REG - Worldsec Limited - Half-year Report
28/09/2023 14:45
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RNS Number : 0431O Worldsec Limited 28 September 2023
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WORLDSEC LIMITED
Interim Report for the six months ended 30 June 2023
Worldsec Limited
Interim Report for the six months ended 30 June 2023
The board (the "Board") of directors of Worldsec Limited (the "Company")
hereby submits the interim report on the Company and its subsidiaries (the
"Group") for the six months ended 30 June 2023 (the "Interim Report").
For the period under review, the Group recorded an unaudited net profit of
US$717,000 (equivalent to basic and diluted earnings per share of 0.84 US
cent) against an unaudited net loss of US$526,000 (equivalent to basic and
diluted loss per share of 0.62 US cent) for the corresponding six months in
2022. This turn from loss to profit reflected mainly the gain of US$917,000
(subject to audit) arising from the disposal of the Group's entire investment
in Velocity Mobile Limited ("Velocity"), while at the same time there was also
a small positive change in the fair value of its financial assets against a
negative change during the previous corresponding period.
The cash proceeds from the Velocity disposal, which were the main reason
behind the increase in the cash and cash equivalents balance from US$526,000
at the beginning of the period under review to US$1.25 million by the end of
the period under review, are intended to be used for general working capital
and to fund future investment acquisitions.
After the Group's disposal of its entire investment in Velocity, at the date
of the Interim Report, the investment portfolio of the Group comprises a total
of six investments:
ICBC Specialised Ship Leasing Investment Fund (the "ICBC Ship Fund")
The Group's investment in the ICBC Ship Fund, which is involved in marine
vessel leasing, continued to provide a stable return through monthly dividend
income generating revenue amounting to US$48,000 for the six months ended 30
June 2023.
Animoca Brands Corporation Limited ("Animoca") through VS SPC Limited ("VS
SPC")
The Group holds an investment in the Class A Participating Shares of VS SPC,
the sole underlying investment asset of which is an equity interest in
Animoca.
Incorporated in Australia, Animoca is an unlisted holding company of a
technology group that uses gamification, blockchain and artificial
intelligence ("AI") technologies to develop and publish a broad portfolio of
products that includes, notably among others, The Sandbox, a decentralised
gaming virtual world. Other key business units of the Animoca group consist of
Animoca Brands KK, GAMEE, nWay, Blowfish Studios, Grease Monkey Games,
Darewise Entertainment, Quidd, Lympo, Forj, Pixowl, Helix Accelerator, Eden
Games, Life Beyond Studios, Notre Game, TinyTap, Be., Anichess, Gryfyn
(https://gryfyn.io/) , Pixelynx and WePlay Media. Animoca is also an active
investor in crypto, blockchain-related and Web3 projects with a broad and
growing portfolio of over 450 investments that includes OpenSea, a leading
non-fungible token ("NFT") marketplace, Axie Infinity, a popular
Pokemon-inspired blockchain-based video game, and Dapper Labs, the developer
of CryptoKitties.
2022 was a trying year with major market events such as the collapse of Terra,
one of the largest stablecoin ecosystems, and FTX, one of the largest
cryptocurrency exchange platforms, which devolved into a frighteningly bearish
market for crypto assets. The commencement of 2023, however, appeared to
have brought a renewed sense of optimism. Being a global leader in the
crypto and NFT industries, Animoca benefited from the price recoveries of
major cryptocurrencies and NFTs significantly. According to the Animoca's 11
May 2023 investor update, the Animoca group held on the 30 April 2023 cash and
stablecoins totalling US$194 million, liquid digital assets of US$566 million
and off-balance sheet token reserves related to majority-owned Web3
subsidiaries of US$2.7 billion. The corresponding comparable figures at the
end of December 2022 were US$191 million, US$469 million and US$1.6 billion
respectively.
Other highlights of the recent development and events of the Animoca group
include the following:
· The Animoca group led OP3N's US$28 million Series A round of funding at
$100 million valuation in March 2023. OP3N aims to bridge the gap between the
Web2 and Web3 technologies by utilising blockchain and decentralised
technologies to build a cohesive consumer-friendly Web3 platform. With the
newly raised funds, OP3N plans to further develop its comprehensive Web3
AI-powered chat, Superapp. Superapp will have the ability to include audio,
video and mixed media contents to on-chain interactions, acting as a one-stop
for all communication, connection and commerce.
· Animoca Brands KK, a strategic subsidiary of Animoca, invested JP¥150
million in LMI, a company that provides various consulting solutions for
physical and virtual retailers. The investment will help LMI accelerate its
growth and expand its reach in the retail media sector in Japan.
