,263,683 - 25,263,683
As at 31 December 2023 43,873,668 - 43,873,668
Net book value as at 31 December 2023 43,873,668 - 43,873,668
The breakdown for all digital assets and tokens held at 30 June 2024 are
listed below:
Token name
Number of tokens £
Bitcoin BTC 250 12,023,692
DigitalBits XDB 751,600 -
Ethereum ETH 2,546 6,546,530
Solana SOL 96,530 10,681,827
IRON 60,938 32,668
29,284,717
6. Investments
Group
Six months ended 30 June Year ended 31 December
2024 2023 2023
£ £ £
At start of the period 1,534,940 3,691,186 3,691,186
Additions - -
Transfer from intangible assets - - 225.000
Impairments - - (1,491,767)
Revaluations - (148,593) (711,109)
Exchange difference 2,134 (170,001) (178,370)
At end of the period 1,537,074 3,372,592 1,534,940
Company
Six months ended 30 June Year ended 31 December
2024 2023 2023
£ £ £
At start of the period 1 534 941 3,691,187 3,691,187
Additions - -
Transfer from intangible assets 225.000
Impairments - - (1,491,767)
Revaluations - (148,593) (711,109)
Exchange difference 2,134 (170,001) (178,370)
At end of the period 1,537,075 3,372,593 1,534,941
The country of incorporation and investment class for investments held by the
Group at 30 June 2024 are listed below:
Country of Incorporation Investment class
£
Pioneer Media Holdings Inc 69,261 Canada Listed
Ordre Group International Limited 254,973 Hong Kong Unlisted
(formerly Aeon International Limited)
(formerly Aeon International Limited)
IO+ Pte Ltd 225,000 Singapore Unlisted
Afterparty Inc 53,189 USA Safe note
Big Whale Labs Inc 144,294 Canada Safe note
Oliver Labs Inc 790,357 USA Safe note
1,537,074
The Company has the following investment directly in subsidiaries at 30 June
2024:
Name and registered address of company Share- Value of share-holding Country of incorporation Nature of business
holding £
1319644 B.C. Ltd 100% 1 Canada Company has not traded during the period
700-401 West Georgia Street, Vancouver BC
V6B 5A1
Canada
7. Events after the reporting period
At the Annual General Meeting, held on 25 July 2024, the Company was granted
authority to purchase its own shares up to a total consideration of
£7,500,000.
As at 26 September 2024, the company has purchased 8,196,172 shares for a
total consideration of £350,094.
These shares are held in Treasury and thus the Company's issued share capital
net of treasury shares is 452,678,808.
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