REG - RA Intnl Group PLC - Interim Results
30/09/2022 07:01
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RNS Number : 2488B RA International Group PLC 30 September 2022
This announcement contains inside information
RA INTERNATIONAL GROUP PLC
("RA International" or the "Company")
Interim Results for the six months to 30 June 2022
RA International Group plc (AIM: RAI), a specialist provider of complex and
integrated remote site services to organisations globally, is pleased to
announce its interim results for the six months ended 30 June 2022.
HIGHLIGHTS
· Revenue of USD 29.2m (H2 21: USD 28.4m, H1 21: USD 26.2m) and
underlying EBITDA of USD nil (H2 21: USD 1.6m, H1 21: USD 5.0m), in line with
external expectations for the period ended 30 June 2022
· Positive run rate of new contract wins for the year to date with USD
35m awarded in the year to August 2022 compared with USD 40m for the full 12
months of 2021
· Order book of USD 95m as at 31 August 2022 (H2 21: USD 100m, H1 21:
USD 129m) provides good forward visibility despite the continued low level of
tendering of larger, long-term contracts in the humanitarian sector
· The new contract award with the UK Ministry of Defence, announced
separately today, demonstrates good progress in deepening our relationships
with western governments. This is a global framework agreement, with a base
term of 5 years and a contract value of up to GBP 35m (not included in current
order book)
· USD 12.0m debt financing completed in May 2022 supports our
liquidity position to fund existing and visible project activity
6 months 6 months 6 months
ended ended ended
30 June 31 December 30 June
2022 2021 2021
USD'm USD'm USD'm
Revenue 29.2 28.4 26.2
Gross profit 3.0 4.4 7.7
Gross profit margin 10.3% 15.4% 29.2%
Underlying EBITDA(1) - 1.6 5.0
Underlying EBITDA margin (0.2%) 5.7% 19.2%
(Loss)/Profit before tax (3.4) (33.0) 0.8
(Loss)/Profit before tax margin (11.7%) (116.7%) 3.8%
Basic EPS (cents) (2.0) (19.3) 0.6
Net (debt)/cash (end of period) (2) (4.3) (1.5) 3.6
Soraya Narfeldt, CEO of RA International, commented:
"We are making good progress in securing high quality overseas work with the
relevant departments of the UK and US Governments, in line with our refreshed
strategy. We see this as a significant opportunity given the scale of these
addressable markets and believe, over time, RA International will be
increasingly well positioned as a differentiated provider of specialist
services to government clients, complementing our work with humanitarian
organisations and the international development community. Our pipeline
activity is healthy and growing within the areas we are targeting, however the
timing of contract awards and project starts remains uncertain. We are not
immune to the macro and general inflationary environment and this informs our
cautious view on our nearer-term financial performance, particularly on
margin. We are mitigating these pressures where we can through commercial
arrangements and other supply chain initiatives and remain focused on
converting our robust pipeline to support the attractive growth opportunity we
have ahead."
Notes to summary table of financial results:
(1) Underlying EBITDA is calculated by adding depreciation, non-underlying
items, and share based payment expense to operating profit.
(2)Net debt/cash represents cash less overdraft balances, term loans and notes
outstanding.
Enquiries:
RA International Group PLC Via Bamburgh Capital
Soraya Narfeldt, Chief Executive Officer
Lars Narfeldt, Chief Operating Officer
Andrew Bolter, Chief Financial Officer
Canaccord Genuity Limited (Nominated Adviser and Broker) +44 (0) 207 523 8000
Bobbie Hilliam
Bamburgh Capital Limited (Financial PR & Investor Relations) +44 (0)131 376 0901
Murdo Montgomery investors@raints.com (mailto:investors@raints.com)
Background to the Company
RA International is a leading provider of services to remote locations. The
Company offers its services through three channels: construction, integrated
facilities management and supply chain, and services two main client groups:
humanitarian and development agencies and western government organisations
focusing on overseas projects. It has a strong customer base, largely
comprising UN agencies, UK and US Government departments and global
corporations.
The Company provides comprehensive, flexible, mission critical support to its
clients enabling them to focus on the delivery of their respective businesses
and services. Focusing on integrity and values alongside making on-going
investment in its people, locations and operations has over time created a
reliable and trusted brand within its sector.