· Following the acquisition of Tiny Tap in 2022, the Animoca group
continued to expand in the edtech sector by leveraging on Tiny Tap's
established Web2 code-free platform which enables educators and publishers to
create and share interactive educational contents and to receive a revenue
share when those contents are used by learners. According to the latest
available figures, Tiny Tap's educational game library holds more than 250,000
activities created by educators and publishers including Sesame Street and
Oxford University Press, serving around 9.2 million registered members with
contents created by over 100,000 content creators. In April 2023, Tiny Tap
raised US$8.5 million from investors including Sequoia Capital, Liberity City
Ventures, Shima Capital and others with a view to accelerating its development
in the Web3 space. In May 2023, both Animoca and Tiny Tap committed to
contribute to the Global Educators Fund, a US$10 million grant fund set up by
Open Campus Protocol, to supplement standard education curricula through the
use of the Web3 technologies and communities. Open Campus is a community-led
protocol for educators, content creators, parents and students and its vision
is to leverage Web3 to create a modern, global and inclusive educational space
where educators, content creators, parents and students can collaborate. In
August 2023, Tiny Tap, Open Campus and Code Green announced the formation of a
strategic partnership to help promote children's learning about climate change
by leveraging the power of tokenised educational contents, interactive gaming
and blockchain technologies. Code Green, a partner to the United Nation's
effort to combat climate change and desertification, is a trail-blasing Web3
organisation driven by a commitment to the planet's health.
· Web3 financial super app and ecosystem, hi, and the Animoca group
forged a strategic partnership through a memorandum of understanding, aiming
to enhance the practicality of fungible tokens and NFTs within their
respective ecosystems. This collaboration involves an investment of US$30
million by the Animoca group in hi, along with joint efforts on various Web3
initiatives.
· Anichess, a subsidiary of Animoca, successfully raised $1.5 million in
an oversubscribed seed round of funding. The raised capital would enable
Anichess to fund the continued and further development of its groundbreaking
decentralised chess game, its team expansion and its community growth.
· In September 2023, the Animoca group received binding commitments for a
funding round to accelerate the development of its Mocaverse project. Led by
CMCC Global and supported by Kingsway Capital, Liberty City Ventures, Koda
Capital and others, the funding of US$20 million was raised by Animoca via the
issue of Simple Agreements for Future Equity ("SAFE") and the grant of a
free-attaching utility token warrant on a 1:1 dollar basis. The SAFE will be
automatically converted into ordinary shares of Animoca after six months.
The number of new shares to be issued, at AUD4.50 per share, will be
determined by the AUD:USD exchange rate at the time of settlement. The
Mocaverse project is designed to bring together all the Animoca group
companies, employees, partners and its portfolio investment companies under an
ecosystem where all participants get to connect, learn, interact and grow
together.
· Animoca has received prestigious recognitions from the crypto and Web3
industries, among which include the following:
· Fortune Crypto 40 ranked Animoca as a top venture capital firm in the
blockchain space with a focus on NFTs and gaming in April 2023.
· nft now, a Web3 digital media platform that empowers culture
creators, honored Animoca as one of the 2023 NFT100, a list of influential
creators and community leaders in the Web3 industry.
· Mr. Yat SIU, the co-founder and executive chairman of Animoca was
selected by the Hong Kong Special Administrative Region Government to join its
task force to promote development and to make recommendations concerning the
responsible and sustainable advancement of the Web3 technologies in Hong Kong.
Innovusion Holdings Ltd. ("Innovusion") through the Hermitage Fund Twelve SP
(the "Hermitage Fund Twelve")
The Group holds an investment in the Class A Participating Shares of the
Hermitage Galaxy Fund SPC attributable to the Hermitage Fund Twelve, the sole
underlying investment asset of which is an equity interest in Innovusion.
Innovusion is an unlisted holding company of a technology group that
specialises in the development of image-grade light detection and ranging
("LiDAR") sensor systems for the autonomous vehicle and advance
driver-assistance system markets. The Innovusion group has developed a product
portfolio that includes both long-range front-view LiDAR sensors and
mid-to-short range side-view LiDAR sensors.
Since March 2022, the LiDAR sensors of the Innovusion group have been used in
many of the NIO's vehicles including the ET5, ET7, ES6, ES7/EL7, ES8 and EC6
models. According to the LiDAR for Automotive Report by Yole Group, an
independent market research firm, Innovusion led the L2 (partial driving
automation) and L3 (conditional driving automation) markets in 2022 with a 27%
market share. All the NIO's NT2.0 platform-based vehicles are now equipped
with Falcon, the image-grade, ultra-long-range front-view LiDAR sensor of the
Innovusion group, as part of the standard configuration.
Innovusion's strategic partnerships with several commercial vehicle firms,
including TuSimple, EaseControl Autonomous, Waytous Technologies, Zhiji Tech
and DeepWay, have solidified the Falcon platform's central role in the
commercial vehicle market. In March 2023, Innovusion obtained ISO 26262
certification for automotive functional safety from DEKRA
Certification. This certification is pivotal in supporting the advancement
of high-quality autonomous driving industry practices, covering all aspects
from design and development to verification, production and operation.
