REG - Reconstruction CapII - Interim Unaudited Financial Statements

Reconstruction Capital IIAnnouncement

12/08/2019 11:15

RNS Number : 7291I
Reconstruction Capital II Ltd
12 August 2019
 


12 August 2019
Reconstruction Capital II Limited (the "Company")
Interim Unaudited Financial Statements
for the six months ended 30 June 2019
 
Reconstruction Capital II Limited ("RC2", the "Company" or the "Group"), a closed-end investment company incorporated in the Cayman Islands admitted to trading on the AIM market of the London Stock Exchange, today announces its results for the six months ended 30 June 2019.
Copies of the company's interim financial statements will today be posted to shareholders. The interim report is also available on the Company's website http://www. reconstructioncapital2.com/.
Financial highlights
On 30 June 2019, Reconstruction Capital II Limited ("RC2") had a total unaudited net asset value ("NAV") of €30.3m or €0.2224 per share, which represents a 0.62% fall since the beginning of the year.
During the first half of the year, RC2 acquired 4,075,463 of its Ordinary Shares of nominal value €0.01 for a total consideration of € 0.65m. The shares were subsequently cancelled bringing the total shares in issue to 136,256,913.



As at 30 June 2019, RC2 had cash and cash equivalents of approximately €0.1m while its subsidiary, RC2 (Cyprus) Ltd, had cash and cash equivalents of € 2.21m. As at 30 June 2018, RC2 had sundry liabilities of € 0.11m.



Operational highlights
Policolor generated consolidated operating revenues of € 30.1m in the first half of 2019, down 9.2% year-on- year and 7.6% below budget. After a strong first quarter, Policolor's coatings sales weakened considerably in the second quarter, in part due to weak demand but also due to the difficulties in continuing to supply its full range of coatings prior to the opening of its new Bucharest factory. Over the first half of 2019, the Group generated recurring EBITDA (net of revenues and expenses allocated to the real estate division) of € 0.8m, significantly below the budgeted EBITDA of € 1.4m, mainly due to the lower coatings sales in the second quarter. Meanwhile, the construction of Policolor's new Bucharest factory and warehouse has progressed well over the quarter, with construction works having been finalized by the end of July, one month later than originally planned.
 Mamaia Resort Hotel's operating revenues over the first semester were € 0.7m, up 19.7% year-on-year but  4.7% below budget. The Hotel, which is highly seasonal, makes most of its revenues over the months of July and August. The re-decoration of the Hotel's beach-facing "Junona" wing bedrooms and the renovation of the kitchen, which started at the end of 2018, were finalized just before the 1st May holiday which is also the official start of the Romanian seaside's summer season. The six-month EBITDA loss of € -0.4m was worse  than the budgeted loss of € -0.2m, due to the lower than expected revenues, but also higher salary expenses and the cost of certain renovation related works which were not initially budgeted.
Following the recruitment of a new CEO as part of its strategy to re-direct its business towards B2B lending, whilst continuing with pay day lending to the extent permitted by the more restrictive prudential regulations introduced by the National Bank of Romania, Telecredit started to finance SMEs in February, having granted € 1.2m as factoring services and microloans over the first half of 2019. The lending activity was further helped by the official launch of Omnicredit, Telecredit's SME financing dedicated online platform at the beginning of June. The book value of Telecredit's SME-focussed portfolio was €0.7m at the end of June, considerably better than the budgeted figure of € 0.5m. Meanwhile, as expected due to the regulatory restrictions on pay day loans which came into effect at the beginning of 2019, pay day lending activity continued to fall, with the book value of the pay day loan book down from € 0.4m at the end of March to € 0.2m at the end of June. At the end of April, RC2 (Cyprus) Ltd, a wholly-owned subsidiary of RC2, acquired 20% of Telecredit for € 185,000, thereby bringing its shareholding in Telecredit to 100%. At the end of June, in order to support the expansion of Telecredit's SME loan book, RC2 (Cyprus) Ltd made available to Telecredit a € 1m financing line, none of which was drawn until after the end of June.
For further information, please contact:
Reconstruction Capital II Limited
Cornelia Oancea / Anca Moraru
Tel: +40 21 316 76 80
 
Grant Thornton UK LLP
(Nominated Adviser)
Philip Secrett

Tel: +44 (0) 20 7383 5100
 
finnCap Limited
(Broker)
William Marle / Giles Rolls
Tel: +44 20 7220 0500
 
 
 
 
 



ADVISER'S REPORT
For the six months ended 30 June 2019
 




On 30 June 2019, Reconstruction Capital II Limited ("RC2") had a total unaudited net asset value ("NAV") of
€30.3m or €0.2224 per share, which represents a 0.62% fall since the beginning of the year.




During the first half of the year, RC2 acquired 4,075,463 of its Ordinary Shares of nominal value €0.01 for a total consideration of € 0.65m. The shares were subsequently cancelled bringing the total shares in issue to 136,256,913.




