REG - Starcrest Education - Interim Results for the six months to 30 June 2022
01/09/2022 07:01
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RNS Number : 8161X Starcrest Education Limited 01 September 2022
1 September 2022
Starcrest Education Limited
("Starcrest" or the "Company" or the "Group")
Interim Results for the six months to 30 June 2022
Starcrest Education Limited (LSE: OBOR), the international developer and
operator of education services in Europe, is pleased to announce its unaudited
results for the six months to 30 June 2022.
Highlights
· As of 30 June 2022, the Group had cash balances of £17,285 (2021:
£652,690)
· Loss before tax of £212,831 (2021: £415,827)
· On 23 March 2022, the Company announced that it had signed an
agreement with Fairview International School (UK) Limited, for an advance of
up to £1 million ("Advance Agreement"). As part of the terms of the Advance
Agreement, Starcrest and Fairview have also agreed to acquire an interest in
several Fairview IB World Schools (together the "Proposed Acquisition")
subject to negotiation on the specific details.
· Post-period end on 15 August 2022, appointment of Shipleys LLP to
conduct an audit of the proposed enlarged group for the year ending 31
December 2022
Jeff Zhang, Executive Director of Starcrest, commented:
"We are pleased to announce Starcrest's interim results for the six months to
30 June 2022.
"We believe that the acquisition of Fairview Schools provides a valuable
opportunity for Starcrest and its shareholders. The Board's focus remains on
progressing the required steps to complete the transaction. Alongside this,
however, in line with the Company's revised strategy and with its extensive
experience and contacts, we will continue to seek further acquisition targets
across the education sector in the UK, Europe and Asia, which the Board
believes demonstrates potential for long-term growth.
"The Directors look forward to providing further updates to the market in due
course."
- Ends -
Enquiries:
Starcrest Education
Jeff Zhang, Executive Director +44 (0) 7768 031454
Guild Financial Advisory (Financial Adviser)
Ross Andrews +44 (0) 7973 839767
Yellow Jersey PR (Financial PR)
Sarah Hollins +44 (0) 20 3004 9512
Henry Wilkinson
Notes to editors:
Starcrest is an international developer and operator of education services in
Europe. The Company was established to seek acquisition opportunities in the
international education sector and to provide premier education services and
products in the UK and to countries in Europe.
Starcrest listed on the Main Market of the London Stock Exchange on 31 January
2019 under the ticker symbol (LSE: OBOR). Further information can be found on
the Company's website at https://www.starcresteducation.com
(https://www.starcresteducation.com) .
Strategic Report
Introduction
I am very pleased to report the Company's interim results for the period ended
30 June 2022.
Strategy and Transactions
As outlined in Starcrest's 2021 final results on 23 March 2022, we were
pleased to announce that the Company had signed an agreement with Fairview
International School (UK) Limited, for an advance of up to £1 million
("Advance Agreement"). As part of the terms of the Advance Agreement,
Starcrest and Fairview have also agreed to acquire an interest in several
Fairview IB World Schools (together the "Proposed Acquisition") subject to
negotiation on the specific details.
Fairview is the largest network of IB World Schools with five campuses across
Malaysia and Scotland being the latest addition to the network. Fairview has
been in education for over four decades and was recognised as among the Top 1%
Global IB Schools for excellence in its academic achievement for the last two
years.
Starcrest continues to advance the respective workstreams in respect of the
Proposed Acquisition. In this regard, the Company is pleased to confirm that
it has determined the acquisition targets, and appointed professional advisers
for the acquisition exercise. A further announcement will be made as and when
appropriate.
The agreement with Fairview has provided an advance of up to £1 million of
which the Company has drawn £200,000 as of 30 June 2022. The Board has
reviewed its cash flows for a period of at least 12 months from the date of
these financial statements, having taken into account optimised overheads,
projected costs and settlement schedule associated with the due diligence on
the Proposed Acquisition. Directors have a reasonable expectation that the
Company and Group will have sufficient resources to meet their obligations as
they fall due.
The Proposed Acquisition is subject to, amongst other things, legal and
financial due diligence, therefore the Company is unable to provide further
information at this stage about the terms of the Proposed Acquisition. If the
Proposed Acquisition is successful, it will amount to a reverse takeover under
the Listing Rules.
