REG - RA Intnl Group PLC - Results for the year ended 31 December 2023
01/05/2024 07:00
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RNS Number : 7046M RA International Group PLC 01 May 2024
1 May 2024
RA INTERNATIONAL GROUP PLC
("RA International", "RA", the "Group" or the "Company")
Results for the year ended 31 December 2023
RA International Group plc (AIM: RAI), a specialist provider of complex and
integrated remote site services to organisations globally, announces its
audited full year results in respect of the 12 months ended 31 December 2023.
The Company expects that its annual report will be available on its website by
the end of next week.
HIGHLIGHTS
· The Group achieved a significant turnaround, delivering an EBITDA
profit of USD 6.3m (2022 EBITDA loss: USD 4.1m) and a profit before tax of USD
0.2m (2022 loss: USD 13.0m).
· This performance was achieved due to an increase in gross profit
margin to 14.5% (2022: 8.3%) primarily due to the sales mix and an increase in
higher-margin IFM revenue, and despite a 7.3% reduction in reported revenue to
USD 58.3m (2022: USD 62.9m).
· The Group successfully secured the sale of previously impaired assets
for USD 5.2m, also securing follow-up work with the same client. In addition,
the Group completed a refinancing and fundraising exercise, raising USD 1.8m
through the issue of new loan notes. Together these actions have significantly
improved the Group's cash and liquidity position.
· Cash increased by USD 9.4m during the year resulting in a net cash
position (cash less loan notes) of USD 1.1m (2022 net debt: USD 6.5m).
· The basic earnings per share was 0.1 cents (2022 loss: 7.6 cents).
· The Group continued to make good progress in strengthening its
position with Government clients and is actively securing and delivering
contracts for the UK and US Governments.
· The closing year-end order book was USD 49m (2022: USD 83m),
reflecting a shift towards high-value UK and US Government framework
agreements that are not included in the order book and a slowdown in the UN
contract bid cycle in recent years. The Group currently has a number of
tenders submitted to the UN organisations that, if successful, will
significantly rebuild the order book.
Soraya Narfeldt, CEO of RA International, commented:
"The Board is pleased with the progress made in 2023 towards its key
objectives of improving RA's financial stability, returning to profitability,
and continuing to invest in the Group's future growth and development.
In 2023, RA continued to deliver high-value, high-margin IFM projects and
secured contracts in existing locations and new regions including Suriname,
Ivory Coast, and Ethiopia. The refreshed RA Federal Services board brings a
wealth of experience, leading to a significant improvement in new business
opportunities and performance. We were very pleased with the sale of
previously impaired assets, which has already resulted in follow-on work with
a new client.
The Group has a healthy sales pipeline and is awaiting decisions on several
large, high-quality bids across its core client base. If successful, these
bids will diversify RA further by geography and client portfolio. Our focus in
2024 is to continue building on the significant progress made in 2023, improve
cash flow further, and increase profitability."
Enquiries:
RA International Group PLC Via Strand Hanson
Sangita Shah, Chair
Soraya Narfeldt, Chief Executive Officer
Strand Hanson Limited (Nominated & Financial Adviser and Broker) +44 (0) 20 7409 3494
Ritchie Balmer / James Spinney / David Asquith
About RA International
RA International is a leading provider of services to remote locations. The
Group offers its services through three channels: construction, integrated
facilities management and supply chain, and services two main client groups:
humanitarian and aid 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 Group 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.
CHAIR'S STATEMENT
In 2023, I am pleased to report that the Group successfully transitioned to
stability, profitability, and positive cash generation. After several
challenging years, RA achieved a significant turnaround from a substantial
loss in 2022 to a modest profit in 2023. Bolstered by a series of refinancing
efforts, we have strengthened the balance sheet and improved cash balances,
setting a healthier financial foundation for the Group.
This successful transition was underpinned by a decision to inject agility and
proportionality and as such the year witnessed significant changes in the
Board, its advisers and auditor. The Group Board was streamlined, with two
Directors retiring, Alec Carstairs and Philip Haydn-Slater. The CFO, Andrew
Bolter also stepped down following ten years of service to the Group. I would
like to express my gratitude on behalf of the Board for their invaluable
service and commitment to the Group. Additionally, in keeping with the Group
strategy, we expanded the US-focused RA Federal Services ("RA FS") board. Dave
Marshall has been promoted to Group Finance Director, reporting directly to
the Board.
The year also saw the transition of RA's auditor to PKF Littlejohn LLP
following a competitive tender process. In addition, we are delighted to have
appointed Strand Hanson as our Nominated and Financial Adviser and Broker,
specialists in advising companies working in frontier and emerging markets.
During the year we reported our inaugural Task Force on Climate-related
Financial Disclosures ("TCFD") framework. Given the size and complexity of the
Group, where our locations are exposed to the physical risks associated with
climate-related risks, the exercise was challenging. However, we recognise the
importance of this initiative in understanding relevant climate-related risks
and enhancing our risk management practices, and as such we established a
cross-departmental TCFD Steering Group responsible for analysing our
climate-related risks. Additionally, the Group enhanced its risk management
capabilities, adding a "four lines of defence" model for risk assurance.
The Board is cognisant of the changes to the QCA Corporate Governance Code
that will come into effect in 2025 and we remain committed to continue to
adopt the code.
In summary, RA is in a far stronger position than the very challenging years
previously. The recent restructuring of the RA FS board, with the appointment
of David Dacquino as its Chair, is already bearing fruit. We have been awarded
strategically important US Government contracts and our pipeline includes
several UK and UN mandates.
I would personally like to take this opportunity to express my gratitude to
the staff at RA, spearheaded by our founders Soraya and Lars, for their
continued commitment, dogged persistence, and assiduous efforts in
successfully transitioning the business. I would also like to thank all our
stakeholders for their continued support.
Sangita Shah
Non-Executive Chair
30 April 2024
CHIEF EXECUTIVE OFFICER'S REVIEW
Our focus on stability and cash generation is evident in our 2023 results,
where the Group returned to profitability after navigating through some of the
most challenging years we have faced.
Throughout this period, we remained steadfast in recognising and building upon
the strengths of our business. As a result, our operations performed well, we
retained clients, and we enhanced the core values of our business.
Furthermore, we continued to execute high-value facilities management projects
and secured multiple supply chain contracts for asset delivery to regions such
as South America, North Africa, and West Africa.
Financial performance
The Group achieved a significant turnaround from an EBITDA loss of USD 4.1m in
2022 to EBITDA profit of USD 6.3m, and a profit before tax of USD 0.2m (2022
loss: USD 13.0m). This result was delivered despite a reduction in reported
revenue of 7.3% to USD 58.3m (2022: USD 62.9m).
Gross profit margin increased to 14.5% (2022: 8.3%) due to the sales mix and
an increase in higher-margin IFM revenue.
IFM revenue increased 16.5% to USD 31.9m (2022: USD 27.4m), primarily relating
to an increase in catering and hotel services, as well as upselling on
long-term contracts.
Construction revenue fell to USD 12.4m (2022: USD 21.3m) due to two
significant projects being completed in the prior year.
Supply chain revenue reduced marginally to USD 13.9m (2022: USD 14.2m).
Cash increased by USD 9.4m during the year resulting in a net cash position
(cash less loan notes) of USD 1.1m (2022 net debt: USD 6.5m).
The basic earnings per share was 0.1 cents (2022 loss: 7.6 cents).
Sale of impaired assets
We were particularly encouraged by the success of previously impaired asset
sales, which generated net income. Additionally, the client who purchased the
assets requested RA to ship and erect the assets, creating additional revenue
and cross-selling opportunities for our other business services. In total, USD
5.2m was recognised and these sales also removed the need for future storage
costs. The disposals generated a net cash inflow of USD 3.5m in 2023, with USD
2.0m of income outstanding at 31 December 2023, and USD 0.4m of related costs
due for payment in 2024.
Refinancing
During the year, the Group completed a refinancing and fundraising exercise.
The purpose of the exercise was to extend the maturity of the USD 14.0m of
loan notes issued by the Group in previous periods, and which were due to
mature in the second half of 2023. USD 11.7m of loan notes were extended to
mature in January 2027, with the Group aiming to repay USD 2.3m by November
2024 in order to begin reducing debt commitments. An additional USD 1.8m was
also raised through the issue of new loan notes in order to maintain adequate
liquidity.
Contract awards and framework agreements
The sale of impaired assets, as previously mentioned, not only contributed to
our financial recovery but also led to follow-on work. This resulted in the
expansion of our client base and global reach, adding Suriname, Ivory Coast,
and Ethiopia to our portfolio. Our supply chain and logistics teams provided
Last Mile Logistics to support these new clients, ensuring timely delivery of
assets. Additionally, our construction team successfully installed all the
assets that were sold.
Pleasingly, our Integrated Facilities Management (IFM) teams will begin
providing facilities management services and catering to these clients,
demonstrating the effectiveness of the RA business model. This integration of
services underscores our commitment to long-term partnerships and
comprehensive support for our clients.
During the period we received contracts with an aggregate value of over USD
25m, including three task orders for US Navy base on Diego Garcia awarded
under an existing framework agreement.
We were also pleased to announce a new framework agreement with the UK FCDO to
provide operational support capability funded through
the Conflict, Stability and Security Fund
(https://www.gov.uk/government/organisations/conflict-stability-and-security-fund/about)
(CSSF) in September 2023. Having scored highest out of 27 awardees, we are
well placed to begin participating in task orders.
From a standing start in 2021, western Government contracts now account for
51% of our revenue. Our success in winning UK and US Government framework
agreements has opened up a large pool of potential projects, diversifying our
client base and aligning with our strategic goal of extending our geographic
reach. However, the nature of these framework agreements means that while we
have visibility on the ceiling value of funds available, we cannot be certain
of the timing, quantity, and exact value of future task orders.