In another recent development, Innovusion joined forces with Wideye, a
subsidiary of the AGC Group specialising in optical sensor integration, to
devise a groundbreaking LiDAR solution for vehicles. This partnership is
centered around the enabling of the practical and aesthetically pleasing
installation of LiDAR systems behind windshields, a crucial advancement as the
demand for integrated LiDAR sensors surges in line with mass production
expansion.
Aiming for further growth, Innovusion has initiated an application for an
initial public offering on Nasdaq. This proposed offering would involve the
issue of up to 21.4 million Innovusion shares for investors, as outlined in a
10 August 2023 announcement on the China Securities Regulatory Commission
website.
ByteDance Ltd. ("ByteDance") through the Homaer Asset Management Master Fund
SPC (the "Homaer Fund")
The Group holds an investment in the Unicorn Equity Investment Portfolio Class
A Shares of the Homaer Fund, the sole underlying investment asset of which is
an equity interest in ByteDance.
ByteDance is an unlisted holding company of a technology group that operates a
series of mobile application platforms powered by AI across cultures and
geographies. The ByteDance group has a portfolio of products that is
available in over 150 markets and 75 languages and that includes, among
others, Douyin, Toutiao, TikTok, Xigua Video and Helo.
The overseas business of the ByteDance group has shown robust growth,
outpacing the strong but slowing growth rate achieved by its domestic
operations as a result of the effect of a rapidly growing base. The robust
growth in overseas revenue has primarily been contributed by TikTok,
complemented by other international ventures such as those in the video game
and enterprise software sectors.
TikTok has recently announced substantial investment plans for Indonesia and
other Southeast Asia countries given its strong market presence in the region.
Indonesia, in particular, has emerged as a pivotal market for TikTok Shop with
a large user base actively participating in in-app shopping. TikTok has also
been reported to be in early-stage discussions with Indonesian regulators
about acquiring a payment license, a move that could enhance its competitive
position in Southeast Asian e-commerce.
While TikTok Shop has flourished in Southeast Asia, it faces challenges in
gaining widespread adoption in the West. As a consequence, TikTok is
refocusing its international expansion efforts on markets, including the UK,
US and Southeast Asia, where its e-commerce service has been established.
TikTok is also introducing the "Trendy Beat" as part of the "Project S" to
drive e-commerce sales. This feature offers popular items from the videos on
TikTok to be sold by ByteDance through a Singapore-registered company and
shipped from China, allowing the ByteDance group to capture the proceeds from
the sales made through this TikTok feature.
Meantime, AI has emerged as a prominent trend attracting significant attention
across the technology landscape. As reported by the Financial Times, Baidu,
ByteDance, Tencent and Alibaba have been actively engaged in the acquisition
of high-performance Nvidia chips, essential for the development of generative
AI systems. These companies have collectively placed orders amounting to US$5
billion, driven by concerns of potential new export controls by the United
States. Beyond this, ByteDance continues to expand its robotics
capability, with a view to capitalising on the synergy between large language
model integration and robotics applications. Spearheading the development in
robotics and AI within the ByteDance group, the Byte Robotics team, an
integral part of the Byte AI Lab, is tasked with the mission that includes
refining and optimising robots for e-commerce operations and streamlining
processes such as sorting, packaging and consumer delivery.
In August 2023, the ByteDance group introduced a new product named Dou Bao,
offering text and image-based conversational AI capabilities akin to ChatGPT.
Dou Bao aims to tap into the burgeoning market of AI-generated contents,
expected to exceed a trillion US dollars in value over the next decade. It
features various AI personas for diverse purposes, including chatting, writing
and English learning, enabling users to engage in multilingual conversations
and create contents.
Following a wave of layoffs last year and a 32-month regulatory scrutiny
period, China's major technology companies are resuming their expansion
initiatives. Premier Li Qiang, in July 2023, expressed the Government's
commitment to addressing the concerns and challenges faced by Internet
companies while improving relevant policies and measures to foster healthy and
regulated development within the Internet economy. This improvement in the
operating environment would enable the ByteDance group to refocus on pursuing
its growth trajectory.
Dingdong (Cayman) Limited ("Dingdong")
Following the distribution of the American depositary shares of Dingdong (the
"Dingdong ADS") by Cambium Grove Growth Opps IV Limited ("Cambium Opps") to
the holders of the Class B Ordinary Shares of Cambium Opps upon the expiry of
the lock-up period associated with initial public offering of Dingdong, the
Group directly holds its investment in the the Dingdong ADS.
Listed on the New York Stock Exchange, Dingdong is the holding company of a
fresh grocery e-commerce group that operates a mobile application platform,
Dingdong Fresh, providing users with fresh produce, meat, seafood, prepared
food and other food products supported by a self-operated frontline
fulfillment grid with about 60 regional processing centres and about 1,100
frontline fulfillment stations on leased properties. The operations of the
Dingdong group cover around 25 cities across China including Beijing,
Shanghai, Shenzhen and Guangzhou.
