THE JUST LOANS GROUP PLC
CHAIRMAN'S STATEMENT
For the Unaudited Interim condensed financial statements
for the 6 months ended 30 June 2017
OVERVIEW
The Just Loans Group Plc ("the
Company") and its subsidiaries (together, "the Group") provide
Finance Facilities to Small and Medium Enterprises that struggle to
obtain traditional sources of funding for a variety of reasons. The
Group is based in the United Kingdom and all entities have been
incorporated in the United Kingdom. The Company is a public limited
company and its shares are listed on the Emerging Companies market
of the Cyprus Stock Exchange and the third market of Vienna Stock
Exchnage.The Group also have debentures that are listed on the
Cyprus Stock Exchange.
In June 2016 the UK voted in a
referendum to leave the EU - the term 'Brexit' was adopted. We live
in uncertain times, Brexit, political upheaval in the UK, USA and
elsewhere in the world; but the World of The Just Loans Group
remains constant. The Company and the Group currently only operates
in the United Kingdom and deal exclusively with the exciting and
growing SME market.
FINANCIAL RESULTS
The unaudited financial results for the period to
30 June 2017 show an operating loss of £1,738k; earnings per share
are negative, being £0.062p.
Included within these financial
results are £149k of the Group's share of early stage losses from
an investment in an associate company. The associate is progressing
well and should produce significant profits in subsequent
years.
The results also include
exceptional costs of £74,000 in respect of costs of raising
additional funds.
CASH FLOW AND FUNDING
In order for the Group to meet its
growth targets it is necessary to raise the funds to be lent out.
The Group signed a £10m facility with the US fund manager SQN
Capital Management in December 15. This facility has now been drawn
down fully. In July 2017, the Group signed a facility with SQN
Secured Income Fund for a further £10M facility allowing the Group
to drawdown £2M per month. The Group has utilised £4M of this
facility, drawing down £2M in July and August. This institutional
fundraising is in addition to the continued fund raising from the
sale of debenture securities which are traded on the Emerging
Companies Market of the Cyprus Stock.
In addition, at the end of 2016, The Company
signed a facility agreement with an institution, who are looking to
raise £50Million via a Bond issue designed for institutional
Investors. The proceeds of this Bond issue will be loaned to the
Company and the Bond issue is secured on a basket of loan
facilities of the Company. The processes and procedures of Just
Cash Flow were rated by an independent rating authority for the
purpose of the Bond which was awarded an Investment Grade A with
stable outlook. To date the company has received £13.3M of which
£9.0m was received in September.
The Group is confident that further funding will
be made available from SQN and the other institutional funder but
the directors continue to source additional funding from other
institutional investors which will enable the Group to broaden its
product range for the SME market.
On 14 February 2017,the Group completed a debt for
equity swap. The Group issued 3,200,000 new shares to replace
debt valued at £4,480,000. The shares were valued at £1.40 per
share
OUTLOOK
The development of our proprietary
"Propensity" lending process is now complete as is the core of our
proprietary "AlfiLMS" IT system. The AlfiLMS system will continue
to evolve with the addition of new Fintech systems that become
available, and / or are upgraded, in order to ensure that our
system remains one of the most advanced customer acquisition and
management systems in operation.
The second half of the financial
year has started well and the new institutional funding will enable
the Group's loan book to reach the critical mass required for the
Group to start making profit. The additional funding will also
enable the Group to broaden its product range for UK SMEs. There
are also plans for the Group to open in other selected European
markets as the opportunities arise but this will be financed in
local currency in order to reduce any foreign exchange risks.
Sir Eric Peacock
Chairman
27 September 2017
The Directors of the Issuer
accept responsibility for this announcement.
