TIDM68WN
RNS Number : 8267Z
Rothschilds Continuation FinancePLC
19 December 2017
Rothschilds Continuation Finance PLC
Half-yearly Report for the six-month period ended 30 September
2017
Interim Management Report
Summary of Important Events
Rothschilds Continuation Finance PLC (the Company) is a
wholly-owned subsidiary of N M Rothschild & Sons Limited (NMR)
and was incorporated on 30 August 2000 to operate as a finance
vehicle for the benefit of NMR and its subsidiaries.
The principal activity of the Company is the raising of finance
for the purpose of lending it to NMR and other companies in NMR's
group (the Group). The Company raises finance by the issue of
perpetual subordinated notes guaranteed by NMR.
Rothschild & Co SCA announced on 21 March 2017 that it will
change its financial year end from 31 March to 31 December. There
will therefore be a 9 month accounting period until 31 December
2017. Rothschilds Continuation Finance PLC will also change its
year end in line with its ultimate parent.
Risks and Uncertainties
The principal risks of the Company are credit risk, liquidity
risk, market risk and operational risk. The Company follows the
risk management policies of the parent undertaking, NMR.
The Company's market risk exposure is limited to interest rate
risk and currency exchange rate movements. Exposure to interest
rate movements on the perpetual subordinated note issues has been
passed to NMR, as the issue proceeds have been lent onwards to NMR
at a fixed margin of one basis point above the rate being paid.
Currency risk is not considered significant as all material foreign
currency balances and cash flows are matched.
Liquidity risk has similarly been transferred to NMR as the
funds on-lent have the same maturity dates as the notes issued. The
Company's principal credit risk is with NMR. Since notes issued by
the Company have been guaranteed by, and funds have been on-lent
to, NMR, the Company's ability to meet its obligations in respect
of notes issued by it is affected by NMR's ability to make payments
to the Company.
Operational risk arising from inadequate or failed internal
processes, people and systems or from external events is managed by
maintaining a strong framework of internal controls.
This half-yearly financial report has not been audited or
reviewed by the Company's auditors pursuant to the Auditing
Practices Board guidance on Review of Interim Financial
Information.
Responsibility Statement
The Directors confirm that to the best of their knowledge:
- the condensed set of financial statements has been prepared in accordance with IAS 34 Interim
Financial Reporting; and
- the interim management report includes a fair review of (i) the important events that have
occurred during the first six months of the financial year, and their impact on the condensed
set of financial statements, and (ii) the principal risks and uncertainties for the remaining
six months of the financial year.
By Order of the Board
Peter Barbour
Director
19 December 2017
Condensed Interim Statement of Comprehensive Income
For the six months ended 30 September 2017
6 months 6 months
to to
30 September 30 September
2017 2016
Note GBP GBP
------------------------------ ----- ------------- -------------
Interest income 810,085 511,946
------------------------------ ----- ------------- -------------
Interest expense (808,607) (506,659)
------------------------------ ----- ------------- -------------
Foreign exchange translation
gains/(losses) 15,288 16,805
------------------------------ ----- ------------- -------------
Profit before tax 16,766 22,092
------------------------------ ----- ------------- -------------
Taxation 3 (3,186) (4,416)
------------------------------ ----- ------------- -------------
Profit for the financial
period 13,580 17,676
------------------------------ ----- ------------- -------------
Other comprehensive - -
income
------------------------------ ----- ------------- -------------
Total comprehensive
income for the financial
period 13,580 17,676
------------------------------ ----- ------------- -------------
Condensed Interim Statement of Changes in Equity
For the six months ended 30 September 2017
Retained
Share Earnings Total
Capital
GBP GBP GBP
------------------------ ---------- ---------- ----------
At 1 April 2017 100,000 191,691 291,691
------------------------ ---------- ---------- ----------
Total comprehensive
income for the period - 13,580 13,580
------------------------ ---------- ---------- ----------
Dividends paid - (100,000) (100,000)
------------------------ ---------- ---------- ----------
At 30 September 2017 100,000 105,271 205,271
------------------------ ---------- ---------- ----------
At 1 April 2016 100,000 171,009 271,009
------------------------ ---------- ---------- ----------
Total comprehensive
income for the period - 17,676 17,676
------------------------ ---------- ---------- ----------
At 30 September 2016 100,000 188,685 288,685
------------------------ ---------- ---------- ----------
Condensed Interim Balance Sheet
At 30 September 2017
At 30 September At 31 March
2017 2017 2017 2017
Note GBP GBP GBP GBP
--------------------- ----- ---------- -------------- ---------- --------------
Non-current
assets
Loan to parent
undertaking 4 132,172,565 128,299,434
--------------------- ----- ---------- -------------- ---------- --------------
Current assets
Cash and cash
equivalents 6 229,586 294,935
--------------------- ----- ---------- -------------- ---------- --------------
Other financial
assets 5 232,330 282,900
--------------------- ----- ---------- -------------- ---------- --------------
461,916 577,835
--------------------- ----- ---------- -------------- ---------- --------------