The Board believes that Fairview provides a valuable opportunity for Starcrest
and its shareholders. The Board is therefore progressing matters and will
update shareholders as soon as they are able. The Company is focused on
completing the transaction with Fairview, however there is no certainty that
the transaction will complete which includes the raising of new monies to fund
the consideration. In the event the transaction does not complete, the Company
will continue to seek another potential acquisition and to ensure that the
Company has sufficient funding. The Company believes that its principal risks
and uncertainties remain unchanged from those disclosed in the 2021 annual
report.
Post-period, on 15 August 2022, Shipleys LLP has been appointed to conduct an
audit of the proposed enlarged group for the year ended 31 December 2022; and
a review of interim financial information for the six months ended 30 June
2022.
Results
Starcrest made approximately £221,896 loss for the period ended June 2022
(2021: £418,219). The losses reported in this period are attributed to
Directors' fees, administration and other costs.
The majority of the losses reported in the comparative period to 30 June 2021,
representing approximately £246,000, were attributed to Directors' fees,
administration and other costs The remaining expenditure related to
professional fees and associated costs relating to the due diligence cost for
acquisition targets. Reverse takeover expenses relate to the 2021 acquisition
project which was aborted.
Board
With the Company's intention to move from a shell to an operating company,
Starcrest will strengthen its Board through the appointment of a new Chairman
and an Executive Director. More details will be provided on this in due
course.
Summary and Outlook
First and foremost, the Board's focus remains on progressing the required
steps to complete the acquisition of the Fairview Schools. Alongside this,
however, in line with the Company's revised strategy and with its extensive
experience and contacts, the Board continues to seek further acquisition
targets across the education sector in the UK, Europe and Asia, which the
Board believes demonstrates potential for long-term growth.
We look forward to providing further updates in due course.
Xiao Jun Zhang
Executive Director
31 August 2022
UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2022
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months 6 months
ended ended
Note 30/06/2022 30/06/2021
Unaudited Unaudited
£ £
Administrative expenses (209,720) (415,827)
Operating loss 10 (209,720) (415,827)
Finance costs (3,110) -
Loss before taxation (212,831) (415,827)
Income tax - -
Loss for the period (212,831) (415,827)
Other Comprehensive (loss)/gain (2,391)
Exchange gain arising on translation (9,065)
to presentation currency
Total comprehensive loss attributable to equity holders of the Company for the (221,896) (418,219)
period
Loss per share - basic and diluted (pence per share) 13 (0.99) (1.93)
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Note As at As at
30/06/2022 31/12/2021
Unaudited Audited
£ £
Current assets
Cash and cash equivalents 14 17,285 42,427
Trade and other receivables 15 1,993 1,441
Total current assets 19,277 43,868
Total assets 19,277 43,868
Equity and liabilities
Capital and reserves attributable to owners of the company
Ordinary shares 17 215,600 215,600
Share premium 3,454,364 3,454,364
Retained earnings (4,547,991) (4,335,160)
Foreign exchange reserves 76,379 85,444
Total equity (801,648) (579,752)
Current liabilities
Trade and other payables 16 820,925 623,620
Lease liabilities - -
Total current liabilities 820,925 623,620
Total equity and liabilities 19,277 43,868
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2022
Share capital Share premium Other reserves Retained earnings Foreign exchange Total equity
£ £ £ £ £ £
Balance at 1 January 2022 215,600 3,454,364 - (4,335,160) 85,444 (579,752)
Loss for the period - - - (212,831) - (212,831)
Other comprehensive loss for the financial period - - - - (9,065) (9,065)
Balance at 30 June 2022 215,600 3,454,364 - (4,547,991) 76,379 (801,648)
(Unaudited)
FOR THE PERIOD ENDED 30 JUNE 2021
Share capital Share premium Other reserves Retained earnings Foreign exchange Total equity
£ £ £ £ £ £
Balance at 1 January 2021 215,600 3,454,364 - (2,943,779) (96,153) 822,338
Loss for the period - - - (415,827) - (415,827)
Other comprehensive gain for the financial period - - - - (2,391) (2,391)
Balance at 30 June 2021 (Unaudited) 215,600 3,454,364 - (3,359,606) 93,761 404,119
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
