TIDMBSP
RNS Number : 6042A
Black Sea Property PLC
30 September 2020
BLACK SEA PROPERTY PLC
("Black Sea Property" or the "Company")
Half-yearly report for the period ended 30 June 2020
The Board of Black Sea Property PLC is pleased to announce its
interim report for the six-month period ended 30 June 2020.
Electronic copies of the interim report will be available at the
Company's website http://www.blackseapropertyplc.com
BLACK SEA PROPERTY PLC
Alex Borrelli - Chairman +44(0) 774 702 0600
PETERHOUSE CAPITAL LIMITED
AQSE Corporate Adviser
Heena Karani and Duncan Vasey +44 (0) 207 469 0930
Chairman's Statement
I am pleased to present the unaudited interim financial
statements of the Company for the six months ended 30 June
2020.
The unaudited net asset value as at 30 June 2020 was EUR21.9
million or 1.21 cents per share (31 December 2019: EUR16.1 million
or 1.27 cents per share).
During the period, the Company generated revenues of EUR129,476
(2019: EUR312,459) which resulted in a loss before taxation of
EUR72,420 (2019: EUR2.526 million which included a loss on
revaluation of investment properties of EUR1.897 million). The
results reflect other income of EUR911,705, which relates to cash
received against the receivable included in the acquisition of
Camping South Beach EOOD (previously written off) and interest
income accrued on this receivable (2019: EUR8,082) (note 11). The
results also reflect property operating expenses of EUR381,301
(2019: EUR294,481), other operating expenses of EUR457,688 (2019:
EUR386,472) and interest payable and other charges of EUR274,612
(2019: EUR317,964). Loss per share amounted to EUR0.01 cents (2019:
EUR0.20 cents).
The impact of Covid-19 has adversely affected our operations
during the period. The holiday season only started at the beginning
of July, after the beaches on the Black Sea coast were opened in
June, and occupancy levels at Camping South Beach have not reached
expected levels. We are commencing our development of the Byala
plots into a further camping operation. We are considering
development proposals for Ivan Vazov 1 Building which we expect
will enhance its value significantly.
In February 2020, we successfully completed the acquisition of
European Convergence Development (Cayman) Limited and ECD
Management (Cayman) Limited, both subsidiaries of European
Convergence Development Company PLC ("ECDC"), for EUR3,582,638. We
also signed agreements for the acquisition of 29.85% of ECDC at a
price per share equal to the net asset value of the shares
equivalent to EUR44,855. We paid EUR1 for the loan granted by ECDC
to ECD Cayman of EUR122,221,701.
The main rationale for the acquisition of interests in ECDC
Group includes: the opportunity to add two development plots
suitable for logistics/industrial development (the site in Plovdiv)
and residential, commercial or hospitality development (the site in
Kraimorie), thus diversifying our portfolio. Both ECD Cayman and
ECDC have established structures in place that will save time and
costs for future investments.
In January 2020, we completed a share placing and simultaneous
'debt to equity' conversion. The overall amount raised before
expenses was EUR4,585,682, through a placement of 416,880,162 new
ordinary shares of nil par value at a price of EUR0.011 per
Ordinary Share. In addition, Mamferay Holdings Limited ("Mamferay")
converted all of its outstanding loans, including interest
totalling EUR1,394,958 into 127,035,545 ordinary shares at EUR0.011
per share. Following this conversion, Mamferay, now has a 26.94%
shareholding in the Company.
We are not yet able to assess fully the impact of the current
restrictions on the results for the year ending 31 December 2020 as
a result of the continuing impact of Covid-19 but, in the meantime,
we are managing closely our cash flow and cost base. We believe
that the potential for our camping operations with the
refurbishment of the Ivan Vazov 1 will add significant value in due
course.