According to unaudited financial information released by Dingdong, the
Dingdong group reported revenue of RMB5.0 billion for the first quarter of
2023 and RMB4.8 billion for the second quarter of 2023, representing
year-on-year decline of 8.2% and 27% respectively. The decline in revenue,
particularly during the second quarter of 2023, reflected the high base
effects of the strong performance recorded in the same periods in the previous
year when pandemic-related restrictions significantly impacted various regions
across China, thus driving up demand for online grocery shopping. Revenue
was also adversely affected by the Dingdong group's strategic decision to
withdraw operations from several cities where attaining profitability in the
short term would be difficult. Nevertheless, and notwithstanding the
normalised post-pandemic operating environment, the Dingdong group continued
to demonstrate resilience by achieving non-GAAP net income of RMB 6.1 million
and RMB 7.5 million during the first and second quarters of 2023
respectively. This marked three consecutive quarters of non-GAAP
profitability since the fourth quarter of 2022, reflecting primarily the
success of the Dingdong group in achieving continued improvement in product
development capabilities and frontline fulfillment labour efficiencies.
In a strategic move to restructure its position across the national market,
the Dingdong group has, as mentioned earlier, withdrawn operations from
several cities with poor short-term profit visibility while placing notable
emphasis on the East China region where operational and financial performance
has shown promising and propitious prospects. According to the second
quarter 2023 financial results released by Dingdong, Shanghai has achieved
overall profitability since the first quarter of 2022. Furthermore, both the
Jiangsu and Zhejiang Provinces have displayed commendable performance by
maintaining three consecutive quarters of profitability since the fourth
quarter of 2022. In the context of mature market growth, both of the provinces
have recorded double-digit year-on-year growth in daily order volume per
station. This underscores the success of the Dingdong group's strategy to
place emphasis on these two provinces to stimulate order volume. Nonetheless,
there remains potential for further improvement in terms of order penetration
and daily order volume per station in the Jiangsu and Zhejiang Provinces when
compared to the performance metrics observed in Shanghai.
Dingdong has also outlined plans to bolster its operational capabilities in
both North and South China. These forthcoming initiatives align with the
commitment of the Dingdong group to expanding its footprint and achieving
sustainable growth in diverse regional markets across China.
For the remaining quarters and for the full year of 2023, Dingdong is
confident on the ability of the Dingdong group to continue to achieve non-GAAP
profitability.
Oasis Education Group Limited ("Oasis Group")
Oasis Group is a 50% joint venture of the Group. The operating subsidiary of
Oasis Group, Oasis Education Consulting (Shenzhen) Company Limited ("Oasis
Shenzhen", 奧偉詩教育諮詢(深圳)有限公司), provides consulting and
support services to the Huizhou Kindergarten in the Guangdong Province in
China.
Following the graduation of 138 pupils in the summer of 2023, the Huizhou
Kindergarten enrolled 79 new pupils for the academic term that commenced in
September 2023 and its total pupil enrolment stood at 257.
With the steadily improving cash flow on the back of a stable operational
performance and after repaying RMB400,000 in December 2021, the Huizhou
Kindergarten made another repayment of RMB600,000 to Oasis Shenzhen in April
2023 to retire part of its borrowings which were related to the set-up costs
incurred at the time when the kindergarten was established.
Velocity Mobile Limited ("Velocity")
Velocity, an unlisted investee company of the Group, is the holding company of
a technology group that operates a lifestyle mobile e-commerce platform
targeting premium consumers with services focusing on the sectors of high-end
travel, experiences and luxury goods.
Having established a leading position in the digital concierge market with a
rapidly growing track record, the Velocity group attracted the attention and
interest that eventually led to a takeover offer to acquire the entire issued
share capital of Velocity by Capital One Financial Corporation ("Capital
One"), one of the largest retail banks in the United States specialising in
credit cards, automobile loans and savings accounts. The acquisition was
completed in June 2023. Under the takeover offer from Capital One, the Group
disposed of its entire investment in Velocity. Almost all of the proceeds
from the Velocity disposal had been received before 30 June 2023. The
balance, subject to any downward-only adjustment Capital One is entitled to
deduct, will be settled in the first quarter/half of 2024.
The gain of US$917,000 (subject to audit) arising from the disposal of the
Group's entire investment in Velocity was the major factor that contributed to
the turn from loss to profit reported by the Group during the period under
review. The cash proceeds from the Velocity disposal are intended to be used
for general working capital and to fund future investment acquisitions.