In contrast, humanitarian and commercial contracts are typically awarded on a
fixed-value basis over a specified period of time. These contracts provide a
more predictable and visible revenue stream, but may not offer the same level
of growth potential as the government contracts. The shift in our business
mix, along with a slowdown in the UN contract bid cycle in recent years, means
that the order book at 31 December 2023 reduced to USD 49m (2022: USD 83m in
2022). Consequently, this is no longer fully representative of the scope and
potential of the projects we are pursuing through our framework agreements and
IDIQ (indefinite delivery indefinite quantity) contracts.
However, we are optimistic about the future given the number of tenders
submitted to UN organisations which, if successful, will significantly rebuild
the order book. Additionally, bid activity with both commercial and
humanitarian organisations is increasing once again, indicating a positive
trend in both these sectors.
RA Federal Services ("RA FS")
During the summer, we made changes to the RA FS board, appointing new
directors to lead the company. Mr. Dave Dacquino, who has been the Chairman
and CEO of Serco US for several years, now leads the Board. He brings a wealth
of experience and knowledge to the table, and we believe he will help us grow
this side of the business rapidly. Joining him are Brandon Weidenfeller as
CEO, and Ms. Danielle Saunders and Ms. Sandy Peavy as board directors, who
together bring extensive experience in US Government work. We are excited
about this change and confident in the future it will bring.
We have several promising opportunities in the pipeline and are preparing for
an influx of work over the next few months. RA FS has been very successful
with US Embassy projects, and we are currently working on projects in
Suriname, Zimbabwe, and Thailand. We anticipate this type of work to increase
over the coming years and are building an organisation to support this growth.
There is a significant momentum with the Overseas Building Operations (OBO)
work, with projects in several new countries. As a result RA FS has
significant opportunities for growth, both overseas and within the US.
Strategy review
In 2023, we conducted a thorough review of the Group's strategy, setting our
guiding compass for the future. This process provides the clarity and
determination necessary to achieve our long-term vision of becoming the
leading infrastructure and support services provider globally. In addition to
our mission to deliver quality work on time, we aim to lead our industry with
differentiable and sustainable solutions and initiatives, ensuring that we are
at the forefront of innovation and excellence.
The three pillars of our strategic goals can be summarised as follows:
· A steadfast commitment to financial stability as we navigate the
ever-changing economic landscape. We understand the importance of maintaining
a strong foundation to support our continued sustainable growth.
· Profitability is a key element that drives our decision-making
process. We understand the significance of striking a balance between
delivering outstanding customer service and generating returns for our
shareholders.
· Doing business the right way. We are dedicated to investing in the
growth and development of our workforce, and strive to promote a sustainable
approach in all aspects of contract execution.
A key focus of our development is leveraging the knowledge gained from our own
sustainability efforts to offer solutions to clients. We recognise that some
clients struggle with sustainability due to limited resources or expertise on
the ground, particularly in measuring supply-chain impacts. We aim to assist
by applying our knowledge to help them set achievable strategies and gather
necessary information to show progress. This aligns with our commitment to
deliver projects while positively impacting the environment and communities.
Outlook
We are making good progress in building a resilient business and our results
for 2023 reflect this, with a return to profitability and cash generation.
Furthermore, we built a broader customer base and enhanced our existing
customer relationships, entering global framework agreements and delivering on
our capabilities. Our efforts are paving the way for us to seize new
opportunities within the commercial sector as well as adding to our service
offering by strengthening our catering capabilities.
In addition to progress made at RA FS, since entering 2024 we have seen a
return in momentum in construction projects and have been invited to support
UK Export Finance and the Togolese Republic in a rural electrification project
funded by UK Export Finance. With the UN, we have won tenders in Western
Sahara and are awaiting adjudication on other bids, including providing
support on the border between South Sudan and Sudan. Furthermore, we are
gaining momentum with our existing UK and US Government framework agreements.
With an increased execution focus on service excellence to our customers,
effective conversion of a substantial pipeline of opportunities, the safety
and productivity of our colleagues, and progressing the technology-enablement
of our business, we are well-aligned to grow our revenues and deliver improved
profits.
Soraya Narfeldt, Chief Executive Officer
30 April 2024
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2023
2023 2022
Notes USD'000 USD'000
Revenue 7 58,286 62,917
Cost of sales 9 (49,853) (57,717)
──────── ────────
Gross profit 8,433 5,200
Administrative expenses 9 (11,587) (11,695)
──────── ────────
Underlying operating loss (3,154) (6,495)
Non-underlying items 9 5,211 (4,217)
──────── ────────
Operating profit/(loss) 2,057 (10,712)
Investment revenue 188 206
Finance costs (2,044) (2,491)
──────── ────────
Profit/(Loss) before tax 201 (12,997)
Tax expense 11 (7) (169)
──────── ────────
Profit/(Loss) and total comprehensive income for the year 194 (13,166)
════════ ════════
Basic earnings per share (cents) 12 0.1 (7.6)
Diluted earnings per share (cents) 12 0.1 (7.6)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2023
2023 2022
Notes USD'000 USD'000
Assets
Non-current assets
Property, plant, and equipment 15 17,024 19,590
Right-of-use assets 16 4,353 4,421
──────── ────────
21,377 24,011
Current assets
Inventories 17 4,147 5,154
Trade and other receivables 18 15,741 16,389
Cash and cash equivalents 19 16,843 7,514
──────── ────────
36,731 29,057
──────── ────────
Total assets 58,108 53,068
════════ ════════
Equity and liabilities
Equity
Share capital 20 24,300 24,300
Share premium ― 18,254
Merger reserve (17,803) (17,803)
Share based payment reserve ― 574
Retained earnings 18,417 (457)
──────── ────────
Total equity 24,914 24,868
──────── ────────
Non-current liabilities
Loan notes 22 13,495 14,000
Lease liabilities 23 4,318 4,556
Employees' end of service benefits 24 1,502 928
──────── ────────
19,315 19,484
──────── ────────
Current liabilities
Loan notes 22 2,280 ―
Lease liabilities 23 833 650
Trade and other payables 25 10,766 6,974
Provisions 26 ― 1,092
──────── ────────
13,879 8,716
──────── ────────
Total liabilities 33,194 28,200
──────── ────────
Total equity and liabilities 58,108 53,068
════════ ════════
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2023
Share
Based
Share Share Merger Treasury Payment Retained
Capital Premium Reserve Shares Reserve Earnings Total
USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000
As at 1 January 2022 24,300 18,254 (17,803) (1,199) 534 13,223 37,309
Total comprehensive income for the period ― ― ― ― ― (13,166) (13,166)
Share based payments (note 13) ― ― ― ― 311 ― 311
Non-cash employee compensation (note 13) ― ― ― 981 ― (608) 373
Lapsed share options (note 13) ― ― ― ― (94) 94 ―
Issuance of treasury shares (note 21) ― ― ― 218 (177) ― 41
────── ─────── ─────── ─────── ─────── ─────── ───────
As at 31 December 2022 24,300 18,254 (17,803) ― 574 (457) 24,868
Total comprehensive income for the period ― ― ― ― ― 194 194
Share based payments (note 13) ― ― ― ― 57 ― 57
Lapsed / cancelled share options (note 13) ― ― ― ― (631) 426 (205)
Capital reduction (*) ― (18,254) ― ― ― 18,254 ―
────── ─────── ─────── ─────── ─────── ─────── ───────
As at 31 December 2023 24,300 ― (17,803) ― ― 18,417 24,914
══════ ═══════ ═══════ ═══════ ═══════ ═══════ ═══════
(*) On 21 December 2023 the Registrar of Companies registered the cancellation
of RA International Group plc's share premium account. USD 18,254,000 of share
premium was accordingly transferred to retained earnings, creating
distributable reserves and enabling the Company to become dividend paying.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2023
2023 2022
Notes USD'000 USD'000
Operating activities
Operating profit/(loss) 2,057 (10,712)
Adjustments for non-cash and other items:
Depreciation and impairment of property, plant, and equipment 15,16 4,241 6,566
Loss/(profit) on disposal of property, plant, and equipment 15 40 (3)
Unrealised differences on translation of foreign balances 105 (35)
Provision for employees' end of service benefits 24 859 526
Share based payments 13 57 489
Non-underlying items 9 (1,668) 3,334
──────── ────────
5,691 165
Working capital adjustments:
Inventories 1,071 2,067
Trade and other receivables 2,691 (257)
Trade and other payables 2,446 (3,362)
──────── ────────
Cash flows generated from/(used in) operations 11,899 (1,387)
Tax paid 11 (129) ―
Employees' end of service benefits paid 24 (285) (329)
Settlement of share options (205) ―
──────── ────────
Net cash flows generated from/(used in) operating activities 11,280 (1,716)
──────── ────────
Investing activities
Investment revenue received 188 206
Purchase of property, plant, and equipment 15 (1,101) (618)
Proceeds from disposal of property, plant, and equipment 15 309 359
──────── ────────
Net cash flows used in investing activities (604) (53)
──────── ────────
Financing activities
Repayment of borrowings 22 ― (11,500)
Proceeds from borrowings 22 1,775 15,500
Repayment of lease liabilities 23 (973) (834)
Finance costs paid (2,044) (2,491)
Proceeds from share options exercised ― 41
──────── ────────
Net cash flows (used in)/generated from financing activities (1,242) 716
──────── ────────
Net increase/(decrease) in cash and cash equivalents 9,434 (1,053)
Cash and cash equivalents as at start of the period 21 7,514 8,532
Effect of foreign exchange on cash and cash equivalents (105) 35
──────── ────────
Cash and cash equivalents as at end of the period 21 16,843 7,514
════════ ════════
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2023
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 limited by shares 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 consolidated financial statements have been prepared in accordance with UK
adopted international accounting standards. They have been prepared under the
historical cost basis and have been presented in United States Dollars
("USD"). All values are rounded to the nearest thousand (USD'000), except
where otherwise indicated.
