Source - LSE Regulatory
RNS Number : 2088U
Ross Group PLC
24 March 2023
 

Ross Group Plc Half Yearly Financial Report  31st December 2022

 


HALF YEARLY FINANCIAL REPORT

FOR THE TWELVE MONTHS ENDED 31 DECEMBER 2022


 Financial Summary (12 months to 31 December 2022)


2022


2021




   £'000


  £'000


  Change







Group Revenue

-


-


-







Gross Profit/(Loss)

-


-


-







Profit/(Loss) before tax

(854)


(85)


1,004.7%







Basic earnings per share

-0.35p


 

-0.04p


875.0%







Diluted earnings per share

-0.29p


-0.03p


966.7%



Chairman's Statement
For the half year (interim) period to the 31st December 2022

I would like to report that, during this particular period, Ross Group PLC ("the Group") decided to change its financial year end to the 30th June and, as a result of this change, the reporting period from 1st January 2022 to 31st December 2022 is hereby termed as an interim or half year set of Accounts.  This is primarily due to the Board of Directors' restructuring and implementation of its planned business strategy, notwithstanding continuing to endure exceptional and extended circumstances related to COVID and its consequential economic effects, all of which as a result has therefore subsequently resulted in a net loss after tax of £854,000 without revenue.

The Board during the last half of 2022 announced a specific Supply Chain Management Agreement ("SCMA") and is in the process of endeavouring to integrate this respective start-up business within the existing overall operations, since the AAG acquisition in 2019/2020 which was subsequently effected by COVID during the last 2 years and required restructuring.

Ross Diversified Ltd, a subsidiary, has been renamed as the Energy Group International Ltd ("EGIL") as a result of the SCMA and is in the process of becoming a more defined water, hydrogen, oil and gas specialist supply chain management and service-providing operation, including, but not limited to, supply chain financing.

Consequently, this division is currently in detailed discussions with a number of companies that are wanting to engage in such specialist supply chain management services and related operations.

As a result, the Group is therefore currently in the process of implementing and/or amending its specialistic supply chain management protocols, procedures and respective disciplines, in order to put in place a more appropriate robust financial and investment infrastructure through the adoption and application of a more horizontal integrational sub-strategy that will hopefully place the Group to be in a better position so as to try to provide more efficient and successful specialist supply chain management services in the foreseeable future.


The Group has also recently approved and appointed Mr Stephen Johanns to become a Group Director and also the CEO of EGIL.  The Board believes that his specialist skill set in both the Group's supply chain management services and also in areas of energy and infrastructure, as well as his own expertise in critical mineral supply chain solutions, will help the Group through EGIL produce some exciting opportunities in the very near future.

Whilst there has been no revenue during this particular period from any outside third party contracts, it is now the Group's intention to significantly revert and re-implement resources that will enable the Group to grow its global supply chain services and produce a more substantial revenue stream in the future.


Business Outlook

For the first half of 2023 the Board will continue, along with our team of Advisors and Consultants, to work tirelessly with our specialist supply chain management team in trying to successfully build a business of a specialist supply chain strategy centered around its Standard Incorporate Coding of Mining & Mineral business in order to try and ensure that the Group has a more balanced structure that can allow and enable the exploring other opportunities that may also arise during this uncertain and unique time.

The Directors have prepared preliminary cashflow forecasts in accordance with the new financial year. These cashflows have been sensitized to assess the adequacy of cash and funding available should future economic effects of recession and/or inflation impinge the activities of the Group.  Certain Directors have also confirmed to be ably to provide additional independent financial support should additional resources be required. Based on the sensitivity testing and additional resources available the Directors are satisfied the Group can continue as a going concern for the foreseeable future.

Principal Risks and Uncertainties
The main risk to the existing operations of the Group is the possibility of depleting necessary working capital in the event of not being able to achieve enough specialist supply chain management service revenues and/or incurring excessive expenses and/or overhead within a viable period of time. The Board is both fully aware of these risks and, as a result, has always endeavoured to managed its cash and cashflow conservatively and prudently; having already ensured that its exposure to any RGP-525 or AAG related liabilities in this instance are primarily limited to its initial investment.  In addition, the Board is equally endeavouring to ensure that funds are being made available to the Group, whilst also exploring other opportunities, specifically in the supply chain of water, hydrogen, oil and gas sectors for future growth.

Your Directors are therefore reasonably confident that the Group currently has both the financial resources and capability to fund existing expenses for future specialist supply chain management growth.

Dividend
No ordinary interim dividend is proposed after considering the result for the first half of the year, and the existing deficiency of retained reserves.

I would very much like to thank the members of the Board of Directors, as well as our contractors, consultants and advisors for all their continued, and highly appreciated, support, expertise and hard work.