CHIEF EXECUTIVE'S REVIEW
We are making good progress in executing on our priorities
As we outlined to investors in our last results statement in late May 2022, we
have a significant opportunity to grow by deepening and strengthening our
relationships with the relevant departments of the US and UK Governments. We
are doing this from a position of some strength with an established platform
as a trusted partner which has seen government sector revenues grow from 6% of
our revenue in 2014 to 47% by 2021. We are strengthening our market position
as a differentiated and specialist remote site service provider to these
clients by aligning our resources more clearly with our business development
activities in this sector and through building our track record in delivering
projects as a prime contractor. This complements our long-term relationships
with humanitarian agencies, and we are excited about the opportunity we have
to scale the Company significantly through our differentiated and integrated
offering supporting clients across these sectors. We also believe the
fragmented market environment plays to our strengths: where international
companies' use of local companies leads to project inefficiencies; where our
track record and past performance is second to none; and where our
one-supplier model gives us a clear cost advantage.
We are pleased with the progress we have made in the period in scaling our
relationships with relevant UK and US Government departments. Through RA
Federal Services, LLC ("RA Federal") our US subsidiary, we now have the US
credentials to deliver full scale capability to the relevant US Federal
Government budget holders as a prime contractor. RA Federal is now operational
and is delivering contracts on behalf of the US Government as a prime
contractor. We will continue to invest in our US capability to spearhead
further growth in this significant market.
On the UK side, we have today announced the award of a contract to provide
operational support capability to the UK Ministry of Defence as lead
contractor. This is a significant award for RA International and will lead to
the Company working closely with British military operational headquarters,
the Permanent Joint Headquarters (PJHQ), for the next five years, with an
option to extend for a further two years. The win is testament to our
capability to deliver operational support to the British military across the
world; providing our expertise in project management, engineering, supply
chain management, logistics and project delivery to support military planning,
operations and training. The contract is structured as a global framework
agreement, with a contract ceiling of GBP 35 million which will be drawn down
as tasks are issued. The contract start date is effective from 1 December 2022
and we will be increasing the size of our UK operations to help facilitate and
oversee the delivery of this contract.
In previous updates we have highlighted the opportunity we have to develop
valuable partnerships and how this continues to be central to our business
development activities. We remain active in delivering projects for a number
of large US defence contractors and are in active discussions with other
companies which could provide significant global opportunities. At the right
time, we also see the opportunity for organic growth to be accelerated by
bolt-on M&A further strengthening our position in underserved markets.
Our financial performance is in-line with external expectations and reflects
the prevailing environment
As we look to grow in-line with our strategy, we are also focusing on the
near-term performance and overall stability of the business. The financial
performance we are reporting for the first half is in-line with external
expectations. It does also highlight how the operating environment and
inflation are putting pressure on gross margin across our Integrated
Facilities Management ("IFM") and Construction sectors, as outlined in
Andrew's Financial Review.
We have taken steps to strengthen our liquidity position, with our loan note
programme refinanced out to late 2024, and are confident we have the financial
capacity to bid for and mobilise multiple large projects simultaneously. In
addition, we are recovering value on the Mozambique related assets we impaired
in FY21 and these results highlight the low level of capex which is required
when we are not constructing camp facilities where ownership will be retained
by the Group.
Our order book of USD 95m as at 31 August 2022 provides good forward
visibility
We were awarded new contracts, uplifts, and extensions to existing contracts
of USD 35m in the first eight months of 2022.
Contract order book:
USD'm
Opening order book as at 1 January 2022 100
New contracts, uplifts and extensions 35
Contracted revenue delivered (40)
────────
Closing order book as at 31 August 2022 95
════════
We have maintained the order book at or around USD 100m at a time when the
level of market activity has been subdued. The nature of project tendering in
the humanitarian sector is a good example of this. We conservatively estimate
there are at least USD 50m of contracts which under normal conditions would be
awarded in the next three months, and which we would expect to have a
reasonable chance of winning. This said, under current conditions, the
timeline of award is very uncertain with the default position remaining
contract extensions rather than new awards. If we look back to our contract
awards in a pre-Covid environment, in 2019, we announced three humanitarian
contracts with a combined value of USD 28m. These are the types of new
contracts which have not been awarded over the last two and a half years,
constraining our order book momentum. In this context, we see the higher
run-rate of contract wins of USD 35m in the year to August 2022 compared with
the USD 40m for the full 12 months of 2021 as encouraging.