Share capital Share premium Other reserves Retained earnings Foreign exchange Total equity
£ £ £ £ £ £
Balance at 1 January 2021 215,600 3,454,364 - (2,943,779) 96,153 822,338
Loss for the year - - - (1,391,381) (1,391,381)
Other comprehensive gain for the year - - - - (10,709) (10,709)
Balance at 31 December 2021 (Audited) 215,600 3,454,364 - (4,335,160) 85,444 (579,752)
FOR THE PERIOD ENDED 30 JUNE 2021
Share capital Share premium Other reserves Retained earnings Foreign exchange Total equity
£ £ £ £ £ £
Balance at 1 January 2021 215,600 3,454,364 - (2,943,779) (96,153) 822,338
Loss for the period - - - (415,827) - (415,827)
Other comprehensive gain for the financial period - - - - (2,391) (2,391)
Balance at 30 June 2021 (Unaudited) 215,600 3,454,364 - (3,359,606) 93,761 404,119
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021
Share capital Share premium Other reserves Retained earnings Foreign exchange Total equity
£ £ £ £ £ £
Balance at 1 January 2021 215,600 3,454,364 - (2,943,779) 96,153 822,338
Loss for the year - - - (1,391,381) (1,391,381)
Other comprehensive gain for the year - - - - (10,709) (10,709)
Balance at 31 December 2021 (Audited) 215,600 3,454,364 - (4,335,160) 85,444 (579,752)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Period Ended 30 JUNE 2022
30/06/2022 30/06/2021
Unaudited Unaudited
£ £
Cash flows from operating activities
Operating loss (212,831) (415,827)
Depreciation - -
Finance cost - -
(Increase) in receivables 15 (552) (18,590)
(Decrease) in payables 16 (11,784) (365,595)
Net cash generated from operating activities (225,167) (800,012)
Cash flows from financing activities
Transaction costs deducted from equity - -
Proceeds from borrowings 200,000
Principal paid on lease liabilities - -
Interest paid on lease liabilities - -
Net cash used in financing activities 200,000 -
Net decrease in cash, cash equivalents (25,167) (800,012)
Cash, cash equivalents at beginning of the period 42,427 1,454,672
Exchange gains on cash and cash equivalents 24 (1,970)
Cash, cash equivalents at end of the period 14 17,285 652,690
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1. GENERAL INFORMATION
Starcrest Education Limited ("the Company") was incorporated and registered in
the Cayman Islands as a private company limited by shares on 23 May 2018 under
the Companies Law (as revised) of The Cayman Islands, with the name Starcrest
Education The Belt & Road Limited, and registered number 337619. The
Company has officially changed the name to Starcrest Education Ltd on 30
September 2021, the RNS was released on 5 October 2021
The subsidiaries included in these condensed consolidated financial statements
were incorporated in November 2019.
The Company's registered office is located at Cricket Square, Hutchins Drive
PO Box 2681, Grand Cayman KY1-1111, Cayman Islands.
2. PRINCIPAL ACTIVITIES
The principal activity of the Group is to seek education related acquisition
opportunities in Europe.
3. RECENT ACCOUNTING PRONOUNCEMENT
a) New interpretations and revised standards effective for the period ended 30
June 2022
The International Accounting Standards Board (Board) has issued an amendment
to IFRS 16 Leases to make it easier for lessees to account for
COVID-19-related rent concessions such as rent holidays and temporary rent
reductions
The Group's had no lease contract during the interim period.
b) Standards and interpretations in issue but not yet effective
There are a number of standards and interpretations which have been issued by
the International Accounting Standards Board that are effective for periods
beginning subsequent to 1 January 2022 (the date on which the Company's next
annual financial statements will be prepared from) that the Company has
decided not to adopt early. The Directors do not believe these standards and
interpretations will have a material impact on the financial statements once
adopted.
4. BASIS OF PREPARATION
These condensed consolidated interim financial statements have been prepared
in accordance with IAS 34 Interim Financial Reporting as adopted by the UK
adopted International Accounting Standards and prepared under the historic
cost convention. The comparative figures as at 31 December 2021 have been
extracted from the Group's Financial Statements for that financial year, but
do not constitute these accounts.
The Company's functional currency is USD. The Company listed its shares on the
main market of the London Stock Exchange on 31 January 2019. The directors
have decided to present the consolidated interim financial information in
Pounds Sterling (£), which is the Group's presentation currency, as the
Company is listed in the UK.
