Source - LSE Regulatory
RNS Number : 9007L
Ross Group PLC
15 September 2021
 

Ross Group Plc Half Yearly Financial Report 30th June 2021

 

 

HALF YEARLY FINANCIAL REPORT

FOR THE SIX MONTHS ENDED 30 JUNE 2021

 

Financial Summary (6 months to  30 June 2021)

2021

 

2020

 

 

 

   £'000

 

  £'000

 

  Change

 

 

 

 

 

 

Group Revenue

-

 

-

 

-

 

 

 

 

 

 

Gross Profit/(Loss)

-

 

-

 

-

 

 

 

 

 

 

Profit/(Loss) before tax

(267)

 

(830)

 

67.8%

 

 

 

 

 

 

Basic earnings per share

-0.122p

 

 

-0.379p

 

67.8%

 

 

 

 

 

 

Diluted earnings per share

-0.122p

 

-0.379p

 

67.8%

 

 

Chairman's Statement

It is once again my pleasure to report to you on both the business activities and the financial interim results of the Ross Group PLC ("Group") for the six month period ended 30th June 2021.

Throughout the COVID pandemic period, the Group has continued diligently researching and exploring specific supply chain management strategic opportunities; primarily involving potential start-ups, mergers, acquisitions and/or business alliances.

Our existing Chitin investment is progressing in accordance with the expectation of RGP-525 and whilst RGP-525 is continuing its research and development into mass production of Chitin, your Board is confident that this has the potential to become a worthy business in the future. 

 

In addition, the Group is still deploying our specialist supply chain management services on a project-by-project basis.

 

Since becoming Chairman, I have always been mindful - even while our Board of Directors were constantly conducting such exploratory and research work - that our operating businesses and Premium Listing Company status should always be capable of generating sufficient profit and/or cashflow from its traditional specialist supply chain management services, in order to primarily cover running costs of the business on a potentially worst-case scenario and/or to be able to finance due diligences of potentially feasible opportunities.

 

Also, especially given the continuation of COVID into this exceptionally unusual year, we have had to rightfully continue to incur such significant restructuring expenses - all of which are considered to be reasonable given our previous years of careful and conservative costings - which throughout this particular period, we are also pleased to announce that the Board has responded as best as possible through taking diligent and prudent measures accordingly. 

 

In this respect, our 2021 interim result of a £267,000 loss (2020: £830,000 loss) is considered both understandable and justifiable.

As the Group is still undergoing a research, development and exploratory mode, there has subsequently been no income during this period. Costs and overhead have progressively decreased over 2020 - Largely due to the implementation, effect and relative success of our various restructuring strategies. 

 

We continue to be prudent and focused in our supply chain management and also our Board remains conservatively confident that we will be progressively focusing in on identifying and being able to put forward an appropriate specialist supply chain strategy and/or appropriate acquisition for due consideration and to hopefully be able to then recommend to our Shareholders at some stage in the foreseeable future.

 

As a result, your Board has recently also decided to place an additional amount of equity equal to 6% of its existing shareholding as per the Announcement released on the London Stock Exchange's RNS website on 10th September 2021 which we believe will be able to better support detailed discussions and due diligences; especially in the second half of this year.

 

The Board and myself are satisfied with the progress that we have made over this period in identifying, initiating, and implementing our emergency short-term strategic plans; including, but not limited to, the ongoing restructuring of the Group and, in particular, specific businesses, in order to be able to both maintain running an efficient supply chain management operation, while also being capable of capturing any considered appropriate opportunity; as and when or if it is presented. 

 

Regarding the consequential subject of Brexit, given the departure from the EU, the timing, terms and impact of the United Kingdom's exit are still somewhat difficult to evaluate; especially with the combined confluence and continuation of COVID. 