Going concern
The Group has a sufficient level of cash and access to liquidity to be able to
operate for the foreseeable future and accordingly it is appropriate to
prepare the financial statements on a going concern basis.
Climate change
In preparing the financial statements, the management has considered the
impact of the physical and transition risks of climate change and identified
this as an emerging risk but have concluded that it does not have a material
impact on the recognition and measurement of the assets and liabilities in
these financial statements as at 31 December 2023. Further details are
available in our Annual Report.
3 BASIS OF CONSOLIDATION
The financial statements comprise the financial statements of the Company and
its subsidiaries as at 31 December 2023. Control is achieved when the Group is
exposed, or has rights, to variable returns from its involvement with the
investee and has the ability to affect those returns through its power over
the investee. Specifically, the Group controls an investee if, and only if,
the Group has:
· Power over the investee (i.e., existing rights that give
it the current ability to direct the relevant activities of the investee),
· Exposure, or rights, to variable returns from its
involvement with the investee, and
· The ability to use its power over the investee to affect
its returns.
Generally, there is a presumption that a majority of voting rights results in
control. To support this presumption and when the Group has less than a
majority of the voting or similar rights of an investee, the Group considers
all relevant facts and circumstances in assessing whether it has power over an
investee, including:
· The contractual arrangement with the other vote holders
of the investee,
· Rights arising from other contractual arrangements, and
· The Group's voting rights and potential voting rights.
The Group reassesses whether or not it controls an investee if facts and
circumstances indicate that there are changes to one or more of the three
elements of control. Consolidation of a subsidiary begins when the Group
obtains control over the subsidiary and ceases when the Company loses control
over the subsidiary. Assets, liabilities, income, and expenses of a subsidiary
acquired or disposed of during the year are included in the financial
statements from the date the Group gains control until the date the Group
ceases to control the subsidiary.
When necessary, adjustments are made to the financial statements of a
subsidiary to bring their accounting policies into line with the Group's
accounting policies. All intra-group assets and liabilities, equity, income,
expenses and cash flows relating to transactions between members of the Group
are eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a change of
control, is accounted for as an equity transaction.
If the Company loses control over a subsidiary, it derecognises the related
assets (including goodwill), liabilities, non-controlling interest, and other
components of equity while any resultant gain or loss is recognised in the
profit or loss. Any investment retained is recognised at fair value.
Current versus non-current classification
The Group presents assets and liabilities in the statement of financial
position based on current/non-current classification.
An asset is current when it is:
· Expected to be realised or intended to be sold or
consumed in the normal operating cycle,
· Held primarily for the purpose of trading,
· Expected to be realised within twelve months after the
reporting period, or
· Cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least twelve months after the
reporting period.
All other assets are classified as non-current.
A liability is current when:
· It is expected to be settled in the normal operating
cycle,
· It is held primarily for the purpose of trading,
· It is due to be settled within twelve months after the
reporting period, or
· There is no unconditional right to defer the settlement
of the liability for at least twelve months after the reporting period.
The Group classifies all other liabilities as non-current.
4 SIGNIFICANT ACCOUNTING POLICIES
Revenue recognition
Revenue from contracts with customers is recognised when control of the goods
or services are transferred to the customer at an amount that reflects the
consideration to which the Group expects to be entitled in exchange for those
goods or services. The Group has concluded that it is acting as a principal in
all its revenue arrangements.
Sale of goods (supply chain)
Revenue from the sale of goods and the related logistics services is
recognised when control of ownership of the goods have passed to the buyer,
usually on delivery of the goods.
Construction
Typically, revenue from construction contracts is recognised at a point in
time when performance obligations have been met. Generally, this is the same
time at which client acceptance has been received. Dependant on the nature
of the contracts, in some cases revenue is recognised over time using the
percentage of completion method on the basis that the performance does not
create an asset with an alternative use and the Group has an enforceable right
to payment for performance completed to date. Contract revenue corresponds to
the initial amount of revenue agreed in the contract and any variations in
contract work, claims and incentive payments are recognised only to the extent
that it is highly probable that they will result in revenue, and they are
capable of being reliably measured.
Services (integrated facilities management)
Revenue from providing services is recognised over time, applying the time
elapsed method for accommodation and similar services to measure progress
towards complete satisfaction of the service, as the customers simultaneously
receive and consume the benefits provided by the Group.
Cost of sales
Cost of sales represent costs directly incurred or related to the revenue
generating activities of the Group, including staff costs, materials and
depreciation.
Contract balances
Trade receivables
A receivable represents the Group's right to an amount of consideration that
is unconditional, meaning only the passage of time is required before payment
of the consideration is due.
Accrued revenue
Accrued revenue represents the right to consideration in exchange for goods or
services transferred to a customer in connection with fulfilling contractual
performance obligations. If the Group performs by transferring goods or
services to a customer before invoicing, accrued revenue is recognised in an
amount equal to the earned consideration that is conditional on invoicing.
Once an invoice has been accepted by the customer accrued revenue is
reclassified as a trade receivable.
Customer advances
If a customer pays consideration before the Group transfers goods or services
to the customer, a customer advance is recognised when the payment is received
by the Group. Customer advances are recognised as revenue when the Group meets
its obligations to the customer.
Borrowing costs
Borrowing costs directly attributable to the construction of an asset are
capitalised as part of the cost of the asset. Capitalisation commences when
the Group incurs costs for the asset, incurs borrowing costs and undertakes
activities that are necessary to prepare the asset for its intended use or
sale. Capitalisation ceases when the asset is ready for use or sale. All other
borrowing costs are expensed in the period in which they occur. Borrowing
costs consist of interest and other costs that are incurred in connection with
the borrowing of funds.
Tax
Current income tax assets and liabilities are measured at the amount expected
to be recovered from or paid to the taxation authorities. The tax rates and
tax laws used to compute the amount are those that are enacted or
substantively enacted at the reporting date in the countries where the Group
operates and generates taxable income. Management periodically evaluates
positions taken in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation and establishes
provisions where appropriate.
Deferred tax is provided on temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts
used for taxation purposes. The amount of deferred tax provided is based on
the expected manner of realisation or settlement of the carrying value amount
of assets and liabilities, using tax rates enacted or substantively enacted at
the Statement of Financial Position date. A deferred tax asset is recognised
only to the extent that it is probable that future taxable profits will be
available against which the asset can be utilised.
Property, plant, and equipment
Property, plant, and equipment are stated at cost less accumulated
depreciation and any impairment in value. Capital work-in-progress is not
depreciated until the asset is ready for use. Depreciation is calculated on a
straight-line basis over the estimated useful lives. At the end of the useful
life, assets are deemed to have no residual value. Contract specific assets
are depreciated over the lesser of the length of the project, or the useful
life of the asset. The useful life of general property, plant and equipment is
as follows:
Land
Unlimited (not depreciated)
Buildings
Lesser of 5 to 20 years and term of land lease
Machinery, motor vehicles, furniture and equipment
2 to 10 years
Leasehold
improvements
Lesser of 10 years and term of lease
The carrying values of property, plant, and equipment are reviewed for
impairment when events or changes in circumstances indicate that the carrying
value may not be recoverable. If any such indication exists and where the
carrying values exceed the estimated recoverable amount, the assets are
written down, with the write down recorded in profit or loss to their
recoverable amount, being the greater of their fair value less costs to sell
and their value in use.
Expenditure incurred to replace a component of an item of property, plant, and
equipment that is accounted for separately is capitalised and the carrying
amount of the component that is replaced is written off. Other subsequent
expenditure is capitalised only when it increases future economic benefits of
the related item of property, plant, and equipment. All other expenditure is
recognised in profit or loss as the expense is incurred.
An item of property, plant, and equipment is derecognised upon disposal or
when no future economic benefits are expected from its use. Any gain or loss
arising on de-recognition of the asset (calculated as the difference between
the net disposal proceeds and carrying amount of the asset) is included in the
profit or loss in the year the asset is derecognised.
Assets' residual values, useful lives, and methods of depreciation are
reviewed at each financial year end, and adjusted prospectively, if
appropriate.
Inventories
Inventories are stated at the lower of cost and net realisable value. Costs
include those expenses incurred in bringing each product to its present
location and condition. Cost is calculated using the weighted average method.
Net realisable value is based on estimated selling price less any further
costs expected to be incurred in disposal.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and balances with banks, which
are readily convertible to known amounts of cash and have a maturity of three
months or less from the date of acquisition. This definition is also used for
the consolidated cash flow statement.
Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that
an asset may be impaired. If any indication exists, or when annual impairment
testing for an asset is required, the Group estimates the asset's recoverable
amount. An asset's recoverable amount is the higher of an asset's or
cash-generating unit's ("CGU") fair value less costs to sell and its value in
use. An asset's recoverable amount is determined for an individual asset,
unless the asset does not generate cash inflows that are largely independent
of those from other assets or groups of assets. Where the carrying amount of
an asset or CGU exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount. In assessing value in
use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset. In determining fair
value less costs to sell, an appropriate valuation model is used maximising
the use of observable inputs. These calculations are corroborated by valuation
multiples, quoted share prices for publicly traded entities or other available
fair value indicators.
The Group bases its impairment calculation on detailed budgets and forecasts
which are prepared separately for each of the Group's CGUs to which the
individual assets are allocated. These budgets and forecasts generally cover a
period of five years. For longer periods, a long-term growth rate is
calculated and applied to project future cash flows after the fifth year.
Impairment losses relating to continuing operations are recognised in those
expense categories consistent with the function of the impaired asset.
An assessment is made at each reporting date as to whether there is any
indication that previously recognised impairment losses may no longer exist or
may have decreased. If such indication exists, the Group estimates the asset's
or CGU's recoverable amount. A previously recognised impairment loss is
reversed only if there has been a change in the assumptions used to determine
the asset's recoverable amount since the last impairment loss was recognised.