Finally, as always, on behalf of our Board of Directors, I would also like to personally extend my sincere thanks to our extraordinarily loyal and also new shareholders for all their continued confidence, patience and truly exceptional understanding.





Barry Richard Pettitt
Chairman

Approved:  24th March 2023

 

 

 

 

 


 

 


CONDENSED CONSOLIDATED INCOME STATEMENT UNAUDITED

 


 


12 months


6 months


Year


 


ended 31 December


ended 30 June


ended 31 Dec


 


2022


2021


2021


 


   £'000


  £'000


  £'000


 




Restated




 








 








 

Group Revenue

-


-


-


 








 

Gross Profit

-


-


-


 








 








 

Profit / (Loss) before Finance Cost

(571)


131


(1,873)









 








 

Finance Cost

283


216


703


 








 

(Loss) before Taxation

(854)


(85)


(2,576)


 








 

Taxation

-


-


-


 








 

(Loss) for the Period

(854)


(85)


(2,576)


 








 








 

Earnings per share (pence)

-0.35


-0.04


-1.11


 

Diluted earnings per share (pence)

-0.29


-0.03


-0.85


 







































CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY UNAUDITED




Share

Capital


Accumulated

Losses


Translation Reserve


Other Reserves





Restated


Restated












Balance at 1 Jan 2021


11,218


(39,820)


(199)


15,384










(Loss) / Profit for the period


-


(85)


-


-

Foreign exchange adjustment


-


-


(13)


-


Total comprehensive income / (deficit)



-



(85)



(212)



-










Balance at 30 June 2021


11,218


(39,905)


(212)


15,384










(Loss) / Profit for the period


-


(2,491)


-


-

Foreign exchange adjustment


-


-


-


-


Total comprehensive income / (deficit)



-



(2,491)



-



-










Share issue


14


-


-


-

Movement on convertible loans


-


453


-


-










Balance at 31 Dec 2021


11,232


(41,943)


(212)


15,384



















Balance at 1 Jan 2022


11,232


(41,943)


(212)


15,384










(Loss) / Profit for the period



-



(854)



-



-

Foreign exchange adjustment


-


-


(387)


-










Total comprehensive income / (deficit)


-


(854)


(387)


-










Share issue


10


-


-


-

Balance at 31 December 2022


11,242


(42,797)


(599)


15,384













CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION UNAUDITED



12 months


6 months


Year Ended


ended 31 December


ended 30 June


31 Dec


2022


2021


2021


£'000


£'000


£'000




Restated









Non Current Assets

32


802


68







Current Assets:






Trade and Other Receivables

114


129


117

Cash and Cash Equivalents

1


307


209








115


436


326







Total Assets

147


1,238


394







Equity and Liabilities












Shareholders' Equity:






Share Capital

11,242


11,218


11,232

Share Premium Account

 3,708


 3,146


 3,540

Other Reserves

15,384


15,384


15,384

Convertible debentures

4,692


5,145


4,692

Translation reserve

(599)


(212)


(212)

Retained Earnings

  (42,797)


  (39,905)


   (41,943)







Total Equity

(8,370)


(5,224)


(7,307)







Non-Current Liabilities:






Lease Liabilities

12


28


10

Long Term Borrowings

3,345


2,552


3,003

Provisions

813


-


813







Current Liabilities:






Trade and Other Payables

3,716


3,178


3,315

Shareholders funds in advance

-


378


-

Lease Liabilities

20


35


37

Bank Overdraft and Loans

611


291


523







Total Liabilities

8,517


6,462


7,701







Total Equity and Liabilities

147


1,238


394








CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS UNAUDITED




12 months


6 months


Year Ended


ended 31 December


ended 30 June


31 Dec


2022


2021


2021


   £'000


   £'000


  £'000







Net Cash From/(Used In) Operating Activities

(516)


(281)


(885)







Net Cash Used In Investing Activities

(1)


567


793







Cash Flows From Financing Activities:






Amount withdrawn by Directors

38


5


-

Issue of ordinary shares

178


-


408

Net Increase/(Decrease) In Borrowings and Lease Liabilities

389


(75)


(198)

Net Cash Flow From Financing Activities

      88


(70)


210







Net Increase/(Decrease) In Cash and Cash Equivalents

(208)


216


118













Cash and Cash Equivalent at Beginning of Period

209


91


91







Cash and Cash Equivalent at End of Period

1


307


209











Notes to the Interim Report



(1)      The financial information contained in these statements for the twelve months ended 31 December 2022 and 30 June 2021 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 2021.


The comparative information at 30 June 2021 has been restated as detailed in note 11.


