TIDM68WN
RNS Number : 4414B
Rothschilds Continuation FinancePLC
20 September 2018
20 September 2018
Rothschilds Continuation Finance PLC
Half-yearly Report for the six-month period ended 30 June
2018
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.
As reported last year, the Company decided to change its
financial year end from 31 March to 31 December. The period being
reported on for this Interim Management Report is the six months to
June 2018. The comparatives are for the six months to 30 September
2017.
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 or 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.
Responsibilities 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
Condensed Interim Statement of Comprehensive Income
For the six months ended 30 June 2018
6 months to 6 months to
30 June 2018 30 September
2017
Note GBP GBP
--------------------------------- ----- ------------- -------------
Interest income 792,051 810,085
--------------------------------- ----- ------------- -------------
Interest expense (786,006) (808,607)
--------------------------------- ----- ------------- -------------
Foreign exchange translation
gains/(losses) (951) 15,288
--------------------------------- ----- ------------- -------------
Profit before tax 5,094 16,766
--------------------------------- ----- ------------- -------------
Taxation 3 (968) (3,186)
--------------------------------- ----- ------------- -------------
Profit for the financial period 4,126 13,580
--------------------------------- ----- ------------- -------------
Other comprehensive income - -
--------------------------------- ----- ------------- -------------
Total comprehensive income for
the financial period 4,126 13,580
--------------------------------- ----- ------------- -------------
Condensed Interim Statement of Changes in Equity
For the six months ended 30 June 2018
Retained
Share Capital Earnings Total
GBP GBP GBP
-------------------------------- ---------------- ---------- ----------
At 1 January 2018 100,000 112,711 212,711
-------------------------------- ---------------- ---------- ----------
Total comprehensive income for
the period - 4,126 4,126
-------------------------------- ---------------- ---------- ----------
At 30 June 2018 100,000 116,837 216,837
-------------------------------- ---------------- ---------- ----------
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
-------------------------------- ---------------- ---------- ----------
Condensed Interim Balance Sheet
At 30 June 2018
At 30 June At 31 December
2018 2018 2017 2017
Note GBP GBP GBP GBP
---------------------------- ----- ---------- -------------- ---------- --------------
Non-current assets
Loan to parent undertaking 4 132,647,106 133,151,064
---------------------------- ----- ---------- -------------- ---------- --------------
Current assets
---------------------------- ----- ---------- -------------- ---------- --------------
Cash and cash equivalents 6 243,859 238,794
---------------------------- ----- ---------- -------------- ---------- --------------
Other financial
assets 5 239,354 203,425
---------------------------- ----- ---------- -------------- ---------- --------------
483,213 442,219
---------------------------- ----- ---------- -------------- ---------- --------------
Current liabilities
Bank overdrafts 6 (23,186) (23,186)
---------------------------- ----- ---------- -------------- ---------- --------------
Current tax liability (5,899) (4,931)
---------------------------- ----- ---------- -------------- ---------- --------------
Other financial
liabilities 7 (237,291) (201,391)
---------------------------- ----- ---------- -------------- ---------- --------------
Net current assets 216,837 212,711
---------------------------- ----- ---------- -------------- ---------- --------------
Total assets less current liabilities 132,863,943 133,363,775
----------------------------------------------- -------------- ---------- --------------
Non-current liabilities
Debt securities
in issue 8 (132,647,106) (133,151,064)
---------------------------- ----- ---------- -------------- ---------- --------------
Net assets 216,837 212,711
---------------------------- ----- ---------- -------------- ---------- --------------
Shareholders' equity
Share capital 10 100,000 100,000
---------------------------- ----- ---------- -------------- ---------- --------------
Retained earnings 116,837 112,711
---------------------------- ----- ---------- -------------- ---------- --------------
Total shareholders'
equity 216,837 212,711
---------------------------- ----- ---------- -------------- ---------- --------------
Condensed Interim Cash Flow Statement
For the six months ended 30 June 2018
6 months to 6 months to
30 June 2018 30 September
2017
Note GBP GBP
------------------------------------- ----- ------------- --------------
Cash flow from operating activities
Net profit for the financial
period 4,126 13,580
------------------------------------- ----- ------------- --------------
Taxation 968 3,186
------------------------------------- ----- ------------- --------------
Operating profit before changes
in working capital and provisions 5,094 16,766
------------------------------------- ----- ------------- --------------
Cash generated from operations 5,094 16,766
------------------------------------- ----- ------------- --------------
Net cash from operating activities 5,094 16,766
------------------------------------- ----- ------------- --------------
Net decrease/(increase) in
loans and interest receivable 468,029 (3,822,560)
------------------------------------- ----- ------------- --------------
Net (decrease)/increase in
debt securities in issue and
interest payable (468,058) 3,822,429
------------------------------------- ----- ------------- --------------
Dividends paid - (100,000)
------------------------------------- ----- ------------- --------------
Net cash flow used in financing
activities (29) (100,131)
------------------------------------- ----- ------------- --------------
Net increase/(decrease) in
cash and cash equivalents 5,065 (83,365)
------------------------------------- ----- ------------- --------------
Cash and cash equivalents
at beginning of period 215,608 294,935
------------------------------------- ----- ------------- --------------
Cash and cash equivalents
at end of period 6 220,673 211,570
------------------------------------- ----- ------------- --------------
Interest receipts and payments during the period were as
follows:
6 months to 6 months to
30 June 2018 30 September
2017
GBP GBP
------------------------------------------- ------------- -------------
Interest received from parent undertaking 756,122 860,655
------------------------------------------- ------------- -------------
Interest paid to note holders 750,106 859,309
------------------------------------------- ------------- -------------
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 June 2018
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 December 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 9 months ended