 

Regardless of the time scale, terms and conditions of the United Kingdom's exit from the European Union, the result with regard to the political and economic outlook of the United Kingdom and the European Union, has been largely not resulted in any major volatility on the exchange rate between the Pound Sterling ("£") and the Euro ("€") and more generally, between the £/Pound and other international currencies such as the US Dollar ("US$")

 

Because the operating subsidiaries of RGP are presently based both in the United States and also outside of Europe, they are therefore predominately in a US$ currency environment and while this could lead to adverse consequences in terms of US$/£ exchange rates, our respective subsidiaries and/or joint ventures are not yet fully trading or selling products, and therefore we do not anticipate any material negative impact and do not intend to take specific measures to cover fluctuations of the currency market at this stage.

 

At this time, I would like to particularly personally thank our Board of Directors, our specialist contractors, consultants and advisors, for all their excellent support, commitment and hard work in helping the Group towards achieving its aims.

 

Also, as always, I would also like to personally thank our extraordinary loyal shareholders for their continued patience and understanding.

 

We would like to wish all of them and everyone else the very best of health during these continuing difficult and dangerous COVID times.

 

Sincerely,

 

 

Barry Richard Pettitt

Chairman and Group Managing Director

 

Approved 15th September 2021

 

 

CONDENSED CONSOLIDATED INCOME STATEMENT UNAUDITED

 

 

6 months

 

6 months

 

Year

 

ended 30 June

 

ended 30 June

 

ended 
31 Dec
 

 

2021

 

2020

 

2020

 

   £'000

 

  £'000

 

  £'000

 

 

 

 

 

 

 

 

 

 

 

 

Group Revenue

-

 

-

 

43

 

 

 

 

 

 

Gross Profit

-

 

-

 

4

 

 

 

 

 

 

 

 

 

 

 

 

Profit / (Loss) before Finance Cost

82

 

(559)

 

(925)

 

 

 

 

 

 

 

 

 

 

 

 

Finance Cost

349

 

271

 

538

 

 

 

 

 

 

(Loss) before Taxation

(267)

 

(830)

 

(1,463)

 

 

 

 

 

 

Taxation

-

 

-

 

-

 

 

 

 

 

 

(Loss) for the Period

(267)

 

(830)

 

(1,463)

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share (pence)

-0.122

 

-0.379

 

-0.669

Adjusted earnings per share (pence)

-0.122

 

-0.379

 

-0.669

               

 

 

 

 

 

 

 

 

Earnings per share from continuing operations(pence)

-0.122

 

-0.379

 

-0.669

Adjusted earnings per share (pence)

-0.122

 

-0.379

 

-0.669

 

 

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY UNAUDITED

 

 

 

Share

Capital

 

Accumulated

Losses

 

Other

Reserves

 

Total

 

 

£'000

 

£'000

 

£'000

 

£'000

 

Balance at 1 Jan 2020

 

11,218

 

(39,175)

 

24,019

 

(3,938)

 

 

 

 

 

 

 

 

 

(Loss) / Profit for the period

 

 

 

(830)

 

 

 

(830)

Foreign exchange adjustment

 

-

 

(196)

 

-

 

(196)

 

Total comprehensive income / (deficit)

 

 

-

 

 

(1,026)

 

 

-

 

 

(1,026)

 

 

 

 

 

 

 

 

 

Movement on convertible loans

 

-

 

-

 

318

 

318

 

 

 

 

 

 

 

 

 

Balance at 30 June 2020

 

11,218

 

(40,201)

 

24,337

 

(4,646)

 

 

 

 

 

 

 

 

 

(Loss) / Profit for the period

 

 

 

(633)

 

 

 

(633)

Foreign exchange adjustment

 

-

 

260

 

-

 

260

 

Total comprehensive income / (deficit)

 

 

-

 

 

(373)

 

 

-

 

 

(373)

 

 

 

 

 

 

 

 

 

Value of conversion rights on convertible loans

 

 

-

 

 

-

 

 

8

 

 

8

 

 

 

 

 

 

 

 

 

Balance at 31 Dec 2020

 

11,218

 

(40,574)

 

24,345

 

(5,011)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 1 Jan 2021

 

11,218

 

(40,574)

 

24,345

 

(5,011)

 

 

 

 

 

 

 

 

 

(Loss) / Profit for the period

 

 

 