The reversal is limited so that the carrying amount of the asset does not
exceed its recoverable amount, nor exceed the carrying amount that would have
been determined, net of depreciation, had no impairment loss been recognised
for the asset in prior years. Such reversal is recognised in the profit or
loss unless the asset is carried at a revalued amount, in which case, the
reversal is treated as a revaluation increase.
Provisions
Provisions are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event, it is probable that an outflow of
resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the
obligation. The expense relating to a provision is presented in the statement
of profit or loss.
If the effect of the time value of money is material, provisions are
discounted using a current pre-tax rate that reflects, when appropriate, the
risks specific to the liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as a finance cost.
Financial instruments
i) Financial assets
Initial recognition and measurement
The classification of financial assets at initial recognition depends on the
financial asset's contractual cash flow characteristics and the Group's
business model for managing them. With the exception of trade receivables that
do not contain a significant financing component or for which the Group has
applied the practical expedient, the Group initially measures a financial
asset at its fair value plus, in the case of a financial asset not at fair
value through profit or loss, transaction costs. Trade receivables that do not
contain a significant financing component or for which the Group has applied
the practical expedient are measured at the transaction price determined under
IFRS 15.
Subsequent measurement
Financial assets at amortised cost are subsequently measured using the
effective interest method and are subject to impairment. Gains and losses are
recognised in profit or loss when the asset is derecognised, modified, or
impaired.
Other receivables are subsequently measured at amortised cost.
Derecognition of financial assets
A financial asset (or, where applicable a part of a financial asset or part of
a group of similar financial assets) is derecognised when the rights to
receive cash flows from the asset has expired.
Impairment of financial assets
The Group recognises an allowance for expected credit losses ("ECLs") for all
debt instruments not held at fair value through profit or loss. ECLs are based
on the difference between the contractual cash flows due in accordance with
the contract and all the cash flows that the Group expects to receive,
discounted at an approximation of the original effective interest rate. The
expected cash flows will include cash flows from the sale of collateral held
or other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has
not been a significant increase in credit risk since initial recognition, ECLs
are provided for credit losses that result from default events that are
possible within the next twelve-months (a twelve-month ECL). For those credit
exposures for which there has been a significant increase in credit risk since
initial recognition, a loss allowance is required for credit losses expected
over the remaining life of the exposure, irrespective of the timing of the
default (a lifetime ECL).
For trade receivables and contract assets, the Group applies a simplified
approach in calculating ECLs. Therefore, the Group does not track changes in
credit risk, but instead recognises a loss allowance based on lifetime ECLs at
each reporting date. When arriving at the ECL we consider historical credit
loss experience including any adjustments for forward-looking factors specific
to the debtors and the economic environment.
A financial asset is deemed to be in default when internal or external
information indicates that the Group is unlikely to receive the outstanding
contractual amounts in full before taking into account any credit enhancements
held by the Group. A financial asset is written off when there is no
reasonable expectation of recovering the contractual cash flows.
Income from financial assets
Investment revenue relates to interest income accrued on a time basis, by
reference to the principal outstanding and at the effective interest rate
applicable, which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to that asset's net
carrying amount.
ii) Financial liabilities
Initial recognition and measurement
Financial liabilities are initially recognised at fair value and subsequently
classified at fair value through profit or loss, loans and borrowings, or
payables. Loans and borrowings and payables are recognised net of directly
attributable transaction costs.
The Group's financial liabilities include trade and other payables and loan
notes.
Subsequent measurement
The measurement of financial liabilities depends on their classification as
described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial
liabilities held for trading and financial liabilities designated upon initial
recognition as held at fair value through profit or loss.
Financial liabilities designated upon initial recognition at fair value
through profit or loss are designated at the initial date of recognition, and
only if the criteria in IFRS 9 are satisfied. The Group has not designated any
financial liability as at fair value through profit or loss.
Financial liabilities are classified as held for trading if they are incurred
for the purpose of repurchasing in the near term. This category also includes
derivative financial instruments entered into by the Group that are not
designated as hedging instruments in hedge relationships as defined by IFRS 9.
Separated embedded derivatives are also classified as held for trading unless
they are designated as effective hedging instruments.
Loans and payables
This is the category most relevant to the Group. After initial recognition,
interest-bearing loans and borrowings are subsequently measured at amortised
cost using the EIR method. Gains and losses are recognised in profit or loss
when the liabilities are derecognised as well as through the EIR amortisation
process.
Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR
amortisation is included as finance costs in the statement of profit or loss.
Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability
is discharged, cancelled or expires.
Where an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability
are substantially modified, such an exchange or modification is treated as a
derecognition of the original liability and the recognition of a new
liability, and the difference in the respective carrying amounts is recognised
in the profit or loss.
Leases
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease
(i.e. the date the underlying asset is available for use). Right-of-use assets
are measured at cost, less any accumulated depreciation and impairment losses,
and adjusted for any remeasurement of lease liability. The cost of
right-of-use assets includes the amount of lease liabilities recognised and
initial direct costs incurred. Right-of-use assets are depreciated on a
straight-line basis over the shorter of the lease term and the estimated
useful lives of the assets.
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities
measured at the present value of lease payments to be made over the lease
term. In calculating the present value of lease payments, the Group uses its
incremental borrowing rate at the lease commencement date because the interest
rate implicit in the lease is not readily determinable. After the commencement
date, the amount of lease liabilities is increased to reflect the accretion of
interest and reduced for the lease payment made. In addition, the carrying
amount of lease liabilities is remeasured if there is a modification, a change
in the lease term or a change in the lease payments.
Short-term leases and leases on low-value assets
The Group applies the short-term lease recognition exemption to its short-term
leases (i.e. those leases that have a lease term of twelve months or less from
the commencement date). It also applies the lease of low-value assets
recognition exemption to leases that are considered to be low value. Lease
payments on short-term leases and leases of low-value assets are recognised as
an expense on a straight-line basis over the lease term.
Employees' end of service benefits
The Group provides end of service benefits to its employees in accordance with
local labour laws. The entitlement to these benefits is based upon the
employees' final salary and length of service, subject to the completion of a
minimum service period. The expected costs of these benefits are accrued over
the period of employment. The Group accounts for these benefits as a defined
contribution plan under IAS 19.
Share based payments
Employees (including senior executives) of the Group receive remuneration in
the form of share-based payments, whereby employees render services as
consideration for equity instruments (equity-settled transactions).
The cost of equity-settled transactions is determined by the fair value at the
date when the grant is made using an appropriate valuation model, further
details of which are provided in note 13.
That cost is recognised in employee benefits expense, included in
administrative expenses, together with a corresponding increase in equity
(share based payment reserve), over the period in which the service and, where
applicable, the performance conditions are fulfilled (the vesting period). The
cumulative expense recognised for equity-settled transactions at each
reporting date until the vesting date reflects the extent to which the vesting
period has expired and the Group's best estimate of the number of equity
instruments that will ultimately vest. The expense or credit in the statement
of profit or loss for a period represents the movement in cumulative expense
recognised as at the beginning and end of that period.
Service and non-market performance conditions are not taken into account when
determining the grant date fair value of awards, but the likelihood of the
conditions being met is assessed as part of the Group's best estimate of the
number of equity instruments that will ultimately vest. Market performance
conditions are reflected within the grant date fair value. Any other
conditions attached to an award, but without an associated service
requirement, are considered to be non-vesting conditions. Non-vesting
conditions are reflected in the fair value of an award and lead to an
immediate expensing of an award unless there are also service and/or
performance conditions.
No expense is recognised for awards that do not ultimately vest because
non-market performance and/or service conditions have not been met. Where
awards include a market or non-vesting condition, the transactions are treated
as vested irrespective of whether the market or non-vesting condition is
satisfied, provided that all other performance and/or service conditions are
satisfied.
The dilutive effect of outstanding options is reflected as additional share
dilution in the computation of diluted earnings per share.
Contingencies
Contingent liabilities are not recognised in the financial statements, they
are disclosed unless the possibility of an outflow of resources embodying
economic benefits is remote. A contingent asset is not recognised in the
financial statements but disclosed when an inflow of economic benefits is
probable.
Foreign currencies
The Group's financial statements are presented in USD, which is the functional
currency of all Group companies. Items included in the financial statements of
each entity are measured using that functional currency.
Transactions in foreign currencies are initially recorded at the functional
currency rate prevailing at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are retranslated at the
functional currency spot rate of exchange prevailing at the reporting date.
All differences are taken to profit or loss.
Non-monetary items that are measured at historical cost in a foreign currency
are translated using the exchange rates as at the dates of the initial
transactions. Non-monetary items measured at fair value in a foreign currency
are translated using the exchange rates at the date when the fair value was
determined.
Foreign currency share capital (including any related share premium or
additional paid-in capital) is translated using the exchange rates as at the
dates of the initial transaction. The value is not remeasured.
5 CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES
New and amended standards and interpretations
Amendments and interpretations that apply for the first time in 2023 do not
have a significant impact on the financial statements of the Group. The Group
has not early adopted any standards, interpretations or amendments that have
been issued but are not yet effective.
6 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND
ASSUMPTIONS
The preparation of the financial statements requires management to make
judgements, estimates and assumptions that may affect the reported amount of
assets and liabilities, revenue, expenses, disclosure of contingent
liabilities, and the resultant provisions and fair values. Such estimates
are necessarily based on assumptions about several factors and actual results
may differ from reported amounts.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised and in any future periods affected.
a) Judgments
Use of Alternative Performance Measures (Note 14)
IAS1 requires material items to be disclosed separately in a way that enables
users to assess the quality of a company's profitability. In practice, these
are commonly referred to as "exceptional" items, but this is not a concept
defined by IFRS and therefore there is a level of judgement involved in
arriving at an Alternative Performance Measure ("APM") which excludes such
exceptional items. The Group refers to these as non-underlying items and
considers items suitable for separate presentation that are outside normal
operations and are material to the results of the Group either by virtue of
size or nature. See note 9 for further details on specific balances which are
classified as non-underlying items.
b) Estimates and assumptions
Impairment reviews (Note 15)
Determining whether Property, Plant and Equipment is impaired requires an
estimation of the value in use of the cash generating units. The value in use
calculation requires the Group to estimate the future cash flows and a
suitable discount rate in order to calculate present value. An impairment
review has been performed at the reporting date and no impairment is required.