PROSPECTS
Global trade returned to growth in the first three months of 2023 after two
consecutive quarterly decline in the second half of 2022. According to the
Global Trade Update by the United Nations Conference on Trade and Development
in June 2023, trade of goods and services in seasonally adjusted values was
estimated to have risen by 1.9% and 2.9% respectively in the first quarter of
2023 when compared to the fourth quarter of 2022. However, the rebound
appeared to have started fading in the second quarter of 2023 and global trade
growth for the rest of 2023 is expected to remain weak. This unfavourable
outlook is echoed in the World Economic Outlook Update by the International
Monetary Fund which projects global economic growth to fall from 3.5% in 2022
to 3.0% in 2023. Continued uncertainties over the path of interest rates,
inflation, geopolitics and the uncompromising war between Russia and Ukraine
are the major negative factors of concern. Although the headline inflation
is estimated by the International Monetary Fund to fall from 8.7% in 2022 to
6.8% in 2023 and 5.2% in 2024, it is still well above the core target of 2%
set by the major developed economies indicating that interest rates will
likely remain at high levels for a longer period of time.
The recent adoption of the narrative of "de-risking" rather than "decoupling"
by the West in their political and economic approach towards China appears
that the West have taken a more moderate stance. However, in practice, to
implement "de-risking" could take different forms. Some countries will focus
on political issues under the national security banner while others will be
more concerned about economic matters such as the diversification of supply
chains and the resistance to economic coercion. Without a clear and
generally recognised definition of "de-risking", such an approach will be
subject to different interpretations by different countries, thereby creating
divergence and not consensus in "de-risking" policies and measures, hence
adding to further uncertainties. Nonetheless, the "de-risking" strategy of
the West towards China, so far as China is concerned, is likely to be no more
than a "selective decoupling of choice" and the ultimate objective of the West
in containing China's development is expected to remain unchanged. In the
absence of geopolitical harmony, there will be structural changes to global
trade that would not be conducive to economic growth across the globe.
The private equity market in the first half of 2023 remained challenging under
the backdrop of the uncertainties surrounding the global economic outlook that
continued to weigh on investment sentiment. The abrupt end of the low
interest rate era experienced in the last 15 years has put pressure on the
financial system worldwide, especially on the banking sector. Corporations
have not only encountered difficulties in obtaining new fundings but are also
facing problems in their refinancing negotiations as banks tighten their
lending policies. The real estate and the technology sectors are among the
most affected. Likewise, fundings from the public markets through initial
public offerings and issuance of bonds and leveraged loans also showed
significant decline. As these traditional sources of fundings become less
accessible, private equity firms, with their unprecedented dry powder reserves
of over US$3.5 trillion that continues to drive competition for quality
investments, are presented with opportunities to negotiate deals at lower
valuations. Nevertheless, given the cautious investment sentiment, deal
volume in the first half of 2023 declined by 4% from the relatively subdued
levels recorded in the second half of 2022 but still remained above the
pre-pandemic 2019 levels according to PWC's 2023 Mid-Year Update on Global
M&A Industry Trends.
Following the uplift of the COVID-19 lockdown measures at the beginning of
2023, China's economy was expected to recover strongly. But the recovery
fell short of the bullish expectation as the initial momentum lost steam on
the back of weakening domestic and external demand. Latest figures, however,
indicate that the slowdown in economic growth seems to be stablising under
policy support notwithstanding the persistent woes of the real estate
sector. As the majority of the investments and underlying investment assets
of the Group are largely China-focused, their near-term prospects do not
appear to be particularly promising in that they are unlikely to produce any
meaningful contributions to the Group's results in the near term.
Nonetheless, the Board remains confident on the long-term potential of these
investments and underlying investment assets which are well-placed to benefit
from the strength of China's economy in the long term. Meantime, the
disposal of the Group's entire investment in Velocity has provided the Group
with additional wherewithal which will be used for general working capital
purposes and to fund future investment opportunities as and when they are
identified.
By order of the Board
Alastair GUNN-FORBES
Non-Executive Chairman
28 September 2023
PRINCIPAL RISKS AND UNCERTAINTIES
The Group is exposed to a number of principal risks and uncertainties that
could materially and adversely affect its performance for the remaining six
months of the year ending 31 December 2023 and beyond. Such risks and
uncertainties, the directors believe, remain largely unchanged from those,
including, in particular, target market risk, key person risk, operational
risks and financial risks, set out on pages 14 and 15 of the Company's 2022
Annual Report.