 

(267)

 

 

 

 

(267)

Foreign exchange adjustment

 

-

 

32

 

-

 

32

 

 

 

 

 

 

 

 

 

Total comprehensive income / (deficit)

 

-

 

(235)

 

-

 

(235)

 

 

 

 

 

 

 

 

 

Movement on convertible loans

 

-

 

-

 

170

 

170

Balance at 30 June 2021

 

11,218

 

(40,809)

 

24,515

 

(5,076)

 

 

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION UNAUDITED

 

 

6 months

 

6 months

 

Year Ended

 

ended 30 June

 

ended 30 June

 

31 Dec

 

2021

 

2020

 

2020

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

Non Current Assets

838

 

1,322

 

1,090

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

Inventories

-

 

41

 

-

Trade and Other Receivables

88

 

70

 

269

Cash and Cash Equivalents

307

 

345

 

91

 

 

 

 

 

 

 

395

 

456

 

360

 

 

 

 

 

 

Total Assets

1,233

 

1,778

 

1,450

 

 

 

 

 

 

Equity and Liabilities

 

 

 

 

 

 

 

 

 

 

 

Shareholders' Equity:

 

 

 

 

 

Share Capital

11,218

 

11,218

 

11,218

Share Premium Account

 3,146

 

 3,146

 

 3,146

Other Reserves

15,384

 

15,384

 

15,384

Convertible debentures

5,985

 

5,650

 

5,815

Retained Earnings

  (40,809)

 

  (40,201)

 

   (40,574)

 

 

 

 

 

 

Total Equity

(5,076)

 

(4,803)

 

(5,011)

 

 

 

 

 

 

Non-Current Liabilities:

 

 

 

 

 

Lease Liabilities

28

 

300

 

183

Long Term Borrowings

1,727

 

1,866

 

1,705

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

Trade and Other Payables

3,178

 

3,300

 

3,408

Shareholders funds in advance

378

 

-

 

-

Lease Liabilities

35

 

249

 

208

Bank Overdraft and Loans

963

 

866

 

957

 

 

 

 

 

 

Total Liabilities

6,309

 

6,581

 

6,461

 

 

 

 

 

 

Total Equity and Liabilities

1,233

 

1,778

 

1,450

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS UNAUDITED

 

 

 

6 months

 

6 months

 

Year Ended

 

ended 30 June

 

ended 30 June

 

31 Dec

 

2021

 

2020

 

2020

 

   £'000

 

   £'000

 

  £'000

 

 

 

 

 

 

Net Cash From/(Used In) Operating Activities

(281)

 

(222)

 

(168)

 

 

 

 

 

 

Net Cash Used In Investing Activities

567

 

(53)

 

(19)

 

 

 

 

 

 

Cash Flows From Financing Activities:

 

 

 

 

 

Amount withdrawn by Directors

5

 

(11)

 

(38)

Net Increase/(Decrease) In Borrowings and Lease Liabilities

(75)

 

(18)

 

(333)

Net Cash Flow From Financing Activities

(70)

 

(29)

 

(371)

 

 

 

 

 

 

Net Increase/(Decrease) In Cash and Cash Equivalents

216

 

(304)

 

(558)

 

 

 

 

 

 

 

 

 

 

 

 

Cash and Cash Equivalent at Beginning of Period

91

 

649

 

649

 

 

 

 

 

 

Cash and Cash Equivalent at End of Period

307

 

345

 

91

 

 

 

 

 

 

 

 

 

 

 

Notes to the Interim Report

 

 

(1)      The financial information contained in these statements for the six months ended

30 June 2021 and 30 June 2020 is unaudited and does not constitute statutory

accounts as defined in section 434 of the Companies Act 2006.

 

These statements are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK.