Percentage of completion (Note 18)
The Group primarily uses the output percentage-of-completion method when
accounting for contract revenue on its long-term construction contracts. Use
of the percentage-of-completion method requires the Group to estimate the
progress of contracts based on surveys of work performed. The Group has
determined this basis of revenue recognition is the best available measure on
such contracts and where possible seeks customer verification of
percentage-of-completion calculations as at financial reporting dates.
The accuracy of percentage-of-completion estimates has a material impact on
the amount of revenue and related profit recognised. As at 31 December 2023,
USD 745,000 of accrued revenue had been calculated using the
percentage-of-completion method (2022: USD nil).
Revisions to profit or loss arising from changes in estimates are accounted
for in the period when the changes occur.
IFRS 16 - interest rate (Note 23)
In some jurisdictions where the Group holds long-term leases, the incremental
borrowing rate is not readily determinable. As a result, the incremental
borrowing rate is estimated with reference to risk adjusted rates in other
jurisdictions where a market rate is determinable, and the Group's cost of
funding.
7 SEGMENTAL 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:
2023 2022
USD'000 USD'000
Integrated facilities management 31,947 27,411
Construction 12,407 21,276
Supply chain 13,932 14,230
──────── ────────
58,286 62,917
════════ ════════
Revenue by recognition timing:
2023 2022
USD'000 USD'000
Revenue recognised over time 44,354 48,160
Revenue recognised at a point in time 13,932 14,757
──────── ────────
58,286 62,917
════════ ════════
Geographic segment
The Group primarily operates in Africa and as such the CODM considers Africa
and Other locations 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:
2023 2022
USD'000 USD'000
Africa 50,863 61,012
Other 7,423 1,905
──────── ────────
58,286 62,917
════════ ════════
Non-current assets by geographic area:
2023 2022
USD'000 USD'000
Africa 19,489 22,223
Other 1,888 1,788
──────── ────────
21,377 24,011
════════ ════════
Revenue split by customer
2023 2022
% %
Customer A 22 19
Customer B 14 12
Customer C 10 9
Customer D 10 8
Customer E 8 ―
Customer F 5 7
Other 31 45
──────── ────────
100 100
════════ ════════
8 GROUP INFORMATION
The Company operates through its subsidiaries, listed below, which are legally
or beneficially, directly or indirectly owned and controlled by the
Company.
The extent of the Company's beneficial ownership and the principal activities
of the subsidiaries are as follows:
Name of the entity Country of incorporation Beneficial ownership Registered address
RA Africa Holdings Limited British Virgin Islands 100% 3rd floor, J&C Building, PO Box 362, Road Town, Torola Virgin Islands
(British) VG110
RA International Commercial Services Limited British Virgin Islands 100% 3th floor, J&C Building, PO Box 362, Road Town, Torola Virgin Islands
(British) VG110
RA International Limited Cameroon 100% 537 Rue Njo-Njo, Bonaprisi, PO Box 1245, Douala, Cameroon
RA International RCA Central African Republic 100% Avenue des Martyrs, Bangui, Central African Republic
RA International Chad Chad 100% N'djamena, Chad
RA International DRC SARL Democratic Republic of Congo 100% Kinshasa, Sis No106, Boulevard Du 30 Juin, Dans La Commune De La Gombe EN RD,
Congo
RA International Guyana Inc. Guyana 100% 210 New Market Street, Georgetown, Guyana
Raints Kenya Limited Kenya 100% The Pavilion 6th Floor, Lower Kabete Road, Westlands, PO Box 2691-00621,
Nairobi, Kenya
RA International SARL Lebanon 100% Beirut Souks, Souk El Dahab, section no 1144, plot no 1479, Beirut, Lebanon
Al Mutaheda Al-Alamia Ltd. Libya 100% Suq El Jumah- Tripoli Libya
Raints Mali Mali 100% Bamako-Niarela Immeuble Sodies Appartement C/7, Mali
RA International Limitada Mozambique 100% Distrito KAMPFUMO, Bairro Sommarchield, Rua. Jose Graverinha, no 198, R/C,
Maputo, Mozambique
RA Facilities Services S.A Mozambique 100% Distrito Urbano 1, Bairro Central, Rua do Sol, 23 Maputo, Mozambique
RA International Niger Niger 100% Niamey, Quartier Cite Piudriere, Avenue du Damergou, CI-48, Niger
RA International Poland Poland 100% UL. MŁYŃSKA, numer 16, lokal 8 PIĘTRO, kod poczt. 61-730, poczta POZNAŃ
RA International* Somalia 100% Mogadishu, Somalia
RA International FZCO South Sudan 100% Plot no. 705, Block 3-K South, , Airport Road, Hai Matar South Sudan
Reconstruction and Assistance Company Ltd Sudan 100% 115 First Quarter Graif west-Khartoum, Khartoum, Republic of Sudan
RA International Limited Tanzania 100% 369 Toure Drive, Oysterbay, PO Box 62, Dar Es Salaam, Tanzania
RA International FZCO UAE 100% Office Number S101221O39, Jebel Ali Free Zone, Dubai, United Arab Emirates
RA International General Trading LLC UAE 100% Building 41, 3B Street, Al Quoz Industrial Area 1, PO Box 115774, Dubai,
United Arab Emirates
RA International Global Operations Limited UK 100% 1 Fleet Place, London, EC4M 7WS, United Kingdom
RA International Limited Uganda 100% 4th Floor, Acacia Mall, Plot 14-18, Cooper Road, Kololo, Kampala, Uganda
RA Federal Services LLC United States of America 100% 3411 Silverside Road, Tatnall Building #104, Wilmington, DE 19810
Berkshire General Insurance Limited United States of America 100% 1 Church Street, 5th Floor, Burlington, Chittenden, Vermont, 05401, United
States of America
( )
(*) RA International in Somalia is not an incorporated legal entity.
RA International Global Operations Limited, registered number 12672019 is
exempt from the requirements of Company Act 2006 relating to the audit of
individual accounts by virtue of section 479A.
9 PROFIT/(LOSS) FOR THE PERIOD
Profit/(loss) for the period is stated after charging:
2023 2022
USD'000 USD'000
Staff costs 23,655 24,382
Materials 18,683 24,079
Depreciation of property, plant, and equipment 4,241 5,110
Impairment of property, plant, and equipment ― 1,456
════════ ════════
Staff costs relate to wages and salaries plus directly attributable expenses.
Non-underlying items
2023 2022
USD'000 USD'000
Restructuring costs 2,245 (3,502)
Palma Project, Mozambique 2,966 (715)
──────── ────────
5,211 (4,217)
════════ ════════
Restructuring costs
During the year, USD 2,245,000 of net income was recognised relating to the
sale of assets previously impaired by the Group. All cash from the transaction
was received during the year.
Palma Project, Mozambique
During the year, a number of Palma Project assets were disposed of, generating
net proceeds of USD 2,966,000 (2022: USD 114,000). These assets had been fully
impaired in 2021 and as a result, the disposal resulted in a recovery which
has been recorded in the current year. At 31 December 2023, USD 2,045,000
relating to the disposals was outstanding and recognised as a receivable, with
USD 377,000 of costs due for payment in 2024.
The sale of assets removed the requirement for continued storage costs, and as
such, no provision for unavoidable costs has been recognised at 31 December
2023 (2022: USD 1,092,000).
The Group reassessed the recoverable amount of all other impaired assets and
deemed there was no further reversals necessary.
Auditor Compensation
Amounts paid or payable by the Group in respect of audit and non-audit
services to the Auditor are shown below.
2023 2022
USD'000 USD'000
Fees for the audit of the Company annual accounts 225 188
Fees for the audit of the subsidiary annual accounts ― 75
Additional fee for the prior year audit of the Group annual accounts ― 25
──────── ────────
Total audit fees 225 288
════════ ════════
──────── ────────
Total non-audit fees ― ―
════════ ════════
10 EMPLOYEE EXPENSES
The average number of employees (including directors) employed during the
period was:
2023 2022
Directors 5 7
Executive management 3 5
Staff 1,198 1,356
──────── ────────
1,206 1,368
════════ ════════
The aggregate remuneration of the above employees was:
2023 2022
USD'000 USD'000
Wages and salaries 19,743 19,820
Social security costs 142 148
Share based payments 57 684
──────── ────────
19,942 20,652
════════ ════════
The remuneration of the Directors and other key management personnel of the
Group are detailed in note 31.
11 TAX
The tax expense on the profit/(loss) for the year is as follows:
2023 2022
USD'000 USD'000
Current tax:
UK corporation tax on loss for the year ― ―
Non-UK corporation tax 7 169
──────── ────────
Tax expense/ for the year 7 169
════════ ════════
Factors affecting the tax expense
The tax assessed for the year varies from the standard rate of corporation tax
in the UK. The difference is explained below:
2023 2022
USD'000 USD'000
Profit/(Loss) before tax 201 (12,997)
──────── ────────
Expected tax credit based on the standard average rate of corporation tax in 47 (2,469)
the UK of 23.5% (2022: 19.0%)
Effects of:
Deferred tax asset not recognised 138 115
Exemptions and foreign tax rate difference (178) 2,523
──────── ────────
Tax expense for the year 7 169
════════ ════════
From 01 April 2023, the UK Corporation tax rate increased from 19.0% to 25.0%,
resulting in an average tax rate for the period of 23.5% (2022: 19.0%).