RESPONSIBILITY STATEMENT
The Board, comprising Alastair GUNN-FORBES, Henry Ying Chew CHEONG, Ernest
Chiu Shun SHE, Mark Chung FONG, Martyn Stuart WELLS and Stephen Lister
d'Anyers WILLIS, confirms to the best of its knowledge and understanding that:
(a) the unaudited consolidated financial statements of the Group for
the six months ended 30 June 2023 have been prepared in accordance with
International Accounting Standard 34 as adopted by the European Union and give
a true and fair view of its assets, liabilities and financial position at that
date and its financial performance for the period then ended; and
(b) the Interim Report includes a fair review of the information, such
as important events and related party transactions that took place during the
six months ended 30 June 2023, that is required by Disclosure Guidance and
Transparency Rules 4.2.7R and 4.2.8R.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2023
Unaudited
Six months ended
Notes 30.6.2023 30.6.2022
US$'000 US$'000
Revenue 4 48 59
Other income, gains and losses, net 5 941 (278)
Staff costs 7 (132) (131)
Other expenses (136) (173)
Finance costs 8 (1) (2)
Share of losses of a joint venture (3) (1)
)
)
Profit/(loss) before income tax expense 717 (526)
Income tax expense 9 - -
Profit/(loss) for the period 717 (526)
Other comprehensive income, net of income tax
Exchange differences on translating foreign operations - -
Other comprehensive income for the period,
net of income tax - -
Total comprehensive income/(loss) for the period 717 (526)
Profit/(loss) for the period attributable to:
Owners of the Company 717 (526)
Total comprehensive income/(loss) for the period attributable to:
Owners of the Company 717 (526)
Earnings/(Loss) per share - basic 10 US0.84 US(0.62) cent
cent
Earnings/(Loss) per share - diluted 10 US0.84 US(0.62) cent
cent
cue
cent
The accompanying notes form an integral part of these interim financial
statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 30 JUNE
2023
Unaudited Audited
As at As at
Notes 30.6.2023 31.12.2022
US$'000 US$'000
Non-current assets
Interest in a joint venture 68 71
Financial assets at fair value through profit or loss 4,128 4,409
Right-of-use assets 16 48
4,212 4,528
Current assets
Other receivables 321 223
Deposits and prepayments 27 26
Financial assets at fair value through profit or loss 161 97
Amount due from a joint venture 257 257
Cash and cash equivalents 1,247 526
2,013 1,129
Current liabilities
Other payables and accruals 44 160
Lease 18 55
liabilities
62 215
Net current assets 1,951 914
Non-current liabilities
Lease - -
liabilities
Net assets 6,163 5,442
Capital and reserves
Share capital 11 85 85
Reserves 6,078 5,357
Total equity 6,163 5,442
The accompanying notes form an integral part of these interim financial
statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2023
Foreign
Contri- Share currency Accumu-
Share Share buted option translation Special lated
capital premium surplus reserve reserve reserve losses Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance as at 1 January 2022 249 (6) 625 (11,811) 6,312
85 7,524 9,646
- - - - - - (526) (526)
Loss and total comprehensive loss for the period
85 7,524 9,646 249 (6) 625 (12,337) 5,786
Balance as at 30 June 2022 (Unaudited)
249 (33) 625 (12,654) 5,442
Balance as at 1 January 2023 85 7,524 9,646
717 717
Profit and total comprehensive income for the period
Recognition of share-based payments - - - - - - 4 4
Balance as at 30 June 2023 (Unaudited) 85 7,524 9,646 249 (33) 625 (11,933) 6,163
The accompanying notes form an integral part of these interim financial
statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2023
Unaudited
Six months ended
30.6.2023 30.6.2022
US$'000 US$'000
Cash flows from operating activities
Profit/(loss) for the period 717 (526)
Adjustments for:
Bank interest income (1) -
Depreciation of right-of-use assets 32 32
Interest on lease liabilities 1 2
Share of losses of a joint venture 3 1
(Gain)/loss on disposal of financial assets at fair value through
profit or loss (917) 20
Change in fair value of financial assets at fair value through profit or loss
(26) 270
Operating loss before working capital changes (191) (201)
(Increase) in deposits and prepayments (1) (1)
(Increase)/decrease in other receivables (98) 90
(Decrease) in other payables and accruals (116) (72)
Net cash used in operating activities (406) (184)
Cash flows from investing activities
Bank interest income received 1 -
Investment in financial assets at fair value through profit and loss (83) (1,188)
Proceeds from disposal of financial assets at fair value through
profit or loss 1,247 598
Net cash from/(used in) investing activities 1,165 (590)
Cash flows from financing activities
Repayment of principal portion of lease liabilities (37) (35)
Repayment of interest portion of lease liabilities (1) (2)
Net cash used in financing activities (38) (37)
Net decrease in cash and cash equivalents 721 (811)
Cash and cash equivalents at beginning of the period 526 1,513
Effects of exchange rate changes - -
Cash and cash equivalents at end of the period
Cash and bank balances 1,247 702
The accompanying notes form an integral part of these interim financial
statements.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE
2023
1. GENERAL INFORMATION
The Company is an exempted company incorporated in Bermuda and has a premium
listing on the Main Market of the London Stock Exchange. The addresses of
the registered office and principal place of business of the Company are
disclosed in the corporate information in the Interim Report.
2. BASIS OF PREPARATION
This unaudited consolidated financial statements of the Company and its
subsidiaries (the "Group") for the six months ended 30 June 2023 (the "Interim
Financial Statements") have been prepared in accordance with International
Accounting Standard 34 ("IAS 34") issued by the International Accounting
Standards Board as adopted by the European Union (the "EU").