On 11 March 2022, the Company signed a loan agreement with Fairview
International School (UK) Limited (Fairview) for an advance of up to
£1,000,000. The loan is made available in tranches, with £253,300 received
to date and further tranches totalling £746,700 to be made available for
expenses incurred by the Group. The loan is repayable on the earlier of the
successful completion of the reverse takeover of the Company by Fairview and
the acquisition of certain Fairview IB World Schools (the Proposed
Acquisition) or 12 months from the date of the loan agreement. The agreement
contains a call option over up to 75% of the share capital of the Company
which can be exercised at any time. The Directors are confident in their
ability to execute the Proposed Acquisition, to raise sufficient capital from
new shareholders, to agree extended payment terms with their creditors and, if
necessary, obtain alternative sources of funds as described above. The
Directors have received a letter of support from the immediate parent company
stating that it will not seek repayment of the amounts owed by the Company
prior to completing the Proposed Acquisition.
On the basis of the above, Directors have a reasonable expectation that the
Company and Group will have sufficient resources to meet their obligations as
they fall due. Accordingly, these financial statements have been prepared on a
going concern basis.
5. SIGNIFICANT ACCOUNTING POLICIES
5.1 Foreign currency translation
Transactions in currencies other than the Company's functional currency
(foreign currencies) are recognised at the rates of exchange prevailing on the
dates of the transactions. At each reporting date, monetary assets and
liabilities that are denominated in foreign currencies are retranslated at the
rates prevailing at that date. Non-monetary items carried at fair value that
are denominated in foreign currencies are translated at the rates prevailing
at the date when the fair value was determined. Non-monetary items that are
measured in terms of historical cost in a foreign currency are not
retranslated.
Exchange differences are recognised in profit or loss in the period in which
they arise.
Results at 30 June 2022 are translated into the presentation currency. Assets
and liabilities are translated at the closing rate while income and expenses
are translated at exchange rates at the dates of the transactions. Differences
arising are recognised in Other Comprehensive Income in the period in which
they arise (foreign currency translation reserve).
5.2 Financial instruments
A financial asset or a financial liability is recognised only when the Group
becomes a party to the contractual provisions of the instrument.
Financial instruments are initially recognised at the transaction price as
this represents fair value, unless the arrangement constitutes a financing
transaction, where it is recognised at the present value of the future
payments discounted at a market rate of interest for a similar instrument.
Financial assets
All financial assets are initially recognised at fair value, less transaction
costs. Subsequent to initial recognition, they are recorded at amortised cost.
Financial liabilities
Financial liabilities are initially recognised at fair value. Subsequent to
initial recognition, they are recorded at amortised cost.
5.3 Share Capital
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of ordinary shares or options in relation to
ordinary shares are shown in equity as a deduction, net of taxation, from the
proceeds.
5.4 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held on call with
banks and other short term highly liquid investments that are readily
convertible into known amounts of cash and which are subject to an
insignificant risk of changes in value.
5.5 Earnings per share
Basic earnings per share is computed using the weighted average number of
shares outstanding during the period. Diluted earnings per share is computed
using the weighted average number of shares during the period plus the
dilutive effect of dilutive potential ordinary shares outstanding during the
year.
5.6 Leases
Where the Group enters into leases that are longer than 12 months, the Group
recognises right-of-use assets measured at an amount equal to the lease
liability. The lease liability is measured at the present value of the
remaining lease payments, discounted using the Group's incremental borrowing
rate at date of lease commencement. Lease modifications are accounted for at
the effective date of the lease modification.
6. ACCOUNTING ESTIMATES AND JUDGEMENTS
Preparation of financial information in conformity with IFRS requires
management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets,
liabilities, income and expenses.
There are no significant accounting estimates or judgements that affect
reported amounts of assets, liabilities, income and expenses in this period.
7. FINANCIAL RISK MANAGEMENT
The Group has exposure to the liquidity risk, foreign currency risk and
capital risks from its use of financial instruments. Credit, interest rate and
market risks are not considered to be material to the Group. The Group is not
subject to any externally imposed capital requirements.
The Group's financial instruments consist mainly of cash and accounts
receivable and payable.
a. Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting
the obligations associated with its financial liabilities. The Group's
approach to managing liquidity is to ensure, as far as possible, that it will
always have sufficient liquidity to meet its liabilities when due, under both
normal and stressed conditions, without incurring unacceptable losses or
risking damage to the Group's reputation.
The Group's financial liabilities comprise trade payables, amounts due to the
parent company and accruals.
The Group's financial assets comprise cash and cash equivalents, trade and
other receivables.
The Group has sufficient cash to meet their liabilities as they fall due.
b. Foreign currency risk
The Company keeps majority of cash in British pound in UK HSBC bank account.