Alex Borrelli
Chairman
29 September 2020
Consolidated Statement of Comprehensive Income
for the period ended 30 June 2020
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year to
to to
30 June 2020 30 June 31 December
2019 2019
Notes EUR EUR EUR
Total revenue
Revenue 129,476 312,459 671,030
Property operating expenses (381,301) (294,481) (468,514)
------------- ------------ ------------
Net rental and related income (251,825) 17,978 202,516
------------- ------------ ------------
(Loss)/gain on revaluation
of investment properties - (1,896,721) 4,564,767
Net (loss)/gain on investment
property - (1,896,721) 4,564,767
------------- ------------ ------------
Operating expenses
Other operating expenses 7 (457,688) (386,472) (977,728)
Total operating (loss)/profit (709,513) (2,265,215) 3,789,555
------------- ------------ ------------
Operating loss before interest
and tax
Other income 11 911,705 8,082 1,318,513
Interest payable and similar
charges ( 274,612) (317,964) (652,436)
(Loss)/profit before tax (72,420) (2,575,097) 4,455,632
Tax expense - 49,310 (391,178)
(Loss)/profit and total comprehensive
income attributable to shareholders (72,420) (2,525,787) 4,064,454
============= ============ ============
(Loss)/earnings per share
Basic & Diluted(loss)/earnings
per share (cents) 12 (0.01) (0.20) 0.32
The notes form an integral part of these financial
statements.
Consolidated Statement of Financial Position
at 30 June 2020
(Unaudited) (Unaudited) (Audited)
30 June 2020 30 June 31 December
2019 2019
Notes EUR EUR EUR
Non-current assets
Investment properties 8 39,655,103 27,566,766 35,986,000
Investment in associate 5 46,626 - -
39,701,729 27,566,766 35,986,000
-------------- -------------- --------------
Current assets
Other receivables 347,846 1,304,568 351,367
Related party loan 10 196,000 - -
Cash and cash equivalents 948,275 978,406 717,945
1,492,121 2,282,974 1,069,312
-------------- -------------- --------------
Total assets 41,193,850 29,849,740 37,055,312
============== ============== ==============
Equity and liabilities
Issued share capital 6 70,699,442 64,774,886 64,774,886
Retained deficit (47,247,377) (53,765,198) (47,174,957)
Foreign exchange reserve (1,533,086) (1,533,086) (1,533,086)
Total equity 13 21,918,979 9,476,602 16,066,843
-------------- -------------- --------------
Non-current liabilities
Bank loans 9 17,217,366 16,576,585 8,326,534
Deferred tax liability 1,903,784 1,466,552 1,903,784
-------------- -------------- --------------
19,121,150 18,043,137 10,230,318
-------------- -------------- --------------
Current liabilities
Trade payables 153,721 587,532 496,684
Shareholder loan 6 - 150,000 1,394,958
Bank loans 9 - 1,592,469 8,866,509
153,721 2,330,001 10,758,151
-------------- -------------- --------------
Total equity and liabilities 41,193,850 29,849,740 37,055,312
============== ============== ==============
Number of ordinary shares
in issue 13 1,813,323,603 1,269,407,896 1,269,407,896
NAV per ordinary share
(cents) 13 1.21 0.75 1.27
The notes form an integral part of these financial
statements.
The financial statements were approved and authorised for issue
by the Board of Directors on 29 September 2020 and were signed on
their behalf by:
Chairman Director
Alex Borrelli Ventsislava Altanova
Consolidated Statement of Changes in Equity
for the period ended 30 June 2020
Share capital Retained Foreign Total
deficit exchange
reserve
EUR EUR EUR EUR
At 1 January 2019 64,774,886 (51,239,411) (1,533,086) 12,002,389
-
Loss for the six-month
period - (2,525,787) - (2,525,787)
At 30 June 2019 (unaudited) 64,774,886 (53,765,198) (1,533,086) 9,476,602
============== ============== ============= =============
At 1 January 2019 64,774,886 (51,239,411) (1,533,086) 12,002,389
Profit for the year - 4,064,454 - 4,064,454
At 31 December 2019 (audited) 64,774,886 (47,174,957) (1,533,086) 16,066,843
============== ============== ============= =============
At 1 January 2020 64,774,886 (47,174,957) (1,533,086) 16,066,843
Transactions with shareholders:
Conversion of shareholder
loan to equity 4,585,682 - - 4,585,682
Share capital issue 1,397,391 - - 1,397,391
Less: share issue costs (58,517) - - (58,517)
-------------- -------------- ------------- -------------
5,924,556 - - 5,924,556
Loss for the six-month
period - (72,420) - (72,420)
At 30 June 2020 (unaudited) 70,699,442 (47,247,377) (1,533,086) 21,918,979
============== ============== ============= =============
The notes form an integral part of these financial
statements.