 

The interim financial statements have been prepared on the basis of the

accounting policies set out in the audited statutory accounts for the year ended

31 December 2020.

 

 

(2)      Reconciliation of Operating (Loss) / Profit to Net Cash Flows From Operating

Activities

 

6 months

 

6 months

 

Year Ended

 

ended 30 June

 

ended 30 June

 

31 Dec

 

2021

 

2020

 

2020

 

   £'000

 

   £'000

 

  £'000

 

 

 

 

 

 

Operating Profit / (Loss)

82

 

(2,926)

 

(925)

 

 

 

 

 

 

Profit on sale of fixed assets

(578)

 

-

 

40

Exchange differences

29

 

(9)

 

92

Depreciation and Amortisation

260

 

1,478

 

279

(Increase)/ Decrease In Inventories

-

 

(1,311)

 

39    

(Increase)/ Decrease In Trade and Other Receivables

176

 

(102)

 

(146)

Increase/(Decrease) In Trade and Other Payables

(250)

 

14,619

 

453

 

 

 

 

 

 

Net Cash Generated From/(Used In) Operations

(281)

 

11,749

 

(168)

 

 

 

 

 

 

 

 

 

(3)       No ordinary interim dividend is proposed for 2021 (2020 - £Nil).

 

 

(4)      The comparative cash flow for the year ended 31 December 2020 has been

extracted from the audited accounts. The cash flows for the six months ended 30

June 2020 and 30 June 2021 are unaudited.

 

 

 

 

 

 

 

 

 

(5)       Reconciliation of Movements In Equity

 

6 months

 

6 months

 

Year Ended

 

ended 30 June

 

ended 30 June

 

31 Dec

 

2021

 

2020

 

2020

 

   £'000

 

  £'000

 

  £'000

Share Premium Account

 

 

 

 

 

Brought Forward

3,146

 

3,146

 

3,146

Movement

-

 

-

 

-

Carried Forward

3,146

 

3,146

 

3,146

 

 

 

 

 

 

Other Reserves

 

 

 

 

 

Brought Forward

15,384

 

15,384

 

15,384

Movement

-

 

-

 

-

Carried Forward

15,384

 

15,384

 

15,384

 

 

 

 

 

 

Retained Earnings

 

 

 

 

 

Brought Forward

  (40,574)

 

  (39,175)

 

(39,175)

(Loss) / Profit for the Period

(267)

 

(830)

 

(1,463)

Foreign exchange adjustment

32

 

(196)

 

64

 

 

 

 

 

 

Carried Forward

(40,809)

 

(40,201)

 

(40,574)

 

 

 

 

 

 

Convertible Debenture

 

 

 

 

 

Brought Forward

  5,815

 

  5,489

 

5,489

Movement

170

 

161

 

326

 

 

 

 

 

 

Carried Forward

5,985

 

5,650

 

5,815

 

 

 

 

(6)       Non Current Assets

 

 

 

Right of use assets

 

Property, Plant &

 

 

 

Investments

 

Land & Buildings

 

Equipment

 

Total

 

   £'000

 

   £'000

 

  £'000

 

  £'000

 

 

 

 

 

 

 

 

Cost

 

 

 

 

 

 

 

At 1 January 2021

424

 

699

 

359

 

1,482

Foreign exchange adjustment

-

 

(3)

 

-

 

(3)

Additions

-

 

-

 

11

 

11

Impairment reversal

-

 

-

 

2,969

 

2,969

Disposals

-

 

(558)

 

(2,969)

 

(3,527)

At 30 June 2021

424

 

138

 

370

 

932

 

 

 

 

 

 

 

 

Depreciation / Amortisation

 

 

 

 

 

 

 

At 1 January 2021

-

 

388

 

4

 

189

Charge for the period

-

 

251

 

9

 

97

On disposals

-

 

(558)

 

-

 

-

At 30 June 2021

-

 

81

 

13

 

94

 

 

 

 

 

 

 

 

Net Book Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 30 June 2021

424

 

57

 

357

 

838

 

 

 

 

 

 

 

 

At 1 January 2021

424

 

311

 

355

 

1,090

 

 

(7)       Inventory

30 June

31 Dec

30 June

 

2021

2020

2020

 

£'000  

£'000  

£'000

 

 

 

 

Raw materials

-

-

41

 

 

 

 

 

-

-

41

 

 

 

 

 

(8)       Current Assets

 

30 June

31 Dec

30 June

 

2021

2020

2020

 

£'000  

£'000  

£'000

 

 

 

 

Trade receivables

-

83

-

Prepayments and accrued income

11

109

11

Other debtors

6

-

8

Directors loan

58

63

36

Loans to associated undertakings

13

14

15

 

 

 

 

 

88

269

70

Interest is charged on the Directors loan at a commercial rate.