The Interim Financial Statements do not include all of the information
required in annual financial statements in accordance with International
Financial Reporting Standards ("IFRS"), International Accounting Standards
("IAS"), Interpretations adopted by the EU, Interpretations adopted by the
International Financial Reporting Interpretations Committee and
Interpretations adopted by the Standing Interpretations Committee
(collectively referred to as "IFRSs"), and should be read in conjunction with
the annual financial statements of the Group for the year ended 31 December
2022. The Interim Financial Statements have neither been audited nor reviewed
by the Group's auditor.
Save for the adoption of the amendments to IFRSs as described in note 3 to the
Interim Financial Statements, which became effective for the Group's financial
year that began on 1 January 2023, the accounting policies adopted in the
Interim Financial Statements were consistent with those used in the
preparation of the Group's annual financial statements for the year ended 31
December 2022.
The Interim Financial Statements have been prepared on a going concern basis
using the historical cost convention, except for certain financial instruments
which were stated at fair value as appropriate.
The preparation of the Interim Financial Statements in conformity with IAS 34
as adopted by the EU required management to make judgments, estimates and
assumptions that could affect the application of accounting policies and
reported amounts of assets, liabilities, income and expenses on a year to date
basis. Actual results might differ from these estimates.
3. ADOPTION OF NEW AND REVISED IFRSs
The Group has applied the same accounting policies in the Interim Financial
Statements as in its annual financial statements for the year ended 31
December 2022, except that it has adopted the following amendments to IFRSs:
Amendments to IAS 1 and Disclosure of Accounting Policies
IFRS Practice Statement 2
Amendments to IAS 8 Definition of Accounting Estimates
Amendments to IAS 12 Deferred tax related to assets and liabilities arising from a single
transaction
The application of the above amendments to IFRSs in the current interim period
had no material effect on the amounts reported and/or disclosures set out in
the Interim Financial Statements.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE
2022
4. REVENUE
The Group's revenue represented dividend income from financial assets at fair
value through profit or loss for the periods ended 30 June 2023 and 2022, an
analysis of which is as follows:
Unaudited
Six months ended
30.6.2023 30.6.2022
US$'000 US$'000
Dividend income from financial assets at fair value through profit or loss
48 59
5. OTHER INCOME, GAINS AND LOSSES, NET
Unaudited
Six months ended
30.6.2022 30.6.2022
US$'000 US$'000
Gain/(loss) on disposal of financial assets at fair value through profit or
loss
917 (20)
Change in fair value of financial assets at fair value through profit or loss 26 (270)
Interest Income
Foreign exchange (loss)/gain, net 1 -
Other (3) 6
- 6
941 (278)
6. BUSINESS AND GEOGRAPHICAL SEGMENTS
No business and geographical segment analyses are presented for the periods
ended 30 June 2023 and 2022 as the major operations and revenue of the Group
arose from Hong Kong. The Board considers that most of the Group's
non-current assets (other than the financial instruments) were located in Hong
Kong.
7. STAFF COSTS
The aggregate staff costs (including directors' remuneration) of the Group
were as follows:
Unaudited
Six months ended
30.6.2023 30.6.2022
US$'000 US$'000
Wages and salaries 129 128
Contributions to pension and provident fund 3 3
132 131
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE
2023
7. STAFF COSTS (CONTINUED)
Key management personnel of the Company are the directors only.
The directors' remuneration was as follows:
Unaudited
Six months ended
30.6.2023 30.6.2022
US$'000 US$'000
Directors' fees 38 36
Other remuneration including contributions to pension and provident fund
- -
38 36
8. FINANCE COSTS
Unaudited
Six months ended
30.6.2023 30.6.2022
US$'000 US$'000
Interest on lease liabilities 1 2
9. INCOME TAX EXPENSE
No provision for taxation has been made as the Group did not generate any
assessable profits for United Kingdom Corporation Tax, Hong Kong Profits Tax
or tax in other jurisdictions during the periods ended 30 June 2023 and 2022.
10. EARNINGS/(LOSS) PER SHARE
The earnings/(loss) and weighted average number of ordinary shares used in the
calculation of basic and diluted earnings/(loss) per share were as follows.
Unaudited
Six months ended
30.6.2023 30.6.2022
Earnings/(loss) for the period attributable to owners of the Company (US$'000)
717 (526)
Weighted average number of ordinary shares for the purposes of basic and
diluted earnings/(loss) per share
85,101,870 85,101,870
Effect of potential dilutive ordinary shares:
- Share options - -
85,101,870 87,151,870
Earnings/(loss) per share - basic US0.84 cent US(0.62) cent
Earnings/(loss) per share - diluted US0.84 cent US(0.62) cent
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE
2022
10. EARNINGS/(LOSS) PER SHARE (CONTINUED)
Diluted earnings/(loss) per share was the same as basic earnings/(loss) per
share for the six months ended 30 June 2023 and 2022 as the impact of the
potential dilutive ordinary shares outstanding had an anti-dilutive effect on
the basic earnings/(loss) per share presented for the six months ended 30 June
2023 and 2022.