Consolidated Statement of Cash Flows
for the period ended 30 June 2020
(Unaudited) (Unaudited) (Audited)
6 months to 6 months to Year to
30 June 2020 30 June 2019 31 December
2019
EUR EUR EUR
Operating activities
(Loss)/profit before tax (72,420) (2,575,097) 4,455,632
Gain/(loss) on revaluation of
investment properties - 1,896,721 (4,564,767)
Other income (911,705) - (1,318,513)
Finance expense 274,612 317,964 652,436
Movement in net cash outflow from
operating activities (709,513) (360,412) (775,212)
Decrease/(increase) in receivables 3,521 (695,342) (659,493)
(Decrease)/increase in payables (510,218) 353,271 265,256
(506,697) (342,071) (394,237)
Withholding tax paid - 6,089 -
Net cash outflow from operating
activities (1,216,210) (696,394) (1,169,449)
Investing activities
Acquisition of subsidiary, net (3,032,745) - -
of cash acquired
Investment property additions (469,103) (1,896,721) (3,854,467)
Investment in associate (46,626) - -
Related party loan granted (196,000) - -
Interest received 911,705 - 1,318,513
Net cash (outflow)/ from investing
activities (2,832,769) (2,593,115) (2,535,954)
Financing activities
Proceeds from share capital issued 4,585,682 - -
Conversion of shareholder loan 1,397,391 - -
to equity
Loans and interest repaid (274,612) (317,964) (669,849)
Bank loan received - 41,246 -
Shareholder loans (converted to
equity net of interest)/received (1,394,958) 150,000 1,394,958
Share capital issue costs (58,517) - -
Bank loans repaid 24,323 - -
Net cash inflow/(outflow) from
financing activities 4,279,309 (126,718) 725,109
Net increase/(decrease) in cash
and cash equivalents 230,330 (2,719,833) (2,980,294)
Cash and cash equivalents at beginning
of period 717,945 3,698,239 3,698,239
Cash and cash equivalents at end
of period 948,275 978,406 717,945
============= ============= ============
The notes form an integral part of these financial
statements.
Notes to the Financial Statements for the period ended 30 June
2020
1. General information
Black Sea Property Plc (the Company) is a company incorporated
and domiciled in the Isle of Man whose shares are publicly traded
on the Aquis Stock Exchange in London.
2. Statement of compliance
These interim consolidated financial statements have been
prepared in accordance with IAS 34 Interim Financial Reporting.
They do not include all of the information required for full annual
financial statements, and should be read in conjunction with the
consolidated financial statements of the Group as at and for the
year-ended 31 December 2019.
The consolidated financial statements of the Group as at and for
the year ended 31 December 2019 are available upon request from the
Company's registered office at 55 Athol Street, Douglas, Isle of
Man or at www.blackseapropertyplc.com .
These interim consolidated financial statements were approved by
the Board of Directors on 29 September 2020.
3. Significant accounting policies
The accounting policies applied in these interim financial
statements, except for the ones listed below, are the same as those
applied in the Group's consolidated financial statements as at and
for the year ended 31 December 2019.
4. Financial risk management policies
The principal risks and uncertainties are consistent with those
disclosed in preparation of the Group's annual financial statements
for the year ended 31 December 2019.
5. Acquisition of ECDC Group
On 21 February 2020, the Company successfully completed the
acquisition of 100% of European Convergence Development (Cayman)
Limited ("ECD Cayman") and ECD Management (Cayman) Limited ("ECD
Management"). The consideration paid for ECD Cayman and ECD
Management in total was EUR3,582,638. Both companies were
subsidiaries of European Convergence Development Company PLC, Isle
of Man ("ECDC").
The Company also signed agreements for the acquisition of 29.85%
of ECDC at a price per share equal to the net asset value of the
shares of EUR0.00168 or a total of EUR44,855. The total cost net of
share transaction fees was EUR46,626. EUR1 was paid for the loan
granted by ECDC to ECD Cayman of EUR122,221,701.
The main rationale for the acquisition of interests in ECDC
Group includes: the opportunity to add two development plots
suitable for logistics/industrial development (the site in Plovdiv)
and residential, commercial or hospitality development (the site in
Kraimorie), thus diversifying BSP portfolio. Both ECD Cayman and
ECDC have established structures in place that will save time and
costs for future investments.