 

 

(9)       Current Liabilities

 

30 June

31 Dec

30 June

 

2021

2020

2020

 

£'000  

£'000  

£'000  

 

 

 

 

Trade payables

245

461

243

Other creditors

496

377

427

Accruals and deferred income

191

344

226

Amounts owed to associated undertakings

2,246

2,226

2,404

Lease creditor

35

208

249

Other loans

8

3

-

Debentures

955

954

866

Shareholders funds in advance

378

-

-

 

 

 

 

 

4,554

3,833

4,415

 

 

(10)       Non Current Liabilities

 

30 June

31 Dec

30 June

 

2021

2020

2020

 

£'000  

£'000  

£'000  

 

 

 

 

Lease creditor

28

183

300

Debentures

-

-

86

Other loans

1,727

1,705

1,780

 

 

 

 

 

1,755

1,888

29,767

 

(11)  On 27 September 2018 two convertible loan debentures were issued for £4,010,000 and £2,062,172 with a coupon rate of 5%.

 

The loan notes are convertible into Ordinary shares of the parent entity in three years after the date of issue. The convertible loan debenture will give right to a percentage of the issued share capital of the parent company at the date of conversion. Each tranche of £1 million debenture owed by the long term holders correspond to 4.925% of the issued share capital at the date of conversion, resulting in a fixed percentage of the issued share capital of the company to be allotted to the loan holders regardless of the value / amount of the share capital of the company.

 

30 June

31 Dec

 

 

2021

2020

 

 

£'000  

£'000  

 

Face value of notes issued

6,072

6,072

 

Value of conversion rights

5,985

5,815

 

 

 

 

 

Convertible loan debenture liability

954

954

 

 

 

 

 

Interest expense recognized in period

171

329

 

 

The other loans have been advanced to the company from One World Limited. The funding was provided for a three year period, and interest is charged on these loans at 6%.

 

 

 

 

(12)  On 10 September 2021 the company made an announcement to the London Stock Exchange confirming the issue of 13,126,051 shares equivalent to 6% of its existing shareholding at a fixed price of 2.8 pence per new ordinary share.

 

 

 

(13)  As no revenue has been generated throughout the group in this period and the amount in the prior year was minimal and was through the subsidiary Ross Diversified Trading Limited, the Chief Operating Decision Maker believes the information already disclosed in the interim financial statements is adequate to fulfill the requirements of IFRS8 segmental reporting.  This will be reconsidered at the year end and in future periods as the group begins to trade.

 

 

(14)  The Interim Report will be sent by mail to all registered shareholders

and copies will be available from the Company's registered office at 71-75 Shelton Street, London, WC2H 9JQ. A downloadable copy will also be posted on the Company's website www.ross-group.co.uk

 

 

 

 

Responsibility statement:

 

    The Directors confirm that, to the best of their knowledge: -

 

a)    the condensed set of financial statements has been prepared in accordance with International Financial Reporting Standards (IFRS) and IAS 34 'Interim Financial Reporting';

 

b)    the financial statements give a true and fair view of the assets, liabilities, financial position and loss of the company:

 

c)    the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

 

d)    the interim management report includes a fair review of the information required by DTR 4.2.8R (disclosure of related parties' transactions and changes therein).

 

On behalf of the Board

 

B Pettitt                          

Chief Executive Officer                        

 

Ross Group plc

 

Registered Office

 

71 - 75 Shelton Street

London WC2H 9JQ

 

 

Contact - M Simon, Non Executive Director

Tel. - 07887  628152

Email - michael@simonsilvermyer.com

Website - www.ross-group.co.uk

 

 

 

 

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