IFM projects represent 53% of order book, with construction 42% and supply
chain 5%. New contract activity has been weighted to construction projects
with many expected to be the first phase of much larger contracts.
Overall, we are committed to building a high-quality and de-risked pipeline
through developing our relationships with western government and humanitarian
clients, either as prime contractor or through a partnership approach where it
makes more commercial sense. Going forward, we see scope for accelerated
contract awards through our targeted business development and as and when the
humanitarian sector returns to more normal tendering patterns.
Summary and outlook
We are making good progress in securing high quality overseas work with the
relevant departments of the UK and US Governments, in line with our refreshed
strategy. We see this as a significant opportunity given the scale of these
addressable markets and believe, over time, RA International will be
increasingly well positioned as a differentiated provider of specialist
services to government clients, complementing our work with humanitarian
organisations and the international development community. Our pipeline
activity is healthy and growing within the areas we are targeting, however the
timing of contract awards and project starts remains uncertain. We are not
immune to the macro and general inflationary environment and this informs our
cautious view on our nearer-term financial performance, particularly on
margin. We are mitigating these pressures where we can through commercial
arrangements and other supply chain initiatives and remain focused on
converting our robust pipeline to support the attractive growth opportunity we
have ahead.
Soraya Narfeldt
Chief Executive Officer
30 September 2022
FINANCIAL REVIEW
Overview
Revenue of USD 29.2m and underlying EBITDA of USD nil are in line with
external expectations and reflect the prevailing market environment where the
level and nature of project activity has not yet returned to pre-Covid norms.
The impact of this disruption, inflationary pressure and related issues such
as material shortages are clearly impacting gross margin rather than revenue,
which has been fairly consistent with comparative periods. Administrative
expenses have reduced by USD 0.2m since H2 21, reflecting our efforts to
streamline the cost base of the business as we reallocate resources to, and
invest in, our growth priorities.
We completed a USD 12.0m debt financing in the first half of the year, with
the maturity of existing notes being extended to the fourth quarter of 2024
and additional liquidity raised of USD 3.6m. We are also making progress in
recovering value for our assets which were fully impaired and relate to the
Palma, Mozambique operations. In H1 22, USD 1.2m of impairment was reversed
resulting from the sale of Palma Project assets. Besides generating a profit
and an impairment recovery this transaction will significantly reduce future
storage costs. Overall, the Company remains in a strong position to bid for
and execute large projects and significant opportunities remain to increase
liquidity through further asset sales.
Cash outflows from operations decreased from prior periods to USD 1.2m in H1
22 (H2 21: USD 1.4m, H1 21: USD 3.4m). Excluding the USD 1.6m in cash outflows
relating to the storage of Palma related assets and the prefabricated camp
facility, operating cashflows were positive. We continue to actively pursue
opportunities to enhance our liquidity position through disposing of these
assets and, in turn, reducing the ongoing holding costs to the business.
6 months 6 months 6 months
ended ended ended
30 June 31 December 30 June
2022 2021 2021
USD'm USD'm USD'm
Revenue 29.2 28.4 26.2
Gross profit 3.0 4.4 7.7
Gross profit margin 10.3% 15.4% 29.2%
Underlying EBITDA - 1.6 5.0
Underlying EBITDA margin (0.2%) 5.7% 19.2%
(Loss)/Profit before tax (3.4) (33.0) 0.8
(Loss)/Profit before tax margin (11.7%) (116.7%) 3.8%
Basic EPS (cents) (2.0) (19.3) 0.6
Net (debt)/cash (end of period) (4.3) (1.5) 3.6
Revenue
Reported revenue for H1 22 of USD 29.2m (H2 21: USD 28.4m, H1 21: USD 26.2m)
is relatively consistent with the comparative periods, as increased Supply
Chain revenue more than offset lower Construction and IFM contributions.
The majority of our Supply Chain revenue is typically earned from long-term
contracts, often three to five years in length, although revenue for this
period was bolstered by a USD 2.3m sale of Palma Project assets, as well as
USD 2.2m in sales relating to parcels of the prefabricated camp facility held
in Turkey. Excluding these asset sales, Supply Chain revenue grew 11.2% period
on period, with IAP expanding our mandate to include a third country, which is
encouraging and indicative of how the relationship is growing.