FOR FURTHER INFORMATION PLEASE CONTACT:
Just Loans Plc
1 Charterhouse Mews
London
EC1M 6BB
Tel: +44 (0) 20 3199 6379
Nick Michaels
Alfred Henry Corporate Finance Limited
Tel: +44 (0) 20 7251 3762
Condensed Consolidated Statement
of Comprehensive Income
For the six months ended 30 June
2017
|
Unaudited |
Unaudited |
Audited |
|
Six months ended |
Six months ended |
Year
ended |
|
30 June 2017 |
30 June 2016 |
31 December
2016 |
|
|
|
|
|
£ |
£ |
£ |
Continuing operations |
|
|
|
Revenue |
4,141,064 |
2,418,260 |
6,037,550 |
Cost of
sales |
(1,449,115) |
(926,702) |
(2,932,074) |
|
|
|
|
Gross profit |
2,691,949 |
1,491,558 |
3,105,476 |
|
|
|
|
Administrative expenses |
(2,020,742) |
(1,528,434) |
(3,460,387) |
|
|
|
|
Operating Profit/ Loss |
671,207 |
(36,876) |
(354,911) |
|
|
|
|
|
|
|
|
Finance
costs
|
(2,335,221) |
(1,726,289) |
(4,302,403) |
Share of
losses from investment in associate |
(149,452) |
(125,582) |
(244,567) |
|
|
|
|
Loss on
ordinary activities before taxation |
(1,813,466) |
(1,888,747) |
(4,901,881) |
|
|
|
|
R & D
tax credit |
74,974 |
- |
43,790 |
|
|
|
|
Profit / (Loss) for the period |
(1,738,492) |
(1,888,747) |
(4,858,091) |
|
|
|
|
Profit /
(Loss) attributable to: |
|
|
|
|
(1,738,492) |
(1,888,747) |
(4,858,091) |
|
|
|
|
Loss per
share (expressed in pence per share) |
(6.16)p |
(37.8)p |
(19.43)p |
Loss per
share based upon subdivision |
(6.16)p |
(7.55)p |
(19.43)p |
|
|
|
|
Condensed consolidated statement
of financial position
|
Unaudited |
Unaudited |
Audited |
|
As at 30 June 2017
|
As at 30 June
2016
|
As at 31 December 2016 |
|
£ |
£ |
£ |
Assets |
|
|
|
Non-current assets |
|
|
|
Intangibles |
- |
- |
- |
Property
Plant and Equipment |
166,123 |
|
56,680 |
Investments |
6 |
|
6 |
Loans and
advances to customers |
917,900 |
|
917,900 |
Trade and
other receivables |
10,891,777 |
7,599,985 |
9,061,681 |
|
11,975,806 |
7,599,985 |
10,036,267 |
|
|
|
|
Current assets |
|
|
|
Inventory |
41,669 |
- |
14,828 |
Loans and
advances to customers |
22,489,833 |
14,578,234 |
17,653,553 |
Trade and
other receivables |
904,311 |
|
339,880 |
Cash and
cash equivalents |
1,624,534 |
4,658,569 |
1,783,282 |
|
25,060,347 |
19,236,803 |
19,791,543 |
|
|
|
|
Total assets |
37,036,153 |
26,836,788 |
29,827,810 |
|
|
|
|
Equity and liabilities |
|
|
|
Equity attributable to owners of the parent |
|
|
|
Ordinary
shares |
4,530,000 |
50,000 |
50,000 |
Other
reserves |
75,049 |
15,000 |
75,049 |
Accumulated losses |
(15,775,161) |
(11,067,325) |
(14,036,669) |
|
(11,170,112) |
(11,002,325) |
(13,911,620) |
Non-controlling interests |
|
- |
- |
Total equity |
(11,170,112) |
(11,002,325) |
(13,911,620) |
|
|
|
|
Liabilities |
|
|
|
Non-current liabilities |
|
|
|
Borrowings |
38,847,963 |
32,416,995 |
35,694,647 |
|
|
|
|
Current liabilities |
|
|
|
Borrowings |
7,247,288 |
4,624,776 |
6,794,814 |
Trade and
other payables |
2,111,014 |
797,342 |
1,249,969 |
|
|
|
|
Total liabilities |
48,206,265 |
37,839,113 |
43,739,430 |
|
|
|
|
Total equity and liabilities |
37,036,153 |
26,836,788 |
29,827,810 |
|
|
|
|
Condensed Consolidated Statement
of Cash Flows
For the six months ended 30 June 2017