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

Activities


12 months


6 months


Year Ended


ended 31 December


ended 30 June


31 Dec


2022


2021


2021


   £'000


   £'000


  £'000




Restated









Operating Profit / (Loss)

(571)


134


(1,873)







Profit on sale of fixed assets

-


(578)


(337)

Exchange differences

(391)


(13)


(4)

Depreciation and Amortisation

42


260


525

(Increase)/ Decrease In Trade and Other Receivables

3


135


212

Increase/(Decrease) In Trade and Other Payables

401


(219)


592







Net Cash Generated From/(Used In) Operations

(516)


(281)


(885)










(3)       No ordinary interim dividend is proposed for 2022 (2021 - £Nil).



(4)      The comparative cash flow for the year ended 31 December 2021 has been

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

June 2021 and twelve months ended 31 December 2022 are unaudited.








(5)       Reconciliation of Movements In Equity


12 months


6 months


Year Ended


ended 31 December


ended 30 June


31 Dec


2022


2021


2021


   £'000


  £'000


  £'000




Restated



Share Premium Account






Brought Forward

3,540


3,146


3,146

Movement

168


-


394

Carried Forward

3,708


3,146


3,540







Other Reserves






Brought Forward

15,384


15,384


15,384

Movement

-


-


-

Carried Forward

15,384


15,384


15,384







Translation Reserve






Brought Forward

(212)


(199)


(199)

Foreign exchange adjustment

(387)


(13)


(13)

Carried Forward

(599)


(212)


(212)







Retained Earnings






Brought Forward

  (41,943)


  (39,820)


(39,820)

(Loss) / Profit for the Period

(854)


(85)


(2,576)

Value of conversion rights on convertible loans

-


-


453







Carried Forward

(42,797)


(39,905)


(41,943)







Convertible Debenture






Brought Forward

  4,692


  5,145


5,145

Movement

-


-


(453)







Carried Forward

4,692


5,145


4,692



On 14 June 2022 the company made an announcement to the London Stock Exchange confirming the issue of 9,087,000 shares equivalent to 4% of its existing shareholding at a fixed price of 1.79 pence per new ordinary share.















(6)       Non Current Assets




Right of use assets


Property, Plant &






Land & Buildings


Equipment


Total




   £'000


  £'000


  £'000









Cost








At 1 January 2022



138


33


171

Foreign exchange adjustment



4


1


5

Additions



-


1


1

At 31 Decembr 2022



142


35


177









Depreciation / Amortisation








At 1 January 2022



97


6


103

Charge for the period



36


6


42

On disposals



-


-


-

At 31 December 2022



133


12


145









Net Book Value
















At 31 December 2022



9


23


32









At 1 January 2022



41


27


68



(7)       Current Assets


31 Dec

31 Dec

30 June


2022

2021

2021


£'000  

£'000  

£'000




Restated





Trade receivables

-

-

-

Prepayments and accrued income

14

9

11

Other debtors

62

45

47

Directors loan

38

63

58

Loans to associated undertakings

-

-

13






114

117

129

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














(8)       Current Liabilities


31 Dec

31 Dec

30 June


2022

2021

2021


£'000  

£'000  

£'000  




Restated





Trade payables

368

293

245

Other creditors

489

407

496

Accruals and deferred income

253

280

191

Amounts owed to associated undertakings

2,647

2,335

2,246

Lease creditor

20

37

35

Other loans

265

177

-

Debentures

346

346

291

Shareholders funds in advance


-

378






4,388

3,875

3,882



(9)       Non Current Liabilities


31 Dec

31 Dec

30 June


2022

2021

2021


£'000  

£'000  

£'000  




Restated





Lease creditor

12

10

28

Debentures

1,318

1,256

825

Other loans

2,027

1,747

1,727

Provision

813

813

-






4,170

3,826

2,580





(10)  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.

At the Annual General Meeting on 31 December 2020 it was agreed to extend the conversion period to 26 September 2022.

At the Annual General Meeting on 31 December 2021 it was agreed to extend the conversion period to 26 September 2025.

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.


31 Dec

31 Dec



2022

2021



£'000  

£'000  


Face value of notes issued

6,072

6,072


Value of conversion rights

4,692

4,692






Convertible loan debenture liability

1,380

1,380






Interest expense recognized in period

123

222



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%.



(11)  The Group has restated the condensed consolidated income statement, condensed consolidated statement of financial position, and condensed consolidated statement of changes in equity for 30 June 2021. This is due errors in the accounting treatment for convertible loan debentures, foreign exchange translation and recognition of a Group asset which was not owned by the Group. This has been considered as a prior year error and has been corrected in accordance with IAS 8 (Accounting Policies, Changes in Accounting Estimates and Errors).Further details on the impact of the restatement were included in the financial statements for the year ended 31 December 2021.




(12)  As no revenue has been generated throughout the group in this period nor the prior period, 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.



(13)  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 group:


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 twelve 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



Tel. - 07973 848349

Email - shashiuk@gmail.com




 

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