Construction revenue of USD 6.4m represents a decrease of USD 1.6m from prior
period (H2 21: USD 8.0m, H1 21: USD 6.2m). The decrease from H2 21 is
reflective of significant disruption caused to some projects by material
shortages and the successful conclusion of a large contract with Cherokee
Nation which strengthened H2 21 revenue and profitability. Overall,
Construction revenue for the period was in-line with H1 21. We expect
Construction revenue to be significantly higher in the second half of the year
as we commence new, recently awarded projects.
IFM revenue of USD 13.3m represents a decrease of USD 2.4m from prior period
(H2 21: USD 15.7m, H1 21: USD 15.4m) and resulted from lower income from our
hotel facility in Somalia. From November 2022, we expect occupancy to
meaningfully improve month on month unless significant travel restrictions are
reintroduced. Overall, IFM revenue continues to be resilient and long-term
in nature.
Government revenue continues to increase as a percentage of total revenue, and
we expect the majority of revenue in FY22 to come from government clients.
Revenue by service channel:
6 months 6 months 6 months
ended ended Ended
30 June 31 December 30 June
2022 2021 2021
USD'm USD'm USD'm
Integrated facilities management 13.3 15.7 15.4
Construction 6.4 8.0 6.2
Supply chain 9.5 4.6 4.6
──────── ──────── ────────
29.2 28.4 26.2
════════ ════════ ════════
Profit Margin
Gross margin in H1 22 was 10.3% (H2 21: 15.4%, H1 21: 29.2%) reflecting weaker
profit margins across all service channels and a far higher percentage of
total revenue being generated from Supply Chain and Construction activities
than in prior periods (H1 22: 55%, H2 21: 44%, H1 21: 41%).
Challenges highlighted within the 2021 full year results continued in the
current period, specifically the fitful nature of construction project
execution. While material shortages and inflationary pressure continued to
depress margins on legacy construction projects, margin improvements are
anticipated in the second half of the year as a number of large contracts are
completed and new projects, which were recently priced and awarded,
commence.
As with revenue, low hotel occupancy rates in Somalia negatively impacted IFM
margins in H1 22. Some improvement is anticipated in H2 22 as more
international organisations expand their presence in the country following the
completion of elections earlier this year. Excluding the sale of Palma Project
assets at a low margin (after taking into account the recovery of impairment),
gross margin generated from Supply Chain activities was relatively resilient
during the period.
Reconciliation of (loss)/profit to Underlying EBITDA:
6 months 6 months 6 months
ended ended ended
30 June 31 December 30 June
2022 2021 2021
USD'm USD'm USD'm
(Loss)/Profit (3.4) (33.1) 1.0
Tax expense - 0.1 (0.2)
──────── ──────── ────────
(Loss)/Profit before tax (3.4) (33.0) 0.8
Finance costs 1.4 0.8 0.6
Investment income (0.1) - -
──────── ──────── ────────
Operating (loss)/profit (2.1) (32.3) 1.4
Non-underlying items (0.4) 31.0 1.2
──────── ──────── ────────
Underlying operating (loss)/profit (2.5) (1.3) 2.6
Share based payments 0.2 0.2 0.3
Depreciation 2.3 2.7 2.1
──────── ──────── ────────
Underlying EBITDA - 1.6 5.0
════════ ════════ ════════
Underlying EBITDA margin in H1 22 was negative 0.2% (H2 21: 5.7%, H1 21:
19.2%), with the negative variance from prior periods reflecting the weakening
in project margins. Administrative expenses decreased by USD 0.2m from H2
21, reflecting efforts made to streamline the support functions of the Group,
ensuring resources are aligned more fully with the Company's focus on
government and humanitarian work.
Non-underlying items
6 months 6 months 6 months
ended ended ended
30 June 31 December 30 June
2022 2021 2021
USD'm USD'm USD'm
COVID-19 costs - 0.3 0.4
Restructuring costs 0.8 - -
Asset impairment (1.2) 30.6 0.8
──────── ──────── ────────
(0.4) 31.0 1.2
════════ ════════ ════════
Restructuring costs result from the strategic decision to redirect resources
and investment towards growing our government and humanitarian client bases,
and away from actively selling to commercial customers. The specific costs
associated with the restructuring exercise can be broadly classified as
relating to staff redundancies and the write-off of past investments which
were to be recovered through contracts with commercial customers.