The fair value of assets and liabilities acquired are as
follows:
(Unaudited)
21 Feb 2020
EUR
Investment property 3,200,000
Cash 549,893
Trade payables (167,255)
3,582,638
------------
6. Cash placing and debt to equity conversion
On 20 January 2020 the Company performed a share placing and
simultaneous debt to equity conversion. The overall amount raised
before expenses was EUR4,585,682, through a placement of
416,880,162 new ordinary shares of nil par value (the "Placing
Shares") at a price of EUR0.011 per Ordinary Share (the
"Placing").
In addition to the Placing, Mamferay Holdings Limited
("Mamferay") agreed to convert all its outstanding loans, including
interest totalling EUR1,394,958 into 127,035,545 ordinary shares at
EUR0.011 per share (the "Loan Shares").
7. Other administration fees and expenses
(Unaudited) (Unaudited) (Audited)
6 months 6 months Year to
to to
30 June 30 June 31 December
2020 2019 2019
EUR EUR EUR
Directors' remuneration 49,847 40,547 81,039
Investment advisory fees 107,136 53,568 214,272
Legal and professional fees 120,506 55,828 123,232
Other administration and sundry expenses 180,199 236,529 559,185
457,688 386,472 977,728
------------ ------------ ------------
8. Investment properties
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
2020 2019 2019
EUR EUR EUR
Beginning of year 35,986,000 27,566,766 27,566,766
Acquisition 3,200,000 - 1,065,723
Fair value adjustment - (1,896,721) 4,564,767
Additions 469,103 1,896,721 2,788,744
------------ ------------ ------------
End of year 39,655,103 27,566,766 35,986,000
------------ ------------ ------------
The Directors confirm that there are no material changes in the
valuation of investments as of 30 June 2020.
9. Bank Loans
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
2020 2019 2019
EUR EUR EUR
Loan and interest accrued from UniCredit 6,976,847 7,066,023 6,980,477
Loan and interest accrued from Central
Cooperative Bank 10,182,940 11,103,031 10,212,566
17,159,787 18,169,054 17,193,043
----------- ------------ ------------
The Central Cooperative Bank debt funding provided to Camping
South Beach EOOD was due to expire on 24 June 2020, however it has
been agreed with the lender to postpone repayment until 24 June
2021.
The Unicredit debt funding provided to BSPF Bulgaria EAD was due
to expire in October 2020, however it has been agreed with the
lender to postpone repayment until 30 April 2021.
10. Related party loan
On 18 June 2020, a subsidiary of the Company, BSPF Project 1 EAD
("Project 1"), entered into a loan agreement with Phoenix Capital
Holding AD. Project 1 lent Phoenix EUR196,000 at a fixed annual
interest rate of 4.5%, with a repayable date of 18 June 2021.
Phoenix Capital Holding AD owns 79.99% of the shares of Phoenix
Capital Management JSC, the Company's investment adviser, and is
also a subsidiary of Mamferay Holdings which owns 26.94% of the
shares of Black Sea Property plc.
11. Other income
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
2020 2019 2019
EUR EUR EUR
Interest income - receivable balances 232,843 8,082 271,551
Reversal of fair value adjustment of
CSB acquisition receivable balance 678,863 - 1,046,962
---------- ------------ ------------
911,705 8,082 1,318,513
---------- ------------ ------------
12. (Loss)/earnings per share
The basic (loss)/earnings per ordinary share is calculated by
dividing the net (loss)/profit attributable to the ordinary
shareholders of the Company by the weighted average number of
ordinary shares in issue during the period.
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
2020 2019 2019
(Loss)/earnings attributable to owners
of parent EUR (72,420) (2,525,787) 4,064,454
Weighted average number of ordinary
shares in issue 1,287,431,251 1,269,407,896 1,269,407,896
Basic (loss)/earnings per share (cents) (0.01) (0.20) 0.32
-------------- -------------- --------------
The Company has no potential dilutive ordinary shares; the
diluted (loss)/earnings per share is the same as the basic
(loss)/earnings per share.
13. Net asset value per share
(Unaudited) (Unaudited) (Audited)
30 June 30 June 31 December
2020 2019 2019
Net assets attributable to owners
of the parent (EUR) 21,918,979 9,476,602 16,066,843
Number of ordinary shares outstanding 1,813,323,603 1,269,407,896 1,269,407,896
-------------- -------------- --------------
Net Asset Value (cents) 1.21 0.75 1.27
-------------- -------------- --------------
14. Events after reporting date
There are no significant events after reporting date.
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