The Group benefits from tax exemptions granted to its customers who are
predominantly governments and large intragovernmental organisations. The CODM
is not aware of any factors that tax exemptions granted will no longer be
available to the Group.
The Group has USD 5,109,000 (2022: USD 3,463,000) of unused tax losses for
which no deferred tax asset has been recognised.
12 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.
2023 2022
Profit/(loss) for the period (USD'000) 194 (13,166)
Basic weighted average number of ordinary shares 173,575,741 172,601,934
Effect of employee share options ― 728,394
──────── ────────
Diluted weighted average number of shares 173,575,741 173,330,328
Basic earnings per share (cents) 0.1 (7.6)
Diluted earnings per share (cents) 0.1 (7.6)
════════ ════════
13 SHARE BASED PAYMENT EXPENSE
The Group recognised the following expenses related to equity-settled payment
transactions:
2023 2022
USD'000 USD'000
Employee retention share plan 57 311
Other share based payments ― 178
Other share based payments - non-underlying ― 195
──────── ────────
57 684
════════ ════════
Employee Retention Share Plan
In October 2020, the Company introduced an Employee Retention Share Plan
("ERSP") and granted share options to a number of senior employees. Awards
vest annually subject to continuous employment. There are no TSR linked
vesting conditions associated with these options.
At 31 December, the following unexercised share options to acquire ordinary
shares under the PSP and ERSP were outstanding:
Year of Grant Share Plan Vesting Date Exercise Number of Number of
price options options
GBP 2023 2022
2020 ERSP 1 May 2022 0.10 ― 229,710
ERSP 1 May 2023 0.10 ― 671,510
2021 ERSP 1 May 2021 0.10 ― 17,212
ERSP 1 May 2022 0.10 ― 47,776
ERSP 1 May 2023 0.10 ― 107,243
ERSP 1 May 2024 0.10 ― 83,413
2022 ERSP 1 Dec 2022 0.22 ― 741,457
ERSP 1 Dec 2023 0.22 ― 741,457
ERSP 1 Dec 2024 0.22 ― 741,457
ERSP 1 May 2023 0.10 ― 130,920
ERSP 1 May 2024 0.10 ― 261,840
ERSP 1 May 2025 0.10 ― 392,760
──────── ────────
― 4,166,755
════════ ════════
The weighted average remaining contractual life for the shares options
outstanding as at 31 December 2023 is nil (2022: 0.9 years).
Weighted Weighted
average average
Number of exercise Number of exercise
options price options price
2023 2023 2022 2022
GBP GBP
Outstanding at 1 January 4,166,755 0.16 3,875,019 0.10
Granted during the year ― ― 3,009,891 0.18
Exercised during the year ― ― (324,463) 0.10
Settled during the year (1,771,238) 0.10 ― ―
Forfeited during the year (1,574,799) 0.21 (328,476) 0.10
Lapsed during the year (820,718) 0.20 (2,065,216) 0.10
──────── ──────── ──────── ────────
Outstanding at 31 December ― ― 4,166,755 0.16
════════ ════════ ════════ ════════
Options issued under the ERSP were valued using the Black Scholes model using
the following inputs:
Weighted average share price Expected volatility Risk free rate
2020 49p (USD 0.64) 49.70% 0.00%
2021 49p (USD 0.68) 48.60% 0.00%
2022 22p (USD 0.28) 46.80% 1.69%
The total fair value of the options at the grant date was USD 1,100,000. A
charge of USD 15,000 (2022: USD 66,000) was recognised in cost of sales and
USD 41,000 (2022: USD 245,000) was recognised in administrative expenses for
the fiscal year ended 2023. The expected volatility input utilised
represents the historic volatility of the share price of the Company since
Admission.
Other Share Based Payments
On 26 July 2022, the Company agreed to issue a total of 1,459,435 Ordinary
Shares to senior members of staff, including certain persons discharging
managerial responsibilities. Ordinary Shares issued pursuant to the award were
satisfied from the pool of Ordinary Shares held in Treasury. The fair value of
the shares on the grant date was GBP 0.21 (USD 0.25) per share. A total charge
of USD 373,000 was recognised, with USD 178,000 recognised as an
administrative expense and USD 195,000 recognised as a non-underlying
restructuring cost given the non-reoccurring nature of the transaction.
14 ALTERNATIVE PERFORMANCE MEASURES
Alternative Performance Measures ("APMs") used by the Group are defined below
along with a reconciliation from each APM to its IFRS equivalent, and an
explanation of the purpose and usefulness of each APM. APMs are non-IFRS
measures.
In general, APMs are presented externally to meet investors' requirements for
further clarity and transparency of the Group's financial performance. APMs
are also used internally by management to evaluate business performance and
for budgeting and forecasting purposes.
2023 2022
USD'000 USD'000
Profit/(loss) 194 (13,166)
Tax expense 7 169
──────── ────────
Profit/(loss) before tax 201 (12,997)
Finance costs 2,044 2,491
Investment income (188) (206)
──────── ────────
Operating profit/(loss) 2,057 (10,712)
Depreciation 4,241 5,110
Impairment ― 1,456
──────── ────────
EBITDA 6,298 (4,146)
════════ ════════
EBITDA
Management defines EBITDA as Operating Profit adjusted for depreciation and
impairment. EBITDA facilitates comparisons of operating performance from
period to period and company to company by eliminating potential differences
caused by variations in capital structures, tax positions and the age and
booked depreciation on assets.
Net Cash
Net cash represents cash less overdraft balances, term loans and notes
outstanding. This is a commonly used metric, helpful to stakeholders when
analysing the business. Negative net cash is referred to as a net debt
position.
2023 2022
USD'000 USD'000
Cash and cash equivalents 16,843 7,514
Loan notes - non-current (13,495) (14,000)
Loan notes - current (2,280) ―
──────── ────────
Net cash/(debt) 1,068 (6,486)
════════ ════════
15 PROPERTY, PLANT, AND EQUIPMENT
Machinery,
Motor
vehicles,
Land and furniture and Leasehold
buildings equipment improvements Total
USD'000 USD'000 USD'000 USD'000
Cost:
At 1 January 2023 39,325 13,683 1,370 54,378
Additions 745 251 106 1,101
Disposals (5) (548) ― (553)
Transfer to inventory (107) ― ― (107)
──────── ──────── ──────── ────────
At 31 December 2023 39,958 13,386 1,476 54,820
──────── ──────── ──────── ────────
Depreciation:
At 1 January 2023 23,780 10,406 602 34,788
Charge for the year 1,804 1,188 263 3,255
Relating to disposals (3) (201) ― (204)
Transfer to inventory (43) ― ― (43)
──────── ──────── ──────── ────────
At 31 December 2023 25,538 11,393 865 37,796
──────── ──────── ──────── ────────
Net carrying amount:
At 31 December 2023 14,420 1,993 611 17,024
════════ ════════ ════════ ════════
Machinery,
motor
vehicles,
Land and furniture and Leasehold
buildings equipment improvements Total
USD'000 USD'000 USD'000 USD'000
Cost:
At 1 January 2022 39,919 14,115 1,370 55,404
Additions 194 424 ― 618
Disposals (788) (856) ― (1,644)
──────── ──────── ──────── ────────
At 31 December 2022 39,325 13,683 1,370 54,378
──────── ──────── ──────── ────────
Depreciation:
At 1 January 2022 21,438 8,089 365 29,892
Charge for the year 2,040 1,893 237 4,170
Relating to disposals (226) (491) ― (717)
Provision for impairment 528 915 ― 1,443
──────── ──────── ──────── ────────
At 31 December 2022 23,780 10,406 602 34,788
──────── ──────── ──────── ────────
Net carrying amount:
At 31 December 2022 15,545 3,277 768 19,590
════════ ════════ ════════ ════════
16 RIGHT-OF-USE ASSETS
2023 2022
USD'000 USD'000
Cost:
At 1 January 7,887 7,887
Additions 918 ―
──────── ────────
At 31 December 8,805 7,887
──────── ────────
Depreciation:
At 1 January 3,466 2,513
Charge for the year 986 940
Provision for impairment ― 13
──────── ────────
At 31 December 4,452 3,466
──────── ────────
Net carrying amount:
At 31 December 4,353 4,421
════════ ════════
Information related to lease liabilities is available in note 23.
The table below details rent resulting from lease contracts which are not
capitalised and are therefore expensed in the year.
2023 2022
USD'000 USD'000
Short-term leases 653 715
════════ ════════
Short-term leases include amounts paid for vehicles and heavy equipment
rental, as well as short-term property leases.
17 INVENTORIES
2023 2022
USD'000 USD'000
Materials and consumables 3,607 4,442
Goods-in-transit 540 712
──────── ────────
4,147 5,154
════════ ════════
No provision has been recognised in 2023 reflecting the cost of prefabricated
camp assets held in inventory (2022: USD 2,478,000).
18 TRADE AND OTHER RECEIVABLES
2023 2022
USD'000 USD'000
Trade receivables 11,196 10,697
Accrued revenue 2,265 3,765
Deposits 80 112
Prepayments 1,173 514
Other receivables 1,027 1,301
──────── ────────
15,741 16,389
════════ ════════
Invoices are generally raised on a monthly basis, upon completion, or part
completion of performance obligations as agreed with the customer on a
contract by contract basis.
During the year 100% of accrued revenue was subsequently billed and
transferred to trade receivables from the opening unbilled balance in the
period (2022: 100%).
As at 31 December the transaction price allocated to remaining performance
obligations was USD 49,000,000 (2022: USD 83,000,000). This represents revenue
expected to be recognised in subsequent periods arising on existing
contractual arrangements. The Group has not taken the practical expedient in
IFRS 15.121 not to disclose information about performance obligations that
have original expected durations of one year or less and therefore no
consideration from contracts with customers is excluded from these amounts.