As indicated previously, USD 1.2m of impairment was reversed in H1 22
resulting from the sale of Palma Project assets. In addition to this recovery
of value, we have also significantly reduced the total storage costs moving
forward. We are in discussions with parties interested in acquiring further
parcels of assets which may lead to a further recovery of value and eliminate
asset storage costs other than those being paid to safeguard machinery and
heavy equipment in Northern Mozambique.
Earnings Per Share
Basic earnings per share was negative 2.0 cents in the current period (H2 21:
negative 19.3 cents, H1 21: 0.6 cents) and is equal to diluted earnings per
share for the current period.
Cashflow
Cash of USD 9.2m at 30 June 2022 reflects a modest increase of USD 0.7m from
2021 year end and results from an increase in loan notes issued, offset by
finance cost and storage expenses incurred and paid during H1 22.
Cash outflows from operations decreased from prior periods to USD 1.2m in H1
22 (H2 21: USD 1.4, H1 21: USD 3.4m). Excluding the USD 1.6m in cash
outflows relating to the storage of Palma related assets and the prefabricated
camp facility, operating cashflows were positive. We have been successful in
selling goods which were incurring significant storage costs and we are
actively pursuing opportunities to minimize the remaining ongoing charges as
well as recover value from the underlying assets.
When we released our full year FY21 results we anticipated FY22 capital
expenditure (capex) to be between USD 1.0m and USD 2.0m. During the Period we
incurred capex of USD 0.3m (H2 21: USD 0.2m, H1 21: USD 3.3m); considering
projects commencing in the second half of the year, we now anticipate full
year expenditure to be towards the lower end of this range.
Balance Sheet and Liquidity
Net assets at 30 June 2022 were USD 34.1m (H2 21: USD 37.3m, H1 21: USD
70.2m), decreasing from 2021 year end in line with the net loss generated in
the Period.
Breakup of net assets:
As at As at As at
30 June 31 December 30 June
2022 2021 2021
USD'm USD'm USD'm
Cash and cash equivalents 9.2 8.5 10.1
Loan notes (13.5) (10.0) (6.5)
──────── ──────── ────────
Net (debt)/cash (4.3) (1.5) 3.6
Net working capital 16.3 14.7 18.8
Non-current assets 28.7 30.9 54.5
Tangible owned assets 23.8 25.5 48.6
Right-to-use assets 4.9 5.4 5.8
Goodwill - - 0.1
Lease liabilities and end of service benefit (6.5) (6.8) (6.8)
──────── ──────── ────────
Net assets 34.1 37.3 70.2
════════ ════════ ════════
Given the events taking place last year in Palma, Mozambique and the effect on
the Company's balance sheet, a focus point for 2022 was improving the
Company's liquidity profile. In H1 22 we made significant progress through
completing a refinancing and fundraising exercise to synchronise and extend
the maturity of the loan notes issued under the Medium-Term Note ("MTN")
programme. The USD 12.0m of loan notes issued mature in November 2024 and we
have commenced the repayment of the USD 1.5m of loan notes maturing in H2 22.
Largely a result of this fundraising exercise, the Company's current ratio
increased to 2.9 at 30 June 2022 from 1.6 as at 31 December 2021.
In addition to the MTN programme, during the Period we established a GBP 10m
long-term debt facility and in July 2022 we agreed a USD 3.5m working capital
facility with one of our primary banks. While we have adequate cash to fund
current and planned operations, we felt it diligent to establish additional
available sources of capital as we enter the next growth phase of the
business.
In addition to fundraising activities we made further progress reducing the
level of inventory. This will remain a focus point during this year. At the
end of June 2022 inventory had decreased to USD 8.6m (H2 21: USD 9.4m, H1 21:
USD 13.3m).
Trade and other receivables increased to USD 17.3m at the end of the current
period (H2 21: USD 16.5m, H1 21: USD 14.2m). The USD 0.8m variance was due to
a USD 2.9m receivable balance relating to the Palma Project and prefabricated
camp asset sales as well as the Company continuing to experience a slow
collection cycle with humanitarian customers.
Dividend
The Company has typically not paid a dividend with respect to the first half
interim results and no dividend has been declared for the first half of 2022.
The Board did not recommend the payment of a final dividend for FY21 in line
with its cautious approach to the prevailing environment. The Board's
intention is to reinstate the dividend as soon as is practical.