31 December 2017.
2. Directors' Emoluments
None of the directors received any remuneration in respect of
their services to the Company during the period (6 months to 31
September 2017: GBPnil).
3. Taxation
6 months to 6 months to
30 June 2018 30 September
2017
GBP GBP
-------------------------------- ------------- -------------
Profit before tax 5,094 16,766
-------------------------------- ------------- -------------
United Kingdom corporation tax
at 19% 968 3,186
-------------------------------- ------------- -------------
Tax charged for the period 968 3,186
-------------------------------- ------------- -------------
4. Non-Current Assets: Loan to Parent Undertaking
At 30 June At 31 December
2018 2017
GBP GBP
------------------------------------ ------------ ---------------
Amounts owed by parent undertaking
------------------------------------ ------------ ---------------
EUR150,000,000 Perpetual floating
rate subordinated loan 132,647,106 133,151,064
------------------------------------ ------------ ---------------
Due
------------------------------------ ------------ ---------------
In 5 years or more 132,647,106 133,151,064
------------------------------------ ------------ ---------------
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 1.15% (31
December 2017: 1.00%) and the fair value was GBP106,356,449 as at
30 June 2018 (31 December 2017: GBP119,476,450). The above loans
were valued from quoted market prices of a similar instrument
(level 2).
5. Current Assets: Other Financial Assets
At 30 June At 31 December
2018 2017
GBP GBP
--------------------- ----------- ---------------
Interest receivable 239,354 203,425
--------------------- ----------- ---------------
6. Cash and Cash Equivalents
At 30 June 2018 the Company held cash of GBP220,673 (31 December
2017: GBP215,608) at the parent undertaking. Of this balance,
GBP23,186 (31 December 2017: GBP23,186) was held as an overdraft in
a sterling account. The equivalent of GBP243,859 (31 December 2017:
GBP238,794) was held in a euro account.
7. Current Liabilities: Other Financial Liabilities
At 30 June At 31 December
2018 2017
GBP GBP
------------------ ----------- ---------------
Interest payable 237,291 201,391
------------------ ----------- ---------------
8. Non-Current Liabilities: Debt Securities in Issue
At 30 June At 31 December
2018 2017
GBP GBP
----------------------------- ------------ ---------------
Medium Term Notes
Perpetual Subordinated Notes
EUR150,000,000 132,647,106 133,151,064
----------------------------- ------------ ---------------
Repayable
In 5 years or more 132,647,106 133,151,064
----------------------------- ------------ ---------------
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 of 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 June 2018
was 1.14% (31 December 2017: 0.99%) and their fair value was
GBP106,157,479 (31 December 2017: GBP119,276,723). 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 not or less or less
payable but over but over
on
Demand demand 3 months 1 year Perpetual Total
GBP GBP GBP GBP GBP GBP
----------------------- ------- --------- ----------- ----------- ------------- -------------
Perpetual subordinated
notes - 390,646 1,171,938 6,250,336 132,647,106 140,460,026
----------------------- ------- --------- ----------- ----------- ------------- -------------
10. Share Capital
At 30 June At 31 December
2018 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 June At 31 December
2018 2017
GBP GBP
------------------------------------- ------------ ---------------
Cash and cash equivalents at parent
undertaking 220,673 215,608
------------------------------------- ------------ ---------------
Accrued interest receivable from
parent undertaking 239,354 203,425
------------------------------------- ------------ ---------------
Loans to parent undertaking 132,647,106 133,151,064
------------------------------------- ------------ ---------------
Amounts recognised in the condensed statement of comprehensive
income in respect of related party transactions were as
follows:
6 months to 6 months to
30 June 2018 30 September
2017
GBP GBP
----------------------------------------- ------------- -------------
Interest income from parent undertaking 792,051 810,085
----------------------------------------- ------------- -------------
There were no loans made to Directors during the period (6
months to 30 September 2017: none) and no balances outstanding at
the period end (6 months to 30 September 2017: GBPnil). There were
no employees of the Company during the period (6 months to 30
September 2017: 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 registered 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 Swithin's Lane, London EC7N
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 news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR LLFEFAEIIFIT
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September 20, 2018 08:59 ET (12:59 GMT)
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