There was no foreign currency payment during the period. Financial risks of
variations in foreign currency exchange rates have been significantly reduced
as a result.
c. Credit risk
Credit risk refers to the risk that counterparty will default on its
contractual obligations resulting in financial loss to the Group. Credit
allowances are made for estimated losses that are anticipated to be incurred
by the reporting date.
8. CAPITAL MANAGEMENT
The Group actively manages the capital available to fund the Group, comprising
equity and reserves. The Group's objectives when maintaining capital is to
safeguard the entity's ability to continue as a going concern, so that it can
continue to provide returns for shareholders.
9. SEGMENT REPORTING
IFRS 8 defines operating segments as those activities of an entity about which
separate financial information is available and which are evaluated by the
Board of Directors to assess performance and determine the allocation of
resources. The Board of Directors are of the opinion that under IFRS 8 the
Group has only one operating segment. The Board of Directors assess the
performance of the operating segment using financial information which is
measured and presented in a manner consistent with that in the Financial
Statements. Segmental reporting will be reviewed and considered in light of
the development of the Group's business over the next reporting period.
10. OPERATING LOSS
The operating loss is stated after charging:
6 months ended 6 months ended
30 June 2022 30 June 2021
Lease - -
expense
11. STAFF COSTS AND KEY MANAGEMENT EMOLUMENTS
Period
ended Period ended
30 June 2022 30
June 2021
£
£
Key management emoluments
Remuneration
131,528
177,500
Directors 86,528 102,500
Staff costs 45,000 75,000
12. TAXATION
The Company is incorporated in the Cayman Islands, and its activities are
subject to taxation at a rate of 0%.
The Company's wholly owned subsidiaries, Starcest Education UK PLC and
Starcest Education Management (UK) Ltd are incorporated in England and Wales,
and its activities are subject to taxation at a rate of 19%. For the period to
30 June 2022 the entities have made a taxable loss. No deferred tax asset has
been recognised.
13. EARNINGS PER SHARE
The Company presents basic and diluted earnings per ordinary share information
for its ordinary shares. Basic earnings per share is calculated by dividing
the loss attributable to ordinary shareholders of the Company by the weighted
average number of ordinary shares in issue during the reporting period.
There is no difference between the basic and diluted loss per share.
6 months ended 6 months ended
30/06/2022 30/06/2021
Loss attributable to ordinary shareholders (212,831) (415,827)
Weighted average number of shares 21,560,000 21,560,000
Losses per share (expressed as pence per share) (0.99) (1.93)
14. CASH AND CASH EQUIVALENTS
Unaudited Audited
30/06/2022 31/12/2021
£ £
Cash and cash equivalents 17,285 42,427
Cash at bank earns interest at floating rates based on daily bank deposit
rates.
15. TRADE AND OTHER RECEIVABLES
Unaudited Audited
30/06/2022 31/12/2021
£ £
VAT and other receivables 1,993 1,441
1,993 1,441
16. TRADE AND OTHER PAYABLES
Unaudited Audited
30/06/2022 31/12/2021
£ £
Trade payables 36,975 229,758
Amounts due to the parent company 225,782 216,726
Other creditors 203,110 -
Accruals 355,058 107,133
820,925 623,620
All payables are financial liabilities measured at amortised cost.
Amounts due to the parent company are unsecured, interest free and repayable
on demand.
17. SHARE CAPITAL
Number of shares Nominal value
£ £
Authorised
Ordinary shares of GBP £0.01 each 1,000,000,000 10,000,000
Issues and fully paid
Issue of ordinary shares of £0.01 each 21,560,000 215,600
18. ULTIMATE CONTROLLING PARTY
The Company's immediate parent company is Starcrest Education Management
Company Ltd. The Company's ultimate parent company is Fubao Group Holdings
Ltd. The ultimate controlling party is Mr Peng Luo, who is also a director of
the Company.
19. RESERVES
The following describes the nature and purpose of each reserve within equity:
Reserve Description and purpose
Share premium Amount subscribed for share capital in excess of nominal value.
Other reserve Consideration received for shares which are not yet issued.
Retained earnings All other net gains and losses and transactions not recognised elsewhere.
Foreign exchange reserve Gains/losses arising on retranslation of net assets from functional to
presentation currency.
20. RELATED PARTY TRANSACTIONS
As at 30 June 2022, an amount of £225,782 (unaudited) (31 December 2021
(audited): £216,729) was owed to Starcrest Education Management Company Ltd.
This amount mainly arose from business expenses paid on behalf of the Group by
the parent company.
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