|
Unaudited |
Unaudited |
Audited |
|
Six months
ended |
Six months
ended |
Year
ended
31 |
|
30 June
2017 |
30 June
2016 |
31 December 2016 |
|
£ |
£ |
£ |
Cash flows from operating activities |
|
|
|
Loss before taxation |
(1,813,466) |
(1,888,747) |
(4,901,881) |
Adjustments for: |
|
|
|
Finance
Costs |
2,335,221 |
1,726,289 |
4,302,403 |
Other
reserves |
- |
- |
60,049 |
Depreciation |
7,131 |
- |
37,950 |
Amortisation |
- |
- |
37,000 |
(Increase)/Decrease in inventory |
(23,841) |
- |
(14,828) |
Increase
in Loans and trade and other receivable |
(7,367,094) |
(8,082,791) |
(13,826,960) |
Increase/(Decrease) in trade and other payables |
967,758 |
(2,239,243) |
(168,550) |
Cash
(utilised) / generated from operations |
(5,984,291) |
(10,484,492) |
(14,474,817) |
|
|
|
|
Finance
costs paid |
(2,335,221) |
(1,726,289) |
(4,302,403) |
R & D
Tax receipt |
74,974 |
- |
43,790 |
Net cash (used by) / generated from operating
activities |
(8,244,538) |
(12,210,781) |
(18,733,430) |
|
|
|
|
Cash flows from investing activities |
|
|
|
Payments
to acquire tangible assets |
- |
- |
(56,680) |
Net cash generated from investing activities |
- |
- |
(56,680) |
|
|
|
|
Cash flows from financing activities |
|
|
|
Proceeds
from issue of shares |
4,480,000 |
|
|
Proceeds
from issue of debenture and other loans |
3,605,790 |
13,785,314 |
17,489,356 |
Net cash generated from financing activities |
8,085,790 |
13,785,314 |
17,489,356 |
|
|
|
|
Net (decrease)/increase in cash and cash
equivalents |
(158,748) |
1,574,533 |
(1,300,754) |
|
|
|
|
Cash and
cash equivalents at the beginning of the period |
1,783,282 |
3,084,036 |
3,084,036 |
|
|
|
|
Cash and cash equivalents at end of period |
1,624,534 |
4,658,569 |
1,783,282 |
Condensed Consolidated Statement
of Changes in Equity
For the six months ended 30 June
2017
|
|
Attributable to owners of the
parent |
Total
Equity |
|
Share capital |
Other reserves |
Accumulated losses |
Total |
|
£ |
£ |
£ |
£ |
£ |
|
|
|
|
|
|
As at
30 June 2016 |
50,000 |
15,000 |
(11,067,325) |
(11,002,325) |
(11,002,325) |
|
|
|
|
|
|
Other
reserves |
|
60,049 |
- |
60,049 |
65,049 |
Loss for
the period |
- |
- |
(2,969,344) |
(2,969,344) |
(2,969,344) |
|
|
|
|
|
|
As at
31 December
2016 |
50,000 |
75,049 |
(14,036,669) |
(13,911,620) |
(13,911,620) |
Share
sale |
4,480,000 |
- |
- |
4,480,000 |
4,480,000 |
|
|
|
|
|
|
Loss for
the period |
- |
- |
(1,738,492) |
(1,738,492) |
(1,738,492) |
|
|
|
|
|
|
As at
30 June 2017 |
4,530,000 |
75,049 |
(15,775,161) |
(11,170,112) |
(11,170,112) |
|
|
|
|
|
|
Share capital is the amount subscribed for shares
at nominal value.
Other reserves represent the expenses recognised
for share-based payments.
Accumulated losses represent the cumulative loss of the group
attributable to equity shareholders.
Notes to the condensed financial
statements
-
Basis of accounting
This interim report, which
incorporates the financial information of the Group, has been
prepared using the historical cost convention, on a going concern
basis and in accordance with International Financial Reporting
Standards ("IFRS") as adopted by the European Union.