Shares in Issue and Treasury Shares
In the First Half, 324,462 ordinary shares were transferred out of treasury in settlement of certain employee share options. As at 30 June 2022, the total number of ordinary shares in issue and admitted to trading on AIM was 173,575,741, comprising 1,459,435 ordinary shares held in treasury and 172,116,306 ordinary shares with voting rights.
In July 2022, the remaining 1,459,435 of ordinary shares held in treasury were issued. As a result, ordinary shares with voting rights in issue total 173,575,741.
Andrew Bolter
Chief Financial Officer
30 September 2022
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2022
6 months 6 months 6 months
ended ended ended
30 June 31 December 30 June
2022 2021 2021
Notes USD'000 USD'000 USD'000
Revenue 29,188 28,355 26,240
Direct costs (26,176) (23,470) (18,580)
Credit provision - (505) -
──────── ──────── ────────
Gross profit 3,012 4,380 7,660
Administrative expenses (5,514) (5,677) (5,042)
──────── ──────── ────────
Underlying operating (loss)/profit (2,502) (1,297) 2,618
Non-underlying items 4 444 (30,979) (1,243)
──────── ──────── ────────
Operating (loss)/profit (2,058) (32,276) 1,375
Investment revenue 56 33 22
Finance costs (1,419) (754) (560)
──────── ──────── ────────
(Loss)/Profit before tax (3,421) (32,997) 837
Tax expense - (84) 164
──────── ──────── ────────
(Loss)/Profit and total comprehensive income for the period (3,421) (33,081) 1,001
════════ ════════ ════════
Basic earnings per share (cents) 5 (2.0) (19.3) 0.6
Diluted earnings per share (cents) 5 (2.0) (19.1) 0.6
CONDESED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2022
As at As at As at
30 June 31 December 30 June
2022 2021 2021
Notes USD'000 USD'000 USD'000
Assets
Non-current assets
Property, plant, and equipment 23,803 25,512 48,555
Right-of-use assets 4,904 5,374 5,810
Goodwill - - 138
──────── ──────── ────────
28,707 30,886 54,503
──────── ──────── ────────
Current assets
Inventories 8,638 9,397 13,267
Trade and other receivables 17,298 16,522 14,201
Cash and cash equivalents 9,174 8,532 10,102
──────── ──────── ────────
35,110 34,451 37,570
──────── ──────── ────────
Total assets 63,817 65,337 92,073
════════ ════════ ════════
Equity and liabilities
Equity
Share capital 24,300 24,300 24,300
Share premium 18,254 18,254 18,254
Merger reserve (17,803) (17,803) (17,803)
Treasury shares (981) (1,199) (1,257)
Share based payment reserve 448 534 383
Retained earnings 9,896 13,223 46,304
──────── ──────── ────────
Total equity 34,114 37,309 70,181
──────── ──────── ────────
Non-current liabilities
Loan notes 12,000 - 6,471
Lease liabilities 4,825 5,206 5,698
Employees' end of service benefits 817 731 562
──────── ──────── ────────
17,642 5,937 12,731
──────── ──────── ────────
Current liabilities
Loan notes 1,502 10,000 -
Lease liabilities 896 834 502
Trade and other payables 8,931 9,835 8,659
Provisions 732 1,422 -
──────── ──────── ────────
12,061 22,091 9,161
──────── ──────── ────────
Total liabilities 29,703 28,028 21,892
──────── ──────── ────────
Total equity and liabilities 63,817 65,337 92,073
════════ ════════ ════════
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2022
Share Based
Share Share Merger Treasury Payment Retained
Capital Premium Reserve Shares Reserve Earnings Total
Notes USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000
As at 1 January 2021 24,300 18,254 (17,803) (1,363) 177 48,509 72,074
Total comprehensive income for the period - - - - - 1,001 1,001
Share based payments - - - - 288 - 288
Dividends declared and authorised 6 - - - - - (3,206) (3,206)
Issuance of treasury shares - - - 106 (82) - 24
──────── ──────── ──────── ──────── ──────── ──────── ────────
As at 30 June 2021 24,300 18,254 (17,803) (1,257) 383 46,304 70,181
Total comprehensive income for the period - - - - - (33,081) (33,081)
Share based payments - - - - 199 - 199
Issuance of treasury shares - - - 58 (48) - 10
──────── ──────── ──────── ──────── ──────── ──────── ────────
As at 31 December 2021 24,300 18,254 (17,803) (1,199) 534 13,223 37,309
Total comprehensive income for the period - - - - - (3,421) (3,421)
Share based payments - - - - 185 - 185
Lapsed share options - - - - (94) 94 -
Issuance of treasury shares - - - 218 (177) - 41
──────── ──────── ──────── ──────── ──────── ──────── ────────
As at 30 June 2022 24,300 18,254 (17,803) (981) 448 9,896 34,114