Current liabilities
Bank overdrafts 6 (18,016) -
--------------------- ----- ---------- -------------- ---------- --------------
Current tax
liability (8,355) (5,168)
--------------------- ----- ---------- -------------- ---------- --------------
Other financial
liabilities 7 (230,274) (280,976)
--------------------- ----- ---------- -------------- ---------- --------------
Net current
assets 205,271 291,691
--------------------- ----- ---------- -------------- ---------- --------------
Total assets
less current
liabilities 132,377,836 128,591,125
--------------------- ----- ---------- -------------- ---------- --------------
Non-current
liabilities
Debt securities
in issue 8 (132,172,565) (128,299,434)
--------------------- ----- ---------- -------------- ---------- --------------
Net assets 205,271 291,691
--------------------- ----- ---------- -------------- ---------- --------------
Shareholders'
equity
Share capital 10 100,000 100,000
--------------------- ----- ---------- -------------- ---------- --------------
Retained earnings 105,271 191,691
--------------------- ----- ---------- -------------- ---------- --------------
Total shareholders'
equity 205,271 291,691
--------------------- ----- ---------- -------------- ---------- --------------
Condensed Interim Cash Flow Statement
For the six months ended 30 September 2017
6 months 6 months
to to
30 September 30 September
2017 2016
Note GBP GBP
---------------------------- ----- ------------- --------------
Cash flow from operating
activities
Net profit for the
financial period 13,580 17,676
---------------------------- ----- ------------- --------------
Taxation 3,186 4,416
---------------------------- ----- ------------- --------------
Operating profit
before changes in
working capital and
provisions 16,766 22,092
---------------------------- ----- ------------- --------------
Cash generated from
operations 16,766 22,092
---------------------------- ----- ------------- --------------
Net cash from operating
activities 16,766 22,092
---------------------------- ----- ------------- --------------
Net increase in loans
and interest receivable (3,822,560) (10,348,874)
---------------------------- ----- ------------- --------------
Net increase in debt
securities in issue
and interest payable 3,822,429 10,348,679
---------------------------- ----- ------------- --------------
Dividends paid (100,000) -
---------------------------- ----- ------------- --------------
Net cash flow (used
in) financing activities (100,131) (195)
---------------------------- ----- ------------- --------------
Net (decrease) in
cash and cash equivalents (83,365) 21,897
---------------------------- ----- ------------- --------------
Cash and cash equivalents
at 1 April 294,935 274,077
---------------------------- ----- ------------- --------------
Cash and cash equivalents
at 30 September 6 211,570 295,974
---------------------------- ----- ------------- --------------
Interest receipts and payments during the period were as
follows:
6 months 6 months
to to
30 September 30 September
2017 2016
GBP GBP
------------------------ ------------- -------------
Interest received from
parent undertaking 860,655 584,658
------------------------ ------------- -------------
Interest paid to note
holders 859,309 579,566
------------------------ ------------- -------------
The notes to the condensed interim financial statements form an
integral part of the condensed interim financial statements.
Notes to the Condensed Interim
Financial Statements
(forming part of the Condensed Interim Financial Statements)
For the six months ended 30 September 2017
1. Basis of Preparation
The condensed interim financial statements are prepared and
approved by the Directors in accordance with IAS 34 Interim
Financial Reporting. The condensed interim financial statements are
prepared under the historical cost accounting rules and should be
read in conjunction with the annual financial statements for the
year ended 31 March 2017, which have been prepared in accordance
with International Financial Reporting Standards.
The accounting policies and methods of valuation are identical
to those applied in the financial statements for the year ended 31
March 2017, with the exception of the cash and cash equivalents
policy. New accounting statements that are effective for the period
ending 31 December 2017 have no impact on these condensed interim
financial statements.
2. Directors' Emoluments
None of the directors received any remuneration in respect of
their services to the Company during the period (2016: GBPnil).
3. Taxation
6 months 6 months
to to
30 September 30 September
2017 2016
GBP GBP
---------------------------- ------------- -------------
Profit before tax 16,766 22,092
---------------------------- ------------- -------------
United Kingdom corporation
tax at 19% (2016: 20%) 3,186 4,418
---------------------------- ------------- -------------
Prior year adjustment - (2)
---------------------------- ------------- -------------
Tax charged for the period 3,186 4,416
---------------------------- ------------- -------------
4. Non-current Assets: Loan to Parent Undertaking
At 30 September At 31 March
2017 2017
GBP GBP
----------------------------- ---------------- ------------
Amounts owed by parent
undertaking
EUR150,000,000 Perpetual
floating rate subordinated
loan 132,172,565 128,299,434
----------------------------- ---------------- ------------
Due
In 5 years or more 132,172,565 128,299,434
----------------------------- ---------------- ------------
The interest rate charged on the EUR150 million loan is
EUR-TEC10-CNO plus 36 basis points, capped at 9.01 per cent, fixed
on 05 February, 05 May, 05 August and 05 November each year.