11. SHARE CAPITAL
Number of Total value
shares US$'000
Authorised:
Ordinary shares of US$0.001 each
As at 1 January 2022, 31 December 2022, 1 January 2023 and
30 June 2023 60,000,000,000 60,000
Called up, issued and fully paid:
Ordinary shares of US$0.001 each
As at 1 January 2022, 31 December 2022, and 1 January 2023 and 30 June 2023
85,101,870 85
12. RELATED PARTY TRANSACTIONS
Other than the compensation of key management personnel disclosed below, the
Group did not have any related party transactions during the six months ended
30 June 2023 and 2022.
Compensation of key management personnel
The remuneration of directors is set out in note 7 to the Interim Financial
Statements.
13. SHARE_BASED PAYMENTS
The Company operates an equity-settled share-based remuneration scheme for the
employees and directors.
On 20 February 2023, the Company granted 350,000 share options to Mr. Willis
to subscribe on a one for one basis new ordinary shares of US$0.001 each in
the share capital of the Company at an exercise price of US$0.034 per share
under the scheme. The share options vested six months from the date of grant
and were then exercisable within a period of 9.5 years.
The following table discloses the movement of the outstanding share options
under the scheme during the period ended 30 June 2023.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE
2022
13. SHARE_BASED PAYMENTS (CONTINUED)
Number of options
Grantee Exercisable period Balance at Granted during the year Exercised during the Forfeited during the year Lapsed during the year Balance at Exercise price per share
1 January 2023 year 30 June 2023 (US$)
Directors 20 August - 350,000 350,000 0.034
2023 to 19 February 2033
29 November
2019 to 28 May 2029
1 June 2016 to 30 November 2025 1,750,000 - - - - 1,750,000 0.034
2,500,000 - - - - 2,500,000 0.122
Employees 29 November - - - 300,000 0.034
2019 to 28
May 2029 300,000 -
1 June 2016 to 30 November 2025 - - - 450,000 0.122
450,000 -
5,000,000 350,000 - - - 5,350,000
The fair value of the share options granted under the scheme during the period
ended 30 June 2023 was determined at the grant date to be US$5,000.
The share-based payment expenses of US$4,000 was charged to the profit or loss
account for the Group during the period ended 30 June 2023.
No share option was exercised, expired or lapsed under the scheme during the
period ended 30 June 2023.
14. CONTINGENT LIABILITIES
The Group had no material contingent liabilities at 30 June 2023 and 31
December 2022.
15. INTERIM REPORT
The Interim Report was approved and authorised for issue by the Board on 28
September 2023.
CORPORATE INFORMATION
Board of Directors
Non-Executive Chairman
Alastair GUNN-FORBES*
Executive Directors
Henry Ying Chew CHEONG (Deputy Chairman)
Ernest Chiu Shun SHE
Non-Executive Directors
Mark Chung FONG*
Martyn Stuart WELLS*
Stephen Lister d'Anyers WILLIS*
* independent
Company Secretary
Vistra Company Secretaries Limited
First Floor, Templeback, 10 Temple Back, Bristol BS1 6FL, United Kingdom
Assistant Company Secretary
Ocorian Services (Bermuda) Limited
Victoria Place, 5th Floor, 31 Victoria Street, Hamilton HM 10, Bermuda
Registered Office Address
Victoria Place, 5th Floor, 31 Victoria Street, Hamilton HM 10, Bermuda
Registration Number
EC21466 Bermuda
Principal Banker
The Hongkong and Shanghai Banking Corporation Limited
1 Queen's Road, Central, Hong Kong
External Auditor
BDO Limited
25(th) Floor, Wing On Centre, 111 Connaught Road Central, Hong Kong
Principal Share Registrar and Transfer Office
Ocorian Management (Bermuda) Limited
Victoria Place, 5th Floor, 31 Victoria Street, Hamilton HM 10, Bermuda
International Branch Registrar
Link Market Services (Jersey) Limited
12 Castle Street, St Helier, Jersey, JE2 3RT, Channel Islands
United Kingdom Transfer Agent
Link Group
10(th) Floor, Central Square, 29 Wellington Street, Leeds, LS1 4DL, United
Kingdom
Investor Relations
For further information about Worldsec Limited, please contact:
Henry Ying Chew CHEONG, Executive Director
Worldsec Group
Unit 607, 6th Floor, FWD Financial Centre, 308 Des Voeux Road Central, Sheung
Wan, Hong Kong
enquiry@worldsec.com (mailto:enquiry@worldsec.com)
Company's Website
http://www.worldsec.com
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