The same accounting policies and
methods are used in the interims as compared with the most recent
annual financial statements.
The interim condensed financial
statements for the 6 months to June 2017 have been prepared in
accordance with International Accounting Standard 34 "Interim
Financial Report" and have not been audited by the external
auditors of the Group.
The unaudited results for period
ended 30 June 2017 do not constitute statutory accounts within the
meaning of Section 434 of the Companies Act 2006.
The Board of Directors of the
Group at its meeting on 27 September 2017 examined and approved the
interim condensed financial results.
2.
Standards and Interpretations adopted with no
material effect on financial statements
There are no IFRS or IFRIC
interpretations that are effective for the first time in this
financial period that
would be expected to have material impact on the company.
There are no other IFRS or IFRIC interpretations that are not yet
effective that would be expected to have
material impact on the company.
3. Loss per
Share
|
Unaudited
Six Months ended 30 June
2017 |
|
Unaudited
Six Months ended 30 June
2016 |
|
Audited
Year ended 31 December
2016 |
Loss per
share:
Basic (pence)
Diluted (pence) |
(0.062)
(0.062) |
|
(0.378)
(0.075) |
|
(19.43)
(19.43) |
|
|
|
|
|
|
Weighted
average number of shares in issue |
28,200,000 |
|
5,000,000 |
|
25,000,000 |
After
subdivision |
|
|
25,000,000 |
|
|
Loss per ordinary share on the
Company's loss for the financial period within the Condensed
Company Statement of Financial Position.
Borrowing
|
|
Unaudited
As at 30 June 2017 |
Unaudited
As at 30 June 2016 |
Audited
As at 31
31 December 2017 |
|
|
£ |
£ |
£ |
Non Current |
|
|
|
|
Debentures and other loans |
|
38,847,963 |
32,416,995 |
35,694,647 |
|
|
|
|
|
Current |
|
|
|
|
Debentures and other loans |
|
7,247,288 |
4,624,776 |
6,794,814 |
|
|
|
|
|
|
|
46,095,251 |
37,041,771 |
42,489,461 |
|
|
|
|
|
All commissions due on debentures
have been deferred against the debentures they relate to and have
either been shown as non-current or current borrowings. All
non-current borrowings are wholly repayable within five years.
The debentures are secured by
first floating charge over all of the assets of the group, and bear
interest as per below. Interest is paid in two half yearly
instalments.
|
Repayment date |
Annual interest |
|
|
|
2017 Debentures |
31
December 2017 |
8.25% |
2018 Debentures |
31
December 2018 |
8.25% |
2019 Debentures |
31
December 2019 |
8.25% |
2020 Debentures |
31
December 2020 |
8.75% |
2021 Debentures |
31
December 2021 |
8.75% |
Included within debentures and
other loans is capitalised commission of £1,901,051 which is
charged to the profit & Loss over the life of the Debentures to
which it relates.
4. Share
Capital
On the 19 October
2016, the Company undertook a subdivision of shares of 5 for 1.
The nominal value
per share adjusted to £0.002 from £0.01.
The ordinary shares
have attached to them full voting, dividend and capital
distribution (including on
Winding
up)right; they do not confer any rights of
redemption.
On the 14
February 2017 issued 3,200,000 new ordinary shares at £1.40 per
share for a total of
£4,480,000
This is a result of
the exchange by a number of debenture holders for their existing
debentures in The
Just Loans Group
Plc and its subsidiaries Just Cash Flow Plc, Just Bridging Loans
Plc and Just Finance
Loans &
Investments Plc.
5. Events after the
reporting period
In July 2017, the Company signed a
facility with SQN Secured Income Fund for a £10M facility allowing
the Company to drawdown £2M per month. The Company has drawn
£4M of this facility, drawing down £2M in July and August.
Since 1 July the Company has
received £9.8m (of which £9.0m was received in September) from the
institutional investor as proceeds from the £50m Bond issue.