All revenue is expected to be recognised within the next five years.
As at 31 December the ageing of trade receivables was as follows:
2023 2022
USD'000 USD'000
Not past due 8,127 5,609
Overdue by less than 30 days 1,843 3,705
Overdue by between 30 and 60 days 805 831
Overdue by more than 60 days 421 552
──────── ────────
11,196 10,697
════════ ════════
Trade receivables are non-interest bearing and generally have payment terms of
30 days. No ECL was recorded as at 31 December 2023 or 31 December 2022. All
receivables are expected, on the basis of past experience, to be fully
recoverable.
19 CASH AND CASH EQUIVALENTS
Cash and cash equivalents in the consolidated statement of financial position
comprised of cash at bank of USD 16,843,000 (2022: USD 7,514,000).
20 SHARE CAPITAL
2023 2022
USD'000 USD'000
Authorised, issued and fully paid
173,575,741 shares (2022: 173,575,741 shares) of GBP 0.10 (2022: GBP 0.10) 24,300 24,300
each
════════ ════════
21 TREASURY SHARES
2023 2023 2022 2022
Number USD'000 Number USD'000
As at 1 January ― ― 1,783,898 1,199
Issued in the period ― ― (1,783,898) (1,199)
──────── ──────── ──────── ────────
As at 31 December ― ― ― ―
════════ ════════ ════════ ════════
22 LOAN NOTES
The table below summarises the loan notes:
2023 2022
USD'000 USD'000
As at 1 January 14,000 10,000
Additions 1,775 15,500
Repayments ― (11,500)
──────── ────────
As at 31 December 15,775 14,000
════════ ════════
Current 2,280 ―
Non-current 13,495 14,000
During the year, the Group completed a refinancing and fundraising exercise.
The purpose of the exercise was to extend the maturity of the USD 14.0m of
loan notes issued by the Group in previous periods which were due to mature in
the second half of 2024. USD 11.7m of notes were extended to mature in January
2027, with the remaining USD 2.3m to be repaid in November 2024. An additional
USD 1.8m was also raised through the issue of new loan notes. The notes with a
2027 maturity date carry an annual fixed interest rate of 8.50% (2022: 7.50%)
for GBP denominated notes and 9.50% (2022: 8.00%) for USD denominated notes.
The term of the note issuance is up to 37 months with principal to be repaid
as a bullet payment upon maturity in January 2027. Interest is paid on a
quarterly basis.
23 LEASE LIABILITIES
Movements in the provision recognised in the consolidated statement of
financial position are as follows:
2023 2022
USD'000 USD'000
As at 1 January 5,206 6,040
Additions 918 ―
Interest 436 476
Payments (1,409) (1,310)
──────── ────────
As at 31 December 5,151 5,206
════════ ════════
Current 833 650
Non-current 4,318 4,556
Interest of USD 436,000 (2022: USD 476,000) relating to the above lease
liabilities has been included in Finance Costs for the year.
As at 31 December the maturity profile of lease liabilities was as follows:
2023 2022
USD'000 USD'000
3 months or less 163 124
3 to 12 months 670 526
1 to 5 years 1,806 1,746
Over 5 years 2,512 2,810
──────── ────────
5,151 5,206
════════ ════════
The Group had total cash outflows relating to leases of USD 2,062,000 in 2023
(2022: USD 2,025,000). This is the total of short-term lease payments from
note 16 and payments from note 23.
24 EMPLOYEES' END OF SERVICE BENEFITS
Movements in the provision recognised in the consolidated statement of
financial position are as follows:
2023 2022
USD'000 USD'000
As at 1 January 928 731
Provided during the year 859 526
End of service benefits paid (285) (329)
──────── ────────
As at 31 December 1,502 928
════════ ════════
25 TRADE AND OTHER PAYABLES
2023 2022
USD'000 USD'000
Trade payables 6,321 3,744
Accrued expenses 2,338 2,309
Accrued tax expense 193 388
Customer advances 1,914 533
──────── ────────
10,766 6,974
════════ ════════
All customer advances recorded at 31 December 2022 were subsequently
recognised as revenue in 2023 and all customer advances held at 31 December
2023 were subsequently recognised as revenue in 2024.
26 PROVISIONS
2023 2022
USD'000 USD'000
As at 1 January 1,092 1,422
Provided during the year ― 1,092
Utilised during the year (1,013) (1,422)
Reversed during the year (79) ―
──────── ────────
As at 31 December ― 1,092
════════ ════════
Following the March 2021 attack on Palma, Mozambique the Group began incurring
unavoidable costs relating to the Offsite Assets. All assets were disposed of
in 2023. As such, no provision is held at 31 December 2023.
27 CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES
1 January 31 December
2023 Cash flows New leases Other 2023
USD'000 USD'000 USD'000 USD'000 USD'000
Non-current liabilities
Loan notes 14,000 1,775 ― (2,280) 13,495
Lease liabilities 4,556 ― 286 (524) 4,318
Current liabilities
Loan notes ― ― ― 2,280 2,280
Lease liabilities 650 (1,409) 632 960 833
──────── ──────── ──────── ──────── ────────
19,206 366 918 436 20,926
════════ ════════ ════════ ════════ ════════
1 January 31 December
2022 Cash flows New leases Other 2022
USD'000 USD'000 USD'000 USD'000 USD'000
Non-current liabilities
Loan notes ― 14,000 ― ― 14,000
Lease liabilities 5,206 ― ― (650) 4,556
Current liabilities
Loan notes 10,000 (10,000) ― ― ―
Lease liabilities 834 (1,310) ― 1,126 650
──────── ──────── ──────── ──────── ────────
16,040 2,690 ― 476 19,206
════════ ════════ ════════ ════════ ════════
The 'Other' column includes the effect of reclassification of non-current
portion of leases to current due to the passage of time, the effect of
contracted loan note amounts not yet received, and the effect of accrued
interest not yet paid.
28 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in market interest
rates. The Group was not exposed to any significant interest rate risk on its
interest-bearing liabilities.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of
a financial instrument will fluctuate because of changes in foreign exchange
rates. The Group's exposure to the risk of changes in foreign exchange rates
relates primarily to the Group's operating activities when revenue or expenses
are denominated in a different currency from the Group's functional currency,
as well as cash and cash equivalents held in foreign currency accounts.
At 31 December 2023, the Group held foreign cash and cash equivalents of GBP
948,000 (USD 1,207,000). Additionally, the Group held GBP denominated loans of
GBP 2,239,000 (USD 2,850,000). UK pound sterling is primarily held by the
Group to settle payment obligations denominated in GBP. As at 31 December
2022, the Group held GBP 364,000 (USD 440,000) and GBP denominated loans of
GBP 1,970,000 (USD 2,382,000).
The Group's exposure to foreign currency variances for all other currencies is
not material.
Credit risk
Credit risk is the risk that one party to a financial instrument will fail to
discharge an obligation and cause the other party to incur a financial loss.
The Group is exposed to credit risk on its bank balances and receivables.
The Group seeks to limit its credit risk with respect to banks by only dealing
with reputable financial institutions as determined by the CODM and with
respect to customers by only dealing with creditworthy customers and
continuously monitoring outstanding receivables. The Company's 5 largest
customers account for 50% of outstanding trade receivables at 31 December 2023
(2022: 61%).
Receivables split by customer:
2023 2022
% %
Customer G 21 ―
Customer A 18 14
Customer B 14 22
Customer C 9 7
Customer D 9 7
Customer F 3 11
Other 26 39
──────── ────────
100 100
════════ ════════
No material credit risk is deemed to exist due to the nature of the Group's
customers, who are predominantly governments and large intragovernmental
organisations.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its
financial obligations as they fall due. The Group limits its liquidity risk by
ensuring bank facilities are available.
The Group's terms of sale generally require amounts to be paid within 30 days
of the date of sale. Trade payables are settled depending on the supplier
credit terms, which are generally 30 days from the date of delivery of goods
or services.
As at 31 December the maturity profile of trade payables and loan notes was as
follows:
As at 31 December 2023
Less than 3 to 6 6 to 12 12 to 24
3 months Months Months Months Total
USD'000 USD'000 USD'000 USD'000 USD'000
Loan notes ― ― 2,280 13,495 15,775
Trade payables 6,321 ― ― ― 6,321
──────── ──────── ──────── ──────── ────────
6,321 ― 2,280 13,495 22,096
════════ ════════ ════════ ════════ ════════
As at 31 December 2022
Less than 3 to 6 6 to 12 12 to 24
3 months Months Months Months Total
USD'000 USD'000 USD'000 USD'000 USD'000
Loan notes ― ― ― 14,000 14,000
Trade payables 3,744 ― ― ― 3,744
──────── ──────── ──────── ──────── ────────
3,744 ― ― 14,000 17,744
════════ ════════ ════════ ════════ ════════
Liabilities falling due within twelve months are recognised as current on the
consolidated statement of financial position. Liabilities falling due after
twelve months are recognised as non-current.
The unutilised bank overdraft facilities at 31 December 2023 amounted to USD
10,000,000 (2022: USD 10,000,000) and carry interest of 1m Term SOFR +3.50%
per annum (2022: 1m Term SOFR +3.50%). The facilities require a 100% cash
margin guarantee to be paid upfront.
The Group manages its liquidity risk by maintaining significant cash reserves.
The Group's cash and cash equivalents balance is substantially all held in
institutions holding a Moody's long-term deposit rating of Aa3 or above.
Capital management
The primary objective of the Group's capital management is to ensure that it
maintains a healthy capital ratio in order to support its business and
maximise shareholder value. The Group manages its capital structure and makes
adjustments to it in light of changes in business conditions.
No changes were made in the objectives, policies or processes during the year
ended 31 December 2023.
Capital comprises share capital, share premium, merger reserve, treasury
shares, share based payment reserve and retained earnings and is measured at
USD 24,914,000 as at 31 December 2023 (2022: USD 24,868,000).