════════ ════════ ════════ ════════ ════════ ════════ ════════
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 June 2022
6 months 6 months 6 months
ended ended ended
30 June 31 December 30 June
2022 2021 2021
Notes USD'000 USD'000 USD'000
Operating activities
Operating (loss)/profit (2,058) (32,276) 1,375
Adjustments for non-cash and other items:
Depreciation on property, plant, and equipment 2,271 2,728 2,127
(Profit)/loss on disposal of property, plant, and equipment (20) (67) 51
Unrealised differences on translation of foreign balances (57) 118 15
Provision for employees' end of service benefits 257 225 208
Share based payments 185 199 288
Non-underlying items 4 627 27,218 817
──────── ──────── ────────
1,205 (1,855) 4,881
Working capital adjustments:
Inventories 487 (428) (4,643)
Accounts receivable, deposits, and other receivables (1,139) (2,363) (1,921)
Accounts payable and accruals (1,814) 3,244 (1,731)
──────── ──────── ────────
Cash flows used in operations (1,261) (1,402) (3,414)
Tax paid - (4) (16)
Employees' end of service benefits paid (142) (56) (163)
──────── ──────── ────────
Net cash flows used in operating activities (1,403) (1,462) (3,593)
──────── ──────── ────────
Investing activities
Investment revenue received 56 33 22
Purchase of property, plant, and equipment (250) (191) (3,287)
Proceeds from disposal of property, plant, and equipment 187 788 35
──────── ──────── ────────
Net cash flows (used in)/from investing activities (7) 630 (3,230)
──────── ──────── ────────
Financing activities
Proceeds from borrowings 3,502 3,529 387
Payment of lease liabilities (319) (199) (543)
Finance costs paid (1,229) (754) (560)
Dividends paid 6 - (3,206) -
Proceeds from share options exercised 41 10 24
──────── ──────── ────────
Net cash flows from/(used in) financing activities 1,995 (620) (692)
──────── ──────── ────────
Net increase/(decrease) in cash and cash equivalents 585 (1,452) (7,515)
Cash and cash equivalents as at start of the period 8,532 10,102 17,632
Effect of foreign exchange on cash and cash equivalents 57 (118) (15)
──────── ──────── ────────
Cash and cash equivalents as at end of the period 9,174 8,532 10,102
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANICAL STATEMENTS
For the six months ended 30 June 2022
1 CORPORATE INFORMATION
The principal activity of RA International Group plc ("RAI" or the "Company")
and its subsidiaries (together the "Group") is providing services in demanding
and remote areas. These services include construction, integrated facilities
management, and supply chain services. RAI was incorporated on 13 March 2018
as a public company in England and Wales under registration number 11252957.
The address of its registered office is One Fleet Place, London, EC4M 7WS.
2 BASIS OF PREPARATION
The financial information set out in these condensed consolidated interim
financial statements does not constitute the Group's statutory accounts within
the meaning of section 434 of the Companies Act 2006.
The unaudited condensed consolidated interim financial statements for the six
months ended 30 June 2022 have been prepared in accordance with IAS 34,
'Interim Financial Reporting'. They do not include all the information
required for full annual financial statements and should be read in
conjunction with the consolidated financial statements of RAI for the year
ended 31 December 2021. The unaudited financial information has been prepared
using the same accounting policies and methods of computation as the Annual
Report for the year ended 31 December 2021. The same accounting policies and
methods of computation will be used to prepare the Annual Report for the year
ending 31 December 2022. The financial statements of the Group are prepared in
accordance with IFRS.
3 SEGMENT INFORMATION
For management purposes, the Group is organised into one segment based on its
products and services, which is the provision of services in demanding and
remote areas. Accordingly, the Group only has one reportable segment. The
Group's Chief Operating Decision Maker ("CODM") monitors the operating results
of the business as a single unit for the purpose of making decisions about
resource allocation and assessing performance. The CODM is considered to be
the Board of Directors.
Operating segments
Revenue, operating results, assets and liabilities presented in the financial
statements relate to the provision of services in demanding and remote areas.