Policolor generated consolidated operating revenues of € 30.1m in the first half of 2019, down 9.2% year-on- year and 7.6% below budget. After a strong first quarter, Policolor's coatings sales weakened considerably in the second quarter, in part due to weak demand but also due to the difficulties in continuing to supply its full range of coatings prior to the opening of its new Bucharest factory. Over the first half of 2019, the Group generated recurring EBITDA (net of revenues and expenses allocated to the real estate division) of € 0.8m, significantly below the budgeted EBITDA of € 1.4m, mainly due to the lower coatings sales in the second quarter. Meanwhile, the construction of Policolor's new Bucharest factory and warehouse has progressed well over the quarter, with construction works having been finalized by the end of July, one month later than originally
planned.




Mamaia Resort Hotel's operating revenues over the first semester were € 0.7m, up 19.7% year-on-year but 4.7% below budget. The Hotel, which is highly seasonal, makes most of its revenues over the months of July and August. The re-decoration of the Hotel's beach-facing "Junona" wing bedrooms and the renovation of the kitchen, which started at the end of 2018, were finalized just before the 1st May holiday which is also the official start of the Romanian seaside's summer season. The six-month EBITDA loss of € -0.4m was worse than the budgeted loss of € -0.2m, due to the lower than expected revenues, but also higher salary expenses and the cost of certain renovation related works which were not initially
budgeted.




Following the recruitment of a new CEO as part of its strategy to re-direct its business towards B2B lending, whilst continuing with pay day lending to the extent permitted by the more restrictive prudential regulations introduced by the National Bank of Romania, Telecredit started to finance SMEs in February, having granted € 1.2m as factoring services and microloans over the first half of 2019. The lending activity was further helped by the official launch of Omnicredit, Telecredit's SME financing dedicated online platform at the beginning of June. The book value of Telecredit's SME-focussed portfolio was €0.7m at the end of June, considerably better than the budgeted figure of € 0.5m. Meanwhile, as expected due to the regulatory restrictions on pay day loans which came into effect at the beginning of 2019, pay day lending activity continued to fall, with the book value of the pay day loan book down from € 0.4m at the end of March to € 0.2m at the end of June. At the end of April, RC2 (Cyprus) Ltd, a wholly-owned subsidiary of RC2, acquired 20% of Telecredit for € 185,000, thereby bringing its shareholding in Telecredit to 100%. At the end of June, in order to support the expansion of Telecredit's SME loan book, RC2 (Cyprus) Ltd made available to Telecredit a € 1m financing line, none of which was drawn until after the end of June.




As at 30 June 2019, RC2 had cash and cash equivalents of approximately €0.1m while its subsidiary, RC2 (Cyprus) Ltd, had cash and cash equivalents of € 2.21m. As at 30 June 2018, RC2 had sundry liabilities of




€ 0.11m.




 
New Europe Capital SRL










 
 
 



STATEMENT OF COMPREHENSIVE INCOME



For the six months ended 30 June 2019
 
 




 


 


30 June


 


30 June


 


31 December




 


 


2019


 


2018


 


2018




 


 


EUR


 


EUR


 


EUR




 


 


Unaudited


 


Unaudited


 


Audited




Investment Income


 


 


 


 


 


 




Fair value loss on financial assets at
fair value through profit or loss


 


 
(2,162,241)


 


 
(2,077,374)


 


 
(7,436,971)




Recovery of previously written off receivable


 


 
-


 


 
-


 


 
9,000




Interest income






2,151,033






2,153,054






4,341,794




Other income


 


255


 


10


 


10




Net investment (loss)/gain


 


(10,953)


 


75,690


 


(3,086,167)




Expenses


 


 


 


 


 


 




Impairment on trade and other
receivables


 


 
-


 


 
(126,000)


 


 
-




Operating expenses


 


(443,456)


 


(534,322)


 


(1,031,186)




Financial expenses


 


-


 


(721)


 


(886)




Total expenses


 


(443,456)


 


(661,043)


 


(1,032,072)




Loss for the period/year


 


(454,409)


 


(585,353)


 


(4,118,239)




Other comprehensive income


 


-


 


-


 


-




Total comprehensive income for the period/year attributable to owners


 


 
 
(454,409)


 


 
 
(585,353)


 


 
 
(4,118,239)




 
 
Earnings Per Share attributable to the owners of the Company


 
 
 
 


 


 


 


 


 




Basic and diluted earnings per share


 


(0.0033)


 


(0.0040)


 


(0.0285)



 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
STATEMENT OF FINANCIAL POSITION



As at 30 June 2019
 
 




 


 


30 June


 


30 June


 


31 December




 


 


2019


 


2018


 


2018




 


 


EUR


 


EUR


 


EUR




 


 


Unaudited


 


Unaudited


 


Audited




ASSETS


 


 


 


 


 


 




Non-current assets


 


 


 


 


 


 




Financial assets at fair value through profit or loss


 
 


 
30,293,424


 


 
33,568,867


 


 
30,614,632




Total non-current assets


 


30,293,424


 


33,568,867


 


30,614,632




 
Current assets


 


 


 


 


 


 




Trade and other receivables


 


14,299






18,281






21,011




Cash and cash equivalents


 