The effective interest rate on the above loan was 1.13% (31
March 2017: 1.47%) and the fair value was GBP112,161,638 as at 30
September 2017 (31 March 2017: GBP92,516,722). The above loans were
valued from quoted market prices of a similar intrument (level
2).
5. Current Assets: Other Financial Assets
At 30 September At 31 March
2017 2017
GBP GBP
--------------------- ---------------- ------------
Interest receivable 232,330 282,900
--------------------- ---------------- ------------
6. Cash and Cash Equivalents
At 30 September 2017 the Company held cash of GBP211,570 (31
March 2017: GBP294,935) at the parent undertaking. Of this balance,
GBP18,016 (31 March 2017: a debit balance of GBP81,985) was held as
an overdraft in a sterling account. The equivalent of GBP229,586
(31 March 2017: GBP212,950) was held in a euro account.
7. Current Liabilities: Other Financial Liabilities
At 30 September At 31 March
2017 2017
GBP GBP
------------------ ---------------- ------------
Interest payable 230,274 280,976
------------------ ---------------- ------------
8. Non-current Liabilities: Debt Securities in Issue
At 30 September At 31 March
2017 2017
GBP GBP
----------------------- ---------------- ------------
Medium Term Notes
Perpetual Subordinated
Notes
EUR150,000,000 132,172,565 128,299,434
----------------------- ---------------- ------------
Repayable
In 5 years or more 132,172,565 128,299,434
----------------------- ---------------- ------------
The interest rate payable on the EUR150 million Perpetual
Subordinated Notes is EUR-TEC10-CNO plus 35 basis points, capped at
9 per cent, fixed on 05 February, 05 May, 05 August and 05 November
each year. From and including the interest payment date falling in
August 2016 and every interest payment date thereafter, the Company
may redeem all (but not some only) of the Perpetual Subordinated
Notes at their principal amount.
The effective interest rate on the above notes at 30 September
2017 was 1.12% (31 March 2017: 1.46%) and their fair value was
GBP111,963,379 (31 March 2017: GBP92,324,273). The fair value was
derived from the quoted market price at the balance sheet date
(level 1).
9. Maturity of Financial Liabilities
The following table shows contractual cash flows payable by the
Company on the perpetual subordinated notes, analysed by remaining
contractual maturity at the balance sheet date. Interest cash flows
on perpetual subordinated notes are shown up to five years only,
with the principal balance being shown in the perpetual column.
3 months
or less 1 year 5 years
but or less or less
not
payable but over but over
on
Demand demand 3 months 1 year Perpetual Total
GBP GBP GBP GBP GBP GBP
-------------- ------- --------- ----------- ----------- ------------- -------------
Perpetual
subordinated
notes - 378,307 1,122,586 6,003,572 132,172,565 139,677,030
-------------- ------- --------- ----------- ----------- ------------- -------------
10. Share Capital
At 30 September At 31 March
2017 2017
GBP GBP
--------------------------- ---------------- ------------
Authorised, allotted,
called up and fully paid
100,000 Ordinary shares
of GBP1 each 100,000 100,000
--------------------------- ---------------- ------------
11. Related Party Transactions
Parties are considered to be related if one party controls, is
controlled by or has the ability to exercise significant influence
over the other party. This includes key management personnel, the
parent company, subsidiaries and fellow subsidiaries.
Amounts receivable from related parties at the period end were
as follows:
At 30 September At 31 March
2017 2017
GBP GBP
----------------------------- ---------------- ------------
Cash and cash equivalents
at parent undertaking 211,570 294,935
----------------------------- ---------------- ------------
Accrued interest receivable
from parent undertaking 232,330 282,900
----------------------------- ---------------- ------------
Loans to parent undertaking 132,172,565 128,299,434
----------------------------- ---------------- ------------
Amounts recognised in the condensed statement of comprehensive
income in respect of related party transactions were as
follows:
6 months 6 months
to to
30 September 30 September
2017 2016
GBP GBP
---------------------- ------------- -------------
Interest income from
parent undertaking 810,085 511,946
---------------------- ------------- -------------
There were no loans made to Directors during the year (2016:
none) and no balances outstanding at the period end (2016: GBPnil).
The Directors did not receive any remuneration in respect of their
services to the Company. There were no employees of the Company
during the period (2016: none).
12. Parent Undertaking and Ultimate Holding Company and Registered Office
The largest group in which the results of the Company are
consolidated is that headed by Rothschild Concordia SAS,
incorporated in France, and whose registed office is at 23bis,
Avenue de Messine, 75008 Paris. The smallest group in which they
are consolidated is that headed by Rothschild & Co SCA, a
French public limited partnership whose registered office is also
at 23bis, Avenue de Messine, 75008 Paris. The accounts are
available on the Rothschild & Co website at
www.rothschildandco.com.
The Company's immediate parent company is N M Rothschild and
Sons Limited, incorporated in England and Wales and whose
registered office is at New Court, St Swithins Lane, London EC4N
8AL.
The Company's registered office is located at New Court, St
Swithin's Lane, London EC4N 8AL.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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