Revenue by service channel:
6 months 6 months 6 months
ended ended ended
30 June 31 December 30 June
2022 2021 2021
USD'000 USD'000 USD'000
Integrated facilities management 13,257 15,747 15,415
Construction 6,415 8,034 6,187
Supply chain 9,516 4,574 4,638
──────── ──────── ────────
29,188 28,355 26,240
════════ ════════ ════════
Revenue by recognition timing:
6 months 6 months 6 months
ended ended ended
30 June 31 December 30 June
2022 2021 2021
USD'000 USD'000 USD'000
Revenue recognised over time 18,919 22,002 19,318
Revenue recognised at a point in time 10,269 6,353 6,922
──────── ──────── ────────
29,188 28,355 26,240
════════ ════════ ════════
Geographic segment
The Group primarily operates in Africa and the CODM considers Africa and Other
to be the only geographic segments of the Group. The below geography split is
based on the location of project implementation.
Revenue by geographic area of project implementation:
6 months 6 months 6 months
ended ended ended
30 June 31 December 30 June
2022 2021 2021
USD'000 USD'000 USD'000
Africa 27,879 26,930 25,427
Other 1,309 1,425 813
──────── ──────── ────────
29,188 28,355 26,240
════════ ════════ ════════
Non-current assets by geographic area:
As at As at As at
30 June 31 December 30 June
2022 2021 2021
USD'000 USD'000 USD'000
Africa 26,489 28,448 51,249
Other 2,218 2,438 3,254
──────── ──────── ────────
28,707 30,886 54,503
════════ ════════ ════════
Revenue split by customer:
6 months 6 months 6 months
ended ended ended
30 June 31 December 30 June
2022 2021 2021
% % %
Customer A 20 22 29
Customer F 12 11 12
Customer E 11 11 18
Customer I 10 - -
Customer B 9 10 1
Customer D 8 10 10
Customer H 8 8 -
Other 22 28 30
──────── ──────── ────────
100 100 100
════════ ════════ ════════
4 NON-UNDERLYING ITEMS
6 months 6 months 6 months
ended ended ended
30 June 31 December 30 June
2022 2021 2021
USD'000 USD'000 USD'000
COVID-19 costs - 339 426
Restructuring costs 760 - -
Palma Project, Mozambique (1,204) 30,640 817
──────── ──────── ────────
(444) 30,979 1,243
════════ ════════ ════════
Restructuring costs
These expenses result from the strategic decision to redirect resources and
investment towards growing our government and humanitarian business as is
described in our 2021 annual results.
Palma Project, Mozambique
In H1 22, the Group sold fixed assets and inventory which had previously been
fully impaired. As a result, a USD 1,204,000 reversal of impairment has been
recorded in the period.
5 EARNINGS PER SHARE
The Group presents basic earnings per share ("EPS") data for its ordinary
shares. Basic EPS is calculated by dividing the profit attributable to
ordinary shareholders of the Group by the weighted average number of ordinary
shares outstanding during the period. Diluted earnings per share is calculated
by dividing the profit attributable to ordinary shareholders of the Group by
the weighted average number of ordinary shares outstanding during the period
plus the weighted average number of ordinary shares that would be issued on
conversion of all the dilutive potential ordinary shares into ordinary shares.
6 months 6 months 6 months
ended ended ended
30 June 31 December 30 June
2022 2021 2021
(Loss)/Profit for the period (USD'000) (3,421) (33,081) 1,001
Basic weighted average number of ordinary shares 171,813,566 171,744,052 171,576,465
Effect of employee share options 1,077,434 1,447,842 1,560,394
──────── ──────── ────────
Diluted weighted average number of shares 172,891,000 173,191,894 173,136,859
Basic earnings per share (cents) (2.0) (19.3) 0.6
Diluted earnings per share (cents) (2.0) (19.1) 0.6
════════ ════════ ════════
6 DIVIDENDS
During the interim period, no dividend was declared and authorised (H2 21:
nil, H1 21: 1.35 pence (USD 0.02) per share (171,662,973 shares) totalling GBP
2,317,000 (USD 3,206,000)).
7 APPROVAL OF CONDENSED CONSOLIDATED INTERIM FINANCIAL
STATEMENTS
The condensed consolidated interim financial statements were approved by the
Board of Directors on 30 September 2022.
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