100,964


 


4,567,668


 


1,480,305




Total current assets


 


115,263


 


4,585,949


 


1,501,316




 
TOTAL ASSETS


 


 
30,408,687


 


 
38,154,816


 


 
32,115,948




 
LIABILITIES


 


 


 


 


 


 




Current liabilities


 


 


 


 


 


 




Trade and other payables


 


109,949


 


2,451,315


 


710,726




 
TOTAL LIABILITIES


 


 
109,949


 


 
2,451,315


 


 
710,726




 
NET ASSETS


 


 
30,298,738


 


 
35,703,501


 


 
31,405,222




 
EQUITY ATTRIBUTABLE TO OWNERS




Share capital


 


1,362,569


 


1,449,460


 


1,403,324




Share premium






109,250,778






110,581,355






109,862,098




Accumulated deficit


 


(80,314,609)


 


(76,327,314)


 


(79,860,200)




TOTAL EQUITY


 


30,298,738


 


35,703,501


 


31,405,222



 



 


 


 


 


 




Net Asset Value per share


 


 


 


 




Basic and diluted net asset value per share


 
 


 
0.2224


 
0.2463


 
0.2238



 
 
 
 
 
 
STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2019
 
 








 
 
Share capital






 
Share premium






Retained (deficit)/ earnings






Equity component of loan notes






 
 
Total








EUR






EUR






EUR






EUR






EUR




Balance at 1 January 2018


1,449,460






110,581,355






(75,741,961)






-






36,288,854




Loss for the period


-






-






(585,353)






-






(585,353)




Other comprehensive income


-






-






-






-






-




 
Total comprehensive income for the period


 
-






 
-






 
(585,353)






 
-






 
(585,353)




Balance at 30 June 2018


1,449,460






110,581,355






(76,327,314)






-






35,703,501




 
Loss for the period


 
-






 
-






 
(3,532,886)






 
-






 
(3,532,886)




Other comprehensive income


-






-






-






-






-




 
Total comprehensive income for the period


 
-






 
-






 
(3,532,886)






 
-






 
(3,532,886)




 
Repurchase and cancellation of own shares


 
(46,136)






 
(719,257)






 
-






 
-






 
(765,393)




Transactions with owners


(46,136)






(719,257)






-






-






(765,393)




Balance at 31 December 2018


1,403,324






109,862,098






(79,860,200)






-






31,405,222




 
Loss for the period


 
-






 
-






 
(454,409)






 
-






 
(454,409)




Other comprehensive income


-






-






-






-






-




 
Total comprehensive income for the period


 
-






 
-






 
(454,409)






 
-






 
(454,409)




 
Repurchase and cancellation of own shares


 
(40,755)






 
(611,320)






 
-






 
-






 
(652,075)




Transactions with owners


(40,755)






(611,320)






-






-






(652,075)




Balance at 30 June 2019


1,362,569






109,250,778






(80,314,609)






-






30,298,738



 
 
 
 
 
 
 
 
 
 



 
CASH FLOW STATEMENT
For the six months ended 30 June 2019
 
 








30 June






30 June






31 December








2019






2018






2018








EUR






EUR






EUR








Unaudited






Unaudited






Audited




Cash flows from operating activities
























Loss before taxation


(454,409)






(585,353)






(4,118,239)




Adjustments for:
























Fair value loss on financial assets at fair value
through profit or loss


 
2,162,241






 
2,077,374






 
7,436,971




Impairment on trade and other receivables


-






126,000






-




Reversal of loan impairment


-






-






(9,000)




Interest income


(2,151,033)






(2,153,054)






(4,341,794)




Net (gain)/loss on foreign exchange


(255)






721






886




Net cash outflow before changes in working capital


 
(443,456)






 
(534,312)






 
(1,031,176)




Decrease/(increase) in trade and other receivables


6,712






(7,842)






115,427




Increase/(decrease) in trade and other payables


14,348






(83,686)






(180,513)




Purchase of financial assets


(133,602)






(1,224,079)






(3,433,045)




Disposals and repayments of financial assets


310,000






-






9,000




Net cash used in operating activities


(245,998)






(1,849,919)






(4,520,307)




Cash flows from financing activities
























Payments to purchase own shares


(1,000,657)






-






(416,810)




Redemptions of B shares


(132,941)






(21,455)






(21,455)




Net cash flow used in financing activities


(1,133,598)






(21,455)






(438,265)




Net decrease in cash and cash equivalents before currency adjustment


 
(1,379,596)






 
(1,871,374)






 
(4,958,572)




Effects of exchange rate differences on cash and cash equivalents


 
255






 
(721)






 
(886)




Net decrease in cash and cash equivalents after currency adjustment


 
(1,379,341)






 
(1,872,095)






 
(4,959,458)




Cash and cash equivalents at the beginning of the period/year


 
1,480,305






 
6,439,763






 
6,439,763




Cash and cash equivalents at the end of the period/year


 
100,964






 
4,567,668






 
1,480,305



 
 
 
 
 
 




This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
IR GGUBURUPBGUP