29 RELATED PARTY DISCLOSURES
Related parties represent shareholders, directors and key management personnel
of the Group, and entities controlled, jointly controlled, or significantly
influenced by such parties. Pricing policies and terms of these transactions
are approved by the Group's management.
There were no transactions with related parties during the year (2022: USD
nil). No outstanding balances with related parties are included in the
consolidated statement of financial position at 31 December 2023 (2022: USD
nil).
30 ULTIMATE CONTROLLING PARTY
The ultimate controlling party of the company, as shown within the substantial
shareholders breakdown within the Directors' Report, is Soraya Narfeldt.
31 COMPENSATION
Compensation of key management personnel
The remuneration of key management during the year was as follows:
2023 2022
USD'000 USD'000
Short-term benefits 1,272 1,379
Stock based compensation ― 373
──────── ────────
1,272 1,752
════════ ════════
The key management personnel comprise of 3 (2022: 3) individuals. Included in
key management personnel are 2 (2022: 3) Directors.
Compensation of directors
The remuneration of directors during the year was as follows:
2023 2022
USD'000 USD'000
Short-term benefits 1,411 1,574
Stock based compensation ― 178
──────── ────────
1,411 1,752
════════ ════════
Highest paid director
The remuneration of the highest paid director during the year was as follows:
2023 2022
USD'000 USD'000
Short-term benefits 492 393
Stock based compensation ― 178
──────── ────────
492 571
════════ ════════
The amount disclosed in the tables is the amount recognised as an expense
during the reporting year related to key management personnel and directors of
the Group.
32 STANDARDS ISSUED BUT NOT YET EFFECTIVE
No other standards and interpretations that are issued, but not yet effective,
up to the date of issuance of the Group's financial statements are expected to
have a material impact on the Group.
COMPANY STATEMENT OF FINANCIAL POSITION
For the year ended 31 December 2023
2023 2022
Notes USD'000 USD'000
Assets
Non-current assets
Investments 4 28,606 28,606
Loan to subsidiary 5 1,000 1,000
──────── ────────
29,606 29,606
Current assets
Trade and other receivables 6 4,190 5,984
Cash and cash equivalents 320 157
──────── ────────
4,510 6,141
──────── ────────
Total assets 34,116 35,747
════════ ════════
Equity and liabilities
Equity
Share capital 7 24,300 24,300
Share premium ― 18,254
Merger reserve ― ―
Treasury shares 8 ― ―
Share based payment reserve ― 574
Retained earnings 9,408 (8,680)
──────── ────────
Total equity 33,708 34,448
──────── ────────
Liabilities
Non-current liabilities
Loan from subsidiary 9 ― 1,000
──────── ────────
― 1,000
Current liabilities
Trade and other payables 10 408 299
──────── ────────
Total liabilities 408 1,299
──────── ────────
Total equity and liabilities 34,116 35,747
════════ ════════
The Company has taken the exemption conferred by section 408 of the Companies
Act 2006 not to publish the profit and loss of the parent company within these
accounts. The result for the Company for the year was a loss of USD 592,000
(2022: USD 22,396,000).
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2023
Share
Based
Share Share Merger Treasury Payment Retained
Capital Premium Reserve Shares Reserve Earnings Total
USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000
As at 1 January 2022 24,300 18,254 9,897 (1,199) 534 3,819 55,605
Total comprehensive income for the period ― ― ― ― ― (22,396) (22,396)
Share based payments ― ― ― ― 311 ― 311
Non-cash employee compensation ― ― ― 981 ― ― 981
Lapsed share options ― ― ― ― (94) ― (94)
Issuance of treasury shares (note 8) ― ― ― 218 (177) ― 41
Transfer of reserve ― ― (9,897) ― ― 9,897 ―
──────── ──────── ──────── ──────── ──────── ──────── ────────
As at 31 December 2022 24,300 18,254 ― ― 574 (8,680) 34,448
Total comprehensive income for the period ― ― ― ― ― (592) (592)
Share based payments ― ― ― ― 57 ― 57
Lapsed / cancelled share options ― ― ― ― (631) 426 (205)
Capital reduction (*) ― (18,254) ― ― ― 18,254 ―
──────── ──────── ──────── ──────── ──────── ──────── ────────
As at 31 December 2023 24,300 ― ― ― ― 9,408 33,708
════════ ════════ ════════ ════════ ════════ ════════ ════════
(*) On 21 December 2023 the Registrar of Companies registered the cancellation
of RA International Group plc's share premium account. USD 18,254,000 of share
premium was accordingly transferred to retained earnings, creating
distributable reserves and enabling the Company to become dividend paying.
NOTES TO THE COMPANY FINANCIAL STATEMENTS
For the year ended 31 December 2023
1 BASIS OF PREPARATION
The financial statements have been prepared in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting Standards
and the Companies Act 2006), including Financial Reporting Standard 101
'Reduced Disclosure Framework' ("FRS101") under the historical cost basis and
have been presented in USD, being the functional currency of the Company.
The Company has applied a number of exemptions available under FRS 101.
Specifically, the requirement(s) of:
(a) paragraphs 91-99 of IFRS 13 "Fair Value Measurement";
(b) paragraph 38 of IAS 1 "Presentation of Financial Statements" to present
comparative information in respect of paragraph 79(a)(iv) of IAS 1;
(c) paragraphs 10(d), 10(f), and 134-136 of IAS 1 "Presentation of Financial
Statements";
(d) IAS 7 "Statement of Cash Flows";
(e) paragraphs 30 and 31 of IAS 8 "Accounting Policies, Changes in Accounting
Estimates and Errors";
(f) paragraph 17 of IAS 24 "Related Party Disclosures" to disclose related
party transactions entered into between two or more members of a group,
provided that any subsidiary which is a party to the transaction is wholly
owned by such a member; and
(g) paragraphs 134(d)-134(f) and 135(c)-135(e) of IAS 36 "Impairment of
Assets".
2 SIGNIFICANT ACCOUNTING POLICIES
Except noted below, all accounting policies applied to the Company are
consistent with that of the Group.
Investments
Investments held by the company are stated at cost less provision for
diminution in value.
Merger Reserve
A merger reserve is a non-distributable reserve often arising from a share for
share exchange transaction, such as that undertaken by the Company in 2018.
The merger reserve is held at carrying value and maybe transferred to
distributable reserves upon the disposable, write down, depreciation,
amortisation, or diminution in value or impairment of the related asset.
3 EMPLOYEE EXPENSES
The average number of employees employed during the period was:
2023 2022
Directors 5 7
════════ ════════
The aggregate remuneration of the above employees was:
2023 2022
USD'000 USD'000
Wages and salaries 389 447
Social security costs 43 53
──────── ────────
432 500
════════ ════════
4 INVESTMENTS
2023 2022
USD'000 USD'000
As at 1 January 28,606 50,047
Additions ― 350
Diminution in value ― (21,791)
──────── ────────
As at 31 December 28,606 28,606
════════ ════════
During the prior year, the Company recognised a provision of USD 21,791,000
relating to diminution in value of the investment as at 31 December 2022. The
provision was calculated with reference to the Company's market capitalisation
at the year end date, adjusted to reflect cost of disposal, in order to
determine the recoverable amount of the investment on a fair value less cost
to sell basis.
Additionally, the Company invested USD 350,000 in RA Federal Services LLC, a
100% owned subsidiary.
5 LOAN TO SUBSIDIARY
2023 2022
USD'000 USD'000
As at 1 January 1,000 ―
Additions ― 1,000
──────── ────────
As at 31 December 1,000 1,000
════════ ════════
During the prior year, the Company advanced a loan of USD 1,000,000 to a
subsidiary. This note carries an annual fixed interest rate of 9.56%. The term
of the note issuance was 25 months with the principal to be repaid as a bullet
payment upon maturity in November 2024. In December 2023, the loan was
extended by 14 months to January 2026. Interest is to be received on an annual
basis.
6 TRADE AND OTHER RECEIVABLES
2023 2022
USD'000 USD'000
Prepayments 99 67
Due from subsidiary 4,057 5,879
VAT recoverable 34 38
──────── ────────
4,190 5,984
════════ ════════
Amounts due from subsidiary represent amounts due from RA International FZCO,
an immediate subsidiary, and are non-interest bearing and payable on demand.
7 SHARE CAPITAL
2023 2023 2022 2022
Number USD'000 Number USD'000
Authorised, issued, and fully paid:
Ordinary shares of GBP 0.10 each 173,575,741 24,300 173,575,741 24,300
════════ ════════ ════════ ════════
8 TREASURY SHARES
2023 2023 2022 2022
Number USD'000 Number USD'000
As at 1 January ― ― 1,783,898 1,199
Issued in the period ― ― (1,783,898) (1,199)
──────── ──────── ──────── ────────
As at 31 December ― ― ― ―
════════ ════════ ════════ ════════
9 LOAN FROM SUBSIDIARY
2023 2022
USD'000 USD'000
As at 1 January 1,000 ―
Additions ― 1,000
Repayments (1,000) ―
──────── ────────
As at 31 December ― 1000
════════ ════════
During the prior year, the Company subscribed to a loan from a subsidiary for
USD 1,000,000. This note carries an annual fixed interest rate 9.56%. The term
of the note issuance was 25 months with the principal to be repaid as a bullet
payment upon maturity in November 2024. Interest is paid on an annual basis.
The note was cancelled in January 2023 for no penalty.
10 TRADE AND OTHER PAYABLES
2023 2022
USD'000 USD'000
Trade payables 149 176
Accruals 259 123
──────── ────────
408 299
════════ ════════
11 RELATED PARTY TRANSACTIONS
The Directors have taken advantage of the exemption under paragraph 8(j) and
8(k) of FRS101 and have not disclosed transactions with other wholly owned
Group undertakings. There are